Explanatory Memorandum to COM(2018)485 - Financial regulation applicable to the 11th European Development Fund - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2018)485 - Financial regulation applicable to the 11th European Development Fund. |
|---|---|
| source | COM(2018)485  |
| date | 22-06-2018 |
• Reasons for and objectives of the proposal
The objective of this proposal is to align the financial rules of the European Development
Fund ('EDF') with those applicable to the Union budget. Council Regulation (EU) 2015/323 on the financial regulation applicable to the 11th European Development Fund ( '11th EDF
Financial Regulation ) iS Structured as a set of references to the financial regulation applicable to the general budget of the Union, excluding or supplementing provisions to cater for EDF specificities. Since Regulation No 966/2012, the financial regulation applicable to the general
budget of the Union ('the Financial Regulation'), has been recently revised, it is necessary to
adapt the 11th EDF Financial Regulation. This is the only way to extend to the EDF the benefit of the simplification achieved through the Financial Regulation, for instance as regards:
— cross reliance on audits and assessments,
— extension of pillar assessment use,
— single set of rules for bodies eligible under indirect management,
— new grounds of excl usion,
— extension of the basic principles of cooperation on good taxation governance (non-cooperative jurisdictions) to all funds under indirect management
Since changes introduced to the Financial Regulation are significant and therefore proposed in the form of a new legal act repealing Regulation (EU, EURATOM) No 966/2012, this proposal follows the same approach: in the interest of legal clarity and readability, and given the significant amendments a new legal act is proposed.
The present alignment only concerns the current 11th EDF which expires in 2020 and is unrelated to the discussions on the 2021-2027 Multiannual Financial Framework.
Consistency
with existing policy provisions in the policy area
The overarching principle of this proposal is to align it as much as possible with the Financial Regulation, which also applies to the other external policy instruments. However, since this 11th EDF expires in December 2020, certain provisions of the Financial Regulation that will enter into force only with the 2021-2027 Multiannual Financial Framework have not been made applicable in the 11th EDF Financial Regulation.
• Consistency with other Union policies
Not applicable.
2. LEGALBASIS, SUBSIDIARITYAND PROPORTIONALITY
• Legal basis
The 11th EDF Financial Regulation is based on Article 10(2) of the Internal Agreement governing the 11th EDF.
• Subsidiarity (for non-exclusive competence)
The adoption of the 11th EDF financial rules falls under the exclusive competence of the EU.
• Proportionality
This proposal focuses on alignment and simplification. The amendments are limited to those necessary to allow the simplifications proposed in the Financial Regulation to deploy their full effect on the ground while keeping the necessary specificities of the 11th EDF.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS ANDIMPACTASSESSMENTS
• Stakeholder consultations
The proposal draws on the results of the public consultation in 2016 that preceded the Commission proposal No 2016/0605 of 14 September 2016 for the Financial Regulation.
• Collection and use of expertise
Not applicable.
• Impact assessment
No impact assessment for the revision of the 11th EDF Financial Regulation has been carried out. The proposed amendments follow the simplifications proposed in the Financial Regulation applicable to the general budget of the Union. Moreover, the 11th EDF Financial Regulation as such has a limited economic, environmental or social impact, since it provides the general rules for the implementation of the 11th EDF.
• Regulatory fitness and simplification
The proposal does not fall under the Regulatory Fitness Programme.
• Fundamental rights
The proposal has no impact on fundamental rights.
4. BUDGETARYIMPLICATIONS
The proposal has no budgetary implications. The EDF is not included in the EU budget and its financial envelope is determined in the Internal Agreement. While the funds will be implemented according to the 11th EDF Financial Regulation, its adoption has no financial impact.
5. LEGALELEMENTSOFTHEPROPOSAL
• Detailed explanation of the specific provisions of the proposal
As stated above, the overarching principle of this proposal is to align it as much as possible with the Financial Regulation. This is achieved by direct references to that Regulation.
Such references have to be read bearing in mind that:
– Article 2(2) of the proposal excludes the application of provisions which give the
Commission the power to adopt delegated acts under Article 290 TFEU.
– Certain provisions of the Financial Regulation apply mutatis mutandis; in such a
case, the applicable provisions have to be read and applied in a reasonable context with the EDF as a whole rather than literally.
Where the applicable Financial Regulation provisions contain internal references, the provisions referred to only apply if the 11th EDF Financial Regulation provides that they are
applicable. In other words, it is solely the 11th EDF Financial Regulation that explicitly lays down the provisions of the Financial Regulation that are applicable to the EDF.
The proposal follows as much as possible the structure of the Financial Regulation. It is divided into three Parts: Main Provisions, Investment Facility, and Transitional and Final Provisions.
The recitals of the proposal address the degree of alignment with the Financial Regulation in more detail.
Part One “Main Provisions” is subdivided into 11 Titles: Subject matter, scope and general provisions; Financial principles; EDF resources and implementation; Financial actors; Revenue operations; Expenditure operations; Various implementation provisions; Funding instruments; Annual accounts and other financial reporting; and External audit and discharge.
The self-standing text of the proposal largely falls into one of two categories. Part of the text is aligned on the substance with the Financial Regulation but the terminological differences or the necessity to carry out minor adjustments to the EDF require complementary text. Examples of this are in Title VIII “Funding instruments”. Other self-standing text is specific to the EDF. Examples of this are in Title VI “Revenue operations” which is largely untouched by this revision.
Part Two, on the investment facility managed by the EIB, is specific to the EDF and is largely unchanged by this revision.
As stated above, since this EDF expires in December 2020, certain provisions of the Financial Rgulation applicable to the general budget of the Union that will enter into force only during the period of the 2021 - 2027 multiannual financial framework have not been made applicable in the 11th EDF Financial Regulation. As an example, the proposal does not make applicable the provisions related to the Common Provisioning Fund (Title X of the Financial Regulation applicable to the general budget of the Union).