CELEX: 51990PC0243
Language: en
Date: 1990-06-15
Title: DRAFT FINANCIAL REGULATION APPLICABLE TO DEVELOPMENT FINANCE COOPERATION UNDER THE FOURTH LOME CONVENTION

No C 165/8                           Official Journal of the European Communities                                 6. 7. 90
              Draft Financial Regulation applicable to Development Finance Cooperation under the fourth
                                                    Lome Convention
                                                   COM(90) 243 final
                                     (Submitted by the Commission on 25 June 1990)
                                                      (90/C 165/07)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                       Whereas the ecu used in application of this Financial
                                                               Regulation is defined in Council Regulation (EEC) No
                                                                1971/89 of 19 June 1989 amending Article 1 of Council
Having regard to the Treaty establishing the European          Regulation (EEC) No 3180/78 or in any subsequent
Economic Community,                                            Council Regulation defining the composition of the ecu,
Having regard to the fourth ACP-EEC Convention,
signd at Lome on 15 December 1989, hereinafter                 HAS ADOPTED THIS FINANCIAL REGULATION:
referred to as 'the Convention',
Having regard to the Internal Agreement on the                                           TITLE I
financing and administration of Community aid, here-
inafter referred to as 'the Internal Agreement' and in                           Financial arrangements
particular Article 32 thereof,
                                                                                        Article 1
Having regard to the Council Decision on the asso-              1.   The Council shall notify the Commission by 30
ciation of the overseas countries and territories with the     November each year of the decision which it adopts
European Economic Community, hereinafter referred to           pursuant to the first subparagraph of Article 6 (1) of the
as 'the Decision',                                             Internal Agreement and which relates to the schedule of
                                                               calls for contributions to the EDF.
Having regard to the General Regulations and General
Conditions for Works, Supplies and Service Contracts
                                                               2.    Annual contributions to the EDF shall in principle
financed by the European Development Fund which
                                                               be called up in four instalments payable on:
were approved by the ACP-EEC Council of Ministers
on . . . March 1990 (hereinafter referred to as 'the
General Regulations and Conditions of Contract'),              — 20 January,
                                                               — 1 April,
Having regard to the draft         Financial    Regulation     — 1 July,
submitted by the Commission.                                   — 1 October.
Having regard to the consultation of the European              The Commission shall notify the Member States as soon
Parliament,                                                    as possible, and in any event at the beginning of each
                                                               financial year, of the amount of the quarterly instalments
                                                               of contributions to be paid on each of the due dates.
Having regard to the opinion of the European
Investment Bank, hereinafter referred to as 'the Bank',
                                                               Supplementary contributions decided on by the Council
                                                               in accordance with Article 6 (3) of the Internal
Having regard to the opinion of the Court of Auditors,         Agreement shall, unless otherwise decided by the
                                                               Council, be due and be made within as brief a period as
                                                               possible which shall be laid down in the decision to call
Whereas, pursuant to Article 1 (1) of the Internal
                                                               for such contributions and which may not in any case
Agreement, the Member States have set up a Seventh
                                                               exceed three months.
European Development Fund, hereinafter referred to as
'the EDF',
                                                               3.    The Commission shall inform the Member States as
Whereas under Article 32 of the Internal Agreement, the        soon as possible before the date on which each
provisions for implementing the Agreement shall be the         instalment of contributions is due whether it intends to
subject of a Financial Regulation adopted, upon the            reduce or refrain from calling the instalment after taking
entry into force of the Convention, by the Council acting      into account the actual cash situation of the EDF
bv the qualified majority laid down in Article 21 (4) of       treasury and the most up-to-date available expenditure
the said Agreement,                                            estimates for the remainder of the year.
 ---pagebreak---   6. 7. 90                             Official Journal of the European Communities                            No C 165/9
  4.     Each Member State shall make the contributions                                    Article 4
  referred to in this Article in proportion to its contri-
  butions to the EDF as fixed in Article 1 (2) of the              The signatures of the Commission officials empowered
  Internal Agreement.                                              to carry out operations on the EDF's accounts shall be
                                                                   lodged with the banks concerned when the accounts are
                                                                   opened or, in the case of officials who are authorized
  5.     Where an instalment of contributions payable under        subsequently, when they are designated.
  this Article is not paid within 15 days of the due date,
  the Member State concerned shall, without further
  notice, be required to pay interest in respect of the                                    Article 5
  amount not paid. The late payment penalty interest shall         1.   EDF resources must be used in accordance with the
  be calculated on the basis of a rate of two percentage          principles of sound financial management, and in
  points above the interest rate for short-term financing         particular those of economy and cost effectiveness.
  applicable on the date on which the instalment is due on        Quantified objectives must be identified and the progress
 the money market of the Member State for the ecu. This           of their realization monitored.
  rate shall be increased by 0,25 of a percentage point for
 each month of delay. The increased rate shall be
 applicable to the entire period of delay. Amounts                2.    The Commission shall, as far as possible, make any
 received by the Commission in respect of such late               withdrawals from the special accounts referred to in
 payment interest shall be credited to the account                Article 2 (3) in such a way as to maintain a distribution
 provided for in Article 9 (2) of the Internal Agreement.         of its assets in those accounts corresponding to the
                                                                  proportions in which the various Member States
                                                                  contribute to the EDF.
                           Article 2
  1.    The financial contributions of the Member States                                  Article 6
 shall be expressed in ecus.                                      In accordance with Article 319 of the Convention and in
                                                                  line with the provisions of Article 50 of this Financial
                                                                  Regulation, payments from the EDF shall be effected, as
 2.     Each Member State shall pay the amount of its
                                                                  the case may be, either in the national currencies of the
 contribution in ecus.
                                                                  ACP States or in ecus.
 3.     Financial contributions shall be credited by each
                                                                                          Article 7
 Member State to a special account entitled 'Commission
 of the European Communities — European Devel-                   The Commission shall transfer from the special accounts
 opment Fund' opened with the bank of issue of that               opened pursuant to Article 2 (3) amounts needed to
 Member State or the financial institution designated by          replenish the accounts opened in its name in accordance
 it. The amount of such contributions shall remain in            with Article 3 of this Financial Regulation and with
these special accounts until required to meet payments           Article 319 of the Convention. Such transfers shall be
needs provided for in Article 319 of the Convention.             made on the basis of the cash requirements to meet
                                                                 payments needs.
4.      Upon expiry of the Convention, that part of the
contributions which the Member States remain obliged
                                                                                          TITLE II
to make shall be called up by the Commission, as
required, on the conditions laid down in this Financial                           Management of the EDF
Regulation.
                                                                                         SECTION I
                           Article 3                                                  General provisions
 1.     In order to make payments provided for in Article
319 of the Convention, the Commission shall open                                          Article 8
accounts with financial institutions in the Member States.
                                                                 1.    The EDF shall be administered financially in
Subject to the provisions of Article 319 (3) of the
                                                                 accordance with the principle that authorizing officers
Convention, deposits in these accounts shall bear
                                                                 and accounting officers shall be different individuals.
interest. Subject to the provisions of Article 192 of the
                                                                 Appropriations shall be administered by authorizing
Convention, such interest shall be credited to the
                                                                 officers, who alone shall have the power to enter into
account provided for in Article 9 (2) of the Internal
                                                                 commitments regarding expenditure, establish sums due
Agreement.
                                                                 to be collected and issue recovery orders and payment
                                                                 orders.
2.     Payments from these accounts shall be made in
accordance with the provisions of Article 319 (4) and (5)        2.    Collection and payment operations shall be carried
of the Convention.                                              out by the accounting officer.
 ---pagebreak--- N o C 165/10                           Official Journal of the European Communities                                 6. 7. 90
3.    The duties of authorizing officer, financial               The financial controller must be consulted on the setting
controller and accounting officer shall be mutually              up of the EDF accounting system and shall have access
incompatible.                                                    to the data of the system.
                          Article 9                                                        Article 11
1.    Within the limit of the appropriations provided for        In accordance with Article 311 (1) of the Convention,
in Article 1 of the Internal Agreement together with any         the Commission shall appoint the chief authorizing
other revenue accruing to the EDF, the Commission                officer of the EDF. He shall be responsible for the prep-
shall, without prejudice to Article 10 (2) of that               aration of the revenue and expenditure accounts referred
Agreement, manage the EDF on its own responsibility in           to in Article 69 of this Financial Regulation. He may
accordance with the conditions laid down in the                  have recourse to deputy authorizing officers, whom he
Convention, the Internal Agreement and this Financial            shall apoint, subject to approval by the Commission.
Regulation.
2.    The Commission may delegate part of the duties of                                    Article 12
the accounting officer and part of the responsibility for
monitoring to authorized agents appointed by it. The              1.   The Commission shall appoint the financial
rules governing responsibilities adopted under this Title        controller, who shall be responsible for monitoring the
shall apply to such authorized agents within the limits of       commitment and authorization of expenditure and for
the powers delegated to them. Each decision to delegate          monitoring revenue. The financial controller may be
powers shall state the duration and extent of the                assisted in his duties by one or more assistant financial
mandate.                                                         controllers.
3.    Those to whom powers are delegated may act only            2.     Monitoring shall be carried out by the financial
within the limits of the powers expressly conferred upon         controller by means of inspection of the files relating to
them. Decisions to delegate powers shall be notified to          expenditure and revenue and, if necessary, on the spot.
those to whom powers are delegated, to the accounting
officer, the financial controller, the authorizing officers
and the Court of Auditors.                                       3.     Special rules applicable to the financial controller
                                                                 shall be formulated in such a way as to ensure his inde-
                                                                 pendence in carrying out his duties. Measures taken in
4.    The principles of the provisions of this Financial         respect of his appointment and promotion, disciplinary
Regulation relating to the monitoring and payment of             action or transfer, and the various procedures of inter-
expenditure shall be applicable to expenditure effected by       ruption or termination of his appointment shall be the
delegation. Such expenditure may not be finally entered          subject of reasoned decisions which shall be forwarded
into the EDF accounts until the Commission has verified          to the Council for its information.
that the expenditure has been correctly cleared and that
the authorization and payments are in order, in
accordance with the requirements of this Regulation.             4.    The persons concerned or the Commission may
                                                                 institute proceedings before the Court of Justice.
                         Article 10
Where revenue and expenditure operations are managed                                      Article 13
by means of integrated computer systems, the provisions
                                                                 The collection of revenue and the payment of expen-
of Sections II and III of Title II of this Financial Regu-
                                                                 diture shall be carried out by an accounting officer
lation shall apply with due allowance for the possibilities
                                                                 appointed by the Commission. Subject to Articles 9 (2)
and     requirements     deriving    from      computerized
                                                                 and 34 (2), the accounting officer alone shall be
management.
                                                                 empowered to manage funds and assets. He shall be
                                                                 responsible for their care.
To this end:
— the supporting documents may remain with the auth-             The accounting officer shall be responsible for main-
    orizing officer or the accounting officer for the            taining the accounts, as provided for in Articles 36 and
    purposes of checking,                                        37 and for the preparation of the financial statements
                                                                 provided for in Article 69.
— signatures and approvals may be added in appro-
    priate computerized form.
                                                                 He may be assisted in his duties either by one or more
                                                                 assistant accounting officers appointed under the same
However, the financial controller may request the                conditions as the accounting officer or by authorized
original supporting documents if he considers it                 agents designated by him under the authority of the
necessary for the purposes of checking.                          Commission.
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                           Article 14                              4.    If the authorizing officer waives the right to
                                                                   recover an established debt, he shall send beforehand a
 The Court of Auditors shall be notified of the                    proposal for cancellation to the financial controller for
 appointment of the authorizing officer, the financial             his approval and to the accounting officer for his infor-
 controller, the accounting officer and the administrator          mation. The purpose of approval by the financial
 of advance funds and of the accounting plan referred to           controller shall be to establish that the waiver is in order
 in Article 37. The Commission shall forward to the                and conforms with the principles of sound financial
 Court any rules of procedure drawn up by it in respect            management. The proposal concerned shall be registered
 of financial matters.                                             by the accounting officer.
                                                                   If approval is withheld, the Commission may, by a
                         SECTION II                                decision stating the full reasons therefor and on its sole
                           Revenue                                 responsibility, overrule this refusal. This decision shall be
                                                                   final and binding. It shall be communicated for infor-
                                                                   mation to the financial controller. The Commission shall
                           Article 15
                                                                   inform the Court of Auditors of all such decisions within
 1.     The recovery of any sum due to the EDF shall give          one month.
 rise to the issue by the authorizing officer of a recovery
 order.
                                                                   5.    Where the financial controller finds that a
                                                                  document establishing a debt has not been drawn up or
 2.     Without prejudice to the provisions of Article 10,        that a sum due has not been recovered, he shall inform
 recovery orders shall be transmitted by the authorizing          the Commission thereof.
 officer to the financial controller and shall be subject to
 the latter's approval. On approval by the financial
controller, the recovery orders shall be registered by the                                    Article 16
 accounting officer. The purpose of approval by the
 financial controller shall be to establish that:                  1.    The accounting officer shall assume responsibility
                                                                  for recovery orders forwarded to him by the authorizing
                                                                  officer.
 (a) the revenue is correctly credited;
 (b) the recovery order is correct and in conformity with         2.     The accounting officer shall do all in his power to
      the provisions applicable to the management of the          ensure that EDF resources are recovered with a
      EDF and with all measures taken in implementation           minimum of delay and that the Community's rights are
      of those provisions;                                        safeguarded.
(c) the principles of sound financial management have             3.     The accounting officer shall inform the authorizing
      been applied;                                               officer and the financial controller of any revenue not
                                                                  recovered within a reasonable time and shall indicate
                                                                  what action has been taken to recover the amount due
(d) the supporting documents are in order;                        and what further steps are proposed to be taken.
(e) the debtor is correctly described;
                                                                                            SECTION III
(f) the due date is indicated;
                                                                  Commitment, clearance, authorization and payment of
                                                                                             expenditure
(g) the amount and currency of the sum to be recovered
      are correct.
                                                                              1. C o m m i t m e n t of e x p e n d i t u r e
3.     The financial controller may withhold his approval                                     Article 17
if he considers that the condidions laid down in
paragraph 2 (a) to (g) are not met.                               1.     All measures which may give rise to expenditure
                                                                  payable by the EDF must be preceded by a proposal for
                                                                  commitment of expenditure from the authorizing officer.
The Commission may, by a decision stating the full                A provisional commitment may be entered into in respect
reasons therefor and on its sole responsibility, overrule         of current expenditure.
this refusal. This decision shall be final and binding; it
shall be communicated for information to the financial
controller. The Commission shall inform the Court of              2.     Without prejudice to Article 34, decisions taken by
Auditors of all such decisions within one month.                  the Commission in accordance with the provisions auth-
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orizing it to grant financial aid from the EDF shall             be final and binding; it shall be communicated for infor-
constitute commitments of expenditure.                           mation to the financial controller. The Commission shall
                                                                 inform the Court of Auditors of all such decisions within
                                                                 one month.
3.     An account shall be kept of commitments and auth-
orizations.
                                                                               2. C l e a r a n c e of e x p e n d i t u r e
                          Article 18                                                            Article 21
Without prejudice to Article 10, proposals for                   The clearance of expenditure shall be the act whereby
commitments accompanied by the suporting documents,              the authorizing officer:
shall be transmitted to the financial controller. They shall
show in particular the purpose of the expenditure, the
estimated amount involved, the item to which it is to be         (a) verifies the existence of the creditor's claim;
charged and the name and description of the creditor.
They shall be registered by the authorizing officer after        (b) determines or verifies the existence and the amount
approval by the financial controller.                                 of the sum due; and
                                                                 (c) verifies the conditions under which payment falls
                          Article 19                                  due.
 1.    The purpose of approval of proposals for
commitment by the financial controller shall be to                                              Article 22
establish that:
                                                                  1.   Clearance of any expenditure shall be subject to the
                                                                 submission of supporting documents showing the
(a) the expenditure has been charged to the correct              creditor's claim and, where appropriate, the service
     item;                                                       rendered or the existence of a document justifying
                                                                 payment. The Commission shall lay down the nature and
(b) appropriations are available;                                contents of the supporting documents to be enclosed
                                                                 with the payment orders.
(c) the expenditure is correct and in conformity with the
     provisions applicable to the management of the EDF          2.    For certain categories of expenditure, advances may
     and with all measures taken in implementation of            be granted under the conditions laid down by the
     those provisions, in particular, the general and            Commission.
     special conditions of the financing agreement
     relating to the operation;
                                                                 3.    The supporting documents relating to the accounts
                                                                 and to the establishment of the revenue and expenditure
(d) the principles of sound financial management
                                                                 account and the balance sheet referred to in Title V shall
     referred to in Article 5 have been applied.
                                                                 be kept for a period of five years following the date of
                                                                 the decision giving discharge in respect of the implemen-
2.     Approval may not be conditional.                          tation of the EDF, referred to in Article 33 (3) of the
                                                                 Internal Agreement. However, the documents relating to
                                                                 transactions not finally closed shall be kept beyond this
                                                                 period until the end of the year following the closure of
                          Article 20                             the transactions concerned.
1.     The financial controller may withhold his approval
if he considers that the conditions laid down in Article
 19 are not met. If he withholds his approval, he shall          4.    The authorizing officer empowered to clear expen-
furnish a written statement giving the reasons therefor.         diture shall personally check the supporting documents
The authorizing officer shall be notified accordingly.           or shall, on his own responsibility, ascertain that this has
                                                                 been done.
Where approval is withheld and the authorizing officer
maintains his proposal, the refusal shall be referred for a                 3. A u t h o r i z a t i o n of e x p e n d i t u r e
decision to the Commission.
                                                                                                Article 23
2.     Except where the availability of appropriations is in     Authorization is the act whereby the authorizing officer,
doubt, the Commission may, by means of a decision                by the issue of a payment order, atuthorizes the
stating the full reasons therefor and taken on its sole          accounting officer to pay an item of expenditure which
responsibility, overrule such a refusal. This decision shall     he has cleared.
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                          Article 24                               (d) the appropriations are available;
  The payment order shall state:
                                                                   (e) the supporting documents are in order;
  (a) the item against which payment shall be charged;
                                                                   (f) the payee is correctly named and described.
  (b) the amount to be paid, showing the currency;
                                                                                              Article 28
  (c) the name and address of the payee;                          Should approval be withheld, the provisions of Article 20
                                                                  shall apply.
  (d) the bank account;
                                                                                             Article 29
  (e) the method of payment;
                                                                  After approval, the original of the payment order,
                                                                  together with all supporting documents, shall be
 (f) the purpose of the expenditure.                              forwarded to the accounting officer.
 The payment order shall be dated and signed by the
                                                                                4. P a y m e n t of e x p e n d i t u r e
 authorizing officer.
                                                                                             Article 30
                          Article 25                              1.    Without prejudice to the provisions of Article 313
  1.    The payment order shall be accompanied by the             and 319(8) of the Convention concerning respectively
 original supporting documents, which shall bear or be            the responsibilities of the national authorizing officer
 accompanied by the statement of the authorizing officer          and the financial liabilities of the agents responsible for
 confirming that the amounts to be paid are correct and           the management and execution of development finance
 that the supplies have been received or the service              cooperation, payment is the final act whereby the EDF is
 performed. The payment order shall show the numbers             discharged of its obligations resulting from carrying out
 and dates of the relevant approvals of commitment.              the operations financed.
                                                                 2.     Payment shall be made by the accounting officer
 2.     Copies of the supporting documents, certified as
                                                                 within the limits of the funds available.
 true copies by the authorizing officer or the Commission
 delegate, may, in duly warranted cases, be accepted in
 place of the originals.
                                                                                             Article 31
                                                                 In the event of a substantive error or of the validity of
                         Article 26                              the discharge being contested or of failure to observe the
                                                                 formalities prescribed by this Financial Regulation, the
 For payments by instalment, the first payment order shall       accounting officer shall suspend payment.
be accompanied by documents establishing the creditor's
claim to payment of the instalment in question.
 Subsequent payment orders shall refer to the supporting                                     Article 32
documents already furnished and repeat the reference
number of the first payment order.                                1.    If payment is suspended, the accounting officer
                                                                 shall give the reasons for his decision in a written
                                                                 statement which he shall send forthwith to the author-
                         Article 27                              izing officer and, for information, to the financial
                                                                 controller.
Without prejudice to the provisions of Article 10,
payment orders shall be sent to the financial controller
for prior approval. The purpose of this prior approval           2.     Except where the validity of the discharge is
shall be to establish that:                                      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 responsi-
(a) the payment order was properly issued;                       bility, that payment be effected.
(b) the payment order agrees with the commitment of
     expenditure and that the amount thereof is correct;                                    Article 33
                                                                 1.     Payments shall, as a general rule, be effected
(c) the expenditure is charged to the correct item;             through a bank account. The procedures for opening,
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administering and using such          accounts    shall  be     shall show all revenue and expenditure for the year and
determined by the Commission.                                    shall be substantiated by supporting documents. The
                                                                 financial statements provided for in Title V shall be
                                                                 drawn up in ecus. However, when debts or commitments
2.     Without prejudice to the provisions of Article 10,
                                                                are expressed in national currencies, the accounting
these procedures shall in particular require two
                                                                system should make it possible, where necessary, for
signatures on cheques and on transfer orders, one
                                                                them to be recorded in national currencies as well as in
signature necessarily being that of the accounting officer,
                                                                ecus.
an assistant accounting officer or a duly authorized
administrator of advance funds; the procedures shall,
moreover, require the specification of the expenditure in
respect of which payment must necessarily be made                                        Article 37
either by cheque or by transfer.
                                                                 1.    Entries in the accounts shall be made on the basis
                                                                of an accounting plan comprising a nomenclature of
                         Article 34                             budgetary items which makes a clear distinction between
                                                                the balance sheet and the revenue and expenditure
 1.    For the payment of certain categories of expen-          accounts. These entries shall make it possible to draw up
diture, advance funds may be set up under the conditions        a general monthly balance and a statement of expen-
laid down by the Commission.                                    diture and revenue.
2.     The rules governing the management           of  the
advance funds shall cover in particular:                        2.     The detailed conditions for drawing up and
                                                                operating the accounting plan shall be defined by the
(a) the appointment of administrators of advance funds;         Commission.
(b) the nature and maximum amount of each item of
     expenditure to be incurred;
                                                                                         Article 38
(c) the maximum amounts which may be advanced;                  The accounts shall be closed at the end of the calendar
                                                                year to enable the financial statements of the EDF to be
(d) the procedures for the production of supporting             drawn up. These shall be submitted to the financial
     documents and the time within which they must be           controller.
     produced;
(e) the responsibility of the adminstrator of advance
     funds.                                                                             SECTION V
                                                                Responsibilities    of   authorizing    officers,   financial
3.    The authorizing officer and the accounting officer        controllers, accounting officers and administrators of
shall take the necessary steps towards clearing, in respect                            advance funds
of the exact amounts and within the appropriate period,
advances granted under the terms of Article 319 (2) of                                   Article 39
the Convention.
                                                                Without prejudice to Articles 313 (1) (f) and 319 (8) of
                                                                the Convention, authorizing officers who, when estab-
                         Article 35                             lishing entitlements to be recovered, or issuing recovery
                                                                orders, entering into commitments of expenditure or
The conversion rates to be used for the definitive
                                                                signing payment orders, do so without complying with
accounting in ecus of payments made for the purpose of
                                                                this Financial Regulation, shall render themselves liable
the projects or programme referred to in Title III of Pan
                                                                to disciplinary action, and where appropriate, to
Three of the Convention shall be those applicable for the
                                                                payment of compensation. The same shall apply if they
effective date of such payments. This date shall
                                                                omit to draw up a document establishing a claim or if
correspond to that on which the Commission accounts
                                                                they neglect to issue recovery orders or are, without
referred to in Article 319 of the Convention and in
                                                                justification, late in issuing them thus incurring civil
Article 3 of this Financial Regulation were debited.
                                                                liability for the Commission with regard to a third party.
                       SECTION IV
                                                                                         Article 40
                         Accounts
                                                                Financial controllers shall be liable to disciplinary action
                        Article 36                              and, where appropriate, to payment of compensation for
                                                                any action taken during their term of office, in particular
The EDF accounts shall be kept in ecus by the double            where they approve expenditure in excess of appropri-
entry method and on the basis of the calender year. They        ations.
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                         Article 41                               Commission departments. The sums corresponding to
                                                                 these allowances shall be credited each month to an
 1.   The accounting officer and assistant accounting
                                                                 account opened by the Comission on behalf of each of
officers shall be liable to disciplinary action and, where       these officials in order to establish a guarantee fund to
appropriate, to payment of compensation as regards               cover any cash or bank shortage for which the person
payments they make in disregard of Article 31.                   concerned might render himself liable, in so far as such
                                                                 shortage has not been covered by refunds from insurance
They shall render themselves liable to disciplinary action       companies.
and to payment of compensation as regards any loss or
deterioration of the monies, assets and documents in
                                                                 The credit balance in these guarantee accounts shall be
their charge where such loss or deterioration was caused
                                                                 paid over to the persons concerned after they terminate
intentionally or was due to serious negligence on their
                                                                 their appointment as accounting officer or administrator
part.
                                                                 of advance funds.
Under the same conditions, they shall be responsible for
the correct execution of orders received by them in                                       Article 42
respect of the use and administration of bank accounts
and, in particular:                                              The liability of authorizing officers, financial controllers,
                                                                 accounting officers, assistant accounting officers and
                                                                 administrators of advance funds to payment of compen-
(a) where the recoveries or payments made by them do             sation and disciplinary acting may be determined in
     not agree with the amounts on the corresponding             accordance with Articles 22 and 86 to 89 of the Staff
     recovery or payment orders;                                 Regulations of officials of the European Communities.
(b) where they effect payments to a party other than the
     entitled payee.                                                                      Article 43
                                                                 The Commission shall be allowed a period of two years
2.    Administrators of advance funds shall be liable to         from the date on which the financial statements are
disciplinary action and, where appropriate, to payment           submitted to the Council to take a decision on the final
of compensation:                                                 discharge to be given to accounting officers for the
                                                                 transactions relating thereto.
(a) where they cannot show due warrant with proper
     documents for payments made by them;
                                                                                          TITLE III
(b) where they effect payments to a party other than the                           Implementing measures
     entitled payee.
                                                                                          Article 44
They shall be liable to disciplinary action and to payment
                                                                 Commitments of amounts from the EDF shall be decided
of compensation in respect of any loss or deterioration
                                                                 on in accordance with the terms of the relevant
of the monies, assets and documents in their charge
                                                                 provisions of the Convention following the procedures in
where such loss or deterioration was caused intentionally
                                                                 Articles 21 to 27 of the Internal Agreement in respect of
or was due to serious negligence on their part.
                                                                 aid managed by the Commission and in Articles 28 and
                                                                 29 of that Agreement for aid managed by the Bank.
3.    The accounting officer, assistant accounting
officers and administrators of advance funds shall insure
themselves against any risk they may incur under this
                                                                                         SECTION I
Article, and which cannot be covered by the guarantee
fund provided for in paragraph 4 of this Article.                    EDF operations administered by the Commission
The Commission shall cover the relevant insurance costs.                                 1. G e n e r a l
It shall specify the categories of officials qualifying as
accounting officers or administrators of advance funds                                    Article 45
and the terms on which it shall cover the insurance costs
borne by these officials in order to protect themselves          1.    Where aid accorded is onlent to the final borrower
against the risks involved in their duties.                      in accordance with Articles 219 (5), 233 (3) and 266 of
                                                                 the Convention, the financial agreement shall specify the
                                                                 terms of such lending, including rates of interest,
4.    Special allowances shall be granted to accounting          duration of loan and arrangements for the utilization of
officers and administrators of advance funds. The                funds provided by reimbursement of capital and interest.
amount of these allowances shall be determined by the            In fixing these terms due regard will be had to the
 ---pagebreak---  N o C 165/16                              Official Journal of the European Communities                                            6. 7. 90
 provisions of Articles 233 (4) (b) and 240 (1) (a) of the                                            Article 49
 Convention.
                                                                     The results of international invitations to tender referred
                                                                     to in this Section shall be published as soon as possible in
 2.    No expenditure in excess of the amount provided               the Official Journal of the European Communities.
 for in the financing agreement may be charged to the
 EDF unless a decision has been taken to commit
 additional funds thereto under the conditions laid down                                              Article 50
 in Articles 21 to 27 of the Internal Agreement and
                                                                      1.    Without prejudice to the provisions of Article
 Article 61 of this Financial Regulation. The request for
                                                                     20 (1) (c) of the Internal Agreement, the provisions of
 the commitment of additional funds shall be addressed to
                                                                     the General Regulations and Conditions of Contract
 the Commission and appraised under the conditions laid
                                                                     shall apply to all tenders and contracts financed from the
 down in Article 292 of the Convention.
                                                                     EDF. The payments arrangements and the currency or
                                                                     currencies of payment shall be those specified in the
                                                                     relevant contracts.
                 2. T e n d e r s and c o n t r a c t s
                              Article 46                             2.     The price offered in tenders for contracts financed
                                                                     by the EDF shall take into account the applicable tax
 Without prejudice to the provisions of Article 20 (1) (c)           arrangements provided for in Articles 308 to 310 of the
 of the Internal Agreement, the Commission shall take all            Convention.
 appropriate measures to ensure the effective dissemi-
 nation of information for the economic operators
 concerned, notably through periodical publication of                3.     Where payment is made in the currency of an ACP
 forecasts of contracts to be financed from the resources            State, it must be made through a bank established in that
 of the EDF.                                                         State.
                                                                     Where payment is made in ecus it must be made through
                             Article 47                              the intermediary of an approved bank or agency estab-
The Commission shall inform the Council each year of                 lished in a Member State.
 any contract concluded during that year. Where appro-
 priate, it shall notify the Council of any measures it has
 taken or proposes to take to improve the terms of                                                    Article 51
 competition for participation in invitations to tender
                                                                     1.     The Commission whether acting through its
 issued by the EDF.
                                                                     services or its Delegate as appropriate shall take all
                                                                     measures necessary to comply with the provisions of
                                                                     Article 314 of the Convention.
 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             2.     Claims for delayed payments for which it is
 undertakings of the various Member States, of the ACP               responsible by virtue of Article 319 of the Convention
 States and of the associated countries and territories              shall be borne by the Commission from the account
equal opportunity of access to works and supply                      provided for in Article 9 (2) of the Internal Regulation.
contracts financed by the EDF.
                             Article 48                                         3. S t r u c t u r a l a d j u s t m e n t support
Within the framework of Articles 298 to 302 of the                                                    Article 52
Convention and without prejudice to the provisions of
Article 293 of the Convention and of Article 24 of the               Support for structural adjustment programmes provided
Internal Agreement, a favourable opinion of the EDF                  under the Convention shall be implemented in
Committee shall be required prior to the placing of                  accordance with the following principles:
contracts by direct agreement or after restricted invi-
tations to tender or where recourse is had to direct
                                                                     1. Contracts arising in the case of sectoral import
labour.
                                                                         programmes which take the form of provision of
                                                                         foreign exchange, may be expressed in currencies
                                                                         other than the ecu or those of ACP States, such other
However, where they are justified by urgency and by
                                                                         currencies to include those of countries which are not
unforeseen circumstances, the above exceptions to the
                                                                         contracting parties to the Convention.
rules governing competition may be authorized by the
Commission without a prior opinion from the EDF
Committee. In that event, the Commission shall                       2. On the occasion of each advance of funds provided in
immediately inform the EDF Committee thereof.                            structural adjustment programmes, the Commission
 ---pagebreak--- 6. 7. 90                                          Official Journal of the European Communities                             N o C 165/17
     shall check the regularity and conformity with respect                                           Article 54
     to the rules in force, the justification of the use of
                                                                            Where advance use is made of the following year's
     funds and in particular the eligibility of goods
                                                                            instalment as provided for in Article 194 of the
     imported, the extent to which rules of origin have
                                                                            Convention, the advances referred to in Article 206 of
     been respected, the application of competition rules as
                                                                            the Convention shall be reduced proportionately.
     well as the price/quality ratio of imports.
                                                                                                      Article 55
        4. M a n a g e m e n t of the e x p o r t e a r n i n g s
                     s t a b i l i z a t i o n system                       Wherever the calculation of the amount of a transfer or
                                                                            advance requires the conversion of statistics expressed in
                                  Article 53                                the national currency of the ACP State concerned, or of
                                                                            any other currency, into ecus, the exchange rate
The annual resources available to the Stabex system                         applicable shall be the average annual rate in force in the
provided for in Article 191 of the Convention shall be                      calendar year to which the amount concerned refers.
managed by the Commission in accordance with the
following procedures:
                                                                                                     SECTION II
  (i) half of each annual instalment shall be credited to
       the system on 1 April and 1 July respectively.                                         Aid managed by the Bank
       However, the first half annual instalment in each
       year shall be reduced by the amount of any                                                     Article 56
       advances granted in the preceding year under
       Article 194 (1) of the Convention. Any sums due to                   The Bank shall forward to the Commission at the
       the Stabex system in the calendar year in which the                  beginning of each (quarter) (month) estimates of all
       Convention came into force shall be transferred to                   amounts expected to be claimed from the EDF in that
       the system on the date of entry into force of this                   (quarter) (month) in respect of risk capital and interest
       Financial Regulation, with effect from the due dates                 rebates.
       laid down above;
 (ii) interest at the rate obtained on the liquid assets of                                       1. Risk c a p i t a l
       the EDF shall be provided on the amounts of annual
       instalments credited to the system's resources as                                              Article 57
       follows:                                                              1.    Each decision to grant risk capital shall set a limit
       — from 1 April each year on the amount of the first                  to the Community's commitment and financial responsi-
           half of each annual instalment less any advance                  bilities and, in the case of shareholdings, to the extent of
           and transfers paid from the system's resources,                  the rights in the company to which such operations
       — in like manner, from 1 July each year in respect                   relate. The decision shall also take into account the
           of the second half of each annual instalment;                    provisions in Article 234 (2) of the Convention relating
                                                                            to responsibility for exchange rate risks.
(iii) any part of annual instalments which has not been
       advanced or transferred shall continue to bear                       The instruments giving effect to risk capital operations
       interest which will be added to the system's                         shall be concluded by the Bank acting as the
       resources;                                                           Community's authorized agent.
(iv) the transfers referred to in Article 211 of the                        2.     The Bank, acting for and on behalf of the
       Convention shall be made in ecus into an interest-                   Community, shall manage the operations referred to in
       bearing bank account chosen by mutual agreement                      paragraph 1 which have been the subject of a financing
       between the ACP State and the Commission. All                        decision by the Board of Directors of the Bank.
       interest accruing shall be credited to that account.
       All withdrawals from the account shall require two
       signatures, one being that of a person designated by                 3.     When each disbursement takes place, the Bank shall
       the ACP State concerned, the other that of the                       request the Commission to pay in ecus the amount of the
       Commission delegate.                                                 risk capital disbursed. The Commission shall pay this
                                                                            amount within 21 days of receipt of the request for
                                                                            payment with the same value date as that of the dis-
       The funds in the account, including interest, shall be               bursement by the Bank.
       mobilized in accordance with Article 186 (2) of the
       Convention as the operations specified in the
       agreement on the use of the resources referred to in                 4.     Amounts due in respect of receipts, income and
      Article 210 of the Convention are implemented.                        repayments relating to risk capital operations shall be
 ---pagebreak---  N o C 165/18                                 Official Journal of the European Communities                                       6. 7. 90
 collected by the Bank on behalf of the Community, in                    4.    The Commission shall pay in ecus the amount of
 accordance with the provisons of Article 58 of this                     subsidy, discounted in accordance with the procedures
 Financial Regulation.                                                   described in paragraph 3, within 21 days of receipt of the
                                                                         request for payment, the value date being that of the
                             Article 58                                  disbursement of the relevant loan instalment.
 The sums collected by the Bank in the form of products,
 revenue or repayments from risk capital operations shall
 be credited to a special account opened on behalf of the                5.    Where the whole of an interest subsidized loan is
 Community for the Member States in proportion to their                  repaid in advance, the Bank shall pay to the Commission
 contributions to the EDF. The account shall be                          the total balance of the discounted subsidy, adjusted for
 denominated in ecus and managed by the Bank in                          the period between receipt and payment by the Bank, on
 accordance with the provisions of Article 9 of the                      the first contractual repayment date subsequent to the
 Internal Agreement. The Bank shall agree with the                       advance payment. Where only part of such a loan is
 Member States on the information to be supplied                         repaid, the payment by the Bank to the Commission shall
 concerning the account.                                                 relate to that part of the loan which has been repaid.
The technical procedures for the management of                  the
 account, including those relating to the fixing of             the      6.    The sums reimbursed to the Commission shall be
 rates of interest on it, shall be decided upon by              the      credited to the amount of ECU 286 million provided for
 Council and the Bank in agreement with                         the      in Article 4 of the Internal Agreement to finance interest
 Commission.                                                             rate subsidies.
                     2. S u b s i d i z e d loans
                                                                         7.    All payments provided for in this Article shall be
                             Article 59                                  made in ecus.
 1.     The aggregate amount of interest rate subsidies on
each loan from the Bank shall be calculated in ecus in
accordance with Article 235 of the Convention on the
                                                                                                  TITLE IV
basis of the composite interest rate to be fixed in
accordance with the procedures set out in paragraph                                            Executive agents
3 (iii) below.
2.      On the signing of each loan contract, the Bank                             l . T h e chief a u t h o r i z i n g officer
shall communicate to the Commission the estimated total
amount of the interest rate subsidy expressed in ecus.                                            Article 60
3.      Upon the disbursement of each instalment of the                  1.    The Chief Authorizing Officer of the EDF,
loan, the Bank shall request the Commission to pay the                  referred to in Article 311 of the Convention, shall take
interest subsidy relating to the instalment based on the                all measures necessary for the implementation of the
following calculations:                                                 provisions of Articles 294 to 307 of the Convention.
   (i) the equivalent in ecus of the amounts of currencies
       in which the loan instalment was disbursed at the
                                                                        Where he deems it appropriate, the Chief Authorizing
       conversion rates for those currencies and the ecu as
                                                                        Officer shall consult experts chosen for their technical
       published in the Official Journal of the European
                                                                        competence and their independence vis-d-vis the firms
        Communities in operation on the date on which the
                                                                        concerned with the award of contracts.
       amount of currencies to be disbursed is determined,
       which date shall be communicated to the
       Commission;
                                                                        2.     The Chief Authorizing Officer shall ensure, before
  (ii) application of the percentage rate of interest subsidy           the publication of an invitation to tender, that the
       to the declining annual capital balance due at each              documents relating to tenders do not contain any direct
       repayment date;                                                  or indirect discriminatory provisions. He shall ensure
(iii) the present value of the interest subsidies relating to           that tenders are compared under equal conditions and, in
       the loan disbursement. Calculation of the present                particular, that the import duties or taxes of the recipient
       value shall be made by reference to a composite                  State, country or territory do not constitute an obstacle
       discount rate equal to the annual interest rate(s)               to participation in invitations to tender.
       which the Bank would in fact receive in the
       currency or currencies used for the relevant disbur-
       sement of the loan if the loan did not benefit from              3.    The Chief Authorizing Officer may suspend the
       an interest subsidy. The actual calculation of present           publication of a notice of invitation to tender where it is
       value shall use this composite discount rate reduced             found that corrections must be made to the specifications
       by four-tenths of a percentage point.                            or other documents in replacement thereof. To this end,
 ---pagebreak---  6. 7. 90                              Official Journal of the European Communities                                    N o C 165/19
 he shall inform the relevant authorities of the recipient                    2. T h e C o m m i s s i o n d e l e g a t e
 State, country or territory of his observations.
                                                                                           Article 63
                                                                 The Commission delegate shall comply with this
                                                                  Financial Regulation in the performance of his duties, as
                           Article 61                             provided for in Articles 316 to 318 of the Convention.
 In accordance with Article 292 of the Convention,
 decisions to commit additional funds required to cover
 any excess expenditure incurred on a project or                                           Article 64
 programme shall be taken by the Chief Authorizing                During the performance of operations financed by the
 Officer where the excess expenditure is equal to, or             EDF, the delegate shall verify on the spot and on the
 lower than, a ceiling of 20 % of the original commitment        basis of records that work carried out or services
 set out in the financing decision. Where the excess is          rendered correspond with their descriptions as given in
 greater than the 20 % ceiling, the procedures of Articles
                                                                 the financing agreements, or other contracts or estimates.
 21 to 24 of the Internal Agreement shall apply to the
 relevant financing decision.
                                                                                           Article 65
                                                                  In the event of failure to comply with this Financial
                                                                 Regulation, of misconduct or gross negligence in the
                           Article 62                            performance of his duties, the delegate shall render
 1.    The Chief Authorizing Officer shall take all              himself liable to disciplinary action, and where necessary,
 measures to ensure that National Authorizing Officers           to payment of compensation.
perform the tasks for which they are responsible by
virtue of Articles 312 to 315 of the Convention and in
 particular that they comply with the provisions of this                           3. T h e p a y i n g a g e n t
 Financial Regulation regarding commitment, clearance
 and authorization of expenditure.
                                                                                           Article 66
                                                                 The Commission shall include in the agreements
                                                                 governing its relation with each paying agent appropriate
 2.    Where the Chief Authorizing Officer becomes               provisions requiring that in the performance of his tasks,
aware of delays in the carrying out of procedures                as laid down in Article 319 of the Convention, the
relating to projects financed by the EDF he shall, in            paying agent shall comply with this Financial Regulation.
conjunction with the National Authorizing Officer,
make all contacts necessary to remedy the situation.
                                                                                           Article 67
                                                                 In the event of failure to observe the provisions in force,
                                                                 of misconduct or of gross negligence which entails
 3.    If, for any reason whatsoever, services have been         financial loss for the Community, the paying agent shall
rendered but further delay in clearance, authorization or        be held financially responsible under the conditions and
payment gives rise to difficulties likely to call into           in accordance with the terms laid down in the contract
question the full performance of the contract, the Chief         binding it to the Commission.
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, projects or                                         TITLE V
programmes to be completed under the best economic                            Presenting and auditing accounts
conditions. He shall inform the National Authorizing
Officer of such measures as soon as possible. If payments
                                                                                           Article 68
are thus made directly by the Commission to the
beneficiary of the contract, the Community shall auto-           1.    The Commission shall draw up, not later than 1
matically acquire that beneficiary's right as creditor           May each year, a balance sheet of assets and liabilities of
vis-d-vis the national authorities.                              the EDF as at 31 December of the preceding year and a
                                                                 statement of sources and uses of funds since the date of
                                                                 the previous balance sheet.
4.     The provisions of this Article shall apply, mutatis
mutandis, to measures to ensure that Regional Author-            2.    The financial statements referred to in paragraph 1
izing Officers referred to in Article 164 (f) (ii) of the        shall be accompanied by a table of revenue showing:
Convention perform tasks assigned to them in the
Convention.                                                      — estimated revenue for the financial year,
 ---pagebreak--- No C 165/20                            Official Journal of the European Communities                                 6. 7. 90
— amendments to the revenue estimates,                                                    Article 72
                                                                  1.   The audit carried out by the Court of Auditors
— entitlements established in the course of the financial        shall be based on records and, if necessary, be performed
    year,                                                        on the spot. Its purpose shall be to establish that all
                                                                 revenue has been received and all expenditure incurred
— amounts still to be collected at the end of the                in a lawful and regular manner with regard to the
    financial year,                                              provisions applicable and that the financial management
                                                                 has been sound.
— additional revenue.
                                                                 2.    As provided for in Article 33 (6) of the Internal
                                                                 Agreement, the Court of Auditors may participate in
                          Article 69
                                                                 on-the-spot checks carried out by the Audit Committee
 1.   The Commission shall in respect of each calendar           of the Bank. The following procedures shall be adopted
year, draw up not later than 1 May of the following              in respect of such participation:
year, revenue and expenditure accounts for the EDF.
                                                                 (a) the Court shall inform the Commission at regular
                                                                     intervals of operations managed by the Bank which
2.    The     revenue   and    expenditure   accounts  shall
                                                                     the Court considers should be subject to on-the-spot
include:
                                                                     checks. At the same time, the Court shall intimate to
                                                                     the Commission in which of the on-the-spot checks
(a) a table of revenue containing the items specified in             in question it wishes to participate; is shall also
     Article 68 (2);                                                 propose a timetable for their execution;
(b) expenditure tables which shall comprise:                     (b) the Commission shall request the Bank:
     — a table showing the decisions taken by the                    — to invite its Audit Committee to carry out those
         Commission or the Council during the calendar                   checks,
         year, together with a table showing the overall
         situation regarding sums committed,
                                                                     — to associate the Court with the checks to be
     — a table showing the situation regarding delegated                 organized by its Audit Committee in which the
         appropriations and expenditure authorizations                   Court wishes to participate;
         effected during the calendar year, together with a
         table showing the overall situation regarding           (c) the Audit Committee of the Bank shall be responsible
         delegated appropriations and expenditure auth-              for the organization of on-the-spot checks. Rep-
         orizations effected.                                        resentatives of the Court participating in such checks
                                                                     may examine any documents they consider necessary
3.    The tables referred to in paragraph 2 shall be                 and may ask questions which they judge to be
accompanied by a cumulative statement showing for                    useful;
each recipient country or territory the aggregate figure
for the commitment decisions taken, for delegated                (d) following each on-the-spot check, the Audit
appropriations granted and for expenditure author-                   Committee of the Bank and the representatives of
izations effected.                                                   the Court shall draw up their respective mission
                                                                     reports which they will forward to one another and
                                                                     to the Commission;
                          Article 70
Without prejudice to Article 33 (5) of the Internal              (e) the Court shall transmit to the Bank and to the
Agreement, the Commission shall forward the balance                  Commission the text of its observations before their
sheet, statement of sources and uses of funds and the                final adoption and publication. The Commission and
revenue and expenditure accounts to the European                     the Bank, acting through the Commission, may make
Parliament, the Council and the Court of Auditors not                known their views on these observations;
later than 1 May of the following financial year.
                                                                 (f) in the case of checks of projects cofinanced by the
                                                                     EDF and the Bank, the Court shall refrain from
                          Article 71                                 using information it may obtain in the course of
                                                                     on-the-spot checks relating to the part financed from
The Court of Auditors and its members may, in carrying               the own resources of the Bank;
out the task of the Court, seek assistance from officers
of the Court.
                                                                 (g) in participating in on-the-spot checks carried out by
                                                                     the Audit Committee of the Bank, the representatives
In such cases, the Court itself, or one of its members,              of the Court, in common with all members of the
shall notify to the authorities with whom such officers              control missions, shall respect the provisions laid
shall work, the tasks delegated to these officers.                   down in Article 214 of the Treaty relative to
 ---pagebreak--- 6. 7. 90                              Official Journal of the European Communities                            No C 165/21
     professional secrecy; they shall also preserve                                      Article 73
     confidentiality in relation to banking matters of
                                                                 1.    In addition to the annual report, the Court of
     which they may become aware.
                                                                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
3.     In the performance of it tasks, the Court of
                                                                of the Communities.
Auditors may, under the conditions laid down in
paragraph 6, consult all documents and information
relating to the financial management of the departments         2.     The special reports shall be transmitted to the
subject to its inspection; it has the power to hear any         institution or body concerned.
official responsible for revenue and expenditure oper-
ations and to use any of the auditing procedures appro-
                                                                The institution concerned shall have two and a half
priate to those departments.
                                                                months in which to inform the Court of Auditors of any
                                                                comments it wishes to make on the observations in
                                                                question.
4.     The Court of Auditors shall ensure that all
securities and cash on deposit are checked against
vouchers signed by the depositaries. The Court may itself       Should the Court of Auditors decide to have such obser-
carry out such checks.                                          vations published in the Official Journal of the European
                                                                 Communities, it shall include after them any comments
                                                                submitted by the institution or institutions concerned.
5.     At the request of the Court, the Commission shall
authorize banks, which hold funds which are the                 The special report shall be transmitted to the European
property of the EDF, to allow the Court to verify that           Parliament and the Council, each of which shall decide
the information disclosed by the EDF's accounting                in conjunction with the Commission what action, if any,
corresponds to that shown in the bank's books.                  is to be taken in response.
6.     The Commission shall provide the Court of                                         Article 74
Auditors with all the facilities and give it all the infor-
mation which the Court may consider necessary for the            1.    The Court of Auditors shall communicate to the
performance of its tasks. In particular, it shall place at      Commission, not later than 15 July in any year, any
the disposal of the Court all documents concerning the          observations which it considers should appear in the
conclusion and implementation of contracts and all               annual report provided for in Article 206a of the Treaty.
accounts of cash or materials, all accounting records or        These observations shall remain confidential.
supporting documents and also the administrative
documents pertaining thereto, all documents relating to         The Commission shall forward its replies to the Court of
revenue and expenditure, all inventories, and all lists of      Auditors not later than 31 October of the relevant year.
posts in the departments which the Court of Auditors
may consider necessary
                                                                2.     The Court of Auditors shall attach to its report an
                                                                 assessment of the soundness of the                financial
To this end, officials subject to audit by the Court of         management.
Auditors shall in particular:
                                                                 3.    The Court of Auditors may also, at any time,
(a) submit the supporting documents in respect of their          submit observations on specific questions and deliver
     management of which they are the depositaries and           opinions at the request of one of the institutions of the
     any books, registers and other documents relating           Community.
     thereto;
                                                                                          Article 75
(b) present the correspondence or any other document
     required for the full implementation of the audits.        The Court of Auditors shall send its annual report,
                                                                together with the Commission's replies, not later than 30
                                                                 November in any year, to the European Parliament, to
The information referred to under (b) may be requested           the Council and to the Commission and shall ensure its
only by the Court of Auditors.                                  publication in the Official Journal of the European
                                                                 Communities.
The Court of Auditors shall be empowered to audit the
documents in respect of EDF revenue and expenditure                                      Article 76
which are held by the Commission's departments and, in
particular, by the departments responsible for decisions         1.    Before 30 April of the following year, the European
on such revenue and expenditure.                                Parliament, upon a recommendation from the Council
 ---pagebreak--- No C 165/22                            Official Journal of the European Communities                               6. 7. 90
acting by a qualified majority, shall give the Commission                                TITLE VI
a discharge in respect of the financial management of the
                                                                                General and final provisions
EDF for the preceding year, in accordance with Article
33 (3) of the Internal Agreement.
                                                                                         Article 77
2.    The financial controller shall take account of the
observations appearing in the decision giving discharge.         Unless otherwise specified, references in this Financial
                                                                 Regulation to the provisions of the Convention shall be
3.    The Commission shall take all appropriate steps to         deemed to refer to the corresponding provisions of the
act on the observations appearing in the decision giving         Decision as shown in the Annex.
discharge. At the request of the European Parliament or
the Council it shall report on the measures taken in the
light of these observations and in particular on the
instructions given to those of its departments which are                                 Article 78
responsible for the management of the EDF. Such                  This Financial Regulation shall be applicable to the aid
reports shall also be forwarded to the Court of Auditors.        specified in the Financial Protocol to the Convention.
4.    Subject to the second sentence of paragraph 3, the
Commission must, in an Annex to the revenue and
                                                                 The provisions of this Financial Regulation shall also
expenditure account for the next financial year, give an
                                                                 apply to aid provided under earlier Lome Conventions
account of the measures taken in the light of the obser-
                                                                 except where such application would be inconsistent with
vations appearing in the decision giving discharge.
                                                                 the provisions of the relevant Convention.
5.    The balance sheet, statement of sources and uses of
funds and the revenue and expenditure accounts for each
financial year and the decision giving the discharge shall       Subject to the provisions of Article 34 of the Internal
be published in the Official Journal of the European             Agreement, this Financial Regulation shall cover the
Communities.                                                     same period as the Convention.