Source: https://southafricavision.com/report-financial-rules-applicable-to-the-general-budget-of-the-union-a8-00492015-committee-on-budgets/
Timestamp: 2019-04-23 00:43:48+00:00

Document:
(9a) Union public procurement should serve to ensure that Union funds are used in an effective, transparent, and appropriate way and, in that regard, electronic procurement should contribute to better use of public funds and enhance access to public contracts for all economic operators.
(11a) It is appropriate to identify and treat distinctly different cases usually referred to as situations of “conflict of interest”. The notion of “conflict of interest” should be solely used for cases where an official or agent of a Union institution is in such a situation. If an economic operator attempts to unduly influence a procedure or obtain confidential information, this is to be treated as “grave professional misconduct”. Finally, economic operators may be in a situation where they cannot implement a contract because of conflicting professional interests, for instance a company should not evaluate a project in which it has participated or an auditor should not be in a position to audit accounts it has previously certified.
(22a) For framework contracts with reopening of competition, it is appropriate to waive the obligation to provide the characteristics and relative advantages of the successful tender to an unsuccessful contractor, on the basis that the receipt of such information by parties to the same framework contract each time a competition is reopened might prejudice fair competition between them.
The aim of the recital is to clarify the reasoning behind the provisions of Art. 113(3).
(29a) This Regulation respects the fundamental rights and observes the principles enshrined in the Charter of Fundamental Rights of the European Union, in particular Articles 47 to 50 thereof, from which it can be derived that the legality and proportionality of offences and penalties must be ensured, and that everyone has the right to an effective remedy and a fair trial, the right of defence and the right not to be tried or punished twice in a proceeding for the same offence.
8. The Commission shall be empowered to adopt delegated acts in accordance with Article 210 concerning detailed rules on the methods of implementation of the budget, including direct management, the exercise of powers delegated to executive agencies, and specific provisions for indirect management with international organisations, with bodies referred to in Articles 208 and 209, with public law bodies or bodies governed by private law with a public service mission, with bodies governed by the private law of a Member State and entrusted with the implementation of a public-private partnership and with persons entrusted with the implementation of specific actions in the CFSP.
3. The entities and persons entrusted pursuant to point (c) of Article 58(1) shall prevent, detect and correct irregularities and fraud when executing tasks relating to the implementation of the budget. To this end, they shall carry out, in accordance with the principle of proportionality, ex ante and ex post controls including, where appropriate, on-the-spot checks on representative and/or risk-based samples of transactions, to ensure that the actions financed from the budget are effectively carried out and implemented correctly. They shall also recover funds unduly paid and bring legal proceedings where necessary in this regard.
7. Paragraph 5 and 6 shall not apply to the contribution of the Union to entities which are subject to a separate discharge procedure under Article 208.
The amendment implements the Joint Statement made by the European Parliament, the Council and the Commission on the separate discharge for Joint Undertakings under Article 209 of the Financial Regulation (29.5.2014), as confirmed by all stakeholders at the Round Table of 13 November 2014 on audit and discharge for JUs.
The activity report shall indicate the results of the operations by reference to the objectives set, the risks associated with those operations, the use made of the resources provided and the efficiency and effectiveness of internal control systems, including an overall assessment of the costs and benefits of controls.
The AM implements the recommendations made by the Court of Auditors in par. 10.63 and 10.65 of its annual report for the financial year 2013.
No later than 15 June each year, the Commission shall send to the European Parliament and the Council a summary of the annual activity reports for the preceding year. The annual activity report of each authorising officer by delegation shall also be made available to the European Parliament and the Council.
1. ‘Procurement’ means the acquisition by means of a contract of buildings, works, supplies or services by one or more contracting authorities from economic operators chosen by those contracting authorities.
1. ‘Procurement’ means the acquisition by means of a contract of works, supplies or services, and the acquisition or rental of land, existing buildings or other immovable property, by one or more contracting authorities from economic operators chosen by those contracting authorities.
Alignment with Art. 10(a) of the procurement directive 2014/24/EU.
7a. ‘Administrative decision’ means a decision of an administrative authority having final and binding effect in accordance with the law of the country in which the economic operator is established, with that of the Member State of the contracting authority, or with the applicable Union law.
Alignment with Art. 57(2) of the Procurement Directive, as recommended by the Court of Auditors.
2. All contracts shall be put out to competition on the broadest possible basis, except when use is made of the negotiated procedure referred to in point (d) of Article 104(1).
The estimated value of a contract may not be determined with a view to circumventing the applicable rules, nor may a contract be split up for that purpose.
The contracting authority shall give reasons when it decides not to divide a contract into lots.
Contracting authorities shall not use framework contracts improperly or in such a way that their purpose or effect is to prevent, restrict or distort competition.
2a. Contracting authorities shall not use framework contracts improperly or in such a way that their purpose or effect is to prevent, restrict or distort competition.
Art. 169 of the draft delegated act (RAP), as presented by the Commission during the first round of expert group meetings, contains some essential provisions which should consequently be integrated into the FR itself.
2b. In accordance with the principle of sustainability, contracting authorities shall take suitable measures to ensure that, when executing contracts, economic operators comply with the environmental, social and labour law obligations established by Union or national legislation, collective agreements or the international environmental, social and labour conventions listed in Annex X to Directive 2014/24/EU of the European Parliament and of the Council1a.
1a Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ L 94, 28.3.2014, p. 65).
2. Procedures with a value below the thresholds set out in Article 118 or Article 190 shall be advertised by appropriate means.
2. Procedures with a value below the thresholds set out in Article 118(1) or Article 190 shall be advertised by appropriate means.
5. The Commission shall be empowered to adopt delegated acts in accordance with Article 210 concerning detailed rules on the types of procurement procedures, dynamic purchasing system, joint procurement, low value contracts and payment against invoices.
5. The Commission shall be empowered to adopt delegated acts in accordance with Article 210 concerning detailed rules on the types of procurement procedures for the award of contracts with reference to their value in comparison to the thresholds referred to in Article 118(1), on a dynamic purchasing system, and on joint procurement.
Clarification. The separate mention of the dynamic purchasing system is maintained because it is not a procurement procedure.
2. In the procurement documents, the contracting authority shall identify the subject matter of the procurement by providing a description of its needs and the characteristics required of the works, supplies or services to be bought and specify the applicable criteria. It shall also indicate which elements define the minimum requirements to be met by all tenders.
2. In the procurement documents, the contracting authority shall identify the subject matter of the procurement by providing a description of its needs and the characteristics required of the works, supplies or services to be bought and specify the applicable exclusion, selection and award criteria. It shall also indicate which elements define the minimum requirements to be met by all tenders.
One of the main principles and aims of the Financial Regulation is the protection of the Union financial interests. The EU has expressed its intentions several times to fight against tax fraud and tax evasion. Statistical data show that the size of the shadow economy in the EU is nearly one fifth of GDP. Also, tens of billions of euro remain offshore, often unreported and untaxed. Stepping up the fight against tax fraud and evasion is not only an issue of revenue, but also of fairness. The protection of the Union financial interests can be further reinforced by including tax evasion as an exclusion ground in the public procurement procedures of the Union institutions.
1a. For the purposes of this Title, “grave professional misconduct” shall mean violation of laws or regulations or of ethical standards of the profession to which the economic operator belongs, as well as any wrongful conduct which has an impact on its professional credibility where they denote a wrongful intent or gross negligence.
(e) attempting to obtain confidential information on the procedure.
Art. 140(1) of the draft delegated act (RAP), as presented by the Commission during the first round of expert group meeting, contains some essential provisions which should consequently be integrated into the FR itself. Additional paragraph to be inserted before the new paragraph contained in AM 8 of the draft report.
(b) administrative decisions which may include disciplinary measures taken by the competent supervisory body responsible for the verification of the application of standards of professional ethics, decisions of the ECB, the EIB, international organisations, or the Commission relating to the infringement of the Union’s competition rules or decisions of a national competent authority.
Art. 140(1) of the draft delegated act (RAP), as presented by the Commission during the first round of expert group meetings, contains some essential provisions which should consequently be integrated into the FR itself to clarify that the provision should apply to evidence for all exclusion grounds.
3. Except for cases provided for in point (d) of paragraph 1, the contracting authority may decide not to exclude the economic operator concerned where it has taken remedial measures to demonstrate its reliability.
3. Except for cases provided for in point (d) of paragraph 1, the panel referred to in Article 108 may decide not to exclude the economic operator concerned where it has taken remedial measures to demonstrate its reliability.
The contracting authority shall report annually to the European Parliament and the Council, in accordance with the provisions of Title IX, on any decisions it has taken pursuant to the second subparagraph.
7. The contracting authority may also verify whether a subcontractor is not in a situation of exclusion listed in paragraph 1 of this Article or is in one of the cases referred to in paragraph 3 of this Article.
7. The contracting authority may also apply paragraphs 1 to 3 to a subcontractor of the economic operator, and shall require that a candidate or tenderer replaces a subcontractor or an entity on whose capacity it intends to rely, which is in an exclusion situation.
Update of AM 9 – integration of an additional provision from Art.141(5) of the draft delegated act (RAP).
1a. Before taking a decision to reject an economic operator from a given procedure, the contracting authority shall give the economic operator the opportunity to submit its observations, unless the rejection has been justified, in accordance with point (a) of paragraph 1, by an exclusion decision taken with regard to the economic operator, following the examination of its observations.
As recommended by the Court of Auditors.
The amendment takes up a recommendation by Transparency International.
As recommended by Transparency International.
(c) by another institution, body or a European office in case of presumed grave professional misconduct, irregularity, fraud or serious breach of contract.
(c) by another institution, body or a European office in case of presumed grave professional misconduct, irregularity, fraud, corruption or serious breach of contract.
The information referred to in points (a), (b) and (c) of the first subparagraph shall be transmitted without delay through the accounting system of the Commission to the authorising officers of the Commission and of its executive agencies, all other institutions, bodies and European offices in order to allow them to take preventive temporary and conservatory measures in the implementation of the budget. Those measures shall not go beyond what is foreseen in the terms and conditions of the procurement documents.
The information referred to in points (a), (b) and (c) of the first subparagraph shall be transmitted without delay through the accounting system of the Commission to the authorising officers of the Commission and of its executive agencies, all other institutions, bodies and European offices in order to allow them to take preventive measures in the implementation of the budget. Those measures shall not go beyond what is foreseen in the terms and conditions of the procurement documents.
The amendment takes up some recommendations by Transparency International.
Art. 145 of the draft delegated act (RAP), as presented by the Commission during the first round of expert group meeting, contains some essential provisions which should consequently be integrated into the FR itself.
In exceptional cases, including where natural persons are concerned or where it is necessary to preserve the confidentiality of the investigation or of a national judicial proceeding, the panel may decide not to publish the exclusion or financial penalty as set out in point (h) of the first subparagraph of this paragraph with due consideration to the right to privacy and with due observance of the rights provided for in Regulation (EC) No 45/2001.
In exceptional cases, including where natural persons are concerned or where it is necessary to preserve the confidentiality of the investigation or of a national judicial proceeding, the panel may decide not to publish the exclusion or financial penalty as set out in point (h) of the first subparagraph of this paragraph with due consideration to the right to privacy and with due observance of the rights provided for in Regulation (EC) No 45/2001. Notwithstanding the foregoing, the Commission shall regularly inform the European Parliament and the Council of those decisions, using appropriate measures to ensure confidentiality.
The contracting authority shall adopt the measures necessary to implement the decision of the panel.
In cases where a publication of the panel’s decision is not possible, the Commission should at least inform the Parliament and the Council about it. Furthermore, a new subparagraph is inserted to clarify the link between the decision taken by the panel and its implementation by authorising officers.
For the cases referred to in Art. 106(1)(d) – corruption, terrorist financing, human trafficking, etc. – the panel should have the possibility to permanently exclude the economic operator.
(b) the date of the final judgment of a national jurisdiction or the final administrative decision of a public authority or an international organisation, in the cases referred to in points (b), (c) and (d) of Article 106(1) of this Regulation.
The limitation period shall be interrupted by any act of the Commission or any other entity involved in the implementation of the Union budget which is notified to the economic operator and which relates to investigations or judicial proceedings. A new limitation period shall begin to run on the day following the interruption.
For the purposes of point (f) of Article 106(1) of this Regulation, the limitation period to exclude or impose financial penalties on an economic operator provided for in Article 3 of Council Regulation (EC, Euratom) No 2988/95 shall apply.
Art. 144(2) of the draft delegated act (RAP), as presented by the Commission during the first round of expert group meetings, contains essential provisions and should therefore be integrated into the FR itself.
4b. In order to determine the exclusion and its duration or financial penalties in compliance with the principle of proportionality, the panel shall take into account in particular the seriousness of the situation, including the impact on the Union’s financial interests and image, the time which has elapsed since the wrongdoing, its duration and its recurrence, the intention or degree of negligence and the measures taken to remedy the situation or any other mitigating circumstances.
Art. 144(1) of the draft delegated act (RAP), as presented by the Commission during the first round of expert group meetings, contains essential provisions and should therefore be integrated into the FR itself.
Where the authorities of the Member States fail to comply with these requirements, they shall be held liable for any damage caused to the Union’s financial interests which is attributed to such failure.
Introduction of an additional sanction mechanism for Member States who fail to cooperate with the Commission on the early detection and exclusion system.
Where the budget is implemented in indirect management with third countries, the Commission may take an exclusion decision or impose a financial penalty in accordance with the procedure referred to in paragraph 3, following the failure of the third country entrusted pursuant to point (c) of Article 58(1) to do so. This shall not affect the responsibility, under Article 60(3), of the third country to prevent, detect and correct irregularities and fraud.
Alignment with EDF practice to ensure that the Commission can take exclusion decisions if the delegatee fails to do so.
8. The Commission shall be empowered to adopt delegated acts in accordance with Article 210 concerning detailed rules on the Union’s system for the protection of the Union’s financial interests, including its standardised procedures and the details subject to publication, the time limits to exclude, the organisation of the panel, the duration of exclusion and financial penalties.
8. The Commission shall be empowered to adopt delegated acts in accordance with Article 210 concerning detailed rules on the Union’s system for the protection of the Union’s financial interests, including its standardised procedures and the details subject to publication, the time limits to exclude, the organisation of the panel, the criteria for membership of the panel, the selection process for members of the panel, the prevention and management of conflicts of interest of members of the panel, the duration of exclusion and financial penalties.
(c) the candidate or tenderer meets the selection criteria specified in the procurement documents.
(c) the candidate or tenderer meets the selection criteria specified in the procurement documents and is not subject to conflicting interests which may negatively affect the performance of the contract.
2. The contracting authority shall base the award of contracts on the most economically advantageous tender.
2. The contracting authority shall base the award of contracts on the most economically advantageous tender in accordance with Article 67 of Directive 2014/24/EU.
2a. The contracting authority may decide not to award a contract to the tenderer submitting the most economically advantageous tender where it has established that the tender does not comply with the applicable environmental, social and labour law obligations established by Union or national legislation, collective agreements or the international environmental, social and labour conventions listed in Annex X to Directive 2014/24/EU.
3. If deemed appropriate and proportionate, the contracting authority may require tenderers to submit a guarantee in advance to make sure that the tenders submitted will not be withdrawn.
3. If deemed appropriate and proportionate, the contracting authority may require tenderers to submit a guarantee in advance to make sure that the tenders submitted will not be withdrawn. The required guarantee shall be proportionate to the estimated value of the contract and be set at a very low level in order to prevent discrimination against diverse economic operators.
1. While the procurement procedure is under way, all contacts between the contracting authority and candidates or tenderers shall satisfy conditions ensuring transparency and equal treatment. After the time limit for receipt of tenders, these contacts shall not lead to changes to the procurement documents or to substantial changes to the terms of the submitted tender, except where a procedure set out in Article 104(1) specifically allows for these possibilities.
1. While the procurement procedure is under way, all contacts between the contracting authority and candidates or tenderers shall satisfy conditions ensuring transparency, equal treatment and good administration as set out in Article 96. After the time limit for receipt of tenders, these contacts shall not lead to changes to the procurement documents or to substantial changes to the terms of the submitted tender, except where a procedure set out in Article 104(1) specifically allows for these possibilities.
2. The contracting authority may modify a contract or framework contract substantially without a procurement procedure only in cases provided for in the delegated acts adopted pursuant to this Regulation and provided the substantial modification does not alter the subject matter of the contract or framework contract.
2. The contracting authority may modify a contract or framework contract without a procurement procedure only in cases provided for in paragraph 2a or in the delegated acts adopted pursuant to this Regulation and provided the modification does not alter the subject matter or overall nature of the contract or framework contract.
Update of AM 20 with added reference to paragraph 2a, following the insertion of the latter. End of sentence aligned with Art. 72(1)(c) of Directive 2014/24/EU.
(ii) 10 % of the initial contract value for service and supply contracts and concession contracts (works or services) and 15% of the initial contract value for works contracts.
Points (a) and (c) of the first subparagraph may also apply to framework contracts.
The initial contract value shall not take price revisions into account.
The net cumulative value of several successive modifications under point (c) of the first subparagraph shall not exceed any threshold laid down therein.
The contracting authority shall apply the ex-post publicity measures provided for in Article 103(1).
On recommendation of the Court of Auditors, Art. 162 of the draft delegated act (RAP), as presented by the Commission during the first round of expert group meetings, is moved up to FR level because it contains essential provisions.
(c) ensure full performance of the contract after payment of the balance.
(c) ensure full performance of the contract during the contract liability period.
Alignment with international customary practice / correction of a technical error: in some cases the payment of the balance takes place at the end of the contract.
2. Subject to exceptions and conditions to be specified in the delegated acts adopted pursuant to this Regulation, in the case of contracts above the thresholds set out in paragraph 1, the contracting authority shall not sign the contract or framework contract with the successful tenderer until a standstill period has elapsed.
2. Subject to exceptions and conditions to be specified in the delegated acts adopted pursuant to this Regulation, in the case of contracts above the thresholds set out in paragraph 1, the contracting authority shall not sign the contract or framework contract with the successful tenderer until a standstill period has elapsed. Contracts signed before the end of the standstill period shall be void.
5. Where financial instruments are implemented under shared management with Member States, the provisions applying to those instruments, including rules for contributions to financial instruments managed directly or indirectly in accordance with this Title, shall be laid down in the Regulations referred to in Article 175.
A unified and full reporting on all financial instruments, whether implemented under direct, shared or indirect management, is essential for enabling the budgetary authority to properly fulfil its scrutiny function.
5a. No financial support shall be granted to dedicated investment vehicles, to financial intermediaries and to final recipients which are in one of the situations referred to in points (a), (b) and (d) of Article 106(1) and points (b) and (c) of Article 107(1).
5a. No financial support shall be granted to dedicated investment vehicles, to financial intermediaries and to final recipients which are in one of the situations referred to in points (a), (b), (c) and (d) of Article 106(1) and points (b) and (c) of Article 107(1).
Social security fraud, tax fraud and conflicts of interest should also constitute exclusion criteria for financial instruments.
1. The Court of Auditors shall transmit to the Commission and the institutions concerned, by 30 June, any observations which are, in its opinion, such that they should appear in the annual report. Those observations shall remain confidential and shall be subject to an adversarial procedure. Each institution shall address its reply to the Court of Auditors by 15 October. The replies of institutions other than the Commission shall be sent to the Commission at the same time.
1. The Court of Auditors shall transmit to the institution or the body concerned any observations which are, in its opinion, such that they should appear in a special report. Those observations shall remain confidential and shall be subject to an adversarial procedure.
“1. The Court of Auditors shall transmit to the institution or the body concerned any observations which are, in its opinion, such that they should appear in a special report. Those observations shall remain confidential and shall be subject to an adversarial procedure.
The institution or the body concerned shall inform the Court of Auditors, within two and a half months of transmission of those observations, of any replies it wishes to make in relation to those observations.
The institution or the body concerned shall inform the Court of Auditors, in general within five weeks of transmission of those observations, of any replies it wishes to make in relation to those observations.
The replies of the institution or the body concerned shall directly and exclusively address those observations.
The Court of Auditors shall adopt the definitive version of the special report the month following receipt of the replies made by the institution or body concerned.
The Court of Auditors shall ensure that special reports are drawn up and adopted within an appropriate period of time, which, in general, shall not exceed 12 months.
The special reports, together with the replies of the institutions or bodies concerned, shall be transmitted without delay to the European Parliament and the Council, each of which shall decide, where appropriate in conjunction with the Commission, what action is to be taken in response.
The Court of Auditors shall take all necessary steps to ensure that the replies to its observations from each institution or body concerned are published together with the special report.
1. The European Parliament, upon a recommendation from the Council acting by qualified majority, shall, before 15 May of year n + 2, give a discharge to the Commission in respect of the implementation of the budget for year n.
“1. The European Parliament, upon a recommendation from the Council acting by qualified majority, shall, before 15 May of year n + 2, give a discharge in respect of the implementation of the budget for year n to the Union institutions and the bodies referred to in Articles 208 and 209.
2. If the date provided for in paragraph 1 cannot be met, the European Parliament or the Council shall inform the institutions and bodies concerned of the reasons for the postponement.
3. The Commission shall submit to the European Parliament, at the latter’s request, any information required for the smooth application of the discharge procedure for the financial year concerned, in accordance with Article 319 TFEU.
1. In accordance with Article 319 TFEU and Article 106a of the Euratom Treaty, the Commission and the other institutions shall take all appropriate steps to act on the observations accompanying the European Parliament’s discharge decision and on the comments accompanying the recommendation for discharge adopted by the Council.
“1. In accordance with Article 319 TFEU and Article 106a of the Euratom Treaty, the Commission and the other institutions and bodies referred to in Articles 208 and 209 shall take all appropriate steps to act on the observations accompanying the European Parliament’s discharge decision and on the comments accompanying the recommendation for discharge adopted by the Council.
2. At the request of the European Parliament or the Council, the institutions shall report on the measures taken in the light of those observations and comments, and, in particular, on the instructions they have given to any of their departments which are responsible for the implementation of the budget. The Member States shall cooperate with the Commission by informing it of the measures they have taken to act on those observations so that the Commission may take them into account when drawing up its own report. The reports from the institutions shall also be transmitted to the Court of Auditors.
1. The Commission shall be empowered to adopt delegated acts in accordance with Article 210 concerning detailed rules on external action procurement.
1. The Commission shall be empowered to adopt delegated acts in accordance with Article 210 concerning detailed rules on external action procurement. These rules shall include specific provisions on procurement related to civilian missions under the Common Security and Defence Policy (CSDP) in order to guarantee the rapid and flexible conduct of operations, establishing, in particular, adapted fast-track procedures to be applied to all civilian CSDP missions.
CSDP missions by definition operate in crisis or post-crisis environments and within a limited period of time. General EU procurement rules are not adapted to these situations and their application is the source of significant delays and inefficiencies. Case-by-case application of existing flexibility provisions does not address the issue sufficiently. Specific rules should therefore be adopted, by means of a delegated act, taking into due account the specificities of civilian crisis management.
The bodies having legal personality set up by a basic act and entrusted with the implementation of a public-private partnership shall adopt their financial rules.
“1. The bodies having legal personality set up by a basic act and entrusted with the implementation of a public-private partnership shall adopt their financial rules.
Those rules shall include a set of principles necessary to ensure sound financial management of Union funds.
The Commission shall be empowered to adopt a model financial regulation by means of a delegated act in accordance with Article 210 which shall lay down the principles necessary to ensure sound financial management of Union funds and which shall be based on Article 60.
The financial rules of those bodies shall not depart from the model financial regulation except where their specific needs so require and with the Commission’s prior consent.
2. Discharge for the implementation of the budgets of the bodies referred to in paragraph 1, shall be given by the European Parliament on the recommendation of the Council. The bodies referred to in paragraph 1 shall fully cooperate with the institutions involved in the discharge procedure and provide, as appropriate, any additional necessary information, including through attendance at meetings of the relevant bodies.
3. The Commission’s internal auditor shall exercise the same powers over the bodies referred to in paragraph 1 as those exercised in respect of the Commission.
OJ C 52, 12.2.2015, p. 1.
The Commission has presented to the European Parliament and the Council a proposal aimed at aligning the financial regulation with the provisions of new directives on public procurement and on award of concession contracts. This proposal includes a modification of Article 190 on “external action procurement”, which is of relevance for the Committee on Foreign Affairs.
Indeed, the obligation to apply general EU procurement rules to the crisis management measures under the Common Foreign and Security Policy, and in particular the civilian missions under the Common Security and Defence policy (CSDP), is the source of significant delays in procuring essential equipment and services with a considerable negative effect on the missions’ functioning.
As a rule, CSDP missions have to operate in a crisis environment and within a limited period of time. They are launched by a unanimous Council Decision, recognising that an urgent response to a crisis is needed. Nevertheless, applying existing financial rules, designed for a functioning European internal market rather than for crisis situations in countries like Mali or South Sudan, often means that essential materials are delivered more than six months after a tender is launched.
The EU’s credibility on the international scene is at stake here, in moments when the Union takes on important commitments for peace and security, like in Georgia in 2008. It is often also the security of its personnel which is at stake, lacking essential equipment such as armoured vehicles. This dangerous inefficiency was denounced by the Court of Auditors in its 2012 special report on the EU support for Kosovo, which concluded that the procurement rules laid down in the financial regulation “are not designed for CSDP missions… where fast and flexible responses are sometimes necessary”.
The Committee on Foreign Affairs therefore believes that specific rules should be introduced for CSDP missions, which by definition operate in crisis or post-crisis environments. This is in line with the European Council conclusions of December 2013, which invited “the Commission, the High Representative and the Member States to ensure that the procedures and rules for civilian missions enable the Union to be more flexible and speed up the deployment of EU civilian missions”.
While the Committee supports any efforts to increase efficiency under the current rules, it takes the view that only a specific set of rules with more flexible procedures, moving away from the current case-by-case approach, can ensure a fast deployment in line with logistical needs and security requirements. Such rules would ensure adequate protection of the Union’s financial interests in the context of the pursuit of the EU’s key security objectives, responding better to the imperative of sound, effective and efficient financial management as a result.
Furthermore, other amendments of the financial regulation would be appropriate to increase the efficiency of CSDP missions, which the Parliament however cannot address within the context of this proposal. In particular, the Commission should consider amending Article 56 in order to allow the delegation of budget implementation powers to the Civilian Operation Commander in the same way that it has done for Heads of EU Delegations. Such a modification would enhance the speed and flexibility of the establishment and functioning of CSDP missions, allowing them to fulfil their mandate in a manner that is more efficient and better adapted to the crisis environments in which they operate.
(8a) Public procurement should serve to ensure that Union funds are used in an effective, transparent, and appropriate manner: that being the case, procurement procedures should be moved into cyberspace, as this would save a great deal of money compared with conventional public procurement procedures, as well as making such procedures more accessible for small and medium-sized enterprises.
(9a) It is appropriate to identify and treat distinctly different cases usually referred to as situations of “conflict of interest”. The notion of “conflict of interest” should be solely used for cases where an official or agent of an EU institution is in such situation. If an economic operator attempts to unduly influence a procedure or to obtain confidential information, this is to be treated as “grave professional misconduct”. Finally, economic operators may be in a situation where they cannot implement a contract because of a professional conflicting interest, for instance a company should not evaluate a project in which it has participated or an auditor should not be in a position to audit accounts it has previously certified.
(29a) This Regulation respects the fundamental rights and observes the principles recognised by the Charter of Fundamental Rights of the European Union, in particular Articles 47 to 50 thereof, from which it can be derived that the legality and proportionality of offences and penalties must be ensured, and that everyone has the right to an effective remedy and to a fair trial, the right of defence and the right not to be tried or punished twice in a proceeding for the same offence.
‘7. Paragraphs 5 and 6 shall not apply to the contribution of the Union to entities which are subject to a separate discharge procedure under Article 208.
It is appropriate to modify the Financial Regulation in order to take on board the Joint Statement made by the European Parliament, the Council, and the Commission on the separate discharge for Joint Undertakings under Article 209 of the Financial Regulation (29.5.2014).
5. Each year the institution shall forward a report to the European Parliament and the Council containing a summary of the number and type of internal audits carried out, the recommendations made and the action taken on those recommendations.
In accordance with article 319(2) last sentence of the Treaty on the Functioning of the European Union: “The Commission shall submit any necessary information to the European Parliament at the latter’s request”. The Financial Regulation should be phrased in a way that it would not hamper the implementation of this Treaty provision.
The exclusion shall be permanent in the case of illegal activities in the context of organised crime.
(b) the date of the final judgment of a national court or of the final administrative decision of a public authority or an international organisation in the cases referred to in points (b), (c) and (d) of Article 106(1).
For the purpose of point (f) of Article 106(1) of this Regulation, the limitation period for excluding and/or imposing financial penalties on an economic operator provided for in Article 3 of Council Regulation (EC, Euratom) No 2988/95* shall apply.
* Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests (OJ L 312, 23.12.1995, p. 1).
4a. In order to determine the exclusion and its duration and/or the financial penalties in compliance with the principle of proportionality, the panel shall take into account in particular the seriousness of the situation, including the impact on the Union’s financial interests and image, the time which has elapsed since the wrongdoing, its duration and its recurrence, the intention or degree of negligence and the measures taken to remedy the situation or any other mitigating circumstances.
Article 144.1 of the Commission Delegated Regulation (EU) No 1268/2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 is moved up as new Article 108.4a of the Regulation (EU, Euratom) No 966/2012 on the financial rules applicable to the general budget of the Union, on the circumstances to be taken into account when imposing exclusion and its duration and/or financial penalties.
Where the budget is implemented in indirect management with third countries, the Commission may take an exclusion decision or impose a financial penalty in accordance with the procedure referred to in paragraph 3, following the failure of the third country entrusted pursuant to point (c) of Article 58(1) to do so. This does not affect the responsibility, under Article 60(3), of the third country to prevent, detect and correct irregularities and fraud.
‘1. The European Parliament, upon a recommendation from the Council acting by qualified majority, shall, before 15 May of year n + 2, give a discharge in respect of the implementation of the budget for year n to the Union institutions and the bodies referred to in Articles 208 and 209.
‘1. In accordance with Article 319 TFEU and Article 106a of the Euratom Treaty, the Commission and the other institutions and bodies shall take all appropriate steps to act on the observations accompanying the European Parliament’s discharge decision and on the comments accompanying the recommendation for discharge adopted by the Council.
1. The bodies having legal personality set up by a basic act and entrusted with the implementation of a public-private partnership shall adopt their financial rules.
2. Discharge for the implementation of the budget of the bodies referred to in paragraph 1 shall be given by the European Parliament on the recommendation of the Council. Those bodies shall fully cooperate with the institutions involved in the discharge procedure and provide, as appropriate, any additional necessary information, including through attendance at meetings of the relevant bodies.
This justification applies also to Article 60 – paragraph 7.

References: Art. 113
 Art. 10
 Art. 57

Art. 169

Art. 140

Art. 140
 Art.141

Art. 145
 Art. 106

Art. 144

Art. 144
 Art. 72
 Art. 162