Sittings · Document

DRAFT REPORT (COM(2022)0223 – C90179/2022 – 2022/0162(COD)) 2023-01-23

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)

Committee on Budgets Committee on Budgetary Control · Rapporteur: Nils Ušakovs, Monika Hohlmeier

DRAFT 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))

(Ordinary legislative procedure – recast)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2022)0223),

– 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),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

– having regard to the opinion of the Court of Auditors of 31 October 2022,

– 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 ... 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 (A90000/2023),

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 15

Text proposed by the Commission	Amendment
(15) Following the adoption of the Multiannual Financial Framework for 2021 to 2027 and related basic acts thereto, certain rules related to budgetary principles, in particular as regards cancellation and carry-over, decommitments and making appropriations corresponding to decommitments available again, laid down in Regulation 2021/211623 of the European Parliament and of the Council, Regulation (EU, Euratom) 2020/2093, Regulation (EU) 2021/836 of the European Parliament and of the Council24 , Regulation (EU) 2021/947 of the European Parliament and of the Council25 , Regulation (EU) 2021/1529 of the European Parliament and of the Council26 , Council Decision (EU) 2021/176427 , Council Regulation (Euratom) 2021/94828 and Regulation (EU) No 2021/1060 of the European Parliament and Council29 , should be incorporated into this Regulation.	(15) Following the adoption of the Multiannual Financial Framework for 2021 to 2027 and related basic acts thereto, certain rules related to budgetary principles, in particular as regards cancellation and carry-over, decommitments and making appropriations corresponding to decommitments available again, laid down in Regulation 2021/211623 of the European Parliament and of the Council, Regulation (EU, Euratom) 2020/2093, Regulation (EU) 2021/836 of the European Parliament and of the Council24 , Regulation (EU) 2021/947 of the European Parliament and of the Council25 , Regulation (EU) 2021/1529 of the European Parliament and of the Council26 , Council Decision (EU) 2021/176427 , Council Regulation (Euratom) 2021/94828 and Regulation (EU) No 2021/1060 of the European Parliament and Council29 , should be included in this Regulation and where appropriate generalised.
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23 Regulation (EU) 2021/2116 of the European Parliament and of the Council of 2 December 2021 on the financing, management and monitoring of the common agricultural policy and repealing Regulation (EU) No 1306/2013, OJ L 435, 6.12.2021, p. 187.	23 Regulation (EU) 2021/2116 of the European Parliament and of the Council of 2 December 2021 on the financing, management and monitoring of the common agricultural policy and repealing Regulation (EU) No 1306/2013, OJ L 435, 6.12.2021, p. 187.
24 Regulation (EU) 2021/836 of the European Parliament and of the Council of 20 May 2021 amending Decision No 1313/2013/EU on a Union Civil Protection Mechanism, OJ L 185, 26.5.2021, p. 1.	24 Regulation (EU) 2021/836 of the European Parliament and of the Council of 20 May 2021 amending Decision No 1313/2013/EU on a Union Civil Protection Mechanism, OJ L 185, 26.5.2021, p. 1.
25 Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing the Neighbourhood, Development and International Cooperation Instrument – Global Europe, amending and repealing Decision No 466/2014/EU and repealing Regulation (EU) 2017/1601 and Council Regulation (EC, Euratom) No 480/2009, OJ L 209, 14.6.2021, p. 1–78	25 Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing the Neighbourhood, Development and International Cooperation Instrument – Global Europe, amending and repealing Decision No 466/2014/EU and repealing Regulation (EU) 2017/1601 and Council Regulation (EC, Euratom) No 480/2009, OJ L 209, 14.6.2021, p. 1–78
26 Regulation (EU) 2021/1529 of the European Parliament and of the Council of 15 September 2021 establishing the Instrument for Pre-Accession assistance (IPA III), OJ L 330, 20.9.2021, p. 1.	26 Regulation (EU) 2021/1529 of the European Parliament and of the Council of 15 September 2021 establishing the Instrument for Pre-Accession assistance (IPA III), OJ L 330, 20.9.2021, p. 1.
27 Council Decision (EU) 2021/1764 of 5 October 2021 on the association of the Overseas Countries and Territories with the European Union including relations between the European Union on the one hand, and Greenland and the Kingdom of Denmark on the other (Decision on the Overseas Association, including Greenland), OJ L 355, 7.10.2021, p. 6.	27 Council Decision (EU) 2021/1764 of 5 October 2021 on the association of the Overseas Countries and Territories with the European Union including relations between the European Union on the one hand, and Greenland and the Kingdom of Denmark on the other (Decision on the Overseas Association, including Greenland), OJ L 355, 7.10.2021, p. 6.
28 Council Regulation (Euratom) 2021/948 of 27 May 2021 establishing a European Instrument for International Nuclear Safety Cooperation complementing the Neighbourhood, Development and International Cooperation Instrument – Global Europe on the basis of the Treaty establishing the European Atomic Energy Community, and repealing Regulation (Euratom) No 237/2014, OJ L 209, 14.6.2021, p. 79.	28 Council Regulation (Euratom) 2021/948 of 27 May 2021 establishing a European Instrument for International Nuclear Safety Cooperation complementing the Neighbourhood, Development and International Cooperation Instrument – Global Europe on the basis of the Treaty establishing the European Atomic Energy Community, and repealing Regulation (Euratom) No 237/2014, OJ L 209, 14.6.2021, p. 79.
29 Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy, OJ L 231, 30.6.2021, p. 159.	29 Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy, OJ L 231, 30.6.2021, p. 159.

Or. en

Justification

The revision of the Financial Regulation provides the occasion to generalise the rules found in sectoral legislation where it is deemed appropriate.

Amendment 2

Proposal for a regulation

Recital 24 a (new)

Text proposed by the Commission	Amendment
	(24a) The concept of performance as regards the budget should also be extended to include the implementation of programmes and activities in a way that respects the Union values laid down in Article 2 TEU and in the Charter of Fundamental Rights, which would lead to better protection of the Union’s financial interests. Concise indicators should therefore be developed and applied through a risk-based approach and used for targeted ex-ante and ex-post assessment of compliance with Union values in the use of Union funds.

Or. en

Justification

As stated in Parliament's resolution of 24 November 2021, the respect for the fundamental values enshrined in Article 2 of the Treaty and in the Charter of Fundamental Rights is paramount for the protection of the Union's financial interests and should therefore be monitored. This explanatory Recital is linked to admissible amendments to Article 6 and Article 33 of the proposal.

Amendment 3

Proposal for a regulation

Recital 24 b (new)

Text proposed by the Commission	Amendment
	(24b) Following the adoption of the Multiannual Financial Framework 2021-2027, the principle of social conditionality has been included in the Common Agricultural Policy 2021-2027. In order to ensure that the Union budget implementation contributes to the achievement of the objectives set out in Article 9 TFEU and the European Pillar of Social Rights, the concept of performance as regards the budget should be extended to include the implementation of programmes and activities in a socially sustainable and fair way. Therefore, compliance by beneficiaries with basic labour standards and employment conditions for workers and occupational safety and health should be ensured before proceeding to the disbursement of payments from the Union budget.

Or. en

Justification

As stated in Parliament's resolution of 24 November 2021, the principle of social conditionality, included in the new CAP 2021-27, should be applied horizontally to Union funding. This explanatory Recital is linked to admissible amendments to Article 33 of the proposal.

Amendment 4

Proposal for a regulation

Recital 24 c (new)

Text proposed by the Commission	Amendment
	(24c) Gender mainstreaming should be better reflected in the drafting and implementation of the budget and a systematic and comprehensive collection of gender-disaggregated data in the context of all Union policies and programmes is necessary in order to measure the impact on gender equality; in addition, the rules on budget implementation should allow for the effective and efficient tracking of funds used in tackling climate change on both the climate mitigation and adaptation fronts, as well as for the accurate monitoring of expenditures contributing to halting and reversing the decline of biodiversity.

Or. en

Justification

As stated in Parliament's resolution of 24 November 2021, data tracking gender, climate and biodiversity-related spending should be comprehensively collected so that the impact of the implementation of the budget can be properly assessed. This explanatory Recital is linked to admissible amendments to Article 33 of the proposal.

Amendment 5

Proposal for a regulation

Recital 24 d (new)

Text proposed by the Commission	Amendment
	(24d) In that regard, specific performance indicators for the Union budget should be 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. Those indicators should be concise and proportionate, avoiding overlapping, should be limited to a manageable number and should not result in excessive administrative burden.

Or. en

Justification

As stated in Parliament's resolution of 24 November 2021, data tracking gender, climate and biodiversity-related spending should be comprehensively collected so that the impact of the implementation of the budget can be properly assessed. It is crucial that the corresponding necessary indicators be designed to avoid any excessive administrative burden. This explanatory Recital is linked to admissible amendments to Article 33 of the proposal.

Amendment 6

Proposal for a regulation

Recital 27

Text proposed by the Commission	Amendment
(27) In order to enhance the protection of the Union budget against fraud, corruption, conflicts of interest, double funding and other irregularities, standardised measures to collect, compare and aggregate information on the recipients of Union funding should be introduced. In particular, in order to effectively prevent, detect, investigate and correct frauds or remedy irregularities, it is necessary to be able to identify the natural persons that ultimately benefit, directly or indirectly, from Union funding and who ultimately profit from the misuse of EU funding. The electronic recording and storage of data on the recipients of Union funding, including their beneficial owners as defined in Article 3, point (6), of Directive (EU) 2015/849 of the European Parliament and of the Council32 and the regular making of those data available in a single integrated IT system for data-mining and risk-scoring provided by the Commission, should facilitate risk assessment for the purposes of selection, award, financial management, monitoring, investigation, control and audit and contribute to effective prevention, detection, correction and follow-up of fraud, corruption, conflicts of interest, double funding and other irregularities. The Commission should be responsible for the development, management and supervision of the single integrated IT system for data-mining and risk-scoring. The Commission, the Member States, the persons or entities implementing the budget, the European Anti-Fraud Office (‘OLAF’) and other Union investigative and control bodies should have the necessary access to those data within the exercise of their respective competences. The rules related to the recording, storage, transfer and processing of data should comply with applicable data protection rules.	(27) In order to enhance the protection of the Union budget against fraud, corruption, conflicts of interest, double funding and other irregularities, standardised measures to collect, compare and aggregate information on the recipients of Union funding should be introduced. In particular, in order to effectively prevent, detect, investigate and correct frauds or remedy irregularities, it is necessary to be able to identify the natural persons that ultimately benefit, directly or indirectly, from Union funding and who ultimately profit from the misuse of EU funding. A single integrated and interoperable information and monitoring system provided by the Commission allowing for the electronic recording and storage of data on the recipients of Union funding, including their beneficial owners and allowing for the regular making of those data available for data-mining and risk-scoring should be designed and put in place to get a clear overview of the distribution and potential concentration of Union funds disbursed, including through a functionality that allows for the aggregation of these funds. That system should reduce the bureaucratic burden on the financial actors and other persons referred to in Article 61, on controllers and auditors, as well as on the recipients of Union funds, and should facilitate risk assessment for the purposes of selection, award, financial management, monitoring, investigation, control and audit and contribute to effective prevention, detection, correction and follow-up of fraud, corruption, conflicts of interest, double funding and other irregularities. The Commission should be responsible for the development, management and supervision of that system. The Commission, the Member States, the European Parliament, the Council, the persons or entities implementing the budget, the European Anti-Fraud Office (‘OLAF’) and other Union investigative and control bodies should have the necessary access to those data within the exercise of their respective competences. The rules related to the recording, storage, transfer and processing of data should comply with applicable data protection rules.
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32 Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (OJ L 141 5.6.2015, p. 73).

Or. en

Justification

The objectives and scope of the new IT system put in place by the Commission should be better detailed. A single integrated and interoperable information and monitoring system should allow for the electronic recording and storage of data on the recipients of Union funding, including their beneficial owners, and make that data available for data-mining and risk-scoring. The system should provide a clear overview of the distribution and potential concentration of the (aggregated) Union funds disbursed.

Amendment 7

Proposal for a regulation

Recital 27 a (new)

Text proposed by the Commission	Amendment
	(27a) The single integrated and interoperable information and monitoring system referred to in Article 36(2) should be based on interoperability, whereby updated information on recipients of Union funds and on company ownership should be retrieved from and transferred into this system, in an automatic way, in real time where feasible, from transparency registers on beneficial owners, relevant national databases, internal systems of relevant national bodies and authorities, management and paying authorities and national public procurement and tender databases.

Or. en

Justification

The new single information and monitoring system should be interoperable and automatically exchange information from relevant sources, where feasible in real time. This Recital elaborates on the updated description of the new IT system and is linked with the admissible amendment to Recital 27.

Amendment 8

Proposal for a regulation

Recital 29

Text proposed by the Commission	Amendment
(29) Without prejudice to the rules on the protection of personal data, the utmost transparency regarding information on recipients should be sought. The information on recipients of Union funds should be published on a dedicated website of Union institutions, such as the Financial Transparency System. Publication requirements should cover all methods of budget implementation, including by other Union institutions and bodies. To that end, Member States, persons and entities implementing the budget and other Union institutions and bodies should transmit to the Commission, at least on a yearly basis, information on their recipients of Union funding. That information should include at least the name, a unique identifier and the locality of the recipient, the amount committed and the purpose of the measure. That information should take into account relevant criteria such as the periodicity, the type and the importance of the measure.	(29) Without prejudice to the rules on the protection of personal data, the utmost transparency regarding information on recipients should be sought. The information on recipients of Union funds should be published on a dedicated website of Union institutions, such as the Financial Transparency System. Publication requirements should cover all methods of budget implementation, including by other Union institutions and bodies. To that end, Member States, persons and entities implementing the budget and other Union institutions and bodies should transmit to the Commission, at least on a yearly basis, information on their recipients of Union funding. That information should include at least the name, a unique identifier and the locality of the recipient, the amount committed, whether the recipient receives state aid and the purpose of the measure. That information should take into account relevant criteria such as the periodicity, the type and the importance of the measure.

Or. en

Justification

As stated in Parliament's resolution of 24 November 2021, the information on recipients on the Financial Transparency System should include whether the recipient receives state aid.

Amendment 9

Proposal for a regulation

Recital 43

Text proposed by the Commission	Amendment
(43) In view of the increased volume of borrowing and lending operations carried out by the Commission on behalf of the Union to finance the recovery from the COVID-19 pandemic, transparency regarding those operations should be further enhanced. To address the increased complexity of those operations and in order to ensure better visibility of their content, a comprehensive overview of borrowing and lending operations carried out by the Commission should be added to the document annexed to the section of the budget relating to the Commission.	(43) In view of the increased volume of borrowing and lending operations carried out by the Commission on behalf of the Union to finance the recovery from the COVID-19 pandemic, transparency regarding those operations should be further enhanced. To address the increased complexity of those operations and in order to ensure better visibility of their content, a comprehensive overview of borrowing and lending operations carried out by the Commission, including as a minimum detailed information on maturities, schedule of payments, interest due and the role of own resources in the repayment of the debt, should be added to the document annexed to the section of the budget relating to the Commission. That document should lay down the underlying data and the methodology used by the Commission to estimate the interest due.

Or. en

Justification

The minimum content of the comprehensive overview of borrowing and lending operations to be provided by the Commission together with the draft budget should be specified so that not only the budgetary authority receives thorough information, but also understands the data and methodology used by the Commission to estimate the interest due.

Amendment 10

Proposal for a regulation

Recital 103

Text proposed by the Commission	Amendment
(103) In order to enhance the protection of the Union financial interests the early-detection and exclusion system should be reinforced. It is important to avoid that a person or entity in an exclusion situation is able to apply to, or to be selected for implementing funds, or to receive such funds under a programme in shared management. Where there is a final judgment or a final administrative decision, the authorising officer responsible should be able to exclude a person or entity, provided that the latter is in an exclusion situation and deemed as not reliable by having engaged in certain serious misconducts referred to in Article 139(1). In the absence of a final judgment or a final administrative decision, the authorising officer responsible should be able to exclude, on the basis of a preliminary classification in law made by the panel referred to in Article 146, having regard to facts and findings established in the context of audits or investigations carried out by European Anti-fraud Office (OLAF), European Public Prosecutor Office (EPPO), the European Court of Auditors (ECA) or any other check, audit or control performed under the responsibility of the authorising officer. Such exclusion should be registered in the early-detection and exclusion system database established under Article 138(1). Member States’ authorities should take it into account by rejecting such persons or entities from being selected to implement Union funds or from receiving such funds. Payment applications from Member States under shared management, including expenditure related to a person or entity that has been excluded, should not be reimbursed. Where funds are disbursed to Member States under performance-based frameworks, specific rules shall apply, as set out in sector-specific legislation.	(103) In order to enhance the protection of the Union financial interests the early-detection and exclusion system should be reinforced. It is important to avoid that a person or entity in an exclusion situation is able to apply to, or to be selected for implementing funds, or to receive such funds under a programme in shared management. Where there is a final judgment or a final administrative decision, the authorising officer responsible should be able to exclude a person or entity, provided that the latter is in an exclusion situation and deemed as not reliable by having engaged in certain serious misconducts referred to in Article 139(1). In the absence of a final judgment or a final administrative decision, the authorising officer responsible should be able to exclude, on the basis of a preliminary classification in law made by the panel referred to in Article 146, having regard to facts and findings established in the context of audits or investigations carried out by European Anti-fraud Office (OLAF), European Public Prosecutor Office (EPPO), the European Court of Auditors (ECA) or any other check, audit or control performed under the responsibility of the authorising officer. Such exclusion should be registered in the early-detection and exclusion system database established under Article 138(1). Member States’ authorities should take it into account by rejecting such persons or entities from being selected to implement Union funds or from receiving such funds. Payment applications from Member States under shared management, including expenditure related to a person or entity that has been excluded, should not be reimbursed. Where funds are disbursed to Member States under performance-based frameworks, specific rules shall apply, as set out in sector-specific legislation. In order to increase the effectiveness of the early-detection and exclusion system, the exclusion situations referred to in Article 139(1) should be reflected, by any technical means necessary and to the highest degree possible, in the risk indicators of the system referred to in Article 36(2). That system should only use risk indicators that are objective, necessary for risk assessment, as well as based on reliable and updated sources of data and information.

Or. en

Justification

The EDES exclusion criteria should as far as possible be made compatible and interoperable with the risk indicators used by the new IT system that will succeed Arachne, in order to increase data quality and effectiveness of both systems.

Amendment 11

Proposal for a regulation

Recital 141 a (new)

Text proposed by the Commission	Amendment
	(141a) Consistent with the Union's efforts to simplify legislation and to avoid overregulation and reduce administrative burdens, as set out in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making, additional administrative obligations (norms, guidelines and procedures set at national, regional or programme level) that go beyond the requirements set at Union level (so-called “gold plating”), should be avoided; auditors at national and Union level including the Commission and the European Court of Auditors should include in their work both the detection of such redundant administrative obligations and the reasons behind them, as well as recommendations on ways to alleviate and prevent such practices; in particular auditors of the Commission should share information about good practices across Member States that can be pointed out as potential solution to such findings.

Or. en

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 12

Proposal for a regulation

Recital 160

Text proposed by the Commission	Amendment
(160) It is appropriate that different cases usually referred to as situations of conflict of interests be identified and treated distinctly. The notion of a ‘conflict of interests’ should be solely used for cases where a person or entity with responsibilities for budget implementation, audit or control, or an official or an agent of a Union institution or national authorities at any level, is in such a situation. Attempts to unduly influence an award procedure or obtain confidential information should be treated as grave professional misconduct which can lead to the rejection from the award procedure and/or exclusion from Union funds. In addition, economic operators might be in a situation where they should not be selected to implement a contract because of a professional conflicting interest. For instance, a company should not evaluate a project in which it has participated or an auditor should not be in a position to audit accounts it has previously certified.	(160) It is appropriate that different cases usually referred to as situations of conflict of interests be identified and treated distinctly. The notion of a ‘conflict of interests’ should be solely used for cases where a person or entity with responsibilities for budget implementation, audit or control, or an official or an agent of a Union institution or national authorities at any level, is in such a situation. The special characteristics of Union programmes reliant on voluntary participation should be taken into account when assessing whether a situation may objectively be perceived as a conflict of interest. The authority assessing conflict of interests shall be able to conduct such evaluations with rules that are enforceable and comprehensible to tenderers. Attempts to unduly influence an award procedure or obtain confidential information should be treated as grave professional misconduct which can lead to the rejection from the award procedure and/or exclusion from Union funds. In addition, economic operators might be in a situation where they should not be selected to implement a contract because of a professional conflicting interest. For instance, a company should not evaluate a project in which it has participated or an auditor should not be in a position to audit accounts it has previously certified.

Or. en

Justification

It should be clarified that identifying conflicts of interest has to take into account the special features of EU programmes with voluntary participation. This amendment is linked to the contents of Recital 45 and parts of Articles 61 and 139, which are part of the recast.

Amendment 13

Proposal for a regulation

Recital 194 a (new)

Text proposed by the Commission	Amendment
	(194a) By introducing a new category of a very low value grant of an amount of up to EUR 5 000, the lessons learned from providing small-scale support during the pandemic to small and medium-sized enterprises and individual applicants should be implemented. The new category would create efficiencies for the implementing partners and the Commission, while reducing bureaucracy for applicants.

Or. en

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 reduce bureaucracy. This is linked to the simplification and crisis management aims of the recast.

Amendment 14

Proposal for a regulation

Recital 219 a (new)

Text proposed by the Commission	Amendment
	(219a) When the Commission is empowered, in a relevant basic act, to borrow on behalf of the Union or Euratom for the purpose of on-lending the corresponding amounts to beneficiary Member States or third countries under the conditions applicable to the borrowings, if the cash flows between the borrowed funds and the loans are matched one-to-one, the Union must carry out market operations based on disbursement needs for each specific case of lending, which limits the possibility to coherently plan various borrowing operations and to structure maturities to achieve the best costs.

Or. en

Justification

Amendment 15

Proposal for a regulation

Recital 219 b (new)

Text proposed by the Commission	Amendment
	(219b) Financing individual programmes of financial assistance through separate funding methods creates cost and complexity as different programmes of financial assistance compete for a limited number of funding opportunities. It fragments the supply of Union debt securities and reduces liquidity and investor interest in the separate programmes, even though all Union debt securities have the same high credit quality. Financial assistance should thus be organised under a single funding method that enhances the liquidity of Union bonds and the attractiveness and cost-effectiveness of Union issuance.

Or. en

Justification

Amendment 16

Proposal for a regulation

Recital 219 c (new)

Text proposed by the Commission	Amendment
	(219c) Recent experience with the funding needs for Ukraine has highlighted the disadvantages of a fragmented approach to the organisation of the Union’s debt. In order to strengthen the Union’s position as an issuer of euro-denominated debt, it is of paramount importance that all new issuance be organised through a single funding method.

Or. en

Justification

Amendment 17

Proposal for a regulation

Recital 219 d (new)

Text proposed by the Commission	Amendment
	(219d) The model for a single funding method, and most elements of the infrastructure needed for its implementation, have already been established in the form of a diversified funding strategy under Council Decision (EU, Euratom) 2020/2053. That strategy has allowed the successful mobilisation of funds for grants and loans under Regulation (EU) 2021/241 of the European Parliament and of the Council and for a range of other Union programmes referred to in Council Regulation (EU) 2020/2094. To anticipate possible future borrowing and lending operations, it is appropriate to establish a diversified funding strategy as the single funding method for implementation of borrowing operations.

Or. en

Justification

Amendment 18

Proposal for a regulation

Recital 219 e (new)

Text proposed by the Commission	Amendment
	(219e) The use of a diversified funding strategy should allow the flexible implementation of the funding programme, while fully respecting the principles of budgetary neutrality and budgetary balance as set out in Article 310(1) of the Treaty on the Functioning of the European Union (TFEU). The costs of the funding programme should be fully borne by the beneficiaries based on a single cost allocation methodology that ensures the transparent and proportional allocation of costs. Repayment obligations should remain with the beneficiaries of the financial assistance, in compliance with Article 224(5), point (e).

Or. en

Justification

Amendment 19

Proposal for a regulation

Recital 219 f (new)

Text proposed by the Commission	Amendment
	(219f) The implementation of a diversified funding strategy requires a single set of rules to be followed in respect of all borrowing and lending programmes relying on it.

Or. en

Justification

Amendment 20

Proposal for a regulation

Recital 219 g (new)

Text proposed by the Commission	Amendment
	(219g) A diversified funding strategy should provide the Commission with more flexibility concerning the timing and the maturity of single funding transactions and allow regular and steady disbursements to different beneficiary countries. Such a strategy should be based on the pooling of funding instruments. This would give the Commission flexibility to organise payments to the beneficiaries independently of market conditions at the time of disbursement, while also reducing the risk that the Commission would have to raise fixed amounts in volatile or adverse conditions.

Or. en

Justification

Amendment 21

Proposal for a regulation

Recital 219 h (new)

Text proposed by the Commission	Amendment
	(219h) Giving the Commission that flexibility would require putting into place a common liquidity pool. Such a centralised liquidity function would render the Union’s funding capacity more resilient, and able to withstand temporary mismatches between all inflows and outflows, based on a robust liquidity forecasting capacity.

Or. en

Justification

Amendment 22

Proposal for a regulation

Recital 219 i (new)

Text proposed by the Commission	Amendment
	(219i) The Commission should implement all necessary transactions aiming at a regular capital market presence, at achieving the best possible funding costs and at facilitating transactions in debt securities of the Union and Euratom.

Or. en

Justification

Amendment 23

Proposal for a regulation

Recital 219 j (new)

Text proposed by the Commission	Amendment
	(219j) In extending the diversified funding strategy to a wider range of programmes, it is therefore appropriate for the Commission to establish the necessary arrangements for its implementation. Those arrangements should comprise a governance framework, risk management procedures, and a cost allocation methodology, which should respect Article 224(5), point (e). To ensure transparency, the Commission should regularly and comprehensively inform the European Parliament and the Council about all aspects of its borrowing and debt management strategy.

Or. en

Justification

Amendment 24

Proposal for a regulation

Recital 219 k (new)

Text proposed by the Commission	Amendment
	(219k) In view of the potential risks arising when the Union budget is used as a guarantee for borrowing operations, and in order to increase scrutiny and democratic accountability, it is important that the European Parliament and the Council, as budgetary authority, approve the maximum amount that the Commission is authorised to borrow under the diversified funding strategy during each financial year, within the limits set by the basic act empowering the Commission to borrow the funds on behalf of the Union.

Or. en

Justification

Parliament's resolution of 24 November 2021 asked for the budgetary authority to be able to scrutinise and authorise, as appropriate, the Commission’s borrowing and lending operations. The introduction of the diversified funding strategy and common liquidity pool in Regulation 2022/2434 provides the possibility to establish an annual 'debt ceiling' for funds borrowed under the strategy, to be set by Parliament and Council during the annual budgetary procedure.

Amendment 25

Proposal for a regulation

Recital 246

Text proposed by the Commission	Amendment
(246) The Union should be able to participate in global initiatives, when such participation contributes to the achievement of Union policy objectives. In order to provide a suitable legal framework for Union participation in global initiatives, Union contribution to such initiatives should be included as a new budget implementation instrument. The use of this new financial vehicle would be subject to conditions and limited to cases where other instruments provided in the Financial Regulation do not enable the achievement of the respective EU policy objectives with the same scale and impact.	deleted

Or. en

Justification

The new Article on Union contribution to global initiatives has an unclear scope of application, unclear added value and creates several issues as regards control of expenditure. At this stage, it is safer to delete it.

Amendment 26

Proposal for a regulation

Recital 256

Text proposed by the Commission	Amendment
(256) Some modifications regarding the transmission to the Commission of data on recipients for the purposes of publication, and regarding the electronic recording and storage of data on recipients and the use of the single integrated IT system for data-mining and risk-scoring to access and analyse those data should apply only to programmes adopted under and financed from the post-2027 multiannual financial framework in order to ensure a smooth transition by allowing sufficient time for the necessary adaption of electronic data systems and of relevant agreements, as well as the provision of guidance and training.	(256) Some modifications regarding the transmission to the Commission of data on recipients for the purposes of publication, and regarding the electronic recording and storage of data on recipients and the use of the system referred to in Article 36(2) to access and analyse those data should apply as of 1 January 2026 in order to ensure a smooth transition by allowing sufficient time for the necessary adaption of electronic data systems and of relevant agreements, as well as the provision of guidance and training.

Or. en

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 27

Proposal for a regulation

Article 2 – paragraph 1 – point 31 a (new)

Text proposed by the Commission	Amendment
	(31a) ‘foreign subsidy’ means a financial contribution provided by a third country, directly or indirectly, which confers a benefit on an economic operator engaging in an economic activity in the internal market and which is limited, in law or in fact, to one or more economic operators or industries; for the purposes of this definition, a financial contribution shall be understood within the meaning of Article 3(2) of Regulation (EU) 2022/2560 of the European Parliament and of the Council;

Or. en

Justification

A new definition is needed 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.

Amendment 28

Proposal for a regulation

Article 2 – paragraph 1 – point 58

Text proposed by the Commission	Amendment
(58) ‘recipient’ means a beneficiary, a contractor, a remunerated external expert or a person or entity receiving prizes , non-financial donations or support from the budget under a financial instrument or a budgetary guarantee, or implementing Union funds pursuant to point (c) of the first subparagraph of Article 62(1);	(58) ‘recipient’ means a beneficiary, a sub-beneficiary, a contractor, a subcontractor, a remunerated external expert or a person or entity, sub-entity or subsidiary receiving prizes , non-financial donations or support from the budget under a financial instrument or a budgetary guarantee, or implementing Union funds pursuant to point (c) of the first subparagraph of Article 62(1);

Or. en

Justification

The definition of recipient should be extended to cover every entity receiving EU funds, including subcontractors, subsidiaries, umbrella organisations and chains of entities.

Amendment 29

Proposal for a regulation

Article 2 – paragraph 1 – point 65 a (new)

Text proposed by the Commission	Amendment
	(65a) 'sub-beneficiary' means a natural person or an entity with or without legal personality who receives Union funds from a beneficiary with a view to performing the tasks financed by a Union grant;

Or. en

Justification

The definition of recipient should be extended to cover every entity receiving EU funds, including subcontractors, subsidiaries and umbrella organisations. This new definition of sub-beneficiary is needed for coherence with the amendment to the definition of beneficiary (point 58 of this Article).

Amendment 30

Proposal for a regulation

Article 2 – paragraph 1 – point 73 a (new)

Text proposed by the Commission	Amendment
	(73a) 'very low value grant’ means a grant lower than or equal to EUR 5000;

Or. en

Justification

The lessons learned from providing small-scale support during the pandemic to small and medium-sized enterprises and individual applicants should be taken on board 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 31

Proposal for a regulation

Article 6 – title

Text proposed by the Commission	Amendment
Respect for budgetary principles and general regime of conditionality for the protection of the Union budget	Respect for budgetary principles and general regime of conditionality for the protection of the Union budget and respect for fundamental rights

Or. en

Justification

As stated in Parliament's resolution of 24 November 2021, the respect for the fundamental values enshrined in Article 2 of the Treaty and in the Charter of Fundamental Rights is paramount for the protection of the Union's financial interests. This amendment is linked to the new paragraph 2 of this Article on compliance with the Rule of Law Conditionality Regulation.

Amendment 32

Proposal for a regulation

Article 6 – paragraph 2 a (new)

Text proposed by the Commission	Amendment
	2a. Member States and the Commission shall ensure respect for fundamental rights including non-discrimination, and compliance with the Charter of Fundamental Rights of the European Union in the implementation of the Union budget.

Or. en

Justification

As stated in Parliament's resolution of 24 November 2021, the respect for the fundamental values enshrined in Article 2 of the Treaty and in the Charter of Fundamental Rights is paramount for the protection of the Union's financial interests. This amendment is linked to the new paragraph 2 of this Article on compliance with the Rule of Law Conditionality Regulation.

Amendment 33

Proposal for a regulation

Article 7 – paragraph 2 – subparagraph 2 – point c

Text proposed by the Commission	Amendment
(c) appropriations made available again in accordance with Article 15;	(c) appropriations made available again in accordance with Article 14;

Or. en

Justification

Technical adaptation linked to the amendments to Articles 14 and 15 of the proposal.

Amendment 34

Proposal for a regulation

Article 7 – paragraph 2 – subparagraph 2 – point e

Text proposed by the Commission	Amendment
(e) appropriations provided following the receipt of revenue assigned during the financial year or carried over from preceding financial years.	(e) appropriations provided following the receipt of assigned revenue during the financial year or carried over from preceding financial years.

Or. en

Justification

Clarification of the terminology used in view of the changes put forward in Articles 21 and 22 of the proposal.

Amendment 35

Proposal for a regulation

Article 14 – paragraph 1

Text proposed by the Commission	Amendment
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 cancelled, unless otherwise provided in Regulation (EU) No 1303/2013, Regulation (EU) No 514/2014 , Regulation (EU) No 223/2014, Regulation (EU) 2021/1060 and Regulation (EU) 2021/2116 and notwithstanding Article 15 of this Regulation.	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.

Or. en

Justification

Parliament's resolution of 24 November 2021 suggested 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. As in the case of NDICI, decommitments will be automatically kept in the budget on the budget line of origin, with no discretion by the budgetary authority. The budgetary authority can and will of course use voted appropriations to re-balance the amounts on the budget lines on which decommitments are reused. This amendment is linked to the amendment to delete Article 15.

Amendment 36

Proposal for a regulation

Article 15

Text proposed by the Commission	Amendment
Article 15	deleted
Making appropriations corresponding to decommitments available again
1. The appropriations corresponding to decommitments referred to in Regulation (EU) No 1303/2013, Regulation (EU) No 223/2014, Regulation (EU) No 514/2014, Regulation (EU) 2021/1060 and Regulation (EU) 2021/2116 may be made available again in the event of a manifest error attributable solely to the Commission.
To that end, the Commission shall examine decommitments made during the preceding financial year and shall decide, by 15 February of the current financial year, on the basis of requirements, whether it is necessary to make the corresponding appropriations available again.
2. In addition to the case referred to in paragraph 1 of this Article, the appropriations corresponding to decommitments shall be made available again in the event of the decommitment of resources transferred back to the Fund from which they have been initially transferred in line with the provisions of Article 26 of Regulation (EU) 2021/1060.
3. Commitment appropriations corresponding to the amount of decommitments made as a result of total or partial non-implementation of corresponding research projects may also be made available again to the benefit of the research programme the projects belong to or its successor in the context of the budgetary procedure.
4. Commitment appropriations corresponding to the amount of decommitments made as a result of total or partial non implementation of an action under Regulation (EU) 2021/947, Regulation (EU) 2021/1529, Decision (EU) 2021/1764 and Council Regulation (Euratom) 2021/948 shall be made available again to the benefit of the budget line of origin.

Or. en

Justification

The deletion of this Article, together with the amendment to Article 14(1) of the proposal, ensures that decommitted appropriations are automatically kept in the budget, in line with Parliament's resolution of 24 November 2021.

Amendment 37

Proposal for a regulation

Article 22 – paragraph 1 – subparagraph 1 – point c

Text proposed by the Commission	Amendment
(c) an attached annex, forming an integral part of the budget, setting out all the budget lines for which external assigned revenue is foreseen and providing information on the estimated amount of such revenue to be received.	(c) in the statement of expenditure, an annex, forming an integral part of the budget, setting out all the budget lines for which internal or external assigned revenue is foreseen and providing information on the estimated amount of such revenue to be received; for each budget line, that information shall be broken down into the specific categories of assigned revenue referred to in Article 21(2), (3) and (5).

Or. en

Justification

In its resolution of 24 November 2021, Parliament asked that assigned revenue form an integral part of the EU budget and be adopted by the budgetary authority as part of that budget. Sufficiently detailed information should be provided to the budgetary authority in the proposed annex to the draft budget which forms an integral part of the budget.

Amendment 38

Proposal for a regulation

Article 22 – paragraph 2 – subparagraph 1 – point c a (new)

Text proposed by the Commission	Amendment
	(ca) in the case provided for in Article 21(5), commitment and payment appropriations shall be made available in the context of the budgetary procedure unless otherwise provided in the relevant basic act.

Or. en

Justification

In its resolution of 24 November 2021, Parliament asked that assigned revenue form an integral part of the EU budget and be adopted by the budgetary authority as part of that budget. When the creation of assigned revenue is provided for in a basic act (as it was the case for NextGenerationEU), the activation should be a prerogative of the budgetary authority. This amendment is linked to the admissible amendment to point c of paragraph 1 of this Article.

Amendment 39

Proposal for a regulation

Article 25 – paragraph 3 – subparagraph 2 – point c a (new)

Text proposed by the Commission	Amendment
	(ca) it does not harm or risk harming the internal security or public order of the Union or the Member States;

Or. en

Justification

It is useful to specify that in-kind donations should not pose a risk to internal security or public order.

Amendment 40

Proposal for a regulation

Article 33 – paragraph 2 – point c a (new)

Text proposed by the Commission	Amendment
	(ca) programmes and activities shall be implemented to achieve their set objectives respecting the Union values set out in Article 2 TEU;

Or. en

Justification

As stated in Parliament's resolution of 24 November 2021, the respect for the fundamental values enshrined in Article 2 of the Treaty and in the Charter of Fundamental Rights is paramount for the protection of the Union's financial interests and should therefore be monitored. This amendment is linked to point (d) of the same paragraph, which is included in the recast, and to the admissible amendment to paragraph 3 of the same Article.

Amendment 41

Proposal for a regulation

Article 33 – paragraph 2 – point d

Text proposed by the Commission	Amendment
(d) programmes and activities should 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 Council51 .	(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 Council51 .
__________________	__________________
51 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (Text with EEA relevance), OJ L 198, 22.6.2020, p. 13.	51 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (Text with EEA relevance), OJ L 198, 22.6.2020, p. 13.

Or. en

Justification

The original formulation of this paragraph is ambiguous as regards the scope of the application of the do no significant harm principle. The amendment clarifies that in general the principle applies, unless specific provisions in applicable sectoral legislation (for instance in the field of research) stipulate otherwise.

Amendment 42

Proposal for a regulation

Article 33 – paragraph 2 – point d a (new)

Text proposed by the Commission	Amendment
	(da) programmes and activities shall be implemented to achieve their set objectives respecting applicable working and employment conditions under relevant collective agreements, national and Union law as well as ILO conventions, and all other relevant applicable legislation regarding, but not limited to, social rights, minimum wages, occupational safety and health, work-life balance and organisation of working time.

Or. en

Justification

As stated in Parliament's resolution of 24 November 2021, the principle of social conditionality, included in the new CAP 2021-27, should be applied horizontally to Union funding. This amendment is linked to point (d) of the same paragraph, which is included in the recast, and to the admissible amendment to paragraph 3 of the same Article.

Amendment 43

Proposal for a regulation

Article 33 – paragraph 3

Text proposed by the Commission	Amendment
3. Specific, measurable, attainable, relevant and time-bound objectives as referred to in paragraphs 1 and 2 and relevant, accepted, credible, easy and robust indicators shall be defined where relevant.	3. Specific, measurable, attainable, relevant and time-bound objectives as referred to in paragraphs 1 and 2 and relevant, accepted, credible, easy, concise and robust indicators shall be defined where relevant. Those indicators shall include indicators to monitor the respect of Union values, including the impact of Union spending on gender equality, and to track spending on climate change mitigation and adaptation and the protection of biodiversity.

Or. en

Justification

Amendment 44

Proposal for a regulation

Article 36 – paragraph 2 – point d

Text proposed by the Commission	Amendment
(d) prevention, detection, correction and follow-up of fraud , corruption, conflicts of interest, double funding and other irregularities , including through the electronic recording and storage of data on the recipients of Union funds including their beneficial owners, as defined in Article 3, point (6), of Directive (EU) 2015/849 , and through the use of a single integrated IT system for data-mining and risk-scoring provided by the Commission to access and analyse those data;	(d) prevention, detection, correction and follow-up of fraud, corruption, conflicts of interest, double funding and other irregularities, including through a single, integrated and interoperable information and monitoring system allowing for the access to and the electronic automatic retrieval, recording, aggregation, storage and transfer in real-time, of data on the recipients of Union funds including their beneficial owners, as defined in Article 3, point (6), of Directive (EU) 2015/849, as well as for data-mining and risk-scoring to analyse those data;

Or. en

Justification

There should be a single integrated and interoperable information and monitoring system that allows for the electronic recording and storage of data on the recipients of Union funding, including their beneficial owners, and makes that data available for data-mining and risk-scoring. The system should provide a clear overview of the distribution and potential concentration of the (aggregated) Union funds disbursed.

Amendment 45

Proposal for a regulation

Article 36 – paragraph 6 – introductory part

Text proposed by the Commission	Amendment
6. For the purposes of point (d) of paragraph 2, the following data shall be recorded and stored electronically in an open, interoperable and machine-readable format and regularly made available in the single integrated IT system for data-mining and risk-scoring provided by the Commission:	6. For the purposes of point (d) of paragraph 2, the following data shall be recorded and stored electronically in an open, interoperable and machine-readable format and regularly made available in the system referred to in paragraph 2 of this Article provided by the Commission:

Or. en

Amendment 46

Proposal for a regulation

Article 36 – paragraph 6 – point a

Text proposed by the Commission	Amendment
(a) the recipient’s full legal name in the case of legal persons, the first and last name in the case of natural persons, their VAT identification number or tax identification number where available or another unique identifier at country level and the amount of funding. If a natural person, also the date of birth;	(a) the recipient’s full legal name in the case of legal persons, the first and last name in the case of natural persons, their VAT identification number or tax identification number where available or another unique identifier at country level, the unique identifier of the Union funding operation and the amount of funding. If a natural person, also the date of birth;

Or. en

Justification

The new single integrated and interoperable information and monitoring system should record the complete set of data which is needed for its purposes.

Amendment 47

Proposal for a regulation

Article 36 – paragraph 6 – point b

Text proposed by the Commission	Amendment
(b) the first name(s), last name(s), date of birth, and VAT identification number(s) or tax identification number(s) where available or another unique identifier at country level of beneficial owner(s) of the recipients, where the recipients are not natural persons.	(b) the first name(s), last name(s), date of birth, and VAT identification number(s) or tax identification number(s) where available or another unique identifier at country level of beneficial owner(s) of the recipients, where the recipients are not natural persons and whether the beneficial owner is a Member State;

Or. en

Justification

The new single integrated and interoperable information and monitoring system should record the complete set of data which is needed for its purposes.

Amendment 48

Proposal for a regulation

Article 36 – paragraph 6 – point b a (new)

Text proposed by the Commission	Amendment
	(ba) information on whether the recipient is a public or private law body or an entity with or without legal personality, or a natural person.

Or. en

Justification

The new single integrated and interoperable information and monitoring system should record the complete set of data which is needed for its purposes.

Amendment 49

Proposal for a regulation

Article 36 – paragraph 7 – subparagraph 1

Text proposed by the Commission	Amendment
The single integrated IT system for data-mining and risk-scoring shall be designed to facilitate risk assessment for the purposes of selection, award, financial management, monitoring, investigation, control and audit and contribute to effective prevention, detection, correction and follow-up of fraud, corruption, conflicts of interest, double funding and other irregularities.	The system referred to in paragraph 2 of this Article shall:
	(a) be designed and put in place to provide a clear overview of the distribution and potential concentration of Union funds disbursed, including through a functionality allowing for the aggregation of these funds and other relevant information in connection with the same recipients and their beneficial owners across different Union funding programmes, reduce the bureaucratic burden on the financial actors and other persons referred to in Article 61, on controllers and auditors, as well as on the recipients of Union funds, and facilitate risk assessment for the purposes of selection, award, financial management, monitoring, investigation, control and audit and contribute to effective prevention, detection, correction and follow-up of fraud, corruption, conflicts of interest, double funding and other irregularities;
	(b) be based on interoperability, whereby information updated in real time on recipients of Union funds and on company ownership may be retrieved from and transferred into this system, in an automatic way in real-time, from transparency registers on beneficial owners, relevant national and European databases, internal systems of relevant national bodies and authorities, management and paying authorities and national public procurement and tender databases;
	(c) only use risk indicators that are objective, proportionate, necessary for risk assessment, as well as based on reliable and sources of data and information updated in real time;
	(d) be designed for its use in line with the general data protection principles, including data minimisation and storage limitation, applicable to the processing of personal data;

Or. en

Justification

The objectives and scope of the single integrated and interoperable information and monitoring system should be better detailed. Interoperability with relevant databases, automatic real-time exchange of information, a proportionate set of risk indicators and the protection of personal data are paramount. The system must provide a clear aggregated overview of the distribution and potential concentration of Union funds.

Amendment 50

Proposal for a regulation

Article 36 – paragraph 7 – subparagraph 1 a (new)

Text proposed by the Commission	Amendment
	For the purpose of maintaining a high quality of the data-mining and risk analysis functions provided by the system referred to in paragraph 2 of this Article, the following non-exhaustive list of actions and measures may be implemented:
	(e) alignment of data fields with the relevant national ICT systems and databases;
	(f) integration of the relevant national ICT systems and databases with the system for an automatic exchange of information;
	(g) providing users with the possibility to tailor and group risk indicators and their weights to the needs and specificities of a Union fund, programme or country;
	(h) use of artificial intelligence for analysing and interpreting data;
	(i) providing users with multiple possibilities for using search options and filtering capabilities;
	(j) providing users with guidance on the interpretation and use of data and results;
	(k) training on how to navigate the system, assess risks and use them in verifications and audits.

Or. en

Justification

It is crucial to ensure the quality of the data used for data-mining and risk-scoring functions in the single integrated and interoperable information and monitoring system. A list of possible actions and measures to achieve this goal should be detailed.

Amendment 51

Proposal for a regulation

Article 36 – paragraph 7 – subparagraph 2

Text proposed by the Commission	Amendment
The use of and access to the data processed by the single integrated IT system for data-mining and risk-scoring shall comply with applicable data protection rules and shall be limited to the Commission or an executive agency as referred to in Article 69, the Member States implementing the budget pursuant to Article 62(1), first subparagraph, point (b), the Member States that receive and implement Union funds pursuant to budget implementation under Article 62(1), first subparagraph, point (a), the persons or entities implementing the budget pursuant to Article 62(1), first subparagraph, point (c), OLAF, the Court of Auditors, EPPO and other Union investigative and control bodies, within the exercise of their respective competences.	The use of and access to the data processed by the system referred to in paragraph 2 of this Article shall comply with applicable data protection rules and shall be limited to the Commission or an executive agency as referred to in Article 69, the Member States implementing the budget pursuant to Article 62(1), first subparagraph, point (b), the Member States that receive and implement Union funds pursuant to budget implementation under Article 62(1), first subparagraph, point (a), the persons or entities implementing the budget pursuant to Article 62(1), first subparagraph, point (c), the European Parliament, the Council, as well as the Court of Auditors, OLAF, EPPO and other Union investigative and control bodies, within the exercise of their respective competences.

Or. en

Justification

Parliament and Council should also have access to the single integrated and interoperable information and monitoring system within the exercise of their budgetary and control competences.

Amendment 52

Proposal for a regulation

Article 36 – paragraph 7 – subparagraph 3

Text proposed by the Commission	Amendment
The Commission shall be the controller within the meaning of Article 3(8) of Regulation (EU) 2018/1725 and shall be responsible for the development, management and supervision of the single integrated IT system for data-mining and risk-scoring, for ensuring the security, integrity and confidentiality of data, the authentication of the users and for protecting the IT system against mismanagement and misuse.	The Commission shall be the controller within the meaning of Article 3(8) of Regulation (EU) 2018/1725 and shall be responsible for the development, management and supervision of the system referred to in paragraph 2 of this Article, for ensuring the security, integrity, correctness, completeness, validity and confidentiality of data, the authentication of the users and for protecting the IT system against mismanagement and misuse.

Or. en

Justification

Clarification of the Commission's competences in relation to the single integrated and interoperable information and monitoring system.

Amendment 53

Proposal for a regulation

Article 36 – paragraph 10 a (new)

Text proposed by the Commission	Amendment
	10a. The Commission shall report annually, no later than 30 September, to the European Parliament and to the Council on the aggregated information and figures on the recipients of funds, contractors, sub-contractors and the beneficial owners, across different Union-funded projects and programmes implemented in the preceding financial year.

Or. en

Justification

It is important that Parliament and Council receive timely thorough aggregated information on the recipients and beneficial owners of Union funding.

Amendment 54

Proposal for a regulation

Article 36 – paragraph 10 b (new)

Text proposed by the Commission	Amendment
	10b. Data shall be stored for the period necessary and proportionate to fulfil the purpose determined in paragraph 2, point (d). The maximum possible storage period shall not exceed 10 years from the last payment claim for the period submitted to the Commission.

Or. en

Justification

Data should be kept in the single integrated and interoperable information and monitoring system for a proportionate amount of time, which allows the system to fulfil its purpose. This amendment also addresses in part the observations of the European Data Protection Supervisor.

Amendment 55

Proposal for a regulation

Article 38 – paragraph 1 – subparagraph 1

Text proposed by the Commission	Amendment
The Commission shall make available on its website information on recipients of funds financed from the budget no later than 30 June of the year following the financial year in which the funds were legally committed, where the budget is implemented by it in accordance with Article 62(1), first subparagraph, point (a), by Union institutions in accordance with Article 59(1), and by the Union bodies referred to in Articles 70 and 71 .	The Commission shall make available on a single website information on recipients of funds financed from the budget no later than 30 June of the year following the financial year in which the funds were legally committed, where the budget is implemented by it in accordance with Article 62(1), first subparagraph, point (a) , by Union institutions in accordance with Article 59(1), and by the Union bodies referred to in Articles 70 and 71 .

Or. en

Justification

Clarification that the information on the recipients of Union funds must be made available on a single website.

Amendment 56

Proposal for a regulation

Article 38 – paragraph 1 – subparagraph 2

Text proposed by the Commission	Amendment
Where the budget is implemented in accordance with Article 62(1), first subparagraph, points (b) and (c), and with Member States in accordance to Article 62(1), first subparagraph, point (a), the Commission shall make available on its website information on recipients no later than 30 June of the year following the financial year in which the contract or agreement setting out the conditions of support was established. Where the budget is implemented in accordance with Article 62(1), first subparagraph, point (b), references in this Article to recipients shall be understood as references to beneficiaries as defined in sector-specific rules.	Where the budget is implemented in accordance with Article 62(1), first subparagraph, points (b) and (c), and with Member States in accordance to Article 62(1), first subparagraph, point (a), the Commission shall make available on the single website referred to in the first subparagraph of this paragraph information on recipients no later than 30 June of the year following the financial year in which the contract or agreement setting out the conditions of support was established. Where the budget is implemented in accordance with Article 62(1), first subparagraph, point (b), references in this Article to recipients shall be understood as references to beneficiaries as defined in sector-specific rules.

Or. en

Justification

Clarification that the information on the recipients of Union funds must be made available on a single website.

Amendment 57

Proposal for a regulation

Article 38 – paragraph 2 – point e a (new)

Text proposed by the Commission	Amendment
	(ea) whether the recipient receives state aid.

Or. en

Justification

As stated in Parliament's resolution of 24 November 2021, the information on recipients on the Financial Transparency System should include whether the recipient receives state aid.

Amendment 58

Proposal for a regulation

Article 38 – paragraph 3 – subparagraph 1 – point b

Text proposed by the Commission	Amendment
(b) very low value contracts awarded to experts selected pursuant to Article 242(2) as well as very low value contracts below the amount referred to in point 14.4 of Annex I;	(b) very low value contracts awarded to experts selected pursuant to Article 242(2) as well as very low value contracts below the amount referred to in point 14.4 of Annex I, except when the aggregated amount of all the funds paid to a single recipient exceeds the amount referred to in point 14.4 of Annex I;

Or. en

Justification

The aggregated amount of all the funds paid to a single recipient should be taken into account when deciding whether the threshold for publication is applicable.

Amendment 59

Proposal for a regulation

Article 38 – paragraph 4 – subparagraph 3

Text proposed by the Commission	Amendment
Member States that receive and implement Union funds, pursuant to budget implementation under Article 62(1), first subparagraph, point (a), shall ensure ex post publication of information on their recipients, in a single website, in accordance with paragraphs 2 and 3 of this Article.	Member States that receive and implement Union funds, pursuant to budget implementation under Article 62(1), first subparagraph, point (a), shall ensure ex post publication of information on their recipients, in the single website referred to in paragraph 1 of this Article, in accordance with paragraphs 2 and 3 of this Article.

Or. en

Amendment 60

Proposal for a regulation

Article 38 – paragraph 5 – subparagraph 1

Text proposed by the Commission	Amendment
The websites of Union institutions shall contain a reference to the address of the website where the information referred to in paragraph 1 can be found if it is not published directly on a dedicated website of Union institutions.	The websites of Union institutions shall contain a reference to the single website referred to in paragraph 1 of this Article where the information referred to in paragraph 1 can be found.

Or. en

Justification

This amendment is needed for coherence with the admissible amendment to paragraph 4 of this Article.

Amendment 61

Proposal for a regulation

Article 38 – paragraph 5 – subparagraph 2

Text proposed by the Commission	Amendment
The Commission shall make available, in an appropriate and timely manner, information about a single website, including a reference to its address, where the information as provided by the Member States, persons, entities or bodies referred to in paragraph 4 can be found.	The Commission shall make available, in an appropriate and timely manner, information about the single website referred to in paragraph 1 of this Article, including a reference to the address, where the information as provided by the Member States, persons, entities or bodies referred to in paragraph 4 can be found.

Or. en

Justification

This amendment is needed for coherence with the admissible amendment to paragraph 4 of this Article.

Amendment 62

Proposal for a regulation

Article 38 – paragraph 7

Text proposed by the Commission	Amendment
7. Where personal data are published, the information shall be removed two years after the end of the financial year in which the funds were legally committed.	7. Where personal data are published, the information shall be removed five years after the end of the financial year in which the funds were legally committed.

Or. en

Justification

While rules on the protection of personal data must be respected, a data retention period of two years is too short to ensure that the system fulfils its intended purpose.

Amendment 63

Proposal for a regulation

Article 41 – paragraph 3 – subparagraph 1 – point d

Text proposed by the Commission	Amendment
(d) a working document on the planned implementation of appropriations for the financial year , information on the implementation of the assigned revenue in the preceding year, including information on the amounts carried over to the financial year and on commitments outstanding;	(d) a working document on the planned implementation of appropriations for the financial year , information on the implementation of internal and external assigned revenue in the preceding year, including information on the amounts carried over to the financial year and on commitments outstanding;

Or. en

Amendment 64

Proposal for a regulation

Article 52 – paragraph 1 – point d – point iii – indent 3

Text proposed by the Commission	Amendment
— a comprehensive overview of borrowing and lending operations;	— a comprehensive overview of borrowing and lending operations; that overview shall provide inter alia detailed information on maturities, schedule of payments, interest due, where applicable dimension and costs of the common liquidity pool underpinning the diversified funding strategy and on the role of own resources in the repayment of the debt;

Or. en

Justification

Amendment 65

Proposal for a regulation

Article 59 – paragraph 3 a (new)

Text proposed by the Commission	Amendment
	3a. To the extent necessary for carrying out its investigative and prosecutorial tasks, the EPPO may conclude financing agreements with the competent national authorities of the Member States participating in the enhanced cooperation on the establishment of the EPPO, with a view to covering the costs of operational expenditure within the meaning of Article 91 of Council Regulation (EU) 2017/1939.

Or. en

Justification

To facilitate the implementation of the EPPO’s appropriations, it should be possible for the EPPO, in the framework of its investigative and prosecutorial tasks, to conclude financing agreements with the competent national authorities and, to the extent necessary, service level agreements, as well as agreements and contracts with recipients without having recourse to a public procurement procedure, where procurement is not possible. The amendments to this Article are linked to parts of the recast dealing with the EPPO, inter alia in Articles 36, 57 and 139 and several Recitals.

Amendment 66

Proposal for a regulation

Article 59 – paragraph 3 b (new)

Text proposed by the Commission	Amendment
	3b. To the extent necessary for carrying out its investigative and prosecutorial tasks, the EPPO may conclude service level agreements as referred to in paragraph 2, and, in duly justified cases, agreements and contracts with recipients without the application of the rules on procurement laid down in this Regulation, where such application is not possible.
	For the purpose of the first subparagraph, the competent authorising officer, prior to any procedure entailing the commitment or payment of Union funds, shall sign a declaration justifying why the application of the rules on procurement laid down in this Regulation is not possible.

Or. en

Justification

Amendment 67

Proposal for a regulation

Article 109 – paragraph 4 – subparagraph 2 a (new)

Text proposed by the Commission	Amendment
	Repayments under the first subparagraph, point (a), of this paragraph shall be made within 60 days of the cancellation or reduction of the fine, other penalty or sanction. Upon the expiry of that time limit, the creditor shall be entitled to interest in accordance with the conditions laid down in Article 117(5).

Or. en

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 68

Proposal for a regulation

Article 117 – paragraph 1 – subparagraph 1 a (new)

Text proposed by the Commission	Amendment
	In contracts awarded exclusively in the interest of the Union delegations in third countries, a time limit for payment different from those laid down in the first subparagraph may be used in exceptional and duly justified circumstances, such as monopoly situations for services, supplies or utility services.

Or. en

Justification

The specific circumstances of Union delegations in third countries, when they are exceptional and duly justified, should be taken into account when setting time limits for payments. This amendment is linked to parts of the recast dealing with Union delegations in third countries, inter alia in Articles 179 and 180.

Amendment 69

Proposal for a regulation

Article 117 – paragraph 3 – subparagraph 3 a (new)

Text proposed by the Commission	Amendment
	Electronic invoices can be used to request payments stemming from a public contract.

Or. en

Justification

This amendment is linked to the content of subparagraph 4 of the same paragraph, which is part of the recast.

Amendment 70

Proposal for a regulation

Article 126 – paragraph 1 – subparagraph 1 – point a – point ii

Text proposed by the Commission	Amendment
(ii) the achievement of results measured by reference to previously set milestones or through performance indicators;	(ii) the achievement of tangible results measured by reference to previously set milestones and targets, including measurable and auditable implementation steps for their achievement, or through performance indicators;

Or. en

Justification

Financing not linked to costs has been used for NextGenerationEU and causes serious concerns for audit and control. The implementation steps of the relevant operation should be measured and auditable, and the results achieved tangible. This amendment is linked to admissible amendments to increase democratic accountability of the budget, inter alia to Articles 22, 52 and 224a.

Amendment 71

Proposal for a regulation

Article 128 a (new)

Text proposed by the Commission	Amendment
	Article 128a
	Administrative burden
	Except in duly justified cases, Union institutions or other bodies mentioned in Article 62(2), points (b) and (c) shall refrain from imposing additional administrative burden on beneficiaries that goes beyond what is required by the applicable Union legislation.
	The Commission shall report annually to the European Parliament and to the Council on efforts to reduce administrative burden in the implementation of the budget, taking due account of relevant audit reports drawing attention to unnecessary additional administrative burden.

Or. en

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 72

Proposal for a regulation

Article 138 – paragraph 2 – subparagraph 4 – point l

Text proposed by the Commission	Amendment
(l) beneficial owners and affiliated entities of the person or entity referred to in point (j).	(l) beneficial owners and any affiliated entities of the person or entity referred to in point (j).

Or. en

Amendment 73

Proposal for a regulation

Article 139 – paragraph 9 – subparagraph 1 – point a

Text proposed by the Commission	Amendment
(a) the person or entity has taken remedial measures as specified in paragraph 7 of this Article, to an extent that is sufficient to demonstrate its reliability. This point shall not apply in the case referred to in point (d) of paragraph 1 of this Article;	(a) the person or entity has taken remedial measures as specified in paragraph 10 of this Article, to an extent that is sufficient to demonstrate its reliability. This point shall not apply in the case referred to in point (d) of paragraph 1 of this Article;

Or. en

Justification

Technical correction.

Amendment 74

Proposal for a regulation

Article 139 – paragraph 10 – subparagraph 1 – introductory part

Text proposed by the Commission	Amendment
The remedial measures referred to in point (a) of the first subparagraph of paragraph 6 shall include, in particular:	The remedial measures referred to in point (a) of the first subparagraph of paragraph 9 shall include, in particular:

Or. en

Justification

Technical correction.

Amendment 75

Proposal for a regulation

Article 139 – paragraph 10 – subparagraph 2

Text proposed by the Commission	Amendment
In order to comply with the requirements of paragraph 6 of this Article, the person or entity shall submit remedial measures that have been assessed by an external independent auditor or be considered sufficient by a decision of a national or Union authority. This is without prejudice to the assessment of the panel referred to in Article 146.	In order to comply with the requirements of paragraph 9 of this Article, the person or entity shall submit remedial measures that have been assessed by an external independent auditor or be considered sufficient by a decision of a national or Union authority. This is without prejudice to the assessment of the panel referred to in Article 146.

Or. en

Justification

Technical correction.

Amendment 76

Proposal for a regulation

Article 144 – paragraph 1 – subparagraph 1 – point d a (new)

Text proposed by the Commission	Amendment
	(da) is subject to a decision of the authorising officer responsible prohibiting the award of the contract due to a foreign subsidy distorting the internal market; the authorising officer responsible shall act in accordance with the internal rules of the Union institution concerned.

Or. en

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.

Amendment 77

Proposal for a regulation

Article 176 – paragraph 3 – subparagraph 1 – point c – point i

Text proposed by the Commission	Amendment
(i) the thresholds referred to in Article 179(1), and in point 38 of Annex I in the field of external actions, applicable at the time of the modification; and	(i) the thresholds referred to in Article 179(1), and in point 39 of Annex I in the field of external actions, applicable at the time of the modification; and

Or. en

Justification

Technical correction.

Amendment 78

Proposal for a regulation

Article 179 – paragraph 1 – subparagraph 2 a (new)

Text proposed by the Commission	Amendment
	The provisions of Article 153(5), Article 179(1), Article 180(3) as well as Point 11.1(m), Point 14, and Point 18.1 of the Annex, which refer to procurement by Union Delegations in third countries, shall also apply to European Parliament Liaison Offices and other equivalent European Parliament offices in third countries.

Or. en

Justification

The same provisions applicable to the procurement of Union Delegations should also apply by analogy to EPLOs and equivalent Parliament offices in third countries.

Amendment 79

Proposal for a regulation

Article 196 – paragraph 3 – point e

Text proposed by the Commission	Amendment
(e) low value grants.	(e) low value grants and very low value grants.

Or. en

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 80

Proposal for a regulation

Article 200 – paragraph 1 – point c a (new)

Text proposed by the Commission	Amendment
	(c a) applicants for very low value grants shall provide simplified documentation, which includes the information referred to in point (a), proof of existence, bank details, and may benefit from a simplified application form, whose content is to be defined by the authorising officer; by derogation, applicants shall not be requested to provide the information as requested in points (b) and (c);

Or. en

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 81

Proposal for a regulation

Article 217 – title

Text proposed by the Commission	Amendment
Effective provisioning rate	Management of the common provisioning fund

Or. en

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 82

Proposal for a regulation

Article 217 – paragraph 1

Text proposed by the Commission	Amendment
1. The provisioning of budgetary guarantees and financial assistance to third countries in the common provisioning fund shall be based on an effective provisioning rate. That rate shall provide a level of protection against the financial liabilities of the Union equivalent to the level that would be provided by the respective provisioning rates if the resources where held and managed separately.	deleted

Or. en

Justification

Amendment 83

Proposal for a regulation

Article 217 – paragraph 2

Text proposed by the Commission	Amendment
2. The effective provisioning rate applicable shall be a percentage of each initial provisioning rate determined in accordance with the second subparagraph of Article 215(2). It shall apply only to the amount of resources in the common provisioning fund foreseen for the payment of guarantee calls over a one year period. It shall provide for a ratio, in the form of a percentage, between the amount of cash and cash equivalents in the common provisioning fund required to honour guarantee calls and the total amount of cash and cash equivalents that would be required in each guarantee fund to honour guarantee calls, if the resources were held and managed separately, where both amounts represent an equivalent liquidity risk. That ratio shall not fall below 95 %. The calculation of the effective provisioning rate shall take into account:	deleted
(a) the forecast of inflows and outflows in the common provisioning fund, having regard to the initial phase of constitution of global provisioning in accordance with the second subparagraph of Article 215(2);
(b) the risk correlation among the budgetary guarantees and the financial assistance to third countries;
(c) the market conditions.
The Commission shall by 1 July 2020 adopt delegated acts in accordance with Article 274 to supplement this Regulation with detailed conditions for the calculation of the effective provisioning rate, including a methodology for that calculation.
The Commission is empowered to adopt delegated acts in accordance with Article 274 to amend the minimum ratio referred to in the first subparagraph of this paragraph in the light of the experience gained with the operation of the common provisioning fund while maintaining a prudent approach in line with the principle of sound financial management. The minimum ratio shall not be set at a level lower than 85 %.

Or. en

Justification

Amendment 84

Proposal for a regulation

Article 217 – paragraph 3

Text proposed by the Commission	Amendment
3. The effective provisioning rate shall be calculated annually by the financial manager of the resources of the common provisioning fund and shall be the reference for the Commission’s calculation of the contributions from the budget pursuant to point (a) of Article 215(4) and, subsequently, point (b) of paragraph 4 of this Article.	deleted

Or. en

Justification

Amendment 85

Proposal for a regulation

Article 217 – paragraph 4 – introductory part

Text proposed by the Commission	Amendment
4. Following the calculation of the annual effective provisioning rate in accordance with paragraphs 1 and 2 of this Article, the following operations in the context of the budgetary procedure shall be made and presented in the working document referred to in point (h) of Article 41(5):	4. After the constitution of the common provisioning and after the end of the eligibility period referred to in Article 215(6), the following operations in the context of the budgetary procedure shall be made and presented in the working document referred to in point (h) of Article 41(5):

Or. en

Justification

Amendment 86

Proposal for a regulation

Article 217 – paragraph 4 – point a

Text proposed by the Commission	Amendment
(a) any surplus of provisions for a budgetary guarantee or a financial assistance to a third country shall be returned to the budget;	(a) any surplus of provisions for a budgetary guarantee or a financial assistance to a third country may be used in accordance with Article 215(5) including for another budgetary guarantee and financial assistance, and for that purpose it shall be held in the common provisioning fund for five years before any remaining amount is returned to the budget;

Or. en

Justification

Amendment 87

Proposal for a regulation

Article 224 – paragraph 2

Text proposed by the Commission	Amendment
2. The borrowing and lending shall not involve the Union in the transformation of maturities, or expose it to any interest risk or to any other commercial risk.	deleted

Or. en

Justification

Amendment 88

Proposal for a regulation

Article 224 – paragraph 7

Text proposed by the Commission	Amendment
7. Funds raised but not yet disbursed cannot be used for any other goal than to provide financial assistance to the corresponding beneficiary country. Pursuant to Article 86(1) and (2), the accounting officer shall set up the procedures for the safekeeping of the funds.	deleted

Or. en

Justification

Amendment 89

Proposal for a regulation

Article 224 a (new)

Text proposed by the Commission	Amendment
	Article 224a
	Diversified funding strategy
	1. Where the Commission is empowered, in relevant basic acts, to borrow funds on behalf of the Union on the capital markets or from financial institutions, the Commission shall implement a diversified funding strategy comprising borrowing and debt management operations. The diversified funding strategy shall be implemented through all necessary transactions aiming at a regular capital market presence, shall be based on pooling of funding instruments and shall make use of a common liquidity pool.
	2. The Commission shall establish the necessary arrangements for the implementation of the diversified funding strategy. The Commission shall regularly and comprehensively inform the European Parliament and the Council about all aspects of its borrowing and debt management strategy
	3. Without prejudice to the basic acts empowering the Commission to borrow funds on behalf of the Union, the European Parliament and the Council shall approve, in the context of the budgetary procedure, the maximum amount that the Commission is authorised to borrow under the diversified funding strategy during that financial year.

Or. en

Justification

Since the recast proposal was published, the Financial Regulation has been amended by Regulation 2022/2434 of 6 December 2022 as regards the establishment of a diversified funding strategy as a general borrowing method. It is therefore necessary to include the amended provisions in the recast. As Parliament has called for the budgetary authority to be able to scrutinise and authorise, as appropriate, the Commission’s borrowing and lending operations, an annual 'debt ceiling' for funds borrowed under the strategy is introduced, to be set during the annual budgetary procedure.

Amendment 90

Proposal for a regulation

Article 238 – paragraph 1 – subparagraph 3

Text proposed by the Commission	Amendment
The Commission shall consult the European Parliament and the Council on its intention to establish a Union trust fund for emergency and post-emergency actions.	deleted

Or. en

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 91

Proposal for a regulation

Article 238 – paragraph 1 – subparagraph 4

Text proposed by the Commission	Amendment
The establishment of a Union trust fund for thematic actions shall be subject to the approval of the European Parliament and of the Council.	The establishment of a Union trust fund shall be subject to the approval of the European Parliament and of the Council.

Or. en

Justification

Amendment 92

Proposal for a regulation

Article 238 – paragraph 1 – subparagraph 4 a (new)

Text proposed by the Commission	Amendment
	A Union trust fund for emergency and post-emergency action shall be deemed to be approved by the European Parliament and the Council unless the European Parliament or the Council decide not to approve it within two months of the date of publication of the draft decision referred to in the fifth subparagraph of this paragraph.

Or. en

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 93

Proposal for a regulation

Article 238 – paragraph 2

Text proposed by the Commission	Amendment
2. The Commission shall submit its draft decisions concerning the financing of a Union trust fund to the competent committee where provided for in the basic act under which the Union contribution to the Union trust fund is provided. The competent committee shall not be invited to pronounce itself on the aspects which have already been submitted to the European Parliament and to the Council for consultation or for approval under the third, fourth and fifth subparagraphs of paragraph 1 respectively.	2. The Commission shall submit its draft decisions concerning the financing of a Union trust fund to the competent committee where provided for in the basic act under which the Union contribution to the Union trust fund is provided. The competent committee shall not be invited to pronounce itself on the aspects which have already been submitted to the European Parliament and to the Council for approval under the third, fourth and fifth subparagraphs of paragraph 1 respectively.

Or. en

Justification

Amendment 94

Proposal for a regulation

Article 240

Text proposed by the Commission	Amendment
Article 240	deleted
Union contributions to global initiatives
(1) The Union may make contributions in the form of financing not linked to costs to multi-donor, pooled funded global initiatives when these support the achievement of Union policy objectives and where budget implementation instruments provided for in other Titles of this Regulation would not be sufficient to achieve such Union policy objectives.
(2) Union contributions to global initiatives shall be subject to the following conditions, taking into account the nature of the Union financing:
(i) the Union contribution is a minority contribution to the initiative, taking into account the global amount contributed to the initiative at the time of the contribution;
(ii) the Union contribution is treated on equal footing with donors of a similar magnitude and, where one or several Member States also contribute to the initiative, the Union contribution benefits from a level of protection no less favourable than the contribution(s) of that or those Member States;
(iii) there is adequate reporting on the results achieved by the initiative, including through relevant indicators;
(iv) the initiative operates under rules ensuring sound financial management, transparency, non discrimination and equal treatment in the use of Union funds in accordance with the principle of proportionality;
(v) there are appropriate systems to prevent and combat irregularities and fraud as well as to report on their functioning at regular intervals, and there are appropriate rules for recoveries of funds by the initiative, including their use for the same initiative.
In the event of suspected cases of serious irregularities such as fraud, corruption or conflict of interests, the authorising officer responsible, the EPPO in respect of those Member States participating in enhanced cooperation pursuant to Regulation (EU) 2017/1939, OLAF and the Court of Auditors shall make use of the rules of the initiative to request additional information and carry out joint audit, control, or investigative missions with the relevant body under the initiative, in line with Article 129.
(3) A justification of the above conditions shall be included in the financing decision to contribute to the initiative.
(4) The procedure laid down in Article 158(6) shall apply mutatis mutandis to the Union contribution to the global initiative.

Or. en

Justification

Amendment 95

Proposal for a regulation

Article 244 – paragraph 1 – subparagraph 1 a (new)

Text proposed by the Commission	Amendment
	In the case of supplies and in keeping with the accounting rules and standards referred to in Article 80, Union institutions and bodies may not provide non-financial donations before the depreciable amount of a supply represents 20 % of the supply cost allocated when the supply was ready for use.

Or. en

Justification

Non-financial donations of supplies should be possible once a certain level of depreciation has been reached.

Amendment 96

Proposal for a regulation

Article 260 – paragraph 1

Text proposed by the Commission	Amendment
1. The examination by the Court of Auditors of whether all revenue has been received and all expenditure incurred in a lawful and proper manner shall have regard to the Treaties, the budget, this Regulation, the delegated acts adopted pursuant to this Regulation and all other relevant acts adopted pursuant to the Treaties. That examination may take account of the multiannual character of programmes and related supervisory and control systems.	1. The examination by the Court of Auditors of whether all revenue has been received and all expenditure incurred in a lawful and proper manner, including in relation to assigned revenue and the related items of expenditure, shall have regard to the Treaties, the budget, this Regulation, the delegated acts adopted pursuant to this Regulation and all other relevant acts adopted pursuant to the Treaties. That examination may take account of the multiannual character of programmes and related supervisory and control systems.

Or. en

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 97

Proposal for a regulation

Article 265 – paragraph 3 a (new)

Text proposed by the Commission	Amendment
	3a. The provisions governing the procedure for granting discharge to the Commission in accordance with Article 319 TFEU, in respect of the implementation of the budget, shall apply to the procedure for granting discharge to other Union institutions and Union bodies referred to in Articles 70 and 71 of this Regulation.

Or. en

Justification

As stated in Parliament's resolution of 24 November 2021, Parliament should be explicitly responsible for scrutinising the budget implementation by the other institutions in the discharge procedure. This amendment is linked to admissible amendments to increase democratic accountability of the budget, inter alia to Articles 22, 52 and 224a.

Amendment 98

Proposal for a regulation

Article 266 – paragraph 1

Text proposed by the Commission	Amendment
1. The discharge decision shall cover the accounts of all the Union’s revenue and expenditure, the resulting balance and the assets and liabilities of the Union shown in the balance sheet.	1. The discharge decision shall cover the accounts of all the Union’s revenue and expenditure, including assigned revenue and the related specific items of expenditure, the resulting balance, the assets and liabilities, including those arising from borrowing and lending operations, of the Union shown in the balance sheet.

Or. en

Justification

It should be clearly stated that the discharge procedure must cover assigned revenue as well as liabilities arising from borrowing and lending operations, as also called for in Parliament's resolution of 24 November 2021. This amendment is needed for coherence with admissible amendments to Articles 22, 52 and 224a.

Amendment 99

Proposal for a regulation

Article 267 – paragraph 2

Text proposed by the Commission	Amendment
2. At the request of the European Parliament or of the Council, Union institutions and Union bodies referred to in Articles 70 and 71 shall report on the measures taken in the light of those observations and comments, and, in particular, on the instructions they have given to any of their departments which are responsible for budget implementation. Member States shall cooperate with the Commission by informing it of the measures they have taken to act on those observations so that the Commission may take them into account when drawing up its own report. The reports from Union institutions and Union bodies referred to in Articles 70 and 71 shall also be transmitted to the Court of Auditors.	2. At the request of the European Parliament or of the Council, Union institutions and Union bodies referred to in Articles 70 and 71 shall report on the measures taken in the light of those observations and comments, and, in particular, on the instructions they have given to any of their departments which are responsible for budget implementation before 1 October of the year n+2. Member States shall cooperate with the Commission by informing it of the measures they have taken to act on those observations so that the Commission may take them into account when drawing up its own report. The reports from Union institutions and Union bodies referred to in Articles 70 and 71 shall also be transmitted to the Court of Auditors.

Or. en

Justification

As stated in Parliament's resolution of 24 November 2021, the requirement for Union institutions and bodies to report on the measures taken in response to the decision on discharge would benefit from the setting of a reasonable deadline for reporting on the measures taken. This amendment is linked to admissible amendments to increase democratic accountability of the budget, inter alia to Articles22, 52 and 224a.

Amendment 100

Proposal for a regulation

Article 271 – paragraph 6 – subparagraph 1

Text proposed by the Commission	Amendment
Without prejudice to Article 17, a building acquisition or structural renovation project may be financed through a loan, subject to prior approval by the European Parliament and by the Council.	Without prejudice to Article 17, a building acquisition or construction project may be financed through a loan, subject to prior approval by the European Parliament and by the Council.

Or. en

Justification

It is not appropriate for structural renovations of buildings to be financed through loans.

Amendment 101

Proposal for a regulation

Article 271 – paragraph 6 – subparagraph 3

Text proposed by the Commission	Amendment
When the Union institution proposes to finance the acquisition or the structural renovation through a loan, the financing plan to be submitted, together with the request for prior approval by the Union institution concerned, shall specify in particular, the maximum level of financing, the financing period, the type of financing, the financing conditions and savings compared to other types of contractual arrangements.	When the Union institution proposes to finance the acquisition or construction through a loan, the financing plan to be submitted, together with the request for prior approval by the Union institution concerned, shall specify in particular, the maximum level of financing, the financing period, the type of financing, the financing conditions and savings compared to other types of contractual arrangements.

Or. en

Justification

It is not appropriate for structural renovations of buildings to be financed through loans.

Amendment 102

Proposal for a regulation

Article 271 – paragraph 6 – subparagraph 4

Text proposed by the Commission	Amendment
The European Parliament and the Council shall deliberate upon the request for prior approval within four weeks, extendable once by two weeks, of its receipt by both institutions. The acquisition or structural renovation financed through a loan shall be deemed to be rejected if the European Parliament and the Council do not expressly approve it within the deadline.	The European Parliament and the Council shall deliberate upon the request for prior approval within four weeks, extendable once by two weeks, of its receipt by both institutions. The acquisition or construction financed through a loan shall be deemed to be rejected if the European Parliament and the Council do not expressly approve it within the deadline.

Or. en

Justification

It is not appropriate for structural renovations of buildings to be financed through loans.

Amendment 103

Proposal for a regulation

Article 275 – paragraph 3

Text proposed by the Commission	Amendment
3. Without prejudice to sector-specific rules and to a voluntary application, the obligations set out in Article 36, point (d) of paragraph 2, paragraphs 6, 7 and 8, concerning the electronic recording and storage of data on the recipients of funds and their beneficial owners and the use of the single integrated IT system for data-mining and risk-scoring shall apply only to programmes adopted under and financed from the post-2027 multiannual financial framework.	3. Without prejudice to sector-specific rules and to a voluntary application, the obligations set out in Article 36, point (d) of paragraph 2, paragraphs 6, 7 and 8, concerning the system referred to in Article 36(2) shall apply only as of 1 January 2026.

Or. en

Justification

Amendment 104

Proposal for a regulation

Article 275 – paragraph 4

Text proposed by the Commission	Amendment
4. The obligations set out in Article 38, third subparagraph of paragraph 4 and in paragraph 6, shall apply only to programmes adopted under and financed from the post-2027 multiannual financial framework.	4. The obligations set out in Article 38, third subparagraph of paragraph 4 and in paragraph 6, shall apply only from 1 January 2026.

Or. en

Justification

Amendment 105

Proposal for a regulation

Annex I – Part 1 – Section 2 – point 16 – point 16.3 – point g a (new)

Text proposed by the Commission	Amendment
	(ga) the requirement established in Article 28 of Regulation (EU) 2022/2560 to notify to the contracting authority all foreign financial contributions received in the three years prior to the notification or confirm in a declaration that they did not receive any foreign financial contributions in the last three years. For the purposes of this point, a notifiable foreign financial contribution in a public procurement procedure shall be deemed to arise where:
	(a) the estimated value of the public procurement or of the contract net of VAT, is equal to or greater than EUR 250 million; and
	(b) the economic operator, including its subsidiary companies without commercial autonomy, its holding companies, and, where applicable, its main subcontractors and suppliers involved in the same tender in the public procurement procedure was granted aggregate financial contributions in the three years prior to notification or, if applicable, the updated notification, equal to or greater than EUR 4 million per third country. In particular, the procedures and rules laid down in Regulation (EU) 2022/2560 shall apply mutatis mutandis for the assessment, review and investigations of such notified foreign financial contribution unless otherwise provided for in this Regulation.

Or. en

Justification

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, and to develop clear, concise indicators to monitor compliance with Union values in the use of EU funds in order to protect the EU financial interests.

 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 on the budget line of origin. The budgetary authority will then be able to use appropriations voted in the context of the budgetary-procedure to re-balance the amounts on the budget lines on which decommitments are reused, so as to ensure the most efficient use of funds.

 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 remove the ambiguously defined possibility for the Union to contribute to global initiatives outside standard rules, 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.