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Document 52012PC0712
Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU, Euratom) No 966/2012 as regards the financing of European political parties
Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU, Euratom) No 966/2012 as regards the financing of European political parties
Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU, Euratom) No 966/2012 as regards the financing of European political parties
/* COM/2012/0712 final - 2012/0336 (COD) */
Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU, Euratom) No 966/2012 as regards the financing of European political parties /* COM/2012/0712 final - 2012/0336 (COD) */
EXPLANATORY MEMORANDUM 1. CONTEXT OF THE PROPOSAL It is necessary to amend the Financial Regulation[1] in order to take account of the
changes proposed in the Commission proposal for a Regulation of the European
Parliament and of the Council on the statute and funding of European political
parties and European political foundations[2]
which will replace current Regulation (EC) No 2004/2003[3]. In application of Article 224
of the Treaty on the Functioning of the European Union (TFEU) the draft
Regulation replacing Regulation (EC) n° 2004/2003 contains new rules regarding,
inter alia, the funding of political parties and political foundations
at European level. Their effectiveness requires that they are accompanied by a
corresponding set of financial rules anchored in the Financial Regulation. It is proposed that a new Title
"Contributions" be inserted at the end of part two of the Financial Regulation
("special part") just before part three ("transitional and final
provisions"). Last, it is not envisaged at this stage to
have any delegated act, based on article 290 TFEU, for this new Title. 2. RESULTS OF CONSULTATIONS
WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS The proposal follows the EP resolution
regarding the financing of the European political parties (the Giannakou
report)[4]
which considers that, in light of the experience gained, the financing of
European political parties and European political foundations should be
improved as regards a number of points. In particular, it calls for an end to
the system of grants and the creation of a new financing instrument in the Financial
Regulation 'devoted solely and tailored specifically to the funding of European
Parties and foundations'. After close analysis, it is proposed that
Political parties should indeed be financed through a new instrument
("contributions") as illustrated in this draft proposal rather than
through an operating grant, as it is currently the case. As regards European political foundations,
it is considered that they should continue to receive an operating grant. The
request of the European Parliament to exclude as well European political
foundations from the grant system is not justified given that the specificities
of European political parties are not present in the European political foundations.
In addition, most of the concerns raised by the European Parliament regarding
the difficulties encountered by these foundations under the Financial Regulation
(EC) n° 1605/2002[5] shall disappear with the application of the Financial Regulation,
removing the need for specific derogations. This is the case in particular for
the possibility for the foundations to receive the entire amount of
pre-financing without lodging a guarantee, and to build up financial reserves
from their own sources, as the amounts dedicated to these reserves shall not be
taken into account for the purpose of verifying compliance with the no-profit
rule. Contributions to European political parties
are based on a model similar to the grant system but with the specificities detailed
hereunder. In addition the Commission has consulted
relevant stakeholders (representatives of the political parties and foundations
at European level, national and academic experts…). Last, this proposal was first presented as
a Commission working document[6]
at the same time than the Commission proposal for a Regulation of the European
Parliament and of the Council on the statute and funding of European political
parties and European political foundations. 3. LEGAL ELEMENTS OF THE
PROPOSAL 3.1. New title in the Financial
Regulation: "Contributions to European political parties" The proposal establishes a new Title VIII
in part Two of the Financial Regulation dedicated to Contributions to European
political parties and it repeals the specific provisions regarding European
political parties which are currently foreseen the Title VI (grants) of part
One. 3.2. Major modifications in
comparison to the current grant system. This proposal introduces the following
elements: 3.2.1. Abolition of the
"annual work programme" The Giannakou
report cited above calls in its §18 for the abolition of the annual work
programme for European political parties pointing out that this precondition is
inappropriate for them and is not required in any Member State legislation. In particular,
the activities of political parties demand a much larger degree of flexibility
and reaction to current events than the one imposed by the system of grants,
which requires the presentation of an annual work programme and a provisional
budget in the request for funding. For this
reason, the contributions should be awarded without annual work programmes or
estimated operating budgets. 3.2.2. Introduction of eligibility
criteria Eligibility
criteria for funding of political parties have been introduced in accordance
with the proposal for a Regulation on the statute and funding of European
political parties and European political foundations. In practice, the
authorising officer should request directly from the Registry of European
political parties (set up in the EP) certificates confirming that European
political parties are duly registered and are in compliance with relevant
obligations (e.g. presentation of accounts) and have not been suspended or
subject to any administrative penalty as foreseen in this above proposal for a
Regulation. 3.2.3. Abolition of the selection
criteria The selection
criteria will not be required in the new Title, since there is little value in
verifying the financial and operational capacity of European political parties
to represent its citizens, a fortiori when no annual work programme or
estimated budget is submitted. 3.2.4. Control on their statutory
obligations A provision has
been introduced which will explicitly require that European political parties
should not be subject to debarment from the Registry or subject to an
administrative penalty during the financial year covered by the contribution.
In such cases, their contributions would be reduced or terminated and any
pre-financing paid recovered. The authorising
officer should request such confirmation to the EP Registry before making the
payment of the balance. 3.2.5. Controls on expenditure and
not on actions The departure
from the current system of grants, which is subject to the submission of a work
programme and of an estimated budget, should not be perceived as a 'carte
blanche' to allow political parties to misuse EU funds. While financial
support should be awarded without an annual work programme and estimated
operating budget, European political parties should justify ex post the sound
use of Union funds. In particular,
the authorising officer should verify if the EU funds have been used to pay
reimbursable expenditure as established in the call for contributions within
the time limits laid down in this Regulation. This solution will simplify the
request for contributions as there is no submission of annual work programmes
or estimated budgets, and will allow political parties to implement their
activities freely and adjust them in the course of the year. 3.2.6. Time limits to use of EU
funds The Giannakou
report calls in its §24 for the possibility to 'build up reserves and
carry-over of funds'. The new Title does not prevent European political parties
from building reserves from their own sources. In addition, European political
parties should also benefit from a certain flexibility regarding the time
limits to use the EU funds awarded. A strict application of the obligation to
use these funds within the financial year for which they were awarded would be
difficult to reconcile with the need for European political parties to adjust
their resources to the electoral cycle. However, EU
funds that have not been spent should be used within a reasonable time.
Contributions to European political parties should be spent to cover
reimbursable expenditures within two financial years following the financial
year for which they were awarded (n+2), after which, any unspent funds
should be recovered by the authorising officer. 3.2.7. Co-financing Financing of European political parties
shall follow the principle of co-financing established by Regulation xx/xxxx,
without prejudice to the possibility mentioned above to use any unused part of
the EU contribution to cover reimbursable expenditure within the following two
financial years after its awarding. 3.2.8. Financing methods As in grants, contributions may be paid
either through the reimbursement of a percentage of the expenditures incurred
or through a system of predefined lump sum, unit costs, and flat rate (forfaits).
3.2.9. 100% pre-financing Contributions should be paid in one
pre-financing payment covering 100% of the sum, unless the authorising officer
decides otherwise for duly justified reasons. 3.2.10. Interest on pre-financing By derogation to Article 5 of the Financial
Regulation, any interest yielded by the pre-financing amounts perceived by the
European political parties should be used to pay reimbursable expenditures
within the following two financial years. 3.2.11. Penalty and control regime
As it is the case for grants, the new Title
should include the standard provisions regarding the control of the EP, OLAF,
and the Court of Auditors. It should also include the same penalty regime
(administrative and financial penalties) which is applicable to grant beneficiaries. 4. BUDGETARY IMPLICATION The envisaged modification of the Financial
Regulation has no budgetary implications. P2012/0336 (COD) roposal for a REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL amending Regulation (EU, Euratom) No
966/2012 as regards the financing of European political parties THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 322 thereof, in
conjunction with the Treaty establishing the European Atomic Energy Community,
and in particular Article 106a thereof, Having regard to the proposal from the
European Commission, After transmission of the draft legislative
act to the national Parliaments, Having regard to the opinion of the Court
of Auditors[7], Acting in accordance with the ordinary
legislative procedure, Whereas: (1) Political parties at
European level are important as a factor for integration within the Union. (2) Article 10 of the Treaty
on European Union and Article 12(2) of the Charter of Fundamental Rights of the
European Union state that political parties at European level contribute to
forming a European political awareness and to expressing the political will of
the citizens of the Union. (3) On 4 November 2003 the
European Parliament and the Council adopted Regulation (EC) No 2004/2003 on the
regulations governing political parties at European level and the rules
regarding their funding[8].
(4) In its resolution of 6
April 2011 on the application of Regulation (EC) No 2004/2003 on the
regulations governing political parties at European level and the rules
regarding their funding[9],
the European Parliament has, in light of experience gained, suggested a number
of improvements on the financing of European political parties and European
political foundations. (5) On […] the European
Parliament and the Council adopted Regulation (EU) No […] on the statute and
funding of European political parties and European political foundations[10] repealing Regulation (EC) No
2004/2003. That Regulation lays down new rules for, inter alia, the funding of
political parties and political foundations at European level, in particular
with regard to funding conditions, mode and distribution of funding, donations
and contributions, financing of campaigns for elections to the European
Parliament, reasonable expenditure, prohibition of funding, accounts,
implementation and control, penalties, and transparency. (6) Regulation (EU, Euratom)
No 966/2012 of the European Parliament and of the Council of 25 October 2012 on
the financial rules applicable to the general budget of the Union[11] (hereinafter "the
Financial Regulation") should include rules on the contributions by the
European Parliament to the European political parties. Those rules should allow
political parties at European level to have a broader degree of flexibility as
regards the time limits to use those contributions, as the nature of their
activities so require. (7) The system of financial
support to European political parties through an operating grant as provided by
Article 125(6) of the Financial Regulation is not suited to their needs, in
particular the obligation to submit an annual work programme and an estimated
operating budget, a requirement that does not exist in the legislation of
Member States. Therefore, the financial support given to European political
parties should take the form of a specific contribution, to match the specific
needs of the European political parties. (8) While financial support is
awarded without an annual work programme and estimated operating budget,
European political parties should justify ex post the sound use of Union funds.
In particular, the authorising officer should verify if the funds have been
used to pay reimbursable expenditure as established in the call for
contributions within the time limits laid down in this Regulation.
Contributions to European political parties should be spent within two
financial years following the financial year it was awarded, after which, any
unspent funds should be recovered by the authorising officer. (9) Union funds awarded to
finance the operating costs of the European political parties should not be
used for other purposes than those established in Regulation (EU) No […], in
particular to finance directly or indirectly other entities such as national
political parties. The European political parties should use the contributions
to pay a percentage of current and future expenditures and not expenditures or
debts incurred before the submission of their applications for contributions. (10) The award of contributions
should also be simplified and adapted to the specificities of the European
political parties, in particular by the absence of selection criteria, the
establishment of 100% pre-financing as a general rule or the possibility to use
lump sums, flat-rate and unit cost financing. (11) The contributions from the
Union budget should be reduced or terminated where the European political
parties violate the obligations laid down in Regulation (EU) No […]. (12) Penalties that are based
both, on the Financial Regulation and Regulation (EU) No […], to be imposed by
the same institution, should be imposed in a coherent way and respecting the
principle of non bis in idem. In accordance with Regulation (EU) No […] administrative
and/or financial penalties provided for by Financial Regulation are not to be
imposed in one of the cases for which penalties have already been imposed on
the basis of Regulation (EU) No […]. (13) The Financial Regulation
should therefore be amended accordingly, HAVE ADOPTED THIS REGULATION: Article 1 Regulation (EU, Euratom) No 966/2012 is
amended as follows: (1) In Part Two, the following Title VIII is added: "TITLE VIII
CONTRIBUTIONS TO EUROPEAN POLITICAL PARTIES Article 204a
General provisions 1. For the purposes of this
Regulation, European political parties shall mean the entities constituted and
registered as such in accordance with Regulation (EU) No [….] of the European
Parliament and of the Council(*). 2. Direct financial contributions
from the budget may be awarded to European political parties in view of their
contribution to forming European political awareness and to expressing the
political will of the citizens of the Union. Article 204b
Principles 1. Contributions shall only
be used to reimburse a percentage of the operating costs of European political
parties directly linked to objectives of those parties. Contributions shall not
be used to grant directly or indirectly any personal advantage, in cash or in
kind, to any individual member or staff of a European political party. 2. Contributions shall not be
used to fund activities of third parties, in particular national political
parties or political foundations at European or national level, whether in the
form of grants, donations, loans or any other similar agreements. 3. Contributions shall be
subject to the principles of transparency and equal treatment, in accordance
with the criteria laid down in Regulation (EU) No [….]. 4. Contributions shall be
awarded by the European Parliament on an annual basis and shall be published in
accordance with Article 35(2). 5. European political parties
receiving a contribution shall not receive other funds from the budget for the
same purposes. In any case, no cost item may be financed twice by the budget. Article 204c
Budgetary aspects Contributions shall be paid from the
European Parliament section of the budget. Article 204d
Call for contributions 1. Contributions shall be
awarded through a call for contributions published each year, at least on the
website of the European Parliament. 2. A European political party
may only be awarded one contribution per year. 3. A European political party
may only receive a contribution if it applies for funding on the terms and
conditions laid down in the call for contributions. 4. The call for contributions
shall determine the eligibility criteria to be met by the applicant as well as
the exclusion criteria. 5. The call for contributions
shall determine, at least, the nature of the expenditure that may be reimbursed
by the contribution. Article 204e
Award procedure 1. Applications for
contribution shall be submitted in writing, including, where
appropriate, in a secure electronic format. 2. Contributions may not be
awarded to applicants who are, at the time of a contribution award procedure,
in one of the situations referred to in Articles 106(1) and 107 and point (a)
of Article 109(1) and those who are registered in the Central exclusion
database referred to in Article 108. 3. Applicants must certify
that they are not in one of the situations referred to in paragraph 2. 4. Contributions shall be
awarded through a contribution agreement or decision as specified in the call
for contributions. 5. The authorising officer
may be assisted by a committee to evaluate and establish the award decision.
The authorising officer shall specify the rules regarding the composition,
appointment and functioning of such committee, and the rules to prevent any
conflict of interests. Article 204f
Evaluation procedure 1. Applications shall be
selected on the basis of the award criteria set out in Regulation (EU) No [….] among
applications respecting the eligibility and exclusion criteria. 2. The eligibility criteria
shall determine the conditions for an applicant to be able to receive a
contribution according to the rules laid down in Regulation (EU) No [….]. 3. The decision of the
authorising officer responsible on the applications shall state at least: (a)
the subject and the overall amount of the
contribution; (b)
the name of the selected applicants and the
amounts accepted; (c)
the names of any applicants rejected and the
reasons for that rejection. 4. The authorising officer
responsible shall inform applicants in writing of the decision on their
application. If the contribution request is rejected or the amounts requested
are not awarded in part or in full, the authorising officer shall give the
reasons for either the rejection of the application or the non-award of the
amounts requested, with reference in particular to the eligibility and award
criteria referred to in paragraphs 1 and 2. Article 204g
Form of contributions 1. Contributions may take any
of the following forms: (a)
reimbursement of a percentage of the
expenditures actually incurred; (b)
reimbursement on the basis of unit costs; (c)
lump sums; (d)
flat-rate financing; (e)
a combination of the forms referred to in points
(a) to (d). 2. Only the expenditure which
meets the criteria established in the calls for contributions and which has not
been incurred prior to the date of submission of the application may be
reimbursed. Article 204h
Rules for contribution 1. Lump sums shall cover, in
global terms, certain expenditures necessary for carrying out a specific
activity of the European political party. Lump sums shall only be used in combination
with other forms of contributions. 2. Unit cost shall cover all
or certain specific categories of reimbursable expenditure which are clearly
identified in advance by reference to an amount per unit. 3. Flat-rate financing shall
cover specific categories of reimbursable expenditure which are clearly
identified in advance by applying a percentage. 4. Where lump sums, flat-rate
financing and unit costs are used, they shall be defined in the call for
contributions. The contribution agreement or decision shall include provisions
that allow verifying that the conditions for the award of lump sums, flat-rate
financing or unit costs have been respected. Article 204i
Pre-financing The contributions shall be paid in the form
of one pre-financing of 100%, except if in duly justified cases, the
authorising officer decides otherwise. Article 204j
Guarantees The authorising officer responsible may, if
he deems it appropriate and proportionate, on a case-by-case basis and subject
to risk analysis, require the European political party to lodge a guarantee in
advance in order to limit the financial risks related to the payment of
pre-financing only when, in the light of his risk assessment, the political
party is at an imminent risk of being in one of the situations described in points
(a) and (d) of Article 106(1) or when the European Parliament has formally
initiated an administrative procedure that could lead to a debarment and/or
revocation of its contribution. The provisions laid down in Article 134 on
the pre-financing guarantee for grants shall apply mutatis mutandis to
guarantees which may be required in the cases foreseen in the above paragraph
to pre-financing payments made to European political parties. Article 204k
Use of contributions 1. Contributions shall be
spent in accordance with Article 204b. 2. Any part of the
contribution not used within the financial year covered by this contribution
shall be spent on any reimbursable expenditure incurred by 31 December of year n+2.
The remaining part of the contribution that is not spent within the n+2
time limit shall be recovered in accordance with Chapter 5 of Part One. 3. European political parties
shall respect the maximum co-financing rate established in Regulation xx/xxxx.
Remaining amounts of the previous two years' contributions may not be used to
finance the part which European political parties must provide from their own
resources. 4. European political parties
shall first use the funds that have not been used within the financial year
covered by the contribution before using the contributions awarded after that
year. 5. Any
interests yielded by the pre-financing payments shall be considered as part of
the Union contribution. Article 204l
Report on the use of the contributions The European political party shall, in
accordance with the conditions and time limits laid down in the call for
contributions, submit to the authorising officer for approval a final report on
the use of the contribution and its accounts. The authorising officer shall draft his
annual activity report referred to in Article 66(9) on the basis of the final
report and accounts referred to in the first paragraph. He may use other
supporting documents for the purposes of his report. Article 204m
Payment of the balance 1. The amount of the
contribution shall not become final until after the authorising officer has
accepted the final report and accounts referred to in Article 204l. Acceptance
of the report and accounts shall be without prejudice to subsequent checks by
the European Parliament. 2. Any unspent amount of
pre-financing shall not become final until it has been used by the European
political party to pay reimbursable expenditures which meet the criteria
defined in the call for contributions. 3. Where the European
political party fails to comply with its obligations related to the use of
contribution, the contributions shall be suspended, reduced or terminated after
the European political party has been given the opportunity to present its
observations. 4. The authorising officer shall
verify before making the payment of the balance that the European political
party is still registered in the registry referred to in Article 6 of
Regulation (EU) No [….] and has not been the subject of any of the penalties
provided for in Article 22 of that Regulation between the date of its
application and the end of the financial year covered by the contribution. 5. Where the European
political party is no longer registered in the Registry referred to in Article
6 of Regulation (EU) No [….] or has been the subject of any of the penalties
provided for in Article 22 of that Regulation, the authorising officer
responsible may suspend, reduce or terminate the contribution and recover
amounts unduly paid under the contribution agreement or decision, in proportion
to the seriousness of the errors, irregularities, fraud or other breach of
obligations related to the use of contribution, after the political party has
been given the opportunity to present its observations. Article 204n
Control and penalties 1. Each contribution
agreement or decision shall provide expressly for the European Parliament,
European Anti-Fraud Office and the Court of Auditors to exercise their powers
of control, on documents and on the premises, over all European political
parties, contractors and subcontractors who have received Union funds. 2. Administrative and
financial penalties which are effective, proportionate and dissuasive may be
imposed on applicants by the authorising officer, in accordance with Article 109
of this Regulation, without prejudice to Article 22(7) of Regulation (EU) No
[….]. 3. Penalties referred to in
paragraph 2 may also be imposed on European political parties which, at the
moment of the submission of the application for contribution or after having
received the contribution, have made false declarations in supplying the
information requested by the authorising officer or fail to supply such
information. Article 204o
Record keeping 1. European political parties
shall keep records, supporting documents, and other records pertinent to the
contribution for five years following the submission of the final report and
accounts referred to in Article 204l. 2. Records related to audits,
appeals, litigation or the settlement of claims arising out of the use of the contribution
shall be retained until the end of such audits, appeals, litigation or
settlement of claims. ___________________ (*) OJ […] " (2) In
paragraph 2 of Article 121, the following point (j) is added: "(j)
contributions to European political parties referred to in Title VIII of Part
Two." (3) The
second subparagraph of Article 125(3) and paragraph 6 of Article 125 are
deleted. Article 2 This Regulation shall enter into force on
the twentieth day following that of 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 European Parliament For
the Council The President The
President [1] Regulation (EU, Euratom) No 966/2012 of the European
Parliament and of the Council of 25 October 2012 on the financial rules
applicable to the general budget of the Union and repealing Council Regulation
(EC, Euratom) N° 1605/2002. (OJ L 298, 26.10.2012, p.1) [2] COM 499/2012 Final of
12.9.2012 [3] Regulation (EC) No 2004/2003 of the European
Parliament and of the Council of 4 November 2003 on the regulations governing
political parties at European level and the rules regarding their funding. (OJ
L 297, 15.11.2003, p. 1) [4] "On
the application of Regulation (EC) No 2004/2003 on the regulations governing
political parties at European level and the rules regarding their funding of 15
March 2011" –(2010/2201 INI) [5] Regulation (EC) No 1605/2002 of 25 June 2002 ( OJ L
248, 16.9.2002, p.1) [6] Commission
working document COM 500/2012 final of 19.9.2012 prefiguring the proposal for
an amendment to the Financial Regulation introducing a new title on the
financing of European political parties. [7] OJ
[…], […], p. […]. [8] OJ L 297, 15.11.2003, p.1. [9] 2010/2201(INI). [10] OJ L … [11] OJ L 298, 26.10.2012, p. 1.