CELEX: 51994PC0014
Language: en
Date: 1994-01-28
Title: Amended proposal for a COUNCIL REGULATION (EC, ECSC, Euratom) amending the Financial Regulation of 21 December 1977 applicable to the general budget of the European Communities

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                          COM(94) 14 final
                                                          Brussels, 28.01.1994
                                           Amended proposal for a
                              COUNCIL REGULATION (EC. ECSC. Euratom)
                     amending the Financial Regulation of 21 December 1977 applicable
                             to the general budget of the European Communities
                 (presented by the Commission pursuant to Article 189a(2) of the EC Treaty
                       and the second paragraph of Article 119 of the Euratom Treaty)
     ^•$"i$§|f
ïï "'*, lit
 ---pagebreak---                             EXPLANATORY MEMORANDUM
On 2 September 1992 the Commission presented a proposal for the amendment of the Financial
Regulation to take account of the revision of the Treaty at Maastricht and the conclusion of the
Agreement on the European Economic Area.1 It also proposed an improvement to the
presentation of borrowing and lending operations in the budget.
Parliament delivered its opinion on this proposal at its part-session from 15 to 19 November 1993
and adopted a number of amendments, some of which the Commission endorses.
Apart from a number of adjustments which are basically changes in wording, the main
amendments which the Commission is accepting can be summed up as follows:
1.   The provisions relating to the financial statement (Article 3 are tightened to ensure all the
     transparency and discipline desired.
2.   The institutional implications of the Maastricht Treaty are supplemented to take account of
     the following aspects:
     (a)      Some provisions have been added to provide a budgetary framework for the
              Ombudsman instituted by Article 138e of the Treaty (in particular Articles 12, 19
              and 20).
     (b)      Details are added to the provisions concerning the Economic and Social Committee
              and the new Committee of the Regions on matters relating to the organization of
              budgetary implementation (in particular the appointment of a single financial
              controller and a single accounting officer - see Articles 22, 24 and 25).
3.   The procedure for transfers within chapters for the Court of Justice, the Court of Auditors,
     the Economic and Social Committee and the Committee of the Regions has been made
     simpler (there is no longer an obligation to notify the budgetary authority in advance - see
     the second subparagraph of Article 26(2)).
  COM(92)358 final.
 ---pagebreak---                                                   - 1 ex. -
      4.   In support of its preliminary draft budget, the Commission will supply further inform: ;^>;
           on personnel management by listing mobility and redeployment measures broken down by
           sector of activity (Article 13(4)(a)).
      5.   As regards the award of contracts, it is stipulated that the price revision procedures are to
           be set out in detail in the implementing rules (Article 58(4)).
      6.   More details are provided on contributions by outside bodies to Community activities (the
           foreseeable amounts and an estimate of any administrative costs are indicated separately for
           information - see Article 124).
      7.   Finally, a new provision (Article 140a) is included to specify the Court of Auditors' powers
           as regards borrowing and lending operations, which are now contained in a separate
           document presented together with the preliminary draft budget in accordance with Part II of
           the proposed Financial Regulation.
Finally, although Parliament suggested that borrowing and lending operations should be entered in full
and that the estimated amounts for contributions from third parties should be formally entered by way
of prior authorization, the Commission has not been able to accept these amendments which are not
compatible with the exercise of budgetary powers in the present context.
                                                   * * *
In accordance with Article 189a(2) of the EC Treaty, the Commission has therefore drawn up this
amended proposal which it is submitting for the subsequent stages of the procedure.
 ---pagebreak---                                                       1 ^ -
                                         AMENDED PROPOSAL FOR A
                              COUNCIL REGULATION (EC. ECSC. Euratom)
                     amending the Financial Regulation of 21 December 1977 applicable
                              to the general budget of the European Communities
                                  (presented by the Commission to the Council
                                        in accordance with Article 189a(2)
                                   of the EC Treaty and the second paragraph
                                      of Article 119 of the Euratom Treaty)
Following the opinions of Parliament and the Court of Auditors, the Commission presents the following
proposal :
                INITIAL PROPOSAL
              (COM(92)358. 2.9.1992)
THE COUNCIL             OF      THE      EUROPEAN          THE COUNCIL OF THE EUROPEAN UNION
COMMUNITIES,
Having regard to the Treaty establishing the European
Coal and Steel Community, and in particular
Article 78h thereof,
Having regard to the Treaty establishing the European
Community, and in particular Article 209 thereof,
Having regard to the Treaty establishing the European
Atomic Energy Community, and in particular
Article 183 thereof,
Having regard to the proposal from the Commission,1
Having regard to the opinion of the European
Parliament,'
Having regard to the opinion of the Court of
Auditors,3
Whereas the conciliation provided for by the Joint
Declaration of 4 March 1975 by the European
Parliament, the Council and the Commission4 has
taken place in a Conciliation Committee;
Whereas the principle of subsidiarity is enshrined in
the Treaty on European Union and must now be
incorporated in the Financial Regulation of
21 December 1977 applicable to the general budget of
the European Communities5 (hereinafter referred to as
the "Financial Regulation"), as last amended by
Regulation (Euratom, ECSC, EEC) No 610/906;
   ^ OJ No C 254, 1.10.1992, p.5.
   ?
     OJ No C 342, 23.12.1992, p. 1.
   4
      01 NoC 89, 22.4.1975, p. 1.
  5
      OJ No L 356, 31.12.1977, p.l.
  6
      OJ No L70, 16,3,1990, p.l.
 ---pagebreak---                  INITIAL PROPOSAL                                       MENDED PROPOSAI
Whereas the provisions of the Treaty on European
Union, and in particular those relating to Monetary
Union, make it all the more necessary to provide in
the Financial Regulation for the principle that the
budget shall be executed in ECU;
Whereas that Treaty raises the Court of Auditors to
institution status and confers a new task upon it;
whereas the provisions of the Financial Regulation
relating to that institution should be adapted and
supplemented accordingly;
Whereas, since that Treaty has enhanced the role of
the Economic and Social Committee and provided for
a Committee of the Regions, provisions need to be
laid down to govern their budgetary status;
                                                        The following recital is inserted after the fifth recital:
                                                        Whereas that Treaty provides for the appointment of
                                                        an Ombudsman after each election of the European
                                                        Parliament: whereas appropriate budgetary
                                                        arrangements therefore need to be made to ensure that
                                                        he is completely independent in the performance of
                                                        his duties:
                                                        The sixth recital is replaced by the following:
Whereas Article 89 of the Financial Regulation must     Whereas Article 89 of the Financial Regulation must
be amended to reflect the stronger powers of political  be amended to reflect the stronger powers of political
control exercised by Parliament and the Council over    control exercised by Parliament and the Council over
the execution of the budget on the basis of reports by  the execution of the budget on the basis of the reports
the Court of Auditors;                                  and the statement of assurance as to the reliability of
                                                        accounts issued by the Court of Auditors;
Whereas the implementation of the Agreement on the
European Economic Area requires that appropriate
provisions be inserted in the Financial Regulation to
govern, in particular, the budgetary presentation and
execution of the additional financial contribution
resulting from financial participation by the EFTA
countries;
Whereas appropriate provisions must be inserted in
the Financial Regulation to govern the financial
participation of third parties in Community activities;
 ---pagebreak---                  INITIAL PROPOSAL                                     AMENDED PROPOSAL
Whereas it must be clearly stated that, when awarding
contracts, the institutions must comply with the same
obligations as are incumbent on bodies in the Member
States by virtue of the Council directives coordinating
procedures for the award of public works, supply and
services contracts with a value equal to or higher than
the thresholds established by those directives;
whereas the provisions applicable to contracts below
those thresholds should at the same time be clarified
and adjusted;
Whereas appropriate provisions should be added in a
second part of the Financial Regulation to improve
the presentation and transparency of information
relating to borrowing and lending activities,
HAS ADOPTED THIS REGULATION:
                        Article 1                                             Article 1
The Financial Regulation is amended as follows:
1.     The following heading is inserted: "Part I
       Provisions applicable to the general budget of
       the European Communities".
                                                        Article 1 is amended as follows:
                                                        (a)  The following phrase is added after the first
                                                             subparagraph of paragraph 1:
                                                              "The budget may also authorize the
                                                             underwriting of borrowing and lending
                                                             operations entered into by the Community:"
       The word "Economic" is deleted from the          (b) The word "Economic" is deleted from the
       second indent of the second subparagraph of           second indent of the second subparagraph:
       Article 1(1).
 ---pagebreak---                   INITIAI PROPOSAL                                      AMENDED PROPOSAL
        Article 3(2) is replaced by the following:       Article 3 is amended as follows:
                                                         (a)    Paragraph 2 is replaced by the following
  "2. For activities of an operational nature, the        "2. For activities of an operational nature, *&.•
 financial statement shall contain financial data        financial statement shall contain financial und
 relating to the assessment by the legislative authority economic data relating to the assessment by i :
 of the need for Community action as provided in the     legislative authority of the need for Community action
 second paragraph of Article 3b of the EC Treaty.        as provided in the second paragraph of Article 3b of
                                                         the EC Treaty.
 It shall also state why the financial instrument        It shall also state why the financial instrument
 provided for is appropriate, specify- how it is to be   provided for is appropriate, specify how it is to be
 implemented and justify the amount proposed."           implemented and justify the amount proposed.
                                                         It shall also give detail; ?JLanv synergies with other
                                                         financial instruments."
                                                         (b) Paragraphs 4 and 5 are replaced by the
                                                               following:
                                                               "4. In order to prevent any risk of fraud, the
                                                               Commission shall, where appropriate, record in
                                                               the financial statement any information
                                                               regarding fraud prevention measures and
                                                               legislative or administrative protection
                                                               mechanisms planned (sanctions, checks, etc.)
                                                               and shall justify them in terms of cost
                                                               effectiveness.
                                                               "5. At the start of the budget procedure, the
                                                               Commission shall supply on the basis of a cost-
                                                               effectiveness analysis, appropriate information
                                                               enabling a comparison to be made between the
                                                               development of appropriation requirements and
                                                               the original estimates contained in the financial
                                                               statements:"
4.     The introductory phrase of the second             The introductory phrase of the second subparagraph
       subparagraph of Article 4(2) is replaced by the   of Article 4(2) is replaced by the following:
       following:
 " Notwithstanding the first subparagraph, and without   "Notwithstanding the first subparagraph, and without
 prejudice to the specific provisions of Title XI,       prejudice to the specific provisions of Title XI,
 certain revenues shall not be used for any other        certain revenues, on condition that they are provided
 purpose, notably:"                                      for in the budget and wimin the limit of the
                                                         authorized amounts, shall not be used for any other
                                                         purpose, notably:"
 ---pagebreak---                  INITIAL PROPOSAL                      5 AMENDED PROPOSAL
5.     The first subparagraph of point 3 of Article 7
       is replaced by the following:
  "3. In the case of appropriations for which a
 decision to carry over may be taken in accordance
 with point 1(a), the Commission shall forward to the
 budgetary authority, not later than 15 February, the
 duly substantiated requests to carry over
 appropriations made by the European Parliament, the
 Council, the Court of Justice, the Court of Auditors,
 the Economic and Social Committee, the Committee
 of the Regions and the Commission itself. "
6.     In Article 9(1) and (3)(b) the words
       "EEC Treaty" are replaced by "EC Treaty".
7.     Article 11 is amended as follows:
 (a)   At the beginning of the first subparagraph of
       paragraph 2 the words "the ECU is the sum of
       specified amounts of the currencies of the
       Member States" are replaced by "the ECU is
       defined as the sum of specified amounts of the
       currencies of the Member States".
 (b)   The second subparagraph of paragraph 2 is
       replaced by the following: "Any change in the
       definition of the ECU adopted by the Council
       in accordance with the EC Treaty, and in
       particular Articles 109g and 1091(4) thereof,
       shall automatically apply to this provision".
 (c)   Paragraph 4 is replaced by the following:
       "4. Without prejudice to specific provisions of
       sectoral rules governing either amounts due or
       expenditure, the rights and obligations of the
       Communities shall be expressed and executed
       in ECU."
 (d)   The following paragraph 5 is added:
       "5. For as long as conversion between the
       ECU and national currencies is necessary, such
       conversion shall, without prejudice to specific
       sectoral rules, be made in accordance with the
       implementing measures provided for in
       Article 142."
 ---pagebreak---               INITIAL PROPOSAL                                       AMENDED PROPOSAL
     Article 12 is amended as follows:                Article 12 is amended as follows:
 (a) The first paragraph is replaced by the           (a) unchanged
     following:
     "The European Parliament, the Council, the
     Court of Justice, the Court of Auditors, the
     Economic and Social Committee and the
     Committee of the Regions shall, each year
     before 1 July, draw up an estimate of their
     revenue and expenditure for the following
     year."
 (b) The second paragraph is deleted.                 (b)  the second paragraph is replaced by the
                                                           following:
                                                            "The Ombudsman shall, before 1 May, forward
                                                           to the European Parliament an estimate of his
                                                           revenue and expenditure for the following year."
9.   The third indent of Article 13(2)(b) is deleted. The third indent of Article 13(2)(b) is deleted and
                                                      Article 13(4)(a) is replaced by the following:
                                                      (a)  in respect of staff:
                                                              a statement of the staff policy measures
                                                              taken, listing the measures taken to promote
                                                              mobility and giving figures for the staff
                                                              redeployed bv category:
                                                              for each category of staff, a detailed list of
                                                              budgetary posts and numbers of persons in
                                                              post on the date of the submission of the
                                                              preliminary draft budget, indicating their
                                                              distribution by grade and administrative unit
                                                               (or principal operational unit for the
                                                              establishments of the Joint Research Centre),
                                                               where a change in the number of persons in
                                                              post is proposed, a statement justifying such
                                                               changes,
                                                               a list of Commission posts broken down by
                                                               area of activity:"
 ---pagebreak---                 INITIAL PROPOSAL                        7 AMENDED PROPOSAL
10.   The first paragraph of Article 14 is replaced by
      the following:
 "The Commission may, on its own initiative or if
 requested by the European Parliament, the Council,
 the Court of Justice, the Court of Auditors, the
 Economic and Social Committee or the Committee
 of the Regions in respect of their section, present to
 the Council a letter of amendment to the preliminary
 draft budget necessitated by the receipt of new
 information which was not available at the time the
 preliminary draft was established."
11.    Article 15 is amended as follows:
 (a)   In paragraph 2, the words "EEC Treaty" are
       replaced by "EC Treaty".
 (b)   Paragraph 4 is replaced by the following:
       "4.     Requests for supplementary and/or
       amending budgets from the European
       Parliament, the Council, the Court of Justice,
       the Court of Auditors, the Economic and Social
       Committee or the Committee of the Regions
       shall be forwarded by the Commission to the
       budgetary authority. The Commission may
       attach a dissenting opinion. "
12.    In the first subparagraph of Article 16(1) the
       words "EEC Treaty" are replaced by
       "EC Treaty".
13.    In Article 17(1) the words "EEC Treaty" are
       replaced by "EC Treaty".
14.    In Article 18 the words "EEC Treaty" are
       replaced by "EC Treaty".
 ---pagebreak---                INITIAL PROPOSAL                                      AMENDED PROPOSAL
15.  Article 19 is amended as follows:                 Article 19 is amended as follows:
 (a) Paragraph 1 is replaced by the following:         (a)   Paragraph 1 is replaced by the following:
     " 1. The budget shall consist of:                  " 1. unchanged
          a general statement of revenue;                    unchanged
          separate sections subdivided into                  unchanged
          statements of revenue and expenditure of
          the European Parliament, the Council, the
          Commission, the Court of Justice and the
          Court of Auditors.
                                                       The revenue and expenditure of the Ombudsman shall
                                                       be entered in the Parliament's section of the budget in
                                                       the form of a statement of revenue and expenditure
                                                       subdivided in the same wav as the sections of the
                                                       budget and subject to the same rules.
     The revenue and expenditure of the Economic             unchanged
     and Social Committee and the Committee of
     the Regions shall be entered in a special section
     subdivided as follows:
          Part A devoted to the Economic and                 unchanged
          Social Committee;
          Part B devoted to the Committee of the             unchanged
          Regions;
          Part C devoted to the common                       unchanged
          organizational structure of the two
          committees.
     The Commission section shall consist of:                unchanged
          Part A for the staff and administrative            unchanged
          expenditure of that institution.
          The revenue and expenditure of the                 unchanged
          Office for Official Publications of the
          European Communities shall be attached
          to this part.
          Part B for operating expenditure, divided          unchanged
          into as many subsections as are required."
 ---pagebreak---             INITIAL PROPOSAL                 AMENDED PROPOSAL
                             (b) Paragraph 6 is replaced by the following :
                             "6. The subsection for EAGGF Guarantee Section
                             expenditure shall include a monetary reserve for
                             which the entry, utilization and financing conditions
                             are determined by the provisions of Title E.
                             paragraph 15 of the 1993-1999 Interinstitutional
                             Agreement. Council Decision .../EEC of ...
                             concerning budgetary discipline1 and Decision
                             .../EEC, Euratom ... of... and Regulation ... on the
                             system of the Communities' own resources and the
                             provisions adopted for implementing them.
(b) Paragraph 7 is deleted.  (c)  Paragraph 7 is deleted.
                             Article 20 is amended as follows:
                             (a)  In point 2(bb) the following fourth indent is
                                  added:
                                  - the amount of any revenue to be re-used.
                                       This amount is mentioned for information
                                       only;"
                             (b)  In point 3 the first indent is replaced by the
                                  following:
                                   "- for each section of the budget, an
                                       establishment plan setting the number of
                                       permanent and temporary posts for each
                                       grade in each category and in each service
                                       authorized within the limits of the budget
                                       appropriations. The staff of the supply
                                       agency shall be shown separately in the
                                       Commission's establishment plan; The staff
                                       of the Ombudsman shall he shown separately
                                       in Parliament's establishment plan: the staff
                                       of the Economic and Social Committee, the
                                       Committee of the Regions and their common
                                       organizational structure shall be shown
                                       separately in their specific section. "
                             1
                                OJ ...
 ---pagebreak---                INITIAL PROPOSAL                        10               AMENDED PROPOSAL
16.  Point 5 of Article 20 is replaced by the             (c) Point 5 is replaced by the following:
     following:
 "5. As regards borrowing and lending operations:         "5. As regards borrowing and lending operations:
 (a) in the general statement of revenue, the budget      (a) in the general statement of revenue, the budget
     headings corresponding to the relevant                   headings corresponding to the relevant
     operations and intended to record any                    operations and intended to record any
     reimbursements received from beneficiaries               reimbursements received from beneficiaries who
     who initially defaulted, leading to activation of        initially defaulted, leading to activation of the
     the performance guarantee. These headings                performance guarantee. These headings shall
     shall carry a token entry and be accompanied             carry a token entry and be accompanied by
     by appropriate remarks;                                  appropriate remarks;
(b)  in the Commission section:                           (b) in the Commission section, Part B:
     - the budget headings containing the                     - the budget headings containing the
        Community's performance guarantees in                     Community's performance guarantees in
        respect of the operations in question. These              respect of the operations in question. These
        headings shall carry a token entry, so long as           headings shall carry a token entry, so long as
        no effective charge which has to be covered               no effective charge which has to be covered
        by specific resources has arisen;                         by specific resources has arisen;
     - remarks giving a reference to the legal basis          - remarks giving a reference to the legal basis
        and, where appropriate, the volume of the                 and, where appropriate, the volume of the
        operations envisaged and the financial                    operations envisaged, the duration and the
        guarantee given by the Communities in                     financial guarantee given by the Communities
        respect of these operations;".                            in respect of these operations;".
17.  Article 22 is amended as follows:                    17. Article 22 is amended as follows:
 (a) Paragraph 2 is replaced by the following:                (a) Paragraph 2 is replaced by the following:
                                                                    "2. The Commission shall confer upon the
     "2. The Commission shall confer upon the                       European Parliament, the Council, the
     European Parliament, the Council, the Court of                 Court of Justice, the Court of Auditors, the
     Justice, the Court of Auditors, the Economic                   Economic and Social Committee and the
     and Social Committee and the Committee of                      Committee of the Regions the requisite
     the Regions the requisite powers for the                       powers for the implementation of the
     implementation of the sections of the budget                   sections of the budget relating to them."
     relating to them."
                                                                    By common agreement, the Economic and
                                                                    Social Committee of the Regions shall
                                                                    delegate the powers of authorizing officer to
                                                                    the official responsible for administering
                                                                    'Part C of the common organizational
                                                                    structure and shall establish the limits and
                                                                    conditions of this delegation of powers^
 ---pagebreak---                INITIAL PROPOSAL                       11                AMENDED PROPO A L
 (b) Paragraph 5 is replaced by the following:           (b) Paragraph 5 is replaced by the following:
     "5. Save as otherwise provided, the Economic                   "5. Save as otherwise provided, the
     and Social Committee and the Committee of                      Ombudsman, the Economic and Social
     the Regions, shall, for the purpose of this                    Committee and the Committee of the
     Financial Regulation, be treated as institutions               Regions, shall, for the purpose of this
     of the Communities."                                           Financial Regulation, be treated as
                                                                    institutions of the Communities."
                                                                    The common organizational structure of the
                                                                    Economic and Social Committee and the
                                                                    Committee of the Regions shall establish an
                                                                    accounting system with a breakdown of
                                                                    expenditure showing the proportion^of
                                                                    services provided to each of these two
                                                                    institutions."
                                                         The first paragraph of Article 24 is replaced by the
                                                         following:
                                                         "Each institution shall appoint a financial controller.
                                                         The Economic and Social Committee and the
                                                         Committee of the Regions shall appoint a financial
                                                         controller by common agreement. "
                                                         In Article 25 the second paragraph is replaced by the
                                                         following:
                                                         "The accounting officer shall be appointed by the
                                                         institution. The Economic and Social Committee and
                                                         the Committee of the Regions shall appoint an
                                                         accounting officer by common agreement."
18.  Article 26 is amended as follows:                   18. Article 26 is amended as follows:
 (a) The second subparagraph of paragraph 2 is                 (a) The second subparagraph of paragraph 2 is
     replaced by the following:                                     replaced by the following:
      "The Court of Justice, the Court of Auditors,                 "The Court of Justice, the Court of
     the Economic and Social Committee and the                      Auditors, the Economic and Social
     Committee of the Regions - the two latter                      Committee and the Committee of the
     Committees with regard to the part which                       Regions - the two latter Committees with
     relates to them and, by common agreement,                      regard to the part which relates to them
     with regard to the common organizational                       and, by common agreement, with regard to
     structure - may, within their own sections of                  the common organizational structure - may,
     the budget, transfer appropriations from one                   within their own sections of the budget,
     article to another within each chapter. They                   transfer appropriations from one article to
     shall inform the budgetary authority and the                   another within each chapter. They shall
     Commission three weeks before making such                      inform the budgetary authority and the
     transfers."                                                    Commission."
 ---pagebreak---                INITIAL PROPOSAL                      12               AMENDED PROPOSAL
 (b) The third subparagraph of paragraph 4 is           (b)  unchanged
     replaced by the following:
     "Proposals made by the other institutions, the
     Economic and Social Committee and the
     Committee of the Regions for transfers from
     one chapter to another shall be automatically
     forwarded to the authority; the Commission
     may attach its own opinion to such proposals."
     Article 56 is renumbered Article 58 and            19. Article 56 is renumbered Article 58 and
     amended as follows:                                     amended as follows:
 (a) In the first subparagraph of paragraph 1 the       (a)  unchanged
     words "either by the automatic public tendering
     procedure or the discretionary tendering
     procedure" are deleted.
 (b) The second subparagraph of paragraph 1 is          (b)  In the second subparagraph of paragraph 1
     replaced by the following:                              "Article 58" is replaced by "Article 59".
     "However, contracts may be made without a
     tendering procedure in the circumstances
     referred to in Article 59."
 (c) In the third subparagraph of paragraph 1,          (c)  unchanged
     "Article 63" is replaced by "Article 60".
 (d)  The following paragraph 3 is added:               (d) The following paragraphs 3 and 4 are added:
     "3. Tendering procedures shall be laid down             "3. Tendering procedures and award criteria
     by the implementing measures provided for in            shall be laid down and governed by the
     Article 142."                                           implementing measures provided for in
                                                             Article 142, on the understanding that these
                                                             criteria shall be laid down bv analogy with those
                                                             provided for in the directives referred to in
                                                             Article 56.
                                                             4. The price revision procedures following the
                                                             conclusion of contracts shall be governed by the
                                                             implementing measures provided for in
                                                             Article 142."
20.  Article 57 is deleted.
21.  The following new Article 57 is inserted:
                    "Article 57
     The provisions of Articles 58, 59 and 60 shall
     be applicable to contracts other than those
     referred to in Article 56. "
 ---pagebreak---                INITIAL PROPOSAL                      13                AMENDED PROFCX
22.  Article 58 is renumbered Article 59 and            Article 58 is renumbered Article 59 and replaced by
     amended as follows:                                the following:
 (a) The introductory words "Contracts may be                                 "Article 59
     made by private treaty:" are replaced by
     "Contracts may be made without invitation to       Contracts may be made by private treaty:
     tender in the following circumstances:".
                                                        (a) within the limit laid down in the implementing
 (b) Point (a) is replaced by the following:                  rules provided for in Article 142 for the
                                                             purchase or hiring of supplies, furniture and
     "(a) where their estimated value, not                    equipment, for the provision of services or for
            including VAT, is below the threshold            building works:
            set by the implementing measures
            provided for in Article 142;".              (b)   where the purchase or hiring of goods, the
                                                              provision of services or the construction works
 (c) In point (b), "Article 57" is replaced by                are so urgently needed that it is not possible to
     "Article 58".                                            wait for one of the tendering procedures
                                                              specified in Article 58 to be carried out;
                                                        (c)   where the automatic public tendering or
                                                              discretionary tendering procedures do not give
                                                              any result or where the prices quoted are not
                                                              acceptable;
                                                        (d)   where for technical, practical or legal reasons
                                                              the supply of goods or services can only be
                                                              carried out by a particular contractor or
                                                              supplier;
                                                        (e)   for contracts for the supply of goods and
                                                              services or for ancillary works which,
                                                              technically, cannot be separated from the main
                                                              contract:
                                                        The institution concerned is bound, however, as far
                                                        as possible and by all appropriate means, to enable
                                                        suppliers or contractors who are likely to be able to
                                                        supply the goods and services in question to compete,
                                                        except in the cases referred to at (d) and (e).
23.  Article 59 is renumbered Article 62.
24.   Article 60 is renumbered Article 63 and in the
      first and third paragraphs "Article 126" is
      replaced by "Article 142".
 ---pagebreak---                   INITIAL PROPOSAL                      14 AMENDED PROPOSAL
25.     Article 61 is renumbered Article 64 and
        amended as follows:
  (a)   In the first paragraph "Article 60" is replaced
        by "Article 63".
 (b)    In the second paragraph, the words "choice of
        supplier" are replaced by "selection of
        tenderer".
26.    The following new Article 61 is inserted:
                        "Article 61
 Articles 62 to 64a shall apply to the award of
 contracts for the purchase or hiring of goods,
 furniture or equipment, for the provision of services
 or for the performance of works."
27.    Article 62 is renumbered Article 64a and
       amended as follows:
 (a)   In the first and third paragraphs, "Article 126"
        is replaced by "Article 142".
 (b)   In the third paragraph, the words "for works
       contracts" are inserted after "obligatory".
28.    Article 63 is renumbered Article 60 and
        "Article 126" is replaced by "Article 142".
29.    Article 64 is renumbered Article 56 and
       replaced by the following:
                       "Article 56
 When concluding contracts for which the amount
 involved is equal to or higher than the threshold
 provided for by the Council directives on the
 coordination of procedures for the award of public
 works, supplies and services contracts, each
 institution shall comply with the same obligations as
 are imposed upon bodies in the Member States by
 those directives.
 The implementing measures provided for in Article
 142 shall include appropriate provisions to that end."
 ---pagebreak---                  INITIAL PROPOSAL                        15                AMENDED PROPOS AL
30.    Point 5 of Article 78 is deleted.
31.    The following Article 87a is added:                  The following Article 87a is added:
                      "Article 87a                                                 "Article 87a
 The Court of Auditors shall provide the European                 At the same time as the annual report referred to
 Parliament and the Council with a statement of                   in Article 88. the Court of Auditors shall
 assurance as to the reliability of the accounts and the          provide the European Parliament and the
 legality and regularity of the underlying                        Council with a statement of assurance as to the
 transactions."                                                   reliability of the accounts and the legality and
                                                                  regularity of the underlying transactions."
32.    Article 88 is amended as follows:
 In the introductory sentence, the words "in Article
 78 of the ECSC Treaty, Article 206a of the EEC
 Treaty and Article 180a of the Euratom Treaty" are
 replaced by "in Article 45c of the ECSC Treaty,
 Article 188c of the EC Treaty and Article 160c of
 the Euratom Treaty".
33.    Article 89 is replaced by the following:             Article 89 is replaced by the following:
                       "Article 89                                                  "Article 89
  1. The European Parliament, upon a                        1.    unchanged
 recommendation from the Council acting by a
 qualified majority, shall, before 30 April of the
 following year, give a discharge to the Commission
 in respect of the implementation of the budget.
 2. To this end the European Parliament shall,              2. To this end the European Parliament shall, after
 after the Council has done so, examine the accounts,       the Council has done so, examine the accounts, the
 the statement of revenue and expenditure and the           statement of revenue and expenditure and the balance
 balance sheet mentioned in Article 78d of the ECSC         sheet mentioned in Article 78d of the ECSC Treaty,
 Treaty, Article 205a of the EC Treaty and Article          Article 205a of the EC Treaty and Article 179a of the
  179a of the Euratom Treaty, the Annual Report             Euratom Treaty, the Annual Report made by the
 made by the Court of Auditors together with the            Court of Auditors together with the replies of the
 replies of the institutions under audit to the             institutions under audit to the observations of the
 observations of the Court of Auditors and any              Court of Auditors and any relevant special reports by
  relevant special reports by the Court of Auditors.        the Court of Auditors and the Court of Auditors'
                                                            statement of assurance as to the reliability of the
                                                            accounts and the legality and regularity of the
                                                            underlying transactions.
 3. Before giving a discharge to the Commission,            3.    unchanged
 the European Parliament may question the
 Commission on the implementation of expenditure or
 the operation of financial control systems. The
  Commission shall submit any necessary information
 to the European Parliament at the latter's request.
 ---pagebreak---                  INITIAL PROPOSAL                        16                AMENDED PROPOSAL
4.     If the date provided for in paragraph 1 cannot       4.    unchanged
be met, the European Parliament or the Council
shall inform the Commission of the reasons for the
po'stponement.
If the European Parliament postpones the decision
giving a discharge, the Commission shall make
every effort to take measures, as soon as possible, to
facilitate removal of the obstacles to that decision.
5.     The discharge decision shall cover the accounts      5.    unchanged
of all the Community's revenue and expenditure, the
resulting balance and the assets and liabilities of the
Community shown in the balance sheet. It shall
include an assessment of the responsibility of the
Commission's budgetary management over the past
financial year.
6. The financial controller shall take account of           6.    unchanged
the comments in the decisions giving discharge.
7.     The institutions shall take all appropriate steps    "7. The institutions shall, for their respective
to act on the observations accompanying the                 sections, take all appropriate steps to act on the
discharge decisions and on other observations by the        observations accompanying the discharge decisions
European Parliament relating to the implementation          and on other observations by the European Parliament
of expenditure, and on the comments accompanying            relating to the implementation of expenditure, and on
the recommendations for discharge adopted by the            the comments accompanying the recommendations for
Council.                                                    discharge adopted by the Council.
8. At the request of the European Parliament or             8.    unchanged
the Council, the institutions shall report on the
measures taken in the light of these observations and
comments, and, in particular, on the instructions
given to those of their departments which are
responsible for the implementation of the budget.
Such reports shall also be transmitted to the Court of
Auditors.
9. The institutions shall also give an account, in          9.    unchanged
an annex to the revenue and expenditure account for
the financial year following that of the discharge
decision, of the measures taken in the light of the
comments appearing in the decisions giving
discharge.
 ---pagebreak---                  INITIAL PROPOSAL                        17            AMENDED PROPOSAL
        10. Supporting documents pertaining to the          10. unchanged
       accounts and the preparation of the revenue and
       expenditure accounts and the balance sheet
       shall be kept for a period of five years
       following the date of the decision giving
       discharge in respect of the implementation of
       the budget.
       However, the documents relating to
       transactions not finally closed shall be kept for
       longer than the said period, until the end of the
       year following the year in which such
       transactions are finally closed.
       Each institution shall decide which department
       will keep the supporting documents."
  34.  In Article 91, the words "VI and XII" are
       replaced by "VI, Title XI and Part III".
  35.  In Article 92(l)(d), the words "Article 1301 of
       the EEC Treaty", "Article 130m of the EEC
       Treaty", "Article 130n of the EEC Treaty",
       and "Article 130o of the EEC Treaty" are
\      replaced by "Article 130k of the EC Treaty,
       "Article 1301 of the EC Treaty", "Article 130m
       of the EC Treaty" and "Article 130n of the EC
       Treaty" respectively.
  36.  In the first paragraph of Article 98, the words
       "and XII" are replaced by "and Part III".
  37.  Article 105 is amended as follows:
   (a) In paragraph 1, the words "VI and XII" are
       replaced by "VI, Title XI and Part III".
   (b) In the second subparagraph of paragraph 3, the
       words "of Article 206a of the EEC Treaty" are
       replaced by "of Article 188c of the EC
       Treaty".
  38.  In Article 119, the words "Articles 56 to 64"
       are replaced by "Articles 56 to 64a".
 ---pagebreak---                    iNfflAL PROPOSAI.                                     AMENDED PROPOSA
  39      In Article 121, the woids "and XII" are
          replaced by "and Part III".
  40.     The following new Title XI is inserted:
                         "Title XI
    SPECIAL PROVISIONS APPLICABLE TO
          FINANCIAL PARTICIPATION BY
   NON-MEMBER COUNTRIES AND OUTSIDE
                        BODIES
            IN COMMUNITY ACTIVITIES
                      SECTION I
               GENERAL PROVISIONS
                      Article 124                                              Article 124
 Financial participation by a non-member country or            unchanged
 outside body in a Community activity shall require
 the prior authorization of the budgetary authority,
 given according to one of the following procedures:
 (a)    in the course of the budgetary procedure if     (a)   in the course of the budgetary procedure if
       already provided for. In such cases, the               already provided for.        In such cases, the
       Commission shall, in the preliminary draft             Commission shall, in the preliminary draft
       budget, propose the appropriate budgetary              budget, propose the appropriate budgetary
       structure and the headings to which the                structure and the headings to which the
       contribution shall be charged in the statement         contribution shall be charged in the statement of
      of revenue and under which the corresponding           revenue and under which the corresponding
      appropriations shall be made available in the          appropriations shall be made available in the
      statement of expenditure, in accordance with           statemem of expenditure, in accordance with
      Article 125. For information purposes the              Article 125. The amount of the contribution
      remarks to these headings may indicate the             shall be shown separately, for information.
      estimated amounts;
(b)   where the request for participation is made in   (b)   where the request for participation is made in
      the course of a financial year, the Commission         the course of a financial year, the Commission
      may, if it considers it to be in the interest of       may, if it considers it to be in the interest of the
      the Community, propose that it be authorized           Community, propose that it be authorized by the
      by the budgetary authority. If neither the             budgetary authority. If neither the Council,
      Council, acting by qualified majority, nor the         acting by qualified majority, nor the European
      European Parliament, acting by an absolute             Parliament, acting by an absolute majority of its
      majority of its members, rejects the proposal          members, rejects the proposal within a period of
      within a period of four weeks, it shall stand as       six weeks, it shall stand as approved.
      approved.
                                                       The Commission shall present its request, with an
                                                       estimate of any administrative costs, entailed by the
                                                       participation of third parties.
 ---pagebreak---                INITIAL PROPOSAL                        19              AMENDED PROPOSAL
                     Article 125
For the purposes of implementing the budget, the
contributions referred to in Article 124 shall lead to
additional appropriations being made available as
follows:
      commitment appropriations equivalent to the
      entitlement due to the Community;
      payment appropriations equivalent to the
      amounts received.
                     Article 126                                               Article 126
The contributions referred to in Article 124 shall             unchanged
constitute earmarked revenue in accordance with the
second subparagraph of Article 4(2).
All necessary accounting measures shall be taken to       All necessary accounting measures shall be taken to
ensure the separate monitoring of the appropriations      ensure the separate monitoring of the use both of the
made available under Article 125.                         revenue from these contributions and of the
                                                          appropriations made available under Article 125.
                    SECTION II
        PROVISIONS APPLICABLE TO
                 PARTICIPATION
PROVIDED FOR UNDER THE AGREEMENT
  ON THE EUROPEAN ECONOMIC AREA
                     Article 127                                               Article 127
The budgetary structure to cover participation by the          unchanged
EFT A States shall be as follows:
(a)   in the statement of revenue there shall be a        (a)  in the statement of revenue there shall be a
      heading to cover the full amount of the                  heading to cover the full amount of the
      contribution of the EFTA States for the                  contribution of the EFTA States for the relevant
      relevant financial year. The amount entered              financial year. The amount shall be entered
      shall be "for information";                              separately "for information";
 ---pagebreak---                  INITIAL PROPOSAL                       20
 (b)  in the statement of expenditure                      (b) unchanged
      - the remark relating to each heading covering               unchanged
         Community activities involving the
         participation of the EFTA States shall
         indicate the amount of their contribution "for
         information";
      - an annex, constituting an integral part of the             unchanged
         budget, shall contain all headings relating to
         Community activities involving the
         participation of the EFTA States.
         The annex shall serve as the budgetary                "The annex shall serve as and supplement the
         structure for making available the                    budgetary structure for making available the
         appropriations corresponding to such                  appropriations corresponding to such
         contributions by virtue of Article 128 and for        contributions by virtue of Article 128 and for
         implementing expenditure.                             implementing expenditure. "
                      Article 128
By virtue of Article 82 of the Agreement on the
European Economic Area, amounts relating to the
annual participation of EFTA States - as confirmed
to the Commission by the Joint Committee in
conformity with Article 1(5) of Protocol 32 - shall,
at the beginning of the financial year, give rise to
the full entry of the corresponding appropriations for
commitment and appropriations for payment.
                      Article 129
1. If in the course of a financial year the
appropriations for budget headings involving the
participation of the EFTA States are increased by
amending or supplementary budgets or by transfers,
without it being possible for the EFTA States, in the
course of that financial year, to adjust their
contribution accordingly in line with the
proportionality factor provided for in Article 82 of
the EEA Agreement, the Commission shall be
authorized to provide provisional advance financing
from its cash resources for the share of the EFTA
States in order to permit balanced implementation of
expenditure relating to the relevant activity.
2. The advance financing shall be regularized as
soon as possible in the budget for the following
financial year or, at the latest, for the second
following financial year.
 ---pagebreak---                     INITIAL PROPOSAL                       21 AMENDED PROPOSAL
                         Article 130
    By way of derogation from Article 58(2), as regards
    the rules governing tendering procedures, invitations
    to tender shall be published throughout all the
    Member States and all the EFTA States whenever
    the contract entails expenditure from a budget
    heading involving participation of the EFTA States.
                         Article 131
     1. The financial contributions of EFTA States
    shall constitute earmarked revenue within the
    meaning of the third indent of the second
    subparagraph of Article 4(2).         All appropriate
    accounting measures shall accordingly be taken to
 \  ensure the separate monitoring both of revenue
N)  flowing from these contributions and of the
    corresponding appropriations.
    2. Point 4 of Article 7 and Article 26(9) shall
    apply to the contributions referred to in paragraph 1.
    3. In the quarterly reports provided for in Article
    34, the Commission shall give clear details of the
    state of execution of both the revenue and the
    expenditure corresponding to participation by the
    EFTA States.
                         Article 132
    The revenue and expenditure corresponding to
    participation by the EFTA States shall be verified in
    compliance with the provisions of the EC Treaty of
    this Regulation and of regulations applicable to
    matters covered by Articles 78 of the Agreement on
    the European Economic Area and Protocol 31
    thereto."
   41.    Title XI is renumbered Title XII.
   42.    Article 124 is renumbered Article 133.
 ---pagebreak---                  INITIAL PROPOSAL                       22             AMENDED PROPOSAI
43.    The following Part II is inserted:
                        "Part II
    SPECIAL PROVISIONS APPLICABLE TO
          BORROWING AND LENDING
       OPERATIONS BY THE EUROPEAN
                    COMMUNITIES
                       Article 134                                             Article 134
 The Commission shall, together with the preliminary       Does not apply to the English version.
 draft budget provided for in Article 13, present a
 document giving details of all borrowing and lending
 operations.
                       Article 135
 The document referred to in Article 134 shall
 contain:
       a detailed statement on borrowing and lending
       policy;
       as an indication:
       - current capital operations and current debt
          management;
       - the capital operations and debt management
          for the financial year in question;
       an estimate of the risk borne by the general
       budget in terms of capital and interest for
       future budget years.
                      Article 136
 In the course of the budgetary procedure the Council
 and European Parliament shall give an assessment of
 borrowing and lending operations, in particular in
 the light of the provisions of the basic acts for each
 of the instruments concerned.
 The Commission shall take that assessment fully into
 account.
                      Article 137
 The Commission shall report to the Council and the
 European Parliament twice a year on the position
 regarding budget guarantees and risks relating
 thereto.
 This information shall be sent at the same time to the
 Court of Auditors.
 ---pagebreak---                 INITIAL PROPOSAL                        23          AMENDED PROPOSAL
                      Article 138
The expenditure and revenue account and financial
balance sheet provided for in Articles 78 and 81
shall give details of capital operations and debt
management indicating:
      the amount of loans granted;
      the amount of the repayments made on
      borrowings contracted and of the charges on
      such borrowings;
      the amount of borrowings contracted;
      the amount of repayments of capital and
      payments of interest made on loans granted.
                      Article 139                                          "Article 139
Borrowing terms shall be negotiated in the best            Borrowing terms shall be negotiated in the best
interests of the Community, in the light of conditions     financial interests of the Community, in the light
on the capital market, and shall respect constraints       of conditions on the capital market, and shall
imposed as to the duration and other terms of the          respect constraints imposed as to the duration
corresponding requests for loans.                          and other terms of the corresponding requests
                                                           for loans."
                      Article 140
      The financial controller of the Commission
      shall be responsible for checking the execution
      of borrowing and lending operations in
      accordance with the powers conferred on the
      Commission in relation to each instrument. To
      this end, he shall check:
      - that operations are in conformity with the
         basic rules;
      - the assessment of risks;
         where appropriate, the calculation of interest
         rate subsidies where they are covered by the
         general budget;
         compliance with the principle of sound
         financial management.
 ---pagebreak---               INITIAL PROPOSAL                       24               AMENDED PROPOSAL
 2. To enable him to exercise his functions to the
    full, the financial controller of the
    Commission:
       shall have access either manually or by
       computer to all data, documents, ledgers,
       registers, correspondence, statements of
       account or computer files relating to
       borrowing and lending operations;
      shall be authorized to conduct or take part in
      on-the-spot checks."
                                                        The following Article 140a is added:
                                                        "The Court of Auditors shall examine the legality,
                                                        regularity and sound financial management of
                                                        borrowing and lending operations. The Commission
                                                        shall provide the Court of Auditors, at its request,
                                                        with any information the latter considers necessary."
44. Title XII is renumbered Part III and entitled
    "Transitional and financial provisions".
45. Article 125 is renumbered Article 141.              Article 125 is renumbered Article 141 and is replaced
                                                        by the following:
                                                                            "Article 141
                                                        The European Parliament and the Council shall be
                                                        empowered to require any information or explanations
                                                        regarding budgetary matters and borrowing and
                                                        lending policy within their competence.
                                                        The Council may be assisted in its task by a
                                                        committee set up within the framework of the
                                                        Permanent Representatives Committee. "
46. Article 126 is renumbered Article 142.
    References to this Article in Articles 22, 23,
    24, 25, 28, 29, 36, 37, 38, 41, 45, 46, 49, 53,
    54, 65, 66, 70, 75, 94, 97 and 123 are adapted
    accordingly.
47. Article 127 is renumbered Article 143.
 ---pagebreak---                 INITIAL PROPOSAL                      25               AMENDED PROPOSAL
48.  Article 128 is renumbered Article 144 and           Article 128 is deleted,
     amended as follows:
 (a) In the introductory phrase, "Article 126" is
     replaced by "Article 142" and "Articles 58,60,
     62, 63" by "Articles 59, 60, 63, 64a";
 (b) in the first indent, "Article 58" is replaced by
     "Article 59" and "by private treaty" by
     "without a tendering procedure";
 (c) the second indent becomes the third indent and
     "Article 60" is replaced by "Article 63";
 (d) the third indent becomes the fourth indent,
     "Article 62" is replaced by "Article 64a" and
     the words "for works contracts" are added after
     the word "compulsory security";
 (e) the fourth indent becomes the second indent
     and "Article 63" is replaced by "Article 60";
 (t) in the first subindent of the fifth indent, the
     words "by private treaty" are replaced by
     "without a tendering procedure";
 (g) in the last subindent of the fifth indent,
     "Article 58" is replaced by "Article 59".
49.  Article 129 is renumbered Article 145.              Article 129 is renumbered Article 144.
50.  Article 130 is renumbered Article 146.              Article 130 is renumbered Article 145.
51.  Article 131 is renumbered Article 147.              Article 131 is renumbered Article 146.
 ---pagebreak---                  INITIAL PROPOSAL                         26 AMENDED PROPOSAL
                        Article 2
This Regulation shall enter into force on the third day
following that of its publication in the Official Journal
of the European Communities.
It shall apply from ....
This Regulation shall be binding in its entirety and
directly applicable in all Member States.
Done at Brussels,
             For the Council
             The President
 ---pagebreak---                                         -  ^  ^    -
                                                                     iSSN 0254-1475
                                                               COM (94) 14 final
                                                      DOCUMENTS
EN                                                                              oi
                                 Catalogue number : CB-CO-94-015-EN-C
                                                             ISBN 92-77-64557-1
Office for Official Publications of the European Communities
L-2985 Luxembourg