CELEX: 51987PC0212
Language: en
Date: 1987-04-30
Title: Proposal for a COUNCIL REGULATION (EEC) amending Regulation (EEC) No 729/70 on the financing of the common agricultural policy as regards the system of advance payments in the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (presented by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (87) 212
Vol. 1987/0121
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 concerning
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 ---pagebreak---   COMMISSION OF THE EUROPEAN COMMUNITIES
                                                         COM(87 ) 212 final
                                                         Brussels , 30 April 1987
                                   Proposal for a
                              COUNCIL REGULATION ( EEC )
     amending Regulation ( EEC ) No 729 / 70 on the financing of the common
      agricultural policy as regards the system of advance payments in
        the Guarantee Section of the European Agricultural Guidance and
                                   Guarantee Fund
                          ( presented by the Commission )
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                               EXPLANATORY MEMORANDUM
Amendment of Regulation No 729 / 70 to replace the system of advances Tor EAGGF
Guarantee fay a system of reimbursements
I . REASQNS_FgR_ÎHE_PRGPgSED_REFgRM
1 . The system of advances to -finance expenditure under the Guarantee Section
    of the European Agricultural Guidance and Guarantee Fund ( EAGGF ) has been
    applied since the system of Community own resources was introduced on
    1 January 1971 . under this system of advances , Community funds are made
    available to the Member States every month to enable the responsible
    departments and agencies to pay out expenditure arising from the common
    agricultural market policy .
2 . These funds are made available in advance on the basis of requests from the
    Member States , supported by details of expenditure paid out up to the end
    of the previous month and estimates of expenditure to be paid out during
    the current month and the following two months drawn up by the departments
    and agencies responsible for payment .
3 . The EAGGF uses this information to determine the monthly advances and enter
    expenditure ih the Community budget . This entry in the accounts is subject
    to the finai clearance of accounts .
4 . The advances are booked as global provisional^ commitments , normally in the
    month before they are used for payments .
    The detailed booking of amounts against individual budget headings normally
    takes places by the end of the third month after payments have been made .
    The accounts are cleared at a later date since more time is needed to check
    expenditure on the basis of documents and on - the - spot inspections before
    expenditure can be occepted as being chargeable to the EAGGF Guarantee
    Section .
5 . However , past experience has shown that this system of advances suffers
    from the following shortcomings :
    ( a ) The advances are granted on the basis of unreliable forecasts , with
          the result that substantial Community funds are tied up , sometimes
          unnecessarily .
 ---pagebreak---      ( b ) The Commi ssi on 7 s central accounts department does not record expendi ¬
           ture by individual heading in the budget nomenclature until several
           months have elapsed , with the result that the documents and reports on
           the execution of the budget cannot give an accurate overall picture .
    ( c ) The delay in booking expenditure means that appropriations have to be
           adjusted after the event . The transfers made therefore have nothing to
           do with " authorization " but are merely a “ regularization " operation ,
           which is incompatible with the sound financial management demanded by
           the Financial Regulation .
These shortcomings have also been highlighted by the Court of Auditors .
6 . To eliminate these shortcomings in the system of advances , a new system is
    needed which requires the expenditure to be booked in detail to the
    Community budget before payments are made . This is what the Commission
    proposal envisages as the final stage of the new system .
7 . However , the transition to this final stage will require extremely elabo ¬
    rate changes in the departments and agencies responsible for payment , in
    the Member States and at the Commission . These changes will also require
    the introduction of data processing and communication facilities on a large
    scale and departments must then be adapted to these modern management
    methods .
8 . The Commission proposal therefore provides for two intermediate stages :
    ( a ) Stage one , in which only the source of the funds used is changed : the
           Member States provide the advance funds and expenditure is still booked
           to the accounts every month with an unchanged time-lag .
    ( bi Stage two , in which the time-limit for forwarding information and
           booking expenditure to the Community budget will become shorter and
           shorter .
 ---pagebreak---                                                3
 1 1 . CHANGES_TQ_IHE_RL)LES_TO_ftCHIEVE_THE_F’ROPOSED_REFORM
To make the change possible , the following two regulations have to be
amended :
1■                              nhange_of_gri_nci^pie_(rei_mburssttents_i_n5tead_Qf
                                advançes)'
The proposed changes to this Regulation are set out in Annex I.
The prooosed amendments have been limited to the strict minimum to achieve the
planned objective : basically , the Member States are to take the place of the
Community as the source of the advance funds for expenditure under the common
market organizations .
However , these amendments are also designed to lay the foundations for a
system of direct Community involvement at the time of payment , the final stage
set out at I above .
To simplify the proposal , the provision on advances and the clearance of
accounts ( Article 5 ) has been replaced . It was considered preferable to
abandon the now unrealistic time-limit for the clearance of accounts and
harmonize it with the time-limit already proposed by the Commission in the
amended proposal for the Financial Regulation presented in 1984 . ( 1 )
2 . Einancial_Re3ulatien_gf _ 21_Pecember_!?ZZ_§SBllEable_tg_the_general_budget
      39an§e5_tc__the_i mgl ementary_grgvi si gns
The Financial Regulation ( 2 ) contains a number of special provision 's -
Articles 95 to 101 - applicable to the implementation of EAGSF Guarantee
appropriations .
Following the replacement of the current system of advances by a system of
reimbursements , the articles concerned will have to be amended accordingly :
this proposal will be submitted in the near future to the institutions
concerned .
( 1 ) COM ( 84 ) 123 final , 9.3.1984 .
( 2 ) 0J L 356 , 31.12 . 1977 .
 ---pagebreak---                                           4
Once the Council n a s taken the above decisions , the Commission will have to
make the necessary adjustments to the implementing regulations which it is
competent '.Regulation No 3184 / 83 on the system of advances and then Regulation
No 1723 / 72 on the clearance o t accounts' .
 ---pagebreak---                                              5
                                                                                Annex
                                    Proposai for a
                               COUNCIL REGULATION ( EEC )
            amending            Regulation ( EEC ) No 729 / 70
                  on the financing of the common agricultural policy
     as regards the system of advance payments in the Guarantee Section of the
                  European Agricultural Guidance and Guarantee Fund
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
and in particular Article 43 thereof ,
Having regard to the proposal from the Commission ,
Having regard to the Opinion of the European Parliament ,
Whereas Council regulation ( EEC ) No 729 / 70 on the financing of the common
agricultural policy ( 1 ), as last amended by Regulation ( EEC ! No 3769 / 85 ( 2 ),
introduced a system whereby budgetary 'funds earmarked to cover the expenditure
of the Guarantee Section of the European Agricultural Guidance and Guarantee
Fund are made available to the authorities and bodies designated to pay out
such expenditure ;
Whereas , under this system , the said expenditure is charged to the budget of
the European Communities , in the first instance , on the basis of the forecasts
made by the Member States and whereas the accounting entries relating to the .
expenditure actually incurred by the designated authorities and bodies are
made at a later stage , the sums initially charged to the budget being adjusted
as necessary ;
Whereas there may be large disparities between these two accounting opera ¬
tions , which makes it more difficult to manage the Community’s budgetary
apprcpr i ati ons and the Community funds held by the Member States ;
Whereas there should be a stage - by - stage changeover to a system whereby the
authorities and bodies designated for the purpose validate the payment of the
said expenditure but the latter is paid by the Commission after it has been
charged to the Community budget ;
Whereas , at a first stage , the said expenditure should be charged to the
Community bucget , on the basis of the monthly statements of expenditure
actually incurred , instead of on the basis of forecasts ;
Whereas , consequently , Member States must make available to the designated
authorities and bodies the necessary funds for paying such expenditure until
the latter has been charged to the budget in this way ;
Whereas , as a second stage , the said statements should be forwarded to the
Commission by electronic transmission on a more frequent basis , thus enabling
expenditure to be charged to the budget more rapidly and at shorter intervals ;
Whereas the settlement of the said expenditure by the Commission does not
remove the need for clearing the annual accounts of the Member States ;
( 1 ) 0J No L 94 , 28.4.1970 , p . 13 .
( 2 ) GJ No L 362 , 31.12 . 1985 , p . 17 .
 ---pagebreak---                                                   6
HAS ADOPTED THIS REGULATION :
                                           Art i_çl e _ 1
Regulation I EEC ) No 729 / 70 is hereby amended as follows :
  I ) Article        is amended 35 follows :
      Paragraoh 2 is replaced by the following :
      " Member States shall make available to the designated authorities and
      bodies the financial resources with which to make the payments referred
      to in paragraph 2 ".
(2?   Article 5 is amended as follows :
      Paragraph 1(a ) is replaced by the following :
      " Statements of expenditure incurred and estimates of expenditure to be
      i ncur red " .
      Paragraph 2 is r e n 1 a c e d by the following :
      “ 2 . The Commission , after consulting the Fund Committee referred to in
      Article 11 , shall clear the accounts of the designated authorities and
      bodies on the oasis of the documents referred to in paragraph 1 ( b ) by no
      later than 30 November of the second year following the financial year in
      question " .
( 3 ) The following Article is inserted :
                                           " Ar t i ç 1 e_5a
      1 . The Commission shall reimburse to the Member States the expenditure
           incurred by their authorities and bodies :
           ( a ) until a date to be set by the Commission in accordance with the
                 procedure laid down in Article 13 , at monthly intervals on the
                 basis of the documents referred to in Article 5(1 ) ( a );
           ( b ) after the date referred to in ( a ) above , at shorter intervals on
                 the basis of the data transmitted electronically .
      2 . After a date to be set by the Council acting by a qualified majority
           on a proposal from the Commission , the Commission shall make the
           expenditure referred to in Article 1(2 ) on the basis of the data
           forwarded by the designated authorities and bodies .
      3 . The dispositions of paragraphs 1 and 2 apply without prejudice to the
           clearance of accounts mentioned in paragraph 2 of Article 5 .
      4 . The detailed rules for applying this Article shall be adopted in
           accordance with the procedure laid down in Article 13 ."
 ---pagebreak---                                         7
( 4 ) The following article is inserted :
                                  " Article 5 b
      To accommodate any difficulties which certain Member States might encounter
      in setting up the system provided for in Article 5a(1 ), appropriate measures
      enabling some or all of the interest to be charged to the Community may be
      adopted according to the procedure laid down in Article 13 ."
                                    Arti^c le_2
This Regulation shall enter into force on .
This Regulation shall be binding in its entirely and directly applicable in
all Member States .
Done at
                                                  For the Council
                                                  The President