What changed between the plenary report and the adopted text

Removed:DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

Added:TEXTS ADOPTED

Removed:on the proposal for a regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (recast)

Added:P9_TA(2024)0163

Removed:(COM(2022)0223 – C90179/2022 – 2022/0162(COD))

Added:Financial rules applicable to the general budget of the Union (recast)

Added:Committee on Budgets and Committee on Budgetary Control

Added:PE740.802

Added:European Parliament legislative resolution of 14 March 2024 on the proposal for a regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (recast) (COM(2022)0223 – C9-0179/2022 – 2022/0162(COD))

8 unchanged paragraphs

(Ordinary legislative procedure – recast)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2022)0223),

– having regard to Article 294(2) and Article 322(1) of the Treaty on the Functioning of the European Union and to Article 106a of the Treaty establishing the European Atomic Energy Community, pursuant to which the Commission submitted the proposal to Parliament (C90179/2022),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

– having regard to the opinion of the Court of Auditors of 31 October 2022,

– having regard to the Interinstitutional Agreement of 28 November 2001 on a more structured use of the recasting technique for legal acts,

– having regard to the letter of 25 April 2023 sent by the Committee on Legal Affairs to the Committee on Budgets and the Committee on Budgetary Control in accordance with Rule 110(3) of its Rules of Procedure,

Added:– having regard to the provisional agreement approved by the committees responsible under Rule 74(4) of its Rules of Procedure and the undertaking given by the Council representative by letter of 20 December 2023 to approve Parliament’s position, in accordance with Article 294(4) of the Treaty on the Functioning of the European Union,

7 unchanged paragraphs

– having regard to the joint deliberations of the Committee on Budgets and the Committee on Budgetary Control under Rule 58 of the Rules of Procedure,

– having regard to Rules 110 and 59 of its Rules of Procedure,

– having regard to the opinion of the Committee on Regional Development,

– having regard to the letter from the Committee on Industry, Research and Energy,

– having regard to the report of the Committee on Budgets and the Committee on Budgetary Control (A9-0180/2023),

A. whereas, according to the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission, the Commission proposal does not include any substantive amendments other than those identified as such in the proposal and whereas, as regards the codification of the unchanged provisions of the earlier acts together with those amendments, the proposal contains a straightforward codification of the existing texts, without any change in their substance;

1. Adopts its position at first reading hereinafter set out, taking into account the recommendations of the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission;

Change 1

Added:2. Approves the joint statement by Parliament and the Council annexed to this resolution, which will be published in the C series of the Official Journal of the European Union;

Added:3. Approves the joint statement by Parliament, the Council and the Commission annexed to this resolution, which will be published in the C series of the Official Journal of the European Union;

Added:4. Takes note of the statements by the Commission annexed to this resolution;

5. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

6. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Change 2

Removed:Recital 1: (1) A number of amendments are to be made to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council15. In the interests of clarity and legal certainty, that Regulation should be recast.

Added:P9_TC1-COD(2022)0162

Change 3

Changed:Recital 11:Position (11)of Athe referenceEuropean toParliament theadopted generalat regimefirst ofreading conditionalityon for14 theMarch protection2024 ofwith thea Unionview budgetto laidthe downadoption inof Regulation (EU, Euratom) 2020/20922024/… of the European Parliament and of the Council22 should be inserted in this Regulation. Regulation (EU, Euratom) 2020/2092 is a cornerstone of the legal framework for the implementationCouncil ofon the Union budget and plays a vital role in ensuring sound financial managementrules andapplicable protectingto the financialgeneral interestsbudget of the Union.Union (recast)

Change 4

Removed:Recital 11 a (new): (11a) It is essential in the implementation of the Union budget to ensure respect for the values on which the Union is founded and for the Charter of Fundamental Rights of the European Union, which includes important principles such as non-discrimination and equality between men and women. It is therefore necessary to provide for the measures to be taken where a breach of the Charter puts the legality of expenditure at risk. In that connection, it is possible to address complaints to the Commission about a breach of Union law by authorities in a Member State. The Commission should handle such complaints expeditiously.

Added:(As an agreement was reached between Parliament and Council, Parliament's position corresponds to the final legislative act, Regulation (EU, Euratom) 2024/2509.)

Removed:Recital 15: (15) Following the adoption of the Multiannual Financial Framework for 2021 to 2027 and related basic acts thereto, certain rules related to budgetary principles, in particular as regards cancellation and carry-over, decommitments and making appropriations corresponding to decommitments available again, laid down in Regulation 2021/211623 of the European Parliament and of the Council, Regulation (EU, Euratom) 2020/2093, Regulation (EU) 2021/836 of the European Parliament and of the Council24 , Regulation (EU) 2021/947 of the European Parliament and of the Council25 , Regulation (EU) 2021/1529 of the European Parliament and of the Council26 , Council Decision (EU) 2021/176427 , Council Regulation (Euratom) 2021/94828 and Regulation (EU) No 2021/1060 of the European Parliament and Council29 , should be included in this Regulation and where appropriate generalised.

Added:ANNEX TO THE LEGISLATIVE RESOLUTION

Removed:The revision of the Financial Regulation provides the occasion to generalise the rules found in sectoral legislation where it is deemed appropriate.

Added:Joint statement on the budgetary treatment of interest or other charges due on cancelled or reduced fines, other penalties or sanctions on the occasion of the adoption of Regulation (EU, Euratom) 2024/2509

Removed:Recital 21: (21) In order to allow a rapid reaction in exceptional circumstances, the Commission should be able to accept in-kind donations, irrespective of their value, where such donations are made for the purposes of humanitarian aid, emergency support, civil protection or crisis management aid. In order to ensure appropriate safeguards, the Commission should only accept such donations where acceptance is in accordance with the principles of sound financial management and transparency, does not give rise to conflicts of interest and does not harm the image of the Union and does not harm or risk harming the security or public order of the Union or the Member States. The donor should not be, at the moment of acceptance, in one of the exclusion situations under the early-detection and exclusion system and should not be registered as excluded in the corresponding database. In the interests of transparency, the Commission should inform the European Parliament and the Council where it accepts such donations.

Added:“The European Parliament and the Council agreed that any interest or other charges due on cancelled or reduced fines, other penalties or sanctions will be recorded as negative revenue for the duration of the current multiannual framework. This is an exception to the prohibition on negative revenue, which is limited to this specific, unforeseeable situation.

Removed:Recital 23 a (new): (23a) In that regard and in the light of the horizontal gender mainstreaming goal, targets for monitoring climate spending and performance and expenditure contributing to halting and reversing the decline of biodiversity, specific performance indicators for the Union budget should be introduced to monitor the impact of Union spending on gender equality, as well as to track spending on climate change mitigation and adaptation and the protection of biodiversity. Those indicators should be concise and proportionate, avoiding overlapping, should be limited to a manageable number and should not result in excessive administrative burden. They should be based on an effective, transparent and comprehensive methodology and, where appropriate, widely recognised scientific evidence.

Added:Without prejudice to the respective prerogatives, the European Parliament, the Council and the Commission agree, taking into account past experience and expected future developments, to examine a long-term sustainable solution, in line with the application of the budgetary principles of the Financial Regulation, for the financing of such interest or other charges, to apply after 2027, including with respect to the rate of interest to pay on the amount of the fines or other penalties to be repaid as an adequate compensation for the recipient undertakings in such situations.”

Removed:Recital 24: (24) Considering the importance of addressing climate and environmental challenges and in order to ensure that budget implementation contributes to the achievement of the European Green Deal30 as well the Union’s climate and energy targets and to the achievement of climate neutrality by 2050 latest, the concept of performance as regards the budget should be extended to include the implementation of programmes and activities in a sustainable way, which would not hinder the achievement of the environmental objectives of climate change mitigation, climate change adaptation, the sustainable use and protection of water and marine resources, the transition to a circular economy, pollution prevention and control and the protection and restoration of biodiversity and ecosystems.

Added:Joint statement of the European Parliament, the Council and the Commission on the single data-mining and risk-scoring tool provided for in Article 36 of the Financial Regulation on the occasion of the adoption of Regulation (EU, Euratom) 2024/2509

Removed:Recital 24 a (new): (24a) Gender mainstreaming should be better reflected in the drafting and implementation of the budget and a systematic and comprehensive collection of gender-disaggregated data in the context of all relevant EU policies and programmes is necessary in order to measure the impact on gender equality. The data to be fed into the single, integrated and interoperable information and monitoring system should include the gender of recipients and their beneficial owners that are natural persons, unless those persons refuse to provide those data. In addition, the rules on budget implementation should allow for the effective and efficient tracking of funds used in tackling climate change on both the climate mitigation and adaptation fronts, as well as for the accurate monitoring of expenditure contributing to halting and reversing the decline of biodiversity.

Added:“The European Parliament, the Council and the Commission (“the three Institutions”) recognise the importance to enhance the protection of the Union’s financial interests as acknowledged in the Inter-institutional Agreement (‘IIA’) of 16 December 2020 and as set out in Article 325 TFEU.

Removed:Recital 24 b (new): (24b) Following the adoption of the Multiannual Financial Framework 2021-2027, the principle of social conditionality has been included in the Common Agricultural Policy 2021-2027. In order to ensure that the Union budget implementation contributes to the achievement of the objectives set out in Article 9 TFEU and the European Pillar of Social Rights, the concept of performance as regards the budget should be extended to include the implementation of programmes and activities in a socially sustainable and fair way.

Added:The three Institutions agree that it is necessary to further develop the tool in accordance with IT security and data protection rules. With a view to reducing the administrative burden and avoiding disproportionate IT costs for the Member States and the other users, established approved systems in Member States will be taken into account.

Removed:Recital 25: (25) In accordance with the Interinstitutional Agreement of 13 April 2016 on Better Law-Making31 , Union legislation should be of high quality and should focus on areas where it has the greatest added value for citizens and is as efficient and effective as possible in delivering the common policy objectives of the Union. Making existing and new spending programmes and activities entailing significant spending subject to evaluation can help achieve those objectives. The Commission should strive to undertake an ex-ante evaluation of programmes and activities in the form of an impact assessment, except in duly justified cases and in particular where urgent action is necessary.

Added:The three Institutions commit to cooperate towards further development of the tool. The Commission confirms that it will continue to develop the tool in consultation with its users and to offer the Member States support to address any technical queries. The Member States will cooperate with the Commission in order to enable synergies necessary for interoperability with relevant IT systems and databases.

Removed:Recital 27: (27) In order to enhance the protection of the Union budget against fraud, corruption, conflicts of interest, double funding and other irregularities, standardised financial and reimbursement requests and measures to collect, compare and aggregate information on the recipients of Union funding should be introduced. In particular, in order to effectively prevent, detect, investigate and correct frauds or remedy irregularities, it is necessary to be able to identify the natural persons that ultimately benefit, directly or indirectly, from Union funding and who ultimately profit from the misuse of EU funding. A single integrated and interoperable information and monitoring system provided by the Commission allowing for the electronic recording and storage of data on the recipients of Union funding, including their beneficial owners as defined in Article 3, point (6), of Directive (EU) 2015/849 of the European Parliament and of the Council 32, which addresses the situation where the beneficial owner is not identified, or if there is any doubt that the person(s) identified are the beneficial owner(s), and allowing for the regular making of those data available for data-mining and risk-scoring should be designed and put in place to get a clear overview of the distribution and potential concentration of Union funds disbursed, including through a functionality that allows for the aggregation of these funds. That system should reduce the bureaucratic burden on the financial actors and…

Added:Following an assessment by the Commission establishing the readiness of the tool based on the criteria referred to in Article 36(6) of the Financial Regulation, the three Institutions, without prejudice to their respective competences, commit to examine and re-discuss the compulsory use of the tool during the post-2027 multiannual financial framework.”

Removed:Recital 27 a (new): (27a) The single integrated and interoperable information and monitoring system referred to in Article 36(2) should be based on interoperability, whereby updated information on recipients of Union funds and on company ownership should be retrieved from and transferred into that system, in an automatic way, in real time where feasible, from transparency registers on beneficial owners, relevant national databases, internal systems of relevant national bodies and authorities, management and paying authorities and national public procurement and tender databases, thereby ensuring comprehensive and complete data. Furthermore, data to be recorded in that system should be aligned with those to be published, so that persons and entities implementing Union funds need provide data only once, thereby reducing any administrative burden.

Added:Unilateral statement by the Commission on decommitments on the occasion of the adoption of Regulation (EU, Euratom) 2024/2509

Removed:Recital 28: (28) In accordance with the principle of transparency enshrined in Article 15 of the Treaty on the Functioning of the European Union (TFEU), Union institutions are to conduct their work as openly as possible, and Member States should do likewise in implementing the Union budget. With regard to budget implementation, the application of that principle implies that citizens, who benefit from the budget and ultimately contribute to it, should know where, and for what purpose, funds are spent by the Union. Such information fosters democratic debate, encourages the citizens' identification with and sense of community within the Union, contributes to the participation of citizens in the Union’s decision-making process, reinforces institutional control and scrutiny over Union expenditure, and contributes to boosting its credibility. Communication should be more targeted and should aim to increase the visibility of the Union contribution for citizens. Such objectives should be achieved by the publication, preferably using modern communication tools, of relevant information concerning all funding opportunities, such as calls for tender in all forms of management on a dedicated website and of relevant information concerning all recipients of funds financed from the budget which takes into account those recipients’ legitimate interests of confidentiality and security and, as far as natural persons are concerned, their right to privacy and the protection of their personal data. Union inst…

Added:“In the context of the preparation for the post-2027 multiannual financial framework, the Commission will examine the question of widening the scope of making appropriations corresponding to decommitments available again. This is without prejudice to the future Commission’s proposal on the post-2027 multiannual financial framework and to the right of legislative initiative of the Commission, as established in the Treaties.”

Removed:Recital 29: (29) Without prejudice to the rules on the protection of personal data, the utmost transparency regarding information on recipients should be sought. The information on recipients of Union funds should be published on a dedicated website of Union institutions, such as the Financial Transparency System. Publication requirements should cover all methods of budget implementation, including by other Union institutions and bodies. To that end and in the interests of reducing administrative burden, the Commission should use the data stored in the single interoperable system to feed the single website. That information should include at least the name, a unique identifier and the locality of the recipient, the gender of the recipient and their final beneficial owner, where provided and in the case of a natural person, the amount committed, whether the recipient receives state aid and the purpose of the measure. That information should take into account relevant criteria such as the periodicity, the type and the importance of the measure.

Added:Unilateral statement by the Commission on the Early Detection and Exclusion System on the occasion of the adoption of Regulation (EU, Euratom) 2024/2509

Removed:Recital 33: (33) For reasons of legal certainty and in accordance with the principle of proportionality, the situations in which publication should not take place should be specified. For example, information should not be published with regard to scholarships or other forms of direct support paid to natural persons most in need, to certain contracts with a very low value or to financial support below a certain threshold provided through financial instruments or budgetary guarantees, or in cases where disclosure risks threatening the rights and freedoms of the individuals concerned as protected by the Charter of Fundamental Rights of the European Union or causing serious harm to the commercial interests of the recipients. For grants, however, there should be no special exemption from the obligation to publish information on the basis of a specific threshold, in order to maintain the current practice and to allow for transparency.