CELEX: 51988PC0838
Language: en
Date: 1988-12-21
Title: PROPOSAL FOR A COUNCIL REGULATION ( ECSC, EEC, EURATOM ) AMENDING THE FINANCIAL REGULATION OF 21 DECEMBER 1977 APPLICABLE TO THE GENERAL BUDGET OF THE EUROPEAN COMMUNITIES

8. 5. 89                                 Official Journal of the European Communities                              No C 115/1
                                                                II
                                                       (Preparatory Acts)
                                                   COMMISSION
            Proposal for a Council Regulation (ECSC, EEC, Euratom) amending the Financial Regulation of
                    21 December 1977 applicable to the general budget of the European Communities
                                                       COM(88) 838 final
                                     (Submitted by the Commission on 16 December 1988)
                                                          (89/C 115/01)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                            a general revision of the Financial Regulation by the end of
                                                                    1988;
Having regard to the Treaty establishing the European
Coal and Steel Community, and in particular Article 78H
thereof,                                                            Whereas provision should be made for an appropriate
                                                                    budgetary structure for all expenditure in order to give a
Having regard to the Treaty establishing the European               clearer picture of the policy breakdown of appropriations
Economic Community, and in particular Article 209                   and thus create the conditions essential for effective
thereof,                                                            management; whereas, to this end, the present Section III
                                                                    of the budget should be reserved for Commission staff and
                                                                    administrative appropriations and a new section should be
Having regard to the Treaty establishing the European
                                                                    introduced for expenditure common to all the institutions,
Atomic Energy Community, and in particular Article 183
                                                                    as well as several sections for operating appropriations,
thereof,                                                            taking into account past changes in the contents of the
                                                                    budget and future prospects;
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,            Whereas it is necessary to produce a more transparent
                                                                    presentation of the appropriations for research and
Having regard to the opinion of the Court of Auditors,              technological development and to introduce appropriate
                                                                    rules for this presentation;
Whereas the conciliation provided for in the Joint
Declaration of 4 March 1975 of the European Parliament,
the Council and the Commission (!) took place in a                  Whereas, in order to cover all the appropriations entered in
                                                                    the general budget of the European Communities, the
Conciliation Committee;
                                                                    Financial Regulation should contain special provisions for
                                                                    the budgetary management of Community external aid;
Whereas Article 107 of the Financial Regulation of 21
December 1977 (2), as last amended by Regulation (ECSC,
EEC, Euratom) No 2049/88 (3) (hereinafter referred to as            Whereas, in view of the changes to the rules on food aid, it
'the Financial Regulation'), provides for the Financial             is no longer necessary to include special provisions in the
Regulation to be examined by the European Parliament                Financial Regulation;
and the Council in the light of a proposal from the
Commission;
                                                                    Whereas special provisions should be entered in the
Whereas, in view of the evolution of the general budget of          Financial Regulation, to be supplemented by implementing
the European Communities and of the application of the              measures, to meet the specific requirements of managing
Financial Regulation, it is necessary to adjust many of the         the administrative appropriations relating to staff serving
provisions of the said Financial Regulation; whereas the            outside the Community and related administration;
European Council of 11,12 and 13 February 1988 called for
                                                                    Whereas budgetary appropriations should be presented in
(!) OJ No C 89, 22. 4. 1975, p. 1.                                  a more uniform manner with the appropriations for all
(2) OJ No L 356, 31. 12. 1977, p. 1.                                administrative expenditure, for the European Agricultural
(3) OJ No L 185, 15. 7. 1988, p. 3.                                 Guidance and Guarantee Fund Guarantee Section, and
 ---pagebreak--- No C 115/2                               Official Journal of the European Communities                                  8. 5. 89
some technical appropriations being non-differentiated,             2.    In Article 1(2), the second subparagraph is replaced
while appropriations for the various policies intended to                 by the following:
cover multiannual operations are differentiated;
                                                                          'Expenditure may not be authorized for a period
Whereas, in the light of the experience acquired since its                extending beyond the financial year.'
entry into force, certain provisions of the Financial
Regulation need to be made more detailed or revised
notably in respect of the arrangements for provisional              3.    Article 1(3) is replaced by the following:
twelfths and transfers;
                                                                          '3.    Administrative expenditure arising from:
Whereas, in order to improve interinstitutional relations,
the Financial Regulation should include provisions on the                — contracts which have been concluded, in accord-
procedure for supplementary and amending budgets, the                          ance with local usage, or
establishment of the financial statement to accompany
proposals, improvements to the organization of relations                 — contractual provisions relating, in particular, to
between the institutions and the Court of Auditors and the                     the supply of equipment,
information to be given to the budgetary authority on the
utilization of advances from the EAGGF Guarantee                         for periods extending beyond the financial year shall
Section;                                                                 be charged to the budget for the financial year in
                                                                         which it is effected.'
Whereas, in connection with the repayment of Community
aids, the Financial Regulation should contain provisions
concerning the payment of interest;                                 4.   In Article 1, paragraphs 3a, 4 and 5 are replaced by
                                                                         the following:
Whereas, in view of the technological advances in
                                                                         '4. Staff and administrative expenditure, expendi-
management and accounting systems, rules should be laid
                                                                         ture under the European Agricultural Guidance and
down to allow the budget to be implemented in a
                                                                         Guarantee Fund, Guarantee Section and expenditure
computerized environment;
                                                                         on repayments to the Member States, as well as loan
                                                                         guarantees, shall be entered in the budget in the form
Whereas, since the cost of living is rising constantly, it has           of non-differentiated appropriations.
become essential that, for the determination of certain
amounts in connection with the awarding of contracts and
                                                                         Other expenditure shall be entered in the form of
with inventories, reference be made to the rules for the
                                                                         differentiated appropriations.
implementation of this Regulation, so that these amounts
can be adjusted by a legislative procedure that is more
appropriate from the technical angle;                                    Commitment appropriations shall cover, for the
                                                                         current financial year, the total cost of the legal
                                                                         obligations entered into for operations whose
Whereas, following the entry into force of this Regulation,              implementation extends over more than one finan-
a consolidated version of the Financial Regulations should               cial year.
be published in the ' C series of the Official journal of the
European Communities, taking account of the various
                                                                         Payment appropriations shall cover expenditure
amendments made to it since its adoption,
                                                                         arising from commitments entered into in the
                                                                         current financial year and/or preceding financial
                                                                         years.
HAS ADOPTED THIS REGULATION:
                                                                         5. Differentiated appropriations shall be shown in
                                                                         the budget as follows:
                          Article 1
                                                                         — the commitment appropriation authorized for
                                                                              the financial year concerned and the payment
The Financial Regulation is hereby amended as follows:                        appropriation for the same financial year shall be
                                                                              entered under the appropriate heading,
1.     In the second subparagraph of Article 1(1), the third             — the estimated annual payment appropriations
       indent is replaced by the following:                                   required for subsequent financial years shall be
                                                                              set out against the commitment appropriations in
       '— the revenue and expenditure of the European                         an indicative schedule in the remarks column.
            Atomic Energy Community which may be
            credited to or charged against the budget                    6. The sum of the non-differentiated appropri-
            pursuant to the Euratom Treaty and to the                    ations and the commitment appropriations shall
            measures taken in implementation thereof.'                   constitute the appropriations for commitments.
 ---pagebreak--- 8. 5. 89                                Official Journal of the European Communities                               No C 115/3
      The sum of the non-differentiated appropriations                  — contributions to Community activities from non-
      and the payment appropriations shall constitute the                   Member States or various bodies,
      appropriations for payments.
                                                                        — revenue from third parties in respect of work
      7. The legal commitments entered into for meas-                       carried out at their request.
      ures extending over more than one financial year
      shall contain a time limit for implementation which
                                                                        3. The total appropriations referred to in para-
      must be specified to the recipient in due form when
                                                                        graph 2 shall be represented by the appropriations
      the aid is granted.
                                                                        for payments.
      This time limit shall be determined with due regard
                                                                        4. The Commission may accept any donation
      to the need for multiannual implementation of the
                                                                        made to the Communities, and in particular
      operations financed and the specific conditions of
                                                                        foundations, subsidies, gifts and bequests.
      implementation in relation to the various spheres of
      intervention.
                                                                        The Commission may accept donations which may
      The Commission may, in special circumstances,                     involve some financial charge only subject to prior
      adjust the time limit for implementation of these                 authorization from Parliament and the Council,
      commitments, on the basis of appropriate proof                    which shall act on the matter within two months of
      supplied by the recipients.'                                      the date of receipt of the request from the
                                                                        Commission. If no objection has been made within
                                                                        this period, the Commission shall take a final
5.    The following new Article 3 is inserted:                          decision in respect of acceptance.
      'Article 3                                                        (!) OJ No L 185, 15. 7. 1988, p. 24.'
      Where proposals submitted to the Council and
      Parliament may have budgetary consequences,                  7.   Article 4 is renumbered Article 5. The present text is
      including significant changes in the number of posts,             numbered paragraph 1 and the following paragraph
      the Commission shall draw up a financial statement.               2 is added:
      In the case of multiannual operations, this financial             '2. No expenditure may be committed or author-
      statement shall contain the estimated schedule of                 ized in excess of the authorized appropriations,
      annual requirements in appropriations and posts.'                 without prejudice to Article 27(2).'
6.    Article 3 is renumbered Article 4. It is replaced by the     8.   Article 5 is renumbered Article 6. It is replaced by the
      following:                                                        following:
      'Article 4                                                        'Article 6
       1. Subject to Article 27, all revenue and expendi-               The financial year shall run from 1 January to 31
      ture shall be entered in full in the budget and in the            December.
      accounts without any adjustment against each other.
                                                                        The revenue of a financial year shall be entered in the
      2. Total revenue shall cover total appropriations;
                                                                        accounts for the financial year on the basis of the
      revenue shall not be assigned to a specific purpose.
                                                                        amounts collected during the financial year, with the
                                                                        exception of the own resources for the month of
      However, certain revenues shall not be used for any               January of the next financial year, in respect of
      other purpose, notably:                                           which advance payment may be made pursuant to
                                                                        Article 10(2) of Council Regulation (EEC, Euratom,
      — financial contributions from Member States to                   ECSC) No 2891/77 of 19 December 1977 im-
          certain research programmes pursuant to the                   plementing the Decision of 21 April 1970 on the
          second paragraph of Article 6 and Article ll(2)(c)            replacement of financial contributions from
          of Council Decision 88/376/EEC, Euratom of 24                 Member States by the Communities' own re-
          June 1988 on the system of the Communities' (!)               sources (*).
          own resources, hereinafter referred to as 'the
          Decision of 24 June 1988',                                    The readjustment of entries in respect of   value added
                                                                        tax own resources and, if appropriate,      of financial
      — revenue earmarked for a specific purpose, such as               contributions, shall be carried out in       accordance
          income from foundations, subsidies, gifts, be-                 with the third subparagraph of Article     10(3) of the
          quests,                                                        abovementioned Regulation.
 ---pagebreak--- No C 115/4                              Official Journal of the European Communities                                     8. 5. 89
     The alloted appropriations shall be used solely to                       carry over appropriations made by Parliament,
     cover expenditure properly entered into and paid in                      the Council, the Court of Justice, the Court of
     the financial year for which they were granted, save                     Auditors and by the Commission itself.
     as otherwise provided in Articles 7 and 104, and to
     cover the debts relating to preceding financial years
     for which no appropriation was carried forward.                          The Council shall consult Parliament and, acting
                                                                               by qualified majority, shall decide on the requests
                                                                              to carry over appropriations in respect of
     The commitments shall be entered in the accounts of                      expenditure necessarily resulting from the
     the basis of the commitments contracted up to                            Treaties or acts adopted in accordance therewith.
     31 December.
                                                                              Parliament shall consult the Council and act on
     The expenditure of a financial year shall be entered                     the requests to carry over appropriations in
     in the accounts for that year on the basis of the                        respect of expenditure other than that necessarily
     expenditure for which authorization reached the                          resulting from the Treaties or acts adopted in
     financial controller not later than 31 December and                      accordance therewith.
     the accounting officer not later than the following
     10 January, and for which payment was effected by
                                                                              If no decision is taken by the budgetary authority
     the accounting officer not later than 15 January.
                                                                              within six weeks, the requests to carry over
                                                                              appropriations shall be deemed to have been
     Notwithstanding the two preceding subparagraphs,                         approved.'
     the expenditure of the EAGGF Guarantee Section,
     shall be taken into account for a financial year in                 (c) Paragraph 4 is replaced by the following:
     accordance with the rules laid down in Article 102.
                                                                              '4. Unused revenue and appropriations avail-
     (!) OJ No L 336, 27. 12. 1977, p. 1.'                                    able at 31 December arising from the specific
                                                                              revenue referred to in Article 4(2) shall be carried
                                                                             over automatically.'
9.  Article 6 is renumbered Article 7.
                                                                        (d) Paragraph 5 is replaced by the following:
     (a) Paragraph 1 is replaced by the following:
                                                                              '5. The following appropriations shall lapse at
                                                                             the end of the year:
         ' 1. In the case of budget headings where there is
         no distinction between commitment appropri-
         ations and payment appropriations:                                   (a) appropriations from the previous financial
                                                                                  year:
         (a) appropriations relating to remunerations and
             allowances of members and staff of the                               — appropriations carried over by decision of
             institutions may not be carried over;                                   the budgetary authority under paragraph
                                                                                     1(b) which have been neither committed
                                                                                     nor paid,
         (b) a decision may be taken to carry over to the
             next financial year only the portion of the
             other appropriations still uncommitted at the                        — appropriations carried over automatically
             close of the financial year;                                            under paragraph 1(c) which have not been
                                                                                     paid,
         (c) appropriations in respect of payments still
             outstanding by virtue of commitments duly                            — commitment appropriations and payment
             entered into before the close of the financial                          appropriations carried over by the Com-
             year shall be carried over automatically to the                         mission under paragraph 2 and remaining
             next financial year only.'                                              unused at the end of the financial year;
                                                                             (b) appropriations of the financial year which
    (b) Paragraph 3 is replaced by the following:
                                                                                  have not been carried over.'
         '3. In the case of appropriations for which a
                                                                        (e) Paragraph 7 is replaced by the following:
         decision to carry over may be taken in accordance
         with paragraph 1(b) above, the Commission shall
         submit to the budgetary authority, not later than                   '7. The revenue and expenditure account shall
         15 February, the duly substantiated requests to                     show the automatic carryovers, the appropri-
 ---pagebreak--- 8. 5. 89                                Official Journal of the European Communities                              No C 115/5
          ations carried over by decision of the budgetary                  (b) Payments may be made monthly in respect of
          authority, those carried over by decision of the                      any chapter:
          Commission and the appropriations made avail-
          able again by the decision of the Commission
          after commitments have been cancelled.'                               — up to one twelfth of the total appropri-
                                                                                   ations entered in the chapter concerned for
                                                                                   the preceding financial year, account being
10.   Article 7 is renumbered Article 8, and                                       taken of all transfers,
      — the first and second paragraphs are numbered 1                          — as long as this measure does not have the
          and 2,                                                                   effect of placing at the disposal of the
                                                                                   Commission, for any month, appropri-
                                                                                   ations in excess of one twelfth of those
      — the third paragraph is replaced by the following:                          provided for in the draft budget or, in the
                                                                                   absence thereof, in the preliminary draft
      '3. Expenditure relating to rents or certain as-                             budget.
      sociated expenditure which is payable in advance in
      accordance with provisions laid down by law or
      contracts may give rise to payments from 20                       3. The draft budget referred to in paragraphs 2(a)
      December onwards to be charged to the appropri-                   and (b) above shall be the draft in the form in which
      ations for the next financial year.'                              it stands at the start of the financial year when the
                                                                        provisional-twelfths arrangements began to be
                                                                        applied.
11.   Article 8 is renumbered Article 9. It is replaced by the
      following:
                                                                        4. Where the absence of a budget is due to the
                                                                        rejection of the draft budget by Parliament, as
      'Article 9                                                        provided for by Article 78(8) of the ECSC Treaty,
                                                                        Article 203(8) of the EEC Treaty and Article 117(8)
                                                                        of the Euratom Treaty, the appropriations referred
      1. If the budget is not finally adopted at the                    to in the second indent of paragraph 2(a) and in the
      beginning of the financial year, Article 78b of the               rejected draft budget or, where appropriate, in the
      ECSC Treaty, Article 204 of the EEC Treaty and                    new draft budget drawn up, following the rejection
      Article 178 of the Euratom Treaty shall apply to                  decision, before the start of the financial year.
      commitment and payment of expenditure already
      approved in principle in the last budget duly
      adopted.                                                          5. If the continuity of Community activities and
                                                                        administrative needs so require:
      An item of expenditure shall be considered as having
      been approved in principle in the last budget duly
                                                                        (a) for compulsory expenditure, the Council, acting
      adopted if it could have been charged to a specific
                                                                            by a qualified majority, may, at the request of the
      budget heading under the financial year concerned.
                                                                            Commission and after consulting Parliament,
                                                                            authorize simultaneously two or more provi-
      2. (a) Commitments may be entered into in respect                     sional twelfths for both commitments and
              of any chapter:                                               payments in addition to those automatically
                                                                            made available under paragraphs 2(a) and (b);
              — for up to one quarter of the total appropri-
                  ations entered in the relevant chapter for            (b) for non-compulsory expenditure, the second
                 the preceding financial year, account being                subparagraph of Article 78b(2) of the ECSC
                 taken of all transfers, plus one twelfth for               Treaty, the third paragraph of Article 204 of the
                 each completed month,                                      EEC Treaty and the third paragraph of Article
                                                                            178 of the Euratom Treaty shall apply.
              — without exceeding the appropriations
                 provided for in the draft budget or, in the
                  absence thereof, in the preliminary draft                 The additional twelfth shall be authorized in
                  budget.                                                   whole and may not be split.
              The global provisional commitments of the                     Where this procedure is to be applied, the annual
              EAGGF Guarantee Section referred to in                        amount authorized for each chapter as twelfths
              Article 100 shall be treated as commitments                   may not exceed the amount in the chapter of the
              for the purposes of these provisions.                         budget for the previous year, account being taken
 ---pagebreak--- No C 115/6                            Official Journal of the European Communities                                    8. 5. 89
         of transfers, or the amount in the chapter of the              Any change in the composition of the ecu decided on
         draft budget or, in the absence thereof, the                   in accordance with Regulation (EEC) No 3180/78,
         preliminary draft budget.                                      shall automatically apply to this provision.
                                                                        The value of the ecu in a given currency shall be
     6. If, for a given chapter, the expenditure required               equal to the sum of the equivalent in that currency of
     to prevent any interruption of Community action in                 the amounts of the currencies which make up the
     the sector concerned cannot be met by application of               ecu.
     the procedures referred to in paragraphs 2 to 5,
     appropriations available under the twelfths arrange-
     ments may, on a proposal from the Commission, be                   3. The financial rights and obligations of the
     transferred between chapters.                                      Communities shall be expressed and implemented in
                                                                        ecus.
     Decisions on the proposal for transfer shall be taken              4. When the principle set out in the third para-
     in accordance with the procedure laid down in                      graph cannot be complied with because of special
     Article 78b(2) of the ECSC Treaty, Article 204 of the              derogations arising from the application of sectoral
     EEC Treaty and the third paragraph of Article 178 of               rules governing debts or expenditure, any conver-
     the Euratom Treaty.                                                sion between the ecu and a national currency shall be
                                                                        effected in accordance with the implementing rules
                                                                        in Article 128.
     If, however, in the case of transfers involving both
     expenditure necessarily resulting from the Treaties
     or from acts adopted in accordance therewith and                   (!) OJ No L 379, 30. 12. 1978, p. 1, as last amended
     other expenditure, the Council and Parliament                          by Council Regulation (EEC) No 2626/84 (OJ
     disagree on the amount to be transferred, the smaller                  No L 247, 16. 9. 1984, p. 1).
     of the amounts accepted by one of the two                          (2) The following amounts applied when this
     institutions shall be deemed to have been approved.                    Regulation entered into force:
     Where one of the institutions rejects the principle of                 — German marks: 0,719,
     the transfer, such transfer shall not be made.                         — Pounds sterling: 0,0878,
                                                                            — French francs: 1,31,
                                                                            — Italian lira: 140,00,
    7. The decisions referred to in the preceding                           — Dutch guilders: 0,256,
    paragraphs shall specify the requisite measures in                      — Belgian francs: 3,71,
    respect of resources for the purposes of this Article.                  — Luxembourg francs: 0,14,
                                                                            — Danish kroner: 0,219,
                                                                            — Irish pounds: 0,00871,
     8. The budgetary authority shall seek to limit the                     — Greek drachmas: 1,15.'
    period for which the system of provisional twelfths is
    applied.'
                                                                 14.   Title II: the heading is replaced by the following:
12. Article 9 is renumbered Article 10. The following
    second paragraph is added:                                                              'TITLE II
                                                                     ESTABLISHMENT AND STRUCTURE OF THE
    'Publication shall, under normal circumstances, take                                   BUDGET'
    place within one month of the final adoption of the
    budget.'
                                                                15.    Section I: the heading is replaced by the following:
13. Article 10 is renumbered Article 11. It is replaced by
    the following:                                                                        'SECTION I
                                                                             ESTABLISHMENT OF THE BUDGET'
    'Article 11
                                                                16.    Article 11 is renumbered Article 12. It is replaced by
                                                                       the following:
    1.    The budget shall be drawn up in ecus.
                                                                       'Article 12
    2. The ecu is the sum of specified amounts of the
    currencies of the Member States as set out in Council              Parliament, the Council, the Court of Justice and the
    Regulation (EEC) No 3180/78 of 18 December 1978                    Court of Auditors shall, each year before 1 July,
    changing the value of the unit of account used by the              draw up an estimate of their revenue and expendi-
    European Monetary Cooperation Fund (*) (2).                        ture for the following year.
 ---pagebreak--- 8. 5. 89                               Official Journal of the European Communities                               No C 115/7
      The Economic and Social Committee shall, before 1                 (b) in respect of subsidies to the bodies set up
      June, forward to the Council an estimate of its                       pursuant to the Treaties or acts adopted in
      revenue and expenditure for the following year.                       accordance therewith, and having legal perso-
                                                                            nality, and subsidies to the European Schools, an
      These estimates shall be forwarded to the Commis-                     estimate of revenue and expenditure prefaced by
      sion and, for information, to Parliament and the                      an explanatory statement drawn up by the bodies
      Council, no later than 1 July.'                                       concerned.
17.   Article 12 is renumbered Article 13. It is replaced by           5. The Commission shall also attach to the
      the following:                                                   preliminary draft budget:
      'Article 13                                                      — an analysis of the financial management for the
                                                                            preceding financial year, as provided for in
      1. The Commission shall, in the preliminary draft                     Article 81, and a balance sheet of assets and
      budget which it places before the Council not later                   liabilities of the Communities as at 31 December
      than 1 September of each year, draw up a general                      of the preceding financial year, as provided for in
      statement of revenue of the Communities and                           Article 82, and
      consolidate the estimates referred to in Article 12.
                                                                       — an opinion on the estimates of the other
      It shall at the same time forward the preliminary
                                                                            institutions; this opinion may contain different
      draft budget to Parliament.
                                                                            estimates, accompanied by the reasons there-
                                                                            fore.'
      2. The Commission shall prepare a general
      introduction to the preliminary draft budget. This
      introduction shall contain in particular:
                                                                  18.  The following new Article 14 is inserted:
      (a) financial tables covering the entire budget; and
                                                                       'Article 14
      (b) as regards the Commission sections:
                                                                       The Commission may, on its own initiative or if
          — a description of the policies for which the                requested by Parliament, the Council, the Court of
              appropriations are requested,                            Justice or the Court of Auditors in respect of their
                                                                       section, present to the Council a letter of amendment
          — an explanation of the changes in appropri-                 to the preliminary draft budget necessitated by the
              ations from one financial year to the next,              receipt of new information which was not available
                                                                       at the time the preliminary draft was established.'
          — a detailed statement on borrowing and
              lending policy.
                                                                  19.  The following new Article 15 is inserted:
      3. Each of the sections of the preliminary draft
      budget shall be preceded by an introduction
                                                                       'Article 15
      prepared by the institution concerned. The Commis-
      sion shall prepare a single introduction to its
      sections.                                                        1. In the event of unavoidable, exceptional or
                                                                       unforeseen circumstances, the Commission may
      4. The preliminary draft budget shall be ac-                     submit preliminary draft supplementary and/or
      companied by working documents containing the                    amending budgets.
      following information:
                                                                       Preliminary draft supplementary budget means any
      (a) in respect of staff:                                         proposal which would alter the total amount of
                                                                       appropriations and hence of revenue or which would
          — for each category of staff, a detailed list of             finance one or more new operations without,
              budgetary posts and numbers of persons in                however, increasing the total amount of appropri-
              post on the date of the submission of the                ations.
              preliminary draft budget, indicating their
              distribution by grade and administrative unit
              (or principal operational unit for the es-               Preliminary draft amending budget means any
              tablishments of the Joint Research Centre),              proposal which would not change or would reduce
                                                                       total appropriations or revenue and which involves
                                                                       internal financial or technical changes to the budget.
          — where a change in the number of persons in
              post is proposed and in particular the
              creation, regrading or conversion of posts, a            2. Preliminary draft supplementary and/or amend-
              statement in support of such changes;                    ing budgets shall be subject to the provisions of
 ---pagebreak--- No C 115/8                            Official Journal of the European Communities                                   8. 5. 89
     Article 78 of the ECSC Treaty, Article 203 of the                specified in the texts implementing the Decision on
     EEC Treaty and Article 177 of the Euratom Treaty.                the system of the Communities' own resources.'
     They shall be submitted, examined, established and
     finally adopted in the same form and according to           22.  The following new Article 18 is inserted:
     the same procedure as the budget whose estimates
     they are amending. They must be substantiated by                 'Article 18
     reference to the latter.
                                                                      The Commission and the budgetary authority may
     3. All preliminary draft supplementary and/or                    agree to bring forward certain dates for the adoption
     amending budgets must, as a general rule, be                     and transmission of the preliminary draft and draft
     forwarded to the Council by the date laid down for               budgets. This agreement may not, however, have the
     the submission of the preliminary draft budget for               effect of reducing or delaying the periods allowed for
     the following financial year.                                    consideration of these texts under Article 78 of the
                                                                      ECSC Treaty, Article 203 of the EEC Treaty and
                                                                      Article 177 of the Euratom Treaty.'
     The competent authorities shall discuss them in the
     light of their urgency.
                                                                 23.  Section II: the heading is replaced by the following:
     4. Requests for supplementary and/or amending
     budgets from Parliament, the Council, the Court of
     Justice or the Court of Auditors shall be forwarded
     by the Commission to the budgetary authority. The
     Commission may attach a dissenting opinion.                                        'SECTION II
                                                                   STUCTURE AND PRESENTATION OF THE BUDGET'
     5. Where the Commission proposes a preliminary
     draft supplementary and/or amending budget, the
     Council must present a draft supplementary and/or           24.  Article 15 is renumbered Article 19. It is replaced by
     amending budget. However, if the Council does not                the following:
     consider it necessary to establish a draft budget, it
     shall consult with Parliament and the Commission.
                                                                      'Article 19
     6. Preliminary draft and draft supplementary and/                1.   The budget shall consist of:
     or amending budgets shall be accompanied by
     statements of grounds and the information available
     on the implementation of the current budget at the               — a general statement of revenue,
     time of their establishment.
                                                                      — a general statement of expenditure, consisting of:
     7. Preliminary draft supplementary and/or amend-
     ing budgets shall take into account the transfers                    — one part for the staff and administrative
     approved up to the time of their establishment.'                         expenditure of the institutions, divided into a
                                                                              section each for Parliament, the Council, the
                                                                              Commission, the Court of Justice and the
20.  Article 13 is renumbered Article 16.                                     Court of Auditors containing a statement of
                                                                              revenue and expenditure, and a section for
                                                                              expenditure common to the institutions.
21.  Article 14 is renumbered Article 17. It is replaced by
     the following:
                                                                              The revenue and expenditure of the Economic
                                                                              and Social Committee shall be entered in an
     'Article 17                                                              annex to the Council section and presented in
                                                                              the form of a statement of revenue and
                                                                              expenditure.
     1. The budget shall be adopted in accordance with
     Article 78 of the ECSC Treaty, Article 203 of the
    EEC Treaty and Article 177 of the Euratom Treaty.                         The revenue and expenditure of the Office for
                                                                              Official Publications of the European Com-
                                                                              munities shall be attached to the section for
     2. Once the budget has been declared finally
                                                                              expenditure common to all the institutions, in
     adopted by the President of Parliament, each
                                                                              accordance with Article 125(2),
    Member State shall, from 1 January of the following
    financial year or from the date of the formal
    declaration if it is made after 1 January, be bound to               — one part for operating expenditure, divided
     make over to the Community the payments due as                           into as many sections as are required.
 ---pagebreak--- 8. 5. 89                               Official Journal of the European Communities                                No C 115/9
      2. Within each section, the items of revenue and                 1.   In the general statement of revenue:
      expenditure shall be classified according to their type
      or the use to which they are assigned under titles,              — the estimated revenue of the Communities for the
      chapters, articles and items.                                        financial year in question, divided into titles,
                                                                           chapters, articles and items,
       3. The budgetary nomenclature shall be de-                      — the revenue for the preceding financial year,
      termined as regards the apportionment of revenue                     divided into titles, chapters, articles and items,
      and expenditure under separate titles, chapters and
      articles, during the budgetary procedure.                        — appropriate remarks on each subdivision.
                                                                       2. In the Commission sections and the section for
      4. Each section of the part relating to staff and                each of the other institutions:
      administrative appropriations may include a chapter
      for 'provisional appropriations' and a 'contingency              (a) as regards the statement of revenue:
      reserve' chapter. The appropriations entered in these
      chapters may be used only by means of transfer in                    — the estimated revenue for each institution for
      accordance with the procedure laid down in Article                      the financial year in question, divided into
      26.                                                                      titles, chapters, articles and items, following a
                                                                              decimal classification system,
      5. The part of the budget relating to operating                      — the revenue entered in the budget for the
      expenditure shall include a section for 'provisional                    preceding financial year and the revenue
      appropriations' and a 'contingency reserve'.                            established for the last financial year for
                                                                              which accounts have been closed, using the
                                                                              same classification,
      This section may include a 'negative reserve' limited
      to a maximum amount of 200 million ecus. This                        — appropriate remarks on each revenue head-
      reserve, which shall be entered in a separate chapter,                  ing;
      may comprise both appropriations for commitments
      and appropriations for payments.                                 (b) as regards the statement of expenditure:
                                                                       (ba) in the case of the various items, articles,
      The appropriations in this section may be utilized                     chapters and titles:
      and the negative reserve applied only in accordance
      with the procedure laid down in Article 26.                            — the appropriations made available for the
                                                                                 financial year in question, these appropri-
                                                                                 ations being the commitment appropri-
                                                                                 ations and the payment appropriations for
      6. The section for EAGGF Guarantee Section
                                                                                 the budget headings for which this distinc-
      expenditure shall include a monetary reserve, for
                                                                                 tion has been agreed,
      which the entry, utilization and financing conditions
      are determined by Council Decision 88/377/EEC of
                                                                             — the appropriations made available for the
      24 June 1988 concerning budgetary discipline (1),
                                                                                 preceding financial year,
      and the Decision of 24 June 1988 and the provisions
      adopted for implementing the latter.
                                                                             — the actual expenditure in the last financial
                                                                                 year for which the accounts have been
                                                                                 closed, determined as follows:
      7. In addition, the document showing all the
      borrowing and lending operations referred to in
                                                                                 — for the headings where the distinction
      point 5 of Article 20 shall be annexed to the part
                                                                                     between commitment appropriations
      relating to operating expenditure.
                                                                                     and payment appropriations has not
                                                                                     been made:
      (!) OJ No L 185, 15. 7. 1988, p. 29.'                                          — actual payments in the last financial
                                                                                         year for which the accounts have been
                                                                                         closed plus the carryovers to the next
                                                                                         financial year,
25.   Article 16 is renumbered Article 20. It is replaced by
      the following:                                                             — for the headings where the distinction
                                                                                     between commitment appropriations
                                                                                     and payment appropriations has been
      'Article 20                                                                    made:
                                                                                     — in      commitments:       commitments
      The budget shall show:                                                             entered into during the financial year
 ---pagebreak--- No C 115/10                            Official Journal of the European Communities                                   8. 5. 89
                      against appropriations for that finan-                 — the European Centre for the Development of
                      cial year and against appropriations                       Vocational Training,
                      carried over from the preceding finan-
                      cial year,
                                                                             — the European Foundation for the Improve-
                                                                                 ment of Living and Working Conditions.
                  — in payments: payments made during
                      the financial year against appropri-               The establishment plan shall show next to the
                      ations for that financial year and                 number of posts authorized for the financial year the
                      against appropriations carried over                number authorized for the preceding year.
                      from the preceding financial year;
                                                                         4. The establishment plan shall constitute an
     (bb) in the case of operations covered by commit-                   absolute limit for each institution; no appointment
           ment appropriations and payment appropri-                     may be made in excess of the limit set.
           ations: in the remarks column, an indicative
           schedule of the payments for the financial year
                                                                        In cases of half time work authorized by the
           concerned and subsequent financial years;
                                                                        appointing authority in accordance with Article 55a
                                                                        of the Staff Regulations of Officials of the European
     (be) appropriate remarks on each subdivision.                      Communities, a post in a given grade may serve for
           These remarks shall include:                                 the assignment of two officials of the same grade or
                                                                        of a lower grade. Such assignment shall automati-
                                                                        cally terminate when the authorization expires.
           — basic legal instrument, where one exists,
                                                                        5.    As regards borrowing and lending operations:
           — all such explanations as may be necessary
              concerning the nature and purpose of the                  (a) in the appropriate section of the part for
              appropriations.                                               operating expenditure:
    3.    As regards staff:                                                 — the budget headings relating to the categories
                                                                                of operation and carrying a token entry so
                                                                                long as no effective charge which has to be
    — for each section of the part of the budget for staff                      covered by specific resources has arisen,
         and administrative appropriations, an establish-
         ment plan setting the number of permanent and
         temporary posts for each grade in each category                    — remarks giving a reference to the legal basis
         and in each service authorized within the limits of                    and, where appropriate, the volume of the
        the budget appropriations. The staff of the                             operations envisaged and the financial guar-
        Supply Agency shall be shown separately in the                          antee given by the Communities in respect of
        Commission's establishment plan,                                        these operations;
                                                                        (b) in a document annexed to the part for operating
    — an establishment plan for staff paid from the
                                                                            expenditure, as an indication:
        research and technological development ap-
        propriations, classified by category and grade
        and distinguishing between permanent and non-                       — current capital operations and current debt
        permanent staff, authorized within the limits of                        management,
        the budget appropriations.
                                                                            — the capital operations and debt management
        As regards scientific and technical staff, the                          for the financial year in question.'
        classification may be based on groups of grades,
        in accordance with the conditions laid down in
        each budget. The establishment plan must specify         26.   Article 17 is renumbered Article 21.
        the number of highly qualified technical or
        scientific personnel who are accorded special
        advantages under the Staff Regulations ap-               27.   Article 18 is renumbered Article 22. Paragraph 3 is
        plicable to these officials.                                   replaced by the following:
    — an establishment plan setting the number of posts                '3. With the exception of decisions overruling the
        for each grade in each category in:                            Financial Controller provided for in Articles 40, 50
                                                                       and 53, the Commission and each of the other
                                                                       institutions may delegate their powers of budgetary
       — the Office for Official Publications,                         implementation in accordance with the conditions
 ---pagebreak--- 8. 5. 89                               Official Journal of the European Communities                             No C 115/11
      laid down by their internal rules of procedure and               provided for in Article 128, shall be such as to
      within the limits which they themselves lay down in              guarantee that they are independent in the perform-
      the act of delegation.                                           ance of their duties. Their appointment, their
                                                                       promotion and disciplinary rules or transfer, and
      Those so empowered may act only within the limits                any interruption or termination of appointment by
      of the powers expressly conferred upon them.                     whatever procedure shall be the subject of reasoned
                                                                       decisions to be forwarded, for information, to
                                                                       Parliament, the Council, the Commission and the
      The acts of delegation shall be communicated to all
                                                                       Court of Auditors.
      the parties concerned in accordance with the
      implementing rules provided for in Article 128.'
                                                                       The persons concerned and the institutions to which
                                                                       they belong may institute proceedings before the
28.   The following new Article 23 is inserted:                        Court of Justice.'
      'Article 23                                                 30.  Article 20 is renumbered Article 25. It is replaced by
                                                                       the following:
      Where revenue and expenditure operations are
      managed by means of integrated computer systems,                 'Article 25
      the provisions of Sections II and III and of Title VI
      shall apply with due allowance for the possibilities             In each institution, the collection of revenue and the
      and requirements deriving from computerized                      payment of expenditure shall be carried out by an
      management. To this end:                                         accounting officer.
      — the supporting documents may remain with the                   The accounting officer shall be appointed by the
          authorizing officer for the purposes of checking,            institution.
      — signatures and approvals may be in appropriate                 Without prejudice to the system provided for in
          computerized form.                                           Articles 4 and 5 of Council Regulation (EEC)
                                                                       No 729/70 of 21 April 1970 on the financing of the
      The conditions for implementing this Article shall be            common agricultural policy (*), and subject to the
      determined by the implementing rules provided for                second paragraph of Article 54 on payments
      in Article 128.'                                                 procedures, to Article 55 on imprests and to Article
                                                                       112 on the financing of external aid of this
                                                                       Regulation, the accounting officer alone is empo-
29.   Article 19 is renumbered Article 24. It is replaced by           wered to manage monies and other assets. He shall
      the following:                                                   be responsible for their safekeeping.
      'Article 24                                                      The accounting officer shall be responsible for
                                                                       preparing the financial statements provided for in
      Each institution shall appoint a financial controller.           Articles 79, 80, 81 and 82 of this Regulation.
      He shall be responsible for monitoring:                          He may be assisted in his duties by one or more
                                                                       assistant accounting officers, appointed under the
                                                                       same conditions as the accounting officer.
      — the commitment and authorization of all ex-
          penditure,
                                                                       The special rules applicable to the accounting officer
                                                                       and to assistant accounting officers shall be laid
      — the establishment and collection of all revenue.               down in the implementing rules provided for in
                                                                       Article 128.
      The financial controller shall be consulted on all
      accounting systems applied by the institution to
      which he is attached. He shall access to the                     (!) OJ No L 94, 28. 4. 1970, p. 13.'
      information contained in these accounts.
                                                                  31.  Article 21 is renumbered Article 26. It is replaced by
      Monitoring shall be carried out by that official by              the following:
      means of inspection of the files relating to expendi-
      ture and revenue and, if necessary, on the spot.                 'Article 26
      The financial controller may be assisted in his duties           1. Appropriations shall be earmarked for specific
      by one or more assistant financial controllers.                  purposes by chapter and article.
      The special rules applicable to such officials, which            2. Parliament, the Council, the Court of Justice
      shall be laid down in the implementing rules                     and the Court of Auditors may transfer appropri-
 ---pagebreak--- No C 115/12                             Official Journal of the European Communities                                      8. 5. 89
     ations from one chapter to another and from one                         its opinion within such time as will permit
     article to another within their own sections of the                     Parliament to be apprised of it and to act within
     budget.                                                                 the time limit indicated. Where Parliament does
                                                                             not act within this time limit, the proposals for
                                                                             transfers shall be deemed to be approved;
     The Court of Justice and the Court of Auditors shall
     inform the budgetary authority and the Commission
     three weeks before making such transfers.                           (c) proposals for transfers relating both to expendi-
                                                                             ture necessarily resulting from the Treaties or
     3. The Commission may, within its own sections                          from acts adopted in accordance therewith, and
     of the budget:                                                          to other expenditure shall be deemed to be
                                                                             approved if neither the Council nor Parliament
                                                                             has decided otherwise within six weeks of the
     (a) transfer appropriations from one article to                         date on which the two institutions received the
          another within each chapter;                                       proposals;
     (b) transfer appropriations from one chapter to
         another within each of the titles relating to staff             (d) if, in the case of proposals for transfers referred to
         and administrative expenditure. It shall inform                     in (c), Parliament and the Council reduce the
         the budgetary authority three weeks before                          proposal for a transfer by different amounts,
         making such transfers;                                              whichever is the smaller of the amounts accepted
                                                                             by one of the two institutions shall be deemed to
                                                                             be approved. Where only one of the institutions
     (c) transfer payment appropriations from one chap-                      rejects the principle of the transfer, such transfer
         ter to another;                                                     shall not be made.
     (d) transfer appropriations entered in the chapter of              6. For the purposes of the Article the Commission
         the budget containing the provisional appropri-                sections shall be treated as a single section.
         ations to the budget heading for which they were
         initially earmarked provided that the suspensive
         condition that originally gave rise to entry of the
                                                                        7. Only appropriations for the current financial
         appropriations in this special chapter has been                year may be transferred. By way of exception,
         satisfied. It shall inform the budgetary authority             appropriations carried over may be transferred by a
         three weeks before making such transfers.                      decision of the budgetary authority in accordance
                                                                        with paragraph 5.
     4. Without prejudice to the transfers which it may
     make on its own authority in accordance with
     paragraph 3, the Commission may make proposals                     8. Appropriations may also be transferred, by
     to the budgetary authority for transfers from one                  decision of the budgetary authority, between
    chapter to another.                                                 headings where a distinction is made between
                                                                        commitment appropriations and payment appropri-
                                                                        ations and headings where no such distinction is
    5. The budgetary authority shall take decisions on                  made.
    transfers of appropriations as follows:
                                                                        9. Every proposal for a transfer within a chapter or
     (a) in the case of proposals for transfers relating to
                                                                        from one chapter to another shall be subject to the
         expenditure necessarily resulting from the
                                                                        approval of the financial controller, who shall certify
         Treaties or from acts adopted in accordance
                                                                        that the appropriations are available.
         therewith, the Council shall, after consulting
         Parliament, act by a qualified majority within six
         weeks, except in urgent cases. Parliament shall
         deliver its opinion within such time as will permit            10. Appropriations may be transferred only to
         the Council to be apprised of it and to act within             budget headings for which the budget has authorized
         the time limit indicated. Where the Council does               appropriations or carried a token entry.
         not act within this time limit, the proposals for
         transfers shall be deemed to be approved;
                                                                        11. This Article shall apply to the appropriations
                                                                        corresponding to revenue earmarked for a specific
     (b) in the case of proposals for transfers relating to             purpose under Article 4(2) only as long as the
         expenditure other than that necessarily resulting              revenue is not used for any other purpose.
         from the Treaties or from acts adopted in
         accordance therewith, Parliament shall, after
         consulting the Council, act within six weeks,                  12. Transfers within the titles of the budget
         except in urgent cases. The Council shall deliver              devoted to the European Agricultural Guidance and
 ---pagebreak--- 8. 5. 89                               Official Journal of the European Communities                               No C 115/13
      Guarantee Fund, Guarantee Section shall be the                       The chart of accounts shall include suspense
      subject of special provisions under Article 105.                     accounts to record reuse operations in both
                                                                           evenue and/or expenditure.'
      13. As regards the section for expenditure common
      to all the institutions, the Commission may, without
      prejudice to the provisions of Article 125, transfer             (c) In paragraph 3, the reference 'Article 3' is
      appropriations from one chapter to another within                    replaced by 'Article 4'.
      the same title, and from one article to another. It
      shall inform the budgetary authority three weeks
      before making such transfers.'                                   (d) Paragraphs 4 and 5 are replaced by the following:
32.   Article 22 is renumbered Article 27:                                 '4. Notwithstanding Article 4, adjustments
                                                                           must be made in respect of exchange differences
                                                                           occurring in budget operations. The final gain or
      (a) In the first subparagraph of paragraph 1, the                    loss shall be included in the balance for the year.
          reference 'from Article 3' is replaced by 'from
          Article 4'.
                                                                           5. In the cases referred to in paragraphs 1(c)
      (b) Paragraph 2 is replaced by the following:                        and 2(b), (d), (e), (g) and (h), reuse and deduction
                                                                           shall be possible only if provision therefor is
                                                                           made in the remarks column in the budget.
          '2. Notwithstanding Articles 4 and 5, the
          following sums may be reused under the heading
          to which the initial expenditure was charged:
                                                                           6. Revenue from the repayment of advances
                                                                           made by recipients of Community aid shall be
          (a) revenue arising from the refund of amounts                   entered in suspense accounts.
              paid in error against budget appropriations;
          (b) proceeds from the supply of goods and                        At the beginning of each financial year the
              services to other institutions or bodies,                    Commission shall examine the volume of this
              including refunds by such institutions or                    revenue and assess, in the light of requirements,
              bodies of mission allowances paid on their                   the need for reuse under the heading to which the
              behalf;                                                      initial expenditure was charged.
          (c) insurance payments received;                                 The Commission shall take this decision by 15
                                                                           February of each financial year, and shall inform
          (d) revenue from the sale of buildings or sums                   the budgetary authority by 15 March of the
              connected with lettings;                                     decision taken.
          (e) revenue from the sale of publications and
                                                                           Revenue not reused shall be entered as miscella-
              films;
                                                                           neous revenue for the financial year in which it
                                                                           was entered in the accounts.'
          (f) refunds of taxes — incorporated in the price
              of the products or services provided to the
              Communities — effected by Member States
              pursuant to the provisions of the Protocol on            Article 23 is renumbered Article 28.
              the Privileges and Immunities of the European
              Communities;
                                                                       (a) In the first subparagraph of paragraph 1, the
          (g) revenue from the supply of goods and services                second sentence is replaced by the following:
              against payment;
                                                                           'Such proposals shall be sent to the financial
          (h) proceeds from the sale of vehicles, equipment                controller of the institution for his approval and
              and installations and scientific and technical               to the accounting officer for provisional regist-
              apparatus, equipment and materials which                     ration.'
              are being replaced or scrapped.
          Such sums must be reused before the end of the               (b) In the final sentence of the final subparagraph of
          financial year following that in which the revenue               paragraph 1, 'every three months' is replaced by
          was collected.                                                   'within one month'.
 ---pagebreak--- No C 115/14                              Official Journal of the European Communities                                    8. 5. 89
34.   Article 24 is renumbered Article 29.                          39.    Article 29 is renumbered Article 34. It is replaced by
                                                                           the following:
      (a) The following sentence is added to the third
           subparagraph of paragraph 1:                                    'Article 34
                                                                          The Commission shall, four times a year, present to
           'If necessary, he shall initiate the recovery
                                                                          Parliament and the Council a report on the
          procedure.'
                                                                          implementation of the budget and of any sup-
                                                                          plementary or amending budgets and on the
      (b) In the final sentence of the third subparagraph of              Communities' financial situation, covering both
          paragraph 2, 'every three months' is replaced by                revenue and expenditure. This report shall also give
           'within one month'.                                            details of the utilization of appropriations carried
                                                                          forward from previous financial years.
35.  Article 25 is renumbered Article 30.                                 This report shall at the same time be sent to the
                                                                          Court of Auditors.'
36.  Article 26 is renumbered Article 31.
                                                                    40.   Article 30 is renumbered Article 35. It is replaced by
                                                                          the following:
     The reference 'in Article 4(2) and (3) of the Decision
     of 21 April 1970' is replaced by 'in Article 2(7) of the
     Decision of 24 June 1988'.                                           'Article 35
                                                                          The financial contributions referred to in Article
37.  Article 27 is renumbered Article 32. It is replaced by               ll(2)(c) of the Decision of 24 June 1988 (for the
     the following:                                                       completion of supplementary research programmes)
                                                                          shall be converted at the rate for the ecu applying on
                                                                         the last but one working day of the month preceding
     'Article 32
                                                                         the final date for entry in the accounts.'
    The balance from each financial year, calculated in
    accordance with Article 15 of Council Regulation               41.   Article 31 is renumbered Article 36.
     (EEC, Euratom, ECSC) No 2891/77, shall be entered
    as revenue in the case of a surplus or expenditure in          42.   Article 32 is renumbered Article 37.
    the case of a deficit in a supplementary or amending
    budget in the following financial year.'                              (a) In paragraph 2, 'Article 96' is replaced by 'Article
                                                                               100'.
38. Article 28 is renumbered Article 33.                                 (b) In paragraph 3, 'Article 106' is replaced by
                                                                               'Article 128'.
     (a) Paragraph 1 is replaced by the following:
                                                                   43.   Article 33 is renumbered Article 38. On the last line,
         ' 1 . The contributions for the financing of                    'Article 106' is replaced by 'Article 128'.
         certain supplementary research programmes
         provided for in Article 11 (2) (c) of the Decision of
         24 June 1988 shall be paid over as follows:               44.   Article 34 is renumbered Article 39.
                                                                         (a) The first paragraph is renumbered paragraph 1.
         — seven twelfths of the amount shown in the
              budget not later than 31 January,
                                                                         (b) The following paragraph 2 is added:
         — the remaining five twelfths not later than 15                      '2.   Approval may not be conditional.'
              July.
                                                                         (c) The second paragraph is renumbered para-
         2. If the budget is not finally adopted before the                   graph 3.
         start of the financial year, the contributions
         provided for in paragraph 1 shall be based on the
                                                                   45.   Article 35 is renumbered Article 40.
         amount shown in the draft budget, as referred to
         in Article 9(3) and (4) of this Regulation or, if this
         does not exist, in the preliminary draft budget.'               (a) In the first paragraph, 'Article 34' is replaced by
                                                                              'Article 39(1)'.
    (b) Paragraph 2 is renumbered paragraph 3.                           (b) In the second paragraph, the phrase 'in the first
                                                                              two paragraphs of Article 18' is replaced by 'in
    (c) Paragraph 3 is renumbered paragraph 4.                               the first two paragraphs of Article 22'.
 ---pagebreak--- 8. 5. 89                                 Official Journal of the European Communities                             No C 115/15
      (c) In the final sentence of the final paragraph, 'every      54.   Article 43 is renumbered Article 49.
          three months' is replaced by 'within one month'.
                                                                    55.   Article 44 is renumbered Article 50. The reference
                                                                          'Article 35' is replaced by 'Article 40'.
46.   Article 36 is renumbered Article 41.
                                                                    56.   Article 45 is renumbered Article 51.
47.   Article 37 is renumbered Article 42.                          57.   Article 46 is renumbered Article 52.
      (a) In paragraph 1, 'Article 106' is replaced by              58.   Article 47 is renumbered Article 53.
          'Article 128'.
                                                                    59.   Article 48 is renumbered Article 54. In the second
      (b) Paragraph 2 is deleted.                                         paragraph 'Article 106' is replaced by 'Article 128'.
      (c) Paragraph 3 is renumbered paragraph 2.                    60.   Article 49 is renumbered Article 55.
                                                                          (a) In the first paragraph 'Article 106' is replaced by
48.   Article 38 is renumbered Article 43.                                     'Article 128'.
                                                                          (b) The following new second paragraph is added:
49.   Article 39 is renumbered Article 44.                                     'Only the accounting officer may replenish the
                                                                               imprest accounts, save in exceptional cases
50.   Article 40 is renumbered Article 45. The third indent                    defined in the implementing rules.'
      is replaced by the following:                                       (c) The second paragraph becomes the third para-
                                                                               graph.
      '— the amount to be paid (in figures and words),
           expressed in ecus or in national currency.'              61.  The following new section is inserted:
51.   Article 41 is renumbered Article 46. In the first                                      'SECTION IV
      paragraph 'Article 106' is resplaced by 'Article 128'
      and 'Article 59' is replaced by 'Article 66\                                   MANAGEMENT OF POSTS'
                                                                    62.  The following new Article 56 is inserted:
52.   Article 42 is renumbered Article 47.
                                                                          'Article 56
      (a) The second paragraph is replaced by the follow-                Within each institution the following shall be
          ing:                                                           established:
          'The authorizing officer may grant advances if                  (a) an establishment plan;
          the Staff Regulations or the rules governing the
                                                                          (b) an organization chart showing the organization
          policy concerned specifically provide therefor.'
                                                                               of the departments.'
      (b) In the third paragraph 'Article 106' is replaced by       63.  In Title IV the title of Section I is replaced by the
          'Article 128'.                                                 following:
      (c) In the fourth paragraph 'Article 49' is replaced by
          'Article 55'.                                                                       'SECTION I
                                                                        CONTRACTS FOR THE SUPPLY OF GOODS AND
53.   The following new Article 48 is inserted:                      SERVICES; CONTRACTS FOR PURCHASE, LEASE AND
                                                                                                 HIRE'
      'Article 48                                                   64.  Article 50 is renumbered Article 57. Paragraph 1 is
                                                                         replaced by the following:
      Interest shall be due, in accordance with the
      implementing rules provided for in Article 128, on                  ' 1 . Contracts for the purchase or hiring of
      any amount paid to recipients' of Community aid:                   buildings or goods, for the provision of services or
                                                                         for the performance of construction work shall be in
                                                                         writing. Apart from contracts relating to the
      — either as an advance,                                            purchase of a building already constructed or to the
                                                                         leasing of a building, all such contracts shall be
      — or under the normal payment procedure,                           concluded after an invitation to tender has been
                                                                         issued either by the automatic public tendering
      which gives rise to repayment to the general budget.'              procedure or the discretionary tendering procedure.
 ---pagebreak--- No C 115/16                                Official Journal of the European Communities                                  8. 5. 89
     However, contracts may be made by private treaty in              72.  Article 58 is renumbered Article 65. It is replaced by
     the circumstances referred to in Article 59.                          the following:
     Contracts may be made against invoice or bill of                      'Article 65
     costs in cases provided for in Article 64.'
                                                                           Without prejudice to the provisions laid down in this
65.  Article 51 is renumbered Article 58. In paragraph 3                   Financial Regulation, when concluding contracts
     'Article 106' is replaced by 'Article 128'.                           referred to in this Regulation, each institution shall
                                                                           comply with the Council Directives (!) on public
                                                                           works and supplies, whenever the amounts involved
66.  Article 52 is renumbered Article 59.                                  are equal to or greater than the amounts provided for
                                                                           in those Directives.
     (a) In point (a), 'where the contract ... involves an
         amount not exceeding 6 500 ecus' is replaced by
         the phrase 'within the limit laid down in the                     The implementing rules provided for in Article 128
         implementing rules provided for in Article 128'.                  shall include the supplementary provisions which
                                                                           may be required in order to implement this article.
     (b) In point (b) 'Article 5 1 ' is replaced by 'Article 58'.
                                                                           (*) The following Directives were in force at the time
67.  Article 53 is renumbered Article 60.                                      this Regulation was drawn up:
                                                                               (a) public works:
                                                                                   Directive 71/305/EEC of 26 July 1971 (OJ No
68.  Article 54 is renumbered Article 61. It is replaced by                        L 185, 16. 8. 1971, p. 5), as amended by
     the following:                                                                Directive 78/669/EEC of 2 August 1978 (OJ
                                                                                   No L 225, 16. 8. 1978, p. 41).
     'Article 61                                                               (b) supplies :
                                                                                   Directive 77/62/EEC of 21 December 1976
                                                                                   (OJ No L 13,15. 1. 1977, p. 1), as amended by
     Each institution shall set up its own advisory
                                                                                   Directive 80/767/EEC of 22 July 1980( OJ No
     committee on procurements and contracts to express
                                                                                   L 215, 18. 8. 1980, p. 1).'
     an opinion on contracts before the authorizing
     officer takes the decision.
                                                                      73.  Article 59 is renumbered Article 66:
     If required, an advisory committee on procurements
     and contracts common to all the institutions may be
     set up.                                                               (a) In the first paragraph, 'permanent quantitative
                                                                               inventories' is replaced by 'permanent inven-
     Details of the operation of these committees and the                      tories showing the quantity and value'.
     limit values for the contracts of which they are to be
     consulted shall be laid down in the implementing                      (b) In the final paragraph, the following phrase is
     rules provided for in Article 128.'                                       added:
69.  Article 55 is renumbered Article 62. In the first                         'in accordance with the implementing rules
     paragraph 'Article 54' is replaced by 'Article 61'.                       provided for in Article 128.'
70.  Article 56 is renumbered Article 63. The third
     paragraph is replaced by the following:                         74.   Article 60 is renumbered Article 67. In the first
                                                                           paragraph, 'Article 106' is replaced by 'Article 128'.
     'Beyond the limit laid down by the implementing
     rules provided for in Article 128, the provision of
     security shall be obligatory. A guarantee may be                75.   Article 61 is renumbered Article 68. In the first
     retained until final acceptance.'                                     paragraph the phrase 'disposed of is replaced by
                                                                           'sold, given away free of charge, ...'.
71.  Article 57 us renumbered Article 64. It is replaced by
     the following:                                                  76.   Article 62 is renumbered Article 69. In the first
                                                                           paragraph, 'Article 59' is replaced by 'Article 66\
     'Article 64
     Contracts may be made against invoice or bill of                77.   Article 63 is renumbered Article 70. In the last
    costs within the limits laid down by the implement-                    sentence, the phrase 'in European units of account' is
     ing rules provided for in Article 128.'                               replaced by 'in ecus'.
 ---pagebreak--- 8. 5. 89                                Official Journal of the European Communities                               No C 115/17
78.   Article 64 is renumbered Article 71. It is replaced by            (b) In paragraphs 3 and 5, 'Article 106', is replaced
      the following:                                                        by 'Article 128'.
      'Article 71                                                       (c) The third and fourth subparagraphs of para-
                                                                            graph 3 are numbered paragraph 4.
      The chart of accounts shall make a clear distinction
      between budgetary accounts and cash accounts.
                                                                        (d) Paragraph 4 is renumbered paragraph 5.
      It shall comprise two parts:
       (a) accounts of budgetary expenditure and revenue,          85.  Article 71 is renumbered Article 77.
           which show the detailed implementation of the
            budget;
                                                                   86.  Article 72 is renumbered Article 78.
       (b) the balance sheet accounts, which disclose the
           assets of the institutions. These accounts shall
                                                                   87.  Article 73 is renumbered Article 79.
           show the expected effect of the Communities'
           legal obligations.
                                                                        (a) The introductory words and point 1 are replaced
      The detailed conditions for the establishment and                     by the following:
      operation of the chart of accounts for transactions
      relating both to assets and to the implementation of                  'The Commission shall draw up, not later than 1
      the budget shall be determined by the implementing                    May of the following year, a consolidated
      rules provided for in Article 128.                                    revenue and expenditure account of the general
                                                                            budget of the European Communities for the
      These accounts shall make it possible to draw up an                   financial year ended 31 December. The con-
      annual balance of assets and a monthly statement of                   solidated revenue and expenditure account shall
      revenue and expenditure by chapter and article.                       include:
      These statements shall be forwarded to the financial
                                                                            1.   a table of revenue comprising:
      controller, the authorizing officer and the Court of
      Auditors.'
                                                                                — estimated revenue for the financial year,
79.   Article 65 is renumbered Article 72.
                                                                                — amendments to the revenue estimates as a
      (a) In the first paragraph, 'Articles 96 and 102' is                          result of supplementary or amending
           replaced by 'Article 100'.                                               budgets and additional revenue as spe-
                                                                                    cified in the second subparagraph of
                                                                                    Article 4(2),
      (b) In the second paragraph, 'Article 42' is replaced
           by 'Article 47'.
                                                                                — entitlements established in the course of
                                                                                    the financial year,
80.   Article 66 is repealed.
                                                                                — entitlements still to be collected from the
81.   Article 67 is renumbered Article 73.                                          preceding financial year,
82.   Article 68 is renumbered Article 74. The following                        — revenue collected during the financial year
      sentence is added:                                                            and revenue carried over pursuant to
                                                                                    Article 7(4),
      'The same shall apply if they neglect to issue
      payment orders or are, without justification, late in
                                                                                — amounts still to be collected at the end of
      issuing them, thereby rendering the institution liable
                                                                                    the financial year.
      to civil action by third parties.'
                                                                                Statements shall be attached to this table
83.   Article 69 is renumbered Article 75.                                      showing revenue carried over pursuant to
                                                                                Article 7(4) and, where appropriate, the
84.   Article 70 is renumbered Article 76.                                      balance and gross amounts of the operations
                                                                                referred to in Article 27(2).'
      (a) In the first subparagraph of paragraph 1, 'the
           third paragraph of Article 46' is replaced by 'the           (b) In the last indent of point 2, 'Article 6' is replaced
           third paragraph of Article 52'.                                  by 'Article 7'.
 ---pagebreak---  No C 115/18                             Official Journal of the European Communities                                   8. 5. 89
       (c) In point 3 :                                                   possible, of all decisions and rules taken pursuant to
                                                                          Articles 4(4), 7(2), (3) and (6), 9, 17(1) and 26.
           — Fourth indent: 'Article 6' is replaced by
              'Article 7'.
                                                                          3. The institutions shall transmit to the Court of
                                                                          Auditors any rules of procedure in respect of
           — Fifth indent: 'Article 6' is replaced by 'Article            financial matters.
              7'.
                                                                          4. The Court of Auditors shall be informed of the
           — In the second paragraph, 'Article 22(2)' is
              replaced by 'Article 27(2)'.                                appointment of authorizing officers, financial
                                                                          controllers, accounting officer and administrators of
                                                                          imprest accounts and of the acts of delegation or
 88.  Article 74 is renumbered Article 80. It is replaced by              appointment under Articles 22, 24, 25 and 55.'
      the following:
      'Article 80                                                  93.    Article 79 is renumbered Article 85. 'Article 19 of
                                                                          Council Regulation (EEC, Euratom, ECSC)
      Each institution shall, not later than 15 February,                 No 2891/77 and to Article 80 of this Financial
      transmit to the Commission, after submitting it to its              Regulation' is replaced by 'Article 18 of Council
      financial controller, the information required for                  Regulation (EEC, Euratom, ECSC) No 2891/77 and
      drawing up the revenue and expenditure account                      to Article 86 of this Financial Regulation'.
      and the balance sheet, together with a contribution
      to the analysis of the financial management referred
      to in Article 81.'                                           94.   Article 80 is renumbered Article 86.
89.   Article 75 is renumbered Article 81. (Amendment                     (a) (Amendment does affect English version.)
      does not affect English version.)
                                                                          (b) In the second paragraph, 'Article 82' is replaced
90.  Article 76 is renumbered Article 82. It is replaced by                   by 'Article 88'.
     the following:
                                                                         (c) In the third paragraph, 'Articles 18 and 19 of
     'Article 82                                                              Regulation (EEC, Euratom, ECSC) No 2891/77'
                                                                              is replaced by 'Articles 17 and 18 of Regulation
      1. The Commission shall draw up not later than 1                        (EEC, Euratom, ECSC) No 2891/77'.
     May a consolidated balance sheet of assets and
     liabilities of the Communities as at 31 December of                 (d) The following fourth paragraph is added:
     the preceding financial year. A statement showing
     the movements and balances of the accounts at the
     same date shall be attached thereto.                                     'At the request of the Court of Auditors, each
                                                                              institution shall authorize outside persons to
     2. These documents shall be submitted to the                             permit the Court to make any checks to ensure
     financial controller.'                                                   that external data tally with the accounts.'
91.  Article 77 is renumbered Article 83. '1 June' is              95.   Article 81 is renumbered Article 87.
     replaced by '1 May.
92.  Article 78 is renumbered Article 84. It is replaced by        96.   Article 82 is renumbered Article 88.
     the following:
                                                                         (a) In point (b) of the second paragraph, 'the first
     'Article 84                                                             paragraph of Article 80' is replaced by 'the first
                                                                             paragraph of Article 86'.
     1. The Court of Auditors and its members may, in
     carrying out the task of the Court, be assisted by
     officers of the Court. The Court itself or one of its               (b) The final paragraph is replaced by the following:
     members shall notify the authorities with which the
     delegated officer is to work of the tasks delegated to                  'The grant of Community funds to beneficiaries
     him.                                                                    outside the institutions shall be subject to the
                                                                             agreement in writing by the recipients to an audit
     2. Parliament, the Council and the Commission                           being carried out by the Court of Auditors on the
     shall inform the Court of Auditors, as soon as                          utilization of the amounts granted.'
 ---pagebreak--- 8 5 89                                          O t t i c i a l ] o u r n a l o t t h e European Communities                                   ^oC115B19
97. Article 83 is renumbered Article 89. It is replaced by                                      ^P Lhe institutions shall tal^e all appropriate steps
    the following                                                                               to a c t o n t h e comments appearing i n t h e decisions
                                                                                                ^i^in^ discharge.
    5Ar^^^9
                                                                                                5. At the request ofParliament or the Council, the
    ^Phe annual report ofthe Court ofAuditors provided                                          institutions shall report on the rules tal^en in the h^ht
    formArticle78ofthePC5CLreaty,Article^0^aof                                                  of these comments, and, in particular, on the
    thePPC^Preaty and Article 180aof thePuratom                                                 instructions ^i^en to those of their departments
    Lreaty shall be ^o^erned by the following pro^i                                             which are responsible for the implementation of the
    sions.                                                                                      budget, ^uch reports shall also be transmitted to the
                                                                                                Court of Auditors.
    1. ^Phe Court of Auditors shall transmit to the
    Commission a n d t h e institutions concerned, by 15                                        D. IfParhament decides to postpone the discharge
    ]uly a t t h e l a t e s t , any comments which are, in its                                 the Commission must as rapidly as possible remote
    opinion,of suchanature that they should appearm                                             anyobstacles to the discharge decision.
    the annual reports, rhesecomments must remain
    confidential, ^ach institution shall address its reply
                                                                                                7. ^upportin^ documents pertaining to the acD
    to the Court of Auditors by 31 October atthe latest.
                                                                                                counts and the preparation of the revenue and
    ^Phe replies of the institutions other than the
                                                                                                expenditure account and the balance sheet shall be
    Commission shall be sent simultaneously to the
                                                                                                leeptforapenod office years following the date of
    Commission.
                                                                                                the decision ^i^in^ discharge in respect of the
                                                                                                implementation of the budget.
    ^. ^Phe annual report shallcontam an assessment
    of the soundness of financial management.
                                                                                                mowe^erghe documents relating to transactions not
                                                                                                finally closed shall be l^ept for longer than the said
    3. Idle annual report shall compnseasection for                                             period until the end of the year following the year in
    eachmstitution. I^achsectionshallcontainall the                                             which suchtransactions are fmallyclosedB
    comments of the Court of Auditors on the relevant
    institution. ^Phe replies of each institution shallbe
    published immediately following the comments
                                                                                           100. ddie following newArticle 91 is inserted^
    relating to that institution.
                                                                                                5^r^^9^
    ^. ^Phe Court of Auditors shall transmit to the
    authontiesresponsiblefor^nan^dischar^eandto
    the other institutions, b y 3 0 ^ o ^ e m b e r at the latest,                              P In a d d i t i o n t o t h e annual report,the Court of
    its annual report accompanied by the replies and it                                         Auditors may also, at any time, submit observations,
    shall ensure publication thereof in the O ^ ^                                               in the form of special reports, on specific questions
                                                                                                and deliver opinions at the request of one of the
                                                                                                institutions of the Communities.
98. Article 8^ is repealed.
                                                                                                ^-. r h e special reports shallbe transmitted to the
                                                                                                institution or bodyconcerned.
99. Article 85 is renumbered Article 90. It is replaced by
    the following.                                                                              ^Phe institution concerned shall ha^e two a n d a h a l f
                                                                                                months in which to inform the Court of Auditors of
    ^A^^90                                                                                      any comments it wishes to mal^e on the observations
                                                                                                in question.
    1. I^arhament,uponarecommeudationfrom the
    Council, acting byaqualifiedma^onty,shall, before                                           ^ h o u l d t h e C o u r t o f Auditors decide t o h a ^ e such
    30 A p n l o f t h e n e ^ t y e a r , ^ i ^ e a d i s c h a r ^ e t o t h e                observations published in the O ^ ^ ^ o ^ r ^ o ^ ^
    Commission in respect of the implementation of the                                          P ^ r o ^ ^ ^ C o ^ ^ ^ ^ ^ ^ , it shall include after them
    budget. If that date cannot be met,I^arliament or the                                       any comments submitted by the institution or
    Council shall inform the Commission of the reasons                                          institutions concerned.
    for the postponement.
                                                                                                3. If the opinions referred to in p a r a ^ r a p h l d o not
    ^. parliament shall deliver its opinion on the                                              relate to proposals for legislation or draft legislation
    discharge, in particular on the basis of the accounts                                       on which it has been consulted, the Court of
    of all revenue and expenditure of the Communities                                           Auditors shall not publish them unless the msti
    audited by the Court of Auditors.                                                           tution which has requested the opinion and the
                                                                                                institution concerned a^ree. In this case, these
    3. ^Phefmancial controller shall tal^eaccount of                                            opinions shall be accompanied by the replies of the
    the c o m m e n t s m t h e decisions ^i^in^dischar^e.                                      institution or institutions concernedB
 ---pagebreak--- No C 115/20                             Official Journal of the European Communities                                   8. 5. 89
101. Title VII: the heading is replaced by the following:                     with Article 130m of the EEC Treaty, or
                                                                              cooperation with third countries or international
                                                                              organizations as provided for in Article 130n of
                                                                              the EEC Treaty;
                         'TITLE VII
                                                                         (e) other activities of the JRC such as exploratory
SPECIAL PROVISIONS APPLICABLE T O RESEARCH                                    research, scientific and technical support ac-
     AND TECHNOLOGICAL DEVELOPMENT                                            tivities for the Commission and services for
                   APPROPRIATIONS'                                            outside bodies and individuals.
102. Articles 86 to 94 are replaced by the following:                   2. The appropriations for projects under the
                                                                        framework programme of activities in the field of
                                                                        research and technological development shall be
     'Article 92                                                        entered separately in this section.
     The provisions of Titles I to VI and XII shall apply to            Article 94
     the research and technological development ap-
     propriations entered in the special section provided
     for in Article 93, save as otherwise provided in this              1. The nomenclature of the special section pro-
     Title or where they are incompatible with the special              vided for in Article 93 shall be based on the purpose
     provisions of this title.                                          of the expenditure in achieving research and
                                                                        technological development objectives or in the other
                                                                        activities referred to in that Article.
     Article 93
                                                                        The remarks for each subdivision shall also show:
     1. The appropriations relating to the activities
     covered by this Title shall be entered in a special
     section in the part of the budget devoted to operating             — the number of staff assigned for the current year,
     appropriations.
                                                                        — details of supplementary programmes, program-
     This section shall contain the appropriations                           mes undertaken by several Member States and
     intended for the realization of research and tech-                      cooperation with third countries or international
     nological development objectives through the im-                        organizations, with an indication of the amount
     plementation of the following:                                          of any financial contribution from the Com-
                                                                             munity.
     (a) direct action, consisting of research programmes
         carried out by the establishments of the Joint
                                                                        2. However, staff appropriations for the Joint
         Research Centre (JRC) and in principle entirely
                                                                        Research Centre shall be entered separately in a
         financed from the general budget of the European
                                                                        single chapter.
         Communities;
                                                                        Article 95
     (b) indirect action, consisting of programmes carried
         out under contracts to be concluded with third
         parties and in principle partially financed from               The following shall be annexed to the special section
         the general budget of the European Communities                 referred to in Article 93:
         (shared-cost action projects);
                                                                        — a table of equivalence giving the breakdown by
     (c) concerted action, consisting of work undertaken                     purpose and type of expenditure of the appropri-
         by the Community to coordinate the individual                       ations made available in the section, as specified
         research projects carried out in the Member                         in the implementing rules provided for in Article
         States, in respect of which the administrative                      128. For management purposes, the Commission
         expenditure alone is financed from the general                      may create appropriation accounts correspond-
         budget of the European Communities;                                 ing to the instruments of implementation,
     (d) possible financial contributions by the Com-                   — a provisional schedule of commitments and
         munity to supplementary programmes in accord-                       payments showing the planned utilization of the
         ance with Article 1301 of the EEC Treaty, or to                     commitment appropriations and the correspond-
         research and development programmes under-                          ing payment appropriations.
         taken by several Member States, including
         participation in the structures created for the
         execution of those programmes, in accordance                        The schedule shall be reviewed annually.
 ---pagebreak--- 8. 5. 89                               Official Journal of the European Communities                           No C 115/21
      Article 96                                                  103. Article 95 is renumbered Article 99. It is replaced by
                                                                       the following:
      Notwithstanding Article 26, the Commission may,
      within the special section referred to in Article 93,            'Article 99
      transfer appropriations from one chapter to another
      within a limit of 15 % for the commitment                        This Title shall apply to expenditure financed under
      appropriations relating to the activities referred to in         the EAGGF, Guarantee Section, in accordance with
      Article 93(1)(a) and (e), provided that these activities         Regulation (EEC) No 729/70, effected through the
      fall under the framework programme.                              authorities or bodies referred to in Article 4(1) of
                                                                       Regulation (EEC) No 727/70, under the implement-
                                                                       ing provisions adopted pursuant to Article 5(3) of
      These transfers may not have the effect of increasing
                                                                       that Regulation.
      the appropriations earmarked for exploratory
      research by more than 5 % of the initial allocation
      for the total appropriations in respect of the JRC               Special operations which the Commission manages
      under the framework programme.                                   directly, shall be implemented in accordance with
                                                                       the rules laid down in Title III of this Regulation.'
      This special provision does not concern staff
      appropriations for the JRC.                                 104. Article 96 is renumbered Article 100.
                                                                       (a) The first and second paragraphs are numbered
      Article 97
                                                                           paragraph 1.
      1. The Commission may provide services for                       (b) The following paragraph 2 is added:
      outside bodies or individuals, in accordance with the
      remarks in the budget for the chapters and articles in               '2. The Commission shall make a monthly
      question.                                                            report to Parliament and the Council. This
                                                                           communication on actual expenditure shall be
      Notwithstanding Article 5, the resulting revenue                     accompanied by any information which it deems
      may give rise to additional appropriations:                          appropriate within the context of the early
                                                                           warning system provided for in Article 6 of
      — in commitments, equal to the amount of the                         Decision 88/377/EEC
          repayments provided for in the contracts con-
          cluded with the outside bodies or individuals,          105. Article 97 is renumbered Article 101. In paragraph 2,
                                                                       'Article 96' is replaced by 'Article 100'.
      — in payments, equal to the entitlements established
          from these repayments.                                  106. Article 98 is renumbered Article 102.
      2. Notwithstanding Article 7(2), additional ap-
                                                                  107. Article 99 is renumbered Article 103. In paragraph 3,
      propriations shall be maintained until they are
                                                                       'Articles 97 and 98' is replaced by 'Articles 101 and
      cancelled by means of the revenue and expenditure
                                                                        102'.
      account.
      3. Where provision is made in the remarks column            108. Article 100 is renumbered Article 104. It is replaced
                                                                       by the following:
      for certain categories of expenditure to be repaid to
      the general budget, such repayments shall be booked
      to the statement of revenue, in accordance with the              'Article 104
      implementing rules, under headings entered specif-
      ically for this purpose.                                         Global provisional commitments which have been
                                                                       made for a financial year in accordance with Article
                                                                        100 and which have not been specifically committed
      Article 98                                                       under the budget nomenclature in accordance with
                                                                       Article 101 by 1 February of the following financial
      With regard to the award of contracts in the fields              year, shall be released under the original financial
      falling under this Title, the implementing rules                 year.'
      provided for in Article 128 may lay down special
      provisions on:
                                                                  109. Article 101 is renumbered Article 105. It is replaced
                                                                       by the following:
      — the limit values determining the conditions for
          concluding contracts,                                        'Article 105
      — the operation and the determination of the                      1. Transfers from one article to another within
          powers of the advisory committee on procure-                 each chapter shall be made by decision of the
          ments and contracts.'                                        Commission, to be taken not later than 31 January in
 ---pagebreak--- No C 115/22                             Official Journal of the European Communities                                    8. 5. 89
      accordance with the procedure provided for in                      3. The appropriations may be earmarked in
      Article 13 of Regulation (EEC) No 729/70.                          particular for grant aid, special loans, risk capital or
                                                                         interest rate subsidies, and shall be used by the
                                                                         Commission, which may confer authority on behalf
      The Commission shall inform the budgetary au-
                                                                         of the Community to administer a part thereof,
      thority of such transfers.
                                                                         either on the European Investment Bank or, under its
                                                                         responsibility, on other organizations.
      2. Not later than one month before 31 January of
      the following financial year, the Commission may
      submit proposals to the budgetary authority for                    This provision shall not prejudice the audit powers
      transfers of appropriations from one chapter to                    of the Court of Auditors under Article 206a of the
      another. Acting by a qualified majority, the Council               EEC Treaty.
      shall take a decision within three weeks, after
      consulting Parliament, in accordance with Article                  4. The following provisions shall govern the use of
      26. If it does not act within that period, the transfers           appropriations by the Commission.
      of appropriations shall be deemed to be approved.
                                                                         5. The amount of special loans and risk capital
      3. Decisions on transfers relating to the monetary                 granted shall be shown in the balance sheet provided
      reserve referred to in Article 19(6) shall be taken by             for in Article 82.
      the budgetary authority in accordance with Article
      26(5)(a).
                                                                         Article 107
     4. Decisions on transfers between the EAGGF
      Guarantee Section headings to which refunds in                     1. Any cooperation project adopted by the Com-
     connection with food aid are charged and the food                   mission may be covered by:
     aid chapter, which are made necessary by changing
     requirements, in relation to the appropriations
     authorized, in the parts of the expenditure char-                  — a financing agreement drawn up between the
     geable to the respective headings shall be taken by                     Commission, acting for the Community, and the
     the Commission.                                                         Government of the recipient State or the
                                                                            governing bodies of the recipient organizations
                                                                            or institutions, hereinafter referred to as the
     The Commission shall inform the budgetary au-                          recipient,
     thority of such transfers 15 days in advance.'
                                                                        — or a contract with international organizations, or
                                                                            natural or legal persons responsible for carrying
110. Title IX and Article 102 are deleted.
                                                                            out the project..
111. The following new Title IX is inserted:                            2. The financing agreement or contract shall
                                                                        determine the financial commitment of the Com-
                                                                        munity for the measure concerned. No expenditure
                                                                        in excess of this amount may be charged to the
                                                                        budget without an additional commitment.
                          'TITLE IX
SPECIAL PROVISIONS APPLICABLE T O EXTERNAL
                                                                        3. In addition, a loan contract shall be drawn up
                             AID
                                                                        between the Commission, acting for the Com-
                         SECTION I                                      munity, and the borrower in respect of any
                  GENERAL PROVISIONS                                    investment project financed by a special loan.
     Article 106
     1. Subject to derogation, the provisions of Titles I                                  SECTION II
     to VI and XII shall apply to foreign aid financed                                 IMPLEMENTATION
     from the Community budget, in so far as they are not
     incompatible with the provisions of this Title.
                                                                        Article 108
     2. The appropriations assigned by the Community
     to its cooperation policy shall be used either under               Projects covered by a financing agreement shall be
     cooperation agreements with a financial protocol                   implemented by the recipient in close collaboration
     ('preferential agreements') or as aid granted unilater-            with the Commission, which shall retain respons-
     ally.                                                              ibility for the utilization of appropriations.
 ---pagebreak--- 8. 5. 89                                 Official Journal of the European Communities                           No C 115/23
      Article 109                                                        and the recipient State, and in respect of the
                                                                         appropriations for which it is the authorizing officer,
                                                                         the Commission may be represented in the recipient
       1. The functions performed by the Commission
                                                                         State by a representative approved by that State.
      may be referred to in the preferential agreements or
      the financing agreements as those of chief author-
      izing officer.
                                                                         2. While operations are in progress the Com-
                                                                         mission's representative shall verify, on the basis of
      2. The Commission, in close cooperation with the                   documents and on the spot, that the work or services
      recipient, shall ensure that participants in tendering             comply with their description in the financing
      procedures can compete on an equal footing, that                   agreements, contracts or estimates.
      there is no discrimination and that the tender
      selected is economically the most advantageous. In
      particular, it shall approve the terms of the invitation           Article 111
      to tender before it is issued, be apprised of the results
      of the examination of the tenders, and approve the
      proposal for the award of the contract.
                                                                          1. For payments in a currency other than that of
                                                                         the recipient State, the Commission shall make
      Article 110                                                        payment direct for services provided in connection
                                                                         with projects financed with grant aid.
      1. In the case of preferential agreements in
      particular, the recipient may appoint a national
      authorizing officer to represent the national author-              2. For payments in the currency of the recipient
      ities in all operations relating to projects financed by           State, accounts denominated in ecus may be opened
      the Community which are the subject of an                          with a financial institution in the recipient State in
      agreement between the recipient State and the                      the name of the Commission or of the recipient.
      Community.
                                                                         In the case of preferential agreements, the tasks
      2. The recipient shall submit invitations to tender                referred to in paragraphs 5 and 6 may be entrusted to
      to the Commission for agreement before issuing                     a financial institution, referred to as the paying
      them. On the basis of the decisions thus endorsed                  agent.
      and in close cooperation with the Commission, the
      recipient shall issue invitations to tender, receive
      tenders, preside over the examination of tenders and               3. The accounts referred to in paragraph 2 shall be
      establish the results of the tendering procedure.                  replenished to meet actual cash requirements.
                                                                         Transfers shall be made in ecus or, exceptionally, in
      3. It shall transmit to the Commission for agree-                  the currency of a Member State and converted into
      ment the results of the examination of the tendering               the currency of the recipient State as payments fall
      procedure and a proposal for the award of the                      due, at the exchange rate ruling on the day of
      contract. It shall sign contracts, additions to                    payment.
      contracts, and estimates and shall notify the
      Commission thereof. For contracts, additions to
      contracts, and estimates, the Commission, where                    4. Interest on the deposits in the accounts referred
      appropriate, shall enter into individual commit-                   to in paragraph 2 shall be used exclusively for the
      ments in accordance with the procedures laid down                  projects concerned, unless agreed otherwise when
      in Articles 37 to 40. Individual commitments shall                 the functions of paying agent are being exercised by a
      count towards the commitments under the financing                  public financial institution.
      agreements provided for in Article 107(2).
      4. Where appropriate, the recipient shall validate                 The paying agent shall not be remunerated for his
      and authorize any expenditure which is the subject                 services.
      of an agreement between that State and the
      Community against appropriations committed by
      the Commission. It shall remain financially liable to              5. Within the limits of the funds available, the
      the Commission until the Commission clears the                     paying agent, after obtaining the approval of the
      operations for the execution of which the recipient is             Commission's representative, shall make the pay-
      responsible.                                                       ments authorized after verifying that the supporting
                                                                         documents provided are substantively accurate and
                                                                         in order.
      Article 111
      1. For the purposes of applying the preferential                   6. At regular intervals, and at least once a quarter,
      agreement or convention between the Community                      the paying agent shall send the Commission a
 ---pagebreak--- No C 115/24                            Official Journal of the European Communities                                     8. 5. 89
     statement of actual expenditure and revenue,                           European Communities       and the official journal
     together with supporting documents.                                    of the recipient State;
     7. Payments made and revenue received in the                      (b) eliminate any discriminatory practice or tech-
     currency of the recipient State shall be subject to a                  nical specification liable to hamper participation
     clearance procedure before they are finally booked                     on equal terms by all natural or legal persons of
     to the budget appropriations. Clearance shall consist                  the Member States and of the recipient State.
     of an examination by the Commission to establish
     that validation, authorization and payment and the
     collection of revenue have been properly effected, in             Article 117
     accordance with this Regulation.
                                                                       In urgent cases or where the nature, small scale or
                                                                       particular characteristics of certain works or
                                                                       supplies so warrant, the Commission or the recipient
                        SECTION III
                                                                       may, by agreement with the Commission stating the
                AWARD OF CONTRACTS                                     reasons therefor, exceptionally authorize:
     Article 113                                                       — the award of contracts after open invitations to
                                                                            tender, confined to a specific geographical area,
     Notwithstanding Title IV of this Financial Regu-
     lation, the award of contracts financed by the
                                                                       — the award of contracts after restricted invitations
     Community for recipients of external aid shall be
                                                                           to tender,
     governed by the following provisions.
     Article 114                                                       — the conclusion of contracts by private treaty,
     The procedure to be followed for the award of                     — the performance of contracts through public
     works, supply or service contracts, or the conclusion                  works departments.
     of technical cooperation contracts, shall be specified
     in the financing agreement, subject to the following
                                                                       Article 118
     principles.
     Article 115                                                       The Commission and the recipient shall ensure that
                                                                       Articles 116, 117 and 119 are observed for each
     1. Participation in tendering procedures shall be                 operation and that the tender selected is economi-
     open on equal terms to all natural and legal persons              cally the most advantageous, with due regard
     coming within the scope of application of the                     notably to the price, utilization costs, technical
     Treaties and to all natural and legal persons in the              value, the qualifications of and the guarantees
     recipient State.                                                  offered by the tenderers, the nature and conditions of
                                                                       execution of the works or supplies.
     The specifications shall therefore require tenderers
     to state their nationality and to present the                     The Commission and the recipient shall ensure that
     supporting evidence normally acceptable under their               all the selection criteria are specified in the invitation
     own law.                                                          to tender.
     2. By way of exception, it may be decided, on the                 The result of invitations to tender shall be published
     basis of the specific conditions laid down in the basic           at the earliest possible date in the Official Journal of
     instruments governing cooperation, to allow                       the European Communities.
     nationals of third countries to compete for contracts
     financed by the Community.
                                                                       Article 119
     Article 116
                                                                       1. Contracts for services and technical cooperation
     The Commission and the recipient shall take the                   shall be awarded after restricted invitations to
     necessary implementing measures to ensure that                    tender.
     participants in tendering procedures and other
     procedures for the award of contracts financed by                 2. However, some contracts may be awarded by
     the Community can compete on an equal footing.                    private treaty, particularly in the following cases:
     To this end, without prejudice to Articles 117 and
     119, care shall be taken in particular to:                        — short projects or projects of minor importance,
     (a) ensure advance publication in reasonable time of              — projects being carried out by non-profit insti-
         invitations to tender in the Official Journal of the              tutions or associations,
 ---pagebreak--- 8. 5. 89                                Official Journal of the European Communities                            No C 115/25
      — extensions to projects already under way,                       payments made not later than 31 December under
                                                                        the imprest accounts may still be booked to the
      — where the invitation to tender has been unsuc-                  accounts for that year up to 15 February of the
          cessful.                                                      following year.
      3. Contracts for services and technical cooperation
      shall, as a rule, be prepared, negotiated and                     Article 124
      concluded by the Commission.
                                                                        In accordance with Article 128 the Commission shall
      4. In the case of preferential agreements, or in cases            adopt implementing rules relating, in particular, to:
      where express provision is made therefor in the
      financing agreements, the tasks referred to in
                                                                        — the award of contracts,
      paragraph 3 shall be delegated to the recipient, in
       agreement and in collaboration with the Com-
      mission's representative.                                         — the keeping of inventories,
      Article 120                                                       — the system of accounts,
      Only service contracts awarded in the interests of the
      Commission shall be governed by the provisions of                 — imprest accounts.'
      Articles 57 to 65.
                                                                   113. Title X is renumbered Title XI.
                        SECTION IV
                AUDITING OF ACCOUNTS                               114. Article 103 is renumbered Article 125.
      Article 121
                                                                        (a) Paragraph 2 is replaced by the following:
       1. Each agreement shall make express provision
      for the Court's power of audit.                                       '2. The appropriations for the Office, the total
                                                                            amount of which shall be entered under a special
      2. Should the Court of Auditors wish to carry out                     budget heading within the section for expendi-
      audits on the territory of recipient States, or States in             ture common to all the institutions, shall be set
      which recipients are located, it shall do so by                       out in detail in an annex to that section. The
      agreement with the relevant authorities of the State                  appropriations shown under this specific budget
      concerned. Such audits shall be limited to the                        heading may be transferred in accordance with
      inspection agreements implemented pursuant to the                     the conditions set out in Article 26.
      provisions governing Community aid and shall not
      apply in respect of the execution arrangements
      which are the responsibility of the national author-                  The annex shall take the form of a statement of
      izing officer.'                                                       revenue and expenditure, subdivided in the same
                                                                            way as the sections of the budget.
112.  The following new Title X is inserted:
                                                                            The appropriations entered in that annex shall
                                                                            cover all the financial requirements of the Office
                          'TITLE X                                          in the performance of its duties in the service of
                                                                            the Community's institutions.
    SPECIAL PROVISIONS APPLICABLE T O THE
MANAGEMENT OF APPROPRIATIONS RELATING                                       3. Where necessary, the estimates may be
T O STAFF SERVING OUTSIDE THE COMMUNITY                                     adjusted during the financial year by the Manage-
         AND T O THEIR ADMINISTRATION                                       ment Committee of the Office, which shall take
                                                                            decisions on the transfers required within the
      Article 122
                                                                            annex as a result of such adjustments. It shall
      The provision of Titles I to VI and XII shall apply to                inform the budgetary authority three weeks
      activities in this field, in so far as they are not                   before effecting transfers from one chapter to
      incompatible with the provisions of this Title.                       another.'
      Article 123                                                       (b) Paragraph 3 is renumbered paragraph 4. The
                                                                            third subparagraph is deleted.
      The expenditure of a financial year shall be booked
      to the accounts for that year on the basis of the
      expenditure for which notification of authorization               (c) Paragraph 4 is deleted.
      reaches the Financial Controller not later than 31
      December and in respect of which payment is made                  (d) In the second subparagraph of paragraph 6,
      before 15 January. However, expenditure involving                     'Article 22' is replaced by 'Article 27'.
 ---pagebreak--- No C 115/26                             Official Journal of the European Communities                                     8. 5. 89
      (e) In the second subparagraph of paragraph 8, the           120.  Article 108 is deleted.
          sentence 'such payments may not exceed the total
          amount of the appropriations entered for this            121.  The following new Article 130 is inserted:
          purpose in the Commission budget' is replaced by               'Article 130
          'such payments may not exceed the total amount
          of the appropriations entered for this purpose in              Until the entry into force of the implementing rules
          the section for expenditure common to all the                  provided for in Article 128, the limit values to be
          institutions, which contains all the appropri-                 specified for the purposes of Articles 59, 61, 63, 64
          ations for the Publications Office'.                           and 98 shall be as follows:
      (f) In paragraph 9, 'Articles 73 and 76' is replaced by            — Article 59, first paragraph, subparagraph (a): the
          'Articles 79 and 82'.                                              limit below which contracts may be made by
                                                                             private treaty shall be 15 000 ecus,
115.  The following new article 126 is inserted:                         — Article 6 1 : the limit above which the powers of
                                                                             the Advisory Committee on Procurements and
      'Article 126                                                           Contracts take effect shall be 50 000 ecus,
                                                                         — third paragraph of Article 63: the threshold for
     The financial rules of Community bodies with legal
                                                                            compulsory security shall be 350 000 ecus,
     personality which receive subsidies from the general
     budget shall take over as far as possible the                       — Article 64: the limits below which contracts may
     provisions of this Regulation and diverge from them                    be made against invoice or bill of costs shall be
     only when their specific operational requirements                      750 and 2 000 ecus respectively for expenditure
     warrant.'                                                              away from the provisional places of work,
                                                                         — Article 98: the limit below which contracts may
116. Article 104 is renumbered Article 127.                                 be made by private treaty shall be 75 000 ecus for
                                                                            scientific and technical equipment and for works
117. Article 105 is deleted.                                                contracts,
                                                                        — the limits for the powers of the Advisory
118. Article 106 is renumbered Article 128. It is replaced                  Committee on Procurements and Contracts shall
     by the following:                                                      be:
     'Article 128                                                           — 350 000 ecus for scientific and technical
                                                                                contracts and contracts relating to the pur-
     After consulting the other institutions, whose                             chase of buildings,
     opinions must be given within two months, the                          — 75 000 ecus for equipment and supply con-
     Commission shall adopt rules for implementing this                         tracts not of a scientific or technical nature,
     Financial Regulation. It shall inform all the Insti-
     tutions of these rules.'                                               — 25 000 ecus for equipment and supply con-
                                                                                tracts not of a scientific or technical nature, to
                                                                                which the provisions of Article 59 (c), (d) and
119. Article 107 is renumbered Article 129. It is replaced
                                                                                 (e) apply.'
     by the following:
     'Article 129                                                                            Article 2
                                                                  This Regulation shall enter into force on ...
     'Amendments to this Financial Regulation, pro-
     posed by the Commission, shall be adopted by the             This Regulation shall be binding in its entirety and directly
     Council after conciliation with Parliament.'                 applicable in all Member States.