CELEX: 51989PC0253
Language: en
Date: 1989-05-31
Title: AMENDED PROPOSAL FOR A COUNCIL REGULATION ( ECSC, EEC, EURATOM ) AMENDING THE FINANCIAL REGULATION OF 21 DECEMBER 1977 APPLICABLE TO THE GENERAL BUDGET OF THE EUROPEAN COMMUNITIES ( PRESENTED BY THE COMMISSION TO THE COUNCIL UNDER ARTICLE 149 ( 3 ) OF THE EEC TREATY AND THE SECOND PARAGRAPH OF ARTICLE 119 OF THE EURATOM TREATY )

No C 193/14                             Official Journal of the European Communities                            31. 7. 89
              Amended proposal for a Council Regulation (ECSC, EEC, Euratom) amending the Financial
              Regulation of 21 December 1977 applicable to the general budget of the European Communities (*)
                                                       COM(89) 253 final
              (Submitted by the Commission to the Council under Article 149(3) of the EEC Treaty and the
                           second paragraph of Article 119 of the Euratom Treaty on 30 May 1989)
                                                          (89/C 193/04)
              (!) Doc. COM(88) 838 final (OJ No C 115, 8. 5. 1989, p. 1).
              In the light of the opinions of Parliament and the Court of Auditors, the Commission is making the
              following amendments to its proposal:
                       INITIAL PROPOSAL                                                 AMENDED PROPOSAL
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European
Coal and Steel Community, and in particular Article 78H
thereof,
Having regard to the Treaty establishing the European
Economic Community, and in particular Article 209
thereof,
Having regard to the Treaty establishing the European
Atomic Energy Community, and in particular Article 183
thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,
Having regard to the opinion of the Court of Auditors,
Whereas the conciliation provided for in the Joint
Declaration of 4 March 1975 of the European Parliament,
the Council and the Commission (!) took place in a
Conciliation Committee;
Whereas Article 107 of the Financial Regulation of
21 December 1977 (2), as last amended by Regulation
(ECSC, EEC, Euratom) No 2049/88 (3) (hereinafter
referred to as 'the Financial Regulation'), provides for the
Financial Regulation to be examined by the European
Parliament and the Council in the light of a proposal from
the Commission;
Whereas, in view of the evolution of the general budget of
the European Communities and of the application of the
Financial Regulation, it is necessary to adjust many of the
provisions of the said Financial Regulation; whereas the
European Council of 11,12 and 13 February 1988 called for
a general revision of the Financial Regulation by the end of
1988;
                                                                   (!) OJ No C 89, 22. 4. 1975, p. 1.
                                                                   (2) OJ No L 356, 31. 12. 1977, p. 1.
                                                                   (3) OJ No L 185, 15. 7. 1988, p. 3.
 ---pagebreak--- 31. 7. 89                              Official Journal of the European Communities                              No C 193/15
                      INITIAL PROPOSAL                                                 AMENDED PROPOSAL
Whereas provision should be made for an appropriate
budgetary structure for all expenditure in order to give a
clearer picture of the policy breakdown of appropriations
and thus create the conditions essential for effective
management; whereas, to this end, the present Section III
of the budget should be reserved for Commission staff and
administrative appropriations and a new section should be
introduced for expenditure common to all the institutions,
as well as several sections for operating appropriations,
taking into account past changes in the contents of the
budget and future prospects;
                                                                  The following recitals are inserted between the fourth and
                                                                  fifth recitals:
                                                                  Whereas the general role played by the Economic and
                                                                  Social Committee in support both of the Council and of the
                                                                  Commission and the importance of the tasks assigned to it
                                                                  in connection with the objectives of cohesion and
                                                                  establishing a European social area are good reasons for
                                                                  treating it, from the point of view of budget structure and
                                                                  execution, like one of the other institutions;
                                                                  Whereas it is useful to be able to enter in the budget being
                                                                 prepared an estimate of the balance based on outturn
                                                                  forecasts in order to help respect the principles of
                                                                  budgetary balance and budgetary truth; whereas the
                                                                  balance is adjusted, by means of a supplementary or
                                                                  amending budget on the basis of the final figures after
                                                                 closure of the accounts, without prejudice to the decision
                                                                 granting the discharge;
Whereas it is necessary to produce a more transparent
presentation of the appropriations for research and
technological development and to introduce appropriate
rules for this presentation;
Whereas, in order to cover all the appropriations entered in
the general budget of the European Communities, the
Financial Regulation should contain special provisions for
the budgetary management of Community external aid;
Whereas, in view of the changes to the rules on food aid, it
is no longer necessary to include special provisions in the
Financial Regulation;
Whereas special provisions should be entered in the
Financial Regulation, to be supplemented by implementing
measures, to meet the specific requirements of managing
the administrative appropriations relating to staff serving
outside the Community and related administration;
 ---pagebreak---  No C 193/16                             Official Journal of the European Communities               31. 7. 89
                       INITIAL PROPOSAL                                            AMENDED PROPOSAL
 Whereas budgetary appropriations should be presented in
 a more uniform manner with the appropriations for all
 administrative expenditure, for the European Agricultural
 Guidance and Guarantee Fund Guarantee Section, and
 some technical appropriations being non-differentiated,
 while appropriations for the various policies intended to
 cover multiannual operations are differentiated;
 Whereas, in the light of the experience acquired since its
 entry into force, certain provisions of the Financial
Regulation need to be made more detailed or revised
 notably in respect of the arrangements for provisional
twelfths and transfers;
Whereas, in order to improve interinstitutional relations-,
the Financial Regulation should include provisions on the
procedure for supplementary and amending budgets, the
establishment of the financial statement to accompany
proposals, improvements to the organization of relations
between the institutions and the Court of Auditors and the
information to be given to the budgetary authority on the
utilization of advances from the EAGGF Guarantee
Section;
Whereas, in connection with the repayment of Community
aids, the Financial Regulation should contain provisions
concerning the payment of interest;
Whereas, in view of the technological advances in
management and accounting systems, rules should be laid
down to allow the budget to be implemented in a
computerized environment;
Whereas, since the cost of living is rising constantly, it has
become essential that, for the determination of certain
amounts in connection with the awarding of contracts and
with inventories, reference be made to the rules for the
implementation of this Regulation, so that these amounts
can be adjusted by a legislative procedure that is more
appropriate from the technical angle;
Whereas, following the entry into force of this Regulation,
a consolidated version of the Financial Regulations should
be published in the ' C series of the Official Journal of the
European Communities, taking account of the various
amendments made to it since its adoption,
HAS ADOPTED THIS REGULATION:
                           Article 1                                                   Article 1
The Financial Regulation is hereby amended as follows:
1.     In the second subparagraph of Article 1(1), the third
       indent is replaced by the following:
       '— the revenue and expenditure of the European
            Atomic Energy Community which may be
            credited, to or charged against the budget
            pursuant to the Euratom Treaty and to the
            measures taken in implementation thereof.'
 ---pagebreak--- 31. 7. 89                              Official Journal of the European Communities                         No C 193/17
                     INITIAL PROPOSAL                                               AMENDED PROPOSAL
                                                                       In Article 1(1) the following new subparagraph is
                                                                       added:
                                                                       The provisions of this Financial Regulation shall
                                                                       apply to Parliament, the Council, the Commission,
                                                                       the Court of Justice, the Court of Auditors and the
                                                                       Economic and Social Committee.
2.    In Article 1(2), the second subparagraph is replaced
      by the following:
      'Expenditure may not be authorized for a period
      extending beyond the financial year.'
3.    Article 1(3) is replaced by the following:
      '3.   Administrative expenditure arising from:
      — contracts which have been concluded, in accord-
          ance with local usage, or
      — contractual provisions relating, in particular, to
          the supply of equipment,
      for periods extending beyond the financial year shall
      be charged to the budget for the financial year in
      which it is effected.'
4.  • In Article 1, paragraphs 3a, 4 and 5 are replaced by
      the following:
      '4. Staff and administrative expenditure, expendi-               4.  Unchanged
      ture under the European Agricultural Guidance and
      Guarantee Fund, Guarantee Section and expenditure
      on repayments to the Member States, as well as loan
      guarantees, shall be entered in the budget in the form
      of non-differentiated appropriations.
      Other expenditure shall be entered in the form of
      differentiated appropriations.
      Commitment appropriations shall cover, for the
      current financial year, the total cost of the legal
      obligations entered into for operations whose
      implementation extends over more than one finan-
      cial year.
      Payment appropriations shall cover expenditure
      arising from commitments entered into in the
      current financial year and/or preceding financial
      years.
      5. Differentiated appropriations shall be shown in               5.  Unchanged
      the budget as follows:
      — the commitment appropriation authorized for
          the financial year concerned and the payment
          appropriation for the same financial year shall be
          entered under the appropriate heading,
      — the estimated annual payment appropriations
          required for subsequent financial years shall be
          set out against the commitment appropriations in
          an indicative schedule in the remarks column.
 ---pagebreak--- No C 193/18                           Official Journal of the European Communities                                  31. 7. 89
                    INITIAL PROPOSAL                                                 AMENDED PROPOSAL
     6. The sum of the non-differentiated appropri-                    6. The sum of the non-differentiated appropri-
     ations and the commitment appropriations shall                    ations and the commitment appropriations (dif-
     constitute the appropriations for commitments.                    ferentiated) shall constitute the appropriations for
                                                                       commitments.
     The sum of the non-differentiated appropriations                 The sum of the non-differentiated appropriations
     and the payment appropriations shall constitute the              and the payment appropriations (differentiated)
     appropriations for payments.                                     shall constitute the appropriations for payments.
     7. The legal commitments entered into for mea-                   7.    Unchanged
     sures extending over more than one financial year
     shall contain a time limit for implementation which
     must be specified to the recipient in due form when
     the aid is granted.
     This time limit shall be determined with due regard
     to the need for multiannual implementation of the
     operations financed and the specific conditions of
     implementation in relation to the various spheres of
     intervention.
     The Commission may, in special circumstances,
     adjust the time limit for implementation of these
     commitments, on the basis of appropriate proof
     supplied by the recipients.'
                                                                      Article 2 is replaced by the following:
                                                                      'Article 2
                                                                      The budget appropriations shall be used in accord-
                                                                      ance with the principles of sound financial manage-
                                                                      ment and in particular cost-effectiveness. Quantified
                                                                      objectives shall be set and progress towards their
                                                                      attainment shall be monitored.
                                                                      Where expenditure is administered on a decentral-
                                                                      ized basis by national agencies, they shall provide the
                                                                      Commission with the information it needs to ensure
                                                                      that their systems for the control and management of
                                                                      Community funds are properly organized.'
5.  The following new Article 3 is inserted:
    'Article 3                                                        'Article 3
    Where proposals submitted to the Council and                      1. Where proposals submitted to the Council and
    Parliament may have budgetary consequences,                       Parliament may have budgetary consequences,
    including significant changes in the number of posts,             including significant changes in the number of posts,
    the Commission shall draw up a financial statement.               the Commission shall draw up a financial statement.
    In the case of multiannual operations, this financial             2. In the case of proposals for operations, the
    statement shall contain the estimated schedule of                 financial statement shall include appropriate expla-
    annual requirements in appropriations and posts.'                 nations of the reasons for the Community's interven-
                                                                      tion.
 ---pagebreak--- 31. 7. 89                               Official Journal of the European Communities                           No C 193/19
                      INITIAL PROPOSAL                                                AMENDED PROPOSAL
                                                                        3. In the case of multiannual operations, the
                                                                        financial statement shall contain the estimated
                                                                        schedule of annual requirements in appropriations
                                                                        and posts. The financial statement shall be drawn up
                                                                        in the light of the financial perspective.
                                                                        4. During the budgetary procedure the Commis-
                                                                        sion shall supply appropriate information to allow a
                                                                        comparison to be made between the appropriations
                                                                        required and the initial forecasts made in the
                                                                        financial statements.'
6.    Article 3 is renumbered Article 4. It is replaced by the
      following; :
      'Article 4
      1. Subject to Article 27, all revenue and expendi-                1.   Unchanged
      ture shall be entered in full in the budget and in the
      accounts without any adjustment against each other.
      2. Total revenue shall cover total appropriations;                2. Total revenue shall cover total appropriations
      revenue shall not be assigned to a specific purpose.              for payments; revenue shall not be assigned to a
                                                                        specific purpose.
      However, certain revenues shall not be used for any               Notwithstanding the previous subparagraph, certain
      other purpose, notably:                                           revenues shall not be used for any other purpose,
                                                                        notably:
          financial contributions from Member States to                     Unchanged
          certain research programmes pursuant to the
          second paragraph of Article 6 and Article ll(2)(c)
          of Council Decision 88/376/EEC, Euratom of
          24 June 1988 on the system of the Com-
          munities' (!) own resources, hereinafter referred
          to as 'the Decision of 24 June 1988',
          revenue earmarked for a specific purpose, such as             — Unchanged
          income from foundations, subsidies, gifts, be-
          quests,
      — contributions to Community activities from non-                 — Unchanged
          Member States or various bodies,
      — revenue from third parties in respect of work                   — Unchanged
          carried out at their request.
      3. The total appropriations referred to in para-                  Paragraph 3 is deleted
      graph 2 shall be represented by the appropriations
      for payments.
      4. The Commission may accept any donation                         Paragraph 4 is renumbered paragraph 3
      made to the Communities, and in particular
      foundations, subsidies, gifts and bequests.
 ---pagebreak--- No C 193/20                           Official Journal of the European Communities                                 31. 7. 89
                     INITIAL PROPOSAL                                               AMENDED PROPOSAL
     The Commission may accept donations which may
     involve some financial charge only subject to prior
     authorization from Parliament and the Council,
     which shall act on the matter within two months of
     the date of receipt of the request from the
      Commission. If no objection has been made within
     this period, the Commission shall take a final
     decision in respect of acceptance.
      (!) OJ No L 185, 15. 7. 1988, p. 24.'
7.   Article 4 is renumbered Article 5. The present text is
     numbered paragraph 1 and the following para-
     graph 2 is added:
     '2. No expenditure may be committed or author-
     ized in excess of the authorized appropriations,
     without prejudice to Article 27(2).'
     Article 5 is renumbered Article 6. It is replaced by the
     following:
     'Article 6
     The financial year shall run from 1 January to
     31 December.
    The revenue of a financial year shall be entered in the
     accounts for the financial year on the basis of the
    amounts collected during the financial year, with the
    exception of the own resources for the month of
    January of the next financial year, in respect of
    which advance payment may be made pursuant to
    Article 10(2) of Council Regulation (EEC, Euratom,
    ECSC) No 2891/77 of 19 December 1977 im-
    plementing the Decision of 21 April 1970 on the
    replacement of financial contributions from
    Member States by the Communities' own re-
    cnnrrpc   Mi
    The readjustment of entries in respect of value added             The readjustment of entries in respect of value added
    tax own resources and, if appropriate, of financial               tax own resources, the additional GNP-based
    contributions, shall be carried out in accordance                 resource and, if appropriate, financial contributions
    with the third subparagraph of Article 10(3) of the               shall be carried out in accordance with the third
    abovementioned Regulation.                                        subparagraph of Article 10(3) of the abovemen-
                                                                      tioned Regulation.
    The alloted appropriations shall be used solely to
    cover expenditure properly entered into and paid in
    the financial year for which they were granted, save
    as otherwise provided in Articles 7 and 104, and to
    cover the debts relating to preceding financial years
    for which no appropriation was carried forward.
    The commitments shall be entered in the accounts of
    the basis of the commitments contracted up to
    31 December.
 ---pagebreak--- 31. 7. 89                                Official Journal of the European Communities                          No C 193/21
                       INITIAL PROPOSAL                                                AMENDED PROPOSAL
      The expenditure of a financial year shall be entered
      in the accounts for that year on the basis of the
      expenditure for which authorization reached the
      financial controller not later than 31 December and
      the accounting officer not later than the following
      10 January, and for which payment was effected by
      the accounting officer not later than 15 January.
      Notwithstanding the two preceding subparagraphs,
      the expenditure of the EAGGF Guarantee Section,
      shall be taken into account for a financial year in
      accordance with the rules laid down in Article 102.
      (!) OJ No L 336, 27. 12. 1977, p. 1.'
9.    Article 6 is renumbered Article 7.
      (a) Paragraph 1 is replaced by the following:
          ' 1. In the case of budget headings where there is
          no distinction between commitment appropri-
          ations and payment appropriations:
          (a) appropriations relating to remunerations and
               allowances of members and staff of the
               institutions may not be carried over;
          (b) a decision may be taken to carry over to the
               next financial year only the portion of the
               other appropriations still uncommitted at the
               close of the financial year;
           (c) appropriations in respect of payments still
               outstanding by virtue of commitments duly
               entered into before the close of the financial
               year shall be carried over automatically to the
               next financial year only.'
                                                                         The last subparagraph of Article 7(2) is replaced by
                                                                         the following:
                                                                          'The Commission shall inform the budgetary
                                                                          authority by 15 March at the latest of the decision
                                                                          taken and state, for each budget item, how the
                                                                          agreed criteria were applied to each carryover.'
 ---pagebreak--- No C 193/22                            Official Journal of the European Communities                              31. 7. 89
                     INITIAL PROPOSAL                                              AMENDED PROPOSAL
     (b) Paragraph 3 is replaced by the following:
          '3. In the case of appropriations for which a                   '3. In the case of appropriations for which a
         decision to carry over may be taken in accordance               decision to carry over may be taken in accordance
         with paragraph 1(b) above, the Commission shall                  with paragraph 1(b) above, the Commission
          submit to the budgetary authority, not later than              shall submit to the budgetary authority, not later
          15 February, the duly substantiated requests to                than 15 February, the duly substantiated requests
         carry over appropriations made by Parliament,                   to carry over appropriations made by Parliament,
         the Council, the Court of Justice, the Court of                 the Council, the Court of Justice, the Court of
         Auditors and by the Commission itself.                          Auditors, the Economic and Social Committee
                                                                         and by the Commission itself.'
         The Council shall consult Parliament and, acting                — Unchanged
         by qualified majority, shall decide on the requests
         to carry over appropriations in respect of
         expenditure necessarily resulting from the
         Treaties or acts adopted in accordance therewith.
         Parliament shall consult the Council and act on                 — Unchanged
         the requests to carry over appropriations in
         respect of expenditure other than that necessarily
         resulting from the Treaties or acts adopted in
         accordance therewith.
         If no decision is taken by the budgetary authority              — Unchanged
         within six weeks, the requests to carry over
         appropriations shall be deemed to have been
         approved.'
     (c) Paragraph 4 is replaced by the following:
         '4. Unused revenue and appropriations avail-
         able at 31 December arising from the specific
         revenue referred to in Article 4(2) shall be carried
         over automatically.'
    (d) Paragraph 5 is replaced by the following:
         '5. The following appropriations shall lapse at                 '5. The following appropriations shall lapse at
         the end of the year:                                            the end of the year:
         (a) appropriations from the previous financial                  (a) appropriations from the previous financial
             year:                                                           year:
             — appropriations carried over by decision of                    — carried over by decision of the budgetary
                the budgetary authority under parag-                            authority under paragraph 1(b) which
                raph 1(b) which have been neither com-                          have been neither committed nor paid,
                mitted nor paid,
             — appropriations carried over automatically                     — carried over automatically under para-
                under paragraph 1(c) which have not been                        graph 1(c) which have not been paid,
                paid,
             — commitment appropriations and payment                         — carried over by the Commission under
                appropriations carried over by the Com-                         paragraph 2 and remaining unused at the
                mission under paragraph 2 and remaining                         end of the financial year;
                unused at the end of the financial year;
 ---pagebreak--- 31. 7. 89                              Official Journal of the European Communities                                 No C 193/23
                      INITIAL PROPOSAL                                                 AMENDED PROPOSAL
           (b) appropriations of the financial year which                    (b) appropriations of the financial year which
               have not been carried over.'                                      have not been carried over.'
                                                                             The last subparagraph of Article 7(2) is replaced
                                                                             by the following:
                                                                             'The Commission shall inform the budgetary
                                                                            authority by 15 March at the latest of the
                                                                            decision taken and state, for each budget item,
                                                                            the reasons for making these appropriations
                                                                            available again.'
                                                                            The following paragraph 7 is added (*):
                                                                            '7. Revenue from the repayment, by recipients
                                                                            of Community aid, of payments on account shall
                                                                            be entered in suspense accounts.
                                                                            At the beginning of each financial year the
                                                                            Commission shall examine the volume of this
                                                                            revenue and assess, in the light of requirements,
                                                                            the need for reuse under the heading to which the
                                                                            initial expenditure was charged.
                                                                            The Commission shall take this decision by
                                                                            15 February of each financial year, and shall
                                                                            inform the budgetary authority by 15 March of
                                                                            the decision taken.
                                                                            Revenue not reused shall be entered as miscella-
                                                                            neous revenue for the financial year in which it
                                                                            was entered in the accounts.'
      (e) Paragraph 7 is replaced by the following:                     (e) Paragraph 7 is renumbered paragraph 8 and is
                                                                            replaced by the following:
          '7. The revenue and expenditure account shall                     '8. The revenue and expenditure account shall
          show the automatic carryovers, the appropri-                      show :
          ations carried over by decision of the budgetary                  (a) the automatic carryovers, the appropriations
          authority, those carried over by decision of the                      carried over by decision of the budgetary
          Commission and the appropriations made avail-                         authority and those carried over by decision
          able again by the decision of the Commission                          of the Commission;
          after commitments have been cancelled.'                           (b) the appropriations made available again by
                                                                                decision of the Commission after commit-
                                                                                ments have been cancelled and sums repaid;
                                                                            (c) the appropriations which have lapsed.'
                                                                            Paragraph 8 is renumbered paragraph 9.
10.   Article 7 is renumbered Article 8, and
          the first and second paragraphs are numbered 1
          and 2,
                                                                 (!) Formerly Article 27(6) in the initial proposal.
 ---pagebreak--- No C 193/24                             Official Journal of the European Communities               31. 7. 89
                     INITIAL PROPOSAL                                             AMENDED PROPOSAL
     — the third paragraph is replaced by the following:
     '3. Expenditure relating to rents or certain as-
     sociated expenditure which is payable in advance in
     accordance with provisions laid down by law or
     contracts may give rise to payments from 20 De-
     cember onwards to be charged to the appropriations
     for the next financial year.'
11. Article 8 is renumbered Article 9. It is replaced by the
     following:
    'Article 9
     1. If the budget is not finally adopted at the                     1. Unchanged
    beginning of the financial year, Article 78b of the
    ECSC Treaty, Article 204 of the EEC Treaty and
    Article 178 of the Euratom Treaty shall apply to
    commitment and payment of expenditure already
    approved in principle in the last budget duly
    adopted.
    An item of expenditure shall be considered as having
    been approved in principle in the last budget duly
    adopted if it could have been charged to a specific
    budget heading under the financial year concerned.
    2. (a) Commitments may be entered into in respect                   2. Unchanged
            of any chapter:
            — for up to one quarter of the total appropri-
                ations entered in the relevant chapter for
                the preceding financial year, account being
                taken of all transfers, plus one twelfth for
                each completed month,
            — without exceeding the appropriations
                provided for in the draft budget or, in the
                absence thereof, in the preliminary draft
                budget.
            The global provisional commitments of the
            EAGGF Guarantee Section referred to in
            Article 100 shall be treated as commitments
            for the purposes of these provisions.
        (b) Payments may be made monthly in respect of
            any chapter:
            — up to one twelfth of the total appropri-
               ations entered in the chapter concerned for
               the preceding financial year, account being
               taken of all transfers,
               as long as this measure does not have the
               effect of placing at the disposal of the
               Commission, for any month, appropri-
               ations in excess of one twelfth of those
               provided for in the draft budget or, in the
               absence thereof, in the preliminary draft
               budget.
 ---pagebreak--- 31. 7. 89                               Official Journal of the European Communities                           No C 193/25
                      INITIAL PROPOSAL                                                AMENDED PROPOSAL
      3. The draft budget referred to in paragraphs 2(a)                3.    Unchanged
      and 2(b) above shall be the draft in the form in which
      it stands at the start of the financial year when the
      provisional-twelfths arrangements began to be
      applied.
      4. Where the absence of a budget is due to the                    4.    Unchanged
      rejection of the draft budget by Parliament, as
      provided for by Article 78(8) of the ECSC Treaty,
      Article 203(8) of the EEC Treaty and Article 117(8)
      of the Euratom Treaty, the appropriations referred
      to in the second indent of paragraph 2(a) and in the
      second indent of paragraph 2(b) shall be those
      entered in the rejected draft budget or, where
      appropriate, in the new draft budget drawn up,
      following the rejection decision, before the start of
      the financial year.
      5. If the continuity of Community activities and                  5. If the continuity of Community activities and
      administrative needs so require:                                  administrative needs so require:
      (a) for compulsory expenditure, the Council, acting               (a) for expenditure necessarily resulting from the
          by a qualified majority, may, at the request of the               Treaties or from acts adopted in accordance
          Commission and after consulting Parliament,                       therewith, the Council, acting by a qualified
          authorize simultaneously two or more provi-                       majority, may, at the request of the Commission
          sional twelfths for both commitments and                          and after consulting Parliament, authorize simul-
          payments in addition to those automatically                       taneously two or more provisional twelfths for
          made available under paragraphs 2(a) and 2(b);                    both commitments and payments in addition to
                                                                            those automatically made available under para-
                                                                            graphs 2(a) and 2(b);
      (b) for non-compulsory expenditure, the second                    (b) for expenditure other than that necessarily
          subparagraph of Article 78b(2) of the ECSC                        resulting from the Treaties or from acts adopted
          Treaty, the third paragraph of Article 204 of the                 in accordance therewith, the second subparag-
          EEC Treaty and the third paragraph of Ar-                         raph of Article 78b(2) of the ECSC Treaty, the
          ticle 178 of the Euratom Treaty shall apply.                      third paragraph of Article 204 of the EEC Treaty
                                                                            and the third paragraph of Article 178 of the
                                                                            Euratom Treaty shall apply.
          The additional twelfth shall be authorized in                     The additional twelfth shall be authorized in
          whole and may not be split.                                       whole.
          Where this procedure is to be applied, the annual                 Where this procedure is to be applied, the annual
          amount authorized for each chapter as twelfths                    amount authorized for each chapter as twelfths
          may not exceed the amount in the chapter of the                   may not exceed the amount in the chapter of the
          budget for the previous year, account being taken                 budget for the previous year, account being taken
          of transfers, or the amount in the chapter of the                 of transfers, or the amount in the chapter of the
          draft budget or, in the absence thereof, the                      draft budget or, in the absence thereof, the
          preliminary draft budget.                                         preliminary draft budget.
 ---pagebreak--- No C 193/26                          Official Journal of the European Communities                                31. 7. 89
                    INITIAL PROPOSAL                                               AMENDED PROPOSAL
     6. If, for a given chapter, the expenditure required             6. If, for a given chapter, the expenditure required
     to prevent any interruption of Community action in               to prevent any interruption of Community action in
     the sector concerned cannot be met by application of             the sector concerned cannot be met by application of
     the procedures referred to in paragraphs 2 to 5,                 the procedures referred to in paragraphs 2 to 5,
     appropriations available under the twelfths arrange-             appropriations available under the twelfths arrange-
     ments may, on a proposal from the Commission, be                 ments may, on a proposal from the Commission, be
     transferred between chapters.                                    transferred between chapters.
                                                                      This exceptional procedure may be used only to
                                                                      allow the Community to fulfil legal obligations
                                                                      towards third parties.
     Decisions on the proposal for transfer shall be taken            Unchanged
     in accordance with the procedure laid down in
     Article 78b(2) of the ECSC Treaty, Article 204 of the
     EEC Treaty and the third paragraph of Article 178 of
     the Euratom Treaty.
     If, however, in the case of transfers involving both            Unchanged
     expenditure necessarily resulting from the Treaties
     or from acts adopted in accordance therewith and
     other expenditure, the Council and Parliament
    disagree on the amount to be transferred, the smaller
    of the amounts accepted by one of the two
    institutions shall be deemed to have been approved.
    Where one of the institutions rejects the principle of
    the transfer, such transfer shall not be made.
    7. The decisions referred to in the preceding                    7.    Unchanged
    paragraphs shall specify the requisite measures in
    respect of resources for the purposes of this Article.
    8. The budgetary authority shall seek to limit the               8.    Unchanged
    period for which the system of provisional twelfths is
    applied.'
12. Article 9 is renumbered Article 10. The following
    second paragraph is added:
    'Publication shall, under normal circumstances, take             'Publication shall take place within one month of the
    place within one month of the final adoption of the              declaration that the budget has been finally ad-
    budget.'                                                         opted.'
13. Article 10 is renumbered Article 11. It is replaced by
    the following:
    'Article 11
    1.    The budget shall be drawn up in ecus.
    2. The ecu is the sum of specified amounts of the
    currencies of the Member States as set out in Council
    Regulation (EEC) No 3180/78 of 18 December 1978
    changing the value of the unit of account used by the
    European Monetary Cooperation Fund (J) (2).
 ---pagebreak--- 31. 7. 89                             Official Journal of the European Communities                         No C 193/27
                      INITIAL PROPOSAL                                             AMENDED PROPOSAL
      Any change in the composition of the ecu decided on
      in accordance with Regulation (EEC) No 3180/78,
      shall automatically apply to this provision.
      The value of the ecu in a given currency shall be
      equal to the sum of the equivalent in that currency of
      the amounts of the currencies which make up the
      ecu.
      3. The financial rights and obligations of the
      Communities shall be expressed and implemented in
      ecus.
      4. When the principle set out in the third para-
      graph cannot be complied with because of special
      derogations arising from the application of sectoral
      rules governing debts or expenditure, any conver-
      sion between the ecu and a national currency shall be
      effected in accordance with the implementing rules
      provided for in Article 128.
       (!) OJ No L 379, 30. 12. 1978, p. 1, as last amended
           by Council Regulation (EEC) No 2626/84 (OJ
           No L 247, 16. 9. 1984, p. 1).
      (2) The following amounts applied when this
           Regulation entered into force:
           — German marks: 0,719,
           — Pounds sterling: 0,0878,
           — French francs: 1,31,
           — Italian lira: 140,00,
           — Dutch guilders: 0,256,
           — Belgian francs: 3,71,
           — Luxembourg francs: 0,14,
           — Danish kroner: 0,219,
           — Irish pounds: 0,00871,
           — Greek drachmas: 1,15.'
14.   Title II: the heading is replaced by the following:
                           'TITLE II
         ESTABLISHMENT AND STRUCTURE
                    OF THE BUDGET'
15.   Section I: the heading is replaced by the following:
                         'SECTION I
            ESTABLISHMENT OF THE BUDGET'
16.   Article 11 is renumbered Article 12. It is replaced by
      the following:
      'Article 12                                                     'Article 12
      Parliament, the Council, the Court of Justice and the           Parliament, the Council, the Court of Justice, the
      Court of Auditors shall, each year before 1 July,               Court of Auditors and the Economic and Social
      draw up an estimate of their revenue and expendi-               Committee shall, each year before 1 July, draw up
      ture for the following year.                                    an estimate of their revenue and expenditure for the
                                                                      following year.
 ---pagebreak--- No C 193/28                           Official Journal of the European Communities                               31. 7. 89
                      INITIAL PROPOSAL                                              AMENDED PROPOSAL
     The Economic and Social Committee shall, before
      1 June, forward to the Council an estimate of its
     revenue and expenditure for the following year.
     These estimates shall be forwarded to the Commis-                These estimates shall be forwarded to the Commis-
     sion and, for information, to Parliament and the                 sion and, for information, to Parliament and the
     Council, no later than 1 July.'                                  Council, no later than 1 July.'
17.  Article 12 is renumbered Article 13. It is replaced by
     the following:
     'Article 13
     1. The Commission shall, in the preliminary draft                1.   Unchanged
     budget which it places before the Council not later
     than 1 September of each year, draw up a general
     statement of revenue of the Communities and
     consolidate the estimates referred to in Article 12.
    It shall at the same time forward the preliminary
    draft budget to Parliament.
    2. The Commission shall prepare a general
    introduction to the preliminary draft budget. This
    introduction shall contain in particular:
     (a) financial tables covering the entire budget; and             (a) Unchanged
     (b) as regards the Commission sections:                          (b) as regards the Commission sections:
         — a description of the policies for which the                    — a description of the policies for which the
             appropriations are requested,                                   appropriations are requested, in the light of
                                                                             the principles and requirements set out in
                                                                             Article 2,
         — an explanation of the changes in appropri-                     — an explanation of the changes in appropri-
             ations from one financial year to the next,                     ations from one financial year to the next,
         — a detailed statement on borrowing and                          — a detailed statement on borrowing and
             lending policy.                                                 lending policy.
    3. Each of the sections of the preliminary draft                  3.   Unchanged
    budget shall be preceded by an introduction
    prepared by the institution concerned. The Commis-
    sion shall prepare a single introduction to its
    sections.
    4. The preliminary draft budget shall be ac-
    companied by working documents containing the
    following information:
    (a) in respect of staff:
        — for each category of staff, a detailed list of
             budgetary posts and numbers of persons in
             post on the date of the submission of the
           . preliminary draft budget, indicating their
             distribution by grade and administrative unit
             (or principal operational unit for the es-
             tablishments of the Joint Research Centre),
        — where a change in the number of persons in                     — where a change in the number of persons in
             post is proposed and in particular the                          post is proposed, a statement in support of
             creation, regrading or conversion of posts, a                   such change;
             statement in support of such changes;
 ---pagebreak--- 31. 7. 89                              Official Journal of the European Communities                            No C 193/29
                       INITIAL PROPOSAL                                             AMENDED PROPOSAL
      (b) in respect of subsidies to the bodies set up
          pursuant to the Treaties or acts adopted in
          accordance therewith, and having legal person-
          ality, and subsidies to the European Schools, an
          estimate of revenue and expenditure prefaced by
          an explanatory statement drawn up by the bodies
          concerned.
      5. The Commission shall also attach to the
      preliminary draft budget:
      — an analysis of the financial management for the
          preceding financial year, as provided for in
          Article 81, and a balance sheet of assets and
          liabilities of the Communities as at 31 December
          of the preceding financial year, as provided for in
          Article 82, and
      — an opinion on the estimates of the other
          institutions; this opinion may contain different
          estimates, accompanied by the reasons therefor.'
18.   The following new Article 14 is inserted:
      'Article 14                                                      'Article 14
      The Commission may, on its own initiative or if                  The Commission may, on its own initiative or if
      requested by Parliament, the Council, the Court of               requested by Parliament, the Council, the Court of
      Justice or the Court of Auditors in respect of their             Justice, the Court of Auditors or the Economic and
      section, present to the Council a letter of amendment            Social Committee, in respect of their section, present
      to the preliminary draft budget necessitated by the              to the Council a letter of amendment to the
      receipt of new information which was not available               preliminary draft necessitated by the receipt of new
      at the time the preliminary draft was established.'              information which was not available at the time the
                                                                       preliminary draft was established.
                                                                       However, save in very exceptional circumstances,
                                                                       the Commission must put such letter of amendment
                                                                       to the Council at least 30 days before the first
                                                                       reading of the draft budget by Parliament, and the
                                                                       Council must put the letter to Parliament at least
                                                                       15 days before the said first reading.'
19.   The following new Article 15 is inserted:
      'Article 15
      1. In the event of unavoidable, exceptional or                   1. In the event of unavoidable, exceptional or
      unforeseen circumstances, the Commission may                     unforeseen circumstances, the Commission may
      submit preliminary draft supplementary and/or                    present preliminary draft supplementary and/or
      amending budgets.                                                amending budgets.
      Preliminary draft supplementary budget means any                 Preliminary draft supplementary budget means any
      proposal which would alter the total amount of                   preliminary draft which would either increase the
      appropriations and hence of revenue or which would               total amount of appropriations for commitments
      finance one or more new operations without,                      and/or payments or provide funds for a new
      however, increasing the total amount of appropri-                operation by increasing the total appropriations.
      ations.
 ---pagebreak--- No C 193/30                           Official Journal of the European Communities                               31. 7. 89
                    INITIAL PROPOSAL                                                AMENDED PROPOSAL
     Preliminary draft amending budget means any                      Preliminary draft amending budget means any
     proposal which would not change or would reduce                  preliminary draft which alters some of the financial
     total appropriations or revenue and which involves               or technical estimates in the budget without
     internal financial or technical changes to the budget.           entailing an increase in the total appropriations or
                                                                      providing for new operations.
     2. Preliminary draft supplementary and/or amend-                 2.   Unchanged
     ing budgets shall be subject to the provisions of
     Article 78 of the ECSC Treaty, Article 203 of the
     EEC Treaty and Article 177 of the Euratom Treaty.
     They shall be submitted, examined, established and
     finally adopted in the same form and according to
     the same procedure as the budget whose estimates
     they are amending. They must be substantiated by
     reference to the latter.
     3. All preliminary draft supplementary and/or                         Unchanged
     amending budgets must, as a general rule, be
     forwarded to the Council by the date laid down for
     the submission of the preliminary draft budget for
     the following financial year.
    The competent authorities shall discuss them in the
    light of their urgency.
    4. Requests for supplementary and/or amending                     4. Requests for supplementary and/or amending
    budgets from Parliament, the Council, the Court of                budgets from Parliament, the Council, the Court of
    Justice or the Court of Auditors shall be forwarded               Justice, the Court of Auditors or the Economic and
    by the Commission to the budgetary authority. The                 Social Committee shall be forwarded by the
    Commission may attach a dissenting opinion.                       Commission to the budgetary authority. The
                                                                      Commission may attach a dissenting opinion.
    5. Where the Commission proposes a preliminary                    5.   Unchanged
    draft supplementary and/or amending budget, the
    Council must present a draft supplementary and/or
    amending budget. However, if the Council does not
    consider it necessary to establish a draft budget, it
    shall consult with Parliament and the Commission.
    6. Preliminary draft and draft supplementary and/                 6.   Unchanged
    or amending budgets shall be accompanied by
    statements of grounds and the information available
    on the implementation of the current budget at the
    time of their establishment.
    7. Preliminary draft supplementary and/or amend-                  7.   Unchanged
    ing budgets shall take into account the transfers
    approved up to the time of their establishment.'
 ---pagebreak--- 31. 7. 89                               Official Journal of the European Communities                            No C 193/31
                      INITIAL PROPOSAL                                                AMENDED PROPOSAL
20.   Article 13 is renumbered Article 16.                         20.  Article 16 is replaced by the following:
                                                                        'Article 16
                                                                        1. The Council shall establish the draft budget in
                                                                        accordance with the procedure laid down in
                                                                        Article 78 of the ECSC Treaty, Article 203 of the
                                                                        EEC Treaty and Article 177 of the Euratom Treaty.
                                                                        The draft budget shall be forwarded by the Council
                                                                        to Parliament and placed before it not later than
                                                                        5 October. The Council shall attach to that draft
                                                                        budget an explanatory memorandum defining in
                                                                        particular its reasons for departing from the
                                                                        preliminary draft budget, if it has done so, and
                                                                        showing the allocation of appropriations proposed
                                                                        in the preliminary draft for each such budget item.
                                                                        2. Paragraph 1 shall apply mutatis mutandis to
                                                                        draft supplementary or amending budgets,
21.   Article 14 is renumbered Article 17. It is replaced by
      the following:
      'Article 17
      1. The budget shall be adopted in accordance with                 1.   Unchanged
      Article 78 of the ECSC Treaty, Article 203 of the
      EEC Treaty and Article 177 of the Euratom Treaty.
      2. Once the budget has been declared finally                      2. Once the budget has been declared finally
      adopted by the President of Parliament, each                      adopted by the President of Parliament, each
      Member State shall, from 1 January of the following               Member State shall, from 1 January of the following
      financial year or from the date of the formal                     financial year or from the date of the formal
      declaration if it is made after 1 January, be bound to            declaration if it is made after 1 January, be bound to
      make over to the Community the payments due as                    make over to the Community the payments due as
      specified in the texts implementing the Decision on               specified in Regulations ... implementing Decision
      the system of the Communities' own resources.'                    88/376/EEC, Euratom on the system of the Com-
                                                                        munities' own resources.'
22.   The following new Article 18 is inserted:
      'Article 18
      The Commission and the budgetary authority may
      agree to bring forward certain dates for the adoption
      and transmission of the preliminary draft and draft
      budgets. This agreement may not, however, have the
      effect of reducing or delaying the periods allowed for
      consideration of these texts under Article 78 of the
      ECSC Treaty, Article 203 of the EEC Treaty and
      Article 177 of the Euratom Treaty.'
 ---pagebreak--- No C 193/32                           Official Journal of the European Communities                                 31. 7. 89
                     INITIAL PROPOSAL                                               AMENDED PROPOSAL
23.  Section II: the heading is replaced by the following:
                        'SECTION II
  STUCTURE AND PRESENTATION OF THE BUDGET'
24.  Article 15 is renumbered Article 19. It is replaced by
     the following:
     'Article 19
     1.   The budget shall consist of:                                 1.  The budget shall consist of:
         a general statement of revenue,                              — a general statement of revenue,
     — a general statement of expenditure, consisting of:             — a general statement of expenditure, consisting of:
        — one part for the staff and administrative                       — one part for the staff and administrative
            expenditure of the institutions, divided into a                  expenditure of the institutions, divided into a
            section each for Parliament, the Council, the                    section each for Parliament, the Council, the
            Commission, the Court of Justice and the                         Commission, the Court of Justice, the Court
            Court of Auditors containing a statement of                      of Auditors, the Economic and Social Com-
            revenue and expenditure, and a section for                       mittee containing a statement of revenue and
            expenditure common to the institutions.                          expenditure, and a section for expenditure
                                                                             common to the institutions.
            The revenue and expenditure of the Economic
            and Social Committee shall be entered in an
            annex to the Council section and presented in
            the form of a statement of revenue and
            expenditure.
            The revenue and expenditure of the Office for                   The revenue and expenditure of the Office for
            Official Publications of the European Com-                      Official Publications of the European Com-
            munities shall be attached to the section for                   munities shall be attached to the section for
            expenditure common to all the institutions, in                  expenditure common to all the institutions, in
            accordance with Article 125(2),                                 accordance with Article 125(2);
            one part for operating expenditure, divided                   — one part for operating expenditure, divided
            into as many sections as are required.                          into as many sections as are required,
                                                                            one part containing details of borrowing and
                                                                            lending operations for information purposes.
    2. Within each section, the items of revenue and                  2.   Unchanged
    expenditure shall be classified according to their type
    or the use to which they are assigned under titles,
    chapters, articles and items.
    3. The budgetary nomenclature shall be de-                        3.   Unchanged
    termined as regards the apportionment of revenue
    and expenditure under separate titles, chapters and
    articles, during the budgetary procedure.
 ---pagebreak--- 31. 7. 89                               Official Journal of the European Communities                           No C 193/33
                     INITIAL PROPOSAL                                                AMENDED PROPOSAL
      4. Each section of the part relating to staff and                 4.    Unchanged
      administrative appropriations may include a chapter
      for 'provisional appropriations' and a 'contingency
      reserve' chapter. The appropriations entered in these
      chapters may be used only by means of transfer in
      accordance with the procedure laid down in
      Article 26.
      5. The part of the budget relating to operating                   5.    Unchanged
      expenditure shall include a section for 'provisional
      appropriations' and a 'contingency reserve'.
      This section may include a 'negative reserve' limited
      to a maximum amount of 200 million ecus. This
      reserve, which shall be entered in a separate chapter,
      may comprise both appropriations for commitments
      and appropriations for payments.
      The appropriations in this section may be utilized
      and the negative reserve applied only in accordance
      with the procedure laid down in Article 26.
      6. The section for EAGGF Guarantee Section                        6. The section for EAGGF Guarantee Section
      expenditure shall include a monetary reserve, for                 expenditure shall include a monetary reserve, for
      which the entry, utilization and financing conditions             which the entry, utilization and financing conditions
      are determined by Council Decision 88/377/EEC of                  are determined by Council Decision 88/377/EEC of
      24 June 1988 concerning budgetary discipline (*),                 24 June 1988 concerning budgetary discipline (1),
      and the Decision of 24 June 1988 and the provisions               the Decision of 24 June 1988 on the system of the
      adopted for implementing the latter.                              Communities' own resources and the provisions
                                                                        adopted for implementing the latter.
      7. In addition, the document showing all the                      7. In addition, a part showing all the borrowing
      borrowing and lending operations referred to in                   and lending operations referred to in point 5 of
      point 5 of Article 20 shall be annexed to the part                Article 20 shall be annexed to the budget.
      relating to operating expenditure.
       (!) OJ No L 185, 15. 7. 1988, p. 29.'                             (!) OJ No L 185, 15. 7. 1988, p. 29.
25.   Article 16 is renumbered Article 20. It is replaced by
      the following:
       'Article 20
      The budget shall show:
       1.   In the general statement of revenue:                         1.   Unchanged
      — the estimated revenue of the Communities for the
           financial year in question, divided into titles,
           chapters, articles and items,
      — the revenue for the preceding financial year,
           divided into titles, chapters, articles and items,
      — appropriate remarks on each subdivision.
 ---pagebreak--- No C 193/34                              Official Journal of the European Communities                                31. 7. 89
                      INITIAL PROPOSAL                                                 AMENDED PROPOSAL
     2. In the Commission sections and the section for
     each of the other institutions:
     (a) as regards the statement of revenue:                            2. (a) Unchanged
         — the estimated revenue for each institution for
             the financial year in question, divided into
             titles, chapters, articles and items, following a
             decimal classification system,
         — the revenue entered in the budget for the
             preceding financial year and the revenue
             established for the last financial year for
             which accounts have been closed, using the
             same classification,
         — appropriate remarks on each revenue head-
            ing;
     (b) as regards the statement of expenditure:                           (b) as regards the statement of expenditure:
     (ba) in the case of the various items, articles,                       (ba) in the case of the various items, articles,
           chapters and titles:                                                   chapters and titles:
          — the appropriations made available for the                            — the appropriations made available for
               financial year in question, these appropri-                           the financial year in question, these
               ations being the commitment appropri-                                 appropriations being the commitment
               ations and the payment appropriations for                             appropriations and the payment ap-
               the budget headings for which this distinc-                           propriations for the budget headings for
               tion has been agreed,                                                 which this distinction has been agreed,
          — the appropriations made available for the                            — the appropriations made available for
               preceding financial year,                                             the preceding financial year,
          — the actual expenditure in the last financial                         — the actual expenditure in the last finan-
               year for which the accounts have been                                 cial year for which the accounts have
               closed, determined as follows:                                        been closed, this being:
               — for the headings where the distinction                              — for the headings where the distinction
                   between commitment appropriations                                     between commitment appropriations
                   and payment appropriations has not                                    and payment appropriations has not
                   been made:                                                            been made:
                  — actual payments in the last financial                                — actual payments in the last finan-
                      year for which the accounts have been                                 cial year for which the accounts
                      closed plus the carryovers to the next                                have been closed plus the car-
                      financial year,                                                       ryovers to the next financial year,
              — for the headings where the distinction                               — for the headings where the distinction
                   between commitment appropriations                                     between commitment appropriations
                   and payment appropriations has been                                   and payment appropriations has been
                  made:                                                                  made:
                  — in commitments:             commitments                             — in commitments: commitments
                      entered into during the financial year                                entered into during the financial
                      against appropriations for that finan-                                year against appropriations for
                      cial year and against appropriations                                  that financial year and against
                      carried over from the preceding finan-                                appropriations carried over from
                      cial year,                                                            the preceding financial year,
 ---pagebreak--- 31. 7. 89                               Official Journal of the European Communities                        No C 193/35
                      INITIAL PROPOSAL                                             AMENDED PROPOSAL
                       in payments: payments made during                                 in payments: payments made
                       the financial year against appropri-                              during the financial year against
                       ations for that financial year and                                appropriations for that financial
                       against appropriations carried over                               year and against appropriations
                       from the preceding financial year;                                carried over from the preceding
                                                                                         financial year;
      (bb) in the case of operations covered by commit-                      (bb) appropriate remarks on each subdivi-
            ment appropriations and payment appropri-                             sion. These remarks shall include:
            ations: in the remarks column, an indicative                          — basic legal instrument, where one
            schedule of the payments for the financial year                          exists,
            concerned and subsequent financial years;                             — all such explanations as may be
                                                                                     necessary concerning the nature and
                                                                                     purpose of the appropriations,
                                                                                  — in the case of operations covered by
                                                                                     commitment appropriations and pay-
                                                                                     ment appropriations: an indicative
                                                                                     schedule of the payments for the
                                                                                     financial year concerned and sub-
                                                                                     sequent financial years;
      (be) appropriate remarks on each subdivision.                          (be) Deleted
            These remarks shall include:
            — basic legal instrument, where one exists,
                all such explanations as may be necessary
                concerning the nature and purpose of the
               appropriations.
      3.   As regards staff:
          for each section of the part of the budget for staff
          and administrative appropriations, an establish-
          ment plan setting the number of permanent and
          temporary posts for each grade in each category
          and in each service authorized within the limits of
          the budget appropriations. The staff of the
          Supply Agency shall be shown separately in the
          Commission's establishment plan,
          an establishment plan for staff paid from the
          research and technological development ap-
          propriations, classified by category and grade
          and distinguishing between permanent and non-
          permanent staff, authorized within the limits of
          the budget appropriations.
 ---pagebreak--- No C 193/36                           Official Journal of the European Communities                                 31. 7. 89
                     INITIAL PROPOSAL                                                AMENDED PROPOSAL
         As regards scientific and technical staff, the
         classification may be based on groups of grades,
         in accordance with the conditions laid down in
         each budget. The establishment plan must specify
         the number of highly qualified technical or
         scientific personnel who are accorded special
         advantages under the Staff Regulations ap-
         plicable to these officials.
         an establishment plan setting the number of posts
         for each grade in each category in:
         — the Office for Official Publications,
         — the European Centre for the Development of
             Vocational Training,
         — the European Foundation for the Improve-
             ment of Living and Working Conditions.
    The establishment plan shall show next to the
    number of posts authorized for the financial year the
    number authorized for the preceding year.
    4. The establishment plan shall constitute an
    absolute limit for each institution; no appointment
    may be made in excess of the limit set.
    In cases of half time work authorized by the
    appointing authority in accordance with Article 55a
    of the Staff Regulations of Officials of the European
    Communities, a post in a given grade may serve for
    the assignment of two officials of the same grade or
    of a lower grade. Such assignment shall automati-
    cally terminate when the authorization expires.
    5.    As regards borrowing and lending operations:                5.   As regards borrowing and lending operations:
                                                                      (a) in the general statement of revenue, the relevant
                                                                          budget headings carrying a token entry and
                                                                          accompanied by appropriate remarks;
    (a) in the appropriate section of the part for                    (b) in the appropriate section of the part for
        operating expenditure:                                            operating expenditure:
            the budget headings relating to the categories                    the budget headings relating to the categories
            of operation and carrying a token entry so                        of operation and carrying a token entry so
            long as no effective charge which has to be                       long as no effective charge which has to be
            covered by specific resources has arisen,                         covered by specific resources has arisen,
            remarks giving a reference to the legal basis                     remarks giving a reference to the legal basis
            and, where appropriate, the volume of the                         and, where appropriate, the volume of the
            operations envisaged and the financial guar-                      operations envisaged and the financial guar-
            antee given by the Communities in respect of                      antee given by the Communities in respect of
            these operations;                                                 these operations;
 ---pagebreak--- 31. 7. 89                              Official Journal of the European Communities                             No C 193/37
                      INITIAL PROPOSAL                                               AMENDED PROPOSAL
      (b) in a document annexed to the part for operating              (c) in a separate part of the budget:
          expenditure, as an indication:
          — current capital operations and current debt                    — the capital operations and debt management
              management,                                                     for the financial year in question and sub-
                                                                               sequent financial years,
          — the capital operations and debt management                     — the capital operations and debt management
              for the financial year in question.'                             for the financial year in question and sub-
                                                                               sequent financial years, including loans gran-
                                                                              ted against budget appropriations.
26.   Article 17 is renumbered Article 21.
27.   Article 18 is renumbered Article 22. Paragraph 3 is         27.  In Article 22, paragraphs 2, 3 and 4 are replaced by
      replaced by the following:                                       the following:
                                                                       '2. The requisite powers for the implementation of
                                                                       the sections of the budget relating to Parliament, the
                                                                       Council, the Court of Justice, the Court of Auditors
                                                                       and the Economic and Social Committee shall be
                                                                       conferred upon these institutions by the Commis-
                                                                       sion.
                                                                       3. In accordance with Article 2, each institution
                                                                       shall take appropriate measures, as regards both
                                                                       organization and monitoring, to ensure that it
                                                                       attains the objectives it has set itself.
      '3. With the exception of decisions overruling the               4. With the exception of decisions overruling the
      Financial Controller provided for in Articles 40, 50             Financial Controller provided for in Articles 28, 29,
      and 53, the Commission and each of the other                     40, 50 and 53, the Commission and each of the other
      institutions may delegate their powers of budgetary              institutions may delegate their powers of budgetary
      implementation in accordance with the conditions                 implementation in accordance with the conditions
      laid down by their internal rules of procedure and               laid down by their internal rules of procedure and
      within the limits which they themselves lay down in              within the limits which they themselves lay down in
      the act of delegation.                                           the act of delegation.
      Those so empowered may act only within the limits                Those so empowered may act only within the limits
      of the powers expressly conferred upon them.                     of the powers expressly conferred upon them.
      The acts of delegation shall be communicated to all              The acts of delegation shall be communicated to all
      the parties concerned in accordance with the                     the parties concerned in accordance with the
      implementing rules provided for in Article 128.'                 implementing rules provided for in Article 128.'
                                                                       Paragraph 4 is renumbered paragraph 5.
                                                                       The following new paragraph 6 is added :
                                                                       6. As regards the management of budgetary
                                                                       headings in the section on expenditure common to
                                                                       the institutions, where responsibility for implemen-
                                                                       tation does not lie with the Commission, it shall
                                                                       confer the necessary powers upon the other insti-
                                                                       tutions.
 ---pagebreak--- No C 193/38                           Official Journal of the European Communities                                 31. 7. 89
                    INITIAL PROPOSAL                                                 AMENDED PROPOSAL
28.  The following new Article 23 is inserted:
     'Article 23                                                       'Article 23
     Where revenue and expenditure operations are                     Where revenue and expenditure operations are
     managed by means of integrated computer systems,                 managed by means of integrated computer systems,
     the provisions of Sections II and III and of Title VI            the provisions of Sections II and III and of Title VI
     shall apply with due allowance for the possibilities             shall apply with due allowance for the possibilities
     and requirements deriving from computerized                      and requirements deriving from computerized
     management. To this end:                                         management. To this end:
    — the supporting documents may remain with the                    — the supporting documents may remain with the
         authorizing officer for the purposes of checking,                 authorizing officer for the purposes of checking;
                                                                          however, the financial controller and the ac-
                                                                          counting officer may ask for the original
                                                                          supporting documents if they consider them
                                                                          necessary;
    — signatures and approvals may be in appropriate                  — signatures and approvals may, with the agree-
         computerized form.                                               ment of the financial controller and the account-
                                                                          ing officer, be in appropriate computerized from.
    The conditions for implementing this Article shall be             The conditions for implementing this article shall be
    determined by the implementing rules provided for                 determined by the implementing rules provided for
    in Article 128.'                                                  in Article 128.'
29. Article 19 is renumbered Article 24. It is replaced by
    the following:
    'Article 24
    Each institution shall appoint a financial controller.            Unchanged
    He shall be responsible for monitoring:
    — the commitment and authorization of all ex-
        penditure,
    — the establishment and collection of all revenue.
    The financial controller shall be consulted on all
    accounting systems applied by the institution to
    which he is attached. He shall have access to the
    information contained in these accounts.
    Monitoring shall be carried out by that official by
    means of inspection of the files relating to expendi-
    ture and revenue and, if necessary, on the spot.
    The financial controller may be assisted in his duties
    by one or more assistant financial controllers.
    The special rules applicable to such officials, which
    shall be laid down in the implementing rules
    provided for in Article 128, shall be such as to
    guarantee that they are independent in the perform-
    ance of their duties. Their appointment, their
    promotion and disciplinary rules or transfer, and
    any interruption or termination of appointment by
    whatever procedure shall be the subject of reasoned
    decisions to be forwarded, for information, to
    Parliament, the Council, the Commission and the
    Court of Auditors.
 ---pagebreak--- 31. 7. 89                               Official Journal of the European Communities                         No C 193/39
                      INITIAL PROPOSAL                                                AMENDED PROPOSAL
      The persons concerned and the institutions to which               The persons concerned and the institutions to which
      they belong may institute proceedings before the                  they belong may institute proceedings before the
      Court of Justice.'                                                Court of Justice. When the proceedings concern the
                                                                        independence of the financial controller, he shall
                                                                        have the right to claim the legal costs from his
                                                                        institution.'
30.   Article 20 is renumbered Article 25. It is replaced by
      the following:
      'Article 25
      In each institution, the collection of revenue and the
      payment of expenditure shall be carried out by an
      accounting officer.
      The accounting officer shall be appointed by the
      institution.
      Without prejudice to the system provided for in
      Articles 4 and 5 of Council Regulation (EEC)
      No 729/70 of 21 April 1970 on the financing of the
      common agricultural policy (1), and subject to the
      second paragraph of Article 54 on payments
      procedures, to Article 55 on imprests and to
      Article 112 on the financing of external aid of this
      Regulation, the accounting officer alone is empo-
      wered to manage monies and other assets. He shall
      be responsible for their safekeeping.
      The accounting officer shall be responsible for
      preparing the financial statements provided for in
      Articles 79, 80, 81 and 82 of this Regulation.
      He may be assisted in his duties by one or more
      assistant accounting officers, appointed under the
      same conditions as the accounting officer.
      The special rules applicable to the accounting officer
      and to assistant accounting officers shall be laid
      down in the implementing rules provided for in
      Article 128.
      (!) OJ No L 94, 28. 4. 1970, p. 13.'
31.   Article 21 is renumbered Article 26. It is replaced by
      the following:
      'Article 26
      1. Appropriations shall be earmarked for specific                 1.   Unchanged
      purposes by chapter and article.
      2. Parliament, the Council, the Court of Justice                  2.   Unchanged
      and the Court of Auditors may transfer appropri-
      ations from one chapter to another and from one
      article to another within their own sections of the
      budget.
 ---pagebreak--- No C 193/40                             Official Journal of the European Communities                                  31. 7. 89
                      INITIAL PROPOSAL                                                  AMENDED PROPOSAL
     The Court of Justice and the Court of Auditors shall                The Court of Justice, the Court of Auditors and the
     inform the budgetary authority and the Commission                   Economic and Social Committee may transfer
     three weeks before making such transfers.                           appropriations from one chapter to another and
                                                                         from one article to another within each title. They
                                                                         shall inform the budgetary authority and the
                                                                         Commission three weeks before making such
                                                                         transfers.'
     3. The Commission may, within its own sections
     of the budget:
     (a) transfer appropriations from one article to                     (a) Unchanged
         another within each chapter;
     (b) transfer appropriations from one chapter to                     (b) Unchanged
         another within each of the titles relating to staff
         and administrative expenditure. It shall inform
         the budgetary authority three weeks before
         making such transfers;
     (c) transfer payment appropriations from one chap-                  (c) Unchanged
         ter to another;
     (d) transfer appropriations entered in the chapter of               (d) transfer appropriations entered in the chapter of
         the budget containing the provisional appropri-                     the budget containing the provisional appropri-
         ations to the budget heading for which they were                    ations to the budget heading for which they were
         initially earmarked provided that the suspensive                    initially earmarked provided that the budgetary
         condition that originally gave rise to entry of the                 authority has explicitly empowered it to do so in
         appropriations in this special chapter has been                     the remarks to the budget and that the suspensive
         satisfied. It shall inform the budgetary authority                  condition that originally gave rise to entry of the
         three weeks before making such transfers.                           appropriations in this special chapter has been
                                                                             satisfied.
                                                                             The Commission shall inform the budgetary
                                                                             authority three weeks before making such
                                                                             transfers.
    4. Without prejudice to the transfers which it may                  4. Without prejudice to paragraphs 2 and 3, the
    make on its own authority in accordance with                        Commission may make proposals to the budgetary
    paragraph 3, the Commission may make proposals                      authority for transfers from one chapter to another.
    to the budgetary authority for transfers from one
    chapter to another.
                                                                        Proposals for transfers shall be accompanied by
                                                                        appropriate and detailed explanations showing the
                                                                        utilization of appropriations and the forecasts of
                                                                        needs up to the end of the year for items to which and
                                                                        from the appropriations are to be transferred.
                                                                        Proposals made by the other institutions for
                                                                        transfers from one chapter to another shall be
                                                                        automatically forwarded to the budgetary au-
                                                                        thority; the Commission may attach its opinion to
                                                                        such proposals.'
    5. The budgetary authority shall take decisions on                  5.    Unchanged
    transfers of appropriations as follows:
 ---pagebreak--- 31. 7. 89                                 Official Journal of the European Communities               No C 193/41
                       INITIAL PROPOSAL                                             AMENDED PROPOSAL
          in the case of proposals for transfers relating to
          expenditure necessarily resulting from the
          Treaties or from acts adopted in accordance
          therewith, the Council shall, after consulting
          Parliament, act by a qualified majority within six
          weeks, except in urgent cases. Parliament shall
          deliver its opinion within such time as will permit
          the Council to be apprised of it and to act within
          the time limit indicated. Where the Council does
          not act within this time limit, the proposals for
          transfers shall be deemed to be approved;
      (b) in the case of proposals for transfers relating to
          expenditure other than that necessarily resulting
          from the Treaties or from acts adopted in
          accordance therewith, Parliament shall, after
          consulting the Council, act within six weeks,
          except in urgent cases. The Council shall deliver
          its opinion within such time as will permit
          Parliament to be apprised of it and to act within
          the time limit indicated. Where Parliament does
          not act within this time limit, the proposals for
          transfers shall be deemed to be approved;
          proposals for transfers relating both to expendi-
          ture necessarily resulting from the Treaties or
          from acts adopted in accordance therewith, and
          to other expenditure shall be deemed to be
          approved if neither the Council nor Parliament
          has decided otherwise within six weeks of the
          date on which the two institutions received the
          proposals;
      (d) if, in the case of proposals for transfers referred to
          in (c), Parliament and the Council reduce the
          proposal for a transfer by different amounts,
          whichever is the smaller of the amounts accepted
          by one of the two institutions shall be deemed to
          be approved. Where only one of the institutions
          rejects the principle of the transfer, such transfer
          shall not be made.
      6. For the purposes of this Article the Commission                  6. Unchanged
      sections shall be treated as a single section.
      7. Only appropriations for the current financial                    7. Unchanged
      year may be transferred. By way of exception,
      appropriations carried over may be transferred by a
      decision of the budgetary authority in accordance
      with paragraph 5.
 ---pagebreak--- No C 193/42                           Official Journal of the European Communities                  31. 7. 89
                      INITIAL PROPOSAL                                             AMENDED PROPOSAL
     8. Appropriations may also be transferred, by                    8.    Unchanged
     decision of the budgetary authority, between
     headings where a distinction is made between
     commitment appropriations and payment appropri-
     ations and headings where no such distinction is
     made.
     9. Every proposal for a transfer within a chapter or             9.    Unchanged
     from one chapter to another shall be subject to the
     approval of the financial controller, who shall certify
     that the appropriations are available.
     10. Appropriations may be transferred only to                    10.    Unchanged
     budget headings for which the budget has authorized
     appropriations or carried a token entry.
     11. This Article shall apply to the appropriations               11.    Unchanged
     corresponding to revenue earmarked for a specific
     purpose under Article 4(2) only as long as the
     revenue is not used for any other purpose.
     12. Transfers within the titles of the budget                    12.    Unchanged
     devoted to the European Agricultural Guidance and
     Guarantee Fund, Guarantee Section shall be the
     subject of special provisions under Article 105.
     13. As regards the section for expenditure common                13.    Unchanged
     to all the institutions, the Commission may, without
     prejudice to the provisions of Article 125, transfer
     appropriations from one chapter to another within
     the same title, and from one article to another. It
     shall inform the budgetary authority three weeks
     before making such transfers.'
32.  Article 22 is renumbered Article 27:
     (a) In the first subparagraph of paragraph 1, the
         reference 'from Article 3' is replaced by 'from
         Article 4'.
     (b) Paragraph 2 is replaced by the following:
         '2. Notwithstanding Articles 4 and 5, the
         following sums may be reused under the heading
         to which the initial expenditure was charged:
         (a) revenue arising from the refund of amounts                   (a) Unchanged
             paid in error against budget appropriations;
         (b) proceeds from the supply of goods and                        (b) Unchanged
             services to other institutions or bodies,
             including refunds by such institutions or
             bodies of mission allowances paid on their
             behalf;
         (c) insurance payments received;                                 (c) Unchanged
 ---pagebreak--- 31. 7. 89                                 Official Journal of the European Communities                           No C 193/43
                      INITIAL PROPOSAL                                                     AMENDED PROPOSAL
          (d) revenue from the sale of buildings or sums                         (d) revenue from sums connected with lettings;
              connected with lettings;
          (e) revenue from the sale of publications and                          (e) Unchanged
              films;
          (f) refunds of taxes — incorporated in the price                       (f) Unchanged
              of the products or services provided to the
              Communities — effected by Member States
              pursuant to the provisions of the Protocol on
              the Privileges and Immunities of the European
              Communities;
          (g) revenue from the supply of goods and services                      (g) Unchanged
              against payment;
          (h) proceeds from the sale of vehicles, equipment                      (h) Unchanged
              and installations and scientific and technical
              apparatus, equipment and materials which
              are being replaced or scrapped.
          Such sums must be reused before the end of the
          financial year following that in which the revenue
          was collected.
          The chart of accounts shall include suspense
          accounts to record reuse operations in both
          revenue and/or expenditure.'
      (c) In paragraph 3, the reference 'Article 3' is
          replaced by 'Article 4'.
      (d) Paragraphs 4 and 5 are replaced by the following:
          '4. Notwithstanding Article 4, adjustments                            4.    Unchanged
          must be made in respect of exchange differences
          occurring in budget operations. The final gain or
          loss shall be included in the balance for the year.
          5. In the cases referred to in paragraphs 1(c)                        5.    Unchanged
          and 2(b), (d), (e), (g) and (h), reuse and deduction
          shall be possible only if provision therefor is
          made in the remarks column in the budget.
          6. Revenue from the repayment of advances                             Paragraph 6 is deleted (*).
          made by recipients of Community aid shall be
          entered in suspense accounts.
                                                                     (J) Provision transferred to Article 7(7).
 ---pagebreak--- No C 193/44                             Official Journal of the European Communities                                  31. 7. 89
                     INITIAL PROPOSAL                                                   AMENDED PROPOSAL
         At the beginning of each financial year the
          Commission shall examine the volume of this
         revenue and assess, in the light of requirements,
         the need for reuse under the heading to which the
         initial expenditure was charged.
         The Commission shall take this decision by
          15 February of each financial year, and shall
         inform the budgetary authority by 15 March of
         the decision taken.
         Revenue not reused shall be entered as miscella-
         neous revenue for the financial year in which it
         was entered in the accounts.'
33.  Article 23 is renumbered Article 28.
     (a) In the first subparagraph of paragraph 1, the
         second sentence is replaced by the following:
         'Such proposals shall be sent to the financial
         controller of the institution for his approval and
         to the accounting officer for provisional regis-
         tration.'
                                                                        In the first subparagraph of paragraph 1, point (b) is
                                                                        replaced by the following:
                                                                        '(b) the proposal is in order and conforms to the
                                                                               relevant provisions, in particular of the budget
                                                                               and of the regulations and also of all acts made
                                                                               in implementation of the Treaties and of the
                                                                               Regulations, and to the principles of sound
                                                                               financial management referred to in Article 2.'
     (b) In the final sentence of the final subparagraph of
         paragraph 1, 'every three months' is replaced by
         'within one month'.
                                                                        In the second subparagraph of paragraph 2, point (f)
                                                                        is replaced by the following:
                                                                        '(f) the order conforms to the principles of sound
                                                                             financial management referred to in Article 2 ; '
34.  Article 24 is renumbered Article 29.
     (a) The following sentence is added to the third
         subparagraph of paragraph 1:
         'If necessary, he shall initiate the recovery
         procedure.'
                                                                             The second subparagraph of paragraph 2 is
                                                                             replaced by the following:
                                                                             'The purpose of the approval of the financial
                                                                             controller shall be to establish that the waiver is
                                                                             in order and conforms with the principles of
                                                                             sound financial management referred to in
                                                                             Article 2. The proposal concerned shall be
                                                                             registered by the accounting officer.'
 ---pagebreak--- 31. 7. 89                                 Official Journal of the European Communities                                        No C 193/45
                       INITIAL PROPOSAL                                                      AMENDED PROPOSAL
      (b) In the final sentence of the third subparagraph of              (b) Unchanged
           paragraph 2, 'every three months' is replaced by
           'within one month'.
35.   Article 25 is renumbered Article 30.
36.   Article 26 is renumbered Article 31.                                'Article 31
      The reference 'in Article 4(2) and (3) of the Decision              Estimates of the own resources and, if appropriate,
      of 21 April 1970' is replaced by 'in Article 2(7) of the            of the c o n t r i b u t i o n s referred t o in Article 2(7) of the
      Decision of 24 June 1988'.                                          Decision of 24 June 1988 shall be entered in the
                                                                          budget expressed in ecus. They shall be made
                                                                          available          in        accordance        with     Regulation
                                                                          (EEC) N o . . . '
37.   Article 27 is renumbered Article 32. It is replaced by
      the following:
      'Article 32                                                         'Article 32
      The balance from each financial year, calculated in                 The balance from each financial year shall be entered
      accordance with Article 15 of Council Regulation                    as revenue in the case of a surplus or as expenditure
       (EEC, Euratom, ECSC) No 2891/77, shall be entered                  in the case of a deficit in the budget of the following
      as revenue in the case of a surplus or expenditure in               financial year.
      the case of a deficit in a supplementary or amending
      budget in the following financial year.'
                                                                          For this purpose, appropriate estimates of such
                                                                          revenue or expenditure shall be entered in the
                                                                          budget. Such estimates shall be made in accordance
                                                                          with the principles set out in Article 15 of Council
                                                                          Regulation ...
                                                                          The headings concerned, either on the revenue side
                                                                          or on the expenditure side, shall be adjusted after
                                                                          closure of the accounts for the year in question by
                                                                          means of a supplementary or amending budget.
                                                                          This procedure shall apply without prejudice to the
                                                                          decision granting discharge.'
38.   Article 28 is renumbered Article 33.
       (a) Paragraph 1 is replaced by the following:
           ' 1 . The contributions for the financing of                       1. The contributions for the financing of
           certain supplementary research programmes                          certain supplementary research programmes
           provided for in Article 11(2) (c) of the Decision of               provided for in Article ll(2)(c) of Decision 88/
           24 June 1988 shall be paid over as follows:                        376/EEC, Euratom of 24 June 1988 shall be paid
                                                                              over as follows:
           — seven twelfths of the amount shown in the
                                                                              — Unchanged
                budget not later than 31 January,
           — the remaining five twelfths not later than
                                                                              — Unchanged
                15 July.
           2. If the budget is not finally adopted before the
                                                                              2. Unchanged
           start of the financial year, the contributions
           provided for in paragraph 1 shall be based on the
           amount shown in the draft budget, as referred to
           in Article 9(3) and (4) of this Regulation or, if this
           does not exist, in the preliminary draft budget.'
 ---pagebreak---  No C 193/46                             Official Journal of the European Communities                                31. 7. 89
                       INITIAL PROPOSAL                                                AMENDED PROPOSAL
      (b) Paragraph 2 is renumbered paragraph 3.
      (c) Paragraph 3 is renumbered paragraph 4.
39.   Article 29 is renumbered Article 34. It is replaced by
      the following:
      'Article 34                                                        'Article 34
      The Commission shall, four times a year, present to                1. Once a month the Commission shall send to
      Parliament and the Council a report on the                         Parliament and the Council figures on the implemen-
      implementation of the budget and of any sup-                       tation of the budget covering both revenue and
     plementary or amending budgets and on the                           expenditure. The figures shall also cover the
      Communities' financial situation, covering both                    utilization of appropriations carried over.
      revenue and expenditure. This report shall also give
     details of the utilization of appropriations carried
     forward from previous financial years.
     This report shall at the same time be sent to the                   These figures shall be sent within 10 working days
     Court of Auditors.'                                                 after the end of each month.
                                                                         2. The Commission shall, four times a year, and in
                                                                         principle after March, June, August and December,
                                                                         present to Parliament and the Council a report on the
                                                                         implementation of the budget, covering both
                                                                         revenue and expenditure and borrowing and lending
                                                                         operations. This report shall also give details of the
                                                                         utilization of appropriations carried forward from
                                                                         previous financial years.
                                                                         3. The figures and the report shall at the same time
                                                                         be sent to the Court of Auditors.'
40.  Article 30 is renumbered Article 35. It is replaced by
     the following:
     'Article 35
     The financial contributions referred to in Ar-
     ticle 11 (2) (c) of the Decision of 24 June 1988 (for the
     completion of supplementary research programmes)
     shall be converted at the rate for the ecu applying on
     the last but one working day of the month preceding
     the final date for entry in the accounts.'
41.  Article 31 is renumbered Article 36.
42.  Article 32 is renumbered Article 37.
     (a) In paragraph 2, 'Article 96' is replaced by
         'Article 100'.
     (b) In paragraph 3, 'Article 106' is replaced by
         'Article 128'.
 ---pagebreak--- 31. 7. 89                                Official Journal of the European Communities                            No C 193/47
                       INITIAL PROPOSAL                                                 AMENDED PROPOSAL
43.   Article 33 is renumbered Article 38. On the last line,             'Article 38
      'Article 106' is replaced by 'Article 128'.
                                                                         Without prejudice to the provisions of Article 23, in
                                                                         each institution, proposals for commitments, ac-
                                                                         companied by the supporting documents, shall be
                                                                         transmitted to the financial controller and to the
                                                                         accounting officer: they shall show, in particular,
                                                                         the purpose of the expenditure, the estimated
                                                                         amount involved, indicating the currency where
                                                                         possible, the budget item to which it is to be charged
                                                                         and also the name and description of the creditor;
                                                                         they shall be registered, after approval by the
                                                                         financial controller, in accordance with the im-
                                                                         plementing measures provided for in Article 128.'
44.   Article 34 is renumbered Article 39.
      (a) The first paragraph is renumbered paragraph 1.                     Unchanged
                                                                             In paragraph 1, point (d) is replaced by the
                                                                             following:
                                                                             (d) the principles of sound financial management
                                                                                 referred to in Article 2 have been applied.'
      (b) The following paragraph 2 is added:                            (b) Unchanged
          '2.   Approval may not be conditional.'
      (c) The second paragraph is renumbered para-                       (c) Unchanged
          graph 3.
45.   Article 35 is renumbered Article 40.
      (a) In the first paragraph, 'Article 34' is replaced by
          'Article 39(1)'.
      (b) In the second paragraph, the phrase 'in the first
          two paragraphs of Article 18' is replaced by 'in
          the first two paragraphs of Article 22'.
      (c) In the final sentence of the final paragraph, 'every
          three months' is replaced by 'within one month'.
46.   Article 36 is renumbered Article 41.
47.   Article 37 is renumbered Article 42.
      (a) In paragraph 1, 'Article 106' is replaced by
          'Article 128'.
      (b) Paragraph 2 is deleted.
      (c) Paragraph 3 is renumbered paragraph 2.
48.   Article 38 is renumbered Article 43.
49.   Article 39 is renumbered Article 44.
50.   Article 40 is renumbered Article 45. The third indent
      is replaced by the following:
      '— the amount to be paid (in figures and words),
           expressed in ecus or in national currency.'
 ---pagebreak---  No C 193/48                            Official Journal of the European Communities                                 31. 7. 89
                      INITIAL PROPOSAL                                                 AMENDED PROPOSAL
 51.  Article 41 is renumbered Article 46. In the first
      paragraph 'Article 106' is replaced by 'Article 128'
      and 'Article 59' is replaced by 'Article 66\
 52.  Article 42 is renumbered Article 47.                                'Article 47
      (a) The second paragraph is replaced by the follow-                 1. The authorizing officer may make payments on
          ing:                                                           account in accordance with the regulations
                                                                         governing operational policies or the stipulations in
                                                                         contracts.
          'The authorizing officer may grant advances if                 In this case, the first payment order shall be
          the Staff Regulations or the rules governing the               accompanied by documents establishing the credi-
          policy concerned specifically provide therefor.'               tor's claim to the payment in question. Subsequent
                                                                         payment orders shall refer to the supporting
                                                                         documents already furnished, and repeat the re-
                                                                         ference number of the first payment order.
      (b) In the third paragraph 'Article 106' is replaced by            2. The authorizing officer may grant advances to
          'Article 128'.                                                 personnel if the Staff Regulations or a provision laid
                                                                         down by regulation specifically provide therefor.
      (c) In the fourth paragraph 'Article 49' is replaced by            The authorizing officer may grant advances to cover
          'Article 55\                                                   disbursements to be effected by an official or other
                                                                         member of staff on behalf of his institution. The
                                                                         implementing conditions for this subparagraph shall
                                                                         be determined by the implementing rules provided
                                                                         for in Article 128.
                                                                         Apart from the imprest accounts referred to in
                                                                         Article 55, no advance may be paid unless it has been
                                                                         approved beforehand by the financial controller.'
53.  The following new Article 48 is inserted:
     'Article 48                                                        'Article 48
     Interest shall be due, in accordance with the                      Interest shall be due from the date specified in the
     implementing rules provided for in Article 128, on                 request for repayment, in accordance with the
     any amount paid to recipients of Community aid:                    implementing rules provided for in Article 128, on
                                                                        any amount paid to recipients of Community aid:
     — either as an advance,                                            — either as a payment on account,
     — or under the normal payment procedure,                           — or under the normal payment procedure,
     which gives rise to repayment to the general budget.'              which gives rise to repayment to the general budget.'
54.  Article 43 is renumbered Article 49.
                                                                        The first paragraph is replaced by the following:
                                                                        'Without prejudice to the provisions of Article 23,
                                                                        payment orders shall be sent for prior approval to
                                                                        the financial controller.'
 ---pagebreak--- 31. 7. 89                                Official Journal of the European Communities                             No C 193/49
                        INITIAL PROPOSAL                                                AMENDED PROPOSAL
                                                                          In the second paragraph, point (b) is replaced by the
                                                                          following:
                                                                          '(b) the payment order agrees with the commitment
                                                                                of expenditure and that the amount thereof is
                                                                                correct, with due allowance for the principles
                                                                                and requirements of sound financial manage-
                                                                                ment referred to in Article 2 ; '
55.    Article 44 is renumbered Article 50. The reference
       'Article 35' is replaced by 'Article 40'.
56.    Article 45 is renumbered Article 51.                               'Article 51
                                                                          After approval, the original of the payment order,
                                                                          together with all supporting documents, shall be sent
                                                                          to the accounting officer. The accounting officer
                                                                          shall be responsible for keeping the original
                                                                          supporting documents and accounting records.'
57.   Article 46 is renumbered Article 52.
58.   Article 47 is renumbered Article 53.
59.   Article 48 is renumbered Article 54. In the second
      paragraph 'Article 106' is replaced by 'Article 128'.
60.   Article 49 is renumbered Article 55.
       (a) In the first paragraph 'Article 106' is replaced by
           'Article 128'.
      (b) The following new second paragraph is added:
           'Only the accounting officer may replenish the
           imprest accounts, save in exceptional cases
           defined in the implementing rules.'
      (c) The second paragraph becomes the third para-
           graph.
61.   The following new section is inserted:
                          'SECTION IV
                 MANAGEMENT OF POSTS'
62.   The following new Article 56 is inserted:
      'Article 56                                                        'Article 56
      Within each institution the following shall be                     Within each institution shall be established:
      established:
      (a) an establishment plan;                                         (a) an establishment plan;
      (b) an organization chart showing the organization                 (b) an organization chart showing the organization
           of the departments.'                                              of the departments and the tasks of each
                                                                             administrative unit;
                                                                         (c) a departmental guide showing in appropriate
                                                                             manner who is responsible for the main ac-
                                                                             tivities.'
 ---pagebreak--- No C 193/50                               Official Journal of the European Communities                                31. 7. 89
                      INITIAL PROPOSAL                                                  AMENDED PROPOSAL
63.  In Title IV, the title of Section I is replaced by the
     following:
                         'SECTION I
    CONTRACTS FOR THE SUPPLY OF GOODS AND
 SERVICES; CONTRACTS FOR PURCHASE, LEASE AND
                            HIRE'
64.  Article 50 is renumbered Article 57. Paragraph 1 is
     replaced by the following:
      ' 1 . Contracts for the purchase or hiring of
     buildings or goods, for the provision of services or
     for the performance of construction work shall be in
     writing. Apart from contracts relating to the
     purchase of a building already constructed or to the
     leasing of a building, all such contracts shall be
     concluded after an invitation to tender has been
     issued either by the automatic public tendering
     procedure or the discretionary tendering procedure.
     However, contracts may be made by private treaty in
     the circumstances referred to in Article 59.
     Contracts may be made against invoice or bill of
     costs in cases provided for in Article 64.'
65.  Article 51 is renumbered Article 58. In paragraph 3
     'Article 106' is replaced by 'Article 128'. .
66.  Article 52 is renumbered Article 59.
      (a) In point (a), 'where the contract ... involves an
           amount not exceeding 6 500 ecus' is replaced by
           the phrase 'within the limit laid down in the
           implementing rules provided for in Article 128'.
      (b) In point (b) 'Article 51' is replaced by 'Article 58'.
67.  Article 53 is renumbered Article 60.
68.  Article 54 is renumbered Article 61. It is replaced by
     the following:
     'Article 61                                                          'Article 61
     Each institution shall set up its own advisory                       For contracts exceeding an amount specified in the
     committee on procurements and contracts to express                   implementing rules provided for in Article 128, an
     an opinion on contracts before the authorizing                       advisory committee on procurements and contracts
     officer takes the decision.                                          shall, in each institution, express an opinion before
                                                                          the authorizing officer takes a decision.
     If required, an advisory committee on procurements                   If required an advisory committee on procurements
     and contracts common to all the institutions may be                  and contracts common to all the institutions may be
     set up.                                                              set up.
     Details of the operation of these committees and the                 Details of the operation of these committees shall be
     limit values for the contracts of which they are to be               laid down in the implementing rules provided for in
     consulted shall be laid down in the implementing                     Article 128.'
     rules provided for in Article 128.'
 ---pagebreak--- 31. 7. 89                               Official Journal of the European Communities                No C 193/51
                      INITIAL PROPOSAL                                             AMENDED PROPOSAL
69.   Article 55 is renumbered Article 62. In the first
      paragraph 'Article 54' is replaced by 'Article 61'.
70.   Article 56 is renumbered Article 63. The third
      paragraph is replaced by the following:
      'Beyond the limit laid down by the implementing
      rules provided for in Article 128, the provision of
      security shall be obligatory. A guarantee may be
      retained until final acceptance.'
71.   Article 57 is renumbered Article 64. It is replaced by
      the following:
      'Article 64
      Contracts may be made against invoice or bill of
      costs within the limits laid down by the implement-
      ing rules provided for in Article 128.'
72.   Article 58 is renumbered Article 65. It is replaced by
      the following:
      'Article 65
      Without prejudice to the provisions laid down in this
      Financial Regulation, when concluding contracts
      referred to in this Regulation, each institution shall
      comply with the Council Directives (*) on public
      works and supplies, whenever the amounts involved
      are equal to or greater than the amounts provided for
      in those Directives.
      The implementing rules provided for in Article 128
      shall include the supplementary provisions which
      may be required in order to implement this article.
      (!) The following Directives were in force at the time
          this Regulation was drawn up:
          (a) public works :
              Directive 71/305/EEC of 26 July 1971 (OJ No
              L 185, 16. 8. 1971, p. 5), as amended by
              Directive 78/669/EEC of 2 August 1978 (OJ
              No L 225, 16. 8. 1978, p. 41).
          (b) supplies:
              Directive 77/62/EEC of 21 December 1976
              (OJ No L 13,15. 1. 1977, p. 1), as amended by
              Directive 80/767/EEC of 22 July 1980 (OJ No
              L 215, 18. 8. 1980, p. 1).'
73.   Article 59 is renumbered Article 66:
      (a) In the first paragraph, 'permanent quantitative
          inventories' is replaced by 'permanent inven-
          tories showing the quantity and value'.
      (b) In the final paragraph, the following phrase is
          added:
          'in accordance with the implementing rules
          provided for in Article 128.'
 ---pagebreak---  No C 193/52                           Official Journal of the European Communities                                31. 7. 89
                     INITIAL PROPOSAL                                                AMENDED PROPOSAL
74.   Article 60 is renumbered Article 67. In the first
      paragraph, 'Article 106' is replaced by 'Article 128'.
75.   Article 61 is renumbered Article 68. In the first
      paragraph the phrase 'disposed of is replaced by
      'sold, given away free of charge, ...'.
76.   Article 62 is renumbered Article 69. In the first
      paragraph, 'Article 59' is replaced by 'Article 66\
77.   Article 63 is renumbered Article 70. In the last
      sentence, the phrase 'in European units of account' is
      replaced by 'in ecus'.
78.  Article 64 is renumbered Article 71. It is replaced by
     the following:
     'Article 71
     The chart of accounts shall make a clear distinction
     between budgetary accounts and cash accounts.
     It shall comprise two parts:
     (a) accounts of budgetary expenditure and revenue,
         which show the detailed implementation of the
         budget;
     (b) the balance sheet accounts, which disclose the
         assets of the institutions. These accounts shall
         show the expected effect of the Communities'
         legal obligations.
     The detailed conditions for the establishment and
     operation of the chart of accounts for transactions
     relating both to assets and to the implementation of
     the budget shall be determined by the implementing
     rules provided for in Article 128.
     These accounts shall make it possible to draw up an
     annual balance of assets and a monthly statement of
     revenue and expenditure by chapter and article.
     These statements shall be forwarded to the financial
     controller, the authorizing officer and the Court of
     Auditors.'
79.  Article 65 is renumbered Article 72.                              'Article 72
     (a) In the first paragraph, 'Articles 96 and 102' is              Except for the advances referred to in Article 100,
         replaced by 'Article 100'.                                    any advance as referred to in Article 47(2), other
                                                                       than regular advances which are periodically re-
                                                                       examined, shall be entered in a non-budget suspense
                                                                       account and settled at the latest during the financial
                                                                       year which follows the payment of this advance.
     (b) In the second paragraph, 'Article 42' is replaced             However, the advances referred to in the second
         by 'Article 47'.                                              subparagraph of Article 47(2) shall be settled as a
                                                                       general rule within six weeks following completion
                                                                       of the project for which they were granted.'
 ---pagebreak--- 31. 7. 89                              Official Journal of the European Communities                            No C 193/53
                      INITIAL PROPOSAL                                                AMENDED PROPOSAL
80.   Article 66 is repealed.
81.   Article 61 is renumbered Article 73.
82.   Article 68 is renumbered Article 74. The following               'Article 74
      sentence is added:
      'The same shall apply if they neglect to issue                   The same shall apply if, for instance, they neglect to
      payment orders or are, without justification, late in            issue payment orders or are, without justification,
      issuing them, thereby rendering the institution liable           late in issuing them, thereby rendering the institution
      to civil action by third parties.'                               liable to civil action by third parties.'
83.   Article 69 is renumbered Article 75.
84.   Article 70 is renumbered Article 76.
      (a) In the first subparagraph of paragraph 1, 'the
          third paragraph of Article 46' is replaced by 'the
          third paragraph of Article 52'.
      (b) In paragraphs 3 and 5, 'Article 106' is replaced by
          'Article 128'.
      (c) The third and fourth subparagraphs of para-
          graph 3 are numbered paragraph 4.
      (d) Paragraph 4 is renumbered paragraph 5.
85.   Article 71 is renumbered Article 77.
86.   Article 72 is renumbered Article 78.
87.   Article 73 is renumbered Article 79.
      (a) The introductory words and point 1 are replaced
          by the following:
          'The Commission shall draw up, not later than                    'The Commission shall draw up, not later than
          1 May of the following year, a consolidated                      1 May of the following year, a consolidated
          revenue and expenditure account of the general                   revenue and expenditure account of the general
          budget of the European Communities for the                       budget of the European Communities for the
          financial year ended 31 December. The con-                       financial year ended 31 December. The con-
          solidated revenue and expenditure account shall                  solidated revenue and expenditure account shall
          include:                                                         include:
          1.   a table of revenue comprising:                              1.   a table of revenue comprising:
             — estimated revenue for the financial year,                       — estimated revenue for the financial year,
             — amendments to the revenue estimates as a                        — amendments to the revenue estimates as a
                 result of supplementary or amending                              result of supplementary or amending
                 budgets and additional revenue as spe-                           budgets and additional revenue as spe-
                 cified in the second subparagraph of                             cified in the second subparagraph of
                 Article 4(2),                                                    Article 4(2),
             — entitlements established in the course of                       — entitlements established in the course of
                 the financial year,                                              the financial year,
             — entitlements still to be collected from the                    — entitlements still to be collected from the
                 preceding financial year,                                        preceding financial year,
             — revenue collected during the financial year                    — revenue collected during the financial year
                 and revenue carried over pursuant to                             and revenue carried over pursuant to
                 Article 7(4),                                                    Article 7(4),
 ---pagebreak--- No C 193/54                               Official Journal of the European Communities                                   31. 7. 89
                       INITIAL PROPOSAL                                                   AMENDED PROPOSAL
                  amounts still to be collected at the end of                      — amounts still to be collected at the end of
                  the financial year.                                                  the financial year,
                                                                                       established entitlements which have been
                                                                                       cancelled.
              Statements shall be attached to this table                           'Statements shall be attached to this table
              showing revenue carried over pursuant to                             showing revenue carried over pursuant to
              Article 7(4) and, where appropriate, the                             Article 7(4) and, where appropriate, the
              balance and gross amounts of the operations                          balance and gross amounts of the operations
              referred to in Article 27(2);'                                       referred to in Article 27(2);
                                                                                   A statement should also be attached giving a
                                                                                   breakdown by Member State of amounts still
                                                                                   to be collected at the end of the financial year
                                                                                   in respect of own resources covered by a
                                                                                   recovery order.'
      (b) In the last indent of point 2, 'Article 6' is replaced
          by 'Article 7'.
      (c) In point 3 :
          — Fourth indent: 'Article 6' is replaced by
              'Article 7'.
          — Fifth indent: 'Article 6' is replaced by
              'Article 7'.
          — In the second paragraph, 'Article 22(2)' is
              replaced by 'Article 27(2)'.
                                                                              In point 4, the following sixth indent is added:
                                                                              '— for each financial year for which the accounts
                                                                                    have been closed, a breakdown, by item and
                                                                                    by Member State, showing the impact of
                                                                                    clearance decisions during the financial year
                                                                                    and using the budgetary nomenclature of the
                                                                                    relevant financial year.'
     Article 74 is renumbered Article 80. It is replaced by
     the following:
     'Article 80                                                          'Article 80
     Each institution shall, not later than 15 February,                  Each institution shall, not later than 1 March,
     transmit to the Commission, after submitting it to its               transmit to the Commission, after submitting it to its
     financial controller, the information required for                   financial controller, the information required for
     drawing up the revenue and expenditure account                       drawing up the revenue and expenditure account
     and the balance sheet, together with a contribution                  and the balance sheet, together with a contribution
     to the analysis of the financial management referred                 to the analysis of the financial management referred
     to in Article 81.'                                                   to in Article 81.'
89. -Article 75 is renumbered Article 81. (Amendment
     does not affect English version.)                                     'Article 81
 ---pagebreak--- 31. 7. 89                               Official Journal of the European Communities                             No C 193/55
                       INITIAL PROPOSAL                                                AMENDED PROPOSAL
                                                                        1. The revenue and expenditure account shall
                                                                        cover all revenue and expenditure transactions
                                                                        relating to the preceding financial year for each
                                                                        institution. It shall be submitted in the same form
                                                                        and following the same subdivision as the budget.
                                                                        2. The revenue and expenditure account shall be
                                                                        preceded by an analysis of the financial management
                                                                        in respect of the year in question.
                                                                        In preparing this analysis, each institution shall
                                                                        endeavour to provide details of the application of the
                                                                        principles and objectives referred to in Article 2.'
90.   Article 76 is renumbered Article 82. It is replaced by
      the following:
      'Article 82                                                       'Article 82
      1. The Commission shall draw up not later than                    1. The Commission shall draw up not later than
      1 May a consolidated balance sheet of assets and                  1 May a consolidated balance sheet of assets and
      liabilities of the Communities as at 31 December of               liabilities of the Communities as at 31 December of
      the preceding financial year. A statement showing                 the preceding financial year. A statement showing
      the movements and balances of the accounts at the                 the movements and balances of the accounts at the
      same date shall be attached thereto.                              same date shall be attached thereto.
                                                                        The balance sheet shall include, on the assets side,
                                                                        the amount of revenue to be collected and, on the
                                                                        liabilities side, the amount of expenditure chargeable
                                                                        to the financial year which has not yet been entered
                                                                        in the accounts.
      2. These documents shall be submitted to the                      2. These documents shall be submitted to the
      financial controller.'                                            financial controller.
91.   Article 77 is renumbered Article 83. '1 June' is
      replaced by '1 May'.
92.   Article 78 is renumbered Article 84. It is replaced by
      the following:
      'Article 84
      1. The Court of Auditors and its members may, in
      carrying out the task of the Court, be assisted by
      officers of the Court. The Court itself or one of its
      members shall notify the authorities with which the
      delegated officer is to work of the tasks delegated to
      him.
      2. Parliament, the Council and the Commission
      shall inform the Court of Auditors, as soon as
      possible, of all decisions and rules taken pursuant to
      Articles 4(4), 7(2), (3) and (6), 9, 17(1) and 26.
      3. The institutions shall transmit to the Court of
      Auditors any rules of procedure in respect of
      financial matters.
 ---pagebreak--- No C 193/56                           Official Journal of the European Communities                                31. 7. 89
                    INITIAL PROPOSAL                                                 AMENDED PROPOSAL
     4. The Court of Auditors shall be informed of the
     appointment of authorizing officers, financial
     controllers, accounting officer and administrators of
     imprest accounts and of the acts of delegation or
     appointment under Articles 22, 24, 25 and 55.'
93.  Article 79 is renumbered Article 85.                             'Article 85
     'Article 19 of Council Regulation (EEC, Euratom,                 1. Each institution shall take the necessary steps to
     ECSC) No 2891/77 and to Article 80 of this                       safeguard all documents supporting its accounts as
     Financial Regulation' is replaced by 'Article 18 of              well as all financial data stored on an electronic
     Council Regulation (EEC, Euratom, ECSC) No                       medium. The Court shall have free access to these
     2891/77 and to Article 86 of this Financial Re-                  documents and medium and may question each
     gulation'.                                                       institution on them.
                                                                      The institutions shall send to the Court of Auditors,
                                                                      at its request, the documents supporting its accounts
                                                                      and a copy of the data kept on a magnetic medium.
                                                                      2. These provisions shall apply without prejudice
                                                                      to Article 86 of this Financial Regulation and
                                                                      Article 18 of Regulation (ECSC, EEC, Euratom)
                                                                      No ...'
94.  Article 80 is renumbered Article 86.
     (a) (Amendment does not affect English version).
     (b) In the second paragraph, 'Article 82' is replaced
         by 'Article 88'.
     (c) In the third paragraph, 'Articles 18 and 19 of               (c) ... Articles 17 and 18 of Regulation (ECSC, EEC,
         Regulation (EEC, Euratom, ECSC) No 2891/77'                      Euratom) No ...
         is replaced by 'Articles 17 and 18 of Regulation
         (EEC, Euratom, ECSC) No 2891/77'.
     (d) The following fourth paragraph is added :                    (d) the fourth paragraph is replaced by the follow-
                                                                          ing:
         'At the request of the Court of Auditors, each                   'At the request of the Court of Auditors, each
         institution shall authorize outside persons to                   institution shall authorize banking organizations
         permit the Court to make any checks to ensure                    holding Community assets to permit the Court to
         that external data tally with the accounts.'                     make any checks to ensure that external data tally
                                                                          with the accounts.'
95.  Article 81 is renumbered Article 87.
96.  Article 82 is renumbered Article 88.
                                                                      The following is added to the first paragraph:
                                                                      'and all documents and data created or stored on a
                                                                      magnetic medium.'
 ---pagebreak--- 31. 7. 89                               Official Journal of the European Communities                            No C 193/57
                       INITIAL PROPOSAL                                              AMENDED PROPOSAL
       (a) In point (b) of the second paragraph, 'the first
           paragraph of Article 80' is replaced by 'the first
           paragraph of Article 86'.
       (b) The final paragraph is replaced by the following:
           'The grant of Community funds to beneficiaries                  'The granting of aid to bodies outside the
           outside the institutions shall be subject to the                institutions shall be subject to the agreement in
           agreement in writing by the recipients to an audit              writing by the recipients to an audit being carried
           being carried out by the Court of Auditors on the               out by the Court of Auditors on the utilization of
           utilization of the amounts granted.'                            the amounts granted as aid.'
97.   Article 83 is renumbered Article 89. It is replaced by
      the following:
       'Article 89
      The annual report of the Court of Auditors provided
      for in Article 78 of the ECSC Treaty, Article 206a of
      the EEC Treaty and Article 180a of the Euratom
      Treaty shall be governed by the following provi-
       1. The Court of Auditors shall transmit to the                   1.  Unchanged
      Commission and the institutions concerned, by
       15 July at the latest, any comments which are, in its
      opinion, of such a nature that they should appear in
      the annual reports. These comments must remain
      confidential. Each institution shall address its reply
      to the Court of Auditors by 31 October at the latest.
      The replies of the institutions other than the
      Commission shall be sent simultaneously to the
      Commission.
      2. The annual report shall contain an assessment                  2.  Unchanged
      of the soundness of financial management.
      3. The annual report shall comprise a section for                 3. Without prejudice to any summary or general
      each institution. Each section shall contain all the              observations which the Court of Auditors considers
      comments of the Court of Auditors on the relevant                 appropriate, the annual report shall contain a
      institution. The replies of each institution shall be             subdivision for each institution.
      published immediately following the comments
      relating to that institution.                                     The Court shall take the necessary measures to
                                                                        ensure that the replies by the institutions to its
                                                                        comments are published immediately following the
                                                                        comments.
      4. The Court of Auditors shall transmit to the                    4.  Unchanged
      authorities responsible for giving discharge and to
      the other institutions, by 30 November at the latest,
      its annual report accompanied by the replies and it
      shall ensure publication thereof in the Official
      Journal of the European       Communities.'
98.   Article 84 is repealed.
 ---pagebreak--- No C 193/58                            Official Journal of the European Communities                                 31. 7. 89
                     INITIAL PROPOSAL                                                AMENDED PROPOSAL
99.  Article 85 is renumbered Article 90. It is replaced by
     the following:
     'Article 90
     1. Parliament, upon a recommendation from the                      1.   Unchanged
     Council, acting by a qualified majority, shall, before
     30 April of the next year, give a discharge to the
     Commission in respect of the implementation of the
     budget. If that date cannot be met, Parliament or the
     Council shall inform the Commission of the reasons
     for the postponement.
     2. Parliament shall deliver its opinion on the                    2. The discharge decision shall cover the accounts
     discharge, in particular on the basis of the accounts             of all revenue and expenditure of the Communities,
     of all revenue and expenditure of the Communities                 the resulting balance and the assets and liabilities of
     audited by the Court of Auditors.                                 the Community shown in the balance sheet. It shall
                                                                       assess the responsibility of the Commission's
                                                                       budgetary management over the past financial year.
     3. The financial controller shall take account of                 3.    Unchanged
     the comments in the decisions giving discharge.
     4. The institutions shall take all appropriate steps              4. The institutions shall take all appropriate steps
     to act on the comments appearing in the decisions                 to act on the comments appearing in the decisions
    giving discharge.                                                  giving discharge, particularly as regards budgetary,
                                                                       operational and accounting aspects.
    5. At the request of Parliament or the Council, the                5. At the request of Parliament or the Council, the
     institutions shall report on the measures taken in the            institutions shall report on the measures taken in the
    light of these comments, and, in particular, on the                light of these comments, and, in particular, on the
    instructions given to those of their departments                   instructions given to those of their departments
    which are responsible for the implementation of the                which are responsible for the implementation of the
    budget. Such reports shall also be transmitted to the              budget. Such reports shall also be transmitted to the
     Court of Auditors.                                                Court of Auditors.
                                                                       The institutions shall give an account, in an annex to
                                                                       the revenue and expenditure account for the next
                                                                       financial year, of the measures taken in response to
                                                                       the comments appearing in the decisions giving
                                                                       discharge.
    6. If Parliament decides to postpone the discharge                 6. If Parliament decides to postpone the discharge
    the Commission must as rapidly as possible remove                  the Commission must as rapidly as possible remove
    any obstacles to the discharge decision.                           any budgetary, operational and accounting obstacles
                                                                       to the discharge decision.
    7. Supporting documents pertaining to the ac-                      7. Supporting documents pertaining to the ac-
    counts and the preparation of the revenue and                      counts and the preparation of the revenue and
    expenditure account and the balance sheet shall be                 expenditure account and the balance sheet shall be
    kept for a period of five years following the date of              kept by the accounting officer for a period of five
    the decision giving discharge in respect of the                    years following the date of the decision giving
    implementation of the budget.                                      discharge in respect of the implementation of the
                                                                       budget.
    However, the documents relating to transactions not                However, the documents relating to transactions not
    finally closed shall be kept for longer than the said              finally closed shall be kept for longer than the said
    period until the end of the year following the year in             period until the end of the year following the year in
    which such transactions are finally closed.'                       which such transactions are finally closed.'
 ---pagebreak--- 31. 7. 89                               Official Journal of the European Communities                             No C 193/59
                     INITIAL PROPOSAL                                                 AMENDED PROPOSAL
100.  The following new Article 91 is inserted:
       'Article 91
       1. In addition to the annual report, the Court of                 1.  Unchanged
      Auditors may also, at any time, submit observations,
       in the form of special reports, on specific questions
       and deliver opinions at the request of one of the
      institutions of the Communities.
      2. The special reports shall be transmitted to the                     Unchanged
      institution or body concerned.
      The institution concerned shall have two and a half
      months in which to inform the Court of Auditors of
      any comments it wishes to make on the observations
      in question.
      Should the Court of Auditors decide to have such
      observations published in the Official Journal of the
      European Communities, it shall include after them
      any comments submitted by the institution or
      institutions concerned.
      3. If the opinions referred to in paragraph 1 do not              3. If the opinions referred to in paragraph 1 do not
      relate to proposals for legislation or draft legislation          relate to proposals for legislation or draft legislation
      on which it has been consulted, the Court of                      on which it has been consulted, they may be
      Auditors shall not publish them unless the insti-                 published by the Court of Auditors in the Official
      tution which has requested the opinion and the                    Journal. The Court shall take its decision on
      institution concerned agree. In this case, these                  publication after consulting the institution which
      opinions shall be accompanied by the replies of the               requested the opinion or the institution concerned by
      institution or institutions concerned.'                           the Court's analysis. Opinions published in the
                                                                        Official Journal shall be accompanied by the replies
                                                                        of the institution or institutions concerned.
                                                                        4. If Parliament adopts, possibly on the basis of a
                                                                        special report or opinion of the Court of Auditors, a
                                                                        resolution containing comments concerning the
                                                                        budgetary control of a Community institution, it
                                                                        may ask the institution concerned to take steps to act
                                                                        on the comments made in the resolution, and give an
                                                                        account of the measures taken in the annex which
                                                                        the Commission attaches to the revenue and the
                                                                        expenditure account referred to in Article 90(5).'
101.  Title VII: the heading is replaced by the following:
                         'TITLE VII
SPECIAL PROVISIONS APPLICABLE T O RESEARCH
     AND TECHNOLOGICAL DEVELOPMENT
                   APPROPRIATIONS'
102.  Articles 86 to 94 are replaced by the following:
      'Article 92
      The provisions of Titles I to VI and XII shall apply to
      the research and technological development ap-
      propriations entered in the special section provided
      for in Article 93, save as otherwise provided in this
      Title or where they are incompatible with the special
      provisions of this title.
 ---pagebreak--- No C 193/60                             Official Journal of the European Communities                               31. 7. 89
                     INITIAL PROPOSAL                                                 AMENDED PROPOSAL
     Article 93
      1. The appropriations relating to the activities
     covered by this Title shall be entered in a special
     section in the part of the budget devoted to operating
     appropriations.
     This section shall contain the appropriations
     intended for the realization of research and tech-
     nological development objectives through the im-
     plementation of the following:
         direct action, consisting of research programmes               (a) Unchanged
         carried out by the establishments of the Joint
         Research Centre (JRC) and in principle entirely
         financed from the general budget of the European
         Communities;
     (b) indirect action, consisting of programmes carried              (b) Unchanged
         out under contracts to be concluded with third
         parties and in principle partially financed from
         the general budget of the European Communities
         (shared-cost action projects);
     (c) concerted action, consisting of work undertaken                (c) Unchanged
         by the Community to coordinate the individual
         research projects carried out in the Member
         States, in respect of which the administrative
         expenditure alone is financed from the general
         budget of the European Communities;
     (d) possible financial contributions by the Com-                   (d) possible financial contributions by the Com-
         munity to supplementary programmes in accord-                      munity to supplementary programmes in accord-
         ance with Article 1301 of the EEC Treaty, or to                    ance with Article 1301 of the EEC Treaty, or to
         research and development programmes under-                         research and development programmes under-
         taken by several Member States, including                          taken by several Member States, including
         participation in the structures created for the                    participation in the structures created for the
         execution of those programmes, in accordance                       execution of these programmes, in accordance
         with Article 130m of the EEC Treaty, or                            with Article 130m of the EEC Treaty, or cooper-
         cooperation with third countries or international                  ation with third countries or international
         organizations as provided for in Article 130n of                   organizations as provided for in Article 130n of
         the EEC Treaty;                                                    the EEC Treaty, or participation in the joint
                                                                            undertakings provided for in Article 130o of the
                                                                            EEC Treaty;
     (e) other activities of the JRC such as exploratory                (e) Unchanged
         research, scientific and technical support ac-
         tivities for the Commission and services for
         outside bodies and individuals.
     2. The appropriations for projects under the                       2.   Unchanged
    .framework programme of activities in the field of
     research and technological development shall be
     entered separately in this section.
 ---pagebreak--- 31. 7. 89                              Official Journal of the European Communities                          No C 193/61
                      INITIAL PROPOSAL                                               AMENDED PROPOSAL
      Article 94
       1. The nomenclature of the special section pro-
      vided for in Article 93 shall be based on the purpose
      of the expenditure in achieving research and
      technological development objectives or in the other
      activities referred to in that Article.
      The remarks for each subdivision shall also show:
      — the number of staff assigned for the current year,
      — details of supplementary programmes, program-
          mes undertaken by several Member States and
          cooperation with third countries or international
          organizations, with an indication of the amount
          of any financial contribution from the Com-
          munity.
      2. However, staff appropriations for the Joint
      Research Centre shall be entered separately in a
      single chapter.
      Article 95
      The following shall be annexed to the special section
      referred to in Article 93:
          a table of equivalence giving the breakdown by
          purpose and type of expenditure of the appropri-
          ations made available in the section, as specified
          in the implementing rules provided for in
          Article 128. For management purposes, the
          Commission may create appropriation accounts
          corresponding to the instruments of implemen-
          tation,
          a provisional schedule of commitments and
          payments showing the planned utilization of the
          commitment appropriations and the correspond-
          ing payment appropriations.
          The schedule shall be reviewed annually.
      Article 96                                                       Article 96
      Notwithstanding Article 26, the Commission may,                  Notwithstanding Article 26, the Commission may,
      within the special section referred to in Article 93,            within the special section referred to in Article 93,
      transfer appropriations from one chapter to another              transfer appropriations from one chapter to another
      within a limit of 15 % for the commitment                        in respect of the activities referred to in Ar-
      appropriations relating to the activities referred to in         ticle 93(1)(a) and the exploratory research referred
      Article 93(l)(a) and (e), provided that these activities         to in Article 93(1)(e) provided that these activities
      fall under the framework programme.                              fall under the framework programme.
 ---pagebreak--- No C 193/62                           Official Journal of the European Communities                                    31. 7. 89
                    INITIAL PROPOSAL                                                   AMENDED PROPOSAL
     These transfers may not have the effect of increasing              These transfers may not have the effect of increasing
     the appropriations earmarked for exploratory                       or reducing the commitment appropriations in the
     research by more than 5 % of the initial allocation                initial allocation entered in the budget for each of the
     for the total appropriations in respect of the JRC                 programmes referred to in Article 93(1) (a) by more
     under the framework programme.                                     than 15 %. They may not have the effect of
                                                                        increasing the commitment appropriations for
                                                                        exploratory research by more than 5 % of the initial
                                                                        allocation for all the programmes referred to above.
     This special provision does not concern staff                      This special provision does not concern staff
     appropriations for the JRC.                                        appropriations for the JRC.
     Article 97
     1. The Commission may provide services for                         1.   Unchanged
     outside bodies or individuals, in accordance with the
     remarks in the budget for the chapters and articles in
     question.
     Notwithstanding Article 5, the resulting revenue
     may give rise to additional appropriations:
     — in commitments, equal to the amount of the
         repayments provided for in the contracts con-
         cluded with the outside bodies or individuals,
     — in payments, equal to the entitlements established
         from these repayments.
     2. Notwithstanding Article 7(2), additional ap-                    2.   Unchanged
     propriations shall be maintained until they are
     cancelled by means of the revenue and expenditure
     account.
     3. Where provision is made in the remarks column                   3. Where provision is made in the remarks column
     for certain categories of expenditure to be repaid to              for certain categories of expenditure to be repaid to
     the general budget, such repayments shall be booked                the general budget, such repayments shall be booked
     to the statement of revenue, in accordance with the                to the statement of revenue, in accordance with the
     implementing rules, under headings entered specif-                 implementing rules provided for in Article 128 under
     ically for this purpose.                                           headings entered specifically for this purpose.
     Article 98                                                         Article 98
     With regard to the award of contracts in the fields                1. With regard to the award of contracts in the
     falling under this Title, the implementing rules                   fields falling under this Title, the implementing rules
     provided for in Article 128 may lay down special                   provided for in Article 128 may lay down special
     provisions on:                                                     provisions on:
     — the limit values determining the conditions for                  — the limit values determining the conditions for
         concluding contracts,                                              concluding contracts,
     — the operation and the determination of the                       — the operation and the determination of the
         powers of the advisory committee on procure-                       powers of the advisory committee on procure-
         ments and contracts.'                                              ments and contracts (l).
                                                                 (!) Current Article 94(5).
 ---pagebreak--- 31. 7. 89                              Official Journal of the European Communities                             No C 193/63
                      INITIAL PROPOSAL                                                AMENDED PROPOSAL
                                                                       2. Notwithstanding the provisions of the first
                                                                       paragraph of Article 67, scientific and technical
                                                                       equipment may be sold, without first being ad-
                                                                       vertised, following a decision taken by the author-
                                                                       izing officer after he has consulted the advisory
                                                                       committee on procurements and contracts.'
103.  Article 95 is renumbered Article 99. It is replaced by
      the following:
      'Article 99                                                      'Article 99
                                                                       1. The provisions of Titles I to VI and Title XII
                                                                       shall apply if they are not incompatible with the
                                                                       special provisions of this Title.
      This Title shall apply to expenditure financed under             2. This Title shall apply to expenditure financed
      the EAGGF, Guarantee Section, in accordance with                 under the EAGGF, Guarantee Section, in accordance
      Regulation (EEC) No 729/70, effected through the                 with Regulation (EEC) No 729/70, effected through
      authorities or bodies referred to in Article 4(1) of             the authorities or bodies referred to in Article 4(1) of
      Regulation (EEC) No 727/70, under the implement-                 Regulation (EEC) No 727/70, under the implement-
      ing provisions adopted pursuant to Article 5(3) of               ing provisions adopted pursuant to Article 5(3) of
      that Regulation.                                                 that Regulation.
      Special operations which the Commission manages                  Special operations which the Commission manages
      directly, shall be implemented in accordance with                directly, shall be implemented in accordance with
      the rules laid down in Title III of this Regulation.'            the rules laid down in Title III of this Regulation.'
104.  Article 96 is renumbered Article 100.
      (a) The first and second paragraphs are numbered
          paragraph 1.
      (b) The following paragraph 2 is added:
          '2. The Commission shall make a monthly                          '2. The Commission shall make a monthly
          report to Parliament and the Council. This                       report to Parliament and the Council; the report
          communication on actual expenditure shall be                     shall be sent within thirty working days of the
          accompanied by any information which it deems                    end of the month following implementation of
          appropriate within the context of the early                      the actual expenditure by the Member States.
          warning system provided for in Article 6 of                      The report shall include data permitting an
          Decision 88/377/EEC                                              assessment of:
                                                                           — the trend in expenditure in the light of the
                                                                               early warning system provided for in Article 6
                                                                               of Decision 88/377/EEC of 24 June 1988,
                                                                           — the projected trend in expenditure during the
                                                                               financial year in relation to market trends.'
105.  Article 97 is renumbered Article 101. In paragraph 2,
      'Article 96' is replaced by 'Article 100'.
106.  Article 98 is renumbered Article 102.
107.  Article 99 is renumbered Article 103. In paragraph 3,
      'Articles 97 and 98' is replaced by 'Articles 101 and
      102'.
 ---pagebreak--- No C 193/64                           Official Journal of the European Communities                               31. 7. 89
                     INITIAL PROPOSAL                                              AMENDED PROPOSAL
108.  Article 100 is renumbered Article 104. It is replaced
      by the following:
      'Article 104
      Global provisional commitments which have been
      made for a financial year in accordance with
     Article 100 and which have not been specifically
     committed under the budget nomenclature in
      accordance with Article 101 by 1 February of the
     following financial year, shall be released under the
     original financial year.'
109. Article 101 is renumbered Article 105. It is replaced
     by the following:
     'Article 105
      1. Transfers from one article to another within                 1.   Unchanged
     each chapter shall be made by decision of the
     Commission, to be taken not later than 31 January in
     accordance with the procedure provided for in
     Article 13 of Regulation (EEC) No 729/70.
     The Commission shall inform the budgetary au-
     thority of such transfers.
     2. Not later than one month before 31 January of                 2. Not later than one month before 31 January of
     the following financial year, the Commission may                 the following financial year, the Commission may
     submit proposals to the budgetary authority for                  submit proposals to the budgetary authority for
     transfers of appropriations from one chapter to                  transfers of appropriations from one chapter to
     another. Acting by a qualified majority, the Council             another. Acting by a qualified majority, the Council
     shall take a decision within three weeks, after                  shall take a decision within three weeks, after
     consulting Parliament, in accordance with Ar-                    consulting Parliament. Parliament shall deliver its
     ticle 26. If it does not act within that period, the             opinion in time for the Council to be apprised of it
     transfers of appropriations shall be deemed to be                and to act within the time limit laid down. If the
     approved.                                                        Council does not act within that time limit, the
                                                                      transfers of appropriations shall be deemed to be
                                                                      approved.
     3. Decisions on transfers relating to the monetary               3.   Unchanged
     reserve referred to in Article 19(6) shall be taken by
     the budgetary authority in accordance with Arti-
     cle 26(5)(a).
     4. Decisions on transfers between the EAGGF                      4.   Unchanged
     Guarantee Section headings to which refunds in
     connection with food aid are charged and the food
     aid chapter, which are made necessary by changing
     requirements, in relation to the appropriations
     authorized, in the parts of the expenditure char-
     geable to the respective headings, shall be taken by
     the Commission.
     The Commission shall inform the budgetary au-
     thority of such transfers 15 days in advance.'
110. Title IX and Article 102 are deleted.
 ---pagebreak--- 31. 7. 89                               Official Journal of the European Communities                           No C 193/65
                      INITIAL PROPOSAL                                                 AMENDED PROPOSAL
111.   The following new Title IX is inserted:
                          'TITLE IX
SPECIAL PROVISIONS APPLICABLE T O EXTERNAL
                             AID
                         SECTION I
                  GENERAL PROVISIONS
      Article 106
       1. Subject to derogation, the provisions of Titles I              1.   Unchanged
      to VI and XII shall apply to foreign aid financed
      from the Community budget, in so far as they are not
      incompatible with the provisions of this Title.
      2. The appropriations assigned by the Community                   2.    Unchanged
      to its cooperation policy shall be used either under
      cooperation agreements with a financial protocol
      ('preferential agreements') or as aid granted unilater-
      ally.
      3. The appropriations may be earmarked in                         3. The appropriations may be earmarked in
      particular for grant aid, special loans, risk capital or          particular for grant aid, special loans, risk capital,
      interest rate subsidies, and shall be used by the                 interest rate subsidies or loan guarantees, and shall
      Commission, which may confer authority on behalf                  be used by the Commission, which may confer
      of the Community to administer a part thereof,                    authority to administer a part thereof, under its
      either on the European Investment Bank or, under its              responsibility either on the European Investment
      responsibility, on other organizations.                           Bank or, under its responsibility, on other organiza-
                                                                        tions.
      This provision shall not prejudice the audit powers               This provision shall not prejudice the audit powers
      of the Court of Auditors under Article 206a of the                of the Court of Auditors under Article 206a of the
      EEC Treaty.                                                       EEC Treaty.
      4. The following provisions shall govern the use of               4.    Unchanged
      appropriations by the Commission.
      5. The amount of special loans and risk capital                   5.   Unchanged
      granted shall be shown in the balance sheet provided
      for in Article 82.
      Article 107
      1. Any cooperation project adopted by the Com-                    1. Any cooperation project or action may give rise
      mission may be covered by:                                        to the conclusion of:
      — a financing agreement drawn up between the                      — a financing agreement drawn up between the
          Commission, acting for the Community, and the                     Commission, acting for the Community, and the
          Government of the recipient State or the                          Government of the recipient State or the
         governing bodies of the recipient organizations                    governing bodies of the recipient organizations
          or institutions, hereinafter referred to as the                   or institutions, hereinafter referred to as the
          recipient,                                                        recipient,
      — or a contract with international organizations, or              — or a contract with international organizations, or
         natural or legal persons responsible for carrying                  natural or legal persons responsible for carrying
         out the project.                                                   out the project.
 ---pagebreak--- No C 193/66                             Official Journal of the European Communities                    *             31. 7. 89
                     INITIAL PROPOSAL                                                  AMENDED PROPOSAL
     2. The financing agreement or contract shall                        2. The financing agreement or contract shall
     determine the financial commitment of the Com-                     determine the financial commitment of the Com-
     munity for the measure concerned. No expenditure                    munity for the measure concerned. No expenditure
     in excess of this amount may be charged to the                     in excess of this amount may be charged to the
     budget without an additional commitment.                           budget without an additional commitment or an
                                                                        amendment to the convention or contract.
     3. In addition, a loan contract shall be drawn up                  3.   Unchanged
     between the Commission, acting for the Com-
     munity, and the borrower in respect of any
     investment project financed by a special loan.
                         SECTION II
                    IMPLEMENTATION
     Article 108
     Projects covered by a financing agreement shall be
     implemented by the recipient in close collaboration
     with the Commission, which shall retain respons-
     ibility for the utilization of appropriations.
     Article 109
     1. The functions performed by the Commission                       1.   Unchanged
     may be referred to in the preferential agreements or
     the financing agreements as those of chief author-
     izing officer.
     2. The Commission, in close cooperation with the                   2. The Commission, in close cooperation with the
     recipient, shall ensure that participants in tendering             recipient, shall ensure that participants in tendering
    procedures can compete on an equal footing, that                    procedures can compete on an equal footing, that
     there is no discrimination and that the tender                     there is no discrimination and that the tender
     selected is economically the most advantageous. In                 selected is economically the most advantageous. In
     particular, it shall approve the terms of the invitation           particular, it shall approve the terms of the invitation
     to tender before it is issued, be apprised of the results          to tender before it is issued, be represented as a rule
     of the examination of the tenders, and approve the                 at the examination of tenders, be apprised of the
    proposal for the award of the contract.                             results of the examination of the tenders, and
                                                                        approve the proposal for the award of the contract.
     Article 110
     1. In the case of preferential agreements in                       1.   Unchanged
    particular, the recipient may appoint a national
     authorizing officer to represent the national author-
    ities in all operations relating to projects financed by
    the Community which are the subject of an
    agreement between the recipient State and the
     Community.
 ---pagebreak--- 31. 7. 89                              Official Journal of the European Communities                            No C 193/67
                     INITIAL PROPOSAL                                                AMENDED PROPOSAL
      2. The recipient shall submit invitations to tender              2. The recipient shall submit invitations to tender
      to the Commission for agreement before issuing                   to the Commission for agreement before issuing
      them. On the basis of the decisions thus endorsed                them. On the basis of the decisions thus endorsed
      and in close cooperation with the Commission, the                and in close cooperation with the Commission, the
      recipient shall issue invitations to tender, receive             recipient shall issue invitations to tender, receive
      tenders, preside over the examination of tenders and             tenders, preside over the examination offenders and
      establish the results of the tendering procedure.                establish the results of the tendering procedure. The
                                                                       Commission shall, as a rule, be represented at the
                                                                       examination of tenders.
      3. It shall transmit to the Commission for agree-                3.   Unchanged
      ment the results of the examination of the tendering
      procedure and a proposal for the award of the
      contract. It shall sign contracts, additions to
      contracts, and estimates and shall notify the
      Commission thereof. For contracts, additions to
      contracts, and estimates, the Commission, where
      appropriate, shall enter into individual commit-
      ments in accordance with the procedures laid down
      in Articles 37 to 40. Individual commitments shall
      count towards the commitments under the financing
      agreements provided for in Article 107(2).
      4. Where appropriate, the recipient shall validate               4.   Unchanged
      and authorize any expenditure which is the subject
      of an agreement between that State and the
      Community against appropriations committed by
      the Commission. It shall remain financially liable to
      the Commission until the Commission clears the
      operations for the execution of which the recipient is
      responsible.
      Article 111
      1. For the purposes of applying the preferential
      agreement or convention between the Community
      and the recipient State, and in respect of the
      appropriations for which it is the authorizing officer,
      the Commission may be represented in the recipient
      State by a representative approved by that State.
      2. While operations are in progress the Com-
      mission's representative shall verify, on the basis of
      documents and on the spot, that the work or services
      comply with their description in the financing
      agreements, contracts or estimates.
      Article 112
      1. For payments in a currency other than that of                 1.   Unchanged
      the recipient State, the Commission shall make
      payment direct for services provided in connection
      with projects financed with grant aid.
 ---pagebreak--- No C 193/68                           Official Journal of the European Communities                                 31. 7. 89
                     INITIAL PROPOSAL                                              AMENDED PROPOSAL
     2. For payments in the currency of the recipient                 2.   Unchanged
     State, accounts denominated in ecus may be opened
     with a financial institution in the recipient State in
     the name of the Commission or of the recipient.
     In the case of preferential agreements, the tasks
     referred to in paragraphs 5 and 6 may be entrusted to
     a financial institution, referred to as the paying
     agent.
     3. The accounts referred to in paragraph 2 shall be              3.   Unchanged
     replenished to meet actual cash requirements.
     Transfers shall be made in ecus or, exceptionally, in
     the currency of a Member State and converted into
     the currency of the recipient State as payments fall
     due, at the exchange rate ruling on the day of
     payment.
     4. Interest on the deposits in the accounts referred             4. Interest on the deposits in these accounts shall
     to in paragraph 2 shall be used exclusively for the              be used exclusively for the projects concerned.
     projects concerned, unless agreed otherwise when                 However, if the functions of paying agent are being
     the functions of paying agent are being exercised by a           exercised by a public financial institution, it may be
     public financial institution.                                    agreed that the payments will not bear interest.
     The paying agent shall not be remunerated for his                The paying agent shall not be remunerated for his
     services.                                                        services.
     5. Within the limits of the funds available, the                 5.   Unchanged
     paying agent, after obtaining the approval of the
     Commission's representative, shall make the pay-
     ments authorized after verifying that the supporting
     documents provided are substantively accurate and
     in order.
     6. At regular intervals, and at least once a quarter,            6.   Unchanged
     the paying agent shall send the Commission a
     statement of actual expenditure and revenue,
     together with supporting documents.
     7. Payments made and revenue received in the                     7.   Unchanged
    currency of the recipient State shall be subject to a
     clearance procedure before they are finally booked
     to the budget appropriations. Clearance shall consist
     of an examination by the Commission to establish
     that validation, authorization and payment and the
     collection of revenue have been properly effected, in
     accordance with this Regulation.
                        SECTION III
               AWARD OF CONTRACTS
     Article 113
     Notwithstanding Title IV of this Financial Regu-
     lation, the award of contracts financed by the
     Community for recipients of external aid shall be
    governed by the following provisions.
 ---pagebreak--- 31. 7. 89                               Official Journal of the European Communities                         No C 193/69
                     INITIAL PROPOSAL                                                AMENDED PROPOSAL
      Article 114
      The procedure to be followed for the award of
      works, supply or service contracts, or the conclusion
      of technical cooperation contracts, shall be specified
      in the financing agreement, subject to the following
      principles.
      Article 115
      1. Participation in tendering procedures shall be
      open on equal terms to all natural and legal persons
      coming within the scope of application of the
      Treaties and to all natural and legal persons in the
      recipient State.
      The specifications shall therefore require tenderers
      to state their nationality and to present the
      supporting evidence normally acceptable under their
      own law.
      2. By way of exception, it may be decided, on the
      basis of the specific conditions laid down in the basic
      instruments governing cooperation, to allow
      nationals of third countries to compete for contracts
      financed by the Community.
      Article 116
      The Commission and the recipient shall take the
      necessary implementing measures to ensure that
      participants in tendering procedures and other
      procedures for the award of contracts financed by
      the Community can compete on an equal footing.
      To this end, without prejudice to Articles 117 and
       119, care shall be taken in particular to:
      (a) ensure advance publication in reasonable time of
          invitations to tender in the Official Journal of the
          European Communities and the official journal
          of the recipient State;
      (b) eliminate any discriminatory practice or tech-
          nical specification liable to hamper participation
          on equal terms by all natural or legal persons of
          the Member States and of the recipient State.
      Article 117
      In urgent cases or where the nature, small scale or               In urgent cases or where the nature, small scale or
      particular characteristics of certain works or                    particular characteristics of certain works or
      supplies so warrant, the Commission or the recipient              supplies so warrant, the Commission or the recipient
      may, by agreement with the Commission stating the                 may, by prior agreement with the Commission
      reasons therefor, exceptionally authorize:                        stating the reasons therefor, exceptionally au-
                                                                        thorize :
 ---pagebreak--- No C 193/70                              Official Journal of the European Communities                               31. 7. 89
                     INITIAL PROPOSAL                                                  AMENDED PROPOSAL
     — the award of contracts after open invitations to                  — the award of contracts after open invitations to
          tender, confined to a specific geographical area,                  tender, confined to a specific geographical area,
     — the award of contracts after restricted invitations               — the award of contracts after restricted invitations
          to tender,                                                         to tender,
     — the conclusion of contracts by private treaty,                    — the conclusion of contracts by private treaty,
     — the performance of contracts through public                       — the performance of contracts through public
          works departments.                                                 works departments.
     Article 118
     The Commission and the recipient shall ensure that
     Articles 116, 117 and 119 are observed for each
     operation and that the tender selected is economi-
     cally the most advantageous, with due regard
     notably to the price, utilization costs, technical
     value, the qualifications of and the guarantees
     offered by the tenderers, the nature and conditions of
     execution of the works or supplies.
     The Commission and the recipient shall ensure that
     all the selection criteria are specified in the invitation
     to tender.
    The result of invitations to tender shall be published
    at the earliest possible date in the Official Journal of
    the European Communities.
    Article 119
     1. Contracts for services and technical cooperation                 1.   Unchanged
    shall be awarded after restricted invitations to
    tender.
    2. However, some contracts may be awarded by                         2.   Unchanged
    private treaty, in particular in the following cases:
    — short projects or projects of minor importance,
    — projects being carried out by non-profit insti-
         tutions or associations,
    — extensions to projects already under way,
    — where the invitation to tender has been unsuc-
         cessful.
    3. Contracts for services and technical cooperation                  3.   Unchanged
    shall, as a rule, be prepared, negotiated and
    concluded by the Commission.
    4. In the case of preferential agreements, or in cases               4.   Unchanged
    where express provision is made therefor in the
    financing agreements, the tasks referred to in
    paragraph 3 shall be delegated to the recipient, in
    agreement and in collaboration with the Com-
    mission's representative.
                                                                         5. No payment may be made unless it is covered by
                                                                         the contract or by an amendment to the contract.
 ---pagebreak--- 31. 7. 89                                Official Journal of     European Communities                             No C 193/71
                       INITIAL PROPOSAL                                               AMENDED PROPOSAL
       Article 120
       Only service contracts awarded in the interests of the
       Commission shall be governed by the provisions of
       Articles 57 to 65.
                          SECTION IV                                                           SECTION IV
                 AUDITING OF ACCOUNTS                                                 AUDITING OF ACCOUNTS
       'Article 121                                                      'Article 121
       1. Each agreement shall make express provision                     1. Each agreement and each contract for a
       for the Court's power of audit.                                   development project shall make express provision
                                                                         for the Court's power of audit on the basis of records
                                                                         and on the spot.
       2. Should the Court of Auditors wish to carry out                 2. Should the Court of Auditors wish to carry out
       audits on the territory of recipient States, or States in         audits on the territory of recipient States, or States in
       which recipients are located, it shall do so by                   which recipients are located, it shall do so in
       agreement with the relevant authorities of the State              cooperation with the relevant authorities of the State
       concerned. Such audits shall be limited to the                    concerned. The scope and arrangements for such
       inspection agreements implemented pursuant to the                 audits shall be laid down in the agreements and
       provisions governing Community aid and shall not                  contracts referred to in paragraph 1'.
       apply in respect of the execution arrangements
       which are the responsibility of the national author-
       izing officer.'
112.   The following new Title X is inserted:
                            'TITLE X
     SPECIAL PROVISIONS APPLICABLE T O THE
MANAGEMENT OF APPROPRIATIONS RELATING
T O STAFF SERVING OUTSIDE THE COMMUNITY
          AND T O THEIR ADMINISTRATION
       Article 122
       The provisions of Titles I to VI and XII shall apply to
       activities in this field, in so far as they are not
       incompatible with the provisions of this Title.
       Article 123
       The expenditure of a financial year shall be booked
       to the accounts for that year on the basis of the
       expenditure for which notification of authorization
       reaches the Financial Controller not later than
       31 December and in respect of which payment is
       made before 15 January. However, expenditure
       involving payments made not later than 31 De-
       cember under the imprest accounts may still be
       booked to the accounts for that year up to 15
       February of the following year.
       Article 124
       In accordance with Article 128 the Commission shall
       adopt implementing rules relating, in particular, to:
       — the award of contracts,
       — the keeping of inventories,
 ---pagebreak--- No C 193/72                            Official Journal of the European Communities               31. 7. 89
                     INITIAL PROPOSAL                                            AMENDED PROPOSAL
     — the system of accounts,
     — imprest accounts.'
113. Title X is renumbered Title XI.
114. Article 103 is renumbered Article 125.
     (a) Paragraph 2 is replaced by the following:
         '2. The appropriations for the Office, the total
         amount of which shall be entered under a special
         budget heading within the section for expendi-
         ture common to all the institutions, shall be set
         out in detail in an annex to that section. The
         appropriations shown under this specific budget
         heading may be transferred in accordance with
         the conditions set out in Article 26.
         The annex shall take the form of a statement of
         revenue and expenditure, subdivided in the same
         way as the sections of the budget.
         The appropriations entered in that annex shall
         cover all the financial requirements of the Office
         in the performance of its duties in the service of
         the Community's institutions.
         3. Where necessary, the estimates may be
         adjusted during the financial year by the Manage-
         ment Committee of the Office, which shall take
         decisions on the transfers required within the
         annex as a result of such adjustments. It shall
         inform the budgetary authority three weeks
         before effecting transfers from one chapter to
         another.'
     (b) Paragraph 3 is renumbered paragraph 4. The
         third subparagraph is deleted.
     (c) Paragraph 4 is deleted.
     (d) In the second subparagraph of paragraph 6,
         'Article 22' is replaced by 'Article 27'.
     (e) In the second subparagraph of paragraph 8, the
         sentence 'such payments may not exceed the total
         amount of the appropriations entered for this
         purpose in the Commission budget' is replaced by
         'such payments may not exceed the total amount
         of the appropriations entered for this purpose in
         the section for expenditure common to all the
         institutions, which contains all the appropri-
         ations for the Publications Office'.
     (f) In paragraph 9, 'Articles 73 and 76' is replaced by
         'Articles 79 and 82'.
 ---pagebreak--- 31. 7. 89                             Official Journal of the   >ean Communities                            No C 193/73
                     INITIAL PROPOSAL                                             AMENDED PROPOSAL
115.  The following new article 126 is inserted:
      'Article 126
      The financial rules of Community bodies with legal
      personality which receive subsidies from the general
      budget shall take over as far as possible the
      provisions of this Regulation and diverge from them
      only when their specific operational requirements
      warrant.'
116.  Article 104 is renumbered Article 127.                        'Article 127
                                                                    The European Parliament and the Council shall be
                                                                    entitled to obtain from the other institutions any
                                                                    information or explanation regarding budgetary
                                                                    matters within their competence.'
117.  Article 105 is deleted.
118.  Article 106 is renumbered Article 128. It is replaced
      by the following:
      'Article 128                                                  'Article 128
      After consulting the other institutions, whose                After consulting the other institutions, whose
      opinions must be given within two months, the                 opinions shall be given within three months, the
      Commission shall adopt rules for implementing this            Commission shall adopt rules for implementing this
      Financial Regulation. It shall inform all the insti-          Financial Regulation.'
      tutions of these rules.'
119.  Article 107 is renumbered Article 129. It is replaced
      by the following:
      'Article 129
      'Amendments to this Financial Regulation, pro-
      posed by the Commission, shall be adopted by the
      Council after conciliation with Parliament.'
120.  Article 108 is deleted.
121.  The following new Article 130 is inserted:              121.  The following new Article 130 is inserted:
      'Article 130                                                  'Article 130
      Until the entry into force of the implementing rules          1. Until the entry into force of the implementing
      provided for in Article 128, the limit values to be           rules provided for in Article 128, the limit values to
      specified for the purposes of Articles 59, 61, 63, 64         be specified for the purposes of Articles 59, 61, 63, 64
      and 98 shall be as follows:                                   and 98 shall be as follows:
      — Article 59, first paragraph, subparagraph (a): the          — Article 59, first paragraph, subparagraph (a): the
          limit below which contracts may be made by                    limit below which contracts may be made by
          private treaty shall be 15 000 ecus,                          private treaty shall be 15 000 ecus,
      — Article 6 1 : the limit above which the powers of           — Article 6 1 : the limit above which the powers of
          the Advisory Committee on Procurements and                    the Advisory Committee on Procurements and
          Contracts take effect shall be 50 000 ecus,                   Contracts take effect shall be 40 000 ecus,
      — third paragraph of Article 63: the threshold for            — third paragraph of Article 63: the threshold for
          compulsory security shall be 350 000 ecus,                    compulsory security shall be 300 000 ecus,
      — Article 64: the limits below which contracts may            — Article 64: the limits below which contracts may
          be made against invoice or bill of costs shall be             be made against invoice or bill of costs shall be
          750 and 2 000 ecus respectively for expenditure               750 and 2 000 ecus respectively for expenditure
          away from the provisional places of work,                     away from the provisional places of work,
 ---pagebreak--- No C 193/74                               Official Journal of the European Communities                                    31. 7. 89
                      INITIAL PROPOSAL                                                   AMENDED PROPOSAL
      — Article 98: the limit below which contracts may                   — Article 98: the limit below which contracts may
          be made by private treaty shall be 75 000 ecus for                 be made by private treaty shall be 75 000 ecus for
          scientific and technical equipment and for works                   scientific and technical equipment and for works
          contracts,                                                         contracts,
      — the limits for the powers of the Advisory                         — the limits for the powers of the Advisory
          Committee on Procurements and Contracts shall                      Committee on Procurements and Contracts shall
          be:                                                                be:
          — 350 000 ecus for scientific and technical                        — 350 000 ecus for scientific and technical
              contracts and contracts relating to the pur-                       contracts and contracts relating to the pur-
              chase of buildings,                                                 chase of buildings,
          — 75 000 ecus for equipment and supply con-                        — 75 000 ecus for equipment and supply con-
              tracts not of a scientific or technical nature,                     tracts not of a scientific or technical nature,
          — 25 000 ecus for equipment and supply con-                        — 25 000 ecus for equipment and supply con-
              tracts not of a scientific or technical nature, to                  tracts not of a scientific or technical nature, to
              which the provisions of Article 59 (c), (d) and                     which the provisions of Article 59 (c), (d) and
              (e) apply.'                                                         (e) apply.
                                                                          2. The implementing rules shall lay down a
                                                                          method of updating the limits through indexation to
                                                                          a deflator expressed in ecus and calculated by the
                                                                          Statistical Office of the European Communities.'
                           Article 2                                                           Article 2
This Regulation shall enter into force on ...                        Unchanged
This Regulation shall be binding in its entirety and directly
applicable in all Member States.