Changes from plenary report to adopted text

RemovedRecital 21: (21) In order to allow a rapid reaction in exceptional circumstances, the Commission should be able to accept in-kind donations, irrespective of their value, where such donations are made for the purposes of humanitarian aid, emergency support, civil protection or crisis management aid. In order to ensure appropriate safeguards, the Commission should only accept such donations where acceptance is in accordance with the principles of sound financial management and transparency, does not give rise to conflicts of interest and does not harm the image of the Union and does not harm or risk harming the security or public order of the Union or the Member States. The donor should not be, at the moment of acceptance, in one of the exclusion situations under the early-detection and exclusion system and should not be registered as excluded in the corresponding database. In the interests of transparency, the Commission should inform the European Parliament and the Council where it accepts such donations.

Added“The European Parliament and the Council agreed that any interest or other charges due on cancelled or reduced fines, other penalties or sanctions will be recorded as negative revenue for the duration of the current multiannual framework. This is an exception to the prohibition on negative revenue, which is limited to this specific, unforeseeable situation.

RemovedRecital 23 a (new): (23a) In that regard and in the light of the horizontal gender mainstreaming goal, targets for monitoring climate spending and performance and expenditure contributing to halting and reversing the decline of biodiversity, 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. They should be based on an effective, transparent and comprehensive methodology and, where appropriate, widely recognised scientific evidence.

AddedWithout prejudice to the respective prerogatives, the European Parliament, the Council and the Commission agree, taking into account past experience and expected future developments, to examine a long-term sustainable solution, in line with the application of the budgetary principles of the Financial Regulation, for the financing of such interest or other charges, to apply after 2027, including with respect to the rate of interest to pay on the amount of the fines or other penalties to be repaid as an adequate compensation for the recipient undertakings in such situations.”

RemovedRecital 24: (24) Considering the importance of addressing climate and environmental challenges and in order to ensure that budget implementation contributes to the achievement of the European Green Deal30 as well the Union’s climate and energy targets and to the achievement of climate neutrality by 2050 latest, the concept of performance as regards the budget should be extended to include the implementation of programmes and activities in a sustainable way, which would not hinder the achievement of 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.

AddedJoint statement of the European Parliament, the Council and the Commission on the single data-mining and risk-scoring tool provided for in Article 36 of the Financial Regulation on the occasion of the adoption of Regulation (EU, Euratom) 2024/2509

RemovedRecital 24 a (new): (24a) 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 relevant EU policies and programmes is necessary in order to measure the impact on gender equality. The data to be fed into the single, integrated and interoperable information and monitoring system should include the gender of recipients and their beneficial owners that are natural persons, unless those persons refuse to provide those data. 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 expenditure contributing to halting and reversing the decline of biodiversity.

Added“The European Parliament, the Council and the Commission (“the three Institutions”) recognise the importance to enhance the protection of the Union’s financial interests as acknowledged in the Inter-institutional Agreement (‘IIA’) of 16 December 2020 and as set out in Article 325 TFEU.

RemovedRecital 24 b (new): (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.

AddedThe three Institutions agree that it is necessary to further develop the tool in accordance with IT security and data protection rules. With a view to reducing the administrative burden and avoiding disproportionate IT costs for the Member States and the other users, established approved systems in Member States will be taken into account.

RemovedRecital 25: (25) In accordance with the Interinstitutional Agreement of 13 April 2016 on Better Law-Making31 , Union legislation should be of high quality and should focus on areas where it has the greatest added value for citizens and is as efficient and effective as possible in delivering the common policy objectives of the Union. Making existing and new spending programmes and activities entailing significant spending subject to evaluation can help achieve those objectives. The Commission should strive to undertake an ex-ante evaluation of programmes and activities in the form of an impact assessment, except in duly justified cases and in particular where urgent action is necessary.

AddedThe three Institutions commit to cooperate towards further development of the tool. The Commission confirms that it will continue to develop the tool in consultation with its users and to offer the Member States support to address any technical queries. The Member States will cooperate with the Commission in order to enable synergies necessary for interoperability with relevant IT systems and databases.

RemovedRecital 27: (27) In order to enhance the protection of the Union budget against fraud, corruption, conflicts of interest, double funding and other irregularities, standardised financial and reimbursement requests and 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 as defined in Article 3, point (6), of Directive (EU) 2015/849 of the European Parliament and of the Council 32, which addresses the situation where the beneficial owner is not identified, or if there is any doubt that the person(s) identified are the beneficial owner(s), 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…

AddedFollowing an assessment by the Commission establishing the readiness of the tool based on the criteria referred to in Article 36(6) of the Financial Regulation, the three Institutions, without prejudice to their respective competences, commit to examine and re-discuss the compulsory use of the tool during the post-2027 multiannual financial framework.”

RemovedRecital 27 a (new): (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 that 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, thereby ensuring comprehensive and complete data. Furthermore, data to be recorded in that system should be aligned with those to be published, so that persons and entities implementing Union funds need provide data only once, thereby reducing any administrative burden.

AddedUnilateral statement by the Commission on decommitments on the occasion of the adoption of Regulation (EU, Euratom) 2024/2509

RemovedRecital 28: (28) In accordance with the principle of transparency enshrined in Article 15 of the Treaty on the Functioning of the European Union (TFEU), Union institutions are to conduct their work as openly as possible, and Member States should do likewise in implementing the Union budget. With regard to budget implementation, the application of that principle implies that citizens, who benefit from the budget and ultimately contribute to it, should know where, and for what purpose, funds are spent by the Union. Such information fosters democratic debate, encourages the citizens' identification with and sense of community within the Union, contributes to the participation of citizens in the Union’s decision-making process, reinforces institutional control and scrutiny over Union expenditure, and contributes to boosting its credibility. Communication should be more targeted and should aim to increase the visibility of the Union contribution for citizens. Such objectives should be achieved by the publication, preferably using modern communication tools, of relevant information concerning all funding opportunities, such as calls for tender in all forms of management on a dedicated website and of relevant information concerning all recipients of funds financed from the budget which takes into account those recipients’ legitimate interests of confidentiality and security and, as far as natural persons are concerned, their right to privacy and the protection of their personal data. Union inst…

Added“In the context of the preparation for the post-2027 multiannual financial framework, the Commission will examine the question of widening the scope of making appropriations corresponding to decommitments available again. This is without prejudice to the future Commission’s proposal on the post-2027 multiannual financial framework and to the right of legislative initiative of the Commission, as established in the Treaties.”

RemovedRecital 29: (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 and in the interests of reducing administrative burden, the Commission should use the data stored in the single interoperable system to feed the single website. That information should include at least the name, a unique identifier and the locality of the recipient, the gender of the recipient and their final beneficial owner, where provided and in the case of a natural person, 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.

AddedUnilateral statement by the Commission on the Early Detection and Exclusion System on the occasion of the adoption of Regulation (EU, Euratom) 2024/2509

RemovedRecital 33: (33) For reasons of legal certainty and in accordance with the principle of proportionality, the situations in which publication should not take place should be specified. For example, information should not be published with regard to scholarships or other forms of direct support paid to natural persons most in need, to certain contracts with a very low value or to financial support below a certain threshold provided through financial instruments or budgetary guarantees, or in cases where disclosure risks threatening the rights and freedoms of the individuals concerned as protected by the Charter of Fundamental Rights of the European Union or causing serious harm to the commercial interests of the recipients. For grants, however, there should be no special exemption from the obligation to publish information on the basis of a specific threshold, in order to maintain the current practice and to allow for transparency.

Added“The European Commission acknowledges the importance of minimising the administrative burden upon Member States’ authorities in the context of the targeted extension of the Early Detection and Exclusion System (EDES) to shared management and direct management with Member States.

RemovedRecital 40: (40) In order to ensure synchronisation with the timeline for the adoption of the statement of estimates, the working document on the building policies of all Union institutions, bodies and agencies should be attached to the draft budget.

AddedThe Commission is committed to developing comprehensive guidance and offering training sessions to Member States on the implementation of EDES and the use of its database.

RemovedAs stated in paragraph 3 of the initiative report adopted ahead of the publication of this proposal, this revision must seek to reinforce transparency, accountability and democratic scrutiny of the EU budget. On this ground there is no reason to limit this publication to European Commission.

AddedThe Commission will continue improving the EDES database, for example by enabling the searches of multiple entities and improving the layouts of the database.

RemovedRecital 43: (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, the investor base, where applicable the 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, as well as the borrowing plan including revenue sources, should be added to the document annexed to the section of the budget relating to the Commission. That document should lay out the underlying data and the methodology used by the Commission to estimate the interest due.

AddedThe Commission will strive to ensure IT interoperability between EDES and relevant national systems to streamline the process and allow for swifter checks on the exclusion situations of relevant persons or entities.

RemovedRecital 103: (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 also 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 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 a…

AddedThe Commission confirms that any request for additional information for the purposes of EDES will not go beyond what is strictly necessary and proportionate, and will be treated in conformity with applicable data protection rules. It is recalled that the opinion of the European Data Protection Supervisor on the Commission proposal for a recast of the Financial Regulation did not raise any concerns in respect of EDES.

RemovedRecital 104: (104) It is important to underline that the EDES system should only apply in respect of Union funds disbursed to the Member States under direct management, such as those under Regulation (EU) 2021/241 of the European Parliament and of the Council41 , where Member States have the responsibility to take all the appropriate measures to protect the financial interests of the Union, to the extent that the Commission has relevant responsibilities under the respective legal framework and with due regard to the sui generis nature of the funds. Therefore, the responsibilities of the Commission should be limited to the obligation to refer a case to the panel for the purpose of excluding a person or entity if the authorising officer becomes aware of misconducts through final judgments and administrative decisions or facts and findings established in the context of audits or investigations carried out concerning those funds by the European Anti-fraud Office (OLAF), the 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. Without prejudice to these responsibilities of the Commission, the Member States remain responsible to verify the information on decisions of exclusion registered in the EDES database, to enforce such decisions and to ensure that no payment application is submitted related to a person or entity that is in such an exclusion situation.

AddedThe Commission is committed to facilitate a smooth transition towards the application of EDES in full cooperation with the Member States.”

RemovedRecital 134: (134) In order to improve governance and quality of interoperable digital public services, the Member States, the Union institutions, the executive agencies and the Union bodies, such as those referred to in Articles 70 and 71 should follow and apply to the greatest possible extent the European Interoperability Framework.

RemovedRecital 140: (140) In order to ensure efficient implementation of the Union budget, it is appropriate to further clarify the application of the principle of proportionality to indirect management. While the principle of proportionality cannot affect the nature of the obligations imposed by the relevant applicable legal framework, it should be systematically used in the cooperation with Union implementing partners, in order to strike the right balance between protection of the Union’s financial interests and preserving the Union’s ability to implement its policies. Certain adjustments and restructuring of the relevant provisions, including a harmonisation of the control procedures between those used by the European Court of Auditors on the one hand and those used at the national and regional levels on the other hand should be made. This should not be interpreted as limiting in practice the necessary rights and access required for the authorising officer responsible, for EPPO in respect of those Member States participating in enhanced cooperation pursuant to Regulation (EU) 2017/1939, for OLAF, for the Court of Auditors, and, where appropriate, for the relevant national authorities, to comprehensively exert their respective competences.

RemovedRecital 141 a (new): (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.

Removed'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.

RemovedRecital 150: (150) In light of the Covid-19 pandemic and the impact of Russia’s war of aggression against Ukraine, it is appropriate to modify the definition of crisis, which applies in particular to the common provisions and to procurement in the field of external actions and covers public and animal health, food security and safety emergencies and global health threats. In order to allow the flexibility needed to ensure a rapid response to unforeseen circumstances of extreme urgency resulting from a crisis, the contracting authority should be allowed to apply simplified procurement rules, such as use of negotiated procedure without prior publication of a contract notice applicable to crisis situations and acceptance of evidence on exclusion and selection criteria from the presumed successful tenderer after the award decision but in any case before the signature of the contract. The contracting authority should also have flexibility to exceptionally modify a contract or a framework contract, beyond the thresholds referred to in Article 176(3), without a procurement procedure in order to respond to a crisis. A declaration of crisis should be required in line with the relevant internal rules prior to having recourse to such simplified rules, except for procurement in the field of external action where such declaration is not required. In addition, the authorising officers responsible should justify case-by-case the extreme urgency resulting from the declared crisis.

RemovedRecital 160: (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 provisions on conflicts of interests should be applied in a way that ensures legal certainty, be based on a clear and proportionate assessment of the risks and allow for practical application by the competent authorities. The assessment of a conflict of interest should allow in particular the control of serious conflicts of interests that are linked to Union funding involving high-level officials. The Commission guidelines should provide clarity to applicants and decision-making bodies, avoid unnecessary administrative burden and respect the principle of proportionality. 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 conflicts of interests should 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 ca…

RemovedRecital 165: (165) It is necessary to simplify the rules governing dynamic purchasing systems, reducing time-consuming procedures, including the resolution of appeals, to enable contracting authorities to take full advantage of the possibilities afforded by that purchasing method. In particular, the systems should be operated in the form of a restricted procedure, thus allowing for any economic operator that submits a request to participate and meets the exclusion and selection criteria to take part in procurement procedures carried out through the dynamic purchasing system over its period of validity, which should not be limited to four years. Tenders may also be presented in the form of an electronic catalogue particularly for off-the-shelf products or services generally available on the market. Moreover, in order to reduce the administrative burden given the dynamic nature of the systems, the requirement to appoint an opening and evaluation committee should be waived for specific procurements under a dynamic purchasing system. Considering the progress in digitalisation of procurement procedures, it should be clarified that public openings for open procedures may be organised remotely via video conferences.

RemovedRecital 194 a (new): (194a) By introducing a new category of a very low value grant of an amount of up to EUR 10 000, 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.

RemovedThe lessons learned from providing small-scale support during the pandemic to small and medium-sized enterprises and individual applicants should be implemented by introducing a new category of a very low value grant of an amount of up to EUR 10000 in order to improve efficiency and reduce bureaucracy. This is linked to the simplification and crisis management aims of the recast.

RemovedRecital 219 a (new): (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.

RemovedRecital 219 b (new): (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.

RemovedRecital 219 c (new): (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.

RemovedRecital 219 d (new): (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.

RemovedRecital 219 e (new): (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).

RemovedRecital 219 f (new): (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.

RemovedRecital 219 g (new): (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.

RemovedRecital 219 h (new): (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 be able to withstand temporary mismatches between all inflows and outflows, based on a robust liquidity forecasting capacity.

RemovedRecital 219 i (new): (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.

RemovedRecital 219 j (new): (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.

RemovedRecital 219 k (new): (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.

RemovedRecital 246: (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. In the interests of transparency and effective decision making, any such Union contribution should be subject to a decision of the European Parliament and the Council on a proposal by the Commission. Furthermore, 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. That Commission proposal should set out in detail why this financial vehicle would be a more appropriate tool to achieve the relevant EU policy objectives than other instruments. The Commission should join any governance board or equivalent steering committee of a global initiative in order to ensure the best representation of the Union’s interest and facilitate access to performance and control data.

RemovedRecital 248: (248) In order to provide a clear legal framework for the Union institutions to donate services, supplies or works, non-financial donations should be included as a new budget implementation instrument. This instrument should not be confused with the general framework of support provided by the Union to third countries which is of a broader nature but can include non-financial donations. In light of the COVID-19 pandemic and the impact of Russia’s war of aggression in Ukraine, such an instrument should provide a stable legal basis in particular for future crisis and emergency situations and ensure that the Union institutions have the appropriate budget support tools to help Member States, other persons and entities when support is most needed. That instrument should be implemented under direct management. Related provisions, such as definitions, suspension, termination and reduction, and evaluation committee should be adjusted accordingly. In the interests of sound financial management, supplies financed from administrative appropriations should not be donated before their depreciated value represents 80 % of the purchase price. However, that rule should not apply to perishable supplies such as foodstuffs, medicines and certain medical goods, including masks, which would not be suitable for donation once their value has depreciated.

RemovedRecital 254: (254) In its Communication on the European Green Deal, the Commission encourages the renovation of buildings in order to reduce their emissions and make them more energy efficient. Taking into account the rapid evolution of the market for energy efficient buildings, there is an acute need for the Union institutions to incorporate the Green Deal commitments in their own building policy and to renovate their buildings, prioritising the most energy-efficient investments. In addition, the recent development of working methods accelerated by the Covid-19 pandemic requires adapting the institutions’ office stock in order to develop a dynamic office policy. As a consequence, financing of structural renovations by loans should be allowed. The interpretation of the concept of new building projects should be broadened and, in particular, include any project concerning structural renovation.

RemovedRecital 256: (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 for national, regional and local authorities.

RemovedWaiting 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.

RemovedArticle 2 – paragraph 1 – point 22 – point b: (b) a situation caused by natural disasters, man-made crisis such as wars and other conflicts or extraordinary circumstances having comparable effects related, inter alia, to climate change, public and animal health, food security and food safety emergencies and global health threats such as pandemics, environmental degradation, privation of access to energy and natural resources or extreme poverty;

RemovedArticle 2 – paragraph 1 – point 31 a (new): (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;

RemovedArticle 2 – paragraph 1 – point 48: (48) ‘non-governmental organisation’ means a voluntary, independent from government, non-profit organisation, which has some degree of formal existence, is transparent and accountable to its members or founders and is not a political party or a trade union;

RemovedArticle 2 – paragraph 1 – point 65 a (new): (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;

RemovedArticle 2 – paragraph 1 – point 73 a (new): (73a) 'very low value grant’ means a grant lower than or equal to EUR 10 000;

RemovedArticle 6 – title: Respect for budgetary principles and general regime of conditionality for the protection of the Union budget and respect for the values on which the Union is founded and fundamental rights

RemovedArticle 6 – paragraph 2 a (new): 2a. The Commission and Member States shall, in the implementation of the Union budget, ensure respect for the values on which the Union is founded and fundamental rights, including non-discrimination, and compliance with the Charter of Fundamental Rights of the European Union.

RemovedArticle 7 – paragraph 2 – subparagraph 2 – point c: (c) appropriations made available again in accordance with Article 14;

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

RemovedArticle 7 – paragraph 2 – subparagraph 2 – point e: (e) appropriations provided following the receipt of assigned revenue during the financial year or carried over from preceding financial years.

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

RemovedArticle 14 – paragraph 1: 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, without prejudice to pre-agreed national envelopes, where applicable.

RemovedArticle 14 – paragraph 1 – subparagraph 1 a (new): Notwithstanding the first subparagraph, where there is an increased risk of continued total and partial non-implementation of the actions for which the budgetary commitments were earmarked, those appropriations may be made available to the benefit of the Single Margin Instrument or the Flexibility Instrument.

RemovedArticle 14 – paragraph 1 – subparagraph 1 b (new): Subparagraph 1a shall not apply to projects under the research programme or to actions under Regulation (EU) 2021/947, Regulation (EU) 2021/1529, Decision (EU) 2021/1764 and Council Regulation (Euratom) 2021/948.

RemovedArticle 15: deleted / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

RemovedArticle 22 – paragraph 1 – subparagraph 1 – point c: (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).

RemovedArticle 22 – paragraph 2 – subparagraph 1 – point c a (new): (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.

RemovedArticle 25 – paragraph 3 – subparagraph 2 – point c a (new): (ca) it does not harm or risk harming the security or public order of the Union or the Member States;

RemovedArticle 25 – paragraph 3 – subparagraph 2 a (new): Where it accepts a donation pursuant to the first subparagraph, the Commission shall inform the European Parliament and the Council.

RemovedArticle 33 – paragraph 2 – point b: (b) progress in the achievement of objectives, including, where relevant, horizontal spending and mainstreaming targets, shall be monitored with performance indicators;

RemovedArticle 33 – paragraph 2 – point c a (new): (ca) programmes and activities shall be implemented to achieve their set objectives respecting the values on which the Union is founded set out in Article 2 TEU;

RemovedArticle 33 – paragraph 2 – point d: (d) programmes and activities shall, where feasible and appropriate in accordance with the relevant sector-specific rules, be implemented to achieve their set objectives without doing significant harm to the environmental objectives of climate change mitigation, climate change adaptation, the sustainable use and protection of water and marine resources, the transition to a circular economy, pollution prevention and control and the protection and restoration of biodiversity and ecosystems, as set out in Article 9 of Regulation (EU) 2020/852 of the European Parliament and of the Council51.

RemovedArticle 33 – paragraph 2 – point d a (new): (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.

RemovedArticle 33 – paragraph 3: 3. Specific, measurable, attainable, relevant and time-bound objectives as referred to in paragraphs 1 and 2 and indicators that are relevant, accepted, credible, easy, concise, robust and based on widely recognized scientific evidence and an effective, transparent and comprehensive methodology shall be defined where relevant. Those indicators shall include indicators to measure the impact of Union spending on gender equality and to track spending on climate change mitigation and adaptation and the protection of biodiversity.

RemovedArticle 36 – paragraph 2 – point d: (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, defined in Article 3, point (6), of Directive (EU) 2015/849, as well as for data-mining and risk-scoring to analyse those data ;

RemovedArticle 36 – paragraph 3 – point b a (new): (ba) procedures for detecting and preventing conflicts of interests;

RemovedArticle 36 – paragraph 6 – introductory part: 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 made available in real time in the system referred to in paragraph 2 provided by the Commission:

RemovedArticle 36 – paragraph 6 – point a: (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 unique identifier of the Union funding operation. If a natural person, also the date of birth and the gender, where provided;

RemovedArticle 36 – paragraph 6 – point a a (new): (aa) the amount of funding committed and, in the case of a commitment with multiple recipients, the breakdown of that amount per recipient where available;

RemovedArticle 36 – paragraph 6 – point a b (new): (ab) the locality of the recipient, namely: / (i) the address of the recipient where the recipient is a legal person; / (ii) the region on NUTS 2 level where the recipient is a natural person and is domiciled in the European Union or the country where the recipient is a natural person and is not domiciled in the European Union;

RemovedArticle 36 – paragraph 6 – point a c (new): (ac) the nature and purpose of the measure;

RemovedArticle 36 – paragraph 6 – point b: (b) the first name(s), last name(s), date of birth, gender, where provided, 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;

RemovedArticle 36 – paragraph 6 – point b a (new): (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.

RemovedArticle 36 – paragraph 7 – subparagraph 1: 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 refered 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 sources of data and inf…

RemovedArticle 36 – paragraph 7 – subparagraph 2: 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, respect the principles of necessity and proportionality 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, who shall have full and direct access to any relevant data within the exercise of their respective competences.

RemovedArticle 36 – paragraph 7 – subparagraph 3: 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.

RemovedArticle 36 – paragraph 7 a (new): 7a. For the purposes of point (d) of paragraph 2 of this Article, Article 145(2) and Article 148, and in addition to any applicable sector-specific rule, Member States implementing the budget under point (b), first subparagraph, Article 62(1), shall transmit to the Commission information through the Irregularity Management System on facts and findings established in the context of final judgments or final administrative decisions, as well as facts established in the context of audits or investigations carried out by the EPPO, the Court of Auditors, OLAF or any check, audit, control performed under the responsibility of the Commission, as to the presence of the exclusion situations referred to in Article 139(1). For the same purposes, Member States shall transmit all other complementary information requested by the Commission.

RemovedArticle 36 – paragraph 8 – subparagraph 1 a (new): For the purposes of point (d) of paragraph 2 of this Article, Article 145(2) and Article 148 and in addition to any applicable sector-specific rule, Member States that receive and implement Union funds, pursuant to budget implementation under point (a), first subparagraph, Article 62(1), shall transmit information through the Irregularity Management System on facts and findings established in the context of final judgments or final administrative decisions, as well as facts established in the context of audits or investigations carried out by the EPPO, the Court of Auditors, OLAF or any check, audit, control performed under the responsibility of the Commission, as to the presence of the exclusion situations referred to in Article 139(1). For the same purposes, Member States shall transmit all other complementary information requested by the Commission.

RemovedArticle 36 – paragraph 8 – subparagraph 1 b (new): For the purposes of the application of the requirements of paragraphs 2, 3 and 6 of this Article, references to recipients shall be understood as final recipients, contractors, subcontractors and sub-beneficiaries as referred to in sector-specific rules.

RemovedArticle 36 – paragraph 9: 9. For the purposes of the application of the requirements of paragraphs 2, 3 and 6 of this Article by Member States implementing the budget under Article 62(1), first subparagraph, point (b), references to recipients shall be understood as references to beneficiaries, sub-beneficiaries, contractors and sub-contractors as referred to in sector-specific rules.

RemovedArticle 36 – paragraph 10 a (new): 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. That information shall, having due regard to the protection of personal data, be made available to any persons or organisations that can demonstrate a legitimate interest.

RemovedArticle 36 – paragraph 10 b (new): 10b. Data shall be stored for the period necessary and proportionate to fulfil the purpose determined in point (d) of paragraph 2. The maximum possible storage period shall not exceed 10 years from the last payment claim for the period submitted to the Commission.

RemovedArticle 38 – paragraph 1 – subparagraph 1: 1. 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 .

RemovedArticle 38 – paragraph 1 – subparagraph 2: 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 final recipients, contractors, subcontractors and sub-beneficiaries as referred to in sector-specific rules.

RemovedArticle 38 – paragraph 2 – introductory part: 2. Save in the cases referred to in paragraph 3, the following information shall be published in an open, interoperable and machine-readable format, which allows data to be sorted, searched, extracted, compared and available for reuse via suitable and secure technical solutions, downloaded in individual datasets and, where available, as a bulk download, having due regard for the requirements of confidentiality and security, in particular the protection of personal data:

RemovedArticle 38 – paragraph 2 – point a: (a) whether the final recipient is a natural or a legal person;

RemovedArticle 38 – paragraph 2 – point b: (b) the final recipient’s full legal name in the case of a legal person and their VAT identification number or tax identification number where available or another unique identifier established at country level, the first and last name of the recipient in the case of a natural person, as well as their gender, where provided;

RemovedArticle 38 – paragraph 2 – point c a (new): (ca) the full name, address and gender, where provided, of the recipient’s final beneficial owner as defined in Article 3, point (6), of Directive (EU) 2015/849 of the European Parliament and of the Council, where the recipient is a legal person;

RemovedArticle 38 – paragraph 2 – point e a (new): (ea) whether the recipient receives state aid.

RemovedArticle 38 – paragraph 3 – subparagraph 1 – point b: (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;

RemovedArticle 38 – paragraph 3 – subparagraph 1 – point d: (d) where disclosure risks threatening the rights and freedoms of the persons or entities concerned as protected by the Charter of Fundamental Rights of the European Union or seriously harming the commercial interests of the recipients;

RemovedArticle 38 – paragraph 4 – subparagraph 3: 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.

RemovedArticle 38 – paragraph 5 – subparagraph 1: 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.

RemovedArticle 38 – paragraph 5 – subparagraph 2: 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 its address, where the information as provided by the Member States, persons, entities or bodies referred to in paragraph 4 can be found.

RemovedArticle 38 – paragraph 6 – subparagraph 1: For the purposes of the first and second subparagraphs of paragraph 1 of this Article and without prejudice to paragraphs 3 and 4 of this Article and to sector-specific rules, the Commission shall use the data stored in the system referred to in Article 36(2) to feed the single website referred to in paragraph 1 of this Article with the information referred to in paragraph 2 of this Article.

RemovedArticle 38 – paragraph 6 – subparagraph 2: In addition, the data shall also include the VAT identification number or tax identification number of natural persons where available or another unique identifier established at country level with a view to improve the quality of the data transmitted without it being used for publication.

RemovedArticle 38 – paragraph 7 – subparagraph 1: 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.

RemovedArticle 38 a (new): Article 38a / Visibility of the budget / Without prejudice to specific provisions laid down in sector-specific rules, or in specific contracts, grant agreements, contribution agreements and financing agreements, all new communication efforts shall make the citizens' connection to the budget more visible by generally using the statements ‘Funded by the people of the European Union’ or ‘Co-funded by the people of the European Union’ next to the emblem of the Union.

RemovedArticle 41 – paragraph 3 – subparagraph 1 – point d: (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;

RemovedArticle 41 – paragraph 3 – subparagraph 1 – point e: (e) as regards appropriations for administration, a working document presenting administrative expenditure to be implemented by the Commission under its section of the budget and a working document on Union institutions', bodies' and agencies' building policy as referred to in Article 271(1) ;

RemovedAs stated in paragraph 3 of the initiative report adopted ahead of the publication of this proposal, this revision must seek to reinforce transparency, accountability and democratic scrutiny of the EU budget. On this ground there is no reason to limit this publication to European Commission.

RemovedArticle 52 – paragraph 1 – point d – point iii – indent 3: – a comprehensive overview of borrowing and lending operations; that overview shall provide inter alia detailed information on maturities, schedule of payments, interest due, the investor base, where applicable the 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, as well as the borrowing plan including revenue sources;

RemovedArticle 59 – paragraph 3 a (new): 3a. Any revision of the service-level agreements referred to in paragraph 2, and the subsequent changes in the financial obligations of the Union institutions involved towards each other, shall be made before the Union institutions concerned submit their estimates of revenue and expenditure to the Commission, if the changes relate to appropriations of the year of those estimates.

RemovedArticle 59 – paragraph 3 b (new): 3b. 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.

RemovedArticle 59 – paragraph 3 c (new): 3c. 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.

RemovedArticle 61 – paragraph 2: 2. Where there is a risk of a conflict of interests involving a member of staff of a national authority, the person in question shall refer the matter to his or her hierarchical superior or, where relevant, to the competent authority at national level. Where such a risk exists for a high office holder at national or Union level, the person in question shall refer the matter to the competent Union authority. Where such a risk exists for staff covered by the Staff Regulations, the person in question shall refer the matter to the relevant authorising officer by delegation. The relevant hierarchical superior or the authorising officer by delegation or the competent Union authority shall confirm in writing whether a conflict of interests is found to exist. Where a conflict of interests is found to exist, the appointing authority or the relevant national authority or the competent Union authority shall ensure that the person in question ceases all activity in the matter and shall ensure that any further appropriate action is taken in accordance with the applicable law, including, where applicable, with the national law relating to conflict of interests.

RemovedArticle 63 – paragraph 1: 1. Where the Commission implements the budget under shared management, tasks relating to budget implementation shall be delegated to Member States. The Commission and Member States shall respect the principles of sound financial management, transparency and non-discrimination and shall ensure the visibility of the Union action when they manage Union funds. To that end, the Commission and Member States shall fulfil their respective control and audit obligations, including the obligation for Member States to record the relevant data in the system referred to in Article 36(2), and assume the resulting responsibilities laid down in this Regulation. Complementary provisions shall be laid down in sector-specific rules.

RemovedArticle 63 – paragraph 4 – subparagraph 1 – point a a (new): (aa) record the data in the system referred to in Article 36(2) before awarding Union funds;

RemovedArticle 63 – paragraph 8 – subparagraph 1 – point c: (c) interrupt payment deadlines or suspend payments where provided for in sector-specific rules, including limiting the interruption or suspension to the part of the expenditure for which relevant data in the system referred to in Article 36(2) are missing;

RemovedArticle 63 – paragraph 8 – subparagraph 1 – point c a (new): (ca) interrupt payment deadlines or suspend payments where non-compliance with Article 6(2a) puts at risk the legality of expenditure.

RemovedArticle 109 – paragraph 4 – subparagraph 2 a (new): 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).

RemovedAmendment 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.

RemovedArticle 117 – paragraph 1 – subparagraph 1 a (new): 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.

RemovedArticle 117 – paragraph 3 – subparagraph 4 a (new): Electronic invoices may be used to request payments stemming from a public contract.

RemovedArticle 126 – paragraph 1 – subparagraph 1 – point a – point i: (i) the fulfilment of conditions set out in sector-specific rules or Commission or Council decisions; or

RemovedArticle 126 – paragraph 1 – subparagraph 1 – point a – point ii: (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;

RemovedArticle 126 – paragraph 1 – subparagraph 2: Union contributions under point (a) of the first subparagraph of this paragraph shall, in direct and indirect management, be established in accordance with Article 185, sector-specific rules or a Commission or Council decision and, in shared management, in accordance with sector-specific rules. Union contributions under points (c), (d) and (e) of the first subparagraph of this paragraph shall, in direct and indirect management, be established in accordance with Article 185 or sector-specific rules and, in shared management, in accordance with sector-specific rules.

RemovedArticle 126 – paragraph 1 – subparagraph 2 a (new): Union contributions referred to in the first subparagraph shall not, except in duly justified cases, such as a crisis, and in accordance with sector-specific rules, substitute recurring national expenditure and shall respect, where applicable, the principle of additionality of Union funding.

RemovedArticle 128 a (new): 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.

Removed'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.

RemovedArticle 131 – title: Applicability of the exclusion system to shared management

RemovedArticle 133 – paragraph 2 – introductory part: 2. Where, after the award, the award procedure proves to have been subject to irregularities or fraud, the authorising officer responsible shall take one of the following actions:

RemovedArticle 133 – paragraph 3 – subparagraph 1 – point c a (new): (ca) non-compliance with Article 6(2a) puts the legality of expenditure at risk;

RemovedArticle 138 – paragraph 1 – subparagraph 1: In order to protect the financial interests of the Union, the Commission shall set up and operate an early-detection and exclusion system, applying to all management systems.

RemovedArticle 138 – paragraph 2 – subparagraph 4 – point l: (l) beneficial owners and any affiliated entities of the person or entity referred to in points (k) and (j).

RemovedArticle 139 – paragraph 1 – point e – point iii: (iii) been discovered by the Commission, an authorising officer, OLAF, the Court of Auditors, the EPPO or a Member State audit institution, following checks, audits or investigations;

RemovedArticle 139 – paragraph 1 – point g: (g) it has been established by a final judgment or final administrative decision that the person or entity has created an entity in a different jurisdiction with the intent to circumvent fiscal, social or any other legal obligations including those related to working rights, employment and labour conditions, in the jurisdiction of its registered office, central administration or principal place of business;

RemovedArticle 139 – paragraph 2 – subparagraph 1: The authorising officer responsible shall exclude a person or entity referred to in Article 138(2)(i), (j), (k) and (l) where that person or entity is in one or more of the exclusion situations referred to in Article 139(1). In the absence of a final judgment or a final administrative decision, the decision shall be taken on the basis of a preliminary classification in law of a conduct as referred to in those points, having regard to the established facts and findings under Article 139, paragraph 3, fourth subparagraph, points (a) and (d), contained in the recommendation of the panel referred to in Article 146.

RemovedArticle 139 – paragraph 9 – subparagraph 1 – point a: (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;

RemovedArticle 139 – paragraph 10 – subparagraph 1 – introductory part: The remedial measures referred to in point (a) of the first subparagraph of paragraph 9 shall include, in particular:

RemovedArticle 139 – paragraph 10 – subparagraph 2: 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.

RemovedArticle 142 – paragraph 1 – subparagraph 1 – point b – point i: (i) five years for the cases referred to in Article 139(1), points (c)(iv), (d) and (i);

RemovedArticle 142 – paragraph 1 – subparagraph 1 – point b – point ii: (ii) three years for the cases referred to in points (c)(i), (ii), (iii), (v) and (vi) and (e) to (h) of Article 139(1);

RemovedArticle 142 – paragraph 1 – subparagraph 1 – point b – point ii a (new): (iia) ten years where a person or entity referred to in Article 138(2) is excluded under several of the grounds listed in Article 139(1)(c)(iv), (d) and (i) or under one of those grounds more than once.

RemovedArticle 143 – paragraph 1 – subparagraph 1 – introductory part: In order to, where necessary, reinforce the deterrent effect of the exclusion and/or financial penalty, the Commission shall, subject to a decision of the authorising officer responsible, publish on its website the following information related to the exclusion and, where applicable, the financial penalty in the cases referred to in points (c) to (i) of Article 139(1):

RemovedArticle 144 – paragraph 1 – subparagraph 1 – point d: (d) has professional conflicting interests which may negatively affect the performance of the contract in accordance with point 20.6 of Annex I.

RemovedArticle 144 – paragraph 1 – subparagraph 1 – point d a (new): (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.

RemovedArticle 151 a (new): Article151a / Financing not linked to costs under direct management with Member States as beneficiaries of grants, non-repayable financial support or loans / 1. Where a Union programme or facility adopted as of the date of application of this Regulation is implemented in direct management with Member States as beneficiaries of grants, non-repayable financial support or loans provided in the form indicated in Article 126(1)(a)(ii), the Commission shall, following the approval of the milestones, targets or performance indicators in accordance with the relevant basic act, conclude an agreement with the Member State concerned constituting an individual legal commitment within the meaning of this Regulation. / 2. The agreement referred to in paragraph 1 shall provide for the obligations of the Member State: / (a) to implement the measures agreed in compliance with applicable rules, in particular regarding the prevention, detection and correction of fraud, corruption, conflicts of interest, and double-funding, and to recover amounts wrongly paid or incorrectly used; / (b) to ensure that the financing provided has been properly used in accordance with all applicable rules; / (c) to have an effective and efficient internal control system; / (d) to accompany a request for payment by: / (i) a management declaration that the relevant milestones, targets or performance indicators have been met with the support of the funds, that the information submitted with the request for payment is c…

RemovedArticle 153 – paragraph 5 – subparagraph 2: For contracts awarded by the Union delegations or awarded exclusively in the interest of Union delegations in third countries, the contracting authority may restrict the submission by letter to only one of the means indicated above. Where the contracting authority makes use of this provision, it shall document the reasons for the restriction.

RemovedWhile the intention of the Commission with this new provision is understandable, it runs the risk of restricting competition, especially if participants are not allowed to submit their application documents by post or by courier service. To ensure that the decision remains justified and comprehensible for all applicants, the contracting authority should document its reasons for the decision.

RemovedArticle 169 – paragraph 2 – subparagraph 6: In a situation of extreme urgency resulting from a crisis, new contracting authorities may be added after the launch of the procurement procedure and before contract signature, subject to the conditions set out in Article 164(6) and provided that the modification does not alter the subject matter of the contract or the framework contract.

RemovedArticle 169 – paragraph 3 a (new): 3a. Where appropriate, two or more Member States may mandate a Union institution, Union body referred to in Articles 70 and 71 or executive agency referred to in Article 69 (‘mandated contracting authority’) to act as a central purchasing body to procure on behalf of the Member States or in their own name, under the following conditions: / (a) The mandated contracting authority shall assess the utility, necessity and proportionality of the request of two or more Member States; / (b) Where the mandated contracting authority intends not to follow the request, it shall inform the Member States concerned and shall give reasons for its refusal; / (c) Where it agrees to procure on behalf of the Member States, the mandated contracting authority shall draw up the proposal for a mandate agreement to be signed by the participating Member States. Such agreement shall include the practical arrangements for the involvement of the participating Member States, the conditions and time frames for possible opt-in and opt-out, and, where appropriate, rules for the allocations of the quantities between the participating Member States; / (d) The mandated contracting authority shall conduct the procurement procedure following its own rules.

RemovedArticle 176 – paragraph 3 – subparagraph 1 – point c – point i: (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

RemovedTechnical correction.

RemovedArticle 179 – paragraph 1 – subparagraph 2 a (new): 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.

RemovedThe same provisions applicable to the procurement of Union Delegations should also apply

RemovedArticle 196 – paragraph 3 – point e: (e) low value grants and very low value grants.

RemovedThe 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.

RemovedArticle 200 – paragraph 1 – point c a (new): (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);

RemovedThe 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.

RemovedArticle 217 – title: Management of the common provisioning fund

RemovedThe 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.

RemovedArticle 217 – paragraph 1: deleted

RemovedThe 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.

RemovedArticle 217 – paragraph 2: deleted / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

RemovedThe 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.

RemovedArticle 217 – paragraph 3: deleted

RemovedThe 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.

RemovedArticle 217 – paragraph 4 – introductory part: 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):

RemovedThe 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.

RemovedArticle 217 – paragraph 4 – point a: (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;

RemovedThe 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.

RemovedArticle 224 – paragraph 2: deleted

RemovedArticle 224 – paragraph 7: deleted

RemovedArticle 224 a (new): 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.

RemovedArticle 238 – paragraph 1 – subparagraph 3: deleted

RemovedAs 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.

RemovedArticle 238 – paragraph 1 – subparagraph 4: The establishment of a Union trust fund shall be subject to the approval of the European Parliament and of the Council.

RemovedAs 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.

RemovedArticle 238 – paragraph 1 – subparagraph 4 a (new): 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.

RemovedFor 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.

RemovedArticle 238 – paragraph 2: 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.

RemovedAs 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.

RemovedArticle 240 – paragraph 1: (1) With a view to coordinating actions with multiple partners to address effectively global challenges with the appropriate scale, the Union may, on a proposal by the Commission, 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.

RemovedArticle 240 – paragraph 1 a (new): (1a) Such contributions shall be subject to a decision by the European Parliament and the Council. / Except in urgent circumstances, the European Parliament and the Council, the latter acting by qualified majority, shall deliberate upon a proposal for a contribution, as referred to in paragraph 1, within eight weeks of its receipt by both institutions. In urgent circumstances, the European Parliament and the Council shall deliberate within four weeks of receipt of the proposal. / A contribution proposal shall be approved or considered to be approved, if, within the eight-week period, any of the following occurs: / (a) the European Parliament and the Council approve it; / (b) either the European Parliament or the Council approves it and the other institution refrains from acting; / (c) neither the European Parliament nor the Council takes a decision to amend or refuse the proposal.

RemovedArticle 240 – paragraph 2 – subparagraph 1 – point iii: (iii) there is adequate reporting on the results achieved by the initiative, including through relevant output and impact indicators;

RemovedArticle 240 – paragraph 2 – subparagraph 1 – point iv: (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 that provide a level of protection comparable to other budget implementation instruments provided for in other Titles of this Regulation;

RemovedArticle 240 – paragraph 2 – subparagraph 1 – point v: (v) there are appropriate systems to prevent and combat irregularities and fraud as well as to report on their functioning at regular intervals, including internal and external auditing systems, and there are appropriate rules for recoveries of funds by the initiative, including their use for the same initiative;

RemovedArticle 240 – paragraph 2 – subparagraph 1 – point v a (new): (va) the Union’s participation brings visibility for the Union.

RemovedArticle 240 – paragraph 2 – subparagraph 2: 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, audit authorities of the Commission, and the Court of Auditors shall be granted access to all relevant information and carry out joint audit, control, or investigative missions with the relevant body under the initiative, in line with Article 129.

RemovedArticle 244 – paragraph 2 – subparagraph 1 a (new): In the case of non-perishable supplies financed from administrative appropriations and in compliance with the accounting rules and standards referred to in Article 80, Union institutions and bodies may not provide non-financial donations before the value of the depreciated supply represents 80 % of the purchase price.

RemovedArticle 260 – paragraph 1: 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.

RemovedIt 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.

RemovedArticle 265 – paragraph 3: 3. If the European Parliament postpones the decision giving a discharge, the Commission and the other Union institutions and Union bodies provided for in Articles 70 and 71 shall make every effort to take measures, as soon as possible, to remove or facilitate removal of the obstacles to that decision.

RemovedArticle 265 – paragraph 3 a (new): 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.

RemovedArticle 266 – paragraph 1: 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.

RemovedArticle 267 – paragraph 2: 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 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.

RemovedArticle 271 – paragraph 1 – subparagraph 1 – point a: (a) for each building, the expenditure and surface area, broken down by office space and other spaces, covered by the appropriations of the corresponding budget lines. The expenditure shall include the costs of the fitting-out of buildings but not the other charges;

RemovedArticle 271 – paragraph 1 – subparagraph 1 – point b: (b) the expected evolution of the global programming of surface area, taking account of trends in teleworking, and locations for the coming years with a description of the building projects in planning phase which are already identified and an assessment of the evolution of the real estate market surrounding the location of the project that leads to additional cost;

RemovedArticle 271 – paragraph 2: 2. For any building project likely to have significant financial implications for the budget, the Union institution concerned shall inform the European Parliament and the Council as early as possible, and in any case before any prospecting of the local market takes place, in the case of building contracts, or before invitations to tender are issued, in the case of building works, about the building surface area required, and the reasons for which it is required, and the provisional planning.

RemovedArticle 271 – paragraph 3 – subparagraph 1: For any building project likely to have significant financial implications for the budget, the Union institution concerned shall present the building project, in particular its detailed estimated costs, specifying in particular those relating to any works required to improve energy efficiency, and its financing including any possible use of internal assigned revenue referred to in point (e) of Article 21(3), as well as a list of draft contracts intended to be used, to the European Parliament and to the Council and shall request their approval before contracts are concluded. At the request of the Union institution concerned, documents submitted relating to the building project shall be treated confidentially.

RemovedArticle 275 – paragraph 2 a (new): 2a. The requirement set out in Article 22(2)(ca) for commitment and payment appropriations, in the case provided for in Article 21(5), to be made available in the context of the budgetary procedure shall apply only in respect of basic acts adopted as of the date of application of this Regulation.

RemovedArticle 275 – paragraph 3: 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.

RemovedWaiting 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.

RemovedArticle 275 – paragraph 4: 4. The obligations set out in Article 38, third subparagraph of paragraph 4 and in paragraph 6, shall apply only from 1 January 2026.

RemovedWaiting 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.

RemovedAnnex I – Part 1 – Section 2 – point 6 – point 6.2: 6.2. In a competitive procedure with negotiation, a competitive dialogue, an innovation partnership, a prospection of the local market in accordance with point (g) of the second subparagraph of point 11.1 and a negotiated procedure for low value contracts in accordance with point 14.3, the minimum number of candidates shall be three.

RemovedAnnex I – Part 1 – Section 2 – point 6 – point 6.3 – point b: (b) negotiated procedures without prior publication in accordance with point 11, except for design contests in accordance with point (d) of the second subparagraph of point 11.1. and prospections of the local market in accordance with point (g) of the second subparagraph of point 11.1.

RemovedAnnex I – Part 1 – Section 2 – point 6 – point 6.6: 6.6. For contracts awarded in accordance with points (d) and (g) of the second subparagraph of point 11.1 and points 14.2 and 14.3, the contracting authority shall invite at least all economic operators who have expressed interest following ex ante publicity as set out in point 3.1 or prospection of the local market or a design contest.

RemovedAnnex I – Part 1 – Section 2 – point 16 – point 16.3 – point g a (new): (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.

RemovedIt 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.

RemovedThe 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.

RemovedWith 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.

RemovedOn 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.

RemovedThe 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.

RemovedThe 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.

Removed 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.

RemovedThe 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.

Removed 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.

RemovedThe 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.

RemovedMore 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.

Removed 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.

Removed 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.

Removed 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.

Removed 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.

Removed 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.

RemovedThe 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.

RemovedThe 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.

RemovedFinally, 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.

RemovedOther amendments are proposed, inter alia to align the Financial Regulation to the recently adopted Regulation (EU) 2022/2560 on foreign subsidies distorting the internal market, to streamline the management of the common provisioning fund, to improve oversight on forms of Union contribution with financing not linked to costs, to introduce a provision to avoid ‘gold-plating’ resulting into excessive administrative burden, and to improve the provisions in relation to the EPPO, Union delegation in third countries and Parliament’s liaison offices, and building projects financed through loans. The amendment adopted as part of Parliament's mandate for inter-institutional negotiations on the stand-alone proposal to revise the Financial Regulation as regards competition fines is also included for coherence.

RemovedThe 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.

RemovedAmendments to parts of the proposal which remain unchanged ('white parts') were necessary for pressing reasons relating to the internal logic of the text or because the amendments are inextricably linked to other admissible amendments.

RemovedIn line with Rule 110(3) of EP Rules of Procedure, there is an inextricable link between the amendments adopted in BUDG/CONT in this procedure.

Removed09.03.2023

RemovedLETTER OF THE COMMITTEE ON INDUSTRY, RESEARCH AND ENERGY

RemovedMr Johan Van Overtveldt

RemovedChair

RemovedCommittee on Budgets

RemovedBRUSSELS

RemovedMs Monika Hohlmeier

RemovedChair

RemovedCommittee on Budgetary Control

RemovedBRUSSELS

RemovedSubject: Opinion on Financial rules applicable to the general budget of the Union (recast) (COM(2022)0223 – C90179-2022 – 2022/0162(COD))

RemovedDear Mr Chair,

RemovedUnder the procedure referred to above, the Committee on Industry, Research and Energy has been asked to submit an opinion to your committee and to the Committee on Budgetary Control. At its meeting of 13 July 2022, the committee decided to send the opinion in the form of a letter. It considered the matter at its meeting of 9 March 2023 and adopted the opinion at that meeting.

RemovedThe opinion consists of the following amendments, which, in accordance with the usual treatment of opinions under Rule 56, I kindly ask you to put to the vote during the vote on the report in your committee:

RemovedITRE 1

RemovedArticle 14 – paragraph 1

RemovedWhere 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.

RemovedThe consequence of the amendment returning the decommitments to the benefit of the budget lines of origin, would address directly the problems with research decommitments.

RemovedITRE 2

RemovedArticle 15

Removeddeleted

RemovedA technical deletion necessary in view of the amendment to Art. 14

RemovedITRE 3

RemovedArticle 33 – paragraph 2 – point d

Removed(d) programmes and activities shall, where feasible and appropriate, in accordance with the relevant sector-specific rules, be implemented to achieve their set objectives without doing significant harm to the environmental objectives of climate change mitigation, climate change adaptation, the sustainable use and protection of water and marine resources, the transition to a circular economy, pollution prevention and control and the protection and restoration of biodiversity and ecosystems, as set out in Article 9 of Regulation (EU) 2020/852 of the European Parliament and of the Council.

RemovedThe amendment alters the Commission proposal on including the Do No Significant Harm principle in the FR. It creates the possibility to specify the application of the principle in sectoral legislation. This would allow ITRE to determine the scope and manner of application appropriate for, for example, the research programme. ITRE has commented on this scope and manner of application already in the past, for example in paragraph 41 of the EIC Implementation INI.

RemovedYours sincerely,

RemovedCristianSilviu Buşoi

Removed6.12.2022