Article 1 
This Regulation lays down the rules for the establishment and implementation of the general budget of the European Communities, hereinafter ‘the budget’, and the presentation and auditing of the accounts. For the purposes of this Regulation, the Economic and Social Committee, the Committee of the Regions, the Ombudsman and the European Data-Protection Supervisor shall be treated as Community institutions.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 1 ):
1. This Regulation lays down the rules for the establishment and the implementation of the general budget of the European Union, (the ‘budget’) and the presentation and auditing of the accounts. 2. For the purposes of this Regulation: — the term ‘institution’ refers to the European Parliament, the European Council and the Council, the European Commission, the Court of Justice of the European Union and the European Court of Auditors, the European Economic and Social Committee, the Committee of the Regions, the European Ombudsman, the European Data Protection Supervisor and the European External Action Service (hereinafter the ‘EEAS’). — the European Central Bank shall not be considered an institution of the Union. 3. Any reference to ‘the Communities’ or to ‘the Union’ shall be understood as a reference to the European Union and / or the European Atomic Energy Community as the context may require.
Article 2 
Any provision concerning the implementation of the revenue and expenditure of the budget, contained in another legislative act, must comply with the budgetary principles set out in Title II.
Article 3 
The budget shall be established and implemented in compliance with the principles of unity, budgetary accuracy, annuality, equilibrium, unit of account, universality, specification, sound financial management which requires effective and efficient internal control, and transparency as set out in this Regulation.
Article 4 
1. The budget is the instrument which, for each financial year, forecasts and authorises all revenue and expenditure considered necessary for the European Community and the European Atomic Energy Community. 2. The revenue and expenditure of the Communities shall comprise: (a) the revenue and expenditure of the European Community, including administrative expenditure occasioned for the institutions by the provisions of the Treaty on European Union relating to the common foreign and security policy and police and judicial cooperation in criminal matters, and the operational expenditure occasioned by implementation of those provisions where this is charged to the budget; (b) the expenditure and revenue of the European Atomic Energy Community. 3. The budget shall record the guarantee for borrowing-and-lending operations entered into by the Communities and payments to the Guarantee Fund for external actions.
Article 5 
1. Subject to Article 74, no revenue shall be collected and no expenditure effected unless booked to a line in the budget. 2. No expenditure may be committed or authorised in excess of the authorised appropriations. 3. An appropriation may not be entered in the budget if it is not for an item of expenditure considered necessary. 4. Subject to Articles 5a, 18 and 74, interest yielded by the funds which are the property of the Communities shall be entered in the budget as miscellaneous revenue.
Article 5a 
1. Interest generated by pre-financing payments shall be assigned to the programme or the action concerned and deducted from the payment of the balance of the amounts due to the beneficiary. The Regulation laying down the rules for implementing this Regulation, hereinafter ‘the implementing rules’, shall specify the cases in which the authorising officer responsible shall, by way of exception, recover annually such interest. That interest shall be entered in the budget as miscellaneous revenue. 2. Interest shall not be due to the Communities in the following cases: (a) pre-financing which does not represent a significant amount, as determined in the implementing rules; (b) pre-financing paid under a procurement contract within the meaning of Article 88; (c) pre-financing paid to Member States; (d) pre-financing paid under the pre-accession aid; (e) advances paid to members of the institutions and to staff in accordance with the Staff Regulations of officials of the European Communities and the Conditions of employment of other servants of the European Communities, hereinafter ‘the Staff Regulations’; (f) pre-financing paid in the framework of joint management as referred to in point (c) of Article 53(1).
Article 6 
The appropriations entered in the budget shall be authorised for one financial year which shall run from 1 January to 31 December.
Article 7 
1. The budget shall contain differentiated appropriations, which shall consist of commitment appropriations and payment appropriations, and non-differentiated appropriations. 2. Commitment appropriations shall cover the total cost of the legal commitments entered into during the current financial year, subject to Articles 77(2) and 166(2). 3. Payment appropriations shall cover payments made to honour the legal commitments entered into in the current financial year and/or earlier financial years. 4. Paragraphs 1 and 2 shall be without prejudice to the special provisions of Titles I, IV and VI of part two. They shall not prevent appropriations being committed globally nor budgetary commitments being made in annual instalments.
Article 8 
1. The revenue of a financial year shall be entered in the accounts for the financial year on the basis of the amounts collected during the financial year. However, the own resources for the month of January of the next financial year may be paid in advance pursuant to the Council Regulation implementing the Decision on the system of the Communities' own resources. 2. The entries in respect of value added tax own resources, the additional GNP-based resource and any financial contributions may be adjusted in accordance with the Regulation referred to in paragraph 1. 3. The appropriations authorised for a given financial year may be used solely to cover expenditure committed and paid in that financial year and to cover amounts due against commitments from earlier financial years. 4. Commitments shall be entered in the accounts on the basis of the legal commitments entered into up to 31 December, subject to the global commitments referred to in Article 77(2) and the financing agreements referred to in Article 166(2), which shall be entered in the accounts on the basis of the budget commitments up to 31 December. 5. Payments shall be entered in the accounts for a financial year on the basis of the payments effected by the accounting officer by 31 December of that year at the latest. 6. By way of derogation from paragraphs 3, 4 and 5, the expenditure of the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) shall be entered in the accounts for a financial year in accordance with the rules laid down in Title I of part two.
Article 9 
1. Appropriations which have not been used at the end of the financial year for which they were entered shall be cancelled. However, they may be carried over to the following financial year only, by a decision taken by the institution concerned by 15 February at the latest, in accordance with paragraphs 2 and 3 or be carried over automatically in accordance with paragraph 4. 2. Differentiated commitment appropriations and non-differentiated appropriations not yet committed at the close of the financial year may be carried over in respect of: (a) amounts corresponding to commitment appropriations for which most of the preparatory stages of the commitment procedure have been completed by 31 December. These amounts may then be committed up to 31 March of the following year; (b) amounts which are necessary when the legislative authority has adopted a basic act in the final quarter of the financial year and the Commission has been unable to commit the appropriations provided for this purpose by 31 December. 3. Payment appropriations may be carried over in respect of amounts needed to cover existing commitments or commitments linked to commitment appropriations carried over, when the appropriations provided for the relevant lines in the budget for the following financial year do not cover requirements. The institution concerned shall first use the appropriations authorised for the current financial year and shall not use the appropriations carried over until the former are exhausted. 4. Non-differentiated appropriations corresponding to obligations duly contracted at the close of the financial year shall be carried over automatically to the following financial year only. 5. The institution concerned shall inform the European Parliament and the Council (hereinafter ‘the budgetary authority’) by 15 March at the latest of the carry-over decision it has taken and shall state, for each budget line, how the criteria in paragraphs 2 and 3 have been applied to each carry-over. 6. Appropriations placed in reserve and appropriations for staff expenditure may not be carried over.
Article 10 
Revenue not used and appropriations available at 31 December arising from the assigned revenue referred to in Article 18 shall be carried over automatically. The appropriations available corresponding to assigned revenue carried over must be used first.
Article 11 
Without prejudice to Articles 157 and 160a , where amounts are decommitted as a result of total or partial non-implementation of the actions for which they were earmarked, in any financial year after that in which the appropriations were entered in the budget, the appropriations concerned shall be cancelled.
Article 12 
The appropriations entered in the budget may be committed with effect from 1 January, once the budget has been finally adopted, save as otherwise provided in Title I and Title VI of part two.
Article 13 
1. If the budget has not been finally adopted at the beginning of the financial year, the first paragraph of Article 273 of the EC Treaty and the first paragraph of Article 178 of the Euratom Treaty shall apply to commitment and payment of expenditure which it has been possible to book to a specific line in the budget as part of implementation of the last budget duly adopted. 2. Commitments may be made per chapter to a maximum of one quarter of the total allotted appropriations in the chapter in question of the previous financial year plus one twelfth for each month which has elapsed. Payments may be made monthly per chapter to a maximum of one twelfth of the allotted appropriations in the chapter in question of the preceding financial year. The limit of the appropriations provided for in the draft budget in preparation may not be exceeded. 3. If the continuity of action by the Communities and management needs so require: (a) the Council, acting by a qualified majority at the request of the Commission and after consulting the European Parliament, may simultaneously authorise two or more provisional twelfths both for commitments and for payments over and above those automatically made available by the provisions of paragraphs 1 and 2; (b) for expenditure other than that necessarily resulting from the Treaties or acts adopted pursuant thereto, the third paragraph of Article 273 of the EC Treaty and the third paragraph of Article 178 of the Euratom Treaty shall apply. The additional twelfths shall be authorised in full and shall not be divisible. 4. If, for a given chapter, the authorisation of two or more provisional twelfths granted in the circumstances and under the procedures provided for in paragraph 3 is not sufficient to cover the expenditure necessary to avoid a break in continuity of the Communities' activity in the area covered by the chapter in question, authorisation may exceptionally be given to exceed the amount of the appropriations entered in the corresponding chapter of the budget of the preceding financial year. The budgetary authority shall act under the procedures provided for in paragraph 3. However, the available overall total of the appropriations in the budget of the preceding financial year may in no circumstances be exceeded.
Article 14 
1. Budget revenue and payment appropriations must be in balance. 2. Without prejudice to Article 46(1)(4), the European Community and the European Atomic Energy Community, as well as the bodies set up by the Communities as referred to in Article 185, may not raise loans.
Article 15 
1. The balance from each financial year shall be entered in the budget for the following financial year as revenue in the case of a surplus or as a payment appropriation in the case of a deficit. 2. The estimates of such revenue or payment appropriations shall be entered in the budget during the budgetary procedure and in a letter of amendment presented pursuant to Article 34. They shall be drawn up in accordance with the Council Regulation implementing the Decision on the system of the Communities' own resources. 3. After the presentation of the accounts for each financial year, any discrepancy with the estimates shall be entered in the budget for the following financial year through an amending budget devoted solely to that discrepancy. In such a case, the preliminary draft amending budget must be submitted by the Commission within 15 days following the submission of the provisional accounts.
Article 16 
The budget shall be drawn up and implemented in euro and the accounts shall be presented in euro. However, for the cash-flow purposes referred to in Article 61, the accounting officer and, in the case of imprest accounts, the imprest administrators, and, for the needs of the administrative management of the Commission's External Service, the authorising officer responsible shall be authorised to carry out operations in national currencies as laid down in the implementing rules.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 16 ):
The budget shall be drawn up and implemented in euro and the accounts shall be presented in euro. However, for the cash-flow purposes referred to in Article 61, the accounting officer and, in the case of imprest accounts, the imprest administrators, and, for the needs of the administrative management of the Commission and the EEAS , the authorising officer responsible shall be authorised to carry out operations in national currencies as laid down in the implementing rules.
Article 17 
Total revenue shall cover total payment appropriations, subject to Article 18. All revenue and expenditure shall be entered in full without any adjustment against each other, subject to Article 20.
Article 18 
1. Without prejudice to Article 160(1a) and Article 161(2), the following items of revenue shall be used to finance specific items of expenditure: (a) financial contributions from Member States to certain research programmes pursuant to the Council Regulation implementing the Decision on the system of the Communities' own resources; (aa) financial contributions from Member States and other donor countries, including in both cases their public and parastatal agencies, or from international organisations to certain external aid projects or programmes financed by the Community and managed by the Commission on their behalf, pursuant to the relevant basic act; (b) interest on deposits and the fines provided for in the Regulation on speeding up and clarifying the implementation of the excessive deficit procedure; (c) revenue earmarked for a specific purpose, such as income from foundations, subsidies, gifts and bequests, including the earmarked revenue specific to each institution; (d) contributions to Community activities from third countries or various bodies; (e) revenue from third parties in respect of goods, services or work supplied at their request; (ea) proceeds from the sale of vehicles, equipment, installations, materials, and scientific and technical apparatus which are being replaced or scrapped when the book value is fully depreciated; (f) revenue arising from the repayment of amounts wrongly paid; (g) proceeds from the supply of goods, services and works for other institutions or bodies, including refunds by other institutions or bodies of mission allowances paid on their behalf; (h) insurance payments received; (i) revenue from payments connected with lettings; (j) revenue from the sale of publications and films, including those on an electronic medium. 2. The basic act applicable may also assign the revenue for which it provides to specific items of expenditure. 3. The budget shall carry lines to accommodate the categories of assigned revenue referred to in paragraphs 1 and 2 and wherever possible shall indicate the amount.
Article 19 
1. The Commission may accept any donation made to the Communities, such as foundations, subsidies, gifts and bequests. 2. Acceptance of donations of a value of EUR 50 000 or more which involve a financial charge, including follow-up costs, exceeding 10 % of the value of the donation made, shall be subject to the authorisation of the European Parliament and of the Council, both of which shall act on the matter within two months of the date of receipt of the request from the Commission. no objection has been made within that period, the Commission shall take a final decision in respect of acceptance.
Article 20 
1. The implementing rules may specify the cases where certain revenue may be deducted from invoices or requests for payment, which shall then be passed for payment of the net amount. 2. The cost of products or services provided to the Communities incorporating taxes refunded by the Member States pursuant to the Protocol on the Privileges and Immunities of the European Communities or by third countries on the basis of the relevant agreements shall be charged to the budget for the ex-tax amount. 3. Adjustments may be made in respect of exchange differences occurring in the implementation of the budget. The final gain or loss shall be included in the balance for the year.
Article 21 
Appropriations shall be earmarked for specific purposes by title and chapter; the chapters shall be further subdivided into articles and items.
Article 22 
1. Any institution other than the Commission may, within its own section of the budget, transfer appropriations: (a) from one title to another up to a maximum of 10 % of the appropriations for the year shown on the line from which the transfer is made; (b) from one chapter to another and from one article to another without limit. 2. Three weeks before making the transfers referred to in paragraph 1, the institutions shall inform the budgetary authority of their intentions. In the event of duly substantiated reasons being raised within this period by either branch of the budgetary authority, the procedure laid down in Article 24 shall apply. 3. Any institution other than the Commission may propose to the budgetary authority, within its own section of the budget, transfers from one title to another exceeding the limit of 10 % of the appropriations for the financial year on the line from which the transfer is to be made. Those transfers shall be subject to the procedure laid down in Article 24. 4. Any institution other than the Commission may, within its own section of the budget, make transfers within articles without informing the budgetary authority beforehand.
Article 23 
1. The Commission may, within its own section of the budget: (a) transfer appropriations within articles and transfers between articles within each chapter; (b) as regards expenditure on staff and administration, transfer appropriations from one title to another up to a maximum of 10 % of the appropriations for the year shown on the line from which the transfer is made, and up to a maximum of 30 % of the appropriations for the year shown on the line to which the transfer is made; (c) as regards operational expenditure, transfer appropriations between chapters within the same title, up to a maximum total of 10 % of the appropriations for the year shown on the line from which the transfer is made; (d) transfer appropriations, as soon as the basic act is adopted pursuant to the procedure laid down in Article 251 of the Treaty, from the ‘provisions’ title referred to in Article 43 for the cases where no basic act existed for the action concerned when the budget was established. Three weeks before making the transfers referred to in points (b) and (c) of the first subparagraph, the Commission shall inform the budgetary authority of its decision. In the event of duly substantiated reasons being raised within that three-week period by either branch of the budgetary authority, the procedure laid down in Article 24 shall apply. However, during the last two months of the financial year, the Commission may autonomously transfer appropriations concerning expenditure on staff, external staff and other agents from one title to another within the total limit of 5 % of the appropriations of the financial year. The Commission shall inform the budgetary authority within two weeks after its decision on those transfers. The Commission shall inform the budgetary authority within two weeks after its decision on transfers referred to in point (d) of the first subparagraph. 2. The Commission may propose to the budgetary authority, within its own section of the budget, transfers other than those referred to in paragraph 1 .
Article 24 
1. The budgetary authority shall take decisions on transfers of appropriations as provided for in paragraphs 2, 3 and 4, save as otherwise provided in Title I of part two. 2. In the case of proposals for transfers of appropriations relating to expenditure necessarily resulting from the Treaties or from acts adopted in accordance therewith, the Council shall, after consulting the European Parliament, act by a qualified majority within six weeks, except in urgent cases. The European Parliament shall deliver its opinion within such time as will permit the Council to take note of it and to act within the stipulated time limit. Where the Council does not act within this time limit, the proposals for transfers shall be deemed to be approved. 3. In the case of proposals for transfers relating to expenditure other than that necessarily resulting from the Treaties or from acts adopted in accordance therewith, the European Parliament shall, after consulting the Council, act within six weeks, except in urgent cases. The Council shall deliver its opinion, by a qualified majority, within such time as will permit the European Parliament to take note of it and to act within the stipulated time limit. Where no decision is taken within this time limit, the proposals for transfers shall be deemed to be approved. 4. Proposals for transfers relating both to expenditure necessarily resulting from the Treaties or from acts adopted in accordance therewith and to other expenditure shall be deemed to be approved if neither the European Parliament nor the Council has decided otherwise within six weeks of the date on which the two institutions received the proposals. If, in the case of such proposals for transfers, the European Parliament and the Council reduce the proposed transfer by different amounts, whichever is the smaller of the amounts accepted by one of the two institutions shall be deemed to be approved. Where one of the institutions rejects the principle of the transfer, the transfer shall not be made.
Article 25 
1. Appropriations may be transferred only to budget lines for which the budget has authorised appropriations or carries a token entry (p.m.). 2. Appropriations corresponding to assigned revenue may be transferred only if such revenue is used for the purpose to which it is assigned.
Article 26 
1. Transfers within the titles of the budget devoted to the European Agricultural Guarantee Fund (EAGF), the Structural Funds, the Cohesion Fund, the European Fisheries Fund, the European Agricultural Fund for Rural Development (EAFRD) and Research shall be the subject of special provisions under Titles I, II and III of Part Two. 2. Decisions on transfers to allow the utilisation of the reserve for emergency aid shall be taken by the budgetary authority on a proposal from the Commission. A separate proposal must be submitted for each individual operation . The procedure provided for in Article 24(2) and (3) shall apply. If the Commission proposal is not agreed to by both arms of the budgetary authority and there is a failure to arrive at a common position on the utilisation of this reserve, the European Parliament and the Council shall refrain from acting on the Commission's proposal for a transfer. 3. In duly substantiated exceptional cases of international humanitarian disasters and crises, occurring after 15 December of the budgetary year, the Commission may transfer unused budgetary appropriations for the current budgetary year still available in the budget titles falling under heading 4 of the multiannual financial framework to the budget titles concerning the crisis management aid and humanitarian aid operations. The Commission shall inform the two branches of the budgetary authority immediately after making such transfers.
Article 27 
1. Budget appropriations shall be used in accordance with the principle of sound financial management, namely in accordance with the principles of economy, efficiency and effectiveness. 2. The principle of economy requires that the resources used by the institution for the pursuit of its activities shall be made available in due time, in appropriate quantity and quality and at the best price. The principle of efficiency is concerned with the best relationship between resources employed and results achieved. The principle of effectiveness is concerned with attaining the specific objectives set and achieving the intended results. 3. Specific, measurable, achievable, relevant and timed objectives shall be set for all sectors of activity covered by the budget. Achievement of those objectives shall be monitored by performance indicators for each activity and information shall be provided by the spending authorities to the budgetary authority. Such information, as referred to in Article 33(2)(d), shall be provided annually and at the latest in the documents accompanying the preliminary draft budget. 4. In order to improve decision-making, institutions shall undertake both ex ante and ex post evaluations in line with guidance provided by the Commission. Such evaluations shall be applied to all programmes and activities which entail significant spending and evaluation results disseminated to spending, legislative and budgetary authorities.
Article 28 
1. Any proposal or initiative submitted to the legislative authority by the Commission or by a Member State in conformity with the relevant provisions of the EC Treaty or the Treaty on European Union (TEU), which may have an impact on the budget, including changes in the number of posts, must be accompanied by a financial statement and the evaluation provided for in Article 27(4) of this Regulation. Any amendment to a proposal or initiative submitted to the legislative authority which may have appreciable implications for the budget, including changes in the number of posts, must be accompanied by a financial statement prepared by the institution proposing the amendment. 2. During the budgetary procedure, the Commission shall provide the necessary information for a comparison between changes in the appropriations required and the initial forecasts made in the financial statements. This information shall include progress made and the stage reached by the legislative authority in its consideration of proposals presented. The appropriations required shall, where appropriate, be revised in the light of the progress of deliberations on the basic act. 3. In order to prevent the risk of fraud and irregularities, the financial statement referred to in paragraph 1 shall record any information regarding existing and planned fraud prevention and protection measures.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 28 ):
1. Any proposal or initiative submitted to the legislative authority by the Commission, the High Representative of the Union for Foreign Affairs and Security Policy (hereinafter the ‘High Representative’) or by a Member State, which may have an impact on the budget, including changes in the number of posts, must be accompanied by a financial statement and by the evaluation provided for in Article 27(4). Any amendment to a proposal or initiative submitted to the legislative authority which may have appreciable implications for the budget, including changes in the number of posts, must be accompanied by a financial statement prepared by the institution proposing the amendment. 2. During the budgetary procedure, the Commission shall provide the necessary information for a comparison between changes in the appropriations required and the initial forecasts made in the financial statements. This information shall include progress made and the stage reached by the legislative authority in its consideration of proposals presented. The appropriations required shall, where appropriate, be revised in the light of the progress of deliberations on the basic act. 3. In order to prevent the risk of fraud and irregularities, the financial statement referred to in paragraph 1 shall record any information regarding existing and planned fraud prevention and protection measures.
Article 28a 
1. The budget shall be implemented in compliance with effective and efficient internal control as appropriate in each management mode, and in accordance with the relevant sector-specific regulations. 2. For the purposes of the implementation of the budget, internal control is defined as a process applicable at all levels of the management and designed to provide reasonable assurance of achieving the following objectives: (a) effectiveness, efficiency and economy of operations; (b) reliability of reporting; (c) safeguarding of assets and information; (d) prevention and detection of fraud and irregularities; (e) adequate management of the risks relating to the legality and regularity of the underlying transactions, taking into account the multi-annual character of programmes as well as the nature of the payments concerned.
Article 29 
1. The budget shall be established and implemented and the accounts presented in compliance with the principle of transparency. 2. The President of the European Parliament shall have the budget and amending budgets, as finally adopted, published in the Official Journal of the European Union. The budget shall be published within three months following the date on which the budget is declared finally adopted. The consolidated annual accounts and the report on budgetary and financial management drawn up by each institution shall be published in the Official Journal of the European Union.
Article 30 
1. Information on borrowing-and-lending operations contracted by the Communities for third parties shall appear in an Annex to the budget. 2. Information on the operations of the Guarantee Fund for external actions shall appear in the financial statements. 3. The Commission shall make available, in an appropriate manner, information on the beneficiaries of funds deriving from the budget held by it when the budget is implemented on a centralised basis and directly by its departments, and information on the beneficiaries of funds as provided by the entities to which budget implementation tasks are delegated under other modes of management. This information shall be made available with due observance of the requirements of confidentiality, in particular the protection of personal data as laid down in Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data ( 8 ) and Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2001 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data ( 9 ), and of the requirements of security, taking into account the specificities of each management mode referred to in Article 53 and where applicable in conformity with the relevant sector-specific rules.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 30 ):
1. Information on borrowing-and-lending operations contracted by the Communities for third parties shall appear in an Annex to the budget. 2. Information on the operations of the Guarantee Fund for external actions shall appear in the financial statements. 3. The Commission shall make available, in an appropriate manner, information on the beneficiaries of funds deriving from the budget held by it when the budget is implemented on a centralised basis and directly by its departments or by Union Delegations in accordance with the second paragraph of Article 51, and information on the beneficiaries of funds as provided by the entities to which budget implementation tasks are delegated under other modes of management. This information shall be made available with due observance of the requirements of confidentiality, in particular the protection of personal data as laid down in Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data ( 8 ) and Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2001 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data ( 9 ), and of the requirements of security, taking into account the specificities of each management mode referred to in Article 53 and where applicable in conformity with the relevant sector-specific rules.
Article 31 
The European Parliament, the Council, the Court of Justice of the European Communities, the Court of Auditors, the Economic and Social Committee, the Committee of the Regions, the Ombudsman and the European Data-Protection Supervisor shall draw up an estimate of their revenue and expenditure, which they shall send to the Commission before 1 July each year. These estimates shall also be sent by these institutions to the budgetary authority for information by no later than 1 July each year. The Commission shall draw up its own estimates, which it shall also send to the budgetary authority by the same date. In preparing its own estimates the Commission shall use the information referred to in Article 32.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 31 ):
The European Parliament, the European Council and the Council, the Court of Justice of the European Communities, the Court of Auditors, the Economic and Social Committee, the Committee of the Regions, the Ombudsman and the European Data-Protection Supervisor and the European External Action Service shall draw up an estimate of their revenue and expenditure, which they shall send to the Commission before 1 July each year. The EEAS shall draw up an estimate of its revenue and expenditure, which it shall send to the Commission before 1 July each year. The High Representative will hold consultations with the Members of the Commission responsible for development policy, neighbourhood policy and international cooperation, humanitarian aid and crisis response, regarding their respective responsibilities. These estimates shall also be sent by these institutions to the budgetary authority for information by no later than 1 July each year. The Commission shall draw up its own estimates, which it shall also send to the budgetary authority by the same date. In preparing its own estimates the Commission shall use the information referred to in Article 32.
Article 32 
Each body referred to in Article 185 shall, in accordance with the instrument establishing it, send to the Commission by 1 April each year an estimate of its revenue and expenditure, including the establishment plan, and its work programme. The Commission shall forward these documents to the budgetary authority for information, except in the case provided for in point (3)(d) of Article 46(1).
Article 33 
1. The Commission shall place a preliminary draft budget before the Council by 1 September each year at the latest. It shall at the same time transmit the preliminary draft budget to the European Parliament. The preliminary draft budget shall contain a summary general statement of the expenditure and revenue of the Communities and consolidate the estimates referred to in Article 31. 2. The Commission shall attach to the preliminary draft budget: (a) an analysis of financial management in the previous year and the commitments outstanding; (b) where appropriate, an opinion on the estimates of the other institutions which may contain different estimates, accompanied by the reasons therefor; (c) any working paper it considers useful in connection with the establishment plans of the institutions and the grants which the Commission awards to the bodies referred to in Article 185 and to the European Schools; (d) the activity statements containing the following: — information on the achievement of all previously set specific, measurable, achievable, relevant and timed objectives for the various activities as well as new objectives measured by indicators, — full justification and cost-benefit approach for proposed changes in the level of appropriations, — clear rationale for intervention at the EU level in keeping, inter alia, with the principle of subsidiarity, — information on the implementation rates of the previous year's activity and implementation rates for the current year. Evaluation results shall be consulted and referred to as evidence of the likely merits of proposed budget changes; (d) the activity statements containing the following: — information on the achievement of all previously set specific, measurable, achievable, relevant and timed objectives for the various activities as well as new objectives measured by indicators, — full justification and cost-benefit approach for proposed changes in the level of appropriations, — clear rationale for intervention at the EU level in keeping, inter alia, with the principle of subsidiarity, — information on the implementation rates of the previous year's activity and implementation rates for the current year. Evaluation results shall be consulted and referred to as evidence of the likely merits of proposed budget changes; (e) a summary statement of the schedule of payments due in subsequent financial years to meet budgetary commitments entered into in earlier financial years.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 33 ):
1. The Commission shall place a preliminary draft budget before the Council by 1 September each year at the latest. It shall at the same time transmit the preliminary draft budget to the European Parliament. The preliminary draft budget shall contain a summary general statement of the expenditure and revenue of the Communities and consolidate the estimates referred to in Article 31. 2. The Commission shall attach to the preliminary draft budget: (a) an analysis of financial management in the previous year and the commitments outstanding; (b) where appropriate, an opinion on the estimates of the other institutions which may contain different estimates, accompanied by the reasons therefor; (c) any working paper it considers useful in connection with the establishment plans of the institutions and the grants which the Commission awards to the bodies referred to in Article 185 and to the European Schools; (d) the activity statements containing the following: — information on the achievement of all previously set specific, measurable, achievable, relevant and timed objectives for the various activities as well as new objectives measured by indicators, — full justification and cost-benefit approach for proposed changes in the level of appropriations, — clear rationale for intervention at the EU level in keeping, inter alia, with the principle of subsidiarity, — information on the implementation rates of the previous year's activity and implementation rates for the current year. Evaluation results shall be consulted and referred to as evidence of the likely merits of proposed budget changes; (d) the activity statements containing the following: — information on the achievement of all previously set specific, measurable, achievable, relevant and timed objectives for the various activities as well as new objectives measured by indicators, — full justification and cost-benefit approach for proposed changes in the level of appropriations, — clear rationale for intervention at the EU level in keeping, inter alia, with the principle of subsidiarity, — information on the implementation rates of the previous year's activity and implementation rates for the current year. Evaluation results shall be consulted and referred to as evidence of the likely merits of proposed budget changes; (e) a summary statement of the schedule of payments due in subsequent financial years to meet budgetary commitments entered into in earlier financial years. 3. In accordance with Article 8(5) of Council Decision 2010/427/EU of 26 July 2010 establishing the organisation and functioning of the European External Action Service ( 10 ) and in order to ensure the budgetary transparency in the area of external action of the Union, the Commission shall transmit to the budgetary authority, together with the draft budget, a working document presenting, in a comprehensive way, — all administrative and operational expenditure related to the external actions of the Union, including Common Foreign and Security Policy / Common Security and Defence Policy (CFSP/CSDP) tasks, and financed from the Union's budget; — the EEAS' overall administrative expenditure for the previous year, broken down into expenditure by delegation and expenditure for the EEAS' central administration; together with the operational expenditure, broken down by geographic area (regions, countries), thematic areas, Union Delegation and mission. The working document shall also: — show the number of posts for each grade in each category and the number of permanent and temporary posts, including contractual and local staff authorised within the limits of the budget appropriations in each Union Delegation, as well as in the central administration of the EEAS; — show any increase or reduction of posts by grade and category in the central administration of the EEAS, and in all Union Delegations based on the preceding year; — show the number of posts authorised for the financial year, the number of posts authorised for the preceding year, as well as the number of posts occupied by diplomats seconded from the Member States, Council and Commission staff; provide a detailed picture of all staff in place in the Union Delegations at the time of presenting the draft budget, including a breakdown by geographic area, individual country and mission, distinguishing establishment plan posts, contract agents, local agents and seconded national experts and appropriations requested in the draft budget for such other types of personnel with corresponding estimates of the equivalent full-time staff that may be employed within the limits of the appropriations requested.
Article 34 
1. The Commission may, on its own initiative or if requested by the other institutions, each in respect of its own section, present to the Council a letter of amendment to the preliminary draft budget on the basis of new information which was not available at the time the preliminary draft was established. 2. However, save as otherwise agreed by the institutions or in exceptional circumstances, the Commission shall put such letter of amendment to the Council at least 30 days before the first reading of the draft budget by the European Parliament. The Council must put the letter of amendment to the European Parliament at least 15 days before the said first reading.
Article 35 
1. The Council shall establish the draft budget in accordance with the procedure laid down in Article 272(3) of the EC Treaty and Article 177(3) of the Euratom Treaty. 2. The Council shall place the draft budget before the European Parliament by 5 October of the year preceding that of implementation of the budget at the latest. The Council shall attach to that draft budget an explanatory memorandum defining its reasons for departing from the preliminary draft budget.
Article 36 
1. The President of the European Parliament shall declare the budget finally adopted in accordance with the procedure provided for in Article 272(7) of the EC Treaty and Article 177(7) of the Euratom Treaty. 2. Once the budget has been declared finally adopted, each Member State shall, from 1 January of the following financial year or from the date of the declaration of final adoption of the budget if that is after 1 January, be bound to make over to the Community the payments due as specified in the Council Regulation implementing the Decision on the system of the Communities' own resources.
Article 37 
1. If there are unavoidable, exceptional or unforeseen circumstances, the Commission may present preliminary draft amending budgets. Requests for amending budgets, in the same circumstances as referred to in the preceding paragraph, from institutions other than the Commission shall be sent to the Commission. Before presenting a preliminary draft amending budget, the Commission and institutions other than the Commission shall examine the scope for reallocation of the relevant appropriations, taking into account any expected under-implementation of appropriations. 2. The Commission shall, save in exceptional circumstances, submit any preliminary draft amending budget to the Council by 1 September each year at the latest. It may attach an opinion to the requests for amending budgets from the other institutions. 3. The budgetary authority shall discuss them with due account for their urgency.
Article 38 
1. Where the Council receives a preliminary draft amending budget, it shall draw up a draft amending budget in accordance with Articles 35 and 37. 2. Except for the timetable, Articles 35 and 36 shall apply to amending budgets. They must be substantiated by reference to the budget whose estimates they are amending.
Article 39 
The Commission and the budgetary authority may agree to bring forward certain dates for the transmission of the estimates, and for the adoption and transmission of the preliminary draft and draft budgets. This arrangement may not, however, have the effect of shortening or prolonging the periods allowed for consideration of these texts under Article 272 of the EC Treaty and Article 177 of the Euratom Treaty.
Article 40 
The budget shall consist of: (a) a general statement of revenue and expenditure; (b) separate sections subdivided into statements of revenue and expenditure for each institution.
Article 41 
1. Commission revenue and the revenue and expenditure of the other institutions shall be classified by the budgetary authority according to their type or the use to which they are assigned under titles, chapters, articles and items. 2. The statement of expenditure for the Commission section shall be set out on the basis of a nomenclature adopted by the budgetary authority and classified according to purpose. A title shall correspond to a policy area and a chapter shall, as a rule, correspond to an activity. Each title may include operational appropriations and administrative appropriations. The administrative appropriations for a title shall be grouped in a single chapter.
Article 42 
The budget may not contain negative revenue. The own resources paid under the Council Decision on the system of the Communities' own resources shall be net amounts and shall be shown as such in the summary statement of revenue in the budget.
Article 43 
1. Each section of the budget may include a ‘provisions’ title. Appropriations shall be entered in this title in the following two circumstances: (a) where no basic act exists for the action concerned when the budget is established; (b) where there are serious grounds for doubting the adequacy of the appropriations or the possibility of implementing, under conditions consonant with sound financial management, the appropriations entered on the lines concerned. The appropriations in this title may be used only after transfer in accordance with the procedure laid down in Article 23(1)(d), where the adoption of the basic act is subject to the procedure laid down in Article 251 of the Treaty, and that of Article 24, for all other cases. 2. In the event of serious implementation difficulties, the Commission may propose, in the course of a financial year, that appropriations be transferred to the ‘provisions’ title. The budgetary authority shall take a decision on these transfers as provided in Article 24.
Article 44 
The Commission section of the budget may include a ‘negative reserve’ limited to a maximum amount of EUR 200 million. This reserve, which shall be entered in a separate title , may comprise both commitment appropriations and payment appropriations. This reserve must be drawn upon before the end of the financial year by means of transfer in accordance with the procedure laid down in Articles 23 and 25 .
Article 45 
1. The Commission section of the budget shall include a reserve for emergency aid for third countries. 2. The reserve referred to in paragraph 1 shall be drawn upon before the end of the financial year by means of transfer in accordance with the procedure laid down in Articles 24 and 26.
Article 46 
1. The budget shall show: (1) in the general statement of revenue and expenditure: (a) the estimated revenue of the Communities for the financial year in question; (b) the estimated revenue for the preceding financial year and the revenue for year n - 2; (c) the commitment and payment appropriations for the financial year in question; (d) the commitment and payment appropriations for the preceding financial year; (e) the expenditure committed and the expenditure paid in year n - 2, (g) appropriate remarks on each subdivision, as set out in Article 41(1); (1) in the general statement of revenue and expenditure: (a) the estimated revenue of the Communities for the financial year in question; (b) the estimated revenue for the preceding financial year and the revenue for year n - 2; (c) the commitment and payment appropriations for the financial year in question; (d) the commitment and payment appropriations for the preceding financial year; (e) the expenditure committed and the expenditure paid in year n - 2, (g) appropriate remarks on each subdivision, as set out in Article 41(1); (2) in the section for each institution, the revenue and expenditure shall be shown in the same structure as in point (1); (3) as regards staff: (a) for each section of the budget, an establishment plan setting the number of posts for each grade in each category and in each service and the number of permanent and temporary posts authorised within the limits of the budget appropriations; (b) an establishment plan for staff paid from the research and technological development appropriations for direct action and an establishment plan for staff paid from the same appropriations for indirect action; the establishment plans shall be classified by category and grade and shall distinguish between permanent and temporary posts, authorised within the limits of the budget appropriations; (c) as regards scientific and technical staff, the classification may be based on groups of grades, in accordance with the conditions laid down in each budget; the establishment plan must specify the number of highly qualified technical or scientific personnel who are accorded special advantages under the specific provisions of the Staff Regulations; (d) an establishment plan setting the number of posts by grade and by category for each body referred to in Article 185 which receives a grant charged to the budget. The establishment plans shall show next to the number of posts authorised for the financial year the number authorised for the preceding year; (3) as regards staff: (a) for each section of the budget, an establishment plan setting the number of posts for each grade in each category and in each service and the number of permanent and temporary posts authorised within the limits of the budget appropriations; (b) an establishment plan for staff paid from the research and technological development appropriations for direct action and an establishment plan for staff paid from the same appropriations for indirect action; the establishment plans shall be classified by category and grade and shall distinguish between permanent and temporary posts, authorised within the limits of the budget appropriations; (c) as regards scientific and technical staff, the classification may be based on groups of grades, in accordance with the conditions laid down in each budget; the establishment plan must specify the number of highly qualified technical or scientific personnel who are accorded special advantages under the specific provisions of the Staff Regulations; (d) an establishment plan setting the number of posts by grade and by category for each body referred to in Article 185 which receives a grant charged to the budget. The establishment plans shall show next to the number of posts authorised for the financial year the number authorised for the preceding year; (4) as regards borrowing-and-lending operations: (a) in the general statement of revenue, the budget lines corresponding to the relevant operations and intended to record any reimbursements received from beneficiaries who initially defaulted, leading to activation of the performance guarantee. These lines shall carry a token entry (p.m.) and be accompanied by appropriate remarks; (b) in the Commission section: (i) the budget lines containing the Communities' performance guarantees in respect of the operations in question. These lines shall carry a token entry (p.m.), so long as no effective charge which has to be covered by definitive resources has arisen; (ii) remarks giving the reference to the basic act and the volume of the operations envisaged, the duration and the financial guarantee given by the Communities in respect of these operations; (c) in a document annexed to the Commission section, as an indication: (i) ongoing capital operations and debt management; (ii) the capital operations and debt management for the financial year in question; (4) as regards borrowing-and-lending operations: (a) in the general statement of revenue, the budget lines corresponding to the relevant operations and intended to record any reimbursements received from beneficiaries who initially defaulted, leading to activation of the performance guarantee. These lines shall carry a token entry (p.m.) and be accompanied by appropriate remarks; (b) in the Commission section: (i) the budget lines containing the Communities' performance guarantees in respect of the operations in question. These lines shall carry a token entry (p.m.), so long as no effective charge which has to be covered by definitive resources has arisen; (ii) remarks giving the reference to the basic act and the volume of the operations envisaged, the duration and the financial guarantee given by the Communities in respect of these operations; (b) in the Commission section: (i) the budget lines containing the Communities' performance guarantees in respect of the operations in question. These lines shall carry a token entry (p.m.), so long as no effective charge which has to be covered by definitive resources has arisen; (ii) remarks giving the reference to the basic act and the volume of the operations envisaged, the duration and the financial guarantee given by the Communities in respect of these operations; (c) in a document annexed to the Commission section, as an indication: (i) ongoing capital operations and debt management; (ii) the capital operations and debt management for the financial year in question; (c) in a document annexed to the Commission section, as an indication: (i) ongoing capital operations and debt management; (ii) the capital operations and debt management for the financial year in question; (5) the budget lines under revenue and expenditure necessary for implementing the Guarantee Fund for external actions. 2. In addition to the documents referred to in paragraph 1 the budgetary authority may attach any other relevant documents to the budget.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 46 ):
1. The budget shall show: (1) in the general statement of revenue and expenditure: (a) the estimated revenue of the Communities for the financial year in question; (b) the estimated revenue for the preceding financial year and the revenue for year n - 2; (c) the commitment and payment appropriations for the financial year in question; (d) the commitment and payment appropriations for the preceding financial year; (e) the expenditure committed and the expenditure paid in year n - 2, (g) appropriate remarks on each subdivision, as set out in Article 41(1); (1) in the general statement of revenue and expenditure: (a) the estimated revenue of the Communities for the financial year in question; (b) the estimated revenue for the preceding financial year and the revenue for year n - 2; (c) the commitment and payment appropriations for the financial year in question; (d) the commitment and payment appropriations for the preceding financial year; (e) the expenditure committed and the expenditure paid in year n - 2, (g) appropriate remarks on each subdivision, as set out in Article 41(1); (2) in the section for each institution, the revenue and expenditure shall be shown in the same structure as in point (1); (3) as regards staff: (a) for each section of the budget, an establishment plan setting the number of posts for each grade in each category and in each service and the number of permanent and temporary posts authorised within the limits of the budget appropriations; (b) an establishment plan for staff paid from the research and technological development appropriations for direct action and an establishment plan for staff paid from the same appropriations for indirect action; the establishment plans shall be classified by category and grade and shall distinguish between permanent and temporary posts, authorised within the limits of the budget appropriations; (c) as regards scientific and technical staff, the classification may be based on groups of grades, in accordance with the conditions laid down in each budget; the establishment plan must specify the number of highly qualified technical or scientific personnel who are accorded special advantages under the specific provisions of the Staff Regulations; (d) an establishment plan setting the number of posts by grade and by category for each body referred to in Article 185 which receives a grant charged to the budget. The establishment plans shall show next to the number of posts authorised for the financial year the number authorised for the preceding year; (3) as regards staff: (a) for each section of the budget, an establishment plan setting the number of posts for each grade in each category and in each service and the number of permanent and temporary posts authorised within the limits of the budget appropriations; (b) an establishment plan for staff paid from the research and technological development appropriations for direct action and an establishment plan for staff paid from the same appropriations for indirect action; the establishment plans shall be classified by category and grade and shall distinguish between permanent and temporary posts, authorised within the limits of the budget appropriations; (c) as regards scientific and technical staff, the classification may be based on groups of grades, in accordance with the conditions laid down in each budget; the establishment plan must specify the number of highly qualified technical or scientific personnel who are accorded special advantages under the specific provisions of the Staff Regulations; (d) an establishment plan setting the number of posts by grade and by category for each body referred to in Article 185 which receives a grant charged to the budget. The establishment plans shall show next to the number of posts authorised for the financial year the number authorised for the preceding year; (4) as regards borrowing-and-lending operations: (a) in the general statement of revenue, the budget lines corresponding to the relevant operations and intended to record any reimbursements received from beneficiaries who initially defaulted, leading to activation of the performance guarantee. These lines shall carry a token entry (p.m.) and be accompanied by appropriate remarks; (b) in the Commission section: (i) the budget lines containing the Communities' performance guarantees in respect of the operations in question. These lines shall carry a token entry (p.m.), so long as no effective charge which has to be covered by definitive resources has arisen; (ii) remarks giving the reference to the basic act and the volume of the operations envisaged, the duration and the financial guarantee given by the Communities in respect of these operations; (c) in a document annexed to the Commission section, as an indication: (i) ongoing capital operations and debt management; (ii) the capital operations and debt management for the financial year in question; (4) as regards borrowing-and-lending operations: (a) in the general statement of revenue, the budget lines corresponding to the relevant operations and intended to record any reimbursements received from beneficiaries who initially defaulted, leading to activation of the performance guarantee. These lines shall carry a token entry (p.m.) and be accompanied by appropriate remarks; (b) in the Commission section: (i) the budget lines containing the Communities' performance guarantees in respect of the operations in question. These lines shall carry a token entry (p.m.), so long as no effective charge which has to be covered by definitive resources has arisen; (ii) remarks giving the reference to the basic act and the volume of the operations envisaged, the duration and the financial guarantee given by the Communities in respect of these operations; (b) in the Commission section: (i) the budget lines containing the Communities' performance guarantees in respect of the operations in question. These lines shall carry a token entry (p.m.), so long as no effective charge which has to be covered by definitive resources has arisen; (ii) remarks giving the reference to the basic act and the volume of the operations envisaged, the duration and the financial guarantee given by the Communities in respect of these operations; (c) in a document annexed to the Commission section, as an indication: (i) ongoing capital operations and debt management; (ii) the capital operations and debt management for the financial year in question; (c) in a document annexed to the Commission section, as an indication: (i) ongoing capital operations and debt management; (ii) the capital operations and debt management for the financial year in question; (5) the budget lines under revenue and expenditure necessary for implementing the Guarantee Fund for external actions; (6) the total amount of Common Foreign and Security Policy (CFSP) expenditure shall be entered into one budget chapter, entitled CFSP, with specific budgetary articles. Those articles shall cover CFSP expenditure and shall contain specific budget lines identifying at least the single major missions. 2. In addition to the documents referred to in paragraph 1 the budgetary authority may attach any other relevant documents to the budget.
Article 47 
1. The establishment plan described in point 3 of Article 46(1) shall constitute an absolute limit for each institution or body; no appointment may be made in excess of the limit set. However, save in the case of grades AD 16, AD 15 and AD 14 , each institution or body may modify establishment plans by up to 10 % of posts authorised, subject to two conditions: (a) that the volume of staff appropriations corresponding to a full financial year is not affected, and (b) that the limit of the total number of posts authorised by each establishment plan is not exceeded. Three weeks before making the modifications referred to in the second subparagraph, the institutions shall inform the budgetary authority of their intentions. In the event of duly justified reasons being raised within this period by either branch of the budgetary authority, the institutions shall refrain from making the modifications and the normal procedure shall apply. 2. By way of derogation from the first subparagraph of paragraph 1, the effects of part-time work authorised by the appointing authority in accordance with the Staff Regulations may be offset by other appointments.
Article 48 
1. The Commission shall implement the revenue and expenditure of the budget in accordance with this Regulation, on its own responsibility and within the limits of the appropriations authorised. 2. The Member States shall cooperate with the Commission so that the appropriations are used in accordance with the principle of sound financial management.
Article 49 
1. A basic act shall first be adopted before the appropriations entered in the budget for any action by the Communities or by the European Union may be used. A basic act is a legal act which provides a legal basis for the action and for the implementation of the corresponding expenditure entered in the budget. 2. In application of the EC Treaty and the Euratom Treaty, a basic act is an act adopted by the legislative authority and may take the form of a regulation, a directive, a decision within the meaning of Article 249 of the EC Treaty or a decision sui generis . 3. In application of Title V of the Treaty on European Union (concerning Common Foreign and Security Policy — CFSP), a basic act may take one of the forms specified in Articles 13(2) and (3), 14, 18(5), 23(1) and (2) and 24 of the Treaty on European Union. 4. In application of Title VI of the Treaty on European Union (concerning Police and Judicial Cooperation in Criminal Matters), a basic act may take one of the forms referred to in Article 34(2) of the Treaty on European Union. 5. Recommendations and opinions do not constitute basic acts within the meaning of this Article, nor do resolutions, conclusions, declarations or other acts which have no legal effects. 6. By way of derogation from paragraphs 1 to 4, the following may be implemented without a basic act provided the actions which they are intended to finance fall within the powers of the Communities or the European Union: (a) appropriations for pilot schemes of an experimental nature designed to test the feasibility of an action and its usefulness. The relevant commitment appropriations may be entered in the budget for not more than two successive financial years; (b) appropriations for preparatory actions in the fields of application of the EC Treaty and the Euratom Treaty and of Title VI of the TEU, designed to prepare proposals with a view to the adoption of future actions. The preparatory actions are to follow a coherent approach and may take various forms. The relevant commitment appropriations may be entered in the budget for not more than three successive financial years. The legislative procedure must be concluded before the end of the third financial year. In the course of the legislative procedure, the commitment of appropriations must correspond to the particular features of the preparatory action as regards the activities envisaged, the aims pursued and the persons benefited. Consequently, the means implemented cannot correspond in volume to those envisaged for financing the definitive action itself. When the preliminary draft budget is presented, the Commission shall submit a report to the budgetary authority on the actions referred to in points (a) and (b) which shall also contain an assessment of results and the follow-up envisaged; (b) appropriations for preparatory actions in the fields of application of the EC Treaty and the Euratom Treaty and of Title VI of the TEU, designed to prepare proposals with a view to the adoption of future actions. The preparatory actions are to follow a coherent approach and may take various forms. The relevant commitment appropriations may be entered in the budget for not more than three successive financial years. The legislative procedure must be concluded before the end of the third financial year. In the course of the legislative procedure, the commitment of appropriations must correspond to the particular features of the preparatory action as regards the activities envisaged, the aims pursued and the persons benefited. Consequently, the means implemented cannot correspond in volume to those envisaged for financing the definitive action itself. When the preliminary draft budget is presented, the Commission shall submit a report to the budgetary authority on the actions referred to in points (a) and (b) which shall also contain an assessment of results and the follow-up envisaged; (c) appropriations for preparatory measures in the field of Title V of the Treaty on European Union (concerning CFSP). These measures shall be limited to a short period of time and shall be designed to establish the conditions for European Union action in fulfilment of the objectives of the CFSP and for the adoption of the necessary legal instruments. For the purpose of EU crisis management operations, preparatory measures are designed inter alia to assess the operational requirements, to provide for a rapid initial deployment of resources, or to establish the conditions on the ground for the launching of the operation. Preparatory measures shall be agreed by the Council, in full association with the Commission. To this end, the Presidency, assisted by the Secretary-General of the Council/High Representative for the CFSP, shall inform the Commission as early as possible of the Council's intention to launch a preparatory measure and in particular of the estimated resources required for this purpose. In conformity with the provisions of this Regulation, the Commission shall take all the necessary measures to ensure a rapid disbursement of the funds; (c) appropriations for preparatory measures in the field of Title V of the Treaty on European Union (concerning CFSP). These measures shall be limited to a short period of time and shall be designed to establish the conditions for European Union action in fulfilment of the objectives of the CFSP and for the adoption of the necessary legal instruments. For the purpose of EU crisis management operations, preparatory measures are designed inter alia to assess the operational requirements, to provide for a rapid initial deployment of resources, or to establish the conditions on the ground for the launching of the operation. Preparatory measures shall be agreed by the Council, in full association with the Commission. To this end, the Presidency, assisted by the Secretary-General of the Council/High Representative for the CFSP, shall inform the Commission as early as possible of the Council's intention to launch a preparatory measure and in particular of the estimated resources required for this purpose. In conformity with the provisions of this Regulation, the Commission shall take all the necessary measures to ensure a rapid disbursement of the funds; (d) appropriations for one-off actions, or even actions for an indefinite duration, carried out by the Commission by virtue of tasks resulting from its prerogatives at institutional level pursuant to the EC Treaty and the Euratom Treaty other than its right of legislative initiative referred to in point (b) and under specific powers directly conferred on it by those Treaties, a list of which is given in the implementing rules; (e) appropriations for the operation of each institution under its administrative autonomy.
Article 50 
The Commission shall confer on the other institutions the requisite powers for the implementation of the sections of the budget relating to them. Each institution shall exercise these powers in accordance with this Regulation and within the limits of the appropriations authorised.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 50 ):
The Commission shall confer on the other institutions the requisite powers for the implementation of the sections of the budget relating to them. However, detailed arrangements may be agreed with the Commission in order to facilitate the implementation of the Union Delegations' administrative appropriations. Those arrangements shall not contain any derogation from the provisions of the Financial Regulation or its implementing rules. Each institution shall exercise these powers in accordance with this Regulation and within the limits of the appropriations authorised.
Article 51 
The Commission and each of the other institutions may, within their departments, delegate their powers of budget implementation in accordance with the conditions laid down by this Regulation and by their internal rules and within the limits which they lay down in the instrument of delegation. Those so empowered may act only within the limits of the powers expressly conferred upon them.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 51 ):
The Commission and each of the other institutions may, within their departments, delegate their powers of budget implementation in accordance with the conditions laid down by this Regulation and by their internal rules and within the limits which they lay down in the instrument of delegation. Those so empowered may act only within the limits of the powers expressly conferred upon them. However, the Commission may delegate its powers of budget implementation concerning the operational appropriations of its own section to the Heads of Union Delegations. It shall, at the same time, inform the High Representative thereof. When Heads of Union Delegations act as sub-delegated authorising officers of the Commission, they shall apply the Commission rules for the implementation of the budget and shall be submitted to the same duties, obligations and accountability as any other sub-delegated authorising officer of the Commission. The Commission may withdraw that delegation in accordance with its own rules. For the purposes of the second paragraph, the High Representative shall take the measures necessary to facilitate the cooperation between Union Delegations and Commission departments.
Article 52 
1. All financial actors and any other person involved in budget implementation, management, audit or control shall be prohibited from taking any action which may bring their own interests into conflict with those of the Communities. Should such a case arise, the person in question must refrain from such actions and refer the matter to the competent authority. 2. There is a conflict of interests where the impartial and objective exercise of the functions of a financial actor or other person, as referred to in paragraph 1, is compromised for reasons involving family, emotional life, political or national affinity, economic interest or any other shared interest with the beneficiary.
Article 53 
The Commission shall implement the budget in accordance with the provisions set out in Articles 53a to 53d in any of the following ways: (a) on a centralised basis; (b) by shared or decentralised management; (c) by joint management with international organisations.
Article 53a 
Where the Commission implements the budget on a centralised basis, implementation tasks shall be performed either directly by its departments or indirectly, in accordance with Articles 54 to 57.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 53a ):
Where the Commission implements the budget on a centralised basis, implementation tasks shall be performed, either directly by its departments or by Union Delegations in accordance with the second paragraph of Article 51, or indirectly, in accordance with Articles 54 to 57.
Article 53b 
1. Where the Commission implements the budget by shared management, implementation tasks shall be delegated to Member States. That method shall apply in particular to the actions referred to in Titles I and II of Part Two. 2. Without prejudice to complementary provisions included in relevant sector-specific regulations, and in order to ensure in shared management that the funds are used in accordance with the applicable rules and principles, the Member States shall take all the legislative, regulatory and administrative or other measures necessary for protecting the Communities' financial interests. To this effect they shall in particular: (a) satisfy themselves that actions financed from the budget are actually carried out and to ensure that they are implemented correctly; (b) prevent and deal with irregularities and fraud; (c) recover funds wrongly paid or incorrectly used or funds lost as a result of irregularities or errors; (d) ensure, by means of relevant sector-specific regulations and in conformity with Article 30(3), adequate annual ex post publication of beneficiaries of funds deriving from the budget. To that effect, the Member States shall conduct checks and shall put in place an effective and efficient internal control system, according to the provisions laid down in Article 28a. They shall bring legal proceedings as necessary and appropriate. 3. Member States shall produce an annual summary at the appropriate national level of the available audits and declarations. 4. In order to ensure that the funds are used in accordance with the applicable rules, the Commission shall apply clearance-of-accounts procedures or financial correction mechanisms which enable it to assume final responsibility for the implementation of the budget.
Article 53c 
1. Where the Commission implements the budget by decentralised management, implementation tasks shall be delegated to third countries in accordance with Article 56 and Title IV of Part Two, without prejudice to delegation of residual tasks to bodies referred to in Article 54(2). 2. In order to ensure that the funds are used in accordance with the applicable rules, the Commission shall apply clearance-of-accounts procedures or financial correction mechanisms which enable it to assume final responsibility for the implementation of the budget. 3. Third countries to which implementation tasks are delegated shall ensure, in conformity with Article 30(3), adequate annual ex post publication of beneficiaries of funds deriving from the budget.
Article 53d 
1. Where the Commission implements the budget by joint management, certain implementation tasks shall be delegated to international organisations, in accordance with the implementing rules, in the following cases: (a) wherever the Commission and the international organisation are bound by a long-term framework agreement laying down the administrative and financial arrangements for their cooperation; (b) wherever the Commission and the international organisation elaborate a joint project or programme; (c) where the funds of several donors are pooled and are not earmarked for specific items or categories of expenditure, that is to say, in the case of multi-donor actions. These organisations shall, in their accounting, audit, internal control and procurement procedures, apply standards which offer guarantees equivalent to internationally accepted standards. 2. Individual agreements concluded with international organisations for the award of financing shall contain detailed provisions for the implementation of the tasks entrusted to such international organisations. 3. International organisations to which implementation tasks are delegated shall ensure, in conformity with Article 30(3), adequate annual ex post publication of beneficiaries of funds deriving from the budget.
Article 54 
1. The Commission may not delegate to third parties the executive powers it enjoys under the Treaties where they involve a large measure of discretion implying political choices. The implementing tasks delegated must be clearly defined and fully supervised as to the use made of them. The delegation of budget-implementation tasks shall comply with the principle of sound financial management which requires effective and efficient internal control and shall ensure compliance with the principle of non-discrimination, and the visibility of Community action. No implementing tasks delegated in this way may give rise to conflicts of interests. 2. Within the limits laid down in paragraph 1, the Commission may, when implementing the budget by indirect centralised management or by decentralised management under Articles 53a or 53c, delegate tasks of public authority and in particular budget implementation tasks to: (a) agencies governed by Community law, referred to in Article 55, hereinafter: ‘executive agencies’; (b) bodies set up by the Communities as referred to in Article 185 and other specialised Community bodies, such as the European Investment Bank or the European Investment Fund, provided that to do so is compatible with the tasks of each body as defined in the basic act; (c) national or international public-sector bodies or bodies governed by private law with a public-service mission providing adequate financial guarantees and complying with the conditions provided for in the implementing rules; (d) persons entrusted with the implementation of specific actions pursuant to Title V of the Treaty on European Union, and identified in the relevant basic act within the meaning of Article 49 of this Regulation. 3. Where the bodies referred to in paragraph 2 perform implementation tasks, they shall conduct regular checks to ensure that the actions to be financed from the budget have been implemented correctly. Such bodies or persons shall take appropriate measures to prevent irregularities and fraud and if necessary bring legal proceedings to recover funds wrongly paid or incorrectly used.
Article 55 
1. The executive agencies shall be legal persons under Community law created by Commission Decision to which powers may be delegated to implement all or part of a Community programme or project on behalf of the Commission and under its responsibility in accordance with Council Regulation (EC) No 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes ( 10 ). 2. Implementation of the corresponding operational appropriations shall be carried out by the director of the agency.
Article 56 
1. Where the Commission implements the budget by indirect centralised management, it shall first obtain evidence of the existence and proper operation within the entities to which it entrusts implementation of the following: (a) transparent procurement and grant-award procedures which are non-discriminatory and exclude any conflict of interest and which are in accordance with the provisions of Titles V and VI respectively; (b) an effective and efficient internal control system for the management of operations, which includes effective segregation of the duties of authorising officer and accounting officer or of the equivalent functions; (c) an accounting system that enables the correct use of Community funds to be verified and the use of funds to be reflected in Community accounts; (d) an independent external audit; (e) public access to information at the level provided for in Community Regulations; (f) adequate annual ex post publication of beneficiaries of funds deriving from the budget in conformity with Article 30(3). The Commission may accept that the audit, accounting and procurement systems of the entities referred to in paragraphs 1 and 2 are equivalent to its own, with due account for internationally accepted standards. 2. In the case of decentralised management, the criteria laid down in paragraph 1 with the exception of the criterion provided in point (e), shall apply, in full or in part, depending on the degree of decentralisation, agreed between the Commission and the third country, national or international public-sector bodies concerned. Notwithstanding paragraph (1)(a) and Article 169a, the Commission may decide: — in the case of pooling of funds, and — under the conditions provided in the basic act, to use the procurement or grant procedures of the beneficiary partner country or as agreed among donors. Before taking such a decision, the Commission shall first obtain evidence on a case-by-case basis that such procedures satisfy the principles of transparency, equal treatment and non-discrimination, prevent any conflict of interest, offer guarantees equivalent to internationally accepted standards and ensure compliance with the provisions of sound financial management which requires effective and efficient internal control. The third country, national or international public-sector bodies concerned shall undertake to fulfil the following obligations: (a) to comply, subject to the first subparagraph of this paragraph, with the criteria laid down in paragraph 1; (b) to ensure that the audit referred to in point (d) of paragraph 1 is exercised by a national institution for independent external auditing; (c) to conduct regular checks to ensure that the actions to be financed from the budget have been implemented correctly; (d) to take appropriate measures to prevent irregularities and fraud and, if necessary, to bring legal proceedings to recover funds wrongly paid. 3. The Commission shall ensure supervision, evaluation and control of the implementation of the tasks entrusted. It shall take the equivalence of control systems into account when it carries out controls using its own control systems.
Article 57 
1. The Commission may not entrust measures of implementation of funds deriving from the budget, including payment and recovery, to external private-sector entities or bodies, except in the case referred to in Article 54(2)(c) or in specific cases where the payments involved are to be made to beneficiaries determined by the Commission, are subject to conditions and amounts fixed by the Commission and do not involve the exercise of discretion by the entity or body making the payments. 2. The tasks which may be entrusted by contract to external private-sector entities or bodies other than those which have a public-service mission are technical expertise tasks and administrative, preparatory or ancillary tasks involving neither the exercise of public authority nor the use of discretionary powers of judgment.
Article 58 
The duties of authorising officer and accounting officer shall be segregated and mutually incompatible.
Article 59 
1. The institution shall perform the duties of authorising officer. 1a. For the purposes of this Title, the term ‘staff’ refers to persons covered by the Staff Regulations. 2. Each institution shall lay down in its internal administrative rules the staff of an appropriate level to whom it delegates in compliance with the conditions in its rules of procedure the duties of the authorising officer, the scope of the powers delegated and the possibility for the persons to whom these powers are delegated to subdelegate them. 3. The powers of authorising officer shall be delegated or subdelegated only to staff. 4. Authorising officers by delegation or subdelegation may act only within the limits set by the instrument of delegation or subdelegation. The responsible authorising officer by delegation or subdelegation may be assisted in his/her task by one or more members of staff entrusted, under his/her responsibility, to carry out certain operations necessary for implementation of the budget and presentation of the accounts.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 59 ):
1. The institution shall perform the duties of authorising officer. 1a. For the purposes of this Title, the term ‘staff’ refers to persons covered by the Staff Regulations. 2. Each institution shall lay down in its internal administrative rules the staff of an appropriate level to whom it delegates in compliance with the conditions in its rules of procedure the duties of the authorising officer, the scope of the powers delegated and the possibility for the persons to whom these powers are delegated to subdelegate them. 3. The powers of authorising officer shall be delegated or subdelegated only to staff. 4. Authorising officers by delegation or subdelegation may act only within the limits set by the instrument of delegation or subdelegation. The responsible authorising officer by delegation or subdelegation may be assisted in his/her task by one or more members of staff entrusted, under his/her responsibility, to carry out certain operations necessary for implementation of the budget and presentation of the accounts. 5. Where Heads of Union Delegations act as authorising officers by sub-delegation in accordance with the second paragraph of Article 51, they shall be subject to the Commission as the institution responsible for the definition, exercise, control and appraisal of their duties and responsibilities as authorising officers by sub-delegation. The Commission shall, at the same time, inform the High Representative thereof.
Article 60 
1. The authorising officer shall be responsible in each institution for implementing revenue and expenditure in accordance with the principles of sound financial management and for ensuring that the requirements of legality and regularity are complied with. 2. To implement expenditure, the authorising officer by delegation and by subdelegation shall make budgetary commitments and legal commitments, shall validate expenditure and authorise payments and shall undertake the preliminaries for the implementation of appropriations. 3. Implementation of revenue shall comprise drawing up estimates of amounts receivable, establishing entitlements to be recovered and issuing recovery orders. It shall involve waiving established entitlements where appropriate. 4. The authorising officer by delegation shall put in place, in compliance with the minimum standards adopted by each institution and having due regard to the risks associated with the management environment and the nature of the actions financed, the organisational structure and the internal management and control procedures suited to the performance of his/her duties, including where appropriate ex post verifications. Before an operation is authorised, the operational and financial aspects shall be verified by members of staff other than the one who initiated the operation. The initiation and the ex ante and ex post verification of an operation shall be separate functions. 5. All staff responsible for controlling the management of financial operations must have the necessary professional skills. They shall respect a specific code of professional standards established by each institution. 6. Any member of staff involved in the financial management and control of transactions who considers that a decision he/she is required by his/her superior to apply or to agree to is irregular or contrary to the principles of sound financial management or the professional rules he/she is required to observe shall inform the authorising officer by delegation in writing and, if the latter fails to take action, the panel referred to in Article 66(4). In the event of any illegal activity, fraud or corruption which may harm the interests of the Community, he/she shall inform the authorities and bodies designated by the applicable legislation. 7. The authorising officer by delegation shall report to his institution on the performance of his duties in the form of an annual activity report together with financial and management information confirming that the information contained in the report presents a true and fair view except as otherwise specified in any reservations related to defined areas of revenue and expenditure. That report shall indicate the results of the operations by reference to the objectives set, the risks associated with these operations, the use made of the resources provided and the efficiency and effectiveness of the internal control system. The internal auditor shall take note of the annual report and any other pieces of information identified. No later than 15 June each year, the Commission shall send to the budgetary authority a summary of the annual reports for the previous year.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 60 ):
1. The authorising officer shall be responsible in each institution for implementing revenue and expenditure in accordance with the principles of sound financial management and for ensuring that the requirements of legality and regularity are complied with. 2. To implement expenditure, the authorising officer by delegation and by subdelegation shall make budgetary commitments and legal commitments, shall validate expenditure and authorise payments and shall undertake the preliminaries for the implementation of appropriations. 3. Implementation of revenue shall comprise drawing up estimates of amounts receivable, establishing entitlements to be recovered and issuing recovery orders. It shall involve waiving established entitlements where appropriate. 4. The authorising officer by delegation shall put in place, in compliance with the minimum standards adopted by each institution and having due regard to the risks associated with the management environment and the nature of the actions financed, the organisational structure and the internal management and control procedures suited to the performance of his/her duties, including where appropriate ex post verifications. Before an operation is authorised, the operational and financial aspects shall be verified by members of staff other than the one who initiated the operation. The initiation and the ex ante and ex post verification of an operation shall be separate functions. 5. All staff responsible for controlling the management of financial operations must have the necessary professional skills. They shall respect a specific code of professional standards established by each institution. 6. Any member of staff involved in the financial management and control of transactions who considers that a decision he/she is required by his/her superior to apply or to agree to is irregular or contrary to the principles of sound financial management or the professional rules he/she is required to observe shall inform the authorising officer by delegation in writing and, if the latter fails to take action, the panel referred to in Article 66(4). In the event of any illegal activity, fraud or corruption which may harm the interests of the Community, he/she shall inform the authorities and bodies designated by the applicable legislation. 7. The authorising officer by delegation shall report to his institution on the performance of his duties in the form of an annual activity report together with financial and management information confirming that the information contained in the report presents a true and fair view except as otherwise specified in any reservations related to defined areas of revenue and expenditure. That report shall indicate the results of the operations by reference to the objectives set, the risks associated with these operations, the use made of the resources provided and the efficiency and effectiveness of the internal control system. The internal auditor shall take note of the annual report and any other pieces of information identified. No later than 15 June each year, the Commission shall send to the budgetary authority a summary of the annual reports for the previous year. The annual activity reports of the authorising officers by delegation shall also be made available to the budgetary authority.
Article 61 
1. Each institution shall appoint an accounting officer who shall be responsible in each institution for: (a) proper implementation of payments, collection of revenue and recovery of amounts established as being receivable; (b) preparing and presenting the accounts in accordance with Title VII; (c) keeping the accounts in accordance with Title VII; (d) laying down, in accordance with Title VII, the accounting rules and methods and the chart of accounts; (e) laying down and validating the accounting systems and where appropriate validating systems laid down by the authorising officer to supply or justify accounting information; the accounting officer shall be empowered to verify the respect of validation criteria; (f) treasury management. 2. The accounting officer shall obtain from authorising officers, who shall guarantee its reliability, all the information necessary for the production of accounts which give a true image of the Communities' assets and of budgetary implementation. 2a. Before the adoption of the accounts by the institution, the accounting officer shall sign them off, thereby certifying that he has a reasonable assurance that the accounts present a true and fair view of the financial situation of the institution. For that purpose, the accounting officer shall satisfy himself that the accounts have been prepared in accordance with the accounting rules, methods and accounting systems established under his responsibility as laid down in this Regulation for the accounts of his institution, and that all revenue and expenditure is entered in the accounts. The authorising officers by delegation shall forward all information that the accounting officer needs in order to fulfil his duties. The authorising officers shall remain fully responsible for the proper use of the funds they manage as well as the legality and regularity of the expenditure under their control. 2b. The accounting officer shall be empowered to check the information received as well as to carry out any further checks he deems necessary in order to sign off the accounts. The accounting officer shall make reservations, if necessary, explaining exactly the nature and scope of such reservations. 2c. The accounting officers of the other institutions and agencies shall sign off their annual accounts and send them to the Commission's accounting officer. 3. Save as otherwise provided in this Regulation, only the accounting officer is empowered to manage cash and cash equivalents. He shall be responsible for their safekeeping.
Amendment rationale: EXPLANATORY MEMORANDUM The present Commission proposal aims at amending the Financial Regulation in line with the creation of the European External Action Service (hereinafter EEAS) as foreseen in the Lisbon Treaty. The Financial Regulation (FR) governs all the rules and procedures applicable to the use of EU funds and must be respected by all institutions. It is completed by Implementing Rules (IR) which should also be amended, in a separate proposal, to accommodate for the creation of the EEAS. Specificities for the management of the EEAS Staff are put forward in a separate Commission proposal to amend the Staff Regulation. The changes proposed build on the guidelines endorsed by the European Council of October 29-30, 2009 for the creation of the future EEAS as a sui generis service. The Commission will present, as foreseen in Article 184 of the Financial Regulation, its proposal for the triennial review of the Financial Regulation at the end of the first semester 2010. However , the Commission considers that an ad-hoc revision of the FR is inevitable before and separately from the triennial review if the EEAS is to be put in place rapidly. Other aspects relating to the implementation of the Lisbon Treaty have been covered by a separate proposal adopted by the Commission on 3 March 2010 (COM(2010) 71). 1. Main changes relating to the creation of the EEAS Article 27(3) of the Treaty on the European Union (TEU) foresees that the EEAS assist the High Representative (HR) to fulfil his mandate and that the organisation and functioning of the service shall be established by a decision of the Council, on a proposal from the HR after consulting the European Parliament and after obtaining the consent of the Commission. In its conclusions, the European Council of October 29-30, 2009 has endorsed some guidelines for the creation of the future EEAS as a sui generis service and invited the High Representative to put the EEAS in place 'by the end of April 2010'. In budgetary terms, the EEAS will be treated as an institution in the sense of Article 1 of the Financial Regulation so that it will have budgetary autonomy, i.e. its own section in the EU budget. It will implement its own administrative expenditure (like all other institutions) and will therefore receive discharge from the European Parliament for it. The European Parliament will therefore exercise its full budgetary and control powers towards the EEAS. Moreover, current Delegations of the Commission around the world become Union Delegations and will be part of the EEAS. Because these Delegations will continue implementing external aid, which is currently for most of them their main task, ways should be found to allow them to implement operational expenditure while they are not anymore part of the Commission, taking into account that the concerned part of their staff, i.e. operational and financial staff, will remain Commission staff. The Commission has been particularly attentive that the present proposal allow to EEAS to fulfil this task of a unified external action, without leading to a weakening of sound financial management, accountability and the protection of the financial interests of the Union. Naturally, the European Parliament will continue to grant discharge to the Commission for the implementation of the Commission section of the Budget, including operational appropriations implemented by Heads of Union Delegations who will act as sub-delegated authorising officers of the Commission. To achieve this purpose, the modifications introduced in the Financial Regulation aim at integrating the EEAS within the financial governance framework of the Commission whenever it participates in the implementation of its operational budget. In this context, it is essential that the EEAS builds on the experience, guidance, support and training for financial management and internal control in the external relations field which have been developed by the Commission over many years. The proposed approach is that Heads of Union Delegations be given sub-delegated implementation powers by the responsible Commission Directors Generals (DG). They would become authorising officers by sub-delegation (AOSDs) of the Commission and would be responsible before the DG which has sub-delegated budget implementation tasks to them. Specific rules are therefore proposed so that Heads of Union Delegations, when they implement part of the Commission section of the budget apply the Commission rules for the implementation of the budget and are submitted to the same duties and obligations as any other sub-delegated authorising officer of the Commission. To this effect the Commission may give them instructions where necessary and appropriate. Current rules on OLAF will also apply to Heads of Union Delegations in cases of financial irregularities relating to the management of appropriations from the EEAS section of the Budget and appropriations sub-delegated to them from the Commission section of the Budget. No specific provision concerning OLAF is required in the Financial Regulation. However, the present Commission proposal includes a new provision so that the panel of irregularities of the Commission is also the panel of irregularities for the EEAS in cases where the Commission sub-delegates implementation powers to Heads of Union Delegations. New provisions are also proposed to ensure that the HR plays a central role for the proper coordination and exchange of information between the EEAS and the Commission. Finally, in order to ensure an efficient management of Union Delegations, it is proposed that administrative and support expenditure which finance common costs in Delegations should be executed by a single support service, whatever the section of the Budget in which the respective appropriations are entered. To that effect, the possibility for detailed rules should be foreseen in Article 50 FR, to be convened with the Commission. 2. Commission Staff Working document concerning the Implementing Rules To complement the present Commission proposal to amend the Financial Regulation, a Commission Staff working document presents the changes required in the Implementing Rules. These changes will be adopted by the Commission once the amended FR is adopted and will concern the specific provisions which should apply to Heads of Delegation when they act as sub-delegated authorising officers of the Commission, in particular: - the fact that they have to sign the Charter for sub-delegated authorising officers, which stipulates in detail their duties and obligations, before starting to implement the EU Budget; - the Internal Rules of the Commission for the execution of the Budget; - the code of professional standards adopted by the Commission; - the panel of irregularities of the Commission (complementary provisions to the ones already set out in the FR are enshrined in the Implementing Rules).
Revised version (Article 61 ):
1. Each institution shall appoint an accounting officer who shall be responsible in each institution for: (a) proper implementation of payments, collection of revenue and recovery of amounts established as being receivable; (b) preparing and presenting the accounts in accordance with Title VII; (c) keeping the accounts in accordance with Title VII; (d) laying down, in accordance with Title VII, the accounting rules and methods and the chart of accounts; (e) laying down and validating the accounting systems and where appropriate validating systems laid down by the authorising officer to supply or justify accounting information; the accounting officer shall be empowered to verify the respect of validation criteria; (f) treasury management. The responsibilities of the accounting officer of EEAS shall concern only the EEAS section of the budget as implemented by the EEAS. The accounting officer of the Commission shall remain responsible for the entire Commission section of the budget, including accounting operations relating to appropriations sub-delegated to Heads of Union Delegations. The accounting officer of the Commission shall also act as the accounting officer of the EEAS in respect of the implementation of the EEAS section of the budget, subject to Article 186a. 2. The accounting officer shall obtain from authorising officers, who shall guarantee its reliability, all the information necessary for the production of accounts which give a true image of the Communities' assets and of budgetary implementation. 2a. Before the adoption of the accounts by the institution, the accounting officer shall sign them off, thereby certifying that he has a reasonable assurance that the accounts present a true and fair view of the financial situation of the institution. For that purpose, the accounting officer shall satisfy himself that the accounts have been prepared in accordance with the accounting rules, methods and accounting systems established under his responsibility as laid down in this Regulation for the accounts of his institution, and that all revenue and expenditure is entered in the accounts. The authorising officers by delegation shall forward all information that the accounting officer needs in order to fulfil his duties. The authorising officers shall remain fully responsible for the proper use of the funds they manage as well as the legality and regularity of the expenditure under their control. 2b. The accounting officer shall be empowered to check the information received as well as to carry out any further checks he deems necessary in order to sign off the accounts. The accounting officer shall make reservations, if necessary, explaining exactly the nature and scope of such reservations. 2c. The accounting officers of the other institutions and agencies shall sign off their annual accounts and send them to the Commission's accounting officer. 3. Save as otherwise provided in this Regulation, only the accounting officer is empowered to manage cash and cash equivalents. He shall be responsible for their safekeeping.
Article 62 
The accounting officer may, in the performance of his duties, delegate certain tasks to subordinate staff. The instrument of delegation shall lay down the tasks entrusted to the delegatees.
Article 63 
1. Imprest accounts may be set up for the collection of revenue other than own resources and for the payment of small sums as defined in the implementing rules. However, in the field of crisis management aid and humanitarian aid operations within the meaning of Article 110, imprest accounts may be used without any limitation on the amount while respecting the level of appropriations decided by the budgetary authority on the corresponding budget line for the current financial year. 2. Imprest accounts shall be endowed by the institution's accounting officer and shall be placed under the responsibility of imprest administrators designated by the institution's accounting officer.
Article 64 
1. Without prejudice to any disciplinary action, authorising officers by delegation and subdelegation may at any time have their delegation or subdelegation withdrawn temporarily or definitively by the authority which appointed them. 2. Without prejudice to any disciplinary action, the accounting officer may at any time be suspended temporarily or definitively from his/her duties by the authority which appointed him/her. 3. Without prejudice to any disciplinary action, imprest administrators may at any time be suspended temporarily or definitively from their duties by the authority which appointed them.
Article 65 
1. The provisions of this Chapter are without prejudice to any liability under criminal law which the financial actors referred to in Article 64 may incur as provided in the applicable national law and in the provisions in force on the protection of the Communities' financial interests and on the fight against corruption involving officials of the Communities or officials of Member States. 2. Each authorising officer, accounting officer or imprest administrator shall be liable to disciplinary action and payment of compensation as laid down in the Staff Regulations, without prejudice to Articles 66, 67 and 68. In the event of illegal activity, fraud or corruption which may harm the interests of the Community, the matter will be submitted to the authorities and bodies designated by the applicable legislation.