EU budget: how the own resources system is implemented

SUMMARY OF:

Regulation (EU, Euratom) 2021/768 laying down implementing measures for the system of own resources of the European Union

WHAT IS THE AIM OF THE REGULATION?

It sets out how the own resources system is implemented to ensure that the European Union (EU) receives all the income to which it is entitled.

KEY POINTS

The legislation defines the balance of a particular financial year as follows:

all revenue collected minus the payment appropriations* made plus any appropriations for that year which may be carried over under Article 12 of Regulation (EU, Euratom) 2018/1046 (see summary). This figure may be amended by
- the net amount of appropriations carried over from previous years which have been cancelled
- changes in euro rates and the balance of exchange gains and losses.

The definition is necessary to implement Article 8 of Decision (EU, Euratom) 2020/2053 (see summary). This states that any surplus EU revenue over actual expenditure from one financial year is carried over to the next.

EU Member States must take all the necessary measures to ensure that own resources are made fully available to the European Commission. The following control and supervision measures are in place:

traditional own resources (notably customs duties):
- the Commission carries out inspections of the Member States in order to ensure that the traditional own resources are established and made available to the EU budget in a correct and timely manner;
value added tax (VAT):
- the Commission carries out inspections together with national officials and confirms that the calculations for total net VAT collected are correct and that the data used are appropriately in line with Regulation (EU, Euratom) 2021/769 amending Regulation (EEC, Euratom) No 1553/89;
plastic packaging waste:
- the Commission’s inspections are carried out together with the competent national officials, and the Commission has access to the necessary documents and data and ensures that the figures for the weight of non-recycled plastic packaging waste are accurate;
gross national income:
- the Commission, along with the Member State concerned, inspects every year the aggregates provided for errors in compilation and has access to the sources and methods used.

The Commission:

appoints officials (‘authorised agents’) and seconded national experts to carry out inspections;
provides them, for each inspection, with written terms of reference stating their identity, official capacity and obligation to respect the rules for officials of the Member State concerned;
may seek officials from other Member States to act as observers;
respects the principle of statistical confidentiality;
emphasises the need for professional secrecy and respect for data protection rules.

Rules on inspections state the following.

The Commission gives the Member State concerned sufficient notice.
Authorised agents, who carry out the inspections, make contact with the competent national authorities.
Member States ensure that all of their relevant authorities cooperate fully with the authorised agents.
Results of controls and inspections are brought to the attention of the Member State concerned within 3 months. It has the same period to react. All Member States are informed of the findings.

Rules on fraud relating to traditional own resources state that:

within 2 months of the end of each quarter, Member States inform the Commission of
- all detected cases of fraud and irregularities of over €10,000
- progress in cases reported earlier, including recovery, cancellation or non-recovery;
the Commission adopt implementing acts to describe different types of fraud and irregularities.

The Member States, by 1 March of each year, must send the Commission detailed annual reports on their previous year’s traditional own resources inspections. These contain overall data and questions of principle on the most important problems arising, and in particular matters of dispute.

The Commission prepares a summary on the basis of the national reports and provides this to the Member States. It reports to the European Parliament and the Council of the European Union every 3 years on the experience of the inspections related to traditional own resources.

The Commission:

is assisted by the Advisory Committee on Own Resources and other committees where necessary;
estimates, before the end of October of each year, the amount of own resources collected for the entire financial year;
may table a letter of amendment to the draft budget for the following financial year or an amending budget for the current financial year if the original estimates prove inaccurate.

The legislation repeals Regulation (EU, Euratom) No 608/2014. This covered own resources during the previous multiannual financial framework (2014-2020).

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 1 January 2021.

BACKGROUND

For more information, see:

Own resources (European Commission).

KEY TERMS

Payment appropriations: actual payments made to beneficiaries during the current financial year.

MAIN DOCUMENT

Council Regulation (EU, Euratom) 2021/768 of 30 April 2021 laying down implementing measures for the system of own resources of the European Union and repealing Regulation (EU, Euratom) No 608/2014 (OJ L 165, 11.5.2021, pp. 1-8)