CELEX: 51980PC0578
Language: en
Date: 1980-10-13
Title: DRAFT FINANCIAL REGULATION applicable to the fifth European Development Fund (Presented by the Commission to the Council)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (80) 578
Vol. 1980/0185
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit
règlement.
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this
file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5
der genannten Verordnung freigegeben.
 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                       COM(80)578 final
                                                       Brussels , 13^ October 1980
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                           DRAFT FINANCIAL REGULATION
                       applicable to the fifth European
                                     Development Raid.
                 ( Presented by the Commission to the Council )
  CCW(80 ) 578 final
 ---pagebreak---                  COMMUNICATION FROM THE COMMISSION TO THE COUNCIL
 Subject : draft Financial Regulation relating to the 5th EDF
                 Under the provisions of Article 28 of the Internal Agreement
 on the financing and administration of Community aid ( 5th EDF ) signed in
Brussels on 28 November 1979, the Commission begs to transmit to the Council
the draft Financial Regulation of the 5th EDF ..
               r In accordance with the provisions of the above-mentioned Article
this draft must be the subject of an opinion delivered by the Court of Auditors .
 ---pagebreak---                                DRAFT FINANCIAL REGULATION
                   applicable to the fifth European Development Fund
     THE COUNCIL OF THE EUROPEAN ■ COMMUNITIES , ■     -
                                                           ».
     Having regard to the Treaty establishing the European Economic Community­
                 ' . •    .        • . •   . .     . .     .1
     Having regard to the ACP-EEC Convention of Lome , signed on 31 October 1979 ,
     hereinafter referred to as the " Convention ",
     Having regard to Council Decision                 / EEC on the association of the
     overseas countries and territories with the European Economic Community^,
     hereinafter referred to as the " Decision ",
     Having regard to Council Decision 75 / 250 / EEC of 21 April 1975 on the
     definition and conversion of the European unit of account used for
     expressing the amounts of aid mentioned in Article 42 of the first
     ACP-EEC Convention of Lome-^,                       .
     Having regard to the Internal Agreement on the financing and administration
                        4
     of Community aid     signed on 20 November 1979 , hereinafter referred to as
     the " Internal Agreement ", and in particular Article 28 thereof .
     Having regard to the draft . Financial Regulation submitted by the Commission ,
     Having regard to the opinion of the European Investment Bank , hereinafter
     referred to as the " Bank ",
                                                                      v
     Having regard to the opinion of the Court of Auditors ,
     Whereas pursuant to Article 1(1 ) of the Internal Agreement the Member
     States have set up a fifth European Development Fund , hereinafter referred .
     to as the " EDF ",                                      '
1
_ 0J  No            -
!lOJ No
^OJOJ No
      No
         L 104, 24.4.1975 , p. 35
 ---pagebreak--- Whereas    under        Article 28 of the Internal Agreement the provisions
for implementing that Agreement shall be the subject of a Financial
Regulation adopted , upon the entry into force of the Convention , by the
Council acting by the qualified majority laid down in Article 17(4 ) of the
said Agreement ,             B
                                                            _                I
                v    •               '
HAS ADOPTED THIS FINANCIAL REGULATION :                       -
                                TITLE I
                        FINANCIAL ARRANGEMENTS
                               Arti cle 1
1.   The Council shall notify the Commission by 31 October each year of
the decision which it adopts pursuant to the first subparagraph of
Article 6(2 ) of the Internal Agreement and which relates to the schedule
of calls for contributions .
2.    Annual      contributions shall normally be payable :
(a)   on 15 January for the requirements of the EDF as forecast for the
      first seven months of the year in question ;                    .    ;
 (b)  on 1 July for . the balance of the annual contribution .
                                                Ν
3.   Supplementary payments decided upon pursuant to the second subparagraph
of Article " 6(2 ) of the Internal Agreement shall , unless otherwise decided
by the Council , be due and be made within as brief a period as possible ,
which may not in any case be more than three months .
4.   Each Member State shall make the payments referred to in paragraphs 2
and 3 above in proportion to its contributions to the EDF as fixed in
Article 1(2 ) of the Internal Agreement .
 ---pagebreak---                               Article 2
1.    The financial contributions of the Member States shall be expressed in
the European unit of account , hereinafter referred to as " EUA", referred
to in Article 3 of the Internal Agreement .
Should the. EUA be replaced by the ECU in accordance with Article 3(2 )
of the Internal Agreement , the initials ECU will automatically be
substituted for the initials EUA in each Of the relevant' provisions of
the Financial Regulation .
2.    Each Member State shall pay the amount of its contribution in its
                                               •                              «
national currency on the basis of the conversion rate of the EUA in force
ten days prior to the due date .
3.         Financial contributions shall be credited by each Member State to
a . special- account entitled " Commission of the European Commuhities -
European Development Fund " opened with the Treasury of that Member State
or the body designated by it .
4.    Upon expiry of the Convention . and the Decision , that part of the
contributions which the Member States remain obliged to make shall be
called up by the Commission , as required , on the conditions laid down in
this Financia I Regulat ion .
                              Article 3
1.    In each Member State the Commission shall hold , with the bank of issue
or the financial institution designated by that Member State , accounts under
the same name as that opened pursuant to Article 2(3 ).
2.    For operations which are not currently undertaken by banks of issue or
by post office giro centres , or in order to facilitate the payments which
it has to make , the Commission shall open accounts at one or more banks .
 ---pagebreak---                                   - 4 -
 3.  The signatures of the Commission officials empowered to carry out
 operations on the EDF 's accounts shall be lodged                   when the
 accounts are opened or , in the case of officials who are authorized
 subsequently , when they are designated .   .                   "                  ■
                                  Article 4
1 .  The Commission shall use the funds credited - to the accounts referred
to in Article 3 to make the necessary payments and transfers .
2.   The Commission s-ha- ll, as far as possible , make any withdrawals from
the special accounts referred to in Article 2(3 ) in such -a way as to
maintain a distribution of its assets amongst the various currencies
corresponding to the proportion in which the currencies of the Member
States make up the EUA .
                                  Article 5                -       -
On the basis of the cash requirements for the execution of projects and
programmes , the Commission shall make the transfers needed to replenish
the accounts opened in its name in accordance with Article '124 of the
Convention   and Article 3 of this Financial Regulation .
                                  Article 6                                   - - •
1.   Any transfers of assets from the currency of one Member State into
that of another Member State which have been requested by the Commission
for the purposes of EDF management shall be made at the current rate of
exchange by the banks of issue or the financial institutions approved by
the Member States .
2.   Any exchange differences and costs shall be charged against EDF resources
 ---pagebreak---                                  Article 7
  The Commission shall communicate to the Council each year a statement of
  contribution payments and a progress report on EDF operations .
                                 TITLE II
                           MANAGEMENT OF THE EDF
• SECTION I
  GENERAL PROVISIONS                                        ^
                                 Article 8
  1 . The EDF shall be administered financially in accordance with the
 principle that      authorizing officers and accounting officers are
  separate individuals .       Appropriations shall be administered by
 authorizing officers , who alone shall have the power . to make commitments
  regarding expenditure , establish sums due to be collected and issue proof
 of receipt and payments out .
                                                                            »
 2.   Collection of sums due and payments out shall be the responsibility of
 the accounting officer .
 3.   The functions of authorizing officer , financial controller and
  accounting officer shall be mutually incompatible .
                                 Article 9
  Within the limit of the appropriations provided - for in Article 1 of the
  Internal Agreement the Commission shall , without prejudice to' Article 10(2 )
 thereof , manage the EDF on its own responsibility in accordance with the
  conditions laid down in the Convention , the Decision , the Internal
 ---pagebreak---                                     - 6 -
   Agreement ar.a this Financial Regulation .    In accordance with
   Article 121(1 ) of the Contention , the Commission shall appoint the chief
   authorizing officer of the EDF .     The latter may have recourse zo deputy <
   authorizing officers , whom he shall appoint subject' to approval by the
   Commission .   Each decision to delegate powers shall state the duration
  and extent of the mandate .       \
  Those to whom powers are delegated .may act only within the limits of the powers
  expressly conferred upon them.'      Decisions to delegate powers shall be
  notified to those to whom powers are delegated and to- the - accounting officer,'
  the financial controller ,-. the authorizing officers and the Court of Auditors .
                                    Article 10
  1.   The Commission shall appoint the financial , controller , who shall be
  responsible •■for monitoring the commitment and authorization of . expenditure and
                                   ».                              -
  for monitoring revenue .                                                   '
  2.   The special rules applicable to the financial controller shall be
" formulated in such a way as to ensure his independence in carrying out his
  duties .   Measures taken in respect of his appointment and promotion , .
  disciplinary action or transfer,      and the various methods of interruption
  or termination of his appointment shall be the subject of reasoned decisions
  which shall be forwarded to the Council for      its information .             .
 3.    The person concerned or the Commission may institute proceedings before
  the Court of Justice .
                                    Article 11
  The collection of revenue and the payment of expenditure . shall be carried out .
  by an accounting officer appointed by the Commission .       Subject to
  Article 33(2 ) this accounting officer alone shall be empowered to manage
  funds and assets .    He shall . be responsible for their care .
                                    Article 12                                 •
  The Commission may delegate part of the duties of the accounting officer and
  part bf the responsibility for monitoring to authorized agents' appointed by
  it .   The rules governing responsibilities adopted under this Title shall       "
  apply to such authorized agents within the limits of the powers delegated
 to them *
 ---pagebreak---                                   - 7 -
The principles of the provisions of this Financial Regulation relating to
the monitoring and payment of expenditure shall be applicable , to expenditure
effected by delegatipn .      Such expenditure may not be finally entered into the
EDF accounts until the Commission has verified that the expenditure has been
correctly cleared and that the authorization and payment are in order , in
accordance with the-requirements of this Financial Regulation .
SECTION   II
REVENUE   -
                                  Article 13
1.  The recovery of any sum due to the EDF shall give rise to the issue ,
by the authorizing officer , of a recovery order .
2.  Recovery orders shall be transmitted by the authorizing officer to the
financial controller and shall be subject to the latter 's approval .,    The
purpose of approval by the financial controller shall be to establish that :
(a)  the revenue is correctly credited ;
(b)  the recovery order is correct and in conformity with the provisions
     applicable to the management of the EDF and with all measures taken
      in implementation of those provisions ;
(c)  the principles of sound financial management have been applied .
        \                .                ' i             '
3.  The 'f inancia I controller may refuse his approval .   The Commission may ,
by means of a decision giving the reasons therefor and on its sole
responsibility , disregard this .       Such decision
shall be implemented ;     it shail be communicated to the financial controller
for information .     The Commission shall inform the Court of Auditors every
                                                      ι .
three months of these decisions .
 ---pagebreak---   4.   when the authorizing officer waives the right to recover sums due , he ^
  shall as a prior measure send a proposal for cancellation to the financial
  controller for his approval and to the accounting officer for his . information .
 The purpose of approval by the financial controller shall be to establish
Nthat the waiver is in order and in accordance with the principles of sound
 financial management .    When it has been approved , the proposal shall be
 registered by the accounting officer .
 If approval is withheld , the Commission may , by means of a decision giving
 reasons therefor . and taken on its sole responsibility , disregard this . , This
 decision shall be implemented;      it shall be communicated to the financial
 controller for his informat ion . The Commission shall inform the Court of Auditors
every three months of each of these decisions . :
5.    Where the financial controller finds that a document establishing a debt
 has not been drawn up or that a sum due has not been recovered , he shall
 inform the Commission thereof .
                                   Article 14
1.    The accounting officer shall assume responsibility for recovery orders .
forwarded to him by the authorizing officer .
2.    The accounting officer shall do all in his power to ensure that EDF
resources are recovered at the due dates and to ensure that the Community 's
rights are safeguarded .     •
3 . The accounting officer shall inform the authorizing officer and the
financial controller of any revenue not recovered within'the time limits
 laid down .                                                '       , _  f ,
                                  Artide 15
A receipt shall be issued in respect of all cash payments made to the           ' »
accounting officer .
 ---pagebreak---  SECTION III
'                                                              •
 COMMITMENT , CLEARANCE , AUTHORIZATION AND PAYMENT OF EXPENDITURE
 1.      Commitment of expenditure -                                    .    .
          .    :                      Arti eie 16
1.       ALL measures . whi ch may give rise to expenditure payable by the EDF must
be preceded by a proposa.L for commitment of expenditure from the authorizing
of f i cer .
2 . > . A provisional commitment may be entered into in respect of current
expenditure .
3.      An account shaLL be kept of commitments and authorizations . .           -    ,
                                      Arti eie 17
            ' .                                 '                '        /
ProposaLs for commitments , accompanied by the supporting documents , shall be          •
referred to the financial controller and to the accounting officer.'           They
shalL in part i cular "show the purpose of the expenditure , the estimated amount
involved , the 'item to which it is to be charged and the name and description
of the creditor .-        They shaLL be registered after approvaL by the financiaL
controller .                            x
                                      Arti c Le 18
The purpose of approval, by the financiaL controLLer shaLL be "- to . establish that
(a)       the expenditure has been charged to the correct item ;
(b)       appropriations are avaiLable ;
(c)       the expenditure is in order and in conformity with the provisions
          applicable to the management of the EDF and with all^ measures taken      .
          in implementation of those provisions , in parti cuLar the general and
        . special conditions of the financing agreement relating to the operation ;
(d)       the . principles of sound financial management have been applied .
                                      Article 19
1.      Where the financial controller withholds his approval he shall furnish a .
written statement, giving reasons therefor .        The authorizing officer shall be
notified accordingly .
 ---pagebreak--- Where approval is withheld and the authorizing officer maintains his
proposal > the refusal shall be referred for a decision to the Commission .
2.   Except where the availability of appropriations is in doubt , the Commission
may , by means of a decision giving reasons therefor and taken on its sole
responsibility , overrule such a refusal .     This decision shall be implemented ;
it shall be communicated to the financial controller for information . ' The
Commission shall inform the Court of Auditors every three months of each of
these decisions .
2.   Clearance of expenditure                                             :
                                Article 20
The clearance of expenditure shall be the act whereby the authorizing officer :
(a)   verifies the existence of the rights . of the creditor ;
(b)   determines or verifies the existence and the amount of the debt ;      and
(c)   verifies the conditions under which payment falls due .
                          '     Arti ele 21
1.   Clearance of any expenditure shall be subject to the submission of
supporting documents showing the creditor 's claim and , where appropriate ,
the service rendered .          -                             '
                                          ■ Ιι '            '
2.   However , for certain categories of expenditure , advances may be granted
under the conditions laid down by the Commission ..
3.   The Commission shall lay down the nature and contents of the supporting
documents to be enclosed with the payment orders .
 4.  The supporting documents relating to the accounts and to the establishment'
 of the revenue and expenditure account and the balance sheet referred to in
 Article 41 shall be retained for a period of five years from the'date of the
 decision giving discharge in respect of the operation of the EDF , referred
 to in Article 29 of the Internal Agreement .                              '
 ---pagebreak---                                     - 11 -
    However , the documents relating to operattons which have not been completed
    shall be retained beyond this period .
    5.   The authorizing officer empowered to clear expenditure shall personally
    check the supporting documents or 'Shall , on his own responsibility ,
    ascertain that this has been done .
    3.   Authorization of expenditure
                                    Artide 22
 / Authorization shall be the act whereby the authorizing officer , by -the issue
    of a payment order , authorizes the accounting officer to pay an item of
    expenditure which he has cleared .
                                    Article 23
    The payment order shall state :
    (a)   the item against which payment shall be charged ;
    (b)   the amount to be paid , in words and figures , with details of the
          currency in which payment is to be made ;       ,.                 ' '
    (c)   the name^and address of the payee ;   ,
    (d )  the method of payment ;                       \
  . (e)   the purpose of the expenditure .            -       .
    The payment order "shall be dated and signed by the authorizing officer .-
            ,                       Article 24                         -         ; •
    1.   The payment order shall be accompanied by the original supporting documents ,
    which shall bear or be accompanied by the approval of the authorizing officer
    confirming that the amouhts to be paid are correct and that the supplies have
. been, received or the service performed .       The payment order'shall show the
    numbers and dates of the relevant approvals of commitment L '
 ---pagebreak---     2.   Copies of the supporting documents , certified as true copies by the
    authorizing officer , may , in duly warranted cases , be accepted in place of
    the originals .           ' .
                                    Arti cle 25                  '        .
. 1.    For payments by instalment , the first payment order shall be accompanied
    by documents establishing the creditor 's right to payment of the instalment
    in question ..  -       .
   2.   Subsequent payment orders shall refer to t he. supporti ng documents already
  - furnished and repeat the reference number of the first payment order .
                          ■         Arti ele 26
                                                                      κ
    Payment orders , shall be sent to the financial controller for prior approval .
    The purpose of this prior approval shall be to establish that :
    (a)   the payment order was proper ly i ssued ;
    (b)   the payment order agrees with the commitment of expenditure and that the
          amount thereof is correct ;                                   "
    (c)   the expenditure is charged to the correct item ; .
    (d)   the appropriations are available ;
    (e)   the supporting documents are in order ;                   1   -
    (f)   the payee is correctly described .
                                                              \                   ...
                      ' - "         Arti ele 27     '
    Should approval be withheld , Article 19 shall apply .
                                    Article 28
    After approval , the original of the payment order , together with all
    supporting documents , shall be forwarded to the accounting officer .    .
 ---pagebreak---                                 " 13
4.   Payment of expenditure
                               ■A r 1 i c'Le 29
1.   Without prejudice to Article 122(3 ) of the Convention , payment shall be
the final act whereby the EDF is discharged of its obligations resulting
from carrying out the operations financed .        ^
2.  Payment shall be made by the accounting officer within the limits of
the funds available . -                            >                       »
                                Article 30
In the event of a substantive error or of the validity of the discharge being
contested or of'failyre to observe the formalities prescribed by this
Financial Regulation , the accounting officer shall suspend payment .
                                Article 31
1.  If payment is suspended , the accounting officer shall give the reasons
therefor in a written statement which he shall send forthwith to the
authorizing officer and , for information , to the financial controller .
2.  Except where the validity of the discharge is . contested the authorizing
officer may , where payment is suspended ,- refer the matter to the Commission .
The latter may require , in writing and on ,its own responsibility , that
payment be made .                                               •
                                                             Ν
                                Article 32
1.  Payments shall , as a general rule , be -effected through a bank account
or a post office giro account .       The procedure for opening , administering
and using such accounts shall be determined by the Commission .
 ---pagebreak---                                     - 14 -
   2.   The procedure referred to in paragraph 1 shall in particular require
   two signatures on cheques and on post office or bank transfer orders , one
   signature necessarily being that of the account ing ' off i cer or of a duly
   authorized administrator of advance funds ; . they shall , moreover , specify
  the expenditure in respect of which payment must necessarily be made either
  by cheque or by post office or bank transfer . .
                                    Article 33
  1 . For the payment of certain categories of expenditure , advance funds may
  be set up under the conditions laid down by the Commission .
  2.    The rules governing the management of the advance funds shall cover in ,
  parti cular :
 •( a )  the appointment of administrators of advance funds ;
  (b)    the nature and maximum " amount of each item of expenditure to be incurred ;
  (c)    the ma'ximum amounts which may be advanced;'
  (d )   the procedures for the production of supporting documents and the . time
         within which they must be produced;
  Ce )   the responsibility of the administrator of advance " funds .
                                    Article 34
• The conversion rates to be used for the calculation in EUA of payments to
  be made for the purpose of the projects or programmes referred to in Title VII
  of the Convention and in the corresponding provisions of the Decision shall
  be those in force on the effective date of such payments .        This date shall
  correspond to that on which the Commission accounts referred to in Article 124
  of the Convention and in Article 3 of this Financial Regulation were debited .
                                                                        •r"- r '
 ---pagebreak--- . SECTION   IV
      ι        ,
  RESPONSIBILITIES OF AUTHORIZING OFFICERS , FINANCIAL CONTROLLERS ,
  ACCOUNTING OFFICERS AND ADMINISTRATORS OF ADVANCE FUNDS
                                  Article 35
  Without prejudice to Article 122(3 ) of the Convention , authorizing officers .
  who , when establishing entitlements to be recovered , when issuing recovery
  orders , entering into commitments of expenditure or signing payment orders ,
  do so without complying with this Financial Regulation , shall - be "liable 'to
'disciplinary action and , where appropriate , to pay compensation .    ■ The
  same shall apply if they omit to draw up a document establishing a claim
  or if they neglect to issue recovery orders or are , without justification ,       '
  late in issuing them .
                                  Article 36
  Financial controllers render themselves liable to disciplinary action and , .
  where appropriate , to payment of compensation in respect of acts
  accomplished in carrying out their duties , notably where they approve
  expenditure in excess of appropriations . ,
                                  Artide 37
  1.    Accounting officers shall be l-iable to disciplinary action and , where
  appropriate , to payment of compensation as regards payments they make in       •;
  disregard of Article 30 .                             . ,
  They shall render themselves Liable to disciplinary action and to payment of
  compensation as regards any Loss or deterioration of the monies , assets and
  documents in their charge where such loss or deterioration results from an
  intentional mistake or serious negligence on their part .
  Under the same conditions , they shall be responsible for the correct execution
  of orders received by them in respect of the use and ,administration of bank
  and post office giro accounts , and in particular :
 ---pagebreak--- (a)    where the payments or . recoveri es made by them do not agree with the
       amounts on the payment orders or recovery orders ;
(b)    where they effect payment to a party other than the entitled payee .
2 . - Administrators of advance funds shall be liable to disciplinary action
and , where appropriate , to payment of compensation :         ,
(a)    where they cannot show due warrant with proper documents for payments
  t
       made by them ;
(b)    where they effect payments to a party other than the entitled payee .
They shall be liable to disciplinary action and to payment of compensation in
respect , pf any loss or deterioration of the monies , assets and documents in .
their charge as a result of an intentional - mistake or serious negligence
on t he,i r part .  ■         "         .
3.    Accounting officers and administrators of advance funds shall insure
themselves against any financial risk they may incur under this Article .         '
The Commission shall cover the relevant insurance costs .        It shall specify
the categories of officials qualifying as accounting of fi cers :,pr administrators
                                                                      \
of advance funds 'and the terrts on which it shall - cover the insurance costs
borne by the accounting officers or administrators of advance funds in order'
to protect themselves against the risks involved in their duties .
A.    A special indemnity shall be granted to accounting officers and
administrators of advance funds .
 The sums corresponding to this indemnity shall be credited each month to an
 account opened by the Commission on behalf of each of these officials in order
 to establish a guarantee fund to cover any cash or bank deficiency for which
 the person concerned might render . himself liable , in so far as such deficiency
 has not been covered by refunds from insurance companies .         ■   ' - ' ,
 ---pagebreak---   The credit balance in these guarantee accounts shall be paid over to the
  persons concerned after they terminate their appointment as accounting
  officer or administrator of advance funds and after they have been gi ven
  final discharge for their financial management .     v
                                 Article 38
'                     •                        '   *s
                          '                                 s
  The liability of authorizing officers , financial controllers , accounting
  officers and administrators of advance funds to payment of compensation and
  disciplinary action may be determined in accordance with Articles-22 and
  86 to 89 of the Staff Regulations of officials of the European Communities .
                                 Arti ele 39            v     ,
  The Commission shall be allowed a period of two years from the date on which
  the revenue and expenditure account is submitted to take a decision on the
  final discharge to be given to accounting officers, for the transactions
  relating thereto .
  SECTION V                                                           '
  ACCOUNTS
                                 Arti ele 40
  1.   The accounts shall be kept in EUA , by the double entry method and on the
  basis of the calendar year .   They shall show all revenue and expenditure
  between 1 January and 31 December of each year and shall ■ include the
  supporting documents .                 .   '   ■   '
  2.   The revenue and expenditure account and the balance sheet shall be
  drawn up in EllA .
 ---pagebreak---                                 -  18 -
                                Ar , i c   41
1.   Entries shall be made on the basis of an accounting system comprising a
nomenclature of budgetary items which males a clear distinction between the      ^
accounts which permit the balance . sheet to be drawn up and those which permit
the revenue and expenditure account to be drawn up .     These entries shall be
recorded in books or on cards , which must make it possible to draw up a
general monthly balance .
2.   The accounting system shall be set out in -a Commission Decision .
SECTION VI
        \
GENERAL PROVISIONS '                     -                  ,           •
                                Article 42
The Court of Auditors shall be notified of the appointment of the authorizing
officer , the financial controller , the accounting officer and of the
administrator of advance funds , of any delegation of powers pursuant to
Articles 9 and 12 and . of the accounting system referred to in Article 41 .
                                                              "   >
                  ' '           TITLE III
                          IMPLEMENTING MEASURES
SECTION I
EXECUTION OF EDF OPERATIONS ADMINISTERED BY THE COMMISSION
                                Article 43
The Commission shall take all appropriate measures to provide effective
information for the economic operators concerned , in particular by publishing
a bulletin containing details of clearly- identified projects , up to the 'stage
of their being put out to tender .
 ---pagebreak---                                     - 19 –
                                    Article 44
   The Commission shall - inform the Council each year of the results of
   invitations to tender for t he . precedi ng year . Where appropriate it shall
   notify the .Council of any measures it has. taken or proposes to take to
   improve the terms of competition for participation in invitations to tender
   issued by the ED F.     '
   In its report , the Commission shall provide the Council with information
   enabling it to assess whether the measures taken by the Commission have in
  -fact given all firms of the various Member " States , of the ACP States and of
  the associated countries and territories equal opportunity of access to
   works and supply contracts financed by the EDF .       .
                                    Arti ele 45
   Under Article 12,7(2 ) of the Convention and the corresponding provisions of
  the Decision , favourable opinion from the EDF Committee shall be required for
  the award of contracts by mutual agreement or after restricted invitations to .
  tender and for the performance thereof through public works departments .
                                                               ' "         '
   However ,, where they are justified by urgency and by 'unforeseen circumstances ,
  the above exceptions to the rules governing competition may be authorized by
  the Commission without a prior opinion from the EDF Committee .      In that
  event , the Commission shall immediately inform the EDF Committee thereof .
                                    Article 46
   The results of the invitations to tender referred to in this Section shall
   be published as soon as possible in the Official Journal of the European
   Communities .
/
 ---pagebreak---                                - 20 -
                               Article 47
1.  Tenders for supply contracts financed by the EDF shall be drawn up and
payments made , at the option of the tenderer , in EUA , in the currency of
the recipient State , country or territory , in the currency of the country
of his registered place of business or in that, of the country producing the
supplies .
2.  Tenders for wor^ks contracts and for technical assistance service contracts
financed by the EDF shall be drawn up and payments made in the currericj^of the
recipient State , cbuntry or territory .   However , the tenderer may request in
his tender that a justified part of the nominal amount of his tender be paid
in the currency of the country of his registered place of business or in the
currency of one of the Member States or in EUA , on the basis of the conversion
rate in force on the first day of the month preceding the month in which / the
date set for the opening of tenders falls .
The justification required under this paragraph shall be assessed
in the light of the verifiable facts , as regards the real origin of the services
to be provided and of the expenditure to which they give rise .      .
Where additional works are ordered which result in an increase in the nominal
amount of the tender , the justified part of the amount of the tender , referred
to in this paragraph , shall apply in respect of the amount of the additional
works in question .
                         *                               '
3.  Tenders for service contracts in respect of studies financed by the EDF
shall be drawn up and payments made , at the option of the contractor , either
in EUA or in the' currency of the country in which the contractor has his
registered place of business .
However , that part of the services provided which corresponds to expenditure
in the currency of the recipient State , country or territory shall be paid in
that currency .-  Where the sums to be paid in the various currencies are
defined by reference to another currency the conversion shall be effected on
the basis of the- rate specified in the contract .
 ---pagebreak--- 4.   Where tenders are drawn up , in EUA , payments connected with the debt
shall , as appropriate , be made in the currency of a Member State or in the
currency of a recipient -State , country or territory specified in the contract
on the basis of the equivalent value of the EUA on the day preceding payment .
5.   Where payment is made in the currency of the recipient State , country or
territory it must be made through a bank established in .the recipient country
Where payment is made in another currency it must be .made through the
intermediary of an approved bank or agency established in the country where
the contractor has his registered place of business ;
SECTION II'                                                  i
FINANCIAL COMMITMENTS
                                 Arti eie 48               >
1.   The financing - agreement referred to in Article 115 of the Convention and
in the corresponding provisions of the Decision shall specify the amount of -.,
the EDF 's financial commitment in respect of the operation in question .
2.   No expenditure in excess of this amount may be charged to the EDF unless
a decision has been taken to commit additional funds . thereto under the
conditions laid down in Articles 16 to 19 and in Article 58 .         -     .
 ---pagebreak--- The request for the commitment of additional funds shall be addressed to the
Commission and appraised under the conditions laid down in Article 117 of the
Convention and in the corresponding provisions of the Decision .
                                  Article 49
The transfer agreement referred to in Article 40 of the Convention and in the
corresponding provisions of the Decision shall state the data on which
calculation of the annual transfer in EUA is based, 'the currencies in which
the transfer of this amount -is to be made and , where appropriate , the
conditions for the reconstituti on of the resources made; available to the
stabilization system referred to in Title II of the Convention .
SECTION III
   \                  N
SPECIAL LOANS
                                  Arti ele 50
1.   A decision to grant special loans shall set the limit to the Community 's
commitment .    Contracts relating to such loans , drawn up jointly with the
Bank for ttie parts wh^ch''* concern the latter , shall be concluded by the
Commission on behalf of the Community .
2.   The amounts of the appropriations corresponding to each loan granted shall
be expressed in EUA ,      If an appropriation is cancelled before all or part of
the payments relating thereto have been made the unpaid part shall be regarded
as not having been granted .
3.   Loans shall be paid in the currency or currencies of the Member States as
fixed by the. Commission after consultation with the borrower .      By way of
derogation from Article 34 , the sums paid shall be charged against the
appropriations on the basis of the conversion rates in force , on the day
             1\         ''                 •       -
preceding that of payment , between the EUA and the currency or currencies
used for the payment .                                                   •
 ---pagebreak---                                  - 23 -
4,   Reimbursements and interest payments shall be credited to the Community 's
account with the Bank .     The Bank shall recover such reimbursements and
interest payments by virtue, of spetial terms of reference conferred upon it
by the Commission , acting for the - Communi ty , after consulting the EDF Committee .
5.   The amounts to be reimbursed and interest due in respect of special loans
shall be expressed in EUA .     Reimbursements and interest payments shall be
made in one or more of the currencies of the Member States , chosen by the
borrower .
                       -
6.   The, rates for converting EUA into- the currencies of the Member States
for' the purpose of paying sums due in the form of reimbursements , interest
payments and any commission due shall be those in force on the tenth day
preceding payment .       '              '                           .
            '                 '  Arti ele 51                ,
In conformity with Article 56 of the Convention and the corresponding provisions
of the Decision , the implementing measures concerning special loans shall also
apply . in respect of the aid granted from the special financing facility for
the mining sector .
SECTION IV
RISK   CAPITAL
                                 Artide 52
1.   Any decision to grant risk capital shall set a limit in EUA to the      .
Community 's commitment and financial responsibilities and to the extent of
the rights in the company attaching^© such operations .
The - instruments giving effect to risk capital operations shall be concluded by '
the; Bank acting as the Community 's authorized agent .
2.    The Bank , acting for and on behalf of the Community , shall manage the
operations referred to in paragraph .1 which have been the Subject of a financing
decision by the Board of Directors of the Bank .
3.    Following the signing of each contract , the Bank shall communicate to the
Commission the estimated dates and amounts of the calls for funds .       Whenever
called upon by the Bank to do so , the Commission shall pay to it in EUA the
amount it needs for carrying out risk capital operations ;
 ---pagebreak---                                      - 24 -
  4.     Payments relating to receipts / income and repayments in respect of risk
  capital operations shall be credited to the Community 's account with the Bank .
  SECTION V
  SUBSIDIZED LOANS FROM THE BANK
                                                1
                                     Article 53
  1.     Pursuant to Article 104 of the Convention and the corresponding provisions
  of the Decision , the aggregate amount of interest rate subsidies on loans from
  the Bank shall be calculated in EUA in terms of its current value on the
  effective date of signing 'of the loan contract , on the basis of a compound
  interest rate fixed by the Council and the'Bank inagreement with the
  Commission     and hereinafter referred- to as the " current value rate ".
  2.     The Bank shall make the estimated calculation of current value referred to
  in paragraph 1 by reference to :
  (a)     the date fixed for the signing of the loan contract and the rate of
          interest applicable on the date the calculation is made ;
  ( b ) ' an estimated schedule for paying out the loan ; :
  (c)     an estimated schedule for repaying the loan on the basis of the
          subsidized interest rate ;
  Cd )    an estimated schedule for the amounts required to cover the interest
          rate subsidies when they fall due .
  The Bank shall communi cate to the Commission as soon as possible the factors
  involved in the calculation and the total amount of the interest rate subsidies
  at their current value on the' date fixed for the signing of the loan contract .
  3.     The up-dated total amount of the interest rate subsidy shall be paid to the
  Bank by the Commission on the date fixed for the signing of the loan contract .
  4.     As soon as a subsidized loan has been fully paid out , account being taken
  of any cancellation of part of the appropn ati on , . the Bank will carry out -
  the final calculation of the interest , rate subsidy relating to the loan on the
Declaration
It is understood that the compound interest rate ( current value rate ) to be
applied to the aggregate amount of interest rate subsidies referred to in
Article 53(1 ) will be set , on a case-by- case basis for each loan , at the
level of three quarters of the annual rate of interest actually being charged *
by the European Investment Bank on the. date of the signing of the icai cciiifu . •.
 ---pagebreak---                                  - 25 -
basis of the relevant data , and in particular the date on -which the loan contract was
signed , the rate of interest being charged by the Bank on that date , the
schedule of payments and any adjustments to the schedule of repayments .
                               *
Should the result of the final calculation of the interest rate subsidy
be at variance with that given by the estimated calculation carried out
irY accordance with paragraph 2 , the Bank shall be entitled to receive
payment of a further subsidy by the Commission or , where appropriate ,
shall be obliged to reimburse any overpayment to the Commission .
5.   If all of an appropriation is cancelled or all or part of a loan which
has been made is repaid in advance , the Bank shall pay back to the - Commi ssion
an amount of the subsidy corresponding to ttie amount of the appropriation or
that part of the loan which has been repaid .
6.   The sums reimbursed to the Commission will be charged against the amount
of 175 million EUA of EDF resources in the form of grants for financing
interest rate subsidies , in accordance with Article 4 of the Internal
Agreement . .
                        l
7.   The amounts of the additional payments to be made by the Commission or
sums to be reimbursed by the Bank pursuant to paragraphs "4 and 5 will be
increased by compound interest and updated at the same rate as that
stipulated in paragraph 1 for the period between the date of payment of the
updated total amount of the interest rate subsidies and the date of the
operation specified in the second subparagraph of paragraph 4 .          The latter date
may not be more than 30 days after the complete or partial cancellation or
advance repayment of the subsidized loan .                     ,
8.   All payments provided fiv in this Article shall be expressed and made
in EUA .
SECTION VI
MANAGEMENT OF THE EXPORT EARNINGS STABILIZATION SYSTEM
                                 Article 54
1 .  For the calculation in EUA of the reference level and of the actual
earnings referred to in Articles 36 and 37 of the Convention and in the
corresponding provisions of the Decision , the exchange rates applicable shall '
be the average rates in force in the periods to which the amounts concerned
refer .
 ---pagebreak---                             /
                                 - 26 -
2.   For payments relating to the transfers referred to in Articles 39 and 40 '
of the Convention and in the corresponding provisions of the Decision , the 1
 conversion rates to be used between the EUA and the currency or currencies
used for payment shall be those in force on the day preceding payment .
3.   For payments relating to the contributions towards the reconstitution of
resources referred to in Article 43 of the Convention -and in the corresponding
provision's of the Decision , the conversion rates to be used between the EUA
and the currency or currencies used for payment shall be those in force on
the tenth day preceding payment .
                                 Article 55
In the event of advance use of the following year 's instalment , the advances
referred to in Article 40(3 ) of the Convention and in the corresponding
provisions of the Decision shall be reduced proportionately .
                                 Article 56
          ν
1 . The Commission shall inform the Council every three months concerning the
financial situation , of the system .     -       '
2.   The information provided pursuant to paragraph 1 shall be supplemented or
updated whenever proposals for transfers are laid before the Member States .
SECTION VII
EXECUTIVE AGENTS   '                                       ^
                                              . .
                                  Chapter I '
            '    _    The chief authorizing officer
                                Article 57
1 . The chief authorizing officer . of the EDF , referred to in Article 121 of
the Convention , shall take all measures necessary for the implementation of
the provisions of Chapter 7 of the Convention and the cor responding
provisions of the Decision .
 ---pagebreak---                                             27 -
        2.    The chief authorizing officer shall ensure , before the publication of an
         invitation to tender , that the documents relating to tenders do not contain
        any direct or indirect discriminatory provisions .      He shall ensure that '
        tenders are compared under equal conditions and in particular that the
         import duties or taxation of the recipient State , country or territory do not
        constitute an obstacle to participation in invitations to tender .
        3„    The chief authorizing officer may suspend the publication of a notice of
        invitation to tender where it is found that corrections must be made to the
        specifications or other documents in replacement thereof .       To this end , he '
        shall inform the relevant authorities of the recipient State , country or
        territory of his observations .                                           ,
        A.    The chief authorizing officer shall ensure that contractors are designated
        and contracts awarded in compliance with Articles 126 and 128 of the
        Convention .
        Where he deems it appropriate , the chief authorizing officer shall consult         '
        experts chosen for their technical competence and their independence
        vis - a - vis the firms concerned by the award of the contract .    1
                                                                                             Ν
                                  '     ... . \    __2 '
                                          Arti eie 58
        Under Arficle'_117 of the Convention and the corresponding provisions of the
        Decision , decisions to commit the additional funds required to cover any
        excess expenditure incurred under a project shall be taken :
' Declaration .       .                                                       '
  It - is understood that the Commission will inform the EDF Committee on a          .
  regular basis concerning decisions to commit additional funds taken by
  the chief authorizing officer pursuant to the second indent of Article 58 .
 ---pagebreak---                                  - 28 -
- in accordance with the procedures Laid down in Articles 18 and 19 of the
   Internal Agreement where the excess expenditure is higher than a ceiling
   of 15% of the original commitment set out in the financing decision ,
- by the chief authorizing officer of the EDF where the excess expenditure
   is equal to or lower than the 15% ceiling .
                                                                 ?■
                               ' Chapter II
                      The national authorizing officer
                                 Arti cle 59
In the performance of his duties , as laid down in Article 122 of the Convention
the national authorizing officer shall comply with the provisions of this
Financial Regulation regarding commitment , clearance and authorization of
expenditure .
                                 Article 60
Where the chief authorizing officer of the EDF is aware of delays in the
procedures relating to projects financed by^the EDF he shall -, in conjunction-
with the national authorizing officer , make all contacts necessary to remedy ,
the situation .
If , for any reason whatsoever , services have been rendered but further delay
in the clearance , authorization or payment gives rise to difficulties likely to
call i nto ^ uesti on the full performance of the contract    the chief authorizing
officer may take all appropriate measures to resolve these difficulties , to
remedy , where necessary , the financial consequences of the resultant situation
and , more generally , to enable , the project or projects to be completed under
the best economic conditions .      He shall inform the national authorizing ,
officer of such measures as soon as possible .       If payments are thus . made
directly by the Commission to the beneficiary of the contract the Community
          I.           ·                           7                            - χ
shall automatically acquire that beneficiary 's right as creditor vis -'a - vis
                                       ■                                      v
the national authorities .
 ---pagebreak---                                   29 -
                               Chapter III
                         The Commission Delegate
                                 Article 61
During the performance of operations , the delegate shall verify on the spot
               /
and on the basis of records that work carried out or services rendered
tally with their descriptions as given in the financing agreements , contracts
or estimates .                                                          ^    • -
                                 Article 62
The delegate shall comply with this Financial Regulation in the performance of
his duties .
                                 Article 63
In the event of failure to comply with this Financial Regulation , of misconduct
or gross negligence in the performance of his duties , the delegate shall be
answerable to the Commission .
                                Chapter IV
                           The paying agent
                             \                                  .
                               - Arti ele 64                      <•
In the performance of itstasks , as laid down in Article 124 of the Convention ,
the paying agent- shall comply with this Financial Regulation .
                                 Article 65
In the event of failure to observe the provisions in force , of misconduct
or of gross negligence which entail financial loss for the Community , the
paying agent shall be held financially responsible under the conditions
and in accordance with the terms laid down in the contract binding it to
the Commission .                                          '
 ---pagebreak---                                       - 30
       SECTION VIII
       PRESENTING AND AUDITING ACCOUNTS
                                                              \
                                      Article 66
       1.  The balance sheet'and revenue and expenditure account , expressed in EUA ,
       shall be adopted by the Commission at the close of each financial year .
       Without prejudice to Article 29(4 ) of the " Internal Agreement , they shall be
       submitted no later than 31 March of the following financial year together
       with documentary evidence , for examination by the Court of Auditors .
       2.   In carrying out the task assigned to it , the Courtof Auditors and
       its members may be assisted by officers of the Court .
       The tasks delegated to such officers must be specifically laid down and
       limited to the time necessary for their completion .     The Court itself
I      or one of its members shall notify these tasks to the authorities with \
       whom the relevant officer is to carry out his work .
  Declaration
  In order to facilitate the audits carried out by the Court of Auditors on the
 operations of each financial year , the Commission shall forward to it on a
  regular basis , during the financial year , records of meetings of the EDF Committee ,
  financing decisions adopted by the .Commi ssion or the Council , financing or transfer
 agreements and any periodic statements relating to the financial situation of
  current operations .
 ---pagebreak---                                         - 31 -
                                        Arti ele 67
'a      1.    The audit carried out by the Court of Auditors , shall be based on records
        and shall , if necessary , be performed on the spot .     It shall be concerned
        solely with operations and projects financed from EDF resources managed
        by the Commission and , its purpose shall be to establish that all revenue
        has been received and all expenditure incurred in a lawful and regular
       manner with regard to the provisions appli cable , and that the, financial
        management has been sound .          1
       2.     In the performance of its task the Court of Auditors may , under the
        conditions laid down in paragraph 4 , consult all documents and information
        relating to the financial management of the departments subject to its
        inspection ;   it has the power to hear any official responsible for revenue
       and expenditure operations and to use any of the auditing procedures
       appropriate to those departments .
       3.    The Court of Auditors shall ensure that all securities and cash on
       deposit or in hand are checked against vouchers signed by the depositaries        >.
       or against official memoranda of cash and securities held .        The board may
        itself carry out such checks .
       4.    The Commission shall provide the Court of Auditors with all the facilities
        and information which the latter deems necessary for the performance of its         .
       task .                                                          *
   Dec larati on ■                                             "
   1.     In no case may the exercise of the powers vested in the Court of Auditors
   infringe the sovereignty of the recipient States ,- countries or territories .
   Should the Court of Auditors wish to carry out audits on thfe territory of the
   recipient States , countries or territories , it may do so by agreement with-
   the , authorities of the State , country of territory concerned .      Such audits
   would be limited to the inspection arrangements implemented pursuant to the /
   provisions governing EDF operations and would not apply in respect of the
   execution arrangements which are the responsibility of the national authorizing
   of f i cer .                            '   ' •              ...           '
 ■ 2 . It is understood that the Court of Auditors may ,. should it so request ,
   carry out, an audit on completion of the contract or estimate relating to an
   operation or project .                                                       '
 ---pagebreak--- In parti cular , it shall place at the disposal of the Court of Auditors
all documents concerning the conclusion and performance of contracts and
all accounts in cash or materials , all accounting records or su*ppol"ting ,
documents and the administrative documents pertaining thereto , as well as
all documents relating to revenue and expenditure .
To this end > officials subject to audit by the Court of Auditors shall in
part i cular :
(a)    make available for inspection their cash in hand and any other cash ,
       securities or assets of any kind , the supporting documents in respect of
       their management of which they are the depositaries - and any books ,
       registers    and other documents relating thereto ;
Cb )   present the correspondence or any other document required for the full .,
      'implementation of the audits ."     ,         /        . . ! • •
The information referred to under ( b ) may be requested only by the Court of
Auditors .                                                     '           '
The Court of Auditors shall be empowered to audit the . 'documents in respect
of EDF revenue and expenditure which are held by . the Commission 's departments
and , in particular , by the departments responsible for , decisions on such
                                  >                ...
revenue and expenditure .
                                  Article 68
1.   The Court of Auditors shall communicate to the Commission , not later than
15 July , any comments which it considers should appear in the annual report
provided for in Article 206a of the Treaty . .                          , ;
  -                          ~         '               ■   t'    •       ■
The Commission shall forward its replies to the Court of Auditors not later
than 31   October .             •   '
2.   The Court of Auditors shall attach to its report an assessment of .the
soundness of the financial management .        '
 ---pagebreak--- 3.   The Court of Auditors may also make comments at any time on specific
matters and may give opinions where requested by one of the Community
institut ions .          ,
                                   Arti ele 69
The^Court of Auditors shall send its annual - report , together with the
Commission 's replies , not later than 30 November to the Council , to the European
Parliament and to the Commission and shall ensure its publication in the
Official Journal of the European Communities .       .
                                   Article 70
1.   Before 30 April of the following year the European Parliament , . acting on the
recommendation of the Council , shall give the Commission a discharge in
respect of the financial management of the EDF for the past year , in
accordance with Article 29(3 ) of the Internal Agreement .
2.   The financial controller shall take account of the comments appearing
in the decision giving discharge .
3.   The Commission shall take all appropriate steps, to act on the comments
                                                l
appearing in the decision giving discharge .    At the request of Parliament
or the Council it shall report on the measures taken in the tight of these
comments and in particular on the instructions given to those of its departments
which are responsible for the management of the EOF .     This report shall also
be 'forwarded to the Cour: of Auditors .                       \
Subject to the second sentence of the preceding paragraph the^'Commission must ,
in an Annex to the revenue and expenditure account for the next financial
year , give an account of the measures taken further to the comments appearing
in the deci si on gi ving di s charge .
3.   The revenue and expenditure account and balance sheet for each financial
year and the decision giving the discharge shall be published in the Official
Journal of the European Communities .
 ---pagebreak---   SECTION IX
  GENERAL AND FINAL PROVISIONS
                                Article 71
  The sums collected by the Bank either in the form of repayments , interest
  or charges in respect of special loans or the aid granted from the
  special financing facility or in the form of products , revenue or
  repayments from risk capital operations shall be centralized in a - special
  account opened with the Bank on behalf of the Community and denominated
' in EUA .
)              ' "              Article 72
  This Regulation shall be applicable for the same period as " the Internal
  Agreement .
  Done at  Brussels ,
                                           For the Council
                                           The President .