Regulation 2002/1605 - Financial Regulation applicable to the general budget of the EC - Main contents

The new Financial Regulation: easier access to EU funding

The financial regulation is the main document containing EU financial rules. It sets out the principles of the EU budget and governs the way the EU budget is spent.

The newly adopted regulation, which came into effect on 1 January 2013, enables EU funding beneficiaries - businesses, NGOs, researchers, students, municipalities and others - to follow easier, clear rules and simple procedures.

ACT

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) No 1605/2002. [Official Journal L 298 of 26.10.2012]

SUMMARY

WHAT WAS THE PURPOSE OF REVIEWING THE FINANCIAL REGULATION?

The EU is modernising its financial procedures in order to better serve the achievement of the objectives of Europe 2020. Broadly speaking, the changes focus on three areas:

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  Simplification: cutting red tape, speeding up procedures and shifting the focus from paperwork to performance;
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  Accountability: ensuring enhanced sound financial management and the protection of the EU's financial interests;
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  Innovation: introducing financial mechanisms which will enable the mobilisation of third-party funds as leverage on EU funds.

WHAT’S NEW?

Specific improvements to focus more on results:

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  no obligation to open separate bank accounts;
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  speeding up payments to beneficiaries (30, 60 or 90 days depending on the complexity of the deliverables);
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  easier procedures (using lump sums and flat rates) for smaller amounts;
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  less paperwork.

Increased accountability:

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  the new rules will increase the accountability of Member States, especially in regional policy;
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  national authorities will have to sign and submit annual declarations certifying that EU funds have been used properly.

Strengthening control:

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  when irregularities occur, mechanisms for financial corrections will be triggered and the Commission will publish decisions imposing penalties for misuse of EU funds.

Flexibility:

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  various financial instruments - loans, equity or guarantees - will be used to multiply the financial impact of EU funds;
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  new possibilities will be created for public-private partnerships (PPPs).

Pooling resources together:

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  the EU will be able to create EU trust funds pooling its own resources with those of its Member States and other donors in order to better coordinate and deliver external aid and increase its visibility.

Further information: http://europa.eu/rapid/press-release_MEMO-12-795_en.htm

REFERENCES

REFERRED ACT

Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union. [Official Journal L 362 of 31.12.2012]

Last updated: 24.01.2014

This summary has been adopted from EUR-Lex.