Legalize / European Union / Financial Regulation

Financial regulation of 27 March 2003 applicable to the 9th European Development Fund

Type Financial Regulation

Publication 2003-04-01

Last updated 2007-03-24

State In force

Department Council of the European Union

Source EUR-Lex

articles 137

Reform history JSON API

2003Q0401 — EN — 24.03.2007 — 001.001

This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents


	FINANCIAL REGULATION of 27 March 2003 applicable to the 9th European Development Fund (OJ L 083, 1.4.2003, p.1)

Amended by:


	Official Journal	Official Journal	Official Journal
	No	page	date
Council Regulation (EC) No 309/2007 of 19 March 2007	L 82	1	23.3.2007

FINANCIAL REGULATION

of 27 March 2003

applicable to the 9th European Development Fund

THE COUNCIL OF THE EUROPEAN UNION

Having regard to the Treaty establishing the European Community,

Having regard to the Partnership Agreement between the members of the African, Caribbean and Pacific Group of States of the one part, and the European Community and its Member States, of the other part, signed in Cotonou on 23 June 2000 (1) (hereinafter referred to as the ‘ACP-EC Agreement’),

Having regard to Council Decision 2001/822/EC of 27 November 2001 on the association of the overseas countries and territories with the European Community (‘Overseas Association Decision’) (2),

Having regard to the Internal Agreement between Representatives of the Governments of the Member States, meeting within the Council, on the Financing and Administration of Community Aid under the Financial Protocol to the Partnership Agreement between the African, Caribbean and Pacific States and the European Community and its Member States signed in Cotonou (Benin) on 23 June 2000 and the allocation of financial assistance for the Overseas Countries and Territories to which Part Four of the EC Treaty applies (3) (hereinafter referred to as the ‘Internal Agreement’) and in particular Article 31 thereof,

Having regard to the proposal from the Commission (4),

Having regard to the opinion of the Court of Auditors (5),

Having regard to the opinion of the European Investment Bank,

Whereas:


(1)	It is necessary to determine the detailed rules for the payment of contributions by the Member States to the 9th European Development Fund (hereinafter ‘the EDF’), set up by the Internal Agreement, and to the allocation of financial assistance for the Overseas Countries and Territories to which Part Four of the EC Treaty applies.

---	---
(2)	It is necessary to lay down the conditions in accordance with which the Court of Auditors is to exercise its powers in respect of the EDF.

---	---
(3)	The provisions concerning scrutiny by the Court of Auditors of the resources managed by the EIB comply with the contractual nature of the Tripartite Agreement provided for in Article 248 of the Treaty.

---	---
(4)	Rules should be laid down for the treatment of any balances remaining from previous EDFs, in particular as regards the detailed arrangements for their transfer to the 9th EDF, their allocation to the various cooperation instruments provided for by the ACP-EC Agreement or by the Overseas Association Decision, and the rules applicable for their implementation.

---	---
(5)	It is necessary to ensure consistency as between this Regulation and the measures adopted by the Commission for the implementation of the Overseas Association Decision.

---	---
(6)	It is appropriate to ensure the proper, prompt and efficient execution of programmes and projects financed under the ACP-EC Agreement and to establish management procedures which are transparent and easy to apply, and which facilitate the decentralisation of tasks and responsibilities.

---	---
(7)	Decision 2/2002 of the ACP-EC Council of Ministers of 7 October 2002 on the implementation of Articles 28, 29 and 30 of Annex IV to the Cotonou Agreement (6) has specified the general regulations and general conditions applicable to works, supply and service contracts financed by the EDF, as well as the rules governing procedure, conciliation and arbitration in relation to such contracts.

---	---
(8)	It is necessary to establish the detailed rules in accordance with which the Chief Authorising Officer of the EDF, to be appointed by the Commission with responsibility inter alia for the clearance of expenditure under the EDF, has, in close cooperation with the National Authorising Officer, to make such arrangements as prove necessary to ensure the proper execution of operations.

---	---
(9)	As far as possible, Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (7), (hereinafter referred to as the ‘General Financial Regulation’) should, as the cornerstone of the reform of the Commission's internal management, be taken into account in drawing up the Financial Regulation for the EDF, particularly with a view to the possible integration of EDF resources into the general budget of the Communities. In the light of the experience acquired from the implementation of this Regulation, the Commission may propose amendments thereto,

HAS ADOPTED THIS FINANCIAL REGULATION:

PART ONE

MAIN PROVISIONS

TITLE I

GENERAL PROVISIONS

CHAPTER 1

SUBJECT MATTER AND SCOPE

Article 1

This Regulation lays down the rules for the establishment and financial implementation of the resources of the 9th EDF.

The Commission shall assume the Community's responsibilities defined in Article 57 of the ACP-EC Agreement and in the Overseas Association Decision. To that end, it shall undertake the financial implementation of operations carried out with EDF resources allocated in the form of non-repayable aid, excluding interest rate subsidies, and make payments in accordance with this Regulation.

In applying this Regulation, the Commission shall act on its own responsibility and within the limits of the resources allocated.

The EIB, acting on behalf of the Community, shall manage the Investment Facility, as well as interest rate subsidies, and shall conduct operations thereunder, in accordance with the rules set out in Part Two. In that context, the EIB shall act on behalf of and at the risk of the Community.

The EIB shall undertake the financial implementation of operations carried out by means of loans from its own resources, where applicable combined with interest rate subsidies drawn from the EDF's grant resources.

The provisions of this Part, together with those of Part Three, shall apply exclusively to the financial implementation of the EDF resources managed by the Commission. Those provisions may not be interpreted as giving rise to any obligations on the Commission's part in respect of the financial implementation of EDF resources managed by the EIB.

Unless otherwise specified, references in this Regulation to the ACP States shall be deemed to refer also to the bodies or representatives defined in Articles 13 and 14 of Annex IV to the ACP-EC Agreement, which they may duly mandate to exercise their responsibilities under that Agreement.

The financial year shall begin on 1 January and end on 31 December.

CHAPTER 2

PRINCIPLE OF THE UNIT OF ACCOUNT

Article 2

EDF resources shall be established and implemented in euro and the accounts shall be presented in euro.

However, for the treasury management purposes referred to in Article 26, the accounting officer may carry out operations in euro, in other currencies and in national currencies.

CHAPTER 3

PRINCIPLE OF SPECIFICATION

Article 3

The resources of the EDF shall be earmarked for specific purposes according to the main instruments of cooperation, as described in the Financial Protocol of the ACP-EC Agreement and the Overseas Association Decision.

In respect of the African, Caribbean and Pacific States, (hereinafter referred to as ‘the ACP States’), those instruments are laid down by the Financial Protocol set out in Annex I to the ACP-EC Agreement. Earmarking of resources shall also be based on the provisions of the Internal Agreement and shall take account of the non-allocated reserve provided for in Article 2(2) of that Agreement and of the resources reserved for costs linked to implementation under Article 4 thereof.

In respect of the Overseas Countries and Territories, (hereinafter referred to as ‘the OCTs’), those instruments are laid down in Annex II A to the Overseas Association Decision. Earmarking of those resources shall also take account of the non-allocated reserve provided for in Article 3(3) of that Annex and of the resources reserved for studies or technical assistance measures under Article 1(1)(c) thereof.

CHAPTER 4

PRINCIPLE OF SOUND FINANCIAL MANAGEMENT

Article 4

EDF resources shall be used in accordance with the principles of sound financial management, that is to say, in accordance with the principles of economy, efficiency and effectiveness.

The principle of economy requires that the resources used for the pursuit of activities 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.

Objectives shall be set and achievement of those objectives shall be monitored by means of measurable indicators. To that end, the use of EDF resources must be preceded by an ex ante evaluation of the operation to be undertaken and the operation must be submitted to an ex post evaluation with a view to ensuring that the intended results justify the means deployed.

Programmes or operations shall be periodically examined, particularly in relation to the estimates of calls for contributions referred to in Article 38(1), so that it can be established that they are justified.

CHAPTER 5

PRINCIPLE OF TRANSPARENCY

Article 5

The resources of the EDF shall be established and implemented and the accounts presented in compliance with the principle of transparency.

The annual estimates of commitments and payments under Article 10 of the Internal Agreement, together with the EDF accounts referred to in Article 96 of this Regulation, shall be published in the Official Journal of the European Union.

TITLE II

RESOURCES AND ADMINISTRATIVE EXPENDITURE

CHAPTER 1

COMPOSITION OF EDF RESOURCES

Article 6

The EDF shall consist of:

(a)the amount laid down in Article 1 of the Internal Agreement;

(b)pursuant to Article 1(2)(b) of the Internal Agreement, any balances remaining from previous EDFs as defined in Title I of Part Three of this Regulation.

The revenue accruing from interest on the funds referred to in paragraph 1 deposited with the paying agents in Europe referred to in Article 37 of Annex IV to the ACP-EC Agreement shall be credited to one or more bank accounts opened in the name of the Commission, and shall be used in accordance with Article 9 of the Internal Agreement and with this Regulation.

The breakdown of allocations laid down by the ACP-EC Agreement and by the Internal Agreement is indicated in the Annex to this Regulation for information purposes.

Article 7

The amount laid down in Article 4 of the Internal Agreement shall be reserved for the financing of costs linked to implementation incurred by the Commission in the framework of the ACP-EC Agreement. It shall be utilised in accordance with the principles set out in Article 9 of the Internal Agreement.

Those resources shall be used inter alia to reinforce the administrative capacities of the Commission and its Delegations in order to ensure the smooth preparation and implementation of operations financed from the EDF.

CHAPTER 2

CONTRIBUTIONS TO THE EDF

Article 8

Each year, the Commission shall establish and communicate to the Council, by 15 October at the latest, a statement of the payments to be made in the following financial year and a schedule of the calls for contributions. In so doing, the Commission shall take into account the estimates submitted to it by the EIB, in accordance with Article 121 concerning operations, including interest rate subsidies, managed by the EIB.

The Commission shall justify the amount requested on the basis of its capacity to deliver the proposed level of resources effectively. The EIB shall justify the amount requested on the basis of its operational requirements. The Council shall decide on those justifications and on each call for contributions in accordance with the rules referred to in Article 10 of the Internal Agreement and laid down in Article 38 of this Regulation.

As regards balances remaining from previous EDFs which are transferred to the 9th EDF in accordance with Article 6, the contributions of each Member State shall be calculated in proportion to the contribution of that State to the EDF in question.

The Commission's annual estimates of contributions shall cover:

(a)its estimates of commitments for the following financial year, and those of the EIB;

(b)its estimates of commitments and disbursements for each of the four years following the year relating to the call for contributions, and those of the EIB. The schedule shall be approved and reviewed annually by the Council.

The financial information on the EDF provided by the Commission to the budgetary authority in the context of the annual budget procedure, including the estimates of contributions for the current and the following financial year, shall be made available to the Council by 15 June. This information serves as a basis for an intermediate estimate of commitments and disbursements.

Should the contributions prove insufficient to meet the EDF's actual needs in the financial year in question, any supplementary payments may be decided upon in accordance with Article 10(4) of the Internal Agreement.

Payments of contributions by the Member States shall be made in accordance with Article 38.

TITLE III

IMPLEMENTATION OF EDF RESOURCES

CHAPTER 1

GENERAL PROVISIONS

Article 9

The Commission may, within its own departments, delegate its powers to implement EDF resources, in accordance with the conditions laid down by this Regulation and within the limits set by the Commission in the instrument of delegation. Delegates may act only within the limits of the powers expressly conferred upon them.

Article 10

All financial actors as defined in Chapter 3 shall be prohibited from taking any measures implementing EDF resources which may bring their own interests into conflict with those of the Community. Should such a case arise, the actor in question shall refrain from such measures and refer the matter to the competent authority.

Article 11

In accordance with the procedures laid down for financing proposals in Articles 24(1) and (3) of the Internal Agreement, and in order to speed up those procedures, the Commission shall submit financing proposals concerning the authorisation of overall amounts allocated to the financing of the activities referred to in Article 16(7) of Annex IV to the ACP-EC Agreement. After the proposal has been adopted, the Commission may take financing decisions on the basis of the global authorisation.

The financing proposals referred to in paragraph 1 shall specify the objectives and, where appropriate, the intended impact of the Community contribution. They shall also describe the viability of the activities, previous experience and earlier evaluations, and coordination with other donors.

CHAPTER 2

METHODS OF IMPLEMENTATION

Article 12

The Commission shall undertake the financial implementation of EDF resources by means of decentralised management with the ACP States in accordance with the conditions set out in the ACP-EC Agreement and applying the breakdown of responsibilities provided for in Article 57 of that Agreement and Articles 34, 35 and 36 of Annex IV thereto.

The Commission shall undertake the financial implementation of EDF resources by means of decentralised management with the OCTs in accordance with the conditions set out in the Overseas Association Decision and in the measures implementing that Decision.

In the cases provided for in the ACP-EC Agreement, in the Internal Agreement, in the Overseas Association Decision and in the measures implementing that Decision, the Commission may undertake the financial implementation of EDF resources by centralised management.

In certain specific cases provided for in the ACP-EC Agreement, in the Internal Agreement, in the Overseas Association Decision and in the measures implementing that Decision, the Commission may undertake the financial implementation of EDF resources by means of joint management with international organisations.

EDF resources may also be associated with funds from other sources in order to achieve a joint objective.

Article 13

In the context of decentralised management, the Commission shall undertake the financial implementation of EDF resources in accordance with the detailed rules laid down in paragraphs 2, 3, and 4 without prejudice to delegation of residual tasks to bodies referred to in Article 14(3).

The Commission and the beneficiary ACP States or OCTs shall:

(a)check regularly that the operations financed by the EDF have been properly implemented;

(b)take appropriate measures to prevent irregularities and fraud and if necessary bring prosecutions to recover funds wrongly paid.

In order to ensure that funds are used in accordance with the applicable rules and within the limits of powers thereby conferred upon it, the Commission shall implement clearance of account procedures or financial correction mechanisms enabling it to discharge its obligations under the ACP-EC Agreement, in particular under Article 34(1) of Annex IV thereto, and under the Overseas Association Decision, in particular under Articles 20 and 32 thereof, for the clearance of expenditure financed from EDF resources.

The implementation by ACP States and OCTs of operations financed from EDF resources shall be subject to Commission scrutiny, which may be exercised by prior approval, by ex post checks or by a combined procedure, in accordance with the provisions of the ACP-EC Agreement, the Overseas Association Decision and the measures implementing that Decision.

Depending on the degree of decentralisation provided for in the ACP-EC Agreement and in the Overseas Association Decision and the measures implementing that Decision, the Commission shall strive to encourage the beneficiary ACP States and the OCTs to adhere, when exercising the powers entrusted to them under the ACP-EC Agreement and under the Overseas Association Decision, to the principle of sound financial management set out in Article 4, in particular the progressive application of the following criteria:

(a)effective segregation of the duties of authorising officer and accounting officer;

(b)existence of an effective system for the internal control of management operations;

(c)separate procedures for the presentation of accounts showing the use made of EDF resources;

(d)existence of an independent, public or private external audit system;

(e)transparent, non-discriminatory procurement procedures which prevent any conflict of interests;

(f)in the case of the direct-labour operations referred to in Article 80(2), adequate provisions for the management and scrutiny of imprest accounts and for the definition of the responsibilities of the imprest administrator and the accounting officer.

For the purposes of applying the first subparagraph, the Commission shall, in agreement with the beneficiary ACP States and OCTs, incorporate appropriate provisions in the financing agreements referred to in Article 51(3).

Article 14

Where the Commission implements EDF resources on a centralised basis, implementation tasks shall be performed either directly in its departments or indirectly, in accordance with paragraphs 2 to 7 of this Article and with Articles 16 and 17.

Indirect implementation, in accordance with paragraphs 2 to 7 of this Article and with Article 15 also applies in the case of delegation of residual tasks to bodies referred to in paragraph 3 of this Article in the case of decentralised management.

The Commission may not entrust to third parties its implementation powers under the ACP-EC Agreement or the Overseas Association Decision where those powers involve a large measure of discretion implying political choices.

The first subparagraph shall apply in particular to the financing decisions provided for in Article 51(2).

Where indirect methods of implementation are used, as provided for in paragraph 3, the implementing tasks delegated must be clearly defined and supervised.

Within the limits laid down in paragraph 2, the Commission may entrust tasks involving the exercise of public authority, in particular financial implementation tasks, to:

(a)the executive agencies referred to in Article 15;

(b)national public-sector bodies governed by private law with a public service mission and providing adequate financial guarantees for the implementation of the tasks assigned to them within the framework defined in this paragraph.

The Commission shall inform annually the Council of the cases and bodies concerned by providing commensurate motivation of the use of national agencies.

In the case, referred to in point (b) of the first subparagraph, of programmes or projects co-financed by the Member States or their implementing bodies and reflecting the priorities laid down in the Country Cooperation Strategies provided for in Chapter III of the Internal Agreement and in Article 20 of the Overseas Association Decision, the Commission may entrust responsibility for managing Community aid to Member States or to their implementing bodies. The Commission may draw on the EDF resources provided for in Article 1(2)(a)(i) and (ii) of the Internal Agreement in order to pay financial compensation for the administration costs incurred.

Implementation tasks may be entrusted to the bodies referred to in point (b) of the first subparagraph only if the delegation of financial implementation tasks is a response to the requirements of sound financial management, as shown by prior analysis and, ensures compliance with the principle of non-discrimination and the visibility of Community action. No implementing tasks entrusted in this way may give rise to conflicts of interests. If the analysis shows that delegation best satisfies the requirements of sound financial management, the Commission shall request the opinion of the EDF Committee provided for in Article 21 of the Internal Agreement before proceeding to implement the delegation. The EDF Committee may also give its opinion on the planned application of the selection criteria.

The financial guarantees referred to in point (b) of the first subparagraph shall apply in particular as regards the full recovery of any amounts due to the Commission.

Where indirect methods of implementation are used, as provided for in paragraph 3, the bodies responsible for implementation shall:

(a)conduct regular checks to ensure that the operations to be financed have been implemented correctly;

(b)take appropriate measures to prevent irregularities and fraud and if necessary bring prosecutions to recover funds lost, wrongly paid or badly used.

The decisions, referred to in paragraph 3, entrusting implementing tasks shall cover all appropriate arrangements for ensuring the transparency of operations carried out and must comprise:

(a)an independent external audit;

(b)an effective internal control system for management operations;

(c)accounting arrangements for those operations and procedures for the presentation of the accounts which will enable the correct use of EDF resources to be ascertained and the true extent of that use to be reflected in the accounts;

(d)procurement and grant award procedures which comply with the provisions of Titles IV and VI.

The Commission may accept that the audit, accounting and procurement systems of the national bodies referred to in paragraph 3 are equivalent to its own, with due account for internationally accepted standards.

The Commission shall ensure periodic supervision, evaluation and control of the implementation of the tasks entrusted to the bodies referred to in paragraph 3. The European Anti-Fraud Office (OLAF) shall enjoy the same powers with regard to such bodies as it does with regard to Commission departments. The bodies in question shall adopt the necessary measures to help OLAF carry out internal investigations. Any act undertaken by such bodies for the financial implementation of EDF resources, and in particular any decision or any contract concluded by them, must specifically provide for the same controls as Article 51(4).

The Commission may not entrust measures implementing funds deriving from EDF resources, such as payment and recovery, to external private sector entities or bodies other than those referred to in point (b) of the first subparagraph of paragraph 3.

The tasks which the Commission may entrust by contract to external private sector entities or bodies other than those referred to in point (b) of the first subparagraph of paragraph 3 shall be technical expertise tasks and administrative, preparatory or ancillary tasks involving neither the exercise of public authority nor the use of discretionary power.

Article 15

The executive agencies shall be legal persons under Community law created by Community decision, to which powers of implementation may be delegated in all or in part on behalf of the Commission and on 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 relating to the management of Community programmes (8) and defining the conditions and arrangements for their creation and operation.

Article 16

In the context of joint management with international organisations, the latter shall, in their accounting, audit, control and procurement procedures, apply standards which offer guarantees equivalent to internationally accepted standards. The implementation by international organisations of operations financed from EDF resources shall be subject to scrutiny by the Commission. Such scrutiny shall be exercised by prior approval, by ex post checks or by a combined procedure.

CHAPTER 3

FINANCIAL ACTORS

Section 1

Principle of segregation of duties

Article 17

The duties of authorising officer and accounting officer shall be segregated and mutually incompatible.

Save where otherwise indicated, references in this Regulation to the authorising officer or to the authorising officer responsible shall be deemed to refer to the Commission's authorising officers defined in Section 2. References to the accounting officer shall be deemed to refer to the Commission's accounting officers defined in Section 3.

Section 2

Authorising officer

Article 18

In the context of the financial implementation of the operations referred to in Article 1(2), the Commission shall perform the duties of authorising officer.

The Commission shall determine the staff of an appropriate level to whom it shall delegate the duties of authorising officer, and shall delimit the powers delegated and the circumstances in which delegates may sub-delegate those powers.

In accordance with Article 34 of Annex IV to the ACP-EC Agreement, the Commission shall appoint an authorising officer by delegation as Chief Authorising Officer of the EDF. It shall also define his duties in respect of the implementation of the Overseas Association Decision. The Chief Authorising Officer may delegate his powers to authorising officers by sub-delegation.

The powers of authorising officer shall be delegated or sub-delegated only to persons covered by the Staff Regulations of officials and the conditions of employment of other servants of the European Communities (hereinafter referred to as ‘the Staff Regulations’).

The rules on spheres of competence adopted in this Title shall apply to authorising officers by delegation or sub-delegation. Authorising officers by delegation or sub-delegation may act only within the limits set by the instrument of delegation or sub-delegation. Each delegation or sub-delegation decision shall indicate the limits and, where appropriate, the duration of the delegation. The authorising officer by delegation or sub-delegation may be assisted in his task by one of more members of staff entrusted, under the responsibility of the former, with certain operations required for the implementation of the EDF and production of the accounts.

Decisions taken pursuant to paragraphs 2, 3 and 5 shall be notified to the delegates, the accounting officer, the internal auditor and the Court of Auditors.

Article 19

The authorising officer entrusted with the management of EDF resources shall be responsible for implementing revenue and expenditure in accordance with the principle of sound financial management and for ensuring that the requirements of legality and regularity are complied with.

Article 20

To implement expenditure, the Chief Authorising Officer and authorising officers by sub-delegation shall make commitments, validate expenditure and authorise payments and shall undertake the preliminaries for the implementation of EDF resources.

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.

Article 21

Save in cases where management is centralised, operations relating to the implementation of programmes or projects shall be carried out by the national or regional authorising officer, as defined in Article 35 of Annex IV to the ACP-EC Agreement and in the measures implementing the Overseas Association Decision, in close cooperation, in the ACP States, with the head of delegation in accordance with Articles 35 and 36 of Annex IV to the ACP-EC Agreement.

The head of delegation shall be an authorising officer by sub-delegation and, in exercising the powers delegated to him, he shall be subject to this Regulation. He shall receive the necessary instructions and powers to perform his duties as defined in Article 36 of Annex IV to the ACP-EC Agreement and in the measures implementing the Overseas Association Decision.

Article 22

The Chief Authorising Officer shall take all measures necessary for the implementation of Annex IV to the ACP-EC Agreement and Articles 18 and 33 of the Overseas Association Decision and Annexes II A to II D thereto.

The Chief Authorising Officer shall take all measures necessary to ensure that national, regional or local authorising officers perform the tasks for which they are responsible by virtue of the ACP-EC Agreement, and in particular Annex IV thereto, and by virtue of the Overseas Association Decision or measures implementing that Decision. In close cooperation with the National Authorising Officer, he shall take such commitment decisions and financial measures as prove necessary, from an economic and technical point of view, to ensure the proper execution of operations.

Article 23

Where the Chief Authorising Officer becomes aware of problems in carrying out procedures relating to management of EDF resources, he shall, in conjunction with the national or regional authorising officer, make all contacts necessary to remedy the situation and take any steps that are necessary. For instance, in cases where the national or regional authorising officer does not or is unable to perform the duties incumbent on him under the ACP-EC Agreement, the Chief Authorising Officer may temporarily take his place, in which case, the Commission may receive, from the resources allocated to the ACP State in question, financial compensation for the extra administrative workload incurred.

Any measure taken by the Chief Authorising Officer pursuant to the first subparagraph shall be taken in the name of and on behalf of the national or regional authorising officer concerned.

Article 24

In compliance with the minimum standards adopted by the Commission and having due regard to the risks associated with the management environment and the nature of the operations financed, the Chief Authorising Officer shall put in place the organisational structure and the internal management and control systems and procedures suited to the performance of his duties, including where appropriate ex post checks. Before an operation is authorised, the operational and financial aspects shall be verified by staff other than the member of staff who initiated the operation. Initiation of an operation and the ex ante and ex post verification of that operation shall be separate functions.

All staff responsible for controlling the management of financial operations shall have the necessary professional skills. They shall respect a specific code of professional standards established by the Commission.

Any member of staff involved in the financial management and control of operations who considers that a decision which his superior requires him to apply or to agree to is irregular or contrary to the principles of sound financial management or the professional rules by which he is bound shall inform the Chief Authorising Officer in writing and, if the latter fails to take action, the panel referred to in Article 35(3). In the event of fraud, corruption or any other illegal activity which may harm the interests of the Community, he shall inform OLAF and the authorities designated by the Staff Regulations.

Article 25

The Chief Authorising Officer shall report to the Commission on the performance of his duties in the form of an annual activity report, which shall include financial and management information. The report shall cover the results of his operations by reference to the objectives set, the risks associated with those operations, the use made of the resources provided and the functioning of the internal control system. The annual activity report and other specified information shall be brought to the attention of the internal auditor of the Commission. By 15 June each year at the latest, the Commission shall send the European Parliament and the Council a summary of the annual activity report for the previous year.

Section 3

Accounting officer

Article 26

The accounting officer shall be responsible for:

(a)proper implementation of payments, collection of revenue and recovery of amounts established as being receivable;

(b)preparing and presenting the financial statements and reports on financial implementation in accordance with Articles 100 and 101;

(c)keeping the accounts for: (i)the allocations referred to in Article 6, except those for the Investment Facility, and interest rate subsidies; (ii)the commitments referred to in Article 51; (iii)payments, revenue and debts;

(d)laying down, in accordance with Title VII, the accounting rules and methods and the chart of accounts;

(e)defining and validating the accounting systems and, where appropriate, validating systems defined by the Chief Authorising Officer for the purpose of supplying or explaining accounting information;

(f)treasury management.

The accounting officer shall obtain from the Chief Authorising Officer and from the EIB, who shall, each for their own part, guarantee its reliability, all the information necessary for the production of accounts giving a true image of the financial implementation of EDF resources.

The accounting officer is alone empowered to handle monies and other assets. He shall be responsible for their safekeeping.

Article 27

The accounting officer shall be appointed by the Commission. The accounting officer may, for the performance of his duties, delegate certain tasks to subordinates who are subject to the Staff Regulations. The instrument of delegation shall define the tasks entrusted to the delegates.

Decisions taken pursuant to the first subparagraph shall be notified to the delegates, the Chief Authorising Officer, the internal auditor and the Court of Auditors.

Section 4

Paying agent

Article 28

In order to make the payments provided for in Article 37(1) and (4) of Annex IV to the ACP-EC Agreement or in the measures implementing the Overseas Association Decision, the accounting officer shall open accounts with financial institutions in the ACP States and the OCTs, for payments in the national currencies of the ACP States or in the local currencies of the OCTs, and with financial institutions in the Member States, for payments in euro and other currencies. In accordance with Article 37(2) of Annex IV to the ACP-EC Agreement, deposits in accounts with financial institutions in the ACP States and the OCTs shall bear no interest and the latter shall receive no remuneration for their services. In accordance with Article 1(3) of the Internal Agreement, deposits in accounts with financial institutions in the Member States shall bear interest and such interest shall be credited to the one of the accounts provided for in that Article.

Article 29

The relations between the Commission and the paying agents provided for in Article 37 of Annex IV to the ACP-EC Agreement or in the measures implementing the Overseas Association Decision shall be the subject of contracts. Once signed, copies of those contracts shall be sent to the Court of Auditors for information purposes.

Article 30

The Commission shall transfer from the special accounts opened pursuant to Article 40(3) the amounts needed to replenish the accounts opened in its name in accordance with Article 28. Such transfers shall be made on the basis of the cash needs of the projects and programmes.

The Commission shall endeavour to make any withdrawals from the special accounts referred to in the first subparagraph of Article 40(3) in such a way as to maintain a distribution of its assets in those accounts corresponding to the proportions in which the various Member States contribute to the EDF.

Article 31

The signatures of the Commission officials and staff who are empowered to carry out operations on the EDF's accounts shall be lodged with the banks concerned when the accounts are opened or, in the case of officials and staff who are authorised subsequently, when they are designated. That procedure also applies to the lodging of signatures of national and regional authorising officers and their deputies for operations in paying agent accounts opened in the ACP States or the OCTs and, where appropriate, in the accounts opened in the Member States.

CHAPTER 4

LIABILITY OF THE FINANCIAL ACTORS

Section 1

General rules

Article 32

Without prejudice to any disciplinary action, the Chief Authorising Officer and authorising officers by sub-delegation may at any time have their delegation or sub-delegation withdrawn temporarily or definitively by the authority which appointed them.

Without prejudice to any disciplinary action, accounting officers may at any time be suspended temporarily or definitively from their duties by the Commission.

Article 33

The provisions of this Chapter shall obtain without prejudice to the criminal law liability which the persons referred to in Article 32 may incur under the applicable national law and the legislation in force on the protection of the European Communities' financial interests and on the fight against corruption involving officials of the European Communities or officials of Member States.

Each authorising officer or accounting officer shall be liable to disciplinary action and payment of compensation as provided for in the Staff Regulations, without prejudice to Articles 34, 35 or 36 of this Regulation. In the event of fraud, corruption or any other illegal activity which may harm Community interests, OLAF and the authorities designated by the Staff Regulations shall be informed.

Section 2

Rules applicable to authorising officers

Article 34

Authorising officers shall be liable to pay compensation in accordance with the conditions laid down in the Staff Regulations, under which an official may be required to make good, in whole or in part, any damage suffered by the Communities as a result of serious misconduct on his part in the course of or in connection with the performance of his duties, in particular in the event of failure to comply with this Financial Regulation when establishing entitlements to be recovered or issuing recovery orders, entering into a commitment of expenditure or signing a payment order. The same shall apply if they omit to draw up a document establishing a debt or if they neglect to issue recovery orders or are, without justification, late in issuing them, or if they neglect to issue payment orders or are, without justification, late in issuing them, thereby rendering the institution liable to civil action by third parties.

Article 35

Where the Chief Authorising Officer or an authorising officer by sub-delegation considers that a decision which it is his responsibility to take is irregular or contrary to the principles of sound financial management, he shall inform the delegating authority in writing. If the delegating authority then gives a reasoned instruction in writing to the Chief Authorising Officer or authorising officer by sub-delegation to take the decision in question, the latter may not be held liable.

In the event of internal sub-delegation, the Chief Authorising Officer shall continue to be responsible for the effectiveness of the internal management and control systems put in place and for the choice of the authorising officer by sub-delegation.

The specialised panel set up by the Commission in accordance the General Financial Regulation, shall have competence to determine, in relation to the EDF, whether a financial irregularity has occurred and, if so, the consequences entailed, if any. In respect of the management of EDF resources by the Commission, cases shall be referred to that panel as provided for in the detailed rules for implementing the General Financial Regulation.

On the basis of the panel's opinion, the Commission shall decide whether to initiate proceedings entailing liability to disciplinary action or to payment of compensation. If the panel detects systemic problems, it shall send a report with recommendations to the Chief Authorising Officer and to the internal auditor.

Section 3

Rules applicable to accounting officers

Article 36

An accounting officer shall be liable to disciplinary action and payment of compensation, as provided for and in accordance with the procedures laid down in the Staff Regulations, in particular where:

(a)he loses or damages monies, assets and documents in his keeping;

(b)he unduly alters bank accounts or postal giro accounts;

(c)he recovers or pays amounts which are not in conformity with the corresponding recovery or payment orders;

(d)he fails to collect revenue due.

CHAPTER 5

REVENUE OPERATIONS

Section 1

Making available of EDF resources

Article 37

EDF revenue consists of payments made by the Member States in accordance with the Internal Agreement and this Regulation, the income generated by deposits in accordance with Article 6(2) of this Regulation and any other sum whose acceptance is established by the Council.

Article 38

The Member States' annual contributions shall be determined by the Council, acting by the qualified majority provided for in Article 21 of the Internal Agreement, on a proposal from the Commission, and shall consist of three instalments payable in accordance with the following procedures.

The proposal for the first instalment of the following year shall be presented by the Commission at the same time as the communication referred to in Article 8(1). The Council shall decide on this instalment at the latest by the end of the current year and Member States shall pay the contributions due at the latest by 21 January of the following year.

The proposal for the second instalment of the current year shall be presented by the Commission at the same time as the communication referred to in Article 8(3). The Council shall decide on this instalment at the latest by 21 calendar days following the presentation by the Commission of its proposal. Member States shall pay the contributions due under this instalment at the latest by 21 calendar days following the date on which the Council's decision was notified to them.

The proposal for the third instalment of the current year shall be presented by the Commission by 10 October. The Council shall decide on this instalment at the latest by 21 calendar days following the presentation by the Commission of its proposal. Member States shall pay the contributions due under this instalment at the latest by 21 calendar days following the date on which the Council's decision was notified to them.

Supplementary contributions for the financial year decided on by the Council in accordance with Article 10(4) of the Internal Agreement shall, unless the Council decides otherwise, be due and be made within as brief a period as possible which shall be laid down in the decision to call for such contributions and which may not exceed three months.

Each instalment of contributions proposed by the Commission and decided by the Council shall specify, in accordance with Article 1:

(a)the amount of the contributions required to finance the EDF operations managed by the Commission;

(b)the amount of the contributions required to finance the EDF operations managed by the EIB, including interest rates subsidies.

The amounts to be paid by each Member State and referred to in paragraph 3 shall be set in such a way as to be in proportion to that State's contributions to the EDF as fixed in Article 1(2) of the Internal Agreement and indicated in the Annex to this Regulation, for each of the amounts referred to in paragraph 3 of this Article.

Article 39

This Part and Part Three shall apply only to revenue collected by the Commission pursuant to Article 40.

Article 40

The financial contributions of the Member States shall be expressed in euro.

Each Member State shall pay the amount of its contribution in euro.

In respect of the amount due to the Commission under Article 38(2)(a), financial contributions shall be credited by each Member State to a special account entitled ‘Commission of the European Communities — European Development Fund’ opened with the bank of issue of that Member State or the financial institution designated by it. The amount of such contributions shall remain in those special accounts until the payments provided for in Article 37 of Annex IV to the ACP-EC Agreement or in the measures implementing the Overseas Association Decision need to be made.

In respect of the amount due to the EIB under Article 38(2)(b), financial contributions shall be credited by each Member State, in accordance with the detailed rules laid down in Article 122, to an account opened with the EIB in the name of each Member State.

Where necessary, the Commission shall provide appropriate technical assistance in the implementation of the Council decisions referred to in Article 38.

Where an instalment of contributions payable under this Article is not paid by the deadline fixed by Article 38(1), the Member State concerned shall be required to pay interest in respect of the unpaid amount. This interest shall be charged at a rate of two percentage points above the interest rate applied by the European Central Bank to its main refinancing operations on the first working day of the month in which the amount falls due, as published in the C series of the Official Journal of the European Union. That rate shall be increased by a quarter of a percentage point for each month of delay. The interest shall be payable for the entire period of delay and shall be calculated from the first calendar day following the deadline for payment of the instalment laid down in Article 38.

In respect of the amount due to the Commission under Article 38(2)(a), such late payment interest shall be credited to one of the accounts provided for in Article 6(2).

In respect of the amount due to the EIB under Article 38(2)(b), such late payment interest shall be credited to the EIB.

Upon expiry of the financial protocol set out in Annex I to the ACP-EC Agreement, that part of the contributions which the Member States remain obliged to pay in accordance with Article 38 of this Regulation shall be called up by the Commission, as required, in accordance with the conditions laid down in this Regulation.

Section 2

Estimates of amounts receivable

Article 41

The authorising officer responsible shall first make an estimate of the amount receivable in respect of any measure or situation which may give rise to or modify an amount owing to the EDF and is brought to the Commission's attention by the National Authorising Officer or is noticed by the Commission itself. Such estimates shall be sent to the accounting officer for recording in the accounts. They shall mention the type of revenue and the accounting item to which it is to be booked and also, as far as possible, the estimated amount involved and the name and description of the debtor. When drawing up estimates of amounts receivable, the accounting officer responsible shall check that:

(a)the revenue is booked to the correct item;

(b)the estimated amount receivable is in order and conforms to the relevant provisions relating to the management of the EDF and all acts adopted pursuant thereto and to the principle of sound financial management referred to in Article 4.

Section 3

Establishment of amounts receivable

Article 42

Establishment of an amount receivable is the act by which the authorising officer responsible:

(a)verifies that the debt exists;

(b)determines or verifies the reality and the amount of the debt;

(c)verifies the conditions in which the debt is due.

Section 4

Principle of recovery

Article 43

Amounts wrongly paid shall be recovered.

The Commission shall lay down the conditions in which interest on late payment is due to the Communities.

Section 5

Authorisation of recovery

Article 44

The authorisation of recovery is the act whereby the authorising officer responsible instructs the accounting officer, by issuing a recovery order, to recover an amount receivable which he has established.

Without prejudice to the responsibilities of the ACP States or the OCTs, the Commission may formally establish an amount as being receivable from persons other than States by means of a decision which shall be enforceable under the same conditions as laid down in Article 256 of the Treaty.

Article 45

Every debt that is identified as being certain, of a fixed amount and due in the context of the implementation of EDF resources shall be established by means of a recovery order given to the accounting officer, followed by a debit note sent to the debtor, both drawn up by the authorising officer responsible. The recovery order shall be accompanied by supporting documents certifying the established entitlements. When drawing up the recovery order, the authorising officer responsible shall ensure that:

(a)the revenue is booked to the correct item;

(b)the recovery order is in order and conforms to the relevant provisions;

(c)the supporting documents are in order;

(d)the particulars of the debtor are correct;

(e)the due date is indicated;

(f)the order conforms to the principle of sound financial management referred to in Article 4;

(g)the amount and currency of the sum to be recovered are correct.

Such recovery orders shall be recorded in the accounts by the accounting officer.

Section 6

Recovery

Article 46

The accounting officer shall act on recovery orders for amounts receivable that have been duly established by the authorising officer responsible. He shall exercise due diligence to ensure that the EDF receives its revenue by the due dates indicated in the recovery orders and ensure that the relevant rights of the Communities are safeguarded.

If recovery has not actually taken place by the due date specified in the recovery order, the accounting officer shall inform the authorising officer responsible and immediately initiate the procedure for effecting recovery by any means offered by the law, including, where appropriate, by offsetting. If this is not possible, the accounting officer shall enforce a recovery decision secured either in accordance with Article 44(2) or by a legal action.

The accounting officer shall recover amounts by offsetting them against equivalent claims that the EDF or the Communities has on any debtor who himself has a claim on the EDF or the Communities that is certain, of a fixed amount and due.

In connection with the direct labour operations referred to in Title V, where claims that the EDF has on the National Authorising Officer via the public or semi-public bodies or departments of the ACP State or OCT concerned are not recovered within the prescribed time-limits, the authorising officer responsible shall take all the necessary measures to obtain actual repayment of the sums due, including, where appropriate, suspension by the Chief Authorising Officer of the use of that type of arrangement for that State or OCT.

Article 47

Where the authorising officer responsible is planning to waive recovery of an established amount receivable, he shall ensure that the waiver is in order and complies with the principles of sound financial management and proportionality in accordance with procedures and criteria previously laid down by the Commission for that purpose. The waiver decision must be substantiated. The authorising officer may delegate the decision only as laid down by the Commission in the rules referred to in paragraph 2.

The detailed rules for implementing the General Financial Regulation shall apply mutatis mutandis to the implementation of this Article.

CHAPTER 6

EXPENDITURE OPERATIONS

Section 1

General provisions

Article 48

Every item of expenditure shall be committed, validated, authorised and paid.

The decisions and procedures for commitment, validation, authorisation and payment of expenditure by the Commission are defined in this Chapter.

Section 2

Commitment of expenditure: principles and definitions

Article 49

The commitment of expenditure shall be preceded by a financing decision adopted by the Commission or by the authorities to which powers have been delegated by the Commission.

Article 50

The financial commitment by the Commission is the operation reserving the funds necessary to cover subsequent payments to honour a legal commitment.

The legal commitment by the Commission is the act whereby the authorising officer responsible enters into an obligation with regard to third parties which may result in expenditure being charged to the EDF.

The financial commitment and the legal commitment shall be adopted by the same authorising officer. That rule may be waived:

(a)in the case of administrative expenditure incurred by the Commission within the meaning of paragraph 4 in respect of which the financial commitments have been divided in accordance with paragraph 3;

(b)where global commitments relate to financing agreements under Article 51(3).

The Commission's financial commitment is individual when the beneficiary and the amount of the expenditure are known.

The Commission's financial commitment is global when at least one of the elements necessary to identify the individual commitment is still not known.

Financial commitments for Commission administrative expenditure may be divided over several years into annual instalments. The corresponding legal commitments shall stipulate that division.

The following shall be regarded as administrative expenditure for the purposes of point (a) of the third subparagraph of paragraph 1:

(a)expenditure on human resources other than regular staff;

(b)training expenditure;

(c)mission expenses;

(d)representation expenses;

(e)meeting expenses;

(f)expenses relating to freelance interpreters and/or translators;

(g)expenses relating to exchanges of officials;

(h)cost of recurring rentals of movable and immovable property;

(i)cost of miscellaneous insurance;

(j)cost of cleaning and maintenance;

(k)costs related to the use of telecommunications services;

(l)cost of water, gas and electricity;

(m)outlay for periodical publications.

Article 51

The authorising officer responsible shall first make a financial commitment before entering into a legal obligation, binding upon the Commission, with third parties.

Financing decisions taken by the Commission, in accordance with the ACP-EC Agreement or the Overseas Association Decision, which authorise it to grant financial aid from the EDF, shall give rise to financial commitments by the Commission.

The following shall constitute legal commitments by the Commission:

(a)a financing agreement between the Commission, acting for the Community, and the beneficiary ACP State or States or the beneficiary OCTs or the bodies they have designated;

(b)a contract or grant agreement between the Commission and national or international public-sector bodies or natural or legal persons responsible for carrying out the operations.

Each financing agreement, contract or grant agreement shall provide expressly for the Commission, OLAF and the Court of Auditors, to exercise their powers of control, on documents and on the spot, over all contractors and subcontractors who have received financing from EDF resources.

Article 52

When adopting a financial commitment, the authorising officer responsible shall ensure that:

(a)the expenditure has been charged to the correct accounting item;

(b)the funds are available;

(c)the expenditure conforms to the relevant provisions, in particular of the ACP-EC Agreement, the Overseas Association Decision, the Internal Agreement, this Regulation, and all acts adopted in implementation of those provisions;

(d)the principle of sound financial management is complied with.

When a legal commitment is adopted, the authorising officer shall ensure that:

(a)the commitment is covered by the corresponding financial commitment;

(b)the expenditure conforms to the relevant provisions, in particular of the ACP-EC Agreement, the Overseas Association Decision, the Internal Agreement, this Regulation, and all acts adopted in implementation of those provisions;

(c)there is compliance with the principle of sound financial management.

Section 3

Commitment of expenditure under centralised management

Article 53

Where EDF resources are managed by the Commission on a centralised basis or jointly, the commitment of expenditure shall be subject to the provisions of this Section.

Individual legal commitments relating to individual financial commitments shall be concluded by the Commission by 31 December of year N at the latest, year N being the year in which the Commission's individual financial commitment was adopted, subject to Article 50(3).

As a general rule, global financial commitments shall cover the total cost of the corresponding individual legal commitments concluded by the Commission up to 31 December of year N + 1, year N being the year in which the Commission's global financial commitment was adopted, subject to Article 50(3).

However, where the global commitments referred to in Article 51(3) are implemented, the Commission shall conclude the corresponding individual contracts and agreements by no later than three years from the date of the financial commitment. Individual contracts and agreements relating to audit and evaluation may be concluded later.

At the end of the periods referred to in the first and second subparagraphs, the unused balance of those financial commitments shall be decommitted by the authorising officer responsible.

The amount of each individual legal commitment adopted by the Commission following a global commitment shall, prior to signature, be registered by the authorising officer responsible in the EDF financial accounts and booked to the global commitment.

The legal commitments entered into for operations extending over more than one financial year and the corresponding financial commitments shall have a final date for implementation set in accordance with the requirements of sound financial management, save in the case of the administrative expenditure referred to in Article 50(3).

Any parts of such commitments which have not been implemented six months after that date shall be decommitted and the corresponding appropriations cancelled.

Where a legal commitment has not given rise to any payment during a period of three years, the authorising officer shall proceed to decommit the financial commitment and cancel the appropriations.

The termination of a project and the decommitment of the funds committed in accordance with paragraphs 1 to 4 shall be carried out when the legal commitments entered into by the Commission in connection with that project with respect to third parties are concluded and the related payments and collections have been recorded in the accounts.

The provisions of paragraph 4 shall apply without prejudice to the decisions that may be adopted by the Council under Articles 96 and 97 of the ACP-EC Partnership Agreement.

Section 4

Commitment of expenditure under decentralised management

Article 54

Where EDF resources are managed on a decentralised basis, the commitment of expenditure by the Commission shall be subject to the provisions of this Section.

Financing agreements with the beneficiary ACP States or OCTs shall be concluded by 31 December of year N+1 at the latest, N being the year in which the Commission's financial commitment was adopted.

Where financing agreements are not concluded by the deadline laid down in the first subparagraph, the corresponding appropriations shall be decommitted.

The Commission shall be under an obligation to effect payment from EDF resources whenever the responsible authorising officer:

(a)endorses contracts and programme estimates, as provided for in Article 80(4);

(b)endorses grant agreements.

In respect of each endorsement the authorising officer responsible shall record in the accounts the value of the contract, programme estimate or grant in question. This recording shall be called ‘assigned funds’.

The assigned funds recorded shall be set off by the Commission against the global commitments corresponding to the financing decisions concerned.

In accordance with the principle of sound financial management referred to in Article 4 and acting within its powers, the Commission shall endeavour to see that:

(a)the individual legal commitments implementing the financing agreements referred to in paragraph 2 are concluded no later than three years from the date of the corresponding financial commitment by the Commission;

(b)the assigned funds corresponding to individual legal commitments entered into for the implementation of a financing agreement referred to in paragraph 2 which have not given rise to any payment during a period of three years are decommitted.

Individual legal commitments as referred to in the first subparagraph shall be contracts, grant agreements or programme estimates concluded by the ACP State or OCT or its authorities or by the Commission acting in their name and on their behalf.

For the purposes of applying the first and second subparagraphs, the Commission shall, in agreement with the beneficiary ACP States and OCTs, incorporate relevant provisions in the financing agreements referred to in paragraph 2.

The termination of a project and the decommitment of the funds committed in accordance with paragraphs 1 to 4 shall be carried out after conclusion of the legal commitments entered into by the ACP State or OCT or its authorities, and/or by the Commission acting in their name and on their behalf in connection with that project with respect to third parties, and after the related payments and collections have been recorded in the accounts.

The provisions of paragraph 4 shall apply without prejudice to the decisions that may be adopted by the Council under Articles 96 and 97 of the ACP-EC Partnership Agreement.

Section 5

Validation of expenditure

Article 55

Validation of expenditure is the act whereby the authorising officer responsible:

(a)verifies the existence of the creditor's entitlement;

(b)determines or verifies the reality and the amount of the claim;

(c)verifies the conditions in which payment is due.

Article 56

Validation of any expenditure shall be based on valid supporting documents attesting the creditor's entitlement, on the basis of a statement of services actually rendered, supplies actually delivered or work actually carried out or on the basis of other documents justifying payment. The nature of the supporting documents to be enclosed with the payment orders and the particulars to be included shall be such as to make it possible to carry out the checks provided for in Articles 55, 58 and 60.

Before taking the decision validating the expenditure, the authorising officer responsible shall personally check the supporting documents or shall, on his own responsibility, ascertain that this has been done.

The decision validating the expenditure shall be expressed by the signing of a ‘passed for payment’ voucher by the authorising officer responsible.

Article 57

The Chief Authorising Officer shall lay down the criteria for signing the ‘passed for payment’ voucher by analogy with the relevant provisions of the detailed rules for the implementation of the General Financial Regulation.

Article 58

In a non-computerised system, ‘passed for payment’ shall take the form of a stamp incorporating the signature of the authorising officer responsible. In a computerised system, ‘passed for payment’ shall take the form of validation using the personal password of the authorising officer responsible.

Section 6

Authorisation of expenditure

Article 59

Authorisation of expenditure is the act whereby the authorising officer responsible, by issuing a payment order, instructs the accounting officer to pay an item of expenditure which he has validated.

Article 60

When drawing up the payment order, the authorising officer responsible shall ensure that:

(a)the payment order has been properly issued, meaning that a corresponding validation decision has been taken previously in the form of ‘passed for payment’;

(b)the payment order corresponds to the financial commitment against which it is booked;

(c)the expenditure is charged to the correct item in the accounts;

(d)the appropriations are available;

(e)the particulars of the payee are correct.

Article 61

The payment order must state:

(a)the financial year against which the expenditure is to be booked;

(b)the instrument and allocation against which it is to be booked in accordance with Article 3;

(c)the references of the legal commitment giving rise to an entitlement to payment;

(d)the references of the financial commitment against which it is to be booked;

(e)the sum to be paid, indicating the currency in which it is to be paid;

(f)the name and address of the payee;

(g)the bank account into which the payment is to be made;

(h)the object of the expenditure;

(i)the means of payment.

The payment order shall be dated and signed by the authorising officer responsible, then sent to the accounting officer.

Article 62

The supporting documents shall be kept by the authorising officer responsible.

Section 7

Payment of expenditure

Article 63

Payment shall be made only on production of proof that the relevant action is in accordance with the provisions of the basic act or the contract and shall cover one or more of the following operations:

(a)payment of the entire amount due;

(b)payment of the amounts due in any of the following ways: (i)pre-financing, which may be divided into a number of payments, (ii)one or more interim payments, (iii)payment of the balance of the amounts due.

A distinction shall be made in the accounts between the different types of payment referred to in paragraph 1 at the time they are made.

Pre-financing is intended to provide the beneficiary with a float. It may be split into a number of payments.

An interim payment, which may be repeated, is intended to reimburse expenditure incurred by the beneficiary on the basis of a statement of expenditure when the action is in progress. It may clear pre-financing in whole or in part, without prejudice to the provisions of the basic act or contract.

The closure of the expenditure shall take the form of the payment of the balance, which may not be repeated and clears all preceding payments, or a recovery order.

Article 64

Payment of expenditure shall be made by the accounting officer within the limits of the funds available.

Article 65

Payments shall be effected through the bank accounts referred to in Article 28. The detailed rules for opening, administering and using such accounts shall be determined by the Commission.

Those rules shall in particular require the joint signatures on transfer orders and all bank payments of two duly authorised officials.

Article 66

In cases where the head of delegation performs the duties of authorising officer by sub-delegation in accordance with Article 21(2), the corresponding payments may be effected by an accounting officer by sub-delegation, where appropriate on the spot.

Reading this document does not replace reading the official text published in the Official Journal of the European Union. We assume no responsibility for any inaccuracies arising from the conversion of the original to this format.

This text is published under EUR-Lex's own terms of reuse, not a Legalize or public-domain licence. EUR-Lex
Creative Commons Attribution 4.0 International (CC BY 4.0)
© European Union, https://eur-lex.europa.eu — Source: EUR-Lex (Publications Office of the European Union). Reused under the Creative Commons Attribution 4.0 International (CC BY 4.0) licence. Only EU legislation published in the printed Official Journal of the European Union is deemed authentic; consolidated texts are reproduced here for documentation purposes and have been reformatted to Markdown.