Explanatory Memorandum to COM(2018)614 - Amendment of Regulation (EU) No 1303/2013 as regards the adjustment of annual pre-financing for the years 2021 to 2023 - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2018)614 - Amendment of Regulation (EU) No 1303/2013 as regards the adjustment of annual pre-financing for the years 2021 to 2023. |
|---|---|
| source | COM(2018)614  |
| date | 07-09-2018 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
Evidence shows that annual pre-financing paid to Member States for a given accounting year and cleared with the acceptance of accounts results in annual recovery orders of a significant magnitude (for instance, EUR 6.6 billion in 2017). This means in practice that payment credits are requested from Member States from payment appropriations in the Union's budget to pay to them annual pre-financing that a year later has to be recovered to a significant extent.
Therefore, to increase transparency and contribute to the predictability of budgetary planning and to a more stable and predictable payment profile, it is proposed that for the last three years of the current implementation period 2021-2023, which are overlapping with the next implementation period starting in 2021, the annual pre-financing is reduced to the necessary minimum. This approach also takes account of payment needs stemming from pre-financing arrangements proposed for the 2021-2027 programmes where only initial pre-financing would be paid in six annual tranches 1 . This intention was already signalled by the Commission 2 .
• Consistency with existing policy provisions in the policy area
The proposal is consistent with the provisions concerning budgetary management of the European Structural and Investment (ESI) Funds as set out in Regulation (EU) No 1303/2013 3 . The amendment does not introduce a structural change of those provisions.
• Consistency with other Union policies
The proposal is consistent with other proposals and initiatives adopted by the European Commission. It is also consistent with the requirements of sound budgetary management.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
Regulation (EU) No 1303/2013 defines the common rules applicable to the ESI Funds. Based on the principle of shared management between the Commission and the Member States, this Regulation includes provisions for the programming process as well as arrangements for programme (including financial) management, monitoring, financial control and evaluation of projects.
• Subsidiarity (for non-exclusive competence)
The proposal concerns the decrease of annual pre-financing provided by the Commission from the budget of the Union to Member States. The rates of annual pre-financing are established at Union level in Regulation (EU) No 1303/2013. Therefore an amendment of the provisions set out in this regulation requires the amendment of this Regulation. National or regional means are not appropriate to address the problem at hand. Therefore, the proposal complies with the subsidiarity principle.
• Proportionality
The proposal is in conformity with the proportionality principle as it does not go beyond the minimum required to achieve the stated objective at Union level and what is necessary for that purpose. The rate of annual pre-financing is decreased to be commensurate with cash-flow requirements taking into account the increased pace of cash-flow on the basis of interim payment applications stemming from the accelerated implementation of the ESI Funds. When establishing the proposed rate, the Commission took into consideration that for the years concerned the basis to which the percentages relate already include the performance reserve, hence a lower share can guarantee the same amount of pre-financing.
• Choice of the instrument
Proposed instrument: amendment of the current Regulation. The Commission has explored the scope for manoeuvre provided by the legal framework and considers it necessary to propose amendments to Regulation (EU) No 1303/2013.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
There was no ex-post evaluation/or fitness checks of the existing legislation.
• Stakeholder consultations
There was no consultation of external stakeholders.
• Collection and use of expertise
Use of external expertise has not been necessary.
• Impact assessment
The proposal is not expected to have significant economic, social or environmental impacts. The proposal will result in decreasing the annual pre-financing from 3% of the amount of the support from the Funds and the European Maritime and Fisheries Fund (‘EMFF’) for the whole programming period to the operational programme to 1% for the years 2021-2023, more suitable to the cash-flow requirements stemming from programme implementation. This lower pre-financing takes into account the anticipated accelerated submission of interim payment claims, the fact that for these years the basis for calculating the amount of annual pre-financing is increased by the size of the performance reserve which will be definitely allocated by then as well as pre-financing available for Member States from the 2021-2027 programming period.
Given that annual pre-financing is made available for an accounting year which spans over two annual budgetary years, the excess amount paid in year N as annual pre-financing will be cleared in year N+1, which results in unnecessary payment flows without added value. Reducing the rate of annual pre-financing for the proposed years will contribute to increasing the predictability of budgetary planning, to a more stable and predictable payment profile, to the reduction of the risk of payment backlogs, to increased transparency in payment needs and, therefore, to better budgetary management.
• Regulatory fitness and simplification
This is not an initiative within the Regulatory Fitness Programme (REFIT).
• Fundamental rights
The proposal has no consequences for the protection of fundamental rights.
4. BUDGETARY IMPLICATIONS
There is no impact on commitment appropriations since no modification is proposed to the maximum amounts of the ESI Funds financing provided for in the operational programmes for the programming period 2014-2020.
The overall impact on payment appropriations is neutralised. As detailed in the financial statement attached to the proposal, the suggested change will contribute to a reduction in payment appropriations related to the year 2021 entirely due to the reduction of the annual pre-financing amounts which will be compensated by higher payment needs for the year 2024. For the years 2022 and 2023, lower annual pre-financing will be offset in the framework of the examination and acceptance of accounts, therefore the effect is neutral.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
Not applicable. The existing delivery systems of the ESI Funds can be used to monitor the implementation of this proposal.
• Explanatory documents (for directives)
Not applicable.
• Detailed explanation of the specific provisions of the proposal
Article 134(2) will be modified to set the annual pre-financing for the years 2021 to 2023 at 1%, from the currently applicable 3%, of the amount of the support from the Funds and the EMFF for the whole programming period to the operational programme. The annual pre-financing for the year 2020 is maintained at 3% of the amount of the support from the Funds and the EMFF for the whole programming period to the operational programme.