Changes from plenary report to adopted text

17. Considers that an NGO should not be financed 100 % by the state and the Commission in order to be considered an NGO;

18. Notes that the Commission uses the terms NGOs and not-for-profit organisations (NFPOs) without a clear distinction in the FTS; regrets that this results in an uncertainty in the allocation and monitoring of EU funds and might lead to a misperception regarding the volume of funding for NGOs and entities; notes that the FTS FAQs provide a definition for NGOs whose non-profit status is an essential element and is subject to validation; regrets that this unclear distinction is possible as up to now, there has been no harmonised EU approach to NGOs and only self-classification of entities has been used for the FTS, which is based solely on rules that may vary among Member States; calls further for the FTS to ensure a proper categorisation of the various types of NGOs or NFPOs in order to avoid situations in which there is little or no differentiation between certain types of organisations and whereby universities, research institutes, voluntary organisations and other NGOs are considered identical in the FTS database;

Towards better EU transparency and accountability of EU funds

19. Considers that fraud, conflict of interests, double funding, corruption and money laundering or embezzlement must be prevented and tackled in all situations and for all beneficiaries irrespective of their nature and legal status; is concerned about the insufficient available data to the discharge authority on such cases; recalls that all applicants and beneficiaries of EU funding, including NGOs, are subject to EU financial rules;

20. Underlines that the Early Detection and Exclusion System (EDES) is an important instrument to protect the Union’s financial interests, ensuring multilevel protection through the early detection of persons or entities representing risks that threaten the Union’s financial interests; welcomes the Commission proposal for a recast of the Financial Regulation, which includes the extension of EDES to shared management and adds new grounds of exclusion; calls on the Commission to make EDES fully operational to allow for an effective exclusion of beneficiaries, including NGOs, based on the Financial Regulation, from further access to EU funds;

21. Is concerned that transparency requirements can be insufficient, especially when funds are passed along a chain and used to co-fund joint projects with other donors; considers it problematic that the FTS only provides information about grants awarded directly by the Commission under direct management, but no details on funds received indirectly from beneficiaries and partners that have a legal relationship with the Commission;

22. Emphasises that not all Member States provide the same level of information on grants and that the existing EU database is not sufficiently consistent and coherent; calls on the Commission to strengthen transparency and accountability in cases of shared and indirect management by verifying the re-allocation of funds and their use up to the final recipients, in line with the proposal for a recast of the Financial Regulation;

23. Calls on the Commission to reinforce ex ante control mechanisms proportionately, including adequate random checks; is of the opinion that severe weaknesses exist in the ex post control on the use of EU funds and urges the Commission, in cooperation with Member States, to produce an in-depth analysis with clear proposals to reinforce their quality, amount and regularity, supported by a well-established and centralised budgetary control task force within the Commission for all interest representatives, disposing of a clear mandate, investigation capabilities and resources;

24. Recognises the importance of transparency in all aspects of EU-funded activities to ensure the responsible and accountable use of funds; acknowledges the concerns regarding potential foreign interference in EU policymaking and that the system in place cannot fully prevent actors from establishing fund and/or co-opt beneficiaries, including NGOs, to promote false narratives including through disinformation, as allegedly happened in Qatargate; believes that existing concerns should not lead to a stigmatisation of all NGOs since most NGOs respect and promote EU democratic principles and values; underlines that the EU budget must not be used to lobby against the EU’s democratic principles and values;

25. Calls on the Commission to require beneficiaries, including NGOs, in receipt of EU funds to publish details of any funding received from other sources in relation to projects co-financed by the EU over a five-year period, while maintaining the principle of confidentiality, in particular, in duly justified cases of beneficiaries, including NGOs, facing serious threats of reprisal; underlines that funding for NGOs from outside the EU can be a legitimate source of financing, but stresses that without clear transparency rules in respect of the principle of confidentiality, such funding possibilities are open to abuse and undue influence from third state actors; calls on the EU institutions to improve the implementation of their transparency standards, including the obligatory reporting of lobbying activities;

26. Encourages the Member States to establish national lobby and transparency registry laws, which should also require the disclosure of donors, including international ones, and sources of funding, with equal transparency requirements for all interest representatives regardless of their nature and legal status;

27. Recalls that Member States are responsible for the registration, control and reporting of cases of detection of fraud, misuse of funds or money laundering, convictions or ongoing investigations; believes that national administrations, which are closer to the ground, represent the first effective layer for the control and monitoring of organisations that are acting against EU rules and values, in order to strengthen efforts to prevent, detect and tackle fraud and the misuse of funds;

28. Calls on national authorities to strengthen their transparency and accountability systems in order to identify all organisations or entities that are acting against EU rules and values and to take legal and administrative measures that facilitate action at EU level and make it easier and quicker for the Commission to include the entities concerned in its systems; urges the Commission to include all interest representatives in violation of EU rules and values in the EDES and to exclude them from EU funding accordingly, in line with the Financial Regulation applicable to the EU budget;

29. Is of the opinion that no margins of appreciation should be left for Member States to subject NGOs to fatally restrictive requirements and obligations; recalls that the Commission started an infringement procedure against Hungary when it introduced a foreign interference law in 2017 and that, in its judgment of 18 June 2020 (European Commission v Hungary), the Court of Justice of the EU stated that the right to freedom of association and thus EU law is violated if systematic obligations on CSOs are rendering significantly more difficult the action and the operation of the organisations subject to them;

30. Regrets the publication of data in the FTS with a delay of between 6 and 18 months and its impact on transparency; calls on the Commission to publish information about EU grants awarded to NGOs and entities no later than six months after the date on which the grant was awarded, including funding received from other sources, while taking into account the principle of confidentiality in duly justified case of beneficiaries, including NGOs, facing serious threats; calls on the Commission to develop and integrate data validation tools so that the FTS data validation process is automatic, continuous and quicker, and consumes fewer resources;

31. Regrets the fact that the Commission’s IT systems are not user-friendly and use different conventions to identify beneficiaries of projects and grants, resulting in differing data, making it difficult to reconcile information from different publicly accessible Commission portals and databases; recommends that the Commission establish harmonised rules and standardise the layout and functionalities of programme-specific databases, taking into consideration the diverse environments and areas of action in which NGOs operate, and without putting additional unnecessary burdens on them;

32. Calls on the Commission to use a common unique entity, such as a unique participant identification code, and project identification keys across all portals and databases, including on beneficiaries’ websites, while maintaining the principle of confidentiality, in particular, in duly justified cases of beneficiaries, including NGOs, facing serious threats of reprisal, in order to facilitate the reconciliation of publicly available information provided by different systems and websites; calls on the Commission to provide all beneficiaries, including NGOs, with code that extracts five years of funding data directly from the FTS and includes links to the corresponding project entries in the Commission’s programme databases;

33. Observes significant inconsistencies in the content and extent of the information displayed on project websites including on the distribution of funds received among partners and on the connection to pertinent Commission databases; calls for a more proactive approach to public transparency and increased cooperation with EU budgetary authorities that goes beyond the current minimal requirements for EU grant funding; calls for the Commission to reinforce a system for a commitment from all applicants, including NGOs, to the EU Charter when applying for EU funds; calls for a clearer and more systematic presentation of information on EU-funded project websites on the grant funding received from the EU and from other sources;

34. Calls for the ultimate owners of companies to be listed in central registers in EU countries, accessible to people with a ‘legitimate interest’, such as investigative journalists, concerned citizens and NGOs;

35. Notes that, although the mainstreaming of the eGrants system as a common grants management tool and applicant registration system across Commission services has improved the quality and completeness of FTS data, more effort needs to be made to improve the reliability of such data; is concerned that there are still continuing shortcomings in terms of consistency in existing Commission transparency portals and systems; calls further on the Commission to step up its work on streamlining databases for a more user-friendly FTS that is linked to the Transparency Register and compatible with specific programme databases; highlights that it should include final payments, making it possible to identify beneficiaries, including NGOs, by category, including through the definition of an NGO and relevant entities in line with the Financial Regulation; requests that the Commission prepares a proposal for further administrative action by the end of 2024;

36. Notes that in some situations the home office of the non-profit organisation is in one country and the beneficiary operations take place in another; calls for the non-profit organisations to take appropriate measures to account for funds and services delivered in locations other than their home jurisdiction;

37. Welcomes the Commission’s proposal to set up, based on Article 36 of the Financial Regulation, a centralised, interoperable IT system for data mining and risk scoring to improve the efficiency of the internal control of budget implementation; underlines that this system must not only include recipients’ data, but also the data of beneficial owners in accordance with Directive (EU) 2015/849; calls for this system to include risk indicators based on data from the EDES under all management modes;

38. Regrets that the coexistence of reporting obligations and accounting practices at national and EU levels may lead to a disproportionate administrative burden for beneficiaries, including NGOs; calls on the Commission to ensure that reporting obligations at EU and national levels are consistent in order to guarantee easier monitoring of the fulfilment of obligations;

39. Emphasises the importance of transparency and of identifying the final recipient of EU funds; calls on the Commission to develop a harmonised monitoring system aimed at reducing the red tape, improving efficiency and identifying final beneficiaries; recommends that the Commission track EU funds up to the final beneficiaries in a systematic, standardised and harmonised manner across information and transparency platforms at EU level; calls, furthermore, for an enhanced dialogue between the Commission and the beneficiaries of EU funding, including NGOs, on how to reduce excessive burdens;

40. Is concerned when the visibility provisions of EU programmes are not entirely respected; calls on the Commission to instruct its services to terminate agreements or reduce payments to beneficiaries not respecting their contractual visibility obligations;

41. Invites the Commission to ensure that it provides training for all of its programme officers and EU agencies on the Financial Regulation and on the EU budget; calls on the Commission to provide all beneficiaries of EU funding, including NGOs, training on reporting and financial rules, and requests that the discharge authority is duly informed about these trainings, including their content, their participants and the related costs; calls on the Commission to simplify the grant application and selection procedures, and to ensure uniformity of approach and transparency of the process, a reduction in administrative burden and regular adaptation of these rules to changing circumstances and lessons learned;

42. Notes the 2018 finding of the European Court of Auditors (ECA) that the provision of sub-granting does not allow the Commission to properly monitor how EU funds are used; calls for the amounts provided to NGOs as third parties in the form of cascading grants to be clearly identifiable in the FTS and in the Commission annual financial and accountability reporting;

43. Calls on all EU institutions to ensure far stricter implementation, enforcement and supervision of adherence to the current provisions on the EU Transparency Register; calls for more resources to be allocated to the Transparency Register Secretariat so that it is able to offer support to all applicants and registrants, especially small entities and NGOs, throughout the registration process and to verify the information they provide more thoroughly; calls, in particular, for a transparency officer to be placed in all committee secretariats and relevant administrative units; recalls that, according to the Transparency Register guidelines, changes in the data provided should be communicated as soon as they occur and, in any case, within three months; insists that any changes in the board or leadership of entities registered should also be recorded in the Transparency Register; requests to have the transparency database only accessible to specific authorised persons, and upon request to the budgetary authority, in order to avoid the dissemination of information that could endanger an individual’s life or personal safety or the existence of an NGO;

44. Regrets the coexistence of different disclosure requirements for different types of organisations in the Transparency Register; calls on the Commission to impose the same disclosure requirements on all types of organisations registered in the Transparency Register; notes that, in particular, they must all be required to disclose their income and all amounts spent on lobbying;

45. Recalls the recommendations from the 2021 Parliament discharge resolution calling for a revision of the EU Transparency Register and its guidelines to require the disclosure of details on all funding sources from registered organisations, including the shares held in other companies, and to allow EU funds to be traced from the direct recipient to the final beneficiary when funds are passed along a chain, including when funds from one beneficiary, including an NGO, are transferred to another, while taking into account the principle of confidentiality in the case of NGOs facing serious threats;

46. Calls on all NGOs and entities committed to full transparency and accountability, the EU Charter and promoting democratic and EU values, to request to be included in the Transparency Register when applying for EU funds;

47. Calls for strict enforcement of the rules for access to Parliament and for invitations to parliamentary committees, which are conditional on the registration of each organisation in the Transparency Register by the new transparency officer who will be placed in each committee secretariat;

49. Considers the adoption of an NGO regulation to be a discriminatory measure that targets NGOs but not any other EU funding recipients; is of the opinion that issues such as revolving doors, transparency in financing and donations, the fight against money laundering, limiting foreign interference, independence from political and economic influence, and whistleblowing are of importance for all entities receiving EU funds and should not be used to limit the space of action of NGOs;

50. Reiterates its call in the 2021 Commission discharge resolution to ensure that all EU funding beneficiaries, including NGOs, that have misused or misappropriated EU funds, or engaged in activities contrary to the EU values enshrined in Article 2 of the Treaty on European Union and the EU Charter, including inciting terrorism, hate speech, supporting or glorifying violence, political and religious extremism as well as spreading disinformation under the disguise of intentionally falsified scientific data, are listed in the EDES and are blocked from access to EU institutions and EU funding programmes in direct and shared management; calls on the Commission and the Member States to enforce the implementation and publication of an improved exclusion list as recommended by Parliament and in line with the agreement on the Financial Regulation; expects the Commission to report on the implementation of this recommendation at the beginning of 2025;

51. Calls on the Commission and the ECA to systematically submit the findings and the audit conclusions related to the risk-based on-site checks of beneficiaries, including NGOs, and their results to Parliament as the discharge authority; encourages increased cooperation with the European Anti-Fraud Office (OLAF) and the ECA; calls on the Commission to enhance, in particular, the access status for OLAF in order to obtain information on the financial misconduct of individual beneficiaries, investigate them and impose appropriate sanctions (i.e. suspension of payment via the EDES system), in the event of fraud, corruption and other irregularities related to EU funds, in compliance with the applicable regulations;

52. Recalls that NGOs are subjected to the same level of controls and investigations as any other recipient of EU funds covering all expenditure sides, within the respective mandates of both OLAF and the European Public Prosecutor’s Office;

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53. Instructs its President to forward this resolution to the Council, the Commission and the European Court of Auditors.