Council Regulation (EC) No 215/2008 of 18 February 2008 on the Financial Regulation applicable to the 10th European Development Fund

PART ONE

MAIN PROVISIONS

TITLE I

Subject Matter, Scope And General Provisions

Article 1

Scope

This Regulation lays down the rules for the financial implementation of the resources of the European Development Fund (EDF) and the presentation and auditing of its accounts.

Article 2

Relation to Regulation (EU, Euratom) No 966/2012

However, for the purposes of this Regulation, the following terms in Regulation (EU, Euratom) No 966/2012 shall be defined as follows:

(a) ‘budget’ or ‘budgetary’ means ‘EDF’;

(b) ‘budgetary commitment’ means ‘financial commitment’;

(c) ‘institution’ means ‘the Commission’;

(d) ‘appropriations’ or ‘operational appropriations’ means ‘EDF resources’;

(e) ‘budget line’ or ‘line in the budget’ means ‘allocation’;

(f) ‘basic act’ means, according to the relevant context, the 10th EDF Internal Agreement, Council Decision 2013/755/EU (¹⁴) (‘the Overseas Association Decision’), or Council Regulation (EC) No 617/2007 (¹⁵) (‘the Implementation Regulation’);

(g) ‘third country’ means any beneficiary country or territory covered by the geographical scope of the EDF.

Article 3

Periods, dates and time limits

Unless otherwise provided, Council Regulation (EEC, Euratom) No 1182/71 (¹⁶) shall apply to deadlines set by this Regulation.

Article 4

Protection of personal data

This Regulation is without prejudice to the requirements of Directive 95/46/EC of the European Parliament and of the Council (¹⁷) and to the requirements of Regulation (EC) No 45/2001 of the European Parliament and of the Council (¹⁸).

Article 29 of Delegated Regulation (EU) No 1268/2012 concerning information on transfers of personal data for audit purposes shall apply.

TITLE II

Financial Principles

Article 5

Financial principles

The EDF resources shall be implemented in compliance with the following principles:

(a) unity and budgetary accuracy;

(b) unit of account;

(c) universality;

(d) specification;

(e) sound financial management;

(f) transparency.

The financial year shall run from 1 January to 31 December.

Article 6

Principles of unity and budgetary accuracy

No revenue shall be collected and no expenditure effected unless booked to the EDF.

Article 8 (2) and (3) and the first subparagraph of Article 8(4) of Regulation (EU, Euratom) No 966/2012 shall apply.

Article 7

Principle of unit of account

Article 19 of Regulation (EU, Euratom) No 966/2012 on the use of the euro shall apply *mutatis mutandis*.

Article 8

Principle of universality

Without prejudice to Article 9 of this Regulation, total revenue shall cover total estimated payments.

All revenue and expenditure shall be entered in full without any adjustment against each other, and without prejudice to Article 23 of Regulation (EU, Euratom) No 966/2012 concerning rules on deductions and exchange rate adjustments, which shall apply.

However, the revenue referred to in point (c) of Article 9(2) of this Regulation shall automatically decrease payments made against the commitment from which it was generated.

The Union may not raise loans within the framework of the EDF.

Article 9

Assigned revenue

The following shall constitute assigned revenue:

(a) financial contributions from Member States and third countries, including in both cases their public agencies, entities or natural persons; and from international organisations to certain external aid projects or programmes financed by the Union and managed by the Commission or the European Investment Bank (EIB) on their behalf in accordance with Article 10 of the Implementation Regulation;

(b) revenue earmarked for a specific purpose, such as income from foundations, subsidies, gifts and bequests;

(c) revenue arising from the repayment, following recovery, of amounts wrongly paid;

(d) revenue generated by interest on pre-financing payments, subject to Article 8(4) of Regulation (EU, Euratom) No 966/2012;

(e) repayments and revenues generated by financial instruments pursuant to Article 140(6) of Regulation (EU, Euratom) No 966/2012;

(f) revenue arising from subsequent reimbursement of taxes pursuant to point (b) of Article 23(3) of Regulation (EU, Euratom) No 966/2012.

Assigned revenue referred to in points (e) and (f) of paragraph 2 shall finance items of expenditure similar to those from which it was generated.

Article 10

Principle of specification

EDF resources shall be earmarked for specific purposes per the ACP States or OCTs and in accordance with the main instruments of cooperation.

In respect of the ACP States, those instruments are laid down by the Financial Protocol annexed to the ACP-EU Partnership Agreement. Earmarking of resources (indicative allocations) shall also be based on the provisions of the 10th EDF Internal Agreement and of the Implementation Regulation and shall take account of the resources reserved for support expenditure linked to programming and implementation under Article 6 of the 10th EDF Internal Agreement.

In respect of the OCTs, those instruments are laid down in Part Four of the Overseas Association Decision and Annex II thereto. Earmarking of those resources shall also take into account the non-allocated reserve provided for in Article 3(3) of that Annex and the resources for studies or technical assistance measures under point (c) of Article 1(1) thereof.

Article 11

Principle of sound financial management

In order to improve decision-making, in particular to justify and specify the determination of the contributions to be paid by Member States referred to in Article 21 of this Regulation, the following evaluations are required:

(a) the use of EDF resources shall be preceded by an ex ante evaluation of the operation to be undertaken, covering the elements listed in Article 18(1) of Delegated Regulation (EU) No 1268/2012;

(b) the operation shall be submitted to an ex post evaluation with a view to ensuring that the intended results justified the means deployed.

Article 12

Internal control

Article 32 of Regulation (EU, Euratom) No 966/2012 shall apply.

Article 13

Principle of transparency

In the case of parallel co-financing, an action is to be split into a number of clearly identifiable components which are each financed by the different partners providing co-financing in such a way that the end-use of the financing can always be identified.

In the case of joint co-financing, the total cost of an action is to be shared between the partners providing the co-financing and the resources are to be pooled in such a way that it is no longer possible to identify the source of financing for any given activity undertaken as part of the action. In such cases, ex-post publication of grant and procurement contracts as required by the first subparagraph of Article 35(2) and Article 35(3) of Regulation (EU, Euratom) No 966/2012 shall comply with the rules of the entrusted entity, if any.

TITLE III

EDF Resources and Implementation

Article 14

Sources of EDF resources

The EDF resources shall consist of the ceiling referred to in Article 1 of Decision 2013/759/EU and of other assigned revenue referred to in Article 9 of this Regulation.

The EDF resources managed by the EIB shall also consist of those resources of the Investment Facility managed as a revolving fund.

Article 15

Structure of the EDF

The EDF revenue and expenditure shall be classified according to their type or the use to which they are assigned.

Article 16

EDF implementation in accordance with the principle of sound financial management

Article 17

Methods of implementation

International organisations as referred to in point (c)(ii) of Article 58(1) of Regulation (EU, Euratom) No 966/2012 and bodies of the Member States as referred to in points (c)(v) and (vi) of Article 58(1) of that Regulation which have been entrusted by the Commission may also entrust budget implementation tasks to non-profit organisations possessing the appropriate operational and financial capacity, under conditions equivalent to those applying to the Commission.

ACP States and OCTs may also entrust budget implementation tasks to their departments and to bodies governed by private law on the basis of a service contract. Those bodies shall be selected on the basis of open, transparent, proportionate and non-discriminatory procedures, avoiding conflict of interests. The financing agreement shall stipulate the terms of the service contract.

Where the EDF is implemented in indirect management with ACP States or OCTs, without prejudice to the responsibilities of the ACP States or the OCTs acting in their capacity of contracting authorities, the Commission:

(a) shall, where necessary, recover amounts due from recipients according to Article 80 of Regulation (EU, Euratom) No 966/2012, including by means of a decision which shall be enforceable under the same conditions as those laid down in Article 299 of the Treaty;

(b) may, where the circumstances so require, impose administrative and/or financial penalties under the same conditions as those laid down in Article 109 of Regulation (EU, Euratom) No 966/2012.

The financing agreement shall contain provisions on the cooperation between the Commission and the ACP State or OCTs to this end.

Reciprocal access by Union financial institutions to financial instruments set up by other organisations shall be promoted, as appropriate.

TITLE IV

Financial Actors

Article 18

General provisions on financial actors and their liability

Article 19

Authorising officer

The annual activity report referred to in Article 66(9) of Regulation (EU, Euratom) No 966/2012 shall include, as an annex, tables showing by allocation, country, territory, region or sub-region, the total commitments, assigned funds and payments effected during the financial year and aggregate totals since the opening of the respective EDF.

Article 20

Accounting officer

TITLE V

Revenue Operations

Article 21

Annual contribution and its instalments

The instalments to be paid by each Member State shall be set in such a way as to be in proportion to that Member State's contributions to the EDF as fixed in Article 1(2) of the 10th EDF Internal Agreement.

The Commission shall present a proposal by 15 October of the year n, setting out:

(a) the ceiling for the annual amount of the contribution for the year n + 2;

(b) the annual amount of the contribution for the year n + 1;

(c) the amount of the first instalment of the contribution for the year n + 1;

(d) an indicative, non-binding forecast based on a statistical approach for the expected annual amounts of contributions for the years n + 3 and n + 4.

The Council shall decide on this proposal by 15 November of the year n.

The Member States shall pay the first instalment of the contribution for the year n + 1 at the latest by 21 January of the year n + 1.

The Commission shall present a proposal by 15 June of the year n + 1, setting out:

(a) the amount of the second instalment of the contribution for the year n + 1;

(b) a revised annual amount of the contribution for the year n + 1 in line with actual needs, in cases where, in accordance with Article 7(3) of the 10th EDF Internal Agreement, the annual amount deviates from actual needs.

The Council shall decide on the proposal at the latest 21 calendar days following the presentation by the Commission of its proposal.

The Member States shall pay the second instalment at the latest 21 calendar days following the adoption of the Council decision.

The Commission shall present a proposal by 10 October of the year n + 1, setting out:

(a) the amount of the third instalment of the contribution for the year n + 1;

(b) a revised annual amount of the contribution for the year n + 1 in line with actual needs, in cases where, in accordance with Article 7(3) of the 10th EDF Internal Agreement, the annual amount deviates from actual needs.

The Council shall decide on the proposal at the latest 21 calendar days following the presentation by the Commission of its proposal.

The Member States shall pay the third instalment at the latest 21 calendar days following the adoption of the Council decision.

The ceiling for the annual amount of the contribution to be paid by each Member State for the year n + 2, the annual amount of the contribution for the year n + 1 and the instalments of the contributions shall specify:

(a) the amount managed by the Commission; and

(b) the amount managed by the EIB, including the interest rates subsidies managed by it.

Article 22

Payment of the instalments

The contribution referred to in point (b) of Article 21(7) of this Regulation shall be credited by each Member State in accordance with Article 53(1).

Article 23

Interest for unpaid contribution amounts

On expiry of the time limits laid down in Article 21(2), (3) and (5), the Member State concerned shall be obliged to pay interest in accordance with the following conditions:

(a) the interest rate shall be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union, in force on the first calendar day of the month in which the time limit expires, increased by two percentage points. That rate shall be increased by a quarter of a percentage point for each month of delay.

(b) the interest shall be payable for the period elapsing from the calendar day following expiry of the time limit for payment up to the day of payment.

In respect of the contribution referred to in point (b) of Article 21(7), the interest shall be credited to the Investment Facility in accordance with Article 53(1).

Article 24

Calling on unpaid contributions

Upon expiry of the financial protocol annexed to the ACP-EU Partnership Agreement, the part of the contributions which the Member States remain obliged to pay in accordance with Article 21 of this Regulation shall be called on by the Commission and the EIB, as required, in accordance with the conditions laid down in this Regulation.

Article 25

Other revenue operations

TITLE VI

Expenditure Operations

Article 26

Financing decisions

The commitment of expenditure shall be preceded by a financing decision adopted by the Commission.

Article 84 of Regulation (EU, Euratom) No 966/2012 shall apply, with the exception of paragraph 2 thereof.

Article 27

Rules applicable to commitments

Article 28

Validation, authorisation and payment of expenditure

Articles 88, 89, Article 90, with the exception of the second subparagraph of paragraph 4 thereof, Article 91 and Article 184(4) of Regulation (EU, Euratom) No 966/2012 shall apply.

Article 29

Time limits for payment

TITLE VII

Various Implementation Provisions

Article 30

Internal auditor

The internal auditor of the Commission shall be the internal auditor of the EDF. Articles 99 and 100 of Regulation (EU, Euratom) No 966/2012 shall apply.

Article 31

IT systems, electronic transmission and e-Government

Articles 93, 94 and 95 of Regulation (EU, Euratom) No 966/2012, concerning the electronic management of operations and documents, shall apply mutatis mutandis.

Article 32

Good administration and redress

Articles 96 and 97 of Regulation (EU, Euratom) No 966/2012 shall apply.

Article 33

Use of the central exclusion database

The central exclusion database set up pursuant to Article 108(1) of Regulation (EU, Euratom) No 966/2012 which contains details of candidates and tenderers, and applicants and beneficiaries who are in one of the situations referred to in Article 106, point (b) of the first subparagraph of Article 109(1), and point (a) of Article 109(2) of that Regulation shall be used for the implementation of the EDF.

Article 108 (2) and (5) of Regulation (EU, Euratom) No 966/2012 and Articles 142 and 144 of Delegated Regulation (EU) No 1268/2012 on the use of the central exclusion database and on the access to it shall apply *mutatis mutandis*.

With regard to Article 108(2) of Regulation (EU, Euratom) No 966/2012, the Union's financial interests shall include the implementation of the EDF.

Article 34

Administrative arrangements with the EEAS

Detailed arrangements may be agreed between the European External Action Service (EEAS) and the Commission services in order to facilitate the implementation by Union Delegations of the resources foreseen for support expenditure linked to the EDF under Article 6 of the 10th EDF Internal Agreement.

TITLE VIII

Types Of Financing

Article 35

General provisions on types of financing

For the purpose of providing financial assistance under this Title, cooperation between the Union, the ACP States and OCTs may take the form, inter alia, of:

(a) triangular arrangements by which the Union coordinates with any third country its assistance to an ACP State, OCTs or region;

(b) administrative cooperation measures such as twinning between the public institutions, local authorities, national public bodies or private law entities entrusted with public service tasks of a Member State or an outermost region, and those of an ACP State or OCTs or their region, as well as cooperation measures involving public-sector experts dispatched from the Member States and their regional and local authorities;

(c) expert facilities for targeted capacity building in the ACP State, OCTs or their region and short term technical assistance and advice to them, as well as support of sustainable centres of knowledge and excellence on governance and reform in the public sector;

(d) contributions to the costs necessary to set up and administer a public-private partnership;

(e) sector policy support programmes, by which the Union provides support to an ACP State's or OCTs' sector programme; or

(f) interest rate subsidies in accordance with Article 37.

In addition to the types of financing provided for in Articles 36 to 42, financial assistance may also be provided through the following:

(a) debt relief, under internationally agreed debt relief programmes;