title: 2011/564/EU: Decision of the European Parliament of 10 May 2011 on discharge in respect of the implementation of the budget of the 8th, 9th and 10th European Development Funds for the financial year 2009

text:
               27.9.2011

               EN

               Official Journal of the European Union

               L 250/111

         DECISION OF THE EUROPEAN PARLIAMENT
   of 10 May 2011
   on discharge in respect of the implementation of the budget of the 8th, 9th and 10th European Development Funds for the financial year 2009
   (2011/564/EU)
   THE EUROPEAN PARLIAMENT,
   having regard to the Commission’s report on the follow-up to the discharge for the 2008 financial year (COM(2010) 650) and to the Commission staff working documents accompanying that report (SEC(2010) 1437 and SEC(2010) 1438),
   having regard to the financial statements and revenue and expenditure accounts of the 8th, 9th and 10th European Development Funds for the financial year 2009 (COM(2010) 402 — C7-0220/2010),
   having regard to the Commission’s annual report of 29 April 2010 on the Financial Management of the 8th-10th European Development Funds in 2009,
   having regard to the financial information on the European Development Funds (COM(2010) 319),
   having regard to the Court of Auditors’ annual report on the activities funded by the 8th, 9th and 10th European Development Funds (EDFs) concerning the financial year 2009, together with the Commission’s replies (1),
   having regard to the statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors pursuant to Article 287 of the Treaty on the Functioning of the European Union (TFEU) (2),
   having regard to the Special Report No 10/2008 of the Court of Auditors on EC Development Assistance to Health Services in sub-Saharan Africa,
   having regard to the Special Report No 18/2009 of the Court of Auditors on the Effectiveness of EDF support for Regional Economic Integration in East Africa and West Africa,
   having regard to the Council’s recommendations of 15 February 2011 concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Funds for the financial year 2009 (05469/2011 — C7-0050/2011, 05472/2011 — C7-0049/2011, 05473/2011 — C7-0048/2011),
   having regard to the Partnership Agreement between the members of the African, Caribbean and Pacific Group of States, of the one part, and the European Community and its Member States, of the other part, signed in Cotonou on 23 June 2000 (3) and revised in Luxembourg on 25 June 2005 (4),
   having regard to Council Decision 2001/822/EC of 27 November 2001 on the association of the overseas countries and territories with the European Community (‘Overseas Association Decision’) (5), amended by Council Decision 2007/249/EC (6),
   having regard to Article 33 of the Internal Agreement of 20 December 1995, between the representatives of the Governments of the Member States, meeting within the Council, on the financing and administration of Community aid under the Second Financial Protocol to the fourth ACP-EC Convention (7),
   having regard to Article 32 of the Internal Agreement of 18 September 2000, between the Representatives of the Governments of the Member States, meeting within the Council, on the Financing and Administration of Community Aid under the Financial Protocol to the Partnership Agreement between the African, Caribbean and Pacific States and the European Community and its Member States signed in Cotonou (Benin) on 23 June 2000, and the allocation of financial assistance for the Overseas Countries and Territories to which Part Four of the EC Treaty applies (8),
   having regard to its resolution of 5 May 2010 (9) accompanying its decisions on discharge in respect of the implementation of the European Union general budget for the financial year 2008, Section III — Commission and executive agencies, in particular paragraphs 268 to 274 thereof,
   having regard to Article 276 of the EC Treaty and Article 319 TFEU,
   having regard to Article 74 of the Financial Regulation of 16 June 1998 applicable to development finance cooperation under the fourth ACP-EC Convention (10),
   having regard to Article 119 of the Financial Regulation of 27 March 2003 applicable to the 9th European Development Fund (11),
   having regard to Article 142 of Council Regulation (EC) No 215/2008 of 18 February 2008 on the Financial Regulation applicable to the 10th European Development Fund (12),
   having regard to Rules 76 and 77, third indent of, and Annex VI to, its Rules of Procedure,
   having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Development (A7-0140/2011),

               1.

               Grants the Commission discharge in respect of the implementation of the budget of the 8th, 9th and 10th European Development Funds for the financial year 2009;

               2.

               Sets out its observations in the resolution below;

               3.

               Instructs its President to forward this Decision, and the resolution that forms an integral part of it, to the Council, the Commission, the Court of Justice of the European Union, the Court of Auditors and the European Investment Bank and to arrange for their publication in the Official Journal of the European Union (L series).

            The President

         Jerzy BUZEK

            The Secretary-General

         Klaus WELLE

      (1)  OJ C 303, 9.11.2010, p. 243.

      (2)  OJ C 303, 9.11.2010, p. 253.

      (3)  OJ L 317, 15.12.2000, p. 3.

      (4)  OJ L 287, 28.10.2005, p. 4.

      (5)  OJ L 314, 30.11.2001, p. 1 and OJ L 324, 7.12.2001, p. 1.

      (6)  OJ L 109, 26.4.2007, p. 33.

      (7)  OJ L 156, 29.5.1998, p. 108.

      (8)  OJ L 317, 15.12.2000, p. 355.

      (9)  OJ L 252, 25.9.2010, p. 39.

      (10)  OJ L 191, 7.7.1998, p. 53.

      (11)  OJ L 83, 1.4.2003, p. 1.

      (12)  OJ L 78, 19.3.2008, p. 1.
    ---documentbreak---

               27.9.2011

               EN

               Official Journal of the European Union

               L 250/113

         RESOLUTION OF THE EUROPEAN PARLIAMENT
   of 10 May 2011
   with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the 8th, 9th and 10th European Development Funds for the financial year 2009
   THE EUROPEAN PARLIAMENT,
   having regard to the Commission’s report on the follow-up to the discharge for the 2008 financial year (COM(2010) 650) and to the Commission staff working documents accompanying that report (SEC(2010) 1437 and SEC(2010) 1438),
   having regard to the financial statements and revenue and expenditure accounts of the 8th, 9th and 10th European Development Funds for the financial year 2009 (COM(2010) 402 — C7-0220/2010),
   having regard to the Commission’s annual report of 29 April 2010 on the Financial Management of the 8th-10th European Development Funds in 2009,
   having regard to the financial information on the European Development Funds (COM(2010) 319),
   having regard to the Court of Auditors’ annual report on the activities funded by the 8th, 9th and 10th European Development Funds (EDFs) concerning the financial year 2009, together with the Commission’s replies (1),
   having regard to the statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors pursuant to Article 287 of the Treaty on the Functioning of the European Union (TFEU) (2),
   having regard to the Special Report No 10/2008 of the Court of Auditors on EC Development Assistance to Health Services in sub-Saharan Africa,
   having regard to the Special Report No 18/2009 of the Court of Auditors on the Effectiveness of EDF support for Regional Economic Integration in East Africa and West Africa,
   having regard to the Annual Report 2009 of the European Investment Bank on the Investment Facility,
   having regard to the Council’s recommendations of 15 February 2011 concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Funds for the financial year 2009 (05469/2011 — C7-0050/2011, 05472/2011 — C7-0049/2011, 05473/2011 — C7-0048/2011),
   having regard to the Partnership Agreement between the members of the African, Caribbean and Pacific Group of States, of the one part, and the European Community and its Member States, of the other part, signed in Cotonou on 23 June 2000 (3) and revised in Luxembourg on 25 June 2005 (4),
   having regard to Council Decision 2001/822/EC of 27 November 2001 on the association of the overseas countries and territories with the European Community (‘Overseas Association Decision’) (5), amended by Council Decision 2007/249/EC (6),
   having regard to Article 33 of the Internal Agreement of 20 December 1995, between the representatives of the Governments of the Member States, meeting within the Council, on the financing and administration of Community aid under the Second Financial Protocol to the fourth ACP-EC Convention (7),
   having regard to Article 32 of the Internal Agreement of 18 September 2000, between the Representatives of the Governments of the Member States, meeting within the Council, on the Financing and Administration of Community Aid under the Financial Protocol to the Partnership Agreement between the African, Caribbean and Pacific States and the European Community and its Member States signed in Cotonou (Benin) on 23 June 2000, and the allocation of financial assistance for the Overseas Countries and Territories to which Part Four of the EC Treaty applies (8),
   having regard to its resolution of 5 May 2010 (9) accompanying its decisions on discharge in respect of the implementation of the European Union general budget for the financial year 2008, Section III — Commission and executive agencies, in particular paragraphs 268 to 274 thereof,
   having regard to Article 276 of the EC Treaty and Article 319 TFEU,
   having regard to Article 74 of the Financial Regulation of 16 June 1998 applicable to development finance cooperation under the fourth ACP-EC Convention (10),
   having regard to Article 119 of the Financial Regulation of 27 March 2003 applicable to the 9th European Development Fund (11),
   having regard to Article 142 of Council Regulation (EC) No 215/2008 of 18 February 2008 on the Financial Regulation applicable to the 10th European Development Fund (12),
   having regard to the answers of the Commission and the European Investment Bank (EIB) to the questions of the Committee on Budgetary Control of 25 January 2011,
   having regard to Rules 76 and 77, third indent of, and Annex VI to, its Rules of Procedure,
   having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Development (A7-0140/2011),

               A.

               whereas the European Development Fund (EDF) is the European Union’s most important financial instrument for development cooperation with the African, Caribbean and Pacific States,

               B.

               whereas, despite Parliament’s repeated request that the EDF be budgetised, the EDFs do not currently fall under the general budget of the European Union and the general Financial Regulation but are instead implemented in accordance with specific financial rules,

               C.

               whereas the total amount of aid channelled through the EDF will increase considerably over the coming years because the amount of Union aid under the 10th EDF for the period 2008 to 2013 has been set at EUR 22 682 000 000 which represents a 64 % increase compared with the financial allocations under the 9th EDF; whereas there is a need for awareness of the looming problem of absorption capacity which requires full knowledge of appropriate expenditure,

               D.

               whereas the High Representative of the Union for Foreign Affairs and Security Policy told the European Parliament on 2 February 2011 that the Union’s Neighbourhood Policy had failed; whereas recent events in North Africa have shown that the combination of sharp demographic increases and stagnating economies is liable to create explosive situations; whereas those events illustrate that such demographic increases require successful economies and that policy vehicles are only appropriate when they are effective on the ground and produce positive change,

               1.

               Recalls that the EDF (EUR 22 682 000 000 for the current, 10th, EDF for 2008-2013) is not integrated in the Union budget, while being the main instrument for providing Union development aid to the people of the African, Caribbean and Pacific (ACP) countries and the overseas countries and territories (OCTs); notes that the EDF consists of several instruments: grants managed by the Commission, risk capital and loans to the private sector managed by the EIB under the Investment Facility and the FLEX mechanism, aiming at remedying the adverse effects of the instability of export earnings;

      EDF budgetisation

               2.

               Reiterates its support for EDF budgetisation, which will strengthen the democratic control, the accountability, and the transparency of funding and will provide more coherence in Union policy concerning ACP countries;

               3.

               Recalls once more the statement by the Commission that it wants to propose to incorporate the EDF into the Union budget during discussions on the next financial framework and that it will keep Parliament’s Committee on Budgetary Control fully informed of this initiative; insists, however, that the incorporation of the EDF into the Union budget must not lead to any overall reduction in development spending with respect to the two current funding instruments;

               4.

               Urges the Council and the Member States to respond positively to the Commission’s proposal and to agree that the EDF will be fully incorporated in the Union’s budget from 2014 onwards as part of the next financial framework; believes this measure to be long overdue and that the budgetisation of the EDF should take place at the earliest possible date;

      Development priorities

               5.

               Recalls the Commission’s commitment (13) to ensuring that a benchmark of 20 % of its allocated assistance under the Development Cooperation Instrument (DCI) is dedicated to basic and secondary education and basic health; calls for reporting against the same benchmark to be provided for the EDFs; calls on the Commission to prioritise support to strengthen health systems by focusing especially on targeting the poorest people, to improve the quality of learning and to help establish a policy framework which favours the poor and which is gender responsive; calls on the Commission to take full account of the recommendations by the Court of Auditors as formulated in its Special Reports No 10/2008 and 12/2010; calls on the Commission to increase this share to 25 % in the future; urges the Commission to place greater emphasis on maternal health and stresses the importance of education and awareness of sexual and reproductive health as an integral part of the women’s health agenda, since this is the Millennium Development Goal in respect of which progress has been most disappointing;

               6.

               Welcomes the record levels of commitments reached in 2009; is also satisfied by a number of other improvements in the Commission’s management of the EDF, including the strengthening of the accounting environment (new accrual-based system), better guidance to fragile states for budget support and more effective, efficient and closely monitored external audits; recognises, however, that, first and foremost, fragile States require a better defined strategy and more attention needs to be paid to particular sectors of their economies;

               7.

               Underlines once more, that the 10th EDF should focus on a limited number of areas, while involving non-governmental organisations (NGOs) that are effective at local level and that are properly audited, in order to avoid the harmful effects arising from the proliferation of objectives; calls on the Commission to make merit-based use of local- and European-based NGOs, in particular in cases where the management of projects and programmes by NGOs and international organisations (Multi-Donor Trust Funds) is more efficient and cost-effective than management by the Commission and where their activity generates projects that remain sustainable after the financial support has expired; urges the Commission to provide Parliament with clear information on the composition of NGO’s own resources for specific projects which are partly financed by the EDF and by the NGOs themselves;

               8.

               Highlights that development aid mechanisms should be also aimed at promoting wealth creation and supporting small and medium-sized enterprises, since wealth creation remains a crucial tool in alleviating poverty; recalls that an estimated EUR 800 000 000 000 is lost annually from developing countries through illicit capital flows, prevention of which could prove decisive in alleviating poverty and achieving the Millennium Development Goals;

      Financial management of the EDFs

               9.

               Notes that, in the Court of Auditors’ opinion, the Commission’s report on the Financial Management of the 8th-10th EDFs in 2009 ‘presents an accurate description of the achievement of the Commission’s operational objectives for the financial year (particularly concerning financial implementation and control activities)’, despite the negative impact of the economic crisis which has hit a large number of developing countries;

               10.

               Underlines, however, that the Commission’s follow-up of observations made by the Court of Auditors in a number of cases is inadequate (for example, the management of implementing organisations should be better supported, ex-ante checks should be improved by focusing more on keys risks and ‘the functionalities of CRIS audit’ should be developed to enable a more efficient and effective monitoring of audit); stresses that the Commission’s action on the Court of Auditors’ recommendations is an important element of accountability for the discharge authority; calls, therefore, on the Commission to inform Parliament’s competent committees on the actions it has taken or plans to take to eliminate the shortcomings as mentioned by the Court of Auditors;

               11.

               Is concerned at certain weaknesses identified by the Court of Auditors, in particular regarding public procurement procedures (14), ex-ante controls in Delegations (15) and partner countries’ internal control systems (16), and urges the Commission to pursue energetically and to broaden existing training programmes for staff working in Delegations and in the offices of national authorising officers;

               12.

               Notes that the statement of assurance of the Court of Auditors does not cover the 9th and 10th EDF resources, which are managed by the EIB and for which the EIB is responsible (17); finds it to be undesirable politically and for reasons of accountability that the Investment Facility is not covered by the Court of Auditors’ statement of assurance or by Parliament’s discharge procedure and agrees with the Court of Auditors that these provisions reduce the scope of Parliament’s powers of discharge, especially considering that EDF resources are derived from public money contributed by European taxpayers and not by the financial markets;

               13.

               Welcomes the opinion of the Court of Auditors that the final annual accounts of the 8th, 9th and 10th EDFs present fairly, in all material respects, the financial position of the EDFs as of 31 December 2009; notes, however, that the Court of Auditors draws attention to an understatement of the amount of guarantees received in respect of pre-financing and to an overstatement of the amount of retention guarantees disclosed in the notes to the financial statements; calls on the Commission to remedy these shortcomings without delay;

               14.

               Notes that, at the end of 2009, the financial statements regarding the on-going amount of guarantees received in respect of prefinancing included an amount of EUR 413 600 000 and that this amount was understated by EUR 82 300 000, or 19,9 %; notes also the fact that the amount of the retention guarantees in respect of the financial statements was EUR 186 200 000 and that this amount was overstated by EUR 58 400 000, or 31,4 %; calls on the Commission to explain on a case-by-case basis the reasons for these under-and overstatements;

      The accounting system of the EDFs

               15.

               Welcomes the introduction of the new accrual-based accounting system (ABAC-EDF) in February 2009 and underlines the fact that the 2009 annual accounts of the EDFs are the first set of accounts which have been prepared using ABAC-EDF; notes that the new accounting system reduces the number of manual adjustments needed and that it strengthens the accounting environment;

               16.

               Notes that EuropeAid’s ex-post controls identified an increased frequency of encoding errors (contract type, contract start and end dates); but recalls that, at the end of 2009, EuropeAid’s central services set up a department to monitor the quality of information encoded in CRIS, which should further improve the reliability of the data used to prepare the annual accounts; wishes to be kept informed of progress made in this respect;

      Regularity of transactions

               17.

               Welcomes the fact that the Court of Auditors considers that the revenue, commitments and payments underlying the accounts of the 8th, 9th and 10th European Development Funds for the year ended 31 December 2009 are in all material respects legal and regular (statement of assurance, paragraph VIII); regrets, however, that the Court of Auditors had to draw special attention to the high frequency of non-quantifiable errors affecting commitments and payments but not included in the estimation of total error; recalls, even if the supervisory and control systems of EuropeAid have significantly improved year after year, that, overall, the Court of Auditors assessed EuropeAid’s supervisory and control systems as only partially effective; expects, consequently, from the Commission, a constant follow-up and requests a report on the measures taken to remedy the abovementioned problems;

               18.

               Notes that the errors that were detected concerned compliance with tendering rules, legal deadlines for the signature of contracts and provisions regarding mandatory guarantees; notes that, as regards budget support commitments, the Court of Auditors found that, in the context of the Commission’s dynamic interpretation of the Cotonou Agreement (18), EuropeAid acted in compliance with that agreement’s requirements; takes note of the fact that, according to the Commission, no payment was made without being covered by financial guarantees;

               19.

               Notes that the main types of quantifiable errors detected on project payments were the following: (a) accuracy: calculation errors; (b) occurrence: absence of invoices or other supporting documents for services rendered or goods supplied; (c) eligibility: expenditure incurred outside the implementation period or related to items not foreseen in the contract, undue payment of VAT or non-application of mandatory penalties; notes that the non-quantifiable errors mainly concerned non-compliance with applicable rules on bank guarantees and incorrect calculations of the reimbursement of advances from contractors; notes, however, the remark of the Commission which pointed out that all the errors in calculating the reimbursement of advances were rectified before the end of the contract; despite this, calls on the Commission to enhance ex-ante controls to prevent this type of error and possible losses as a result of non-compliance with the bank guarantee rules;

      Monitoring of implementing organisations

               20.

               Welcomes the efforts of EuropeAid and of the Delegations in addressing the various weaknesses which still exist in the financial procedures and controls of implementing organisations, supervisors and National Authorising Officers (NAOs); invites EuropeAid to strengthen its efforts in these areas in future; recalls also the recommendations of the Court of Auditors that EuropeAid should continue its efforts to ensure that the Delegations record data in the CRIS Audit in a comprehensive and timely manner (19);

               21.

               Is deeply concerned at the Court of Auditors’ finding that the monitoring and supervision by Delegations is only partially effective; deplores the lack of capacity of most NAOs in beneficiary countries, which results in poorly documented and ineffective checks, as well as the shortcomings in the financial procedures and controls instituted by implementing organisations and supervisors; shares the Court of Auditors’ view that Delegations are subject to resource constraints which often limit their capacity to perform certain activities; calls on the Commission to address this problem without delay;

      Special Report No 18/2009 of the Court of Auditors

               22.

               Welcomes the Special Report No 18/2009 of the Court of Auditors on the Effectiveness of EDF support for Regional Economic Integration in East Africa and West Africa and the thorough analysis carried out by the Court of Auditors, and deplores the unsatisfactory situation revealed therein; stresses nevertheless its concern at the lack of complementarity between the Commission’s regional and national cooperation strategies and emphasises that bringing regional and national strategies in line with one another is essential to increase the effectiveness of the aid provided;

               23.

               Is deeply concerned about the insufficient absorption capacity of regional organisations; urges the Commission, during the mid-term review of the regional strategies foreseen for the first half of 2011, to take account of the regional cooperation situation and to pay special attention to the possibility of revising the amounts allocated;

               24.

               Finds it nevertheless unacceptable that the Court of Auditors, through a lack of proper reporting, was ‘unable to assess’ a number of projects financed;

               25.

               Takes the view that the Union should be represented in each Regional Organisation by a specifically assigned Head of Delegation and that Union Delegations should be mandated to discuss the aligning of membership in different regional groupings;

               26.

               Underlines that, in its Special Report No 18/2009, the Court of Auditors assessed EDF support for regional economic integration in East Africa and West Africa, to which a considerable proportion — over 50 % — of EDF funding was allocated, as only partially effective; asks the Commission to inform Parliament about the measures being taken following the requests formulated by Parliament in its resolution of 5 May 2010 (20) accompanying its Decision on discharge to the 7th, 8th, 9th and 10th EDFs, before the start of the discharge procedure 2010; would also welcome a complete overview showing which of these measures have been implemented effectively in the regions concerned;

               27.

               Acknowledges that regional economic integration can create growth and jobs in developing countries and thereby contribute to reducing poverty; welcomes, accordingly, the fact that EDF funding in this area has more than doubled over the financial period in question;

               28.

               Regrets that EDF support for regional integration has not yet been wholly effective, mainly owing to lack of capacity on the part of the African authorities, the overlapping membership of African regional economic organisations leading to the duplication of efforts and dispersion of resources, and inadequate support and coordination from Commission Delegations, principally due to lack of resources;

               29.

               Calls, accordingly, on the Commission to step up capacity-building for East African and West African regional economic organisations and their institutions, including support for national parliaments and local civil society, and to encourage convergence between regional blocs with a view to eliminating overlapping membership over time, whilst taking care to respect partner countries’ ownership of the process;

               30.

               Calls on the Commission and the European External Action Service to allocate more resources in order to enable Union Delegations to manage regional integration processes more effectively, and to ensure greater coordination and more coherence between regional and national programmes;

               31.

               Insists that the Union should not pressure African states to sign up to Economic Partnership Agreements (EPAs) any faster or which cover a greater range of issues than they want to, and that the Union should avoid undermining existing regional groupings by agreeing EPAs with individual countries;

               32.

               Insists that smaller states’ fund allocation, especially for the least-developed countries, should be more focused on sustainable economic development, such as through wealth creation mechanisms, so as to reduce the dependency on regional economic ‘giants’, such as Nigeria in West Africa; calls on the Commission to continue its funding for regional programmes, otherwise known as Intra-ACP Programmes, which cover several or all countries in a particular region;

      Use of accrued interest

               33.

               Does not agree with the use of accrued interest on EDF treasury accounts (including transfers from the period 2001-2007), which is estimated at EUR 34 000 000, to cover staff expenditure but considers that it should only be used for expenditure for projects and programmes; asks the Commission to explain what the policy in the past was and, if necessary, to make proposals to amend the regulation in force in line with this principle without delay;

      Budget support

               34.

               Recalls that Parliament’s assessment of budget support should not focus on the risks only but also on the benefits, as well as on the risks and benefits of alternative aid delivery; asks the Commission to provide information concerning those cases in which the goals set for EU budget support were accomplished and concerning recipient countries in which specific problems were encountered;

               35.

               Is aware that budget support is a controversial development tool offering the advantage of low transaction costs, increased ownership and enhanced dialogue between partners and donors, while at the same time, involving the risk of misappropriation and unwanted use of funds when public finance management by recipient countries does not prove sufficiently transparent, accountable and effective; stresses that budget support is not the right answer to every situation and should not be perceived to be the sole option;

               36.

               Recalls that, in accordance with Article 25(1)(b) of Regulation (EC) No 1905/2006 of the European Parliament and of the Council (21), budget support may be granted if the partner country’s management of public spending is sufficiently transparent, reliable and effective; in that context, expresses its concern at the risks of inefficient and ineffective public spending that are entailed by the Commission’s ‘dynamic’ interpretation of the eligibility criteria; calls on the Commission to continue its efforts to substantiate its decisions concerning the eligibility of budget support and to ensure that all financing agreements provide a comprehensive and clear basis for the assessment of compliance with payment conditions;

               37.

               Regrets the high level of errors in budget support payments (35 %); reiterates its call for more transparent and objective eligibility criteria for budget support, and supports the Court of Auditors’ recommendation for the Commission to ‘clearly specify the indicators, targets, calculation methods and verification sources’ (22); calls on the Commission to intensify audits and supervisory and control systems and to monitor and report back on the extent to which these criteria are being met, in line with the provisions of Article 25(1)(b) Regulation (EC) No 1905/2006;

               38.

               Welcomes the publication of the green paper on the future of EU budget support to third countries (COM(2010) 586) but deplores the fact that, despite previous calls by Parliament, the Commission has failed to draw up an annual report on the use of budget support, including useful, comprehensive, reliable, analytical and evaluative information on planned and disbursed budget support, achievement of expected results as set out by donor objectives and country strategies, existence and quality of complementary conditions, the effectiveness of the dialogue, the state of donor harmonisation, the complementary capacity building which has taken place and the effect of that capacity building, achievement of improved country systems, accountability institutions, public finance management institutions, monitoring and evaluation institutions, the amount and rate of irregular expenditure, and an analysis of the typology of irregularities (systemic and non-systemic) brought to light by controls and audits and remedial action taken;

               39.

               Recalls that Parliament’s role as regards budget support is to hold the Commission accountable for the results of spending, and that budget support is an aid instrument which requires a paradigm shift in oversight behaviour, moving from mere control over inputs to the checking of results against indicators, thus ensuring that support spending benefits the population of the recipient country;

               40.

               Considers, within the scope of the revision of the guidelines on budgetary support by the Commission, that particular attention must be given to supervisory and control systems; expects the Commission to strengthen the monitoring and annual reporting on the compliance with the eligibility criteria; recalls that capacity building projects within the scope of budgetary support operations are subject to the same supervisory and control system as any other project, which includes audits;

               41.

               Recalls that under the 10th EDF, as compared with the 8th and 9th EDFs, there was a significant increase in the share of cumulative financing decisions accounted for by budget support and structural adjustment; expresses its concern about this development;

               42.

               Recalls that the Court of Auditors found in its Annual Report on the EDFs, concerning the financial year 2009 that budget support payments were affected by a high frequency of non-quantifiable errors and that ‘[t]he main explanation was that the Delegations’ public finance management assessment reports did not explain the criteria against which progress had to be assessed […], the progress made and the reasons why the reform programme may not have been implemented according to the recipient Government’s plan’ (23); urges the Commission to evaluate the budget support payments with even greater rigour and to tighten up its payment procedures from now on;

               43.

               Calls on the Commission to ensure that the specific conditions for performance-based variable tranches clearly specify the indicators, targets, calculation methods and verification sources and that Delegations’ reports provide a structured and formalised demonstration of public finance management progress by clearly setting the criteria against which progress was to be assessed, the progress made and the reasons why the reform programme may have not been implemented according to plan;

               44.

               Calls on the Commission to take all necessary measures in order to combat corruption in the beneficiary states, through maintaining a close dialogue with partner governments on corruption issues and, by taking a pro-active approach, to ensure that the appropriate systems are in place and that sanctions are available when necessary; believes that the provision of funds should be reconsidered if such cooperation is not forthcoming and if no guarantee as to the basic effectiveness of the systems to tackle corruption can be obtained;

               45.

               Reiterates its opinion that the involvement of national parliaments, civil society and local authorities in partner countries is indispensable in order to achieve genuine ownership of the process and repeats its call on the Commission to make every effort in order to improve dialogue with these bodies at all the different stages of the programming process;

               46.

               Urges the Commission to help partner countries develop parliamentary control and audit capacities and to involve national parliaments, as well as local civil society partners, in drawing up their national development strategies;

               47.

               Invites its relevant committees to establish direct contacts with their sister committees in the parliaments of the recipient ACP countries in order to encourage and support their role in ensuring the effectiveness of aid through parliamentary oversight activities;

               48.

               Urges the Commission to ensure better visibility for Union-funded activities overseas;

      Disclosure statement by beneficiary countries

               49.

               Recalls once more its view that development aid in general and budget support in particular should be tied to an ex-ante disclosure statement, issued by the recipient country’s government and signed by its finance minister, concerning selected issues that affect the governance and accountability structure of a beneficiary country;

      Human resources

               50.

               Is extremely concerned that vacancy rates in third-country Delegations are considered as a ‘critical risk’ (24) and that resource constraints, staff shortages and high staff turnover significantly hamper the Commission’s effective implementation of EDF funds, in particular as regards project management, training, monitoring, and reliable and timely audits; consequently expects the European External Action Service to make it a priority to equip all Delegations with adequate levels of qualified staff, notably experts in the field of development;

      EuropeAid

               51.

               Regrets that, although the ex-ante controls by authorising officers in EuropeAid’s central services were assessed by the Court of Auditors as effective, it concluded that EuropeAid’s supervisory and control systems were only partially effective in ensuring that payments are regular;

               52.

               Reminds the Commission that:

                           —

                           EuropeAid should, in the context of its planned review of its overall control strategy, develop a key indicator of the estimated financial impact of the uncorrected errors after all controls have been implemented,

                           —

                           EuropeAid should, in the context of this review, assess the cost-effectiveness of the various controls, notably of the transactional ex-post control system, and examine the relevance and feasibility of an annual audit of a representative statistical sample of closed projects,

                           —

                           regarding budget support, EuropeAid should ensure that the specific conditions for payments are clearly defined and that Delegations’ reports provide a structured and formalised demonstration of progress achieved in public finance management;

      The Investment Facility

               53.

               Very much welcomes the fact that, during the discharge procedure for the financial year 2009, the EIB presented, for the first time, its annual report on the implementation of the Investment Facility to Parliament’s Committee on Budgetary Control and gave extensive replies to the written and oral questions from its members; requests the EIB to conclude a framework agreement with Parliament’s committee responsible for the discharge procedure for the coming years, including the information to be provided by the EIB;

               54.

               Expects the EIB to confirm that there is no overlap between projects it finances and those financed by the Commission and considers substantial improvements in coordination between the Commission and the EIB to be indispensable, as the EIB Director-General for Operations outside the European Union told the Committee on Budgetary Control on 25 January 2011; asks itself whether EIB staff should be posted to Union Delegations; expects to receive, by the end of September 2011, a combined report from both institutions on the reinforcement of their cooperation and the agreed procedures including an analysis of the possible need to post EIB staff in the Delegations;

               55.

               Calls on the EIB to carry out thorough due diligence, verifying the presence of appropriate local public consultation, on development-related aspects of projects covered by the EU guarantee, prior to project approval, including the performance of financial intermediaries in using the loan granted by the EIB on these aspects; is of the opinion that, when it comes to lending in developing countries, the EIB should apply stringent enhanced due diligence in accordance with standardised procedures, following international best practices, concerning the fight against money laundering and the financing of terrorism;

               56.

               Calls once more on the EIB to focus its reporting on results and to present complete, relevant and objective information as regards outcomes, objectives set, objectives achieved and reasons for possible deviation, as well as evaluations carried out and a summary of evaluation results;

               57.

               Welcomes that the EIB now seems to be more committed to focusing on reporting on results, and that in the 2010 Annual Report on the Investment Facility which is currently being finalised, there will be more focus on results, compared to 2009; considers it a positive step forward that the EIB is currently working on development result indicators which should be ready for implementation towards the second half of 2011;

               58.

               Expects the next annual report of the EIB to be less theoretical and more practical, in particular on the results obtained by the various programs and actions financed by the Investment Facility;

               59.

               Calls on the EIB to forward to it additional information on the blacklist of fraudsters, whilst preserving the customary confidentiality of open cases; welcomes the EIB’s stated aim of setting up an anti-fraud unit and expects to receive regular updates on progress made in establishing it;

               60.

               Is surprised at the EIB’s statement in which it found that no fraudulent practice exists in the context of EIB Investment Facility programmes;

               61.

               Considers it indispensable to conduct an overall audit of all projects in developing countries financed by the EIB, which should not be restricted to major projects but should also review all appropriations and guarantees the EIB must write off;

               62.

               Invites the Commission to monitor and control closely the implementation of the Investment Facility with a view to guaranteeing that it fulfils its objective as a development tool, and to inform Parliament’s Committee on Budgetary Control on a regular basis of its findings.

      (1)  OJ C 303, 9.11.2010, p. 243.

      (2)  OJ C 303, 9.11.2010, p. 253.

      (3)  OJ L 317, 15.12.2000, p. 3.

      (4)  OJ L 287, 28.10.2005, p. 4.

      (5)  OJ L 314, 30.11.2001, p. 1 and OJ L 324, 7.12.2001, p. 1.

      (6)  OJ L 109, 26.4.2007, p. 33.

      (7)  OJ L 156, 29.5.1998, p. 108.

      (8)  OJ L 317, 15.12.2000, p. 355.

      (9)  OJ L 252, 25.9.2010, p. 39.

      (10)  OJ L 191, 7.7.1998, p. 53.

      (11)  OJ L 83, 1.4.2003, p. 1.

      (12)  OJ L 78, 19.3.2008, p. 1.

      (13)  Commission Declaration concerning Article 5 DCI, Annex to the Communication from the Commission to the European Parliament of 24 October 2006 (COM(2006) 628).

      (14)  Paragraph IX, Court of Auditors’ Annual Report 2009 on the EDFs.

      (15)  Point 30, Court of Auditors’ Annual Report 2009 on the EDFs.

      (16)  Point 5, Court of Auditors’ Annual Report 2009 on the EDFs.

      (17)  Point 3, Court of Auditors’ Annual Report 2009 on the EDFs.

      (18)  Points 28 and 29 of Special Report No 2/2005 of the Court of Auditors concerning EDF budget aid to ACP countries (OJ C 249, 7.10.2005, p. 1).

      (19)  Point 54, Court of Auditors’ Annual Report 2009 on the EDFs.

      (20)  OJ L 252, 25.9.2010, p. 109.

      (21)  Regulation (EC) No 1905/2006 of the European Parliament and of the Council of 18 December 2006 establishing a financing instrument for development cooperation (OJ L 378, 27.12.2006, p. 41).

      (22)  Point 55, Court of Auditors’ Annual Report 2009 on the EDFs.

      (23)  Point 25, Court of Auditors’ Annual Report 2009 on the EDFs.

      (24)  Point 40, Court of Auditors’ Annual Report 2009 on the EDFs.


title: 2007/637/EC: Council Decision of 26 September 2007 appointing four Spanish members and seven Spanish alternate members of the Committee of the Regions

text:
               4.10.2007

               EN

               Official Journal of the European Union

               L 258/29

      COUNCIL DECISION

   of 26 September 2007
   appointing four Spanish members and seven Spanish alternate members of the Committee of the Regions
   (2007/637/EC)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty establishing the European Community, and in particular Article 263 thereof,
   Having regard to the proposal from the Spanish Government,
   Whereas:

               (1)

               On 24 January 2006 the Council adopted Decision 2006/116/EC appointing the members and alternate members of the Committee of the Regions for the period from 26 January 2006 to 25 January 2010 (1).

               (2)

               Four members’ seats on the Committee of the Regions have fallen vacant following the end of the mandates of Mr MATAS PALOU, Mr MARTÍN MENIS, Mr REVILLA ROIZ and Mr RODRÍGUEZ IBARRA. Seven alternate members’ seats on the Committee of the Regions have fallen vacant following the end of the mandates of Ms GOROSTIAGA SÁIZ, Mr SÁNCHEZ AMOR, Mr VILLANUEVA RODRÍGUEZ, Ms AMOR PÉREZ, Mr DÍAZ ÁLVAREZ, Mr JAÉN PALACIOS and Ms de ESTEBAN MARTÍN,

         HAS DECIDED AS FOLLOWS:
   Article 1
   The following are hereby appointed to the Committee of the Regions for the remainder of the current term of office, which runs until 25 January 2010:

               (a)

               as members:

                           Mr Francesc ANTICH i OLIVER, Presidente del Gobierno de la Comunidad Autónoma de las Islas Baleares,

                           Mr Paulino RIVERO BAUTES, Presidente de la Comunidad Autónoma de Canarias,

                           Mr Guillermo FERNÁNDEZ VARA, Presidente de la Junta de Extremadura,

                           Ms Dolores GOROSTIAGA SAIZ, Vicepresidenta del Gobierno de Cantabria y Consejera de Empleo y Bienestar Social (change of mandate),

                     and

               (b)

               as alternate members:

                           Mr Vicente RAMBLA MOMPLET, Vicepresidente Primero y Consejero de Presidencia, Comunidad Valenciana,

                           Mr Jaime RABANAL GARCÍA, Consejero de Economía y Asuntos Europeos, Comunidad Autónoma del Principado de Asturias,

                           Mr Gabriel AMER AMER, Delegado del Gobierno de las Islas Baleares en Bruselas, Comunidad Autónoma de las Islas Baleares,

                           Mr José Félix GARCÍA CALLEJA, Director General Asuntos Europeos y Cooperación al Desarrollo, Comunidad Autónoma de Cantabria,

                           Ms María de DIEGO DURANTEZ, Directora General Relaciones Institucionales y Acción Exterior, Comunidad Autónoma de Castilla y León,

                           Ms Lucía MARTÍN DOMÍNGUEZ, Directora General de Acción Exterior, Comunidad Autónoma de Extremadura,

                           Mr Antonio GONZÁLEZ TEROL, Director General de Asuntos Europeos, Comunidad Autónoma de Madrid.

         Article 2
   This Decision shall take effect on the date of its adoption.

      Done at Brussels, 26 September 2007.

            For the Council

            The President

         J. SILVA

      (1)  OJ L 56, 25.2.2006, p. 75.


66/236/EEC: Decision of 5 April 1966 of the Representatives of the Governments of the Member States of the European Economic Community, meeting within the Council, on tobacco


title: 2012/622/EU: Decision of the European Parliament of 10 May 2012 on discharge in respect of the implementation of the budget of the European Medicines Agency for the financial year 2010

text:
               17.10.2012

               EN

               Official Journal of the European Union

               L 286/377

         DECISION OF THE EUROPEAN PARLIAMENT
   of 10 May 2012
   on discharge in respect of the implementation of the budget of the European Medicines Agency for the financial year 2010
   (2012/622/EU)
   THE EUROPEAN PARLIAMENT,

               —

               having regard to the final annual accounts of the European Medicines Agency for the financial year 2010,

               —

               having regard to the Court of Auditors’ report on the annual accounts of the European Medicines Agency for the financial year 2010, together with the Agency’s replies (1),

               —

               having regard to the Council’s recommendation of 21 February 2012 (06083/2012 – C7-0051/2012),

               —

               having regard to Article 319 of the Treaty on the Functioning of the European Union,

               —

               having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (2), and in particular Article 185 thereof,

               —

               having regard to Regulation (EC) No 726/2004 of the European Parliament and of the Council (3) establishing a European Medicines Agency, and in particular Article 68 thereof,

               —

               having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (4), and in particular Article 94 thereof,

               —

               having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

               —

               having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on the Environment, Public Health and Food Safety (A7-0107/2012),

               1.

               Postpones its decision on granting the Executive Director of the European Medicines Agency discharge in respect of the implementation of the Agency’s budget for the financial year 2010;

               2.

               Sets out its observations in the resolution below;

               3.

               Instructs its President to forward this Decision and the resolution that forms an integral part of it to the Executive Director of the European Medicines Agency, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

            The President

         Martin SCHULZ

            The Secretary-General

         Klaus WELLE

      (1)  OJ C 366, 15.12.2011, p. 27.

      (2)  OJ L 248, 16.9.2002, p. 1.

      (3)  OJ L 136, 30.4.2004, p. 1.

      (4)  OJ L 357, 31.12.2002, p. 72.
   ANNEX

      EUROPEAN PARLIAMENT RECOMMENDATIONS OVER PAST YEARS

               European Medicines Agency

               2006

               2007

               2008

               2009

               Performance

               n.a.

                           —

                           The principle of sound financial management was not rigorously fulfilled: the Agency’s cash forecast had not been prepared properly

                           —

                           The Agency carries out its operations in two locations, exposing it to additional costs (direct posts: EUR 450 000)

                           —

                           Good results in having put in place sophisticated activity-based budgeting and user-satisfaction monitoring

                           —

                           Calls on the Agency to reassess its brokerage policy in light of the financial risks incurred throughout the year

                           —

                           The Agency carries out its operations in two locations, exposing it to additional costs

                           —

                           Unacceptable that the Agency does not apply the relevant rules for management of conflicts of interest effectively

                           —

                           12 very important & 1 critical recommendations from several earlier IAS Annual Audit Reports were still not implemented in 2009
                           Unacceptable that the Agency is not complying with its Code of Conduct, urges the Agency to document & assess its controls & file the relevant allocation decisions which must be made available on its website

                           —

                           Urges the Agency to inform the discharge authority of the steps it has taken to ensure the independence of its experts since its inception

                           —

                           Asks the Agency to complete & regularly update the European Experts Database as required by Regulation (EC) No 726/2004

               Carry-over of appropriations

               The budgetary principle of annuality was not strictly observed: the utilisation rate for commitment appropriations was less than 60 %. more than 40 % of the commitments were carried over to the financial year 2007

               The agency had difficulties in the programming, the budgeting of its activities, and their implementation: EUR 32 000 000 euro were carried over and EUR 4 000 000 were cancelled: Calls on the agency to fulfil the principle of annuality

               Calls on the Agency to fulfil the annuality principle: the budget appropriations carried over and cancelled have amounted respectively to EUR 36 000 000 (19,7 % of the budget) and EUR 9 700 000 (5,3 % of the budget)

               Court of Auditors reports a carryover of EUR 19 500 000 (38 % of Agency’s commitments), EUR 14 800 000 of this was for activities not yet implemented at year end, indicates delays in the implementation of activities financed form Title II. Agency is not in accordance with budgetary principle of annuality

               Procurement procedures

               n.a.

                           —

                           Transparency issues at the level of selection criteria and at the level of the evaluation methods for the price criteria and joint procurement procedure

                           —

                           Recalls on improving procurement management

               Calls on the Agency to improve the quality of its procurement procedures so as to put an end to the shortcomings: i.e. as regards the application of evaluation methods for the price criteria and as regards the essential need for justifications for the choice procedure

                           —

                           Concerned that the Court of Auditors findings of errors in the procurement procedures corresponding to a significant amount of the Agency’s total budget for the financial year of 2009. Shortcomings in evaluation criteria such as price and choice of procedures

                           —

                           Urges the Agency to improve the quality of its procurement procedures in order to put an end to the shortcomings identified by the Court of Auditors

                           —

                           Calls on the Agency to set up a multiannual procurement plan

                           —

                           Calls on the Agency to ensure the results of procurement procedures are verified before contracts are awarded

               Revenue from fees

               The Agency has not been able to make a comprehensive analysis of the costs incurred by Member States’ rapporteurs in order to obtain an objective and documented basis on which to adapt its payments to them, and consequently the fee charged to its customers: This situation was in breach of the Fee Regulation

               Transparency issues on the amount repaid to the Member States’ rapporteurs

               Calls on the Commission to evaluate the Agency’s endemic high level of cash holdings (EUR 41 887 000)

               Calls on the Agency to ensure better coordination between its financial & scientific services in order to remedy the unacceptable long day of recovery orders

               Internal Audit

               n.a.

               n.a

               Calls on the Agency to fulfil a ‘critical recommendation’ made the Commission’s Internal Audit Service related to the area of experts’ conflicts of interests, and other eight ‘very important’ recommendations in the areas of documentation of conflicts of interest for the Agency’s staff, databases used to support the administrative procedures for evaluation and development of guidelines for filing and full implementation of such guidelines

                           Unacceptable that the Executive Director’s statement of assurance does not mention any reservations which is inconsistent with the undertaking given in its Code of Conduct adopted by the Agency in the light of the statements of assurance from the IAS & the Court of Auditors

                           Asks the Agency to forward the IAS reports since 2007 to the discharge authority by 30 June 2011

                           Urges the Agency to rapidly implement the IAS recommendations, provide the discharge authority with an overview of measures taken & implemented

          ---documentbreak---

               17.10.2012

               EN

               Official Journal of the European Union

               L 286/378

         RESOLUTION OF THE EUROPEAN PARLIAMENT
   of 10 May 2012
   with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the European Medicines Agency for the financial year 2010
   THE EUROPEAN PARLIAMENT,

               —

               having regard to the final annual accounts of the European Medicines Agency for the financial year 2010,

               —

               having regard to the Court of Auditors’ report on the annual accounts of the European Medicines Agency for the financial year 2010, together with the Agency’s replies (1),

               —

               having regard to the Council’s recommendation of 21 February 2012 (06083/2012 – C7-0051/2012),

               —

               having regard to Article 319 of the Treaty on the Functioning of the European Union,

               —

               having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (2), and in particular Article 185 thereof,

               —

               having regard to Regulation (EC) No 726/2004 of the European Parliament and of the Council (3) establishing a European Medicines Agency, and in particular Article 68 thereof,

               —

               having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (4), and in particular Article 94 thereof,

               —

               having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

               —

               having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on the Environment, Public Health and Food Safety (A7-0107/2012),

               A.

               whereas the Court of Auditors, in its report on the annual accounts of the European Medicines Agency for the financial year 2009, qualified its opinion on the legality and regularity of the underlying transactions,

               B.

               whereas in its Decision of 10 May 2011, Parliament decided to postpone its decision on granting the Executive Director of the Agency discharge in respect of the implementation of its budget for 2009 (5) but then granted it in its Decision of 25 October 2011 (6),

               C.

               whereas on 25 October 2011 Parliament granted the Executive Director of the Agency discharge for implementation of the Agency’s budget for the financial year 2009, and in its resolution accompanying the discharge decision, inter alia:

                           —

                           emphasises that the discharge authority should continue to carefully monitor during the upcoming discharge procedures the level of implementation of the measures undertaken to address the Agency’s serious weaknesses disclosed by the reports from both the Court of Auditors and the Internal Audit Service (IAS),

                           —

                           called on the Agency to inform the discharge authority of the action taken on issues relating to effective compliance with its Code of Conduct as regards the management of conflicts of interest,

                           —

                           insisted, but also warned the Agency, that all the action mentioned in the respective audit reports, including the one for the year 2010, should be fully implemented before the start of the next discharge procedure,

               D.

               whereas the Court of Auditors has stated that it has obtained reasonable assurances that the annual accounts for the financial year 2010 are reliable and that the underlying transactions are legal and regular,

               E.

               whereas the budget of the Agency for 2010 was EUR 208 400 000, which represents an increase of 7,20 % over the financial year 2009;

               F.

               whereas the initial contribution of the Union to the budget of the Agency for 2010 was EUR 28 279 600 compared with EUR 36 390 000 in 2009 (7), and whereas the overall contribution of the Union to the budget of the Agency for 2010 was EUR 36 600 100,

      Follow-up of 2009 discharge

               1.

               Expects the Agency to inform the discharge authority of the results of the action taken with regard to the following issues:

                           —

                           the process of adoption by the Management Board of the action plan with specific measures and a timetable for implementation to remedy the shortcomings identified in the procurement procedures;

                           —

                           the thorough verification of the effective use of the existing procedures for the identification and management of conflicts of interest for its staff and experts;

                     calls on the Court of Auditors to give reasonable assurances that the Agency has effectively addressed its shortcomings relating to procurement procedures, and on the IAS to give assurances the discharge authority on the effective use of existing procedures for the management of conflicts of interest for the Agency’s staff and experts;

               2.

               Calls on the Agency and on the IAS to immediately verify whether all the action specified in the audit reports, including that for 2010, were fully implemented and to inform the discharge authority accordingly;

               3.

               Notes from the Agency that on 15 December 2011 the Management Board endorsed a proposal for the Agency to present at the June 2012 meeting of the Management Board the detailed implementing measures related to the:

                           —

                           establishment of the new structure and scope of the Advisory Committee on Procurement and Contract,

                           —

                           implementation of a multiannual procurement plan,

                           —

                           establishment of the responsibilities for the above;

                     insists that the Management Board sends the Action Plan to the discharge authority at the latest by 30 June 2012;

      Budget and financial management

               4.

               Recalls that the initial Union contribution to the Agency for 2010 amounted to EUR 26 335 100; notes however that EUR 10 265 000 coming from the recovery of surplus, was added to that amount which, as a result, makes a total Union contribution of EUR 36 600 100 for 2010;

               5.

               Stresses that the general budget of the European Union for the financial year 2010, as definitively adopted, presents two different figures as the initial contribution of the Union to the budget of the Agency, i.e. EUR 28 279 600 and EUR 26 335 100; urges, therefore, the Commission to inform the discharge authority of the exact subsidy allocated to the Agency;

               6.

               Acknowledges that the Agency’s budget is financed both from the Union budget and from fees paid by the pharmaceutical industry when applying for, obtaining or maintaining Union marketing authorisations; finds from the Annual Activity Report that in 2010, 73 % of the revenue of the Agency is estimated to have derived from the fee revenue and that, in parallel with the increase in the fee-based revenue, the relative percentage income from the Union contribution fell from 23 % in 2006 to 14 % in 2010;

               7.

               Finds from the Annual Activity Report that 17 exceptions were entered in the register of exceptions in 2010;

               8.

               Notes weaknesses in the Agency’s system for validating creditor claims in respect of IT contractors; takes note of the Agency’s statement that the weaknesses noted by the Court of Auditors related to a human error and were corrected, that it has strengthened its ex-ante operational and financial control of invoices and that no further weaknesses have been detected; invites the Court of Auditors to verify and inform Parliament in this respect;

      Carryover appropriations and cancellations

               9.

               Acknowledges from the Agency’s Report on budgetary and financial management that automatic carryovers to the 2011 financial year totalled EUR 41 655 049,44, or 20,90 % of the appropriation committed, and that one non-automatic carryover to the 2011 financial year was requested totalling EUR 3 500 000, or 1,68 % of the final appropriation;

               10.

               Is concerned that the Court of Auditors has once more reported a high carryover of EUR 17 600 000 in Title II (Administrative expenditure); stresses that this situation indicates delays in the implementation of activities financed from Title II of the Agency’s budget and that the Agency is not complying with the budgetary principle of annuality;

               11.

               Notes with concern the additional comment from the Court of Auditors that only 36 % of the appropriations carried forward to 2011 correspond to expenditure accrued from 2010, while the remaining 64 % of amounts carried over did not relate to the 2010 financial year;

               12.

               Points out that the Court of Auditors had already reported a high level of carryovers in previous financial years; notes, in particular, that in the 2009 budget the Court of Auditors reported a carryover of EUR 19 500 000 (38 % of the Agency’s commitments) and in 2008 it was EUR 36 000 000 (19,7 % of the 2008 budget);

               13.

               Establishes from the Agency’s Report on budgetary and financial management that in 2010, appropriations totalling EUR 9 074 296,49 were cancelled compared with EUR 7 693 276,58 in 2009; notes the Agency’s reply that the level of cancelled expenditure appropriations is a result of stringent monitoring of actual revenue and adjustments to expenditure; urges the Agency to take immediate action to reduce the level of cancelled appropriations and to adopt an Action Plan with concrete measures — including aimed at a stricter estimation of the fee income and the period to be received — and deadlines to address this persistent problem by 30 June 2012;

      Procurement Procedures and Transfers

               14.

               Ascertains from the Annual Activity Report that, in addition to the 165 specific contracts concluded under framework contracts, 70 new procurement contracts exceeding EUR 25 000 in value were concluded by the Agency during 2010;

               15.

               Notes from the Agency’s Report on budgetary and financial management that, during 2010, 13 transfers of a total amount of EUR 13 714 500 (15,29 % of the final appropriations) were approved; further notes that the Agency already adopted 10 transfers of a total amount of EUR 9 609 000 in 2009; calls on the Agency to adopt an Action Plan with concrete measures and deadlines to remedy this persistent problem;

      System of remuneration for services

               16.

               Urges the Agency to introduce a system of remuneration for services provided by national Member State authorities based on the Member States’ real costs; also calls on the Agency to promptly inform the discharge authority when this system is put in place; notes in this regards that a new payment system was already presented to the Management Board at their meeting of 10 December 2009 but it, in the end, rejected the proposal;

               17.

               Supports all efforts at the executive and administrative levels of the Agency to reform the payment system for services provided by Member States’ authorities which should clearly be based on the real costs; urges the Management Board to move forward on this issue;

               18.

               Notes that by refusing a new payment system, the Management Board accepts and takes direct responsibility for very important risks, such as non-compliance with legislative requirements, the potential financial impact of the current remuneration system, and reputation; is therefore not ready to accept this questionable attitude from the Management Board and calls on the Agency to adopt an Action Plan on this matter and to inform the discharge authority by 30 June 2012;

      Human resources management

               19.

               Urges the Agency to strengthen its recruitment processes and ensure that its documentation is correctly managed; calls in particular on the Agency to improve the documentation of the recruitment files for contract agents and on the Appointing Authority to adopt the reserve lists proposed by the selection committees;

               20.

               Acknowledges also from the Court of Auditors that the Agency did not distinguish sufficiently between employment-agency staff and contract staff recruitment; calls therefore on the Agency to use employment-agency staff to cover short-term needs only and grant transparent access for contract staff positions;

      Management of conflict of interest

               21.

               Urges the Agency to provide central coordination for the development of a common experts’ assessment methodology applicable to all national competent authorities and for its monitoring; notes that, after the Memorandum of Understanding (MoU) signed between the Agency and each national competent authority on the monitoring of the scientific level of the experts became effective on 4 July 2011, the Agency still has responsibility for developing and coordinating a common experts’ assessment and experts’ methodology;

               22.

               Emphasises that the Agency needs to finalise the signing of MoUs on the independence of scientific evaluation, to amend internal procedures correspondingly, and to update the experts’ database; takes note of the Agency’s reply that MoUs on the independence of scientific evaluation have been signed as of October 2011 and that the experts’ database was updated to allow for the direct uploading of the electronic declarations of interest into the database; calls on the Agency to inform the discharge authority of the status of implementation of these measures by 30 June 2012; also invites the IAS to inform the discharge authority when these very important recommendations are effectively implemented by the Agency;

               23.

               Calls on the Agency to inform the discharge authority of the way in which it ensures that procedures for the involvement of experts are fully applied until the MoUs on the independence of scientific evaluation have been signed by all national competent authorities;

               24.

               Calls on the Agency to report on its involvement in the organisation of conferences by private organisations such as the Organisation for Professionals in Regulatory Affairs;

               25.

               Takes note from the Agency of the adoption on 1 February 2012 of the ‘Decision on rules relating to Articles 11a and 13 of the Staff Regulations concerning the handling of declared interests of employees of the European Medicines Agency’ by the Management Board and of the ‘Decision on rules concerning the handling of declared interests of national experts on secondment, visiting experts, trainees and interims of the European Medicines Agency’ by the Executive Director; calls on the Agency to inform the discharge authority of the concrete measures undertaken to implement these decisions by 30 June 2012 in order to enable Parliament to assess the procedures in place for handling potential conflicts of interest for all categories listed in the two decisions, plus the members of the Management Board;

               26.

               Notes with concern that in the financial circuits there are also potential conflicts of interests in processing payments due to insufficient segregation of duties; urges the Agency therefore to duly take into account this very significant risk and take immediate action to address this deficiency;

               27.

               Notes that the former Executive Director of the Agency wrote to the Agency on 28 December 2010 outlining the activities which he was intending to take up at the end of his term of office; considers the first decision of 11 January 2011, taken by the Chairman of the Agency Management Board, to authorise the new activities of the former Executive Director of the Agency to be a breach of Union rules relating to conflicts of interest, in particular with regard to Title II, Article 16, of the Staff Regulations of the Officials of the European Union; recalls that according to Title II, Article 11, and title IV, Article 91, of the Conditions of Employment of Other Servants of the European Union, this provision applies by analogy to temporary agents and to contract employees; considers the fact that the Management Board adopted limitations on the future activities of the former Executive Director on 17 March 2011 — only after strong public protest — to be clear proof that the Agency did initially not apply the Staff Regulations properly, which in turn raises serious questions about their application of the rules in general; asks the Executive Director to present a detailed report on the implementation of Article 16 of the Staff Regulations within the Agency;

               28.

               Is seriously concerned by the failure of the Agency and its Management Board to effectively address the matter of conflict of interests; takes note that in April 2012 the Agency adopted a revised policy on the handling of conflicts of interests of Scientific Committee members and experts, as well as a breach of trust procedure for Committee members and experts; insists that implementation and concrete results are the only elements to prove the efficiency of the new policy and procedure; believes that the Agency should verify, during 2012, all declarations of interest of experts and Scientific Committee members; therefore, calls on the Agency to provide data — figures and names included — following the enforcement of this procedure; calls also on the Agency to have verified at least 75 % of the experts’ declarations of interest and at least 75 % of the Scientific Committee members’ declarations of interest and to provide the discharge authority with the verification results and with an Action Plan with a calendar concerning the rest of the verification process for declarations of interest by the end of August 2012;

               29.

               Recalls that, following the employment of the Agency’s former Executive Director by a consultancy that advises, among others, pharmaceutical companies almost immediately after he left the Agency, the discharge authority raised concerns over the actual independence of the Agency and the way in which its Management Board implemented Article 16 of the Staff Regulations; is furthermore concerned by the allegations that the Agency’s former Executive Director created his own consultancy firm while still in office; calls on the Agency to provide the discharge authority with further information on this matter by 30 June 2012;

               30.

               Urges the Court of Auditors to finalise and present its current audit of conflict of interest in the Agency;

               31.

               Regrets the fact that many of the experts failed to publish their declarations of interests, and that the comparison of declarations of interests published by the relevant national agencies and by the Agency shows significant differences in some cases; deplores, furthermore, the fact that at least one member of the Management Board of the Agency, also substitute member of the Committee for Medicinal Products for Human Use, failed to declare his recent management responsibilities in a pharmaceutical firm;

               32.

               Welcomes the Agency’s initiative to publish the declarations of interests of its staff occupying management positions and of the experts involved in the evaluation of medicinal products on its website; notes with interest that the list of experts also indicates their risk level in terms of conflict of interest; believes that at least the previous working places – professional background – should also be published along with the declarations of interest to allow verification of the declarations of interest and identify possible conflicts; therefore invites the Agency to provide Parliament with information on the status of implementation of these measures by 30 June 2012;

               33.

               Urges the Agency to carry out checks on the declarations of interests submitted to it, and a detailed check on a random basis, notably by implementing a system under which declarations are cross-checked against information held by industry and by the relevant national agencies;

               34.

               Is nevertheless concerned by the Agency’s approach vis-à-vis the scrutiny of declarations of interest, which is primarily based on trust rather than on verification; is notably concerned by the fact that the comparison of the experts’ declaration of interest published by the relevant national agencies and by the Agency reveals significant discrepancies in some cases; therefore calls on the Agency to establish a genuine mechanism enabling proper scrutiny of the declarations of interest received by the Agency and to inform the discharge authority on this matter by 30 June 2012;

               35.

               Urges the Agency to apply its conflict of interest policy to its Management Board;

               36.

               Notes that the Agency has been audited by the Court of Auditors in the framework of the Special Report on conflicts of interest management in the Union agencies; acknowledges from the Court of Auditors that the above-mentioned Special Report will be published by the end of June 2012; is of the opinion that, given the extent of criticisms questioning conflict of interest issues in the Agency, the decision on discharge should be postponed until the publication of the Special Report to take into account the findings of the Court of Auditors in this respect;

               37.

               Considers that the effective management of conflict of interest is crucial to maintain public trust in the work of the Agency;

               38.

               Acknowledges the Agency’s willingness to publish the Declarations of Interests of experts involved in the evaluation of medicinal products; but deplores the fact that many of the experts have yet to publish their Declarations of Interests;

               39.

               Takes note of the fact that the Management Board adopted limitations on the subsequent professional activities of the former Executive Director on 17 March 2011 after public protest supported by Parliament regarding its decision in January 2011 to authorise his new activities fully; recalls in this context that a delegation of the Committee on the Environment, Public Health and Food Safety visited the Agency in June 2011 to follow up this case and to receive further information on the improved procedures; recalls, furthermore, that the Committee held an exchange of views with the Executive Director — designate in July 2011 where the issue was addressed again in order to avoid future recurrences;

      Performance

               40.

               Considers the assessment of the adequacy and effectiveness of the systems in place to support the provision of scientific advice for human medicines in the Agency as an important tool to measure the Agency’s performance;

               41.

               Takes note of the increased number of products and services (opinions, reports, scientific advice, inspections) compared with 2009; is also satisfied with the implementation of Regulation (EC) No 141/2000 of the European Parliament and of the Council of 16 December 1999 on orphan medicinal products (8) and encourages the Agency to continue its action to provide incentives for research, development and placing on the market of designated orphan medicinal products;

      Internal audit

               42.

               Acknowledges from the Agency that 11 ‘very important’ recommendations from the IAS still need to be implemented; notes that one of them has been reported as implemented by the Agency and is now under the IAS review;

               43.

               Is concerned that seven of these ‘very important’ recommendations have been delayed by up to more than 12 months; notes that these recommendations concern:

                           —

                           the compliance with Article 110 of the Staff Regulations;

                           —

                           the recruitment process;

                           —

                           the use of databases;

                           —

                           the definition of rules on filing for products;

                           —

                           the guidelines on the management of potential conflicts of interest of staff;

                           —

                           the procedures on involvement of experts;

                           —

                           the segregation of duties in the financial circuits;

                     urges the Agency therefore to promptly address these deficiencies identified by the IAS and to inform the discharge authority of the measures taken;

               44.

               Is further concerned that the Agency rejected two ‘very important’ recommendations relating to:

                           —

                           the fees paid to national agencies;

                           —

                           the reduction in the number of consultants working in-house;

                     urges the Agency to explain immediately to the discharge authority the rejection of these two recommendations;

               45.

               Notes that if the IAS in its follow-up report of September 2010 continues to find ‘inadequate assessment of the independence of the experts’, the Executive Director should publish a list of all the authorised medicinal products concerned and report how the Agency intends to rectify these procedures;

               46.

               Draws attention to its recommendations from previous discharge reports, as set out in the Annex to this resolution;

               47.

               Refers, in respect of the other observations accompanying its Decision on discharge, which are of a horizontal nature, to its resolution of 10 May 2012 (9) on the performance, financial management and control of the agencies.

      (1)  OJ C 366, 15.12.2011, p. 27.

      (2)  OJ L 248, 16.9.2002, p. 1.

      (3)  OJ L 136, 30.4.2004, p. 1.

      (4)  OJ L 357, 31.12.2002, p. 72.

      (5)  OJ L 250, 27.9.2011, p. 173.

      (6)  OJ L 313, 26.11.2011, p. 27.

      (7)  OJ L 64, 12.3.2010, p. 445.

      (8)  OJ L 18, 22.1.2000, p. 1.

      (9)  Texts adopted, P7_TA(2012)0164. (see page 388 of this Official Journal).


title: 2005/36/EC: Commission Decision of 8 September 2004 amending Decision 2004/166/EC on aid which France intends to grant for the restructuring of the Société Nationale Maritime Corse-Méditerranée (SNCM) (notified under document number C(2004) 3359)Text with EEA relevance

text:
               21.1.2005

               EN

               Official Journal of the European Union

               L 19/70

      COMMISSION DECISION

   of 8 September 2004
   amending Decision 2004/166/EC on aid which France intends to grant for the restructuring of the Société Nationale Maritime Corse-Méditerranée (SNCM)
   (notified under document number C(2004) 3359)
   (Only the French text is authentic)
   (Text with EEA relevance)
   (2005/36/EC)
   THE COMMISSION OF THE EUROPEAN COMMUNITIES,
   Having regard to the Treaty establishing the European Community, and in particular the first subparagraph of Article 88(2) thereof,
   Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof,
   Having regard to Commission Decision 2004/166/EC of 9 July 2003 (1), and in particular Article 2 thereof,
   Whereas:
   1.   PROCEDURE
   1.1.   Procedural overview

               (1)

               On 9 July 2003, the Commission adopted Decision 2004/166/EC on aid which France intends to grant for the restructuring of Société Nationale Maritime Corse-Méditerranée (SNCM) (hereinafter final decision), in which it declared part of the aid notified to be compatible with the single market provided that certain conditions were met. One of these conditions, which is stated in Article 2 of the final decision, is that until 31 December 2006 SNCM was to refrain from acquiring new ships and signing contracts for building, ordering or chartering new or renovated ships. SNCM could only operate the 11 ships which it already possessed at the date of the final decision, namely: the Napoléon Bonaparte, Danielle Casanova, Île de Beauté, Corse, Liamone, Aliso, Méditerranée, Pascal Paoli, Paglia Orba, Monte Cinto and Monte d'Oro. The last paragraph of this Article reads: ‘If for reasons beyond its control SNCM has to replace one of its ships before 31 December 2006, the Commission may authorise such a replacement on the basis of a duly reasoned notice served by France’.

               (2)

               In a letter dated 23 June 2004 (2), the French authorities requested permission from the Commission to replace the vessel Aliso with the Asco in the list of ships included in Article 2 of the final decision. Also, due to the difficulties encountered by SNCM in selling the Asco, the French authorities requested permission from the Commission to sell either the Aliso or the Asco, contrary to the provision made in the restructuring plan (3).

         1.2.   Name of the measure

               (3)

               The name of the measure is ‘Amendments to the Commission’s final decision of 9 July 2003 on aid for the restructuring of SNCM’.

         1.3.   Beneficiary of the measure

               (4)

               The beneficiary of the aid for restructuring is SNCM, a shipping company operating services to Corsica and northern Africa from the French mainland. The beneficiary of the proposed amendments would therefore be SNCM.

         1.4.   Objectives of the amendments

               (5)

               The main objective of the proposed amendments is to allow SNCM to use the Aliso rather than the Asco by amending the list of ships it is authorised to use under Article 2 of the final decision, and to facilitate the sale of the fourth ship provided for in the final decision by allowing potential purchasers to choose between the Aliso and the Asco, which are identical vessels.

         2.   DETAILED DESCRIPTION OF THE PROPOSED MEASURES
   2.1.   The proposal to replace the Aliso with the Asco

               (6)

               In their letter of 23 June 2004, the French authorities proposed replacing the Aliso with the Asco in the list of ships that SNCM is authorised to use throughout the restructuring period. This list is explicitly included in the second paragraph of Article 2 of the final decision of 9 July 2003. The high-speed vessel Asco had not yet been sold at the date of the French authorities’ request.

               (7)

               The reason for the proposed change is that given SNCM’s difficulties in disposing of the Asco, the French authorities wish to make it possible for the company to dispose of either of the two ships.

               (8)

               The French authorities have also forwarded a certificate from the Marseilles port authorities testifying that the Aliso has been berthed since 2 November 2003.

         2.2.   Proposal to allow SNCM to sell either the Asco or the Aliso

               (9)

               The French authorities have also requested permission for SNCM to sell either the Asco or the Aliso under the restructuring plan, depending on the requirements of the potential buyers.

         3.   EVALUATION OF THE PROPOSED AMENDMENTS
   3.1.   Impact of the proposal to replace the Aliso with the Asco

               (10)

               The Commission notes that the Asco and the Aliso are ‘sister ships’, i.e. twin vessels built using the same plans and by the same shipyard. They have exactly the same size, shape and capacity.

               (11)

               The Commission considers that replacing one ship with the other is not intended to increase SNCM’s capacity and would therefore not affect the scope of the final decision, in particular with regard to the condition limiting the company’s capacity as contained in Article 2 of that decision.

               (12)

               The Commission also notes that the composition of SNCM’s authorised fleet may only be modified for reasons beyond SNCM’s control. In the case at hand, the Commission considers that the problems encountered by SNCM in selling the Asco are beyond the company’s control and were not foreseeable at the time the final decision was adopted.

         3.2.   Impact of the proposal to allow SNCM to sell either the Asco or the Aliso

               (13)

               The Commission considers that if SNCM were to find a buyer for the Aliso instead of the Asco, the sale of the Aliso would have the same effect on the Company’s capacity as the sale of the Asco. It also considers that the French authorities would be in compliance with the restructuring plan in respect of the undertaking to sell the four vessels composing SNCM’s operational fleet, since the Company has already sold three of the four ships whose disposal was envisaged in the restructuring plan.

               (14)

               If SNCM sells the Aliso instead of the Asco, the Commission considers that the condition regarding the disposal of the four ships as provided for in the restructuring plan will be deemed to have been fulfilled.

         4.   CONCLUSIONS

               (15)

               To conclude, the Commission considers that the amendments requested by the French authorities do not alter the scope of the provisions in the final decision and that aid to restructuring in the form of recapitalisation, subject to strict compliance with the conditions thus modified, is compatible with the single market.

               (16)

               The Commission invites France:

                           —

                           to notify the Commission as soon as possible, and at the latest within 15 working days from the date of receipt of this decision, which information it considers to be covered by the obligation of professional secrecy pursuant to Article 25 of Regulation (EC) No 659/1999 (4),

                           —

                           to inform the beneficiary of the aid of this decision as soon as possible, concealing, as need be, the information it considers to be covered by the obligation of professional secrecy, communication of which to the beneficiary of the aid might be detrimental to some of the parties concerned, and to indicate in the version sent, if need be, any other information that it considers to be covered by the obligation of professional secrecy and has not concealed,

         HAS ADOPTED THIS DECISION:
   Article 1
   1.   In the second paragraph of Article 2 of Decision 2004/166/EC, the word ‘Aliso’ is replaced with ‘Asco’.
   2.   Under the last indent in recital 97 of that Decision, the words ‘high-speed ship Asco’ are replaced with ‘either the high-speed ship Asco or its sister ship, the high-speed ship Aliso’.
   Article 2
   This Decision is addressed to the French Republic.

      Done at Brussels, 8 September 2004.

            For the Commission

         Loyola DE PALACIO

            Vice-President

      (1)  OJ L 61, 27.2.2004, p. 13.

      (2)  Registered by the Commission under reference TREN(2004) A/26015.

      (3)  See recital 97 of the final decision.

      (4)  OJ L 83, 27.3.1999, p. 1. Regulation as amended by the 2003 Act of Accession.


title: Council Decision of 18 June 1973 concluding the Agreement between the European Economic Community and the World Food Programme on the supply of food aid in the form of skimmed-milk powder for developing countries

text:
  24 . 12 . 73                        Official Journal of the European Communities                          No L 355/ 1
                                                             II
                                        (Acts whose publication is not obligatory)
                                                   COUNCIL
                                                  COUNCIL DECISION
                                                     of 18 June 1973
               concluding the Agreement between the European Economic Community and the World
               Food Programme on the supply of food aid in the form of skimmed-milk powder for
                                                   developing countries
                                                       (73/408/EEC)
 THE COUNCIL OF THE EUROPEAN COMMUNITIES ,                      Food Programme on the supply of food aid in the
                                                                 form of skimmed-milk powder for developing coun
                                                                 tries, the text of which Agreement is annexed hereto,
Having regard to the Treaty establishing the Euro               is hereby concluded.
pean Economic Community, and in particular Articles
 113 , 114 and 228 thereof;
                                                                                Article 2
Having regard to the proposal from the Commission ;
                                                                The President of the Council is hereby authorized to
Whereas in Council Regulation (EEC) No 2721/72                  designate the persons empowered to sign the Agree
 (*) of 19 December 1972 on the supply of food aid              ment, and to confer upon them the necessary powers
in the form of skimmed-milk powder, it was decided              to bind the Community.
to place at the disposal of the World Food Pro
gramme 29 450 metric tons of skimmed-milk powder,
                                                                Done at Luxembourg, 18 June 1973 .
HAS DECIDED AS FOLLOWS :
                                                                                For the Council
                         Article 1
                                                                                The President
On behalf of the Community, the Agreement between
the European Economic Community and the World                                                       A. LAYENS
(l) OJ No 291 , 28. 12. 1972, p. 28 .