CELEX: 31976Q0647
Language: en
Date: 1976-07-27 00:00:00
Title: 76/647/EEC: Financial Regulation of 27 July 1976 applicable to the fourth European Development Fund

20.8.76                                 Official Journal of the European Communities                           No L 229/9
                                                 FINANCIAL REGULATION
                                                       of 27 July 1976
                                 applicable to the fourth European Development Fund
                                                         (76/647/EEC)
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,                          'the Internal Agreement', and in particular Article
                                                                   30 thereof,
 Having regard to the Treaty establishing the
European Economic Community,                                       Having regard to the draft Financial Regulation
                                                                   presented by the Commission,
Having regard to the ACP-EEC Convention of                         Having regard to the opinion of the European
Lome        signed on 28 February 1975, hereinafter                Investment Bank, hereinafter referred to as 'the
referred to as 'the Convention',                                   Bank',
Having regard to Council Decision 76/568/EEC of 29                 Whereas pursuant to Article 1 ( 1 ) of the Internal
June 1976 on the association of the overseas                       Agreement the Member States have set up a fourth
 countries and territories        with      the    European        European Development Fund, hereinafter referred to
 Economic Community (2 ),                                          as 'the EDF ;
                                                                   Whereas according to Article 30 of the Internal
Having regard to Council Decision 75 /250/EEC of                   Agreement the provisions for implementing that
 21 April 1975 on the definition and conversion of the             Agreement shall be the subject of a Financial
European unit of account used for expressing the                   Regulation adopted, upon the entry into force of the
 amounts of aid mentioned in Article 42 of the ACP­
                                                                   Convention, by the Council acting by the qualified
EEC Convention of Lome (3),                                        majority laid down in Article 18 (4) of the said
                                                                   Agreement,
Having regard to the Internal Agreement on the
financing and administration of Community aid (4)
signed on 11 July 1975 , hereinafter referred to as                HAS ADOPTED THIS FINANCIAL" REGULATION :
                                                           TITLE I
                                              FINANCIAL ARRANGEMENTS
                          Article 1                                Member States remain obliged to make shall be
                                                                   called up by the Commission, as required, on the
1.     The financial contributions of the Member
                                                                   conditions laid down in this Financial Regulation.
States shall be expressed in the European unit of
account, hereinafter referred to as 'EUA', referred                                         Article 2
to in Article 3 of the Internal Agreement and defined
by Decision 75/250/EEC. Each Member State shall                    1 . The Council Decision provided for in the first
pay the amount of its contribution in its national                 subparagraph of Article 7 (2) of the Internal
currency on the basis of the conversion rate                       Agreement and which relates to the schedule of calls
calculated by the Commission pursuant to Article 2                for contributions, shall be notified to the
of the said Decision.                                              Commission by 31 October each year.
2. The financial contributions shall be credited by                2. The annual contributions shall normally be
each Member State to a special account entitled                    payable :
' Commission of the European Communities —
European Development Fund' opened with the                         ( a) before 20 January for the requirements of the
Treasury of that Member State or the body                                EDF as forecast for the first seven months of the
designated by it.                                                        year in question ;
3 . Upon expiry of the Convention and Decision                     ( b ) on 1 July for the balance of the annual
                                                                         contribution .
76/568/EEC, that part of the contributions which the
(!) OJ No L 25 , 30. 1 . 1976, p. 1 .                             3 . Each Member State shall make the payments
(2) OJ No L 1 76, 1 . 7. 1976, p. 8 .                             referred to in paragraph 2 in proportion to its
( 3) OJ No L 104, 24. 4. 1975, p. 35 .                             contributions as fixed in Article 1 (2) of the Internal
(4) OT No L 25 , 30. 1 . 1976, p. 168 .                           Agreement.
 ---pagebreak--- No L 229/ 10                        Official Journal of the European Communities                               20. 8 . 76
4.     Supplementary      payments     decided     upon        to in Article 1 (2) in such a way as to maintain
pursuant to the second subparagraph of Article 7 (2)            a distribution of its assets amongst the various
of the Internal Agreement shall, unless otherwise              currencies corresponding to the proportion in which
decided by the Council, be due and be made within              the currencies of the Member States enter into the
as brief a period as possible, which may not in any            composition of the EUA.
case be more than three months .
                                                                                       Article S
                         Article 3
                                                               By reference to the cash requirements for executing
1.     In each Member State the Commission shall               projects and programmes, the authorizing officer
hold, with the bank of issue or the financial                  shall make the transfers needed to replenish the
institution designated by that Member State,                    accounts opened on behalf of the Commission in
accounts under the same name as that opened                     accordance with Article 32 of Protocol 2 annexed to
pursuant to Article 1 (2).                                     the Convention, hereinafter referred to as 'Protocol
                                                               2', and with Article 3 of this Financial Regulation.
2. For operations which are not currently
undertaken by banks of issue or by post office giro
centres, or in order to facilitate the payments which                                   Article 6
it has to make, the Commission shall open accounts
at one or more banks .
                                                                1.     Any transfers of assets from the currency of
                                                                one Member State into that of another Member State
3 . The signatures of the Commission officials
empowered to carry out operations on the EDF's                  which have been requested by the Commission for
 accounts shall be lodged when the accounts are                 the management of the EDF shall be made at the
 opened or, in the case of officials who are authorized         current rate of exchange by the banks of issue or the
 subsequently, when they are designated.                        financial institutions approved by the Member
                                                                States .
                                                                 2. Any exchange differences and costs shall be
                        Article 4
                                                                charged against EDF resources .
 1.     The Commission shall use the funds credited to
 the accounts referred to in Article 3 to make the                                      Article 7
 necessary payments and transfers.
                                                                The Commission shall communicate to the Council
 2.     The Commission shall, as far as possible, make          each year a statement of contribution payments and
 any withdrawals from the special accounts referred             a progress report on EDF operations .
                                                         TITLE II
                                            MANAGEMENT OF THE EDF
                        SECTION I                               3.     An authorizing officer may not exercise the
                                                                 functions of financial controller or accounting
                  GENERAL PROVISIONS                             officer.
                         Article 8
                                                                                        Article 9
  1 . The EDF shall be adminstered financially in
 accordance with the principle that the authorizing              Within the limit of the appropriations provided for
  officers and accounting officers are separate                  in Article 1 of the Internal Agreement the
  individuals . The appropriations shall be administered         Commission shall, without prejudice to Article 11 (2)
  by the authorizing officers, who alone shall have               thereof, manage the EDF on its own responsibility
  the power to enter into commitments regarding                  under the conditions laid down in the Convention,
  expenditure, establish sums due to be collected and            in Decision 76/568/EEC, in the Internal Agreement
  issue proof of revenue and payments .                          and in this Financial Regulation. In accordance with
                                                                 Article 29 ( 1 ) of Protocol 2 the Commission shall
  2. Collection and payment operations shall be                   appoint the chief authorizing officer of the EDF. The
  carried out by the accounting officers .                       latter may have recourse to deputy authorizing
 ---pagebreak--- 20 . 8 . 76                        Official Journal of the European Communities                          No L 229/ 11
officers, whom he shall appoint subject to approval                                SECTION II
by the Commission. Each decision to delegate
                                                                                     REVENUE
powers shall state the duration and extent of the
mandate .
Those to whom powers are delegated may act only                                     Article 13
within the limits of the powers expressly conferred
upon them.                                                    1 . The recovery of any sum due to the EDF shall
                                                             give rise to the issue, by the authorizing officer, of
                                                              a revenue order .
                        Article 10
                                                             2.     Revenue orders shall be transmitted by the
1 . The Commission shall appoint the financial               authorizing officer to the financial controller and
controller, who shall be responsible for monitoring          shall be subject to the latter's approval. The purpose
the commitment, for authorizing expenditure and for           of approval by the financial controller shall be to
monitoring revenue.                                          establish that :
2.      The special rules applicable to the financial         (a) the revenue is correctly credited ;
controller shall be formulated in such a way as to
ensure his independence in carrying out his duties .          (b ) the revenue order is in order and in conformity
Measures taken in respect of his appointment and                   with the provisions applicable to the
promotion, disciplinary action or transfers, and the               management of the EDF, with all acts taken in
various methods of interruption or termination of                  implementation of those provisions ;
his appointment shall be the subject of reasoned
decisions which shall be forwarded to the Council             (c) the principles of sound financial management
for information .                                                  have been affected .
3 . The person concerned or the Commission may                3 . The financial controller may refuse his
institute proceedings before the Court of Justice .          approval. The authorizing officer may, by means of
                                                             a decision stating the full reasons therefor and on his
                                                             sole responsibility, disregard this . The decision of the
                        Article 11                           authorizing officer shall be implemented ; it shall be
                                                             communicated to the financial controller for
                                                             information . The Commission shall inform the Audit
The collection of revenue and the payment of                  Board provided for in Article 206 of the Treaty of
expenditure shall be carried out by an accounting            each of these decisions .
officer appointed by the Commission. Subject to
Article 33 (2) this accounting officer alone shall be
empowered to manage funds and assets . He shall be           4. When the authorizing officer waives the right
responsible for their care.                                  to draw up a document establishing a debt or to
                                                             recover sums due, he must inform the financial
                                                             controller and the Audit Board .
                       Article 12
                                                              When the financial controller finds that a document
The Commission may delegate part of the duties of             establishing a debt has not been drawn up or that a
the accounting officer and part of the responsibility         sum due has not been recovered, he shall inform the
                                                             Commission thereof.
for monitoring to authorized agents appointed by it.
The rules governing responsibilities adopted under
this Title shall apply to such authorized agents
within the limits of the powers delegated to them.                                  Article 14
The principles of the provisions of this Financial            1 . The       accounting     officer    shall    assume
Regulation relating to the monitoring and payment            responsibility for revenue orders forwarded to him
of expenditure shall be applicable to expenditure            by the authorizing officer.
effected by delegation. Such expenditure may not be
finally entered into the EDF accounts until the
Commission has verified that the expenditure has              2.    The accounting officer shall do all in his power
been correctly cleared and that the authorization and         to ensure that EDF resources are recovered at the due
payment are in order, in accordance with the                  dates and to ensure that the Community's rights are
requirements of this Regulation.                              safeguarded.
 ---pagebreak--- No L 229/ 12                         Official Journal of the European Communities                               20. 8 . 76
3 . The accounting officer shall inform the                    2.      The financial controller shall take into account
authorizing officer and the financial controller of            any observations made in the discharge decisions.
any revenue not recovered within the time limits laid
down .
                                                                                          Article 19
                         Article 15
                                                               1.      Where the financial controller withholds his
A receipt shall be issued in respect of all cash
                                                               approval he shall furnish a written statement of his
                                                               reasons therefor. The authorizing officer shall be
payments made to the accounting officer.                       notified accordingly.
                       SECTION III
                                                               Where approval is withheld and the authorizing
                                                               officer maintains his proposal, the refusal shall be
                                                               referred for a decision to the Commission .
    COMMITMENT, CLEARANCE, AUTHORIZATION
           AND PAYMENT OF EXPENDITURE
                                                               2. Except where the availability of appropriations
              1 . Commitment of expenditure                    is in doubt, the Commission may, by means of a
                                                               decision stating the full reasons therefor and on its
                                                               sole responsibility, overrule such a refusal. This
                         Article 16                            decision shall be implemented; it shall be
                                                               communicated for information to the financial
1.      All measures which may give rise to                    controller. The Commission shall inform the Audit
                                                               Board of each of these decisions .
expenditure payable by the EDF must be preceded
by a proposal for commitment of expenditure from
the authorizing officer.
                                                                                 2. Clearance of expenditure
2. A provisional commitment may be entered into
in respect of current expenditure.
                                                                                          Article 20
3.      An account shall be kept of commitments and
authorizations .
                                                               The purpose of clearance of expenditure by the
                                                                authorizing officer shall be :
                         Article 17
                                                                (a ) to verify the existence of the rights of the
                                                                     creditor;
Proposals for commitments shall be referred to the
financial controller. They shall in particular show             (b) to determine or verify the existence and the
the purpose of the expenditure, the estimated                        amount of the debt; and
amount involved, the item to which it is to be
charged and the name and description of the                     ( c) to verify the conditions under which payment
                                                                     falls due .
creditor. They shall be registered after approval by
the financial controller.
                                                                                          Article 21
                         Article 18
                                                                1 . Clearance of any expenditure shall be subject to
                                                               the submission of supporting documents showing the
1.      The purpose of approval by the financial               creditor's claim and, where appropriate, the service
controller shall be to establish that :
                                                               rendered.
 ( a) the expenditure has been charged to the correct
      item ;                                                   2. However, for certain categories of expenditure,
                                                               advances may be granted under the conditions laid
 ( b) appropriations are available ;                           down by the Commission.
 (c) the expenditure is in order and in conformity
      with the provisions applicable to the management         3 . The Commission shall lay down the nature and
      of   the    EDF  and   with    all  acts  taken   in      contents of the supporting documents to be enclosed
      implementation of those provisions, in particular        with the payment orders.
      the general and special clauses of the financing
      agreement relating to the operation ;                    4. The authorizing officer empowered to clear
                                                               expenditure shall personally check the supporting
 (d) the principles of sound financial management               documents or shall, on his own responsibility,
      have been applied.                                        ascertain that this has been done.
 ---pagebreak--- 20 . 8 . 76                          Official Journal of the European Communities                          No L 229/ 13
              3 . Authorization of expenditure                  ( b) the payment order agrees with the commitment
                                                                      of expenditure and that the amount thereof is
                                                                      correct ;
                          Article 22
                                                                ( c) the expenditure is charged to the correct item ;
Authorization shall be the act whereby the
 authorizing officer, by the issue of a payment order,          ( d ) the appropriations are available ;
authorizes the accounting officer to pay an item of             (e) the supporting documents are in order ;
expenditure which he has cleared.
                                                                ( f) the payee is correctly described.
                          Article 23
                                                                                         Article 27
The payment order shall state :
 ( a) the item against which payment shall be charged ;        Should approval be withheld, Article 19 shall apply.
 ( b) the amount to be paid;
                                                                                         Article 28
 ( c) the name and address of the payee ;
 ( d), the method of payment;                                  After approval, the original of the payment order,
                                                               together with all supporting documents, shall be
 (e) the purpose of the expenditure.                           forwarded to the accounting officer.
The payment order shall be dated and signed by the
authorizing officer.
                                                                                4. Payment of expenditure
                          Article 24
                                                                                         Article 29
1.      The payment order shall be accompanied by
the original supporting documents, which shall bear
or be accompanied by the approval of the                        1 . Payment shall be the final act whereby the EDF
authorizing officer confirming that the amounts to             is discharged of its obligations resulting from
be paid are correct, the receipt of the supplies or the        carrying out the operations financed.
performance of the service. The payment order shall
show      the    numbers   and   dates  of   the  relevant     2.      Payment shall be made by the accounting
                                                               officer within the limits of the funds available.
approvals of commitment.
2. Copies of the supporting documents, certified
as true copies by the authorizing officer, may, in                                       Article 30
some cases, be accepted in place of the originals .
                                                               In the event of a substantive error or of the validity
                                                               of the discharge being contested or of failure to
                          Article 25                           observe the formalities prescribed by this Financial
                                                               Regulation, the accounting officer shall suspend
1 . For payments by instalment, the first payment              payment.
order shall be accompanied by documents
establishing the creditor's right to payment of the
instalment in question.                                                                 Article 31
2. Subsequent payment orders shall refer to the                1.      If payment is suspended, the accounting officer
supporting documents already furnished and repeat              shall give the reasons therefor in a written statement
the reference number of the first payment order.               which he shall send forthwith to the authorizing
                                                               officer and, for information, to the financial
                                                               controller.
                          Article 26
                                                               2. Except where the validity of the discharge is
Payment orders shall be sent to the financial                  contested the authorizing officer may, where
controller for prior approval. This prior approval             payment is suspended, refer the matter to the
shall confirm that :                                           Commission. The latter may require, in writing and
                                                               on its own responsibility, that the withholding of
( a) the payment order was properly issued ;                   payment be disregarded.
 ---pagebreak--- No L 229/ 14                        Official Journal of the European Communities                                20 . 8 . 76
                        Article 32                            orders, entering into commitments of expenditure or
                                                              signing payment orders, do so without complying
1 . Payments shall, as a general rule, be effected            with this Financial Regulation, shall be liable to
through a bank account or a post office giro                  disciplinary action and, where appropriate, to pay
account. The procedure for opening, administering             compensation. The same shall apply if they omit to
and using such accounts shall be determined by the            draw up a document establishing a claim or if they
Commission.
                                                              neglect to issue revenue orders or are, without
2. The procedures referred to in paragraph 1 shall            justification, late in issuing them.
in particular require two signatures on cheques and
on post office or bank transfer orders, one signature                                  Article 36
necessarily being that of the accounting officer or of
a duly authorized administrator of advance funds ;            Financial     controllers render themselves liable to
they shall, moreover, determine the expenditure               disciplinary action and, where appropriate, to
whose payment must necessarily be effected either by          payment of compensation if they allow
cheque or by post office or bank transfer.                    appropriations to be exceeded or are guilty of
                                                              serious negligence in carrying out their duties .
                        Article 33
                                                                                       Article 37
1 . For the payment of certain categories of
expenditure funds for advances may be set up under            1 . Accounting officers shall be liable to
the conditions laid down by the Commission.                   disciplinary action and, where appropriate, to
                                                              payment of compensation as regards payments they
2.     The rules governing the management of the              make in disregard of Article 31 .
advance funds offices shall in particular concern :
(a) the appointment of administrators of advance              They shall render themselves liable to disciplinary
     funds ;                                                  action and to payment of compensation as regards
                                                              any loss or deterioration of the monies, assets and
(b) the nature and maximum amount of each                     documents in their charge where such loss or
     expenditure to be incurred ;                             deterioration results from an intentional mistake or
(c) the maximum amount of the funds which may                 serious negligence on their part.
     be advanced ;                                            Under the same conditions, they shall be responsible
 (d) the procedures for the production of supporting          for the correct execution of orders received by them
     documents and the time within which they must            in respect of the use and administration of bank and
     be produced ;                                            post office giro accounts, and in particular:
 (e) the responsibility of the administrator of advance       (a) if the payments or recoveries made by them do
     funds.                                                         not agree with the amounts on the payment
                                                                    orders or collection orders ;
                         Article 34                            ( b) if they effect payment to a party other than the
                                                                    entitled payee.
The conversion rates to be used for the calculation
in EUA of payments to be made for the purpose of              2.      Administrators of advance funds shall be liable
the projects or programmes referred to in Title IV of         to disciplinary action and, where appropriate, to
the Convention and in the corresponding provisions            payment of compensation :
of Decision 76/568 /EEC shall be those in force on
                                                              ( a) if they cannot show due warrant with proper
the effective date of such payments. This date shall                documents for payments made by them ;
correspond to that in which the Commission
accounts referred to in Article 32 of Protocol 2 and          (b ) if they effect payments to a party other than the
in Article 3 were debited.                                          entitled payee.
                                                              They shall be liable to disciplinary action and            to
                       SECTION IV                             payment of compensation in respect of any loss             or
                                                              deterioration of the monies, assets and documents          in
RESPONSIBILITIES OF AUTHORIZING OFFICERS,                     their charge as a result of an intentional mistake         or
              FINANCIAL CONTROLLERS,                          serious negligence on their part.
             ACCOUNTING OFFICERS AND
       ADMINISTRATORS OF ADVANCE FUNDS                        3 . Accounting officers and administrators of
                                                              advance funds shall insure themselves against any
                        Article 35                            financial risks they may incur vis-a-vis the
                                                              Commission under this Article.
Without prejudice to Article 30 (5 ) of Protocol 2,
authorizing officers who, when establishing                   The Commission shall cover the relevant insurance
entitlements to be recovered, when issuing collection         costs. It shall specify the categories of officials
 ---pagebreak--- 20 . 8 . 76                        Official Journal of the European Communities                          No L 229 / 15
qualifying as accounting officers or administrators of                              SECTION V
advance funds and the terms on which it shall cover
the insurance costs borne by the accounting officers                                ACCOUNTS
or administrators of advance funds in order to
protect themselves against the risks involved in their
duties .                                                                             Article 40
4. A special indemnity shall be granted to                    1.    The accounts shall be kept, expressed in EUA,
accounting officers and administrators of advance             by the double entry method and on the basis of the
funds .                                                       calendar year. They shall show all revenue and
                                                              expenditure between 1 January and 31 December of
The sums corresponding to this indemnity shall be             each year and shall include the supporting documents.
credited each month to an account opened by the
Commission on behalf of each of these officials in            2.    The revenue and expenditure account and the
order to establish a guarantee fund to cover any cash         balance sheet shall be drawn up in EUA.
or bank shortage for which the person concerned
might render himself liable, in so far as such a
shortage has not been covered by refunds from
                                                                                     Article 41
insurance companies.
                                                              1.    Entries shall be made on the basis of an
The credit balance in these guarantee accounts shall
be paid over to the persons concerned after they              accounting system comprising a nomenclature of
terminate their appointment as accounting officer or          budgetary items which makes a clear distinction
 administrator of advance funds and after they have           between the accounts which permit the balance sheet
been given final discharge for their financial                to be drawn up and those which permit the revenue
administration .                                              and expenditure account to be drawn up. These
                                                              entries shall be recorded in books or on cards, which
                                                              must make it possible to draw up a general monthly
                                                              balance .
                       Article 38
                                                              2.    The accounting system shall be set out in a
The liability of authorizing officers, financial              Commission Decision .
controllers, accounting officers and administrators of
advance funds to payment of compensation and
disciplinary action may be determined in accordance                                 SECTION VI
with Articles 22 and 86 to 89 of the Staff Regulations
of officials of the European Communities.                                     GENERAL PROVISIONS
                       Article 39                                                    Artide 42
The Commission shall be allowed a period of two               The    Audit    Board   shall    be notified   of  the
years from the date on which the account for                  appointment of the authorizing officer, the financial
revenue and expenditure is submitted to take a                controller, the accounting officer and of the
decision on the final discharge to be given to                administrator of advance funds, of any delegation of
accounting officers for the transactions relating             powers pursuant to Articles 9 and 12 and of the
thereto .                                                     accounting system referred to in Article 41 .
                                                     TITLE III
                                          IMPLEMENTING MEASURES
                       SECTION I                              each year of the results of invitations to tender for
                                                              the preceding year. Where appropriate it shall notify
            EXECUTION OF EDF OPERATIONS
                                                              the Council of any measures it has taken or proposes
                                                              to take to improve the terms of competition for
                                                              participation in invitations to tender issued by the
                       Article 43                             EDF .
The Commission shall, in respect of those resources          In its report, the Commission shall provide the
of the EDF which it administers, inform the Council           Council with information enabling it to assess
 ---pagebreak--- No L 229/ 16                        Official Journal of the European Communities                                20 . 8 . 76
whether the measures taken by the Commission                   various currencies are defined by reference to
have actually afforded all firms of the various                another currency the conversion shall be effected on
Member States, of the ACP States and of the                    the basis of the rate specified in the contract.
associated countries and territories equal opportunity
of access to works and supply contracts financed by            4.    Where tenders are drawn up in EUA, payments
the EDF.
                                                               connected with the debt shall, as appropriate, be
                                                               made in the currency of a Member State or in the
                                                               currency of a recipient State, country or territory
                       Article 44                              specified in the contract on the basis of the
                                                               equivalent value of the EUA on the day preceding
Under     Article   19   of    Protocol    2   and   the       payment .
corresponding provisions of Decision 76/568/EEC, a
favourable opinion from the EDF Committee shall                5.    Where payment is made in a currency other
be required for the award of contracts by direct               than the currency of the recipient State, country or
agreement or after restricted invitations to tender            territory or other than the currency of the country
and for the performance thereof through public                 where the contractor has his registered place of
works departments.                                             business, it must be through the intermediary of an
                                                               approved bank or agency, established in the country
However, where they are justified by urgency and by            where the contractor has his registered place of
unforeseen circumstances, the above exceptions to              business .
the rules governing competition may be authorized
by the Commission without a prior opinion from the
EDF Committee. In that event, the Commission shall
immediately inform the EDF Committee thereof.
                                                                                      SECTION II
                       Article 45                                           FINANCIAL COMMITMENTS
1 . Tenders for supply contracts financed by the
EDF shall be drawn up and payments made, at the
option of the tenderer, in EUA, in the currency of
the recipient State, country or territory, in the                                      Article 46
currency of the country of his registered place of
business or in that of the country producing the
supplies.                                                      Where the EDF's resources managed by the
                                                               Commission are involved a financing agreement shall
2.     Tenders for works contracts and for technical           be drawn up and concluded in EUA between the
 assistance contracts and contracts for the supervision        Commission, acting for the Community, and the
of works financed by the EDF shall be drawn up and             Government of the recipient State or the competent
payments made in the currency of the recipient State,          authority of the recipient country or territory for any
country or territory. However, the tenderer may                project or programme on which a financing decision
                                                               is taken .
request in his tender that a justified part of the
nominal amount of his tender be paid in the
 currency of the country of his registered place of
business on the basis of the conversion rate in force          The financing agreement shall specify the details of
 on the first day of the month preceding the month in          the EDF's financial commitment, the arrangements
which the date set for the opening of tenders falls.           for and terms of the financing, and the persons or
He may also draw up that part in EUA on the basis              institutions responsible for supervision, payments
                                                               and recoveries .
of the conversion rate stipulated above.
3 . Tenders for study contracts financed by           the
EDF shall be drawn up and payments made at            the
 option of the contractor either in EUA or in         the
 currency of the country in which the contractor     has                               Article 47
 his registered place of business.
                                                               No expenditure in excess of the amount laid down
 However, that part of the services     provided which         in the financing agreement may be charged to the
corresponds to expenditure in the       currency of the        EDF unless a decision has been taken to commit
 recipient State, country or territory  shall be paid in        additional funds thereto under the conditions laid
 that currency. Where the sums to        be paid in the        down in Articles 16 to 19 and in Article 56 .
 ---pagebreak---   20 . 8 . 76                         Official Journal of the European Communities                          No L 229/ 17
  The request for the commitment of additional funds              Reimbursements and interest payments shall be made
  shall be addressed to the Commission and examined               in one or more of the currencies of the Member
  under the conditions laid down in Article 33 of                 States, chosen by the borrower.
  Protocol 2 .
                                                                  6. The rates for converting EUA into the
                                                                  currencies of the Member States for the purpose of
                        Article 48                                paying sums due in the form of reimbursements,
                                                                  interest payments and any commission due shall be
                                                                  those in force on the 10th day preceding payment.
  The transfer agreement referred to in Article 22 of
  the Convention and in the corresponding provisions
  of Decision 76/568 /EEC shall state the data on
  which calculation of the annual transfer in EUA is                                    SECTION IV
  based, the currencies in which the transfer of this
  amount is to be made and, where appropriate, the                                    RISK CAPITAL
  conditions for the reconstitution of the resources
  made available to the stabilization system referred to
 in Title II of the Convention .
                                                                                         Article 50
                       SECTION III                               1 . Any decision to grant risk capital shall set a
                                                                 limit in EUA to the Community's commitment and
                     SPECIAL LOANS                               financial responsabilities and to the extent of the
                                                                 rights in the company attaching to such operations.
                                                                The instruments giving effect to risk capital
                        Article 49
                                                                operations shall be concluded by the Bank acting as
                                                                the Community's authorized agent.
 1 . A decision to grant special loans shall set the
 limit to the Community's commitment. Contracts                 2.      The Bank, acting for and on behalf of the
 relating to such loans, drawn up jointly with the              Community, shall manage the operations referred to
 Bank for the parts which concern the latter, shall be          in paragraph 1 which have been the subject of a
 concluded by the Commission on behalf of the                   financing decision by the Board of Directors of the
 Community.                                                     Bank.
 2. The         amounts     of     the    appropriations        3.      Following the signing of each contract, the Bank
 corresponding to each loan granted shall be                    shall communicate to the Commission the estimated
 expressed in EUA. If an appropriation is cancelled             dates and amounts of the calls for funds . Whenever
 before all or part of the payments relating thereto            called upon by the Bank to do so, the Commission
 have been made the unpaid part shall be regarded as            shall pay to it the amount it needs for carrying out
not having been granted.                                        risk capital operations in the currency or currencies
                                                                fixed by the Bank.
 3 . Loans shall be paid in the currency or
 currencies of the Member States as fixed by the                4. Payments relating to receipts, income and
 Commission after consultation with the borrower. By            repayments in respect of risk capital operations shall
way of derogation from Article 34, the sums paid                be made to the Bank for the Community.
shall be charged against the appropriations on the
basis of the conversion rates in force, on the day
preceding that of payment, between the EUA and the
currency or currencies used for the payment.
                                                                                         Article 51
4.      Reimbursements and interest payments shall be
credited to the Community's account with the Bank.              The quasi-capital aid referred to in Article 4 of
The Bank shall recover such reimbursements and                  Protocol 2 and in the corresponding provisions of
                                                                Decision 76/568 /EEC shall serve to finance :
interest payments by virtue of special terms of
reference conferred upon by the Commission ,                    — primarily, fixed investments in public, private or
acting for the Community, after consulting the EDF                   semi-public firms,
Committee.
                                                                — secondarily, specific studies for the preparation
5.     The amounts to be reimbursed and interest due                 of projects and assistance for firms during the
in respect of special loans shall be expressed in EUA.               starting-up period.
 ---pagebreak--- No L 229/ 18                        Official Journal of the European Communities                             20. 8 . 76
Where such aid is granted to a consultancy firm it             4. If all or part of an appropriation which has
shall normally, on execution of the project, be                been opened is cancelled or all or part of a loan
incorporated in the capital or quasi-capital assistance        which has been made is repaid in advance the Bank
to which the promoting firm may also be entitled for           shall pay back into the special account opened with
the execution of the project.                                  the Bank in the name of the Community under
                                                               Article 68 an amount corresponding to that part of
                                                               the appropriation which has been cancelled or that
                                                               part of the loan which has been repaid, plus the
                                                               compound interest, up-dated at the same rate as that
                      SECTION V
                                                               stipulated in paragraph 1 , for the period between the
                                                               date of payment of the up-dated total amount of the
        SUBSIDIZED LOANS FROM THE BANK                         interest rate subsidies and the date of repayment.
                                                               The latter date may not be more than 30 days after
                                                               the complete or partial cancellation or advance
                        Article 52                             repayment of the subsidized loan.
1.     Pursuant to Article 5 of Protocol 2 and the             5 . All payments provided for in this Article shall
corresponding provisions of Decision 76/568/EEC,               be expressed in EUA and movements of funds
the aggregate amount of interest rate subsidies on             relating thereto shall be made in the currencies of the
loans from the Bank shall be calculated in EUA in              Member States on the basis of the composition of the
terms of its current value on the effective date of            EUA.
signing of the loan contract, on the basis of a
compound interest rate fixed by the Council and the
Bank in agreement with the Commission.
For periods of less than one month the calculation                                    SECTION VI
shall be made on the basis of simple interest.
                                                                   MANAGEMENT OF THE EXPORT EARNINGS
2.     The Bank shall make the calculation of current                          STABILIZATION SYSTEM
value referred to in paragraph 1 by reference to the
following two schedules :
                                                                                        Article 53
 ( a) an estimated schedule for paying out and
      repaying the loan ;
 (b) an estimated schedule for the amounts required            1.      For the calculation in EUA of the reference
      to cover the interest rate subsidies when they           level and of the actual earnings referred to in Article
      fall due.                                                19 ( 1 ) and (2) respectively of the Convention and in
                                                               the corresponding provisions of Decision 76/568/
                                                               EEC, the exchange rates applicable shall be the
The Bank shall communicate to the Commission as
                                                               average rates in force in the periods to which the
soon as possible the schedules and the total amount            amounts concerned refer.
of the interest rate subsidies at their current value on
the date fixed for the signing of the loan contract.
                                                               2. For the purposes of payments relating to the
Where the actual schedule for paying out the loan              transfers referred to in Article 19 (3) and (6) of the
proves to differ appreciably from the estimated                Convention and in the corresponding provisions of
schedule, the amount of the subsidy on the interest            Decision 76/568/EEC, the conversion rates to be
paid to the Bank shall be recalculated.                        used between the EUA and the currency or
                                                               currencies used for payment shall be those in force
                                                               on the day preceding payment.
Should the date fixed for the signing be changed the
Bank shall revise the calculation of the current value
and shall forthwith communicate to the Commission
the total amount of the interest rate subsidies at their
                                                               3.      For the purposes of payments relating to the
                                                               contributions towards the reconstitution of resources
current value on the new date fixed for the signing            referred to in Article 21 (2) of the Convention and in
together with the appropriate grounds therefor.                the corresponding provisions of Decision 76/568/
                                                               EEC, the conversion rates to be used between the
3.     The up-dated total amount of the interest rate          EUA and the currency or currencies used for
subsidy shall be paid to the Bank by the Commission            payment shall be those in force on the 10th day
on the date on which the loan contract is signed.              preceding payment.
 ---pagebreak--- 20. 8 . 76                         Official Journal of the European Communities                         No L 229/19
                        Article 54                            decisions to commit the additional funds required to
                                                              cover any excess expenditure incurred under a
 In the event of advance use of the following year's          project shall be taken :
 instalment, the advances referred to in Article 19 ( 6)
of the Convention and in the corresponding                    — in accordance with the procedures laid down in
provisions of Decision 76/568/EEC shall be reduced               Articles 19 and 20 of the Internal Agreement
proportionately.                                                 where the excess expenditure is higher than a
                                                                 ceiling of 15 °/o of the original commitment set
                                                                 out in the financing decision,
                      SECTION VII
                                                             — by the chief authorizing officer of the EDF where
                 EXECUTIVE AGENTS                                the excess expenditure is equal to or lower than
                                                                 the 15 °/o ceiling.
                       Chapter I
             The chief authorizing officer
                        Article 55
                                                                                      Chapter II
1.     The chief authorizing officer of the EDF,                         The national authorizing officer
referred to in Article 29 of Protocol 2, shall take all
measures necessary for the implementation of the
provisions of Chapter 8 of Protocol 2 and of the
corresponding provisions of Decision 76/568/EEC.                                       Article 57
2. The chief authorizing officer shall ensure,
before the publication of an invitation to tender, that      In the performance of his duties, the national
the documents relating to tenders do not contain any         authorizing officer shall comply with the provisions
direct or indirect discriminatory provisions. He shall       of this Financial Regulation regarding commitment,
ensure that tenders are compared under equal                 clearance and authorization of expenditure.
conditions and in particular that the import duties or
taxation of the recipient State, country or territory
do not constitute an obstacle to participation in
invitations to tender.                                                                 Article 58
3 . The chief authorizing officer may suspend the
publication of a notice of invitation to tender where        Where the chief authorizing officer of the EDF is
it is found that corrections must be made to the             aware of delays in the procedures relating to projects
specifications or other replacement documents. To            financed by the EDF he shall, in conjunction with
this end, he shall inform the relevant authorities of        the national authorizing officer, make all contacts
the recipient State, country or territory of his             necessary to remedy the situation.
observations .
4. The chief authorizing officer shall ensure that           If, for any reason whatsoever, services have been
when a contractor is designated and a contract is            rendered but further delay in the clearance,
awarded Articles 18 and 20 of Protocol 2 are                 authorization or payment entails difficulties likely to
respected.                                                   call into question the full performance of the
                                                             contract, the chief authorizing officer may take all
Where he deems it appropriate, the chief authorizing         appropriate measures to resolve these difficulties, to
officer shall consult experts chosen for their               remedy, where necessary, the financial consequences
technical competence and their independence vis-a­           of the resultant situation and, more generally, to
vis the firms concerned by the award of the contract.        enable the project or projects to be completed under
                                                             the best economic conditions . He shall inform the
                                                             national authorizing officer of such measures as soon
                       Article 56                            as possible. If payments are thus made directly by
                                                             the Commission to the beneficiary of the contract
                                                             the Community shall automatically acquire that
Under Article 33 (3 ) of Protocol 2 and the                  beneficiary's rights as creditor vis-h-vis the national
corresponding provisions of Decision 76/568 /EEC             authorities .
 ---pagebreak--- No L 229/20                        Official Journal of the European Communities                              20 . 8 . 76
                      Chapter III                            Commission at the close of each financial year.
                                                             Without prejudice to Article 31 (4) of the Internal
              The Commission delegate                        Agreement, they shall be submitted no later than 31
                                                             March of the following financial year together with
                                                             documentary evidence, for examination by the Audit
                       Article 59                            Board .
During the performance of operations, the delegate
shall verify on the spot and on the basis of records,        2. The powers conferred upon the Audit Board
that work carried out or services rendered tally with        shall be exercised by its members, who shall take
their descriptions as given in the financing                 collective action and assume collective responsibility.
agreements, contracts or estimates .
                                                             The Audit Board may instruct one or more of its
                                                             members to carry out certain tasks or certain audits.
                       Article 60                            Any member or members so instructed may on his
                                                             or their initiative seek assistance from officers of the
The delegate shall comply with this Financial                board .
Regulation in the performance of his duties.
                                                             The tasks delegated to such officers must be
                       Article 61                            specifically laid down and limited to the time
                                                             necessary for their completion. The board itself or
In the event of failure to comply with this Financial        one of its members shall notify these tasks to the
Regulation, of misconduct or gross negligence in the         authorities with whom the relevant officers are to
performance of his duties, the delegate shall be             carry out their work.
answerable to the Commission .
                                                                                     Article 65
                      Chapter IV
                   The paying agent                           1 . The audit carried out by the Audit Board shall
                                                             be based on records and, if necessary, performed on
                        Article 62
                                                             the spot. It shall be concerned with operations and
                                                             projects financed from EDF resources managed by
                                                             the Commission v and its purpose shall be to establish
In the performance of his duties, the paying agent           that    all revenue    has    been   received  and       all
referred to in Article 32 of Protocol 2 shall comply         expenditure incurred in a lawful and regular manner
with this Financial Regulation.                              with regard to the provisions applicable, and that the
                                                             financial management has been sound.
                       Article 63
                                                             2.    In the performance of its task the Audit Board
In the event of failure to observe the provisions in         may, under the conditions laid down in paragraph 4,
force of misconduct or of gross negligence which             consult all documents and information relating to
entail financial loss for the Community, the paying          the financial management of the departments subject
agent shall be held financially responsible under the        to its inspection ; it has the power to hear any
conditions and in accordance with the terms laid             official responsible for revenue and expenditure
down     in  the    contract   binding    him   to  the      operations and to use any of the auditing procedures
Commission .                                                 appropriate to those departments.
                                                             3.    The Audit Board shall ensure that all securities
                     SECTION VIII                            and cash on deposit or in hand are checked against
                                                             vouchers signed by the depositaries or against
     PRESENTING AND AUDITING ACCOUNTS                        official memoranda of cash and securities held. The
                                                             board may itself carry out such checks.
                       Article 64                            4.    The Commission shall provide the Audit Board
                                                             with all the facilities and information which the
1 . The balance sheet and revenue and expenditure            latter deems necessary for the performance of its
account, expressed in EUA, shall be adopted by the           task.
 ---pagebreak--- 20 . 8 . 76                        Official Journal of the European Communities                           No L 229/21
In particular, it shall place at the disposal of the          The Audit Board may, on its own initiative, place
Audit Board all documents concerning the                      similar reports or analyses before the European
conclusion of contracts and all accounts in cash or           Parliament or the Council.
materials, all accounting records or supporting
documents       and  the    administrative   documents
                                                                                      Article 67
pertaining thereto, as well as all documents relating
to revenue and expenditure.                                   1 . Before 30 April of the following year the
To this end, officials subject to audit by the Audit          Commission shall be given a discharge in respect of
Board shall in particular :                                   the financial management of the EDF for the past
                                                              year, in accordance with Article 31 (3 ) of the
( a) make available for inspection their cash in hand,        Internal Agreement.
     any other cash, securities and all types of assets,
     the supporting documents in respect of their             2. The Commission shall take all appropriate
     management of the funds of which they are the            steps to act on the comments appearing in the
     depositaries and any books, registers and other          decision giving discharge. At the request of the
     documents relating thereto;                              European Parliament or the Council it shall report
                                                              on the measures taken in the light of these comments
( b) present the correspondence or any other                  and in particular on the instructions given to those
     document required for the full implementation of         of its departments which are responsible for the
     the audits .
                                                              management of the EDF. This report shall also be
The information referred to under ( b) may be                 forwarded to the Audit Board.
requested only by the Audit Board or by one of its            Subject to the second sentence of the preceding
members, and such request shall be in writing.                paragraph the Commission must, in an Annex to the
The Audit Board shall be empowered to audit the               revenue and expenditure account for the next
documents in respect of EDF revenue and                       financial year, give an account of the measures taken
expenditure which are held by the Commission's                further to the comments appearing in the decision
departments and, in particular, by the department             giving discharge .
responsible for decisions on such revenue and                 3 . The revenue and expenditure account and
expenditure.                                                  balance sheet for each financial year and the decision
                                                              giving the discharge shall be published in the Official
                       Article 66                             journal of the European Communities.
1 . Any comments which the Audit Board
considers should appear in the annual report
                                                                                    SECTION IX
provided for in Article 206 of the Treaty shall be
communicated to the Commission .                                       GENERAL AND FINAL PROVISIONS
The Commission shall forward its replies to the
Audit Board . The Audit Board shall attach to its                                     Article 68
report an assessment of the soundness of the
financial management.                                         The sums collected by the Bank either in the form of
                                                              repayments, interest or charges in respect of sp.ecial
2. The Audit Board shall conclude its report on               loans or in the form of products, revenue or
the accounts for the preceding financial year not             repayments from risk capital operations shall be
later than 15 July.                                           centralized in a special account opened with the
The revenue and expenditure account, the balance              Bank on behalf of the Community.
sheet and the report of the Audit Board, together             Repayments in respect of interest rate subsidies
with the replies to the comments, shall be submitted          received shall also be centralized in this account.
by the Commission to the European Parliament and
the Council not later than 31 October.
                                                                                     Article 69
3.      The European Parliament and the Council may
request the Audit Board to forward, in addition to            This Regulation shall be applicable for the same
the annual report, reports or analyses in respect of          period as the Internal Agreement.
specific problems relating to operations which have
been closed.                                                  Done at Brussels, 27 July 1976.
                                                                             For the Council
                                                                              The President
                                                                           M. van der STOEL