52003PC0471

Proposal for a COUNCIL REGULATION on the establishment of structures for the management of the European satellite radionavigation programme

(presented by the Commission)

EXPLANATORY MEMORANDUM

It is imperative to entrust to a public authority the supervision of the deployment and operational phases of the European satellite radionavigation system, given its strategic nature and the need to ensure that essential public interests are adequately defended and represented.

To this end, it is proposed to set up a Supervisory Authority (Chapter 1) and a Centre or Security and Safety (Chapter 2).

The Supervisory Authority

Article 2 defines the tasks of the Supervisory Authority and the instruments placed at its disposal for the accomplishment of these tasks.

The Supervisory Authority will conclude the concession contract with whichever consortium is selected on completion of the Galileo development phase, in accordance with the procedure laid down in Article 2(3) of the statutes of the Galileo Joint Undertaking, [1] and will take steps to ensure compliance by that consortium with the obligations arising from that contract.

[1] Council Regulation (EC) No 876/2002 of 21 May 2002 setting up the Galileo Joint Undertaking (OJ L 138, 28.5.2002, p. 1-8).

It will be responsible for managing and controlling the use of the Community funds allocated to the programme.

Given the importance of system safety and reliability, the Supervisory Authority will draw up, in collaboration with the Centre or Security and Safety mentioned in Article 20 and the concessionaire, procedures aimed at ensuring compliance with the rules laid down in these areas.

Although there is no question of wishing to change the existing rules, Member States that have lodged files with the International Telecommunication Union on the use of the frequencies necessary to ensure the operation of the system will authorise the Supervisory Authority to assign the right of exclusive use thereof to the concessionaire. The Authority will be the sole body dealing with the concessionaire in these matters while at the same time being responsible for organising the necessary coordination procedures with the Member States.

One of the Supervisory Authority's tasks will be to assist the Commission in matters involving satellite radionavigation, particularly in cases where legislative and regulatory measures prove necessary.

Article 3 establishes that the Supervisory Authority is the owner of the entire satellite radionavigation system, including whatever may have been developed by the concessionaire during the deployment phase, unless the concession contract specifically provides otherwise. In point of fact, the Joint Undertaking, in its capacity as owner of all the tangible and intangible assets created or assigned to it during the development phase pursuant to Article 6 of its statutes, will, at the moment of its dissolution on completion of the development phase, transfer ownership of all these assets to the Supervisory Authority.

Under Article 3(1) of this Regulation, the Authority will assign to the concessionaire right of use but not ownership, which will remain in public hands. This is justified, in particular, on the grounds that the programme definition and development phases have been financed entirely from public funds and all the components thus developed will be placed at the disposal of the concessionaire. This also represents a quid pro quo for the fact that a major part of the deployment phase would have to be financed from Community appropriations.

Article 4 concerns the legal status of the Supervisory Authority, which is a Community body whose status is modelled on that of a regulatory agency [2] and which has legal personality. Its seat is located in Brussels and it is empowered to set up offices away from its seat. This may prove necessary, for instance, at the headquarters of the entity responsibility for designing the system, and subsequently, at the concessionaire's location.

[2] Commission Communication of 11 December 2002 (COM(2002)718 final) and Commission Regulation (EC, Euratom) No 2343/2002 of 19.11.2002.

Articles 5 and 6 describe the composition, functioning and tasks of the Administrative Board, which acts as the Supervisory Authority's control unit, with the Director assuming responsibility for day-to-day management.

Under the provisions of Article 5, the Administrative Board is made up of 12 members: 6 are appointed by the Commission, and 6 by the Council.

Under Article 6, the Administrative Board will be in charge of running the Supervisory Authority:

- It will appoint the Director, pursuant to Article 7, over whom it will exercise disciplinary authority;

- It will adopt the Financial Regulation of the Supervisory Authority;

- It will adopt the work programme, budget and organisational chart of the Supervisory Authority;

- It will adopt the the annual general report;

- It will lay down the rules governing the languages of the Supervisory Authority; if necessary, it will create and set up the Scientific and Technical Committee, to which it may entrust research and expert valuation tasks;

- It will adopt its own rules of procedure.

Articles 7 and 8 concern the Director of the Supervisory Authority, who, having been appointed by the Administrative Board on the basis of a list proposed by the Commission, acts as the Authority's legal representative and is responsible for its day-to-day management under the control of the Administrative Board. The Director prepares the decisions and documents to be adopted by the Board and is responsible for directing and managing the staff of the Supervisory Authority.

Under Article 9, the Administrative Board is empowered to set up a Scientific and Technical Committee bringing together under the auspices of the Supervisory Authority the most highly qualified experts in satellite radionavigation and related areas, mainly with a view to being in a position to anticipate potential developments affecting these technologies in the future.

Articles 10 to 13 concern the budget of the Supervisory Authority, viz. its content (Article 10), the procedure for its adoption (Article 11), its execution (Article 12) and its Financial Regulation (Article 13). Article 14 concerns the checks to be carried out with regard to the management of the funds entrusted to the Supervisory Authority by the Anti-Fraud Office and the Court of Auditors.

Article 15 provides for the Protocol on Privileges and Immunities to be applied to the Supervisory Authority, on the grounds that it is a Community body (Article 4).

Article 16 deals with the status of staff who will be subject to the Regulations and rules applicable to officials and other servants of the European Communities, on the understanding that the Administrative Board, with the Commission's agreement, will draw up the necessary procedural rules.

Article 17 concerns the contractual liability and non-contractual liability arrangements, as well as the arrangements applicable to the staff of the Supervisory Authority.

Under Article 18, Community legislation on access to documents and protection of data of a personal nature is applied to the Supervisory Authority.

Article 19 seeks to enable countries which are not members of the European Union to participate in the Supervisory Authority, provided they have concluded a prior agreement to this effect with the Community. Indeed, countries such as Norway or Switzerland need to have a right to participate in the Supervisory Authority because of their involvement in the previous phases of Galileo through their contribution to the GalileoSat programme of the European Space Agency.

The Centre or Security and Safety

The programme seeks to set up a European satellite navigation system which should be regarded as a sensitive infrastructure in terms of safety and reliability.

The object of ensuring the safety and reliability of the system is to protect it against attacks (malicious or otherwise) and to prevent its use for purposes that run counter to the interests of the European Union and its Member States.

The pursuit of this objective necessitates the setting-up of a permanent fully operational decision-making structure to deal with the various elements of this problem (hereinafter referred to as the "Centre or Security and Safety").

Article 20 sets up, under the auspices of the Secretary-General of the Council and without prejudice to what may be decided at the next Intergovernmental Conference, a Centre or Security and Safety to be made up of a permanent small team ready to go into action at any moment.

Article 21 lists the tasks of the Centre or Security and Safety, which include the obligation to carry out expert assignments linked to the safety and reliability of the system as well as to participate in the elaboration of, and promotion of compliance with, a future operational and regulatory framework in the field of safety and reliability. It will also need to be capable of taking the measures required in real time in the event of a crisis, mainly in relation to the operator of the system in association with the Supervisory authority.

Under Article 22, the Secretary-General of the Council is entrusted with the task of laying down, in association with the Commission, policy guidelines for this centre, which will be placed under his responsibility and in which the Commission will be represented.

In addition to the creation of this Centre or Security and Safety, the Council will be able to call on COREPER to create, in accordance with Article 19(3) of the rules of procedure [3] of the Council, a committee for the safety and reliability of the European satellite radionavigation system. This committee will deal with questions of safety and reliability affecting the European satellite radionavigation system and falling within the jurisdiction of the Council.

[3] OJ L 230, 28.2.2002, p. 7

2003/0177 (CNS)

Proposal for a COUNCIL REGULATION on the establishment of structures for the management of the European satellite radionavigation programme

THE COUNCIL OF THE EUROPEAN UNION

Having regard to the Treaty establishing the European Community, and in particular Article 308 thereof,

Having regard to the proposal from the Commission [4],

[4] OJ C [...], [...], p. [...].

Having regard to the opinion of the European Parliament [5],

[5] OJ C [...], [...], p. [...].

Whereas:

(1) The conclusions of the European Council in Cologne (3 and 4 June 1999), Feira (19 and 20 June 2000), Nice (7 to 11 December 2000), Stockholm (23 and 24 March 2001), Laeken (14 and 15 December 2001), Barcelona (15 and 16 March 2002) and Brussels (20 and 21 March 2003) have stressed the strategic nature of the Galileo satellite radionavigation programme which is cofinanced by the European Union and the European Space Agency.

(2) It is imperative to supervise the deployment and operational phases of the European satellite radionavigation system, given its strategic nature and the need to ensure that essential public interests are adequately defended and represented.

(3) Galileo is the first European space programme to be financed and managed by the European Union (in association with the European Space Agency). It will allow the development of numerous applications in areas that are associated, directly or indirectly, with Community policies, such as transport (positioning and measurement of the speed of moving bodies, insurance, motorway tolls, law enforcement (surveillance of suspects, measures to combat crime, customs and excise operations (investigations on the ground, etc.) agriculture (grain or pesticide dose adjustments depending on the terrain, etc.), fisheries (monitoring of boat movements).

(4) Accordingly, while this Community action would appear to be necessary in order to achieve these objectives, the fact remains that the Treaty, in the absence of a specific space policy, has made no provision for conferral of the necessary powers. Consequently, Article 308 should be invoked with a view to the creation of this Supervisory Authority and this Centre or Security and Safety.

(5) On a number of occasions, and particularly in its conclusions of 5 April 2001 and 26 March 2002, the Council came out in favour of private sector participation in the development and operating phases of the programme.

(6) To this end, the Supervisory Authority will be able to conclude a concession contract with whichever consortium is selected on completion of the Galileo development phase and take steps to ensure compliance by that consortium with the obligations -and, in particular, public service obligations - arising from the concession contract.

(7) In view of the requirement that it should own the various system components, it will assign the right of use thereof to the concessionaire for the duration of the concession.

(8) The Authority will be responsible for managing and controlling the use of the Community funds allocated to the programme.

(9) There would appear to be a need for Member States that have lodged files with the International Telecommunication Union on the use of the frequencies necessary to ensure the operation of the system to assign the right of exclusive use thereof to the concessionaire, so as to enable the latter to provide the requisite services stipulated in the specifications, while at the same time being able to rely on a single mouthpiece in the form of the Supervisory Authority.

(10) The Supervisory Authority will be able to assist the Commission in matters involving satellite radionavigation, particularly in cases where legislative and regulatory measures prove necessary.

(11) Following the dissolution of the Joint Undertaking (on completion of the development phase), the Joint Undertaking will transfer to the Supervisory Authority ownership of the entire satellite radionavigation system (EGNOS and Galileo), including whatever may have been developed by the concessionaire during the deployment phase; this is justified on the grounds that the programme definition and development phases have been financed entirely from public funds and all the components thus developed will be placed at the disposal of the concessionaire; it also represents a quid pro quo for the fact that a major part of the deployment phase would have to be financed from Community appropriations.

(12) The legal status of the Supervisory Authority should be such as to enable it to act as a legal person in the discharge of its tasks.

(13) The Administrative Board will be the Supervisory Authority's control unit, with the Director assuming responsibility for day-to-day management.

(14) Provision needs to be made for the possible creation of a Scientific and Technical Committee to be responsible for research and expert valuation tasks.

(15) The Director of the Supervisory Authority will be the latter's legal representative and will see to its day-to-day management under the control of the Management Committee.

(16) The budgetary and financial provisions applicable to the Supervisory Authority will need to be in line with Commission Regulation (EC, Euratom) No 2343/2002 of 23 December 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.

(17) The funds paid to the Supervisory Authority will need to be checked by the Court of Auditors and by the Anti-Fraud Office (OLAF).

(18) The Protocol on Privileges and Immunities should be applied to the Supervisory Authority, on the grounds that it is a Community body.

(19) Staff should be subject to the Regulations and rules applicable to officials and other servants of the European Communities.

(20) Steps must be taken to ensure that the Supervisory Authority complies with Community legislation governing access to documents and with legislation on the protection of physical persons with regard to the treatment of data of a personal nature.

(21) Steps should also be taken to make it possible for countries which are not members of the European Union to participate in the Supervisory Authority, provided they have concluded a prior agreement to this effect with the Community, particularly when these countries have been involved in the previous phases of the programme through their contribution to the GALILEOSAT programme of the European Space Agency.

(22) The European satellite radionavigation system should be regarded as a sensitive infrastructure in terms of safety and reliability.

(23) Measures must be put in place to ensure the safety and reliability of the system against attacks (malicious or otherwise) and to prevent its use for purposes that run counter to the interests of the European Union and its Member States.

(24) The pursuit of this objective necessitates the setting-up of a permanent fully operational decision-making structure to deal with the various elements of this problem.

(25) This operational structure, known as the Centre or Security and Safety, should, in particular, be capable of taking, in real time, such measures as may be required in the event of a crisis, especially by providing the operator with the necessary instructions (for example, jamming or cutting off the signal); in addition, it will provide an interface with the security authorities (European, Member State, third country and Nato) and with the operator.

HAS ADOPTED THIS REGULATION:

Chapter 1: The Supervisory Authority

Article 1

Aim and objective

A Supervisory Authority is hereby set up to manage the public interests relating to the European satellite radionavigation programme.

Article 2

Tasks

With a view to accomplishing the objective set out in Article 1, the Supervisory Authority shall carry out the following tasks:

- It shall act as a licensing authority vis-à-vis the private concessionaire responsible for implementing and managing the programme deployment and operating phases; under this head, it shall conclude with the latter the concession contract; it shall ensure that the concessionaire complies with the concession contract and the specifications annexed thereto; it shall grant the concessionaire the right to use the tangible and intangible assets referred to in paragraph 1 of Article 3 for the duration of the concession.

- It shall manage the Community funds allocated to the European satellite radionavigation programme in the phases following on from the development phase.

- It shall assist the Centre or Security and Safety provided for in Article 22 in monitoring compliance by the concessionaire with the safety and reliability rules.

- It shall act as the depositary of all the frequencies necessary to ensure the operation of the system and will be responsible for coordinating Member State actions in this respect; it shall deal directly with the concessionaire on matters relating to the use of these frequencies.

- It shall assist the Commission in preparing the measures to be taken for the implementation of the European satellite radionavigation programme and shall provide it with the technical, scientific and administrative support needed to accomplish its tasks.

- It may accomplish such budgetary implementation tasks as are entrusted to it by the Commission and that are linked to the European satellite radionavigation programme in accordance with the provisions of Article 54 (2) (b) of the Financial Regulation applicable to the budget of the European Union.

Article 3

Ownership

1. Unless the concession contract specifically provides otherwise, the Supervisory Authority shall be the owner of all the tangible and intangible assets which are transferred to it by the Galileo Joint Undertaking on completion of the development phase and which may be created or developed by the concessionaire during the deployment and operational phases.

2. The procedures governing ensuing transfers of property will, in the case of the Joint Undertaking, be set out in the course of the winding-up proceedings laid down in Article 21 of the statutes of the Galileo Joint Undertaking annexed to Regulation (EC) No 876/2002 and, in the case of the concessionaire, in the concession contract.

Article 4

Legal status, seat, local offices

1. The Supervisory Authority is a Community body with legal personality.

2. In each Member State, the Supervisory Authority shall possess the most extensive legal capacity accorded to legal persons under national law. It may, in particular, acquire or dispose of movable and immovable property and be a party to legal proceedings.

3. The seat of the Supervisory Authority shall be located in Brussels. The Supervisory Authority may set up its own local offices in the Member States, subject to the agreement of the latter.

4. The Supervisory Authority shall be represented by its Director.

Article 5

The Administrative Board

1. The Supervisory Authority shall have an Administrative Board to execute the tasks listed in Article 6. In addition, the Administrative Board shall assist and monitor the Director in the execution of his tasks.

2. The Administrative Board shall be made up of twelve members. Six shall be appointed by the Commission, and six by the Council of the European Union. The term of office shall be five years. This term of office shall be renewable once

3. The Administrative Board shall appoint a Chairman and a Vice-Chairman from among its members. The Vice-Chairman shall automatically replace the Chairman if the latter is not in a position to perform his duties. The term of office of the Chairman and of the Vice-Chairman shall be two and a half years and shall be renewable. In any event, however, the term of office of the Chairman and that of the Vice-Chairman shall expire the moment they cease to be members of the Administrative Board.

4. Meetings of the Administrative Board shall be convened by its Chairman. The Director of the Supervisory Authority shall participate in the deliberations. The Administrative Board shall meet at least twice a year in ordinary session. It shall also meet at the initiative of its Chairman or at the request of at least a third of its members. The Administrative Board may invite any person with potentially relevant opinions to attend its meetings in the capacity of an observer. The members of the Administrative Board may, subject to the provisions of its rules of procedure, be assisted by advisers or by experts. The Administrative Board's secretarial services shall be provided by the Supervisory Authority.

5. Administrative Board decisions shall be adopted on the basis of a two-thirds majority of its members.

6. Each member shall have one vote. The Director of the Supervisory Authoriy shall not take part in the vote.

The rules of procedure set out in greater detail the arrangements governing voting, especially the conditions whereby one member can act on behalf of another and also, where appropriate, the rules governing quorums.

Article 6

The tasks of the Administrative Board

1. The Administrative Board shall appoint the Director in accordance with Article 7(2).

2. The Administrative Board shall adopt, before 30 September each year and after receiving the Commission's opinion, the work programme of the Supervisory Authority for the coming year and shall transmit it to the European Parliament, the Council and the Commission; this work programme shall be adopted without prejudice to the annual budgetary procedure.

3. The Administrative Board shall exercise its budgetary powers in accordance with Articles 10, 11 and 12.

4. The Administrative Board shall decide, after having obtained the agreement of the Commission, on whether to accept any legacies, donations or grants from other Community sources.

5. The Administrative Board shall exercise disciplinary authority over the Director.

6. The Administrative Board shall define the organisational structure of the Supervisory Authority and draw up the Supervisory Authority's staff policy pursuant to Article 16(1).

7. The Administrative Board shall adopt the special provisions necessary for the implementation of the right of access to the documents of the Supervisory Authority, in accordance with Article 18.

8. The Administrative Board shall adopt the annual report on the activities and prospects of the Supervisory Authority and shall transmit it, by 15 June at the latest, to the European Parliament, the Council, the Commission, the European Economic and Social Committee and the Court of Auditors.

9. Each year the Supervisory Authority shall transmit to the budgetary authority any relevant information on the results of the assessment procedures.

10. The Administrative Board shall adopt its own rules of procedure.

11. The Administrative Board shall adopt the rules to be applied to the Supervisory Authority regarding the use of languages.

Article 7

The Director

1. The Supervisory Authority shall be managed by its Director, who shall act independently in the exercise of his functions. Without prejudice to the respective powers of the Commission and the Administrative Board, the Director shall not seek or accept any instruction from any government or from any official body.

2. The Director shall be appointed, on the basis of merit as well as skills and experience, from a list of candidates proposed by the Commission; he may be removed from office by the Administrative Board. The Administrative Board shall reach its decision on the basis of a majority of three quarters of its members. The Director's term of office shall be five years. This term of office may be renewed once for a maximum period of five years.

3. Parliament or the Council may call upon the Director to submit a report on the performance of his duties.

Article 9

The tasks of the Director

1. The Director shall be responsible for representing the Supervisory Authority and shall be in charge of its management.

2. The Director shall prepare the work of the Administrative Board. He shall participate, without having the right to vote, in the work of the Board.

3. The Director shall be responsible for implementing the annual work programme of the Supervisory Authority under the control of the Administrative Board.

4. The Director shall take the necessary measures, notably the adoption of internal administrative instructions and the publication of notices, so as to ensure the functioning of the Supervisory Authority in accordance with this Regulation.

5. The Director shall make an estimate of the revenue and expenditure of the Supervisory Authority pursuant to Article 11 and shall implement the budget of the Supervisory Authority pursuant to Article 12.

6. Each year the Director shall prepare a draft general report and shall submit it to the Administrative Board.

7. With regard to the staff of the Supervisory Authority, the Director shall exercise the powers provided for in Article 16.

8. With the approval of the Administrative Board, he may adopt decisions on the establishment of local offices in the Member States in accordance with Article 4.

Article 9

The Scientific and Technical Committee

1. The Administrative Board may set up a Scientific and Technical Committee and appoint its members and chairman from among acknowledged experts in the fields on which the Committee will be called upon to give a ruling.

2. At the request of the Administrative Board, the Scientific and Technical Committee may be given responsibility for:

- delivering opinions on technical questions or on proposals involving major changes in the design of the European satellite radionavigation system;

- making recommendations on the modernisation of the system;

- carrying out any other task necessary for the development of expertise in the area of satellite radionavigation.

3. Subject to approval by the Administrative Board, the Scientific and Technical Committee shall draw up its own rules of procedure.

Article 10

Budget of the Supervisory Authority

1. All Supervisory Authority revenue and expenditure shall be the subject of forecasts for each financial year, coinciding with the calendar year, and shall be entered in its budget.

2. The budget shall be balanced in terms of revenue and expenditure.

3. Without prejudice to other resources and dues yet to be defined, revenue accruing to the Supervisory Authority shall include a Community grant entered in the general budget of the European Community in order to ensure a balance between revenue and expenditure.

4. In particular, Supervisory Authority expenditure shall cover staff remuneration, administrative and infrastructure expenditure, operating costs and expenditure associated with the functioning of the Scientific and Technical Committee and the contracts and grant agreements concluded by the Supervisory Authority with a view to implementing the European satellite radionavigation programme.

Article 11

Establishment of the budget

1. Each year the Administrative Board, on the basis of a draft prepared by the Director, shall make an estimate of the revenue and expenditure of the Supervisory Authority for the following financial year. These estimates, including a draft list of posts, shall be transmitted by the Administrative Board to the Commission by 31 March at the latest.

2. The estimates shall be transmitted by the Commission to the European Parliament and to the Council (hereinafter referred to as the budgetary authority) together with the preliminary draft general budget of the European Union.

3. On the basis of the estimates, the Commission shall enter in the preliminary draft general budget of the European Union the predictions it considers necessary in respect of the list of posts and the amount of the grant to be charged to general budget in accordance with Article 272 of the Treaty.

4. The budgetary authority shall authorise the appropriations under the grant allocated to the Supervisory Authority.

The budgetary authority shall draw up the list of posts of the Supervisory Authority.

5. The budget of the Supervisory Authority shall be drawn up by the Administrative Board. It shall become definitive after the final adoption of the general budget of the European Union. Where necessary, it shall be adjusted in consequence.

Article 12

Implementation and control of the budget

1. The Director shall implement the budget of the Supervisory Authority.

2. Not later than 1 March following the completion of the financial year, the Supervisory Authority accounting officer shall forward the provisional accounts, accompanied by the report on budgetary and financial management over the financial year, to the Commission accounting officer. The latter shall then consolidate the provisional accounts of the institutions and decentralised bodies in accordance with Article 128 of the general Financial Regulation.

3. Not later than 31 March following the completion of the financial year, the Commission accounting officer shall forward the provisional accounts of the Supervisory Authority, accompanied by the report on budgetary and financial management over the financial year, to the Court of Auditors. The report on budgetary and financial management over the financial year shall also be forwarded to the European Parliament and the Council.

4. After receiving the observations of the Court of Auditors on the provisional accounts of the Supervisory Authority in accordance with the provisions of Article 129 of the general Financial Regulation, the Director, acting on his own responsibility, shall draw up the definitive accounts of the Supervisory Authority and transmit them, for opinion, to the Administrative Board.

5. The Administrative Board shall deliver an opinion on the definitive accounts of the Supervisory Authority.

6. The Director shall transmit these definitive accounts, accompanied by the opinion of the Administrative Board, not later than 1 July following the completion of the financial year, to the European Parliament, the Council, the Commission and the Court of Justice.

7. The definitive accounts shall be published.

8. The Director shall send the Court of Auditors a reply to the latter's observations by 30 September at the latest. He shall also send a copy of this reply to the Administrative Board.

9. The Director shall submit to the European Parliament, at the latter's request and as provided for in Article 146(3) of the general Financial Regulation, any information necessary for the smooth running of the discharge procedure for the financial year in question.

10. The European Parliament, following a recommendation from the Council acting on a qualified majority, shall, before 30 April of the year N + 2, grant a discharge to the Director for the implementation of the budget for the financial year N.

Article 13

Financial Regulation

The financial regulations applicable to the Supervisory Authority shall be drawn up by the Administrative Board after consultations with the Commission. These regulations may deviate from 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 only if the specific needs for the functioning of the Supervisory Authority so require and subject to the prior agreement of the Commission.

Article 14

Anti-fraud measures

1. For the purposes of combating fraud, corruption and other illegal acts, the provisions of Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) shall apply without restriction.

2. The Supervisory Authority shall comply with the Interinstitutional Agreement of 25 May 1999 concerning internal investigations by the European Anti-Fraud Office (OLAF) and shall immediately adopt appropriate provisions that shall apply to all staff of the Supervisory Authority.

3. The funding decisions, the agreements and the implementing instruments resulting therefrom stipulate specifically that the Court of Auditors and OLAF may, if need be, carry out on-the-spot checks on the beneficiaries of monies disbursed by the Supervisory Authority as well as on the staff responsible for allocating these monies.

Article 15

Privileges and immunities

The Protocol on Privileges and Immunities of the European Communities shall apply to the Supervisory Authority.

Article 16

Staff

1. The Staff Regulations of Officials of the European Communities, the regulations applicable to other servants of the European Communities and the rules adopted jointly by the European Community institutions for the purpose of applying these regulations shall apply to the staff of the Agency. The Administrative Board, in agreement with the Commission, shall adopt the necessary implementing measures.

2. Without prejudice to Article 8, the powers conferred on the appointing authority under the Staff Regulations and the regulations applicable to other servants shall be exercised by the Supervisory Authority with respect to its own staff.

3. The staff of the Supervisory Authority shall be made up of officials assigned or seconded by the Commission or the Member States on a temporary basis and of other staff recruited as need be by the Supervisory Authority to perform its tasks.

Article 17

Liability

1. Contractual liability on the part of the Supervisory Authority shall be governed by the law applicable to the contract in question. The Court of Justice shall have jurisdiction by virtue of any arbitration clause contained in a contract entered into by the Supervisory Authority.

2. In the event of non-contractual liability, the Supervisory Authority shall take steps, in accordance with the general principles common to the laws of the Member States, to remedy any damage caused by its departments or by its staff in the performance of their duties. The Court of Justice shall have jurisdiction in any dispute over the remedying of such damage.

3. The personal liability of its staff vis-à-vis the Supervisory Authority shall be governed by the provisions of the various regulations applicable to those staff.

4. The Court of Justice shall have jurisdiction in disputes over the remedying of damage referred to in paragraph 3.

Article 18

Access to documents and protection of data of a personal character

1. Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents shall apply to documents held by the Supervisory Authority.

2. The Administrative Board shall adopt practical measures for applying Regulation (EC) No 1049/2001 within six months from the date of entry into force of Regulation (EC) No ... on the establishment of structures for the management of the European satellite radionavigation programme.

3. Decisions taken by the Supervisory Authority in pursuance of Article 8 of Regulation (EC) No 1049/2001 may be the subject of a complaint to the mediator or of proceedings before the Court of Justice, in accordance with the conditions laid down in Articles 195 and 230 respectively of the Treaty.

4. The processing of data of a personal nature by the Supervisory Authority shall be subject to the provisions of Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data.

Article 19

Participation of third countries

The Supervisory Authority shall be open to the participation of countries which are not members of the European Union and which have concluded agreements with the European Union to this effect.

Under the relevant provisions of these agreements, arrangements shall be worked out specifying, in particular, the nature, scope and procedural aspects of the involvement of these countries in the work of the Supervisory Authority, including provisions relating to financial contributions and to staff.

Chapter 2: The Centre or Security and Safety

Article 20

Setting-up of the Centre or Security and Safety

A Centre or Security and Safety - permanent and operational - is hereby created under the auspices of the Secretary-General of the Council.

Article 21

Tasks of the Centre or Security and Safety

The Centre or Security and Safety shall be responsible for carrying out the following tasks:

- giving instructions to the operator of Galileo to ensure the safety and reliability of the system, in particular by compelling the operator to take such signal scrambling or interruption measures as may be required in the event of a crisis;

- contributing to the actions relating to the safety of the European satellite radionavigation system, and, in particular, monitoring the specifications of the system (architecture and safety of the system constituents);

- where necessary, and without prejudice to Article 300 of the EC Treaty, providing the Commission with technical expertise in its ongoing negotiations with third States with regard to aspects relating to the safety of the European satellite radionavigation system;

- being consulted on the safety annexes to contracts already concluded, or yet to be concluded, with a view to setting up the system;

- being consulted on the technical specifications of the government service (public regulated service) and the procedures and means of identifying the users;

- defining the type of cryptology that requires government approval (development, design, validation of cryptologic components);

- performing any other task in this area entrusted to it by the Council.

Article 22

Composition and operation of the Centre or Security and Safety

The Secretary-General of the Council, in liaison with the Commission, shall determine the composition and operational procedures of the Centre or Security and Safety, and in particular the possibility of the Commission being represented within it.

Article 23

Entry into force

This Regulation shall enter into force on the tenth day following its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President

Annex 1 LEGISLATIVE FINANCIAL STATEMENT

Policy area(s): TRANSPORT AND ENERGY

Activity(ies): Galileo Programme deployment and operational phase

Title of operation: Proposal for a council regulation on the establishment of structures for the management of the european satellite radionavigation programme

1. BUDGET LINE(S) + TITLE(S)

Under Chapter 06 03 Trans-European Networks

Creation of the appropriate structure for the Supervisory Authority (regulatory agency), i.e.:

- creation of an item 06 03 XX entitled "Supervisory Authority"

- creation of an item 06 03 XX XX - entitled "Supervisory Authority" - Grant Titles 1 and 2

- creation of an item 06 03 XX XX - entitled "Supervisory Authority" - Grant Title 3

The choice of article and items, under Chapter 06 03, will be determined under the budget procedure for 2006.

2. OVERALL FIGURES

2.1 Allocation for the action: EUR3.55 million/year in commitment appropriations

This annual allocation is included in the appropriations entered under Article 06 03 01 for the year 2006 (financial allocation for the period 2000-2006 laid down by regulation) and will possibly be included in the future in the financial allocation to be fixed for subsequent years.

2.2 Period of application

The action will be of unlimited duration (annual grant)

2.3 Overall multiannual estimate on expenditure:

a) Schedule of commitment appropriations / payment appropriations (financial intervention)

in EUR millions

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2.4 Compatibility with financial programming and the financial perspective

x Proposal compatible with existing financial programming (2000/2006)

2.5 Financial impact on revenue

x No financial implications

3. BUDGET CHARACTERISTICS

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4. LEGAL BASIS

EC Treaty: Article 308

5. DESCRIPTION AND GROUNDS

5.1 Need for Community intervention

5.1.1 Objectives pursued

It is imperative to entrust to a public authority the supervision of the deployment and operational phases of the European satellite radionavigation system, given its strategic nature and the need to ensure that essential public interests are adequately defended and represented.

This public authority - to be known as the Supervisory Authority - will conclude the concession contract with whichever consortium is selected on completion of the Galileo development phase and will take steps to ensure compliance by that consortium with the obligations arising from the concession contract; in its capacity as owner of the various system components, it will be required to assign the right of use thereof to the concessionaire for the duration of the concession.

It will be responsible for managing and controlling the use of the Community funds allocated to the programme.

Given the importance of system safety and reliability, the Supervisory Authority will draw up, in collaboration with the crisis management centre mentioned in Article 20 and the concessionaire, procedures aimed at ensuring compliance with the rules laid down in these areas.

It will coordinate the actions and positions to be defended by Member States that have lodged files with the International Telecommunication Union on the use of the frequencies necessary to ensure the operation of the system; in addition, these Member States will authorise the Supervisory Authority to assign the right of exclusive use thereof to the concessionaire.

One of the Supervisory Authority's tasks will be to assist the Commission in matters involving satellite radionavigation, particularly in cases where legislative and regulatory measures prove necessary.

5.1.2 Measures taken in connection with ex ante evaluation

The proposed mechanism is the result of numerous discussions with all the players involved in the Galileo Programme and is based on the framework set out in the conclusions reached at the meeting of the Transport Council on 4 and 5 April 2001.

5.2 Actions envisaged and arrangements for budget intervention

With a view to accomplishing its objectives, the Supervisory Authority will carry out the following measures:

- It will act as a licensing authority vis-à-vis the private concessionaire responsible for implementing and managing the programme deployment and operating phases; under this head, it will conclude with the latter the concession contract; it will ensure that the concessionaire complies with the concession contract and the specifications annexed thereto; it will grant the concessionaire the right to use the tangible and intangible assets for the duration of the concession.

- It will manage the Community funds allocated to the European satellite radionavigation programme in the phases following on from the development phase.

- It will assist the Centre or Security and Safetyi in monitoring compliance by the concessionaire with the safety and reliability rules.

- It will act as the custodian of all the frequencies necessary to ensure the operation of the system and will be responsible for coordinating Member State actions in this respect; it will deal directly with the concessionaire on matters relating to the use of these frequencies.

- It will carry out any other task entrusted to it by the Commission.

All Supervisory Authority revenue and expenditure are the subject of forecasts for each financial year, coinciding with the calendar year, and are entered in its budget.

The budget is balanced in terms of revenue and expenditure. Without prejudice to other resources and dues yet to be defined, revenue accruing to the Supervisory Authority includes a Community grant entered in the general budget of the European Community in order to ensure a balance between revenue and expenditure.

In particular, Supervisory Authority expenditure covers staff remuneration, administrative and infrastructure expenditure, operating costs and expenditure associated with the functioning of the Scientific and Technical Committee and the contracts concluded with institutions or companies responsible for implementing the Galileo European satellite radionavigation programme.

5.3 Methods of implementation

The legal status of the Supervisory Authority should be such as to enable it to act as a legal person in the discharge of its tasks.

1. An Administrative Board will serve as the Supervisory Authority's control unit. The Administrative Board is made up of 12 members. Six are appointed by the Commission, and six by the Council. The term of office is five years. This term of office is renewable once.

The Supervisory Authority is headed by a Director appointed by the Administrative Board for a period of five years, renewable once. The Director is the legal representative of the Supervisory Authority.

Provision will also need to be made for the possible creation of a Scientific and Technical Committee to be responsible for research and expert valuation tasks. At the request of the Management Committee, the Scientific and Technical Committee may be made responsible for:

- delivering opinions on technical matters or on proposals involving major changes in the design of the European satellite radionavigation system;

- making recommendations on how to modernise the system;

- carrying out any other task necessary for the development of expertise in the area of satellite radionavigation.

6. FINANCIAL IMPACT

6.1 Method of calculating the total cost of the action (To be determined by DG BUDG and DG ADMIN)

The Supervisory Authority's annual costs will be covered by the Community grants. The various types of expenditure can be analysed as follows:

Staff expenditure

The proposed budget is based on an estimated staff of 20 [6], and this evaluation is based on a comparison with other structures linked to the management of the Galileo Programme (such as the Galileo Interim Support Structure (GISS) and the Galileo Joint Undertaking).

[6] These staff will be recruited as temporary staff, in accordance with the rules applicable to Commission staff.

The assessment of staff costs is based on the annual costs for categories A3, A4-5, A6-7, B2-3, C1-3; the high proportion of staff in the upper A echelons reflects the high level of scientific competence required by the Authority for the effective execution of its tasks.

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Total annual staff expenditure is estimated at EUR2.2 million, taking as the average the cost of European Commission staff, i.e. EUR0.108 million per year, which includes expenditure associated with buildings and related administrative expenditure (mailing charges, telecommunications, IT, etc.).

Capital expenditure

Expenditure relating to the acquisition of movable property and associated expenditure will not be very high, since all the equipment purchased in connection with the functioning of the Galileo Joint Undertaking will be transferred to the Supervisory Authority. Accordingly, a sum of EUR150 000 per year has been set aside to cover additional costs.

Operating costs

These costs cover meetings and studies, as well as translation, publication and public relations costs. Based on preliminary estimates, these operating costs come to EUR1 million per year.

Mission expenditure

In order to discharge its tasks, the Supervisory Authority will need to organise trips both inside and outside the EU (transport and accommodation costs). The mission expenses budget is estimated to come to EUR200 000 per year. These estimates are based on actual average mission expenses costs attributed to DG TREN.

6.2 Breakdown by elements of the action (To be determined by DG BUDG and ADMIN)

Commitment appropriations in euros (at current prices)

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6.3 Schedule of commitment appropriations / payment appropriations

in millions of euros

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7. FOLLOW-UP AND EVALUATION

The management of the funds entrusted to the Supervisory Authority comes under the control of the Court of Auditors (Article 12), the European Parliament (Article 12) and the European Anti-Fraud Office (Article 14).

8. ANTI-FRAUD MEASURES

See point 7 above.