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DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
ORDINARY LEGISLATIVE procedure
Follow up to the European Parliament legislative resolution on the proposal for a regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (recast)
(COM(2022)0223 – C90179/2022 – 2022/0162(COD))
1. Rapporteur: Monika HOHLMEIER (EPP / DE), Nils UŠAKOVS (S&D / LV)
(Ordinary legislative procedure – recast)
2. Reference numbers: 2022/0162 (COD) / A9-0180/2023 / P9_TA(2024)0163
The European Parliament,
3. Date of adoption of the resolution: 14 March 2024
– having regard to the Commission proposal to Parliament and the Council (COM(2022)0223),
4. Legal basis: Article 322(1) of the Treaty on the Functioning of the European Union and Article 106a of the Treaty establishing the European Atomic Energy Community
– having regard to Article 294(2) and Article 322(1) of the Treaty on the Functioning of the European Union and to Article 106a of the Treaty establishing the European Atomic Energy Community, pursuant to which the Commission submitted the proposal to Parliament (C90179/2022),
5. Competent Parliamentary Committee: Committee on Budgetary Control (CONT), Committee on Budget (BUDG)
– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,
6. Commission's position: accepts all amendments. The Commission presented the following statement in relation to the data-mining and risk-scoring tool and the publication of data on recipients of EU funds
– having regard to the opinion of the Court of Auditors of 31 October 2022,
“The Commission considers that the reference made in Article 36(10) to Article 38(1) in relation to the notion of recipients does not expand the scope of the obligations of the Member States laid down in sector-specific rules.”
– having regard to the Interinstitutional Agreement of 28 November 2001 on a more structured use of the recasting technique for legal acts,
– having regard to the letter of 25 April 2023 sent by the Committee on Legal Affairs to the Committee on Budgets and the Committee on Budgetary Control in accordance with Rule 110(3) of its Rules of Procedure,
– having regard to the joint deliberations of the Committee on Budgets and the Committee on Budgetary Control under Rule 58 of the Rules of Procedure,
– having regard to Rules 110 and 59 of its Rules of Procedure,
– having regard to the opinion of the Committee on Regional Development,
– having regard to the letter from the Committee on Industry, Research and Energy,
– having regard to the report of the Committee on Budgets and the Committee on Budgetary Control (A9-0180/2023),
A. whereas, according to the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission, the Commission proposal does not include any substantive amendments other than those identified as such in the proposal and whereas, as regards the codification of the unchanged provisions of the earlier acts together with those amendments, the proposal contains a straightforward codification of the existing texts, without any change in their substance;
1. Adopts its position at first reading hereinafter set out, taking into account the recommendations of the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission;
2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;
3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.
Amendment 1
Proposal for a regulation
Recital 1
Amendment 2
Proposal for a regulation
Recital 11
Amendment 3
Proposal for a regulation
Recital 11 a (new)
Amendment 4
Proposal for a regulation
Recital 15
Justification
The revision of the Financial Regulation provides the occasion to generalise the rules found in sectoral legislation where it is deemed appropriate.
Amendment 5
Proposal for a regulation
Recital 21
Amendment 6
Proposal for a regulation
Recital 23 a (new)
Amendment 7
Proposal for a regulation
Recital 24
Amendment 8
Proposal for a regulation
Recital 24 a (new)
Amendment 9
Proposal for a regulation
Recital 24 b (new)
Amendment 10
Proposal for a regulation
Recital 25
Amendment 11
Proposal for a regulation
Recital 27
Amendment 12
Proposal for a regulation
Recital 27 a (new)
Amendment 13
Proposal for a regulation
Recital 28
Amendment 14
Proposal for a regulation
Recital 29
Amendment 15
Proposal for a regulation
Recital 33
Amendment 16
Proposal for a regulation
Recital 40
Justification
As stated in paragraph 3 of the initiative report adopted ahead of the publication of this proposal, this revision must seek to reinforce transparency, accountability and democratic scrutiny of the EU budget. On this ground there is no reason to limit this publication to European Commission.
Amendment 17
Proposal for a regulation
Recital 43
Amendment 18
Proposal for a regulation
Recital 103
Amendment 19
Proposal for a regulation
Recital 104
Amendment 20
Proposal for a regulation
Recital 134
Amendment 21
Proposal for a regulation
Recital 140
Amendment 22
Proposal for a regulation
Recital 141 a (new)
Justification
'Gold plating' by Member States, whereby additional administrative obligations are imposed over and above EU rules, should be avoided. This amendment is linked to the surrounding Recitals, which are part of the recast.
Amendment 23
Proposal for a regulation
Recital 150
Amendment 24
Proposal for a regulation
Recital 160
Amendment 25
Proposal for a regulation
Recital 165
Amendment 26
Proposal for a regulation
Recital 194 a (new)
Justification
The lessons learned from providing small-scale support during the pandemic to small and medium-sized enterprises and individual applicants should be implemented by introducing a new category of a very low value grant of an amount of up to EUR 10000 in order to improve efficiency and reduce bureaucracy. This is linked to the simplification and crisis management aims of the recast.
Amendment 27
Proposal for a regulation
Recital 219 a (new)
Amendment 28
Proposal for a regulation
Recital 219 b (new)
Amendment 29
Proposal for a regulation
Recital 219 c (new)
Amendment 30
Proposal for a regulation
Recital 219 d (new)
Amendment 31
Proposal for a regulation
Recital 219 e (new)
Amendment 32
Proposal for a regulation
Recital 219 f (new)
Amendment 33
Proposal for a regulation
Recital 219 g (new)
Amendment 34
Proposal for a regulation
Recital 219 h (new)
Amendment 35
Proposal for a regulation
Recital 219 i (new)
Amendment 36
Proposal for a regulation
Recital 219 j (new)
Amendment 37
Proposal for a regulation
Recital 219 k (new)
Amendment 38
Proposal for a regulation
Recital 246
Amendment 39
Proposal for a regulation
Recital 248
Amendment 40
Proposal for a regulation
Recital 254
Amendment 41
Proposal for a regulation
Recital 256
Justification
Waiting for the adoption of the programmes under the post-2027 MFF in order to start using the new single integrated and interoperable information and monitoring system is disproportionately long. A date of application of 1 January 2026 should provide sufficient time for the development of the system and the adaptation of the various involved systems.
Amendment 42
Proposal for a regulation
Article 2 – paragraph 1 – point 22 – point b
Amendment 43
Proposal for a regulation
Article 2 – paragraph 1 – point 31 a (new)
Amendment 44
Proposal for a regulation
Article 2 – paragraph 1 – point 48
Amendment 45
Proposal for a regulation
Article 2 – paragraph 1 – point 65 a (new)
Amendment 46
Proposal for a regulation
Article 2 – paragraph 1 – point 73 a (new)
Amendment 47
Proposal for a regulation
Article 6 – title
Amendment 48
Proposal for a regulation
Article 6 – paragraph 2 a (new)
Amendment 49
Proposal for a regulation
Article 7 – paragraph 2 – subparagraph 2 – point c
Justification
Technical adaptation linked to the amendments to Articles 14 and 15 of the proposal.
Amendment 50
Proposal for a regulation
Article 7 – paragraph 2 – subparagraph 2 – point e
Justification
Clarification of the terminology used in view of the changes put forward in Articles 21 and 22 of the proposal.
Amendment 51
Proposal for a regulation
Article 14 – paragraph 1
Amendment 52
Proposal for a regulation
Article 14 – paragraph 1 – subparagraph 1 a (new)
Amendment 53
Proposal for a regulation
Article 14 – paragraph 1 – subparagraph 1 b (new)
Amendment 54
Proposal for a regulation
Article 15
Amendment 55
Proposal for a regulation
Article 22 – paragraph 1 – subparagraph 1 – point c
Amendment 56
Proposal for a regulation
Article 22 – paragraph 2 – subparagraph 1 – point c a (new)
Amendment 57
Proposal for a regulation
Article 25 – paragraph 3 – subparagraph 2 – point c a (new)
Amendment 58
Proposal for a regulation
Article 25 – paragraph 3 – subparagraph 2 a (new)
Amendment 59
Proposal for a regulation
Article 33 – paragraph 2 – point b
Amendment 60
Proposal for a regulation
Article 33 – paragraph 2 – point c a (new)
Amendment 61
Proposal for a regulation
Article 33 – paragraph 2 – point d
Amendment 62
Proposal for a regulation
Article 33 – paragraph 2 – point d a (new)
Amendment 63
Proposal for a regulation
Article 33 – paragraph 3
Amendment 64
Proposal for a regulation
Article 36 – paragraph 2 – point d
Amendment 65
Proposal for a regulation
Article 36 – paragraph 3 – point b a (new)
Amendment 66
Proposal for a regulation
Article 36 – paragraph 6 – introductory part
Amendment 67
Proposal for a regulation
Article 36 – paragraph 6 – point a
Amendment 68
Proposal for a regulation
Article 36 – paragraph 6 – point a a (new)
Amendment 69
Proposal for a regulation
Article 36 – paragraph 6 – point a b (new)
Amendment 70
Proposal for a regulation
Article 36 – paragraph 6 – point a c (new)
Amendment 71
Proposal for a regulation
Article 36 – paragraph 6 – point b
Amendment 72
Proposal for a regulation
Article 36 – paragraph 6 – point b a (new)
Amendment 73
Proposal for a regulation
Article 36 – paragraph 7 – subparagraph 1
Amendment 74
Proposal for a regulation
Article 36 – paragraph 7 – subparagraph 2
Amendment 75
Proposal for a regulation
Article 36 – paragraph 7 – subparagraph 3
Amendment 76
Proposal for a regulation
Article 36 – paragraph 7 a (new)
Amendment 77
Proposal for a regulation
Article 36 – paragraph 8 – subparagraph 1 a (new)
Amendment 78
Proposal for a regulation
Article 36 – paragraph 8 – subparagraph 1 b (new)
Amendment 79
Proposal for a regulation
Article 36 – paragraph 9
Amendment 80
Proposal for a regulation
Article 36 – paragraph 10 a (new)
Amendment 81
Proposal for a regulation
Article 36 – paragraph 10 b (new)
Amendment 82
Proposal for a regulation
Article 38 – paragraph 1 – subparagraph 1
Amendment 83
Proposal for a regulation
Article 38 – paragraph 1 – subparagraph 2
Amendment 84
Proposal for a regulation
Article 38 – paragraph 2 – introductory part
Amendment 85
Proposal for a regulation
Article 38 – paragraph 2 – point a
Amendment 86
Proposal for a regulation
Article 38 – paragraph 2 – point b
Amendment 87
Proposal for a regulation
Article 38 – paragraph 2 – point c a (new)
Amendment 88
Proposal for a regulation
Article 38 – paragraph 2 – point e a (new)
Amendment 89
Proposal for a regulation
Article 38 – paragraph 3 – subparagraph 1 – point b
Amendment 90
Proposal for a regulation
Article 38 – paragraph 3 – subparagraph 1 – point d
Amendment 91
Proposal for a regulation
Article 38 – paragraph 4 – subparagraph 3
Amendment 92
Proposal for a regulation
Article 38 – paragraph 5 – subparagraph 1
Amendment 93
Proposal for a regulation
Article 38 – paragraph 5 – subparagraph 2
Amendment 94
Proposal for a regulation
Article 38 – paragraph 6 – subparagraph 1
Amendment 95
Proposal for a regulation
Article 38 – paragraph 6 – subparagraph 2
Amendment 96
Proposal for a regulation
Article 38 – paragraph 7 – subparagraph 1
Amendment 97
Proposal for a regulation
Article 38 a (new)
Amendment 98
Proposal for a regulation
Article 41 – paragraph 3 – subparagraph 1 – point d
Amendment 99
Proposal for a regulation
Article 41 – paragraph 3 – subparagraph 1 – point e
Justification
As stated in paragraph 3 of the initiative report adopted ahead of the publication of this proposal, this revision must seek to reinforce transparency, accountability and democratic scrutiny of the EU budget. On this ground there is no reason to limit this publication to European Commission.
Amendment 100
Proposal for a regulation
Article 52 – paragraph 1 – point d – point iii – indent 3
Amendment 101
Proposal for a regulation
Article 59 – paragraph 3 a (new)
Amendment 102
Proposal for a regulation
Article 59 – paragraph 3 b (new)
Amendment 103
Proposal for a regulation
Article 59 – paragraph 3 c (new)
Amendment 104
Proposal for a regulation
Article 61 – paragraph 2
Amendment 105
Proposal for a regulation
Article 63 – paragraph 1
Amendment 106
Proposal for a regulation
Article 63 – paragraph 4 – subparagraph 1 – point a a (new)
Amendment 107
Proposal for a regulation
Article 63 – paragraph 8 – subparagraph 1 – point c
Amendment 108
Proposal for a regulation
Article 63 – paragraph 8 – subparagraph 1 – point c a (new)
Amendment 109
Proposal for a regulation
Article 109 – paragraph 4 – subparagraph 2 a (new)
Justification
Amendment adopted as part of Parliament's mandate for inter-institutional negotiations on the stand-alone proposal to revise the Financial Regulation as regards competition fines.
Amendment 110
Proposal for a regulation
Article 117 – paragraph 1 – subparagraph 1 a (new)
Amendment 111
Proposal for a regulation
Article 117 – paragraph 3 – subparagraph 4 a (new)
Amendment 112
Proposal for a regulation
Article 126 – paragraph 1 – subparagraph 1 – point a – point i
Amendment 113
Proposal for a regulation
Article 126 – paragraph 1 – subparagraph 1 – point a – point ii
Amendment 114
Proposal for a regulation
Article 126 – paragraph 1 – subparagraph 2
Amendment 115
Proposal for a regulation
Article 126 – paragraph 1 – subparagraph 2 a (new)
Amendment 116
Proposal for a regulation
Article 128 a (new)
Justification
'Gold plating' by Member States, whereby additional administrative obligations are imposed over and above EU rules, should be avoided. This amendment is linked to the Recitals surrounding the new proposed Recital 141a, which are part of the recast.
Amendment 117
Proposal for a regulation
Article 131 – title
Amendment 118
Proposal for a regulation
Article 133 – paragraph 2 – introductory part
Amendment 119
Proposal for a regulation
Article 133 – paragraph 3 – subparagraph 1 – point c a (new)
Amendment 120
Proposal for a regulation
Article 138 – paragraph 1 – subparagraph 1
Amendment 121
Proposal for a regulation
Article 138 – paragraph 2 – subparagraph 4 – point l
Amendment 122
Proposal for a regulation
Article 139 – paragraph 1 – point e – point iii
Amendment 123
Proposal for a regulation
Article 139 – paragraph 1 – point g
Amendment 124
Proposal for a regulation
Article 139 – paragraph 2 – subparagraph 1
Amendment 125
Proposal for a regulation
Article 139 – paragraph 9 – subparagraph 1 – point a
Amendment 126
Proposal for a regulation
Article 139 – paragraph 10 – subparagraph 1 – introductory part
Amendment 127
Proposal for a regulation
Article 139 – paragraph 10 – subparagraph 2
Amendment 128
Proposal for a regulation
Article 142 – paragraph 1 – subparagraph 1 – point b – point i
Amendment 129
Proposal for a regulation
Article 142 – paragraph 1 – subparagraph 1 – point b – point ii
Amendment 130
Proposal for a regulation
Article 142 – paragraph 1 – subparagraph 1 – point b – point ii a (new)
Amendment 131
Proposal for a regulation
Article 143 – paragraph 1 – subparagraph 1 – introductory part
Amendment 132
Proposal for a regulation
Article 144 – paragraph 1 – subparagraph 1 – point d
Amendment 133
Proposal for a regulation
Article 144 – paragraph 1 – subparagraph 1 – point d a (new)
Amendment 134
Proposal for a regulation
Article 151 a (new)
Amendment 135
Proposal for a regulation
Article 153 – paragraph 5 – subparagraph 2
Justification
While the intention of the Commission with this new provision is understandable, it runs the risk of restricting competition, especially if participants are not allowed to submit their application documents by post or by courier service. To ensure that the decision remains justified and comprehensible for all applicants, the contracting authority should document its reasons for the decision.
Amendment 136
Proposal for a regulation
Article 169 – paragraph 2 – subparagraph 6
Amendment 137
Proposal for a regulation
Article 169 – paragraph 3 a (new)
Amendment 138
Proposal for a regulation
Article 176 – paragraph 3 – subparagraph 1 – point c – point i
Justification
Technical correction.
Amendment 139
Proposal for a regulation
Article 179 – paragraph 1 – subparagraph 2 a (new)
Justification
The same provisions applicable to the procurement of Union Delegations should also apply
Amendment 140
Proposal for a regulation
Article 196 – paragraph 3 – point e
Justification
The lessons learned from providing small-scale support during the pandemic to small and medium-sized enterprises and individual applicants should be implemented by introducing a new category of a very low value grant of an amount of up to EUR 5000 in order to improve efficiency and reducing bureaucracy. This is linked to the simplification and crisis management aims of the recast.
Amendment 141
Proposal for a regulation
Article 200 – paragraph 1 – point c a (new)
Justification
The lessons learned from providing small-scale support during the pandemic to small and medium-sized enterprises and individual applicants should be implemented by introducing a new category of a very low value grant of an amount of up to EUR 5000 in order to improve efficiency and reducing bureaucracy. This is linked to the simplification and crisis management aims of the recast.
Amendment 142
Proposal for a regulation
Article 217 – title
Justification
The CPF is organised in compartments, and it can happen that there are at the same time over- and under-provisioned compartments, so the Commission may have to simultaneously request replenishment of one and repay a surplus from another back to the budget. It would be more efficient to allow transfer of surplus provisions from fully constituted over-provisioned compartments to compartments facing challenges. This in turn makes the concept of effective provisioning rate obsolete. The amendments to this Article are linked to admissible amendments to Articles 22, 52 and 224a.
Amendment 143
Proposal for a regulation
Article 217 – paragraph 1
Justification
The CPF is organised in compartments, and it can happen that there are at the same time over- and under-provisioned compartments, so the Commission may have to simultaneously request replenishment of one and repay a surplus from another back to the budget. It would be more efficient to allow transfer of surplus provisions from fully constituted over-provisioned compartments to compartments facing challenges. This in turn makes the concept of effective provisioning rate obsolete. The amendments to this Article are linked to admissible amendments to Articles 22, 52 and 224a.
Amendment 144
Proposal for a regulation
Article 217 – paragraph 2
Justification
The CPF is organised in compartments, and it can happen that there are at the same time over- and under-provisioned compartments, so the Commission may have to simultaneously request replenishment of one and repay a surplus from another back to the budget. It would be more efficient to allow transfer of surplus provisions from fully constituted over-provisioned compartments to compartments facing challenges. This in turn makes the concept of effective provisioning rate obsolete. The amendments to this Article are linked to admissible amendments to Articles 22, 52 and 224a.
Amendment 145
Proposal for a regulation
Article 217 – paragraph 3
Justification
The CPF is organised in compartments, and it can happen that there are at the same time over- and under-provisioned compartments, so the Commission may have to simultaneously request replenishment of one and repay a surplus from another back to the budget. It would be more efficient to allow transfer of surplus provisions from fully constituted over-provisioned compartments to compartments facing challenges. This in turn makes the concept of effective provisioning rate obsolete. The amendments to this Article are linked to admissible amendments to Articles 22, 52 and 224a.
Amendment 146
Proposal for a regulation
Article 217 – paragraph 4 – introductory part
Justification
The CPF is organised in compartments, and it can happen that there are at the same time over- and under-provisioned compartments, so the Commission may have to simultaneously request replenishment of one and repay a surplus from another back to the budget. It would be more efficient to allow transfer of surplus provisions from fully constituted over-provisioned compartments to compartments facing challenges. This in turn makes the concept of effective provisioning rate obsolete. The amendments to this Article are linked to admissible amendments to Articles 22, 52 and 224a.
Amendment 147
Proposal for a regulation
Article 217 – paragraph 4 – point a
Justification
The CPF is organised in compartments, and it can happen that there are at the same time over- and under-provisioned compartments, so the Commission may have to simultaneously request replenishment of one and repay a surplus from another back to the budget. It would be more efficient to allow transfer of surplus provisions from fully constituted over-provisioned compartments to compartments facing challenges. This in turn makes the concept of effective provisioning rate obsolete. The amendments to this Article are linked to admissible amendments to Articles 22, 52 and 224a.
Amendment 148
Proposal for a regulation
Article 224 – paragraph 2
Amendment 149
Proposal for a regulation
Article 224 – paragraph 7
Amendment 150
Proposal for a regulation
Article 224 a (new)
Amendment 151
Proposal for a regulation
Article 238 – paragraph 1 – subparagraph 3
Justification
As stated in Parliament's resolution of 24 November 2021, Parliament should have an appropriate role in the setting up, supervision and scrutiny of trust funds, including for emergency and post-emergency actions. The amendments to this Article give Parliament and Council the power to approve any trust fund, and are linked to admissible amendments to increase democratic accountability of the budget, inter alia to Articles 52 and 224a.
Amendment 152
Proposal for a regulation
Article 238 – paragraph 1 – subparagraph 4
Justification
As stated in Parliament's resolution of 24 November 2021, Parliament should have an appropriate role in the setting up, supervision and scrutiny of trust funds, including for emergency and post-emergency actions. The amendments to this Article give Parliament and Council the power to approve any trust fund, and are linked to admissible amendments to increase democratic accountability of the budget, inter alia to Articles 52 and 224a.
Amendment 153
Proposal for a regulation
Article 238 – paragraph 1 – subparagraph 4 a (new)
Justification
For trust funds for emergency and post-emergency action, it is appropriate that a time limit is set for the approval by Parliament and Council, so as to preserve the possibility to act in an emergency. This kind of trust funds should be deemed approved unless Parliament or Council object within that time limit. The amendments to this Article are linked to admissible amendments to increase democratic accountability of the budget, inter alia to Articles 52 and 224a.
Amendment 154
Proposal for a regulation
Article 238 – paragraph 2
Justification
As stated in Parliament's resolution of 24 November 2021, Parliament should have an appropriate role in the setting up, supervision and scrutiny of trust funds, including for emergency and post-emergency actions. The amendments to this Article give Parliament and Council the power to approve any trust fund, and are linked to admissible amendments to increase democratic accountability of the budget, inter alia to Articles 52 and 224a.
Amendment 155
Proposal for a regulation
Article 240 – paragraph 1
Amendment 156
Proposal for a regulation
Article 240 – paragraph 1 a (new)
Amendment 157
Proposal for a regulation
Article 240 – paragraph 2 – subparagraph 1 – point iii
Amendment 158
Proposal for a regulation
Article 240 – paragraph 2 – subparagraph 1 – point iv
Amendment 159
Proposal for a regulation
Article 240 – paragraph 2 – subparagraph 1 – point v
Amendment 160
Proposal for a regulation
Article 240 – paragraph 2 – subparagraph 1 – point v a (new)
Amendment 161
Proposal for a regulation
Article 240 – paragraph 2 – subparagraph 2
Amendment 162
Proposal for a regulation
Article 244 – paragraph 2 – subparagraph 1 a (new)
Amendment 163
Proposal for a regulation
Article 260 – paragraph 1
Justification
It should be clearly stated that the examination by the Court of Auditors must also include assigned revenue. This amendment is needed for coherence with admissible amendments to Article 22.
Amendment 164
Proposal for a regulation
Article 265 – paragraph 3
Amendment 165
Proposal for a regulation
Article 265 – paragraph 3 a (new)
Amendment 166
Proposal for a regulation
Article 266 – paragraph 1
Amendment 167
Proposal for a regulation
Article 267 – paragraph 2
Amendment 168
Proposal for a regulation
Article 271 – paragraph 1 – subparagraph 1 – point a
Amendment 169
Proposal for a regulation
Article 271 – paragraph 1 – subparagraph 1 – point b
Amendment 170
Proposal for a regulation
Article 271 – paragraph 2
Amendment 171
Proposal for a regulation
Article 271 – paragraph 3 – subparagraph 1
Amendment 172
Proposal for a regulation
Article 275 – paragraph 2 a (new)
Amendment 173
Proposal for a regulation
Article 275 – paragraph 3
Justification
Waiting for the adoption of the programmes under the post-2027 MFF in order to start using the new single integrated and interoperable information and monitoring system is disproportionately long. A date of application of 1 January 2026 should provide sufficient time for the development of the system and the adaptation of the various involved systems.
Amendment 174
Proposal for a regulation
Article 275 – paragraph 4
Justification
Waiting for the adoption of the programmes under the post-2027 MFF in order to start using the new single integrated and interoperable information and monitoring system is disproportionately long. A date of application of 1 January 2026 should provide sufficient time for the development of the system and the adaptation of the various involved systems.
Amendment 175
Proposal for a regulation
Annex I – Part 1 – Section 2 – point 6 – point 6.2
Amendment 176
Proposal for a regulation
Annex I – Part 1 – Section 2 – point 6 – point 6.3 – point b
Amendment 177
Proposal for a regulation
Annex I – Part 1 – Section 2 – point 6 – point 6.6
Amendment 178
Proposal for a regulation
Annex I – Part 1 – Section 2 – point 16 – point 16.3 – point g a (new)
Justification
It is necessary to align the Financial Regulation with the recently adopted Regulation (EU) 2022/2560 on foreign subsidies distorting the internal market. This amendment is in line with the aim of the recast, see for instance Recitals 5 and 15.
EXPLANATORY STATEMENT
The Financial Regulation has a particularly important role for EU finances and the functioning of the Union in general. It is meant to be the ‘single rulebook’ laying down the principles and general financial rules for establishing and implementing the EU budget and controlling EU finances. Its current version entered into force into 2018 after a major revision.
With the entry into force of the 2021-27 multiannual financial framework (MFF), the Financial Regulation needs to be aligned to the MFF so that all general financial rules are included in the singe rulebook. On 24 November 2021, Parliament adopted a reslution on the revision of the Financial Regulation in view of the entry into force of the 2021-2027 multiannual financial framework, laying down its views on what such a revision should address.
On 16 May 2022, the Commission published its proposal for the revision, in the form of a recast. The proposal is targeted to the MFF alignment and to specific improvements and simplifications that mostly build on the lessons learned from the COVID-19 pandemic and focus on crisis management, the protection of EU financial interests, and simplification.
The rapporteurs welcome the Commission proposal as a step in the right direction towards a better management of EU finances. However, they believe that the proposal falls far short of what is necessary and possible to achieve in order to ensure better democratic accountability for a modern EU budget, via increased parliamentary oversight, digitalisation, and mainstreaming of important EU policies, as clearly set out in Parliament’s resolution of 24 November 2021.
The rapporteurs propose therefore a number of amendments that, while keeping the revision targeted to its main objectives, improve the Commission proposal in several aspects in line with the views expressed by Parliament. The main amendments proposed are briefly described below.
External assigned revenue. Parliament has repeatedly expressed concern that the number and scope of off-budget instruments have grown significantly in the past decade, with NextGenerationEU (NGEU) taking this practice to the next level. These developments put at risk central budgetary principles and pose a serious challenge to Parliament’s ability to fulfil its decision-making, scrutiny and discharge functions and, more generally, to the transparency of the EU budget. In a joint declaration included in the MFF package, the three Institution agreed that the provisions on the external assigned revenue would be assessed and, as appropriate, revised.
The rapporteurs welcome that the Commission proposed to have an annex, forming an integral part of the budget, setting out the budget lines for which assigned revenue is foreseen and the estimated amount. They propose that the information included in that annex be broken down into the specific categories of assigned revenue. In addition, the future activation of assigned revenue provided for in a basic act (as was for instance the case for NGEU) should in general be subject to a decision of the budgetary authority. Finally, it should be made explicit that the audits of the Court of Auditors and Parliament’s discharge decision include assigned revenue.
Borrowing and lending. The above-mentioned joint declaration by the three Institutions also included a commitment to assess, and as appropriate revise, the provisions on reporting on borrowing and lending operations. Parliament has long called for the full ‘budgetisation’ of these operations, and asked to be able to scrutinise and authorise them.
The Commission proposal only includes the codification of existing practices, by means of a comprehensive overview of borrowing and lending operations to be annexed to the draft budget. For a start, the rapporteurs propose to specify the minimum content of that document better, and to make sure that it also includes the underlying data and explains the methodology used by the Commission to estimate the interest due.
More importantly, the recently adopted Regulation 2022/2434 of 6 December 2022 amended the Financial Regulation by introducing a diversified funding strategy as a general borrowing method, based on a flexible pooling of funding instruments, so that the Commission can borrow for different initiatives into the same ‘pot’ at the best market conditions. The adopted changes must be reflected in the recast, and provide in addition the occasion to introduce a much needed form of oversight of the Commission’s borrowing and lending operations, in the form of a yearly ‘debt ceiling’ that the budgetary authority can set (and if necessary revise) in the context of the annual budgetary procedure.
Union values. The rapporteurs welcome the inclusion in the proposal of the compliance with the Rule of law Conditionality Regulation (EU, Euratom) 2020/2092 as a general principle. They propose to include the respect of fundamental rights as a general principle as well.
Tracking and mainstreaming of EU policies. The rapporteurs propose to clarify the application of the do no significant harm principle proposed by the Commission. In addition, they propose that the principle of social conditionality be applied horizontally to EU funding, following its inclusion in the new CAP 2021-27, and that concise and proportionate performance indicators are introduced to monitor the impact of Union spending on gender equality, as well as to track spending on climate change mitigation and adaptation and the protection of biodiversity, all without imposing excessive administrative burden.
Decommitments. The rapporteurs propose that the re-use of decommitted appropriations as a result of full or partial non-implementation of projects should be extended to include all appropriations. By analogy with what is already the case in external action pursuant to the NDICI Regulation, decommitments should be automatically kept in the budget.
Trust funds. The rapporteurs introduce amendments to guarantee an appropriate role of Parliament in the setting up, supervision and scrutiny of trust funds. Parliament and Council should be empowered to approve trust funds for emergency and post-emergency actions as they do for trust funds for thematic actions, but within a short defined timeframe to preserve the emergency character of the actions.
Tracking EU funds via digital tools. Parliament has repeatedly stressed the importance of knowing how EU funds are spent and who truly benefits from them in order to protect the financial interests of the EU and to detect fraud, corruption and conflicts of interest, and expressed concern that data for identifying economic operators and their beneficial owners is not easily accessible.
The rapporteurs welcome the Commission proposal to improve the Arachne IT system for data-mining and risk-scoring, to make it compulsory and to extend it to direct management, as a much needed first step. They propose to go much further with the compulsory centralisation of information within a single integrated interoperable reporting and monitoring system to be set up by the Commission, allowing for the electronic recording and storage of data on the recipients of Union funding, also in an aggregated format, including their beneficial owners and allowing for the regular making of those data available for data-mining and risk-scoring.
The rapporteurs’ proposed amendments set out several details of the new system, as regards inter alia interoperability and real-time automatic exchange of data with relevant systems and databases, and setting out precise actions and measures to achieve the necessary high quality of data. Moreover, the indicators used by the system should be reliable, objective and limited to what is necessary for risk assessment, and be reflected to the highest degree possible in the exclusion criteria of the EDES system in order to improve the efficiency of EDES.
Finally, the rapporteurs believe that the transition period proposed by the Commission before the use of the new system is made mandatory is disproportionately long and propose to bring the date of application of the system forward, while still providing sufficient time for the development and adoption of the system.
Other amendments are proposed, inter alia to align the Financial Regulation to the recently adopted Regulation (EU) 2022/2560 on foreign subsidies distorting the internal market, to streamline the management of the common provisioning fund, to improve oversight on forms of Union contribution with financing not linked to costs, to introduce a provision to avoid ‘gold-plating’ resulting into excessive administrative burden, and to improve the provisions in relation to the EPPO, Union delegation in third countries and Parliament’s liaison offices, and building projects financed through loans. The amendment adopted as part of Parliament's mandate for inter-institutional negotiations on the stand-alone proposal to revise the Financial Regulation as regards competition fines is also included for coherence.
The rapporteurs believe that the amendments proposed are key to a fruitful revision of this central legislative tool that increases transparency, accountability and democratic scrutiny and improves the implementation of the EU budget.
Amendments to parts of the proposal which remain unchanged ('white parts') were necessary for pressing reasons relating to the internal logic of the text or because the amendments are inextricably linked to other admissible amendments.
In line with Rule 110(3) of EP Rules of Procedure, there is an inextricable link between the amendments adopted in BUDG/CONT in this procedure.
09.03.2023
LETTER OF THE COMMITTEE ON INDUSTRY, RESEARCH AND ENERGY
Mr Johan Van Overtveldt
Chair
Committee on Budgets
BRUSSELS
Ms Monika Hohlmeier
Chair
Committee on Budgetary Control
BRUSSELS
Subject: Opinion on Financial rules applicable to the general budget of the Union (recast) (COM(2022)0223 – C90179-2022 – 2022/0162(COD))
Dear Mr Chair,
Under the procedure referred to above, the Committee on Industry, Research and Energy has been asked to submit an opinion to your committee and to the Committee on Budgetary Control. At its meeting of 13 July 2022, the committee decided to send the opinion in the form of a letter. It considered the matter at its meeting of 9 March 2023 and adopted the opinion at that meeting.
The opinion consists of the following amendments, which, in accordance with the usual treatment of opinions under Rule 56, I kindly ask you to put to the vote during the vote on the report in your committee:
ITRE 1
Article 14 – paragraph 1
Where budgetary commitments are decommitted in any financial year after the year in which they were made as a result of the total or partial non-implementation of the actions for which they were earmarked, the appropriations corresponding to such decommitments shall be made available again to the benefit of the budget line of origin.
Justification
The consequence of the amendment returning the decommitments to the benefit of the budget lines of origin, would address directly the problems with research decommitments.
ITRE 2
Article 15
deleted
Justification
A technical deletion necessary in view of the amendment to Art. 14
ITRE 3
Article 33 – paragraph 2 – point d
(d) programmes and activities shall, where feasible and appropriate, in accordance with the relevant sector-specific rules, be implemented to achieve their set objectives without doing significant harm to the environmental objectives of climate change mitigation, climate change adaptation, the sustainable use and protection of water and marine resources, the transition to a circular economy, pollution prevention and control and the protection and restoration of biodiversity and ecosystems, as set out in Article 9 of Regulation (EU) 2020/852 of the European Parliament and of the Council.
Justification
The amendment alters the Commission proposal on including the Do No Significant Harm principle in the FR. It creates the possibility to specify the application of the principle in sectoral legislation. This would allow ITRE to determine the scope and manner of application appropriate for, for example, the research programme. ITRE has commented on this scope and manner of application already in the past, for example in paragraph 41 of the EIC Implementation INI.
Yours sincerely,
CristianSilviu Buşoi
6.12.2022
OPINION OF THE COMMITTEE ON REGIONAL DEVELOPMENT
for the Committee on Budgets and the Committee on Budgetary Control
on the proposal for a regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (recast)
(COM(2022/0223) – C90179/2022 – 2022/0162(COD))
Rapporteur for opinion: Daniel Buda
AMENDMENTS
The Committee on Regional Development calls on the Committee on Budgets and the Committee on Budgetary Control, as the committees responsible, to take into account the following amendments:
Amendment 1
Proposal for a regulation
Recital 1
Amendment 2
Proposal for a regulation
Recital 9
Amendment 3
Proposal for a regulation
Recital 21
Amendment 4
Proposal for a regulation
Recital 24
Amendment 5
Proposal for a regulation
Recital 27
Amendment 6
Proposal for a regulation
Recital 29
Amendment 7
Proposal for a regulation
Recital 103
Amendment 8
Proposal for a regulation
Recital 115
Amendment 9
Proposal for a regulation
Recital 134
Amendment 10
Proposal for a regulation
Recital 140
Amendment 11
Proposal for a regulation
Recital 150
Amendment 12
Proposal for a regulation
Recital 158
Amendment 13
Proposal for a regulation
Recital 161
Amendment 14
Proposal for a regulation
Recital 165
Amendment 15
Proposal for a regulation
Recital 178
Amendment 16
Proposal for a regulation
Recital 248
Amendment 17
Proposal for a regulation
Recital 256
Amendment 18
Proposal for a regulation
Article 2 – paragraph 1 – point 1
Amendment 19
Proposal for a regulation
Article 2 – paragraph 1 – point 5
Amendment 20
Proposal for a regulation
Article 2 – paragraph 1 – point 20
Amendment 21
Proposal for a regulation
Article 2 – paragraph 1 – point 22 – point b
Amendment 22
Proposal for a regulation
Article 6 – paragraph 1
Justification
The addition of the respect for rule of law and fundamental rights among the principles is needed for reasons relating to the internal logic of the text and it is strictly linked to the modification proposed on art. 6, paragraph 2.
Amendment 23
Proposal for a regulation
Article 6 – paragraph 2
Amendment 24
Proposal for a regulation
Article 33 – paragraph 2 – point d
Amendment 25
Proposal for a regulation
Article 36 – paragraph 2 – point d
Amendment 26
Proposal for a regulation
Article 36 – paragraph 3 – point c
Amendment 27
Proposal for a regulation
Article 36 – paragraph 6 – point a
Amendment 28
Proposal for a regulation
Article 36 – paragraph 7 – subparagraph 1
Amendment 29
Proposal for a regulation
Article 36 – paragraph 7 – subparagraph 2
Amendment 30
Proposal for a regulation
Article 56 a (new)
Justification
This new article on budget implementation in accordance with the principle of respect for rule of law and fundamental rights is needed for reasons relating to the internal logic of the text and it is strictly linked to the modification proposed on art. 6, paragraph 2.
Amendment 31
Proposal for a regulation
Article 63 – paragraph 5 – point b
Justification
The purpose of this addition is to bring more closely into line the provisions of Article 63(5)(b) of the Financial Regulation and those of Article 77(3)(b) of Regulation (EU) No 1060/2021 laying down common provisions for the programming period 2021-2027, clearly obviating the need to draw up two separate documents for the programming period 2021-2027: the annual summary drawn up by the managing authority and the annual control report drawn up by the audit authority.
Amendment 32
Proposal for a regulation
Article 168 – paragraph 5 – point b
Justification
Addition of Article 182(1) setting thresholds for external actions. Procedures involving calls for expression of interest are applicable to external actions, under point 13.1 of Annex I, which relates to both limit categories - referred to in Article 179 (1) (new) and Article 182 (1) (new).
Amendment 33
Proposal for a regulation
Article 212 – paragraph 5 – subparagraph 2
Amendment 34
Proposal for a regulation
Annex I – Part 2 – point 34 – point 34.2 – paragraph 2
Justification
Point 34 is not mentioned under point 37 (new) as exempt from external actions. We accordingly propose the inclusion of reference to the new Article 182(1), which sets out the thresholds for external actions.
PROCEDURE – COMMITTEE ASKED FOR OPINION
FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR OPINION
25.4.2023
LETTER OF THE COMMITTEE ON LEGAL AFFAIRS
Ms Monika Hohlmeier
Chair
Committee on Budgetary control
BRUSSELS
Mr Johan Van Overtveldt
Chair
Committee on Budgets
BRUSSELS
Subject: Opinion on a proposal for a regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (recast) (COM(2022)0223 – C90179/2022 – 2022/0162(COD))
Dear Chairs,
The Committee on Legal Affairs has examined the proposal referred to above pursuant to Rule 110 on recasting of Parliament's Rules of Procedure.
Paragraph 3 of that Rule reads as follows:
“If the committee responsible for legal affairs considers that the proposal does not entail any substantive changes other than those identified as such in the proposal, it shall inform the committee responsible for the subject matter thereof.
In such a case, over and above the conditions laid down in Rules 180 and 181, amendments shall be admissible within the committee responsible for the subject-matter only if they concern those parts of the proposal which contain changes.
However, amendments to parts of the proposal which remain unchanged may, by way of exception and on a case-by-case basis, be accepted by the Chair of the committee responsible for the subject matter if he or she considers that this is necessary for pressing reasons relating to the internal logic of the text or because the amendments are inextricably linked to other admissible amendments. Such reasons must be stated in a written justification to the amendments.”
Following the here attached opinion of the Consultative Working Party of the Legal Services of the Parliament, the Council and the Commission, which has examined the recast proposal, and in keeping with the recommendations of the Rapporteur, the Committee on Legal Affairs considers that the proposal in question does not include any substantive changes other than those identified as such and that, as regards the codification of the unchanged provisions of the earlier act with those substantive amendments, the proposal contains a straightforward codification of the existing text, without any change in its substance.
As regards the amendments originating from a later act, that is Regulation (EU, Euratom) 2022/2434, which was proposed and adopted after the proposal for the recast of Regulation (EU, Euratom) 2018/1046 was submitted, the Committee on Legal Affairs considers that those amendments should also be incorporated into the final text of the recast version of Regulation (EU, Euratom) 2018/1046.
In conclusion, at its meeting of 25 April 2023, the Committee on Legal Affairs unanimously decided to recommend that the Committee on Budgets and the Committee on Budgetary Control, as the committees responsible, proceed to examine the above proposal in accordance with Rule 110.
Yours sincerely,
Adrián Vázquez Lázara
Encl.: Opinion of the Consultative Working Party.
Annex
Brussels, 11 April 2023
OPINION
FOR THE ATTENTION OF THE EUROPEAN PARLIAMENT
THE COUNCIL
THE COMMISSION
Proposal for a regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union
COM(2022)0223 of 16.5.2022 – 2022/0162(COD)
Having regard to the Inter-institutional Agreement of 28 November 2001 on a more structured use of the recasting technique for legal acts, and in particular to point 9 thereof, the Consultative Working Party consisting of the respective legal services of the European Parliament, the Council and the Commission met on 19 January, 25 January and 2 February 2023 for the purpose of examining the aforementioned proposal submitted by the Commission.
At those meetings, an examination of the proposal for a Regulation of the European Parliament and of the Council recasting Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union resulted in the Consultative Working Party’s establishing, by common accord, as follows.
1. The following should have been marked with the grey-shaded type generally used for identifying substantive amendments:
- the deletion of recital 181 of Regulation (EU, Euratom) 2018/1046;
- in Article 14(1), the replacement of the words ‘without prejudice to’ with the word ‘notwithstanding’;
- in Article 32(2), first subparagraph, the adding of the words ‘under Article 9(1), point (b), of Regulation (EU, Euratom) 2020/2093’;
- in Article 32(2), third subparagraph, the adding of the words ‘for assistance under Article 9(1), point (b), of Regulation (EU, Euratom) 2020/2093’;
- in Article 38(2)(b), the adding of the words ‘first and last’;
- in Article 49(1), second subparagraph, the replacement of the reference made to ‘point (c) of the first subparagraph of Article 30(1)’ with a reference to ‘Article 30(2), point (a)’;
- in Article 62(1), first subparagraph, point (a), the replacement of the article number ‘153’ with ‘157’;
- in Article 62(1), first subparagraph, point (c), introductory wording, the replacement of the article number ‘149’ with ‘153’;
- in Article 93(4), first subparagraph, introductory wording, the replacement of the reference made to ‘Article 143(2)’ with a reference to ‘Article 146(2), subparagraph 1, points (a) and (b)’;
- in Article 113(4), first subparagraph, the deletion of the words ‘either’ and ‘or’;
- in Article 138(4), second subparagraph, the adding of the indication ‘and (8)’;
- in Article 139(1), point (c)(iv), the deletion of the word ‘procedure’;
- in Article 139(4), point (f)(ii), the adding of the word ‘or’;
- in Article 162(2), the replacement of the reference made to ‘Article 155(5)’ with a reference to ‘Article 159(8)’;
- in Article 200(1), point (d), the replacement of the reference made to ‘point (c) of the first subparagraph of Article 62(1)’ with a reference to ‘Article 62(1), first subparagraph, point (b)’;
- in Article 253(1), point (d), the replacement of the reference made to ‘Article 118(4)’ with a reference to ‘Article 119(8)’;
- in Article 275(1), the deletion of the third sentence of Article 279(1) of Regulation (EU, Euratom) 2018/1046;
- in Article 278, second paragraph, the replacement of the date ‘2 August 2018’ with the indication ‘[...]’;
- in the introductory wording of point 20.2 of Annex I, the adding of the words ‘in particular’.
2. In Article 41(2), first subparagraph, the reference made to ‘the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management’ should have been replaced with a reference to ‘the Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources’. The corresponding footnote no. 69 should read ‘OJ L 4331, 22.12.2020, p. 28’.
3. In Article 139(1), point (d)(iv), the words ‘in Article 4 of that Decision’ should have been replaced by the words ‘in Article 14 of that Directive’.
In consequence, examination of the proposal has enabled the Consultative Working Party to conclude, without dissent, that the proposal does not comprise any substantive amendments other than those identified as such.
The Working Party also concluded, as regards the codification of the unchanged provisions of the earlier act with those substantive amendments, that, at the time when proposal COM(2022) 223 final was submitted by the Commission to the European Parliament and to the Council, that proposal contained a straightforward codification of the existing legal text, without any change in its substance. However, after the submission of proposal COM(2022) 223 final, the Commission also submitted proposal COM(2022) 596 final and, as a result of the relevant legislative procedure, Regulation (EU, Euratom) 2022/2434 of the European Parliament and of the Council of 6 December 2022 amending Regulation (EU, Euratom) 2018/1046 as regards the establishment of a diversified funding strategy as a general borrowing method was adopted and published in the Official Journal. The amendments originating from Regulation (EU, Euratom) 2022/2434 should therefore be incorporated in the final text of the recast version of Regulation (EU, Euratom) 2018/1046.
F. DREXLER J.B. LAIGNELOT D. CALLEJA CRESPO
Jurisconsult acting Director-General Director-General
PROCEDURE – COMMITTEE RESPONSIBLE
FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE