Annexes to COM(2022)349 - Establishing the European defence industry Reinforcement through common Procurement Act - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2022)349 - Establishing the European defence industry Reinforcement through common Procurement Act. |
|---|---|
| document | COM(2022)349  |
| date | October 18, 2023 |
2.2.2.Information concerning the risks identified and the internal control system(s) set up to mitigate them
The Instrument is meant to support cooperation in the procurement of the most urgent and critical defence products. Thus the main risk identified are: Timetable Risk: Schedule issue, delays in implementation, Governance risk: Lack of cooperation between Member States and/or national industry leading to delays of inefficient implementation, Financial risk: Cost management, Low absorption (delays), etc. Technical risks: Difficulties in specific development; Technical issues; Lower performance level. The Commission would therefore implement the Instrument in direct management building on the expertise gained in implementing the European Defence Fund, prepare and adopt only one multi-annual work programme, shorten the time to grant and apply financing not linked to costs.
2.2.3.Estimation and justification of the cost-effectiveness of the controls (ratio of "control costs ÷ value of the related funds managed"), and assessment of the expected levels of risk of error (at payment & at closure)
The budget of the programme will be under direct management. Based on the Commission experience on grant management, the overall control costs of the Instrument by the Commission are estimated at less than 1% of the related funds managed.
In terms of expected error rate(s), the aim is to maintain the error rate below the threshold of 2%. The Commission considers that the implementation of the programme in direct management, with trained (experienced staff, possibly recruited as from Member States Ministries of Defence) and well-staffed teams acting under delegated authorising officers, applying clear rules and making an appropriate use of output based instruments (i.e. financing not linked to costs) will maintain an error rate below the 2% materiality threshold.
2.3.Measures to prevent fraud and irregularities
Specify existing or envisaged prevention and protection measures, e.g. from the Anti-Fraud Strategy.
The European Anti-Fraud Office (OLAF) is competent to carry out investigations on operations supported under this initiative. Agreements resulting from this Regulation, including agreements concluded with international organisations, shall provide for supervision and financial control by the Commission, or any representative authorised by it, and audits by the European Court of Auditors, the European Public Prosecutor’s Office (EPPO) or OLAF, if necessary on-the spot. Commission's officials who have the required security clearance, can also make on site visits.
3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
3.1.Heading(s) of the multiannual financial framework and expenditure budget line(s) affected
·Existing budget lines (see table under section 3.2)
In order of multiannual financial framework headings and budget lines.
| Heading of multiannual financial framework | Budget line | Type of expenditure | Contribution | |||
| Number | Diff./Non-diff. 13 | from EFTA countries 14 | from candidate countries 15 | from third countries | within the meaning of Article 21(2)(b) of the Financial Regulation | |
| [XX.YY.YY.YY] | Diff./Non-diff. | YES/NO | YES/NO | YES/NO | YES/NO |
·New budget lines requested
In order of multiannual financial framework headings and budget lines.
| Heading of multiannual financial framework | Budget line | Type of expenditure | Contribution | |||
| Number | Diff./Non-diff. | from EFTA countries | from candidate countries | from third countries | within the meaning of Article 21(2)(b) of the Financial Regulation | |
| 5 | 13.0106 | Non-Diff | YES | NO | NO | NO |
| 5 | 13.06 | Diff | YES | NO | NO | NO |
3.2.Sources of financing for the proposal
3.2.1.Source of financing of appropriations under the proposal
| Contribution from margins and special instruments of the MFF | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | Total |
| Marrgins of Heading 5 | 83.700 | 44.900 | 32.100 | 1 | 160.700 | |||
| Special instruments of the MFF | 111.400 | 227.900 | 339.300 | |||||
| Total | 83.700 | 156.300 | 260.000 | 500.000 |
3.2.2.Summary of estimated impact on operational appropriations
–◻ The proposal/initiative does not require the use of operational appropriations
–☑ The proposal/initiative requires the use of operational appropriations. as explained below:
EUR million (to three decimal places)
| Heading of multiannual financial framework | 05 | Security and Defence – Cluster 13 Defence | |||||||||
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | Post 2027 | TOTAL | |||
| 13.0601 Operational appropriations STI defence products | Commitments | (1) | 83.700 | 156.300 | 260.000 | 500.000 | |||||
| Payments | (2) | 72.000 | 174.000 | 104.000 | 72.000 | 78.000 | 500.000 | ||||
| 13.016 – Support expenditure | Commitments = Payments | (3) | p.m.. | p.m. | 0 | ||||||
| TOTAL appropriations for the envelop of the programme under heading 5 | Commitments | =1+3 | 83.700 | 156.300 | 260.000 | 500.000 | |||||
| Payments | =2+3 | 0 | 72.000 | 174.000 | 104.000 | 72.000 | 78.000 | 500.000 |
Heading of multiannual financial framework | 7 | ‘Administrative expenditure’ |
This section should be filled in using the 'budget data of an administrative nature' to be firstly introduced in the Annex to the Legislative Financial Statement (Annex V to the internal rules). which is uploaded to DECIDE for interservice consultation purposes.
EUR million (to three decimal places)
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | Post 2027 | TOTAL | ||
| Human resources | 0.961 | 1.831 | 1.831 | 1.517 | 1.517 | 1.187 | 8.844 | |||
| Other administrative expenditure | 0.047 | 0.279 | 0.279 | 0.067 | 0.057 | 0.057 | 0.786 | |||
| TOTAL appropriations under HEADING 7 of the multiannual financial framework | (Total commitments = Total payments) | 1.008 | 2.110 | 2.110 | 1.584 | 1.574 | 1.244 | 9.630 |
EUR million (to three decimal places)
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | Post 2027 | TOTAL | |||
| TOTAL appropriations across HEADINGS of the multiannual financial framework | Commitments | 84.708 | 158.410 | 262.110 | 1.584 | 1.574 | 1.244 | 509.630 | |||
| Payments | 1.008 | 74.110 | 176.110 | 105.584 | 73.574 | 79.244 | 0 | 509.630 |
3.2.3.Summary of estimated impact on administrative appropriations
–◻ The proposal/initiative does not require the use of appropriations of an administrative nature
–☑ The proposal/initiative requires the use of appropriations of an administrative nature. as explained below:
EUR million (to three decimal places)
| Years | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | TOTAL |
| HEADING 7 of the multiannual financial framework | ||||||||
| Human resources | 0.961 | 1.831 | 1.831 | 1.517 | 1.517 | 1.187 | 8.844 | |
| Other administrative expenditure | 0.047 | 0.279 | 0.279 | 0.067 | 0.057 | 0.057 | 0.786 | |
| Subtotal HEADING 7 of the multiannual financial framework | 1.008 | 2.110 | 2.110 | 1.584 | 1.574 | 1.244 | 9.630 | |
| Outside HEADING 7 of the multiannual financial framework | ||||||||
| Human resources | ||||||||
| Other expenditure of an administrative nature (former BA lines) | ||||||||
| Subtotal outside HEADING 7 of the multiannual financial framework |
| TOTAL | 1.008 | 2.110 | 2.110 | 1.584 | 1.574 | 1.244 | 9.630 |
The administrative appropriations required will be met by the appropriations which are already assigned to management of the action and/or which have been redeployed, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of existing budgetary constraints.
3.2.3.1.Estimated requirements of human resources
–◻ The proposal/initiative does not require the use of human resources.
–✓ The proposal/initiative requires the use of human resources. as explained below:
Estimate to be expressed in full time equivalent units
| Years | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | |
| • Establishment plan posts (officials and temporary staff) for DG DEFIS | ||||||||
| Headquarters and Commission’s Representation Offices | 5 | 10 | 10 | 8 | 8 | 7 | ||
| Delegations | ||||||||
| Research | ||||||||
| • External staff (in Full Time Equivalent unit: FTE) - AC. AL. END. INT and JED for DG DEFIS Heading 7 | ||||||||
| Financed from HEADING 7 of the multiannual financial framework | - at Headquarters | 2 | 3 | 3 | 3 | 3 | 1 | |
| - in Delegations | ||||||||
| Financed from the envelope of the programme | - at Headquarters | |||||||
| - in Delegations | ||||||||
| Research | ||||||||
| Other (specify) | ||||||||
| TOTAL | 7 | 13 | 13 | 11 | 11 | 8 |
The human resources required will be met by staff from the DG who are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.”
Description of tasks to be carried out:
| Officials and temporary staff | 5 FTEs (5 AD) will be required to ramp-up the Instrument in 2022 and to start up the first activities, 10 FTEs (7AD and 3 AST) to implement the activities. and reduced to 7 (5 AD and 2 AST) in 2027 to ensure the work programme adoption; management of the evaluation and the operational. financial and legal monitoring of the implementation of the projects. |
| External staff | 2 FTEs to start the activities (2 SNE). increasing to 3 (1 AC and 2 SNE) reduced to 1 in 2027 (1 AC) to ensure the the operational. financial and legal monitoring of the implementation of the projects. |
3.2.4.Compatibility with the current multiannual financial framework
The proposal/initiative:
–◻ can be fully financed through redeployment within the relevant heading of the Multiannual Financial Framework (MFF).
–☑ requires use of the unallocated margin under the relevant heading of the MFF and/or use of the special instruments as defined in the MFF Regulation.
Margin of Heading 5. See details in section 3.2
–◻ requires a revision of the MFF.
Explain what is required. specifying the headings and budget lines concerned and the corresponding amounts.
3.2.6.Third-party contributions
The proposal/initiative:
–☑ does not provide for co-financing by third parties
–◻ provides for the co-financing by third parties estimated below:
Appropriations in EUR million (to three decimal places)
| 2023 | 2024 | 2025 | 2026 | 2027 | Total | |
| TOTAL appropriations co-financed |
3.3.Estimated impact on revenue
–☑ The proposal/initiative has no financial impact on revenue.
–◻ The proposal/initiative has the following financial impact:
on own resources
on other revenue
please indicate. if the revenue is assigned to expenditure lines
EUR million (to three decimal places)
| Budget revenue line: | Appropriations available for the current financial year | Impact of the proposal/initiative 16 | ||||||
| Year N | Year N+1 | Year N+2 | Year N+3 | Enter as many years as necessary to show the duration of the impact (see point 1.6) | ||||
| Article …………. |
For assigned revenue. specify the budget expenditure line(s) affected.
[…]
Other remarks (e.g. method/formula used for calculating the impact on revenue or any other information).
[…]
(1) OJ C , , p. .
(2) OJ L 433I, 22.12.2020, p. 28.
(3) Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999,(OJ L248, 18.9.2013, p. 1.
(4) Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests (OJ L 312, 23.12.95, p.1).
(5) Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities' financial interests against fraud and other irregularities (OJ L292,15.11.96 , , p.2).
(6) Council Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced cooperation on the establishment of the European Public Prosecutor’s Office (‘the EPPO’) (OJ L283, 31.10.2017, p.1).
(7) Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union's financial interests by means of criminal law (OJ L 198, 28.7.2017, p. 29).
(8) Council Decision 2013/755/EU of 25 November 2013 on the association of the overseas countries and territories with the European Union (Overseas Association Decision) (OJ L 344, 19.12.2013, p. 1).
(9) Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ L 94, 28.3.2014, p. 65).
(10) Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC (OJ L 94, 28.3.2014, p. 243).
(11) As referred to in Article 58(2)(a) or (b) of the Financial Regulation.
(12) Details of management modes and references to the Financial Regulation may be found on the BudgWeb site: https://myintracomm.ec.europa.eu/budgweb/EN/man/budgmanag/Pages/budgmanag.aspx
(13) Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.
(14) EFTA: European Free Trade Association.
(15) Candidate countries and, where applicable, potential candidates from the Western Balkans.
(16) As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net amounts, i.e. gross amounts after deduction of 20 % for collection costs.