26.6.2003 EN Official Journal of the European Union L 157/49 COUNCIL DIRECTIVE 2003/49/EC of 3 June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 94 thereof, Having regard to the proposal from the Commission (1), Having regard to the opinion of the European Parliament (2), Having regard to the opinion of the European Economic and Social Committee (3), Whereas: (1) In a Single Market having the characteristics of a domestic market, transactions between companies of different Member States should not be subject to less favourable tax conditions than those applicable to the same transactions carried out between companies of the same Member State. (2) This requirement is not currently met as regards interest and royalty payments; national tax laws coupled, where applicable, with bilateral or multilateral agreements may not always ensure that double taxation is eliminated, and their application often entails burdensome administrative formalities and cash-flow problems for the companies concerned. (3) It is necessary to ensure that interest and royalty payments are subject to tax once in a Member State. (4) The abolition of taxation on interest and royalty payments in the Member State where they arise, whether collected by deduction at source or by assessment, is the most appropriate means of eliminating the aforementioned formalities and problems and of ensuring the equality of tax treatment as between national and cross-border transactions; it is particularly necessary to abolish such taxes in respect of such payments made between associated companies of different Member States as well as between permanent establishments of such companies. (5) The arrangements should only apply to the amount, if any, of interest or royalty payments which would have been agreed by the payer and the beneficial owner in the absence of a special relationship. (6) It is moreover necessary not to preclude Member States from taking appropriate measures to combat fraud or abuse. (7) Greece and Portugal should, for budgetary reasons, be allowed a transitional period in order that they can gradually decrease the taxes, whether collected by deduction at source or by assessment, on interest and royalty payments, until they are able to apply the provisions of Article 1. (8) Spain, which has launched a plan for boosting the Spanish technological potential, for budgetary reasons should be allowed during a transitional period not to apply the provisions of Article 1 on royalty payments. (9) It is necessary for the Commission to report to the Council on the operation of the Directive three years after the date by which it must be transposed, in particular with a view to extending its coverage to other companies or undertakings and reviewing the scope of the definition of interest and royalties in pursuance of the necessary convergence of the provisions dealing with interest and royalties in national legislation and in bilateral or multilateral double-taxation treaties. (10) Since the objective of the proposed action, namely setting up a common system of taxation applicable to interest and royalty payments of associated companies of different Member States cannot be sufficiently achieved by the Member States and can therefore be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective, HAS ADOPTED THIS DIRECTIVE: Article 1 Scope and procedure 1. Interest or royalty payments arising in a Member State shall be exempt from any taxes imposed on those payments in that State, whether by deduction at source or by assessment, provided that the beneficial owner of the interest or royalties is a company of another Member State or a permanent establishment situated in another Member State of a company of a Member State. 2. A payment made by a company of a Member State or by a permanent establishment situated in another Member State shall be deemed to arise in that Member State, hereafter referred to as the ‘source State’. 3. A permanent establishment shall be treated as the payer of interest or royalties only insofar as those payments represent a tax-deductible expense for the permanent establishment in the Member State in which it is situated. 4. A company of a Member State shall be treated as the beneficial owner of interest or royalties only if it receives those payments for its own benefit and not as an intermediary, such as an agent, trustee or authorised signatory, for some other person. 5. A permanent establishment shall be treated as the beneficial owner of interest or royalties: (a) if the debt-claim, right or use of information in respect of which interest or royalty payments arise is effectively connected with that permanent establishment; and (b) if the interest or royalty payments represent income in respect of which that permanent establishment is subject in the Member State in which it is situated to one of the taxes mentioned in Article 3(a)(iii) or in the case of Belgium to the ‘impôt des non-résidents/belasting der niet-verblijfhouders’ or in the case of Spain to the ‘Impuesto sobre la Renta de no Residentes’ or to a tax which is identical or substantially similar and which is imposed after the date of entry into force of this Directive in addition to, or in place of, those existing taxes. 6. Where a permanent establishment of a company of a Member State is treated as the payer, or as the beneficial owner, of interest or royalties, no other part of the company shall be treated as the payer, or as the beneficial owner, of that interest or those royalties for the purposes of this Article. 7. This Article shall apply only if the company which is the payer, or the company whose permanent establishment is treated as the payer, of interest or royalties is an associated company of the company which is the beneficial owner, or whose permanent establishment is treated as the beneficial owner, of that interest or those royalties. 8. This Article shall not apply where interest or royalties are paid by or to a permanent establishment situated in a third State of a company of a Member State and the business of the company is wholly or partly carried on through that permanent establishment. 9. Nothing in this Article shall prevent a Member State from taking interest or royalties received by its companies, by permanent establishments of its companies or by permanent establishments situated in that State into account when applying its tax law. 10. A Member State shall have the option of not applying this Directive to a company of another Member State or to a permanent establishment of a company of another Member State in circumstances where the conditions set out in Article 3(b) have not been maintained for an uninterrupted period of at least two years. 11. The source State may require that fulfilment of the requirements laid down in this Article and in Article 3 be substantiated at the time of payment of the interest or royalties by an attestation. If fulfilment of the requirements laid down in this Article has not been attested at the time of payment, the Member State shall be free to require deduction of tax at source. 12. The source State may make it a condition for exemption under this Directive that it has issued a decision currently granting the exemption following an attestation certifying the fulfilment of the requirements laid down in this Article and in Article 3. A decision on exemption shall be given within three months at most after the attestation and such supporting information as the source State may reasonably ask for have been provided, and shall be valid for a period of at least one year after it has been issued. 13. For the purposes of paragraphs 11 and 12, the attestation to be given shall, in respect of each contract for the payment, be valid for at least one year but for not more than three years from the date of issue and shall contain the following information: (a) proof of the receiving company's residence for tax purposes and, where necessary, the existence of a permanent establishment certified by the tax authority of the Member State in which the receiving company is resident for tax purposes or in which the permanent establishment is situated; (b) beneficial ownership by the receiving company in accordance with paragraph 4 or the existence of conditions in accordance with paragraph 5 where a permanent establishment is the recipient of the payment; (c) fulfilment of the requirements in accordance with Article 3(a)(iii) in the case of the receiving company; (d) a minimum holding or the criterion of a minimum holding of voting rights in accordance with Article 3(b); (e) the period for which the holding referred to in (d) has existed. Member States may request in addition the legal justification for the payments under the contract (e.g. loan agreement or licensing contract). 14. If the requirements for exemption cease to be fulfilled, the receiving company or permanent establishment shall immediately inform the paying company or permanent establishment and, if the source State so requires, the competent authority of that State. 15. If the paying company or permanent establishment has withheld tax at source to be exempted under this Article, a claim may be made for repayment of that tax at source. The Member State may require the information specified in paragraph 13. The application for repayment must be submitted within the period laid down. That period shall last for at least two years from the date when the interest or royalties are paid. 16. The source State shall repay the excess tax withheld at source within one year following due receipt of the application and such supporting information as it may reasonably ask for. If the tax withheld at source has not been refunded within that period, the receiving company or permanent establishment shall be entitled on expiry of the year in question to interest on the tax which is refunded at a rate corresponding to the national interest rate to be applied in comparable cases under the domestic law of the source State. Article 2 Definition of interest and royalties For the purposes of this Directive: (a) the term ‘interest’ means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures; penalty charges for late payment shall not be regarded as interest; (b) the term ‘royalties’ means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematograph films and software, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience; payments for the use of, or the right to use, industrial, commercial or scientific equipment shall be regarded as royalties. Article 3 Definition of company, associated company and permanent establishment For the purposes of this Directive: (a) the term ‘company of a Member State’ means any company: (i) taking one of the forms listed in the Annex hereto; and (ii) which in accordance with the tax laws of a Member State is considered to be resident in that Member State and is not, within the meaning of a Double Taxation Convention on Income concluded with a third state, considered to be resident for tax purposes outside the Community; and (iii) which is subject to one of the following taxes without being exempt, or to a tax which is identical or substantially similar and which is imposed after the date of entry into force of this Directive in addition to, or in place of, those existing taxes: — impôt des sociétés/vennootschapsbelasting in Belgium, — selskabsskat in Denmark, — Körperschaftsteuer in Germany, — Φόρος εισοδήματος νομικών προσώπων in Greece, — impuesto sobre sociedades in Spain, — impôt sur les sociétés in France, — corporation tax in Ireland, — imposta sul reddito delle persone giuridiche in Italy, — impôt sur le revenu des collectivités in Luxembourg, — vennootschapsbelasting in the Netherlands, — Körperschaftsteuer in Austria, — imposto sobre o rendimento da pessoas colectivas in Portugal, — yhteisöjen tulovero/inkomstskatten för samfund in Finland, — statlig inkomstskatt in Sweden, — corporation tax in the United Kingdom; (b) a company is an ‘associated company’ of a second company if, at least: (i) the first company has a direct minimum holding of 25 % in the capital of the second company, or (ii) the second company has a direct minimum holding of 25 % in the capital of the first company, or (iii) a third company has a direct minimum holding of 25 % both in the capital of the first company and in the capital of the second company. Holdings must involve only companies resident in Community territory. However, Member States shall have the option of replacing the criterion of a minimum holding in the capital with that of a minimum holding of voting rights; (c) the term ‘permanent establishment’ means a fixed place of business situated in a Member State through which the business of a company of another Member State is wholly or partly carried on. Article 4 Exclusion of payments as interest or royalties 1. The source State shall not be obliged to ensure the benefits of this Directive in the following cases: (a) payments which are treated as a distribution of profits or as a repayment of capital under the law of the source State; (b) payments from debt-claims which carry a right to participate in the debtor's profits; (c) payments from debt-claims which entitle the creditor to exchange his right to interest for a right to participate in the debtor's profits; (d) payments from debt-claims which contain no provision for repayment of the principal amount or where the repayment is due more than 50 years after the date of issue. 2. Where, by reason of a special relationship between the payer and the beneficial owner of interest or royalties, or between one of them and some other person, the amount of the interest or royalties exceeds the amount which would have been agreed by the payer and the beneficial owner in the absence of such a relationship, the provisions of this Directive shall apply only to the latter amount, if any. Article 5 Fraud and abuse 1. This Directive shall not preclude the application of domestic or agreement-based provisions required for the prevention of fraud or abuse. 2. Member States may, in the case of transactions for which the principal motive or one of the principal motives is tax evasion, tax avoidance or abuse, withdraw the benefits of this Directive or refuse to apply this Directive. Article 6 Transitional rules for Greece, Spain and Portugal 1. Greece and Portugal shall be authorised not to apply the provisions of Article 1 until the date of application referred to in Article 17(2) and (3) of Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments (4). During a transitional period of eight years starting on the aforementioned date, the rate of tax on payments of interest or royalties made to an associated company of another Member State or to a permanent establishment situated in another Member State of an associated company of a Member State must not exceed 10 % during the first four years and 5 % during the final four years. Spain shall be authorised, for royalty payments only, not to apply the provisions of Article 1 until the date of application referred to in Article 17(2) and (3) of Directive 2003/48/EC. During a transitional period of six years starting on the aforementioned date, the rate of tax on payments of royalties made to an associated company of another Member State or to a permanent establishment situated in another Member State of an associated company of a Member State must not exceed 10 %. These transitional rules shall, however, remain subject to the continued application of any rate of tax lower than those referred to in the first and second subparagraphs provided by bilateral agreements concluded between Greece, Spain or Portugal and other Member States. Before the end of any of the transitional periods mentioned in this paragraph the Council may decide unanimously, on a proposal from the Commission, on a possible extension of the said transitional periods. 2. Where a company of a Member State, or a permanent establishment situated in that Member State of a company of a Member State: — receives interest or royalties from an associated company of Greece or Portugal, — receives royalties from an associated company of Spain, — receives interest or royalties from a permanent establishment situated in Greece or Portugal of an associated company of a Member State, or — receives royalties from a permanent establishment situated in Spain of an associated company of a Member State, the first Member State shall allow an amount equal to the tax paid in Greece, Spain or Portugal in accordance with paragraph 1 on that income as a deduction from the tax on the income of the company or permanent establishment which received that income. 3. The deduction provided for in paragraph 2 need not exceed the lower of: (a) the tax payable in Greece, Spain or Portugal on such income on the basis of paragraph 1, or (b) that part of the tax on the income of the company or permanent establishment which received the interest or royalties, as computed before the deduction is given, which is attributable to those payments under the domestic law of the Member State of which it is a company or in which the permanent establishment is situated. Article 7 Implementation 1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive not later than 1 January 2004. They shall forthwith inform the Commission thereof. When Member States adopt these measures, they shall contain a reference to this Directive or shall be accompanied by such reference on the occasion of their official publication. The methods of making such a reference shall be laid down by the Member States. 2. Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive, together with a table showing how the provisions of this Directive correspond to the national provisions adopted. Article 8 Review By 31 December 2006, the Commission shall report to the Council on the operation of this Directive, in particular with a view to extending its coverage to companies or undertakings other than those referred to in Article 3 and the Annex. Article 9 Delimitation clause This Directive shall not affect the application of domestic or agreement-based provisions which go beyond the provisions of this Directive and are designed to eliminate or mitigate the double taxation of interest and royalties. Article 10 Entry into force This Directive shall enter into force on the day of its publication in the Official Journal of the European Union. Article 11 Addressees This Directive is addressed to the Member States. Done at Luxembourg, 3 June 2003. For the Council The President N. CHRISTODOULAKIS (1) OJ C 123, 22.4.1998, p. 9. (2) OJ C 313, 12.10.1998, p. 151. (3) OJ C 284, 14.9.1998, p. 50. (4) See page 38 of this Official Journal. ANNEX List of companies covered by Article 3(a) of the Directive (a) Companies under Belgian law known as: ‘naamloze vennootschap/société anonyme, commanditaire vennootschap op aandelen/société en commandite par actions, besloten vennootschap met beperkte aansprakelijkheid/société privée à responsabilité limitée’ and those public law bodies that operate under private law; (b) companies under Danish law known as: ‘aktieselskab’ and ‘anpartsselskab’; (c) companies under German law known as: ‘Aktiengesellschaft, Kommanditgesellschaft auf Aktien, Gesellschaft mit beschränkter Haftung’ and ‘bergrechtliche Gewerkschaft’; (d) companies under Greek law known as: ‘ανώνυμη εταιρíα’; (e) companies under Spanish law known as: ‘sociedad anónima, sociedad comanditaria por acciones, sociedad de responsabilidad limitada’ and those public law bodies which operate under private law; (f) companies under French law known as: ‘société anonyme, société en commandite par actions, société à responsabilité limitée’ and industrial and commercial public establishments and undertakings; (g) companies in Irish law known as public companies limited by shares or by guarantee, private companies limited by shares or by guarantee, bodies registered under the Industrial and Provident Societies Acts or building societies registered under the Building Societies Acts; (h) companies under Italian law known as: ‘società per azioni, società in accomandita per azioni, società a responsabilità limitata’ and public and private entities carrying on industrial and commercial activities; (i) companies under Luxembourg law known as: ‘société anonyme, société en commandite par actions and société à responsabilité limitée’; (j) companies under Dutch law known as: ‘naamloze vennootschap’ and ‘besloten vennootschap met beperkte aansprakelijkheid’; (k) companies under Austrian law known as: ‘Aktiengesellschaft’ and ‘Gesellschaft mit beschränkter Haftung’; (l) commercial companies or civil law companies having a commercial form, cooperatives and public undertakings incorporated in accordance with Portuguese law; (m) companies under Finnish law known as: ‘osakeyhtiö/aktiebolag, osuuskunta/andelslag, säästöpankki/sparbank’ and ‘vakuutusyhtiö/försäkringsbolag’; (n) companies under Swedish law known as: ‘aktiebolag’ and ‘försäkringsaktiebolag’; (o) companies incorporated under the law of the United Kingdom.

Summary: Taxation of interest and royalty payments made between associated companies Taxation of interest and royalty payments made between associated companies SUMMARY OF: Directive 2003/49/EC — common system of taxation on interest and royalty payments made between associated companies of different EU countries WHAT IS THE AIM OF THE DIRECTIVE? It aims at ensuring fair taxation of payments made between associated companies* in different EU countries, while avoiding double-taxation between EU countries. It applies to: interest payments*; royalty payments* KEY POINTS The purpose of the directive is to abolish taxes levied at the EU country of source, while the EU country of receipt taxes the same payment. Therefore, the main aim is to ensure that the payments are not taxed in more than one country (double taxation). Interest and royalty payments arising in an EU country are exempt from any taxes imposed on those payments in that country provided that the beneficial owner* of the interest or royalties is: a company of another EU country* or a permanent establishment* situated in another EU country. The annex to the directive includes a list of the types of companies to which the directive applies. The directive has been amended to take into account the types of companies in the countries that joined the EU in 2004, 2007 and 2013. Where an associated company or permanent establishment pays excess tax on interest or royalties in an EU country that is not its own, it must apply for a refund. The country must repay the excess tax withheld within 1 year following receipt of an application and any supporting information that it may reasonably ask for from the company or permanent establishment. If the tax withheld has not been refunded within that period, the company or permanent establishment is entitled (on expiry of the year in question) to interest on the tax which is refunded. This interest is calculated at a rate corresponding to the national interest rate to be applied in comparable cases under the domestic law of the country in question. This directive will not rule out the application of domestic or agreement-based rules required for the prevention of fraud or abuse. EU countries may withdraw the benefits of this directive or refuse to apply it in the case of transactions for which the principal motive or one of the principal motives is tax evasion, tax avoidance or abuse. Certain countries benefited for a period from transitional rules whereby the application of the directive was delayed. The International Bureau of Fiscal Documentation conducted a survey on the directive’s implementation for the European Commission in 2006 and the Commission published its own report on its operation in 2009. In 2011, the Commission adopted a proposal to recast the directive with a view to expanding its scope and to avoid situations where tax relief is granted but the corresponding income is not effectively subject to tax (double non-taxation). FROM WHEN DOES THE DIRECTIVE APPLY? The directive has applied since 26 June 2003 and had to become law in the EU countries by 1 January 2004. BACKGROUND For more information, see: Taxation of cross-border interest and royalty payments in the EU (European Commission). KEY TERMS Interest payment: income from debt-claims of every kind, whether or not they are secured by mortgage and whether or not carrying a right to participate in the debtor’s profits. Examples include income from bonds or debentures (long-term bonds which yield a fixed rate of interest, issued by a company and secured against assets), and premiums and prizes relating to those bonds or debentures. Penalty charges for late payment are not regarded as interest. Royalty payment: payments of any kind received for the use of or the right to use any copyright of literary, artistic or scientific work, including:cinematograph films and software,any patent,trade mark,design or model,plan,secret formula or process or for information concerning industrial, commercial or scientific experience.Payments for the use of, or the right to use, industrial, commercial or scientific equipment are regarded as royalties. Associated companies: 2 companies are regarded as associated companies:when one has a direct minimum holding of 25% in the capital of the other, orwhen a third company has a direct minimum holding of 25% in the capital of both companies. Beneficial owner: the company that receives those payments for its own benefit and not as an intermediary, such as an agent, trustee or authorised signatory, for some other person.In case of a permanent establishment, when the payment is effectively connected with that permanent establishment. Company of another EU country: this company must meet the 3 following criteria:it was formed in accordance with the law of an EU country (i.e. it has its registered office, central administration or principal place of business within the EU and its activities present an effective and continuous link with the economy of that country);it is resident in that EU country;it is subject to corporation tax. Permanent establishment: a fixed place of business situated in a Member State through which the business of a company of another Member State is wholly or partly carried on. MAIN DOCUMENT Council Directive 2003/49/EC of 3 June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States (OJ L 157, 26.6.2003, pp. 49-54) Successive amendments and changes to Directive 2003/49/EC have been incorporated in the original text. This consolidated version is of documentary value only. RELATED DOCUMENTS Proposal for a Council Directive on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States (COM(2011) 714 final, 11.11.2011) last update 04.07.2018


EUR-Lex - 32002D0621 - EN Avis juridique important | 32002D0621 2002/621/EC: Decision of the Secretaries-General of the European Parliament, the Council and the Commission, the Registrar of the Court of Justice, the Secretaries-General of the Court of Auditors, the Economic and Social Committee and the Committee of the Regions, and the Representative of the European Ombudsman of 25 July 2002 on the organisation and operation of the European Communities Personnel Selection Office Official Journal L 197 , 26/07/2002 P. 0056 - 0059 Decision of the Secretaries-General of the European Parliament, the Council and the Commission, the Registrar of the Court of Justice, the Secretaries-General of the Court of Auditors, the Economic and Social Committee and the Committee of the Regions, and the Representative of the European Ombudsmanof 25 July 2002on the organisation and operation of the European Communities Personnel Selection Office(2002/621/EC)THE SECRETARIES-GENERAL OF THE EUROPEAN PARLIAMENT, THE COUNCIL, THE COMMISSION, THE REGISTRAR OF THE COURT OF JUSTICE, THE SECRETARIES-GENERAL OF THE COURT OF AUDITORS, THE ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS, AND THE REPRESENTATIVE OF THE EUROPEAN OMBUDSMAN,Having regard to the Staff Regulations of officials of the European Communities and the Conditions of employment of other servants of the European Communities, as laid down by Council Regulation (EEC, Euratom, ECSC) No 259/68(1),Having regard to the Decision of the European Parliament, the Council, the Commission, the Court of Justice, the Court of Auditors, the Economic and Social Committee, the Committee of the Regions and the Ombudsman of 25 July 2002 establishing a European Communities Personnel Selection Office, and in particular Article 5 thereof(2),Whereas:(1) Pursuant to Article 27 of the Staff Regulations, the institutions are committed to ensuring that recruitment is directed to securing the services of officials of the highest standard of ability, efficiency and integrity, recruited on the broadest possible geographical basis from among nationals of Member States of the Communities, without distinction as to race, political, philosophical or religious beliefs, sex or sexual orientation and without reference to their marital status or family situation.(2) The third subparagraph of Article 1(1) of Annex III to the Staff Regulations sets out the area of responsibility of the common Joint Committee and the second paragraph of Article 3 of that Annex outlines the way the members of the selection board are to be appointed for the purpose of organising open competitions,HAVE DECIDED AS FOLLOWS:Article 1Duties of the Office1. The Office shall organise open competitions with a view to securing the services of officials on optimal professional and financial terms for the institutions of the European Communities. The Office shall draw up reserve lists enabling the institutions to recruit highly qualified staff meeting the needs determined by the institutions.2. More specifically, the Office's tasks shall be to:(a) organise open competitions at the request of individual institutions with a view to drawing up reserve lists of suitable applicants for appointment as officials. The competitions shall be organised in compliance with the Staff Regulations, on the basis of harmonised criteria laid down in accordance with Article 6(c) and in compliance with the work programme approved by the Management Board;(b) cooperate closely with the institutions with a view to assessing the future staff needs indicated by the institutions and preparing and implementing a programme of competitions to meet those needs in a timely manner;(c) develop selection methods and techniques on the basis of best practice and in line with the skills profiles laid down for the various categories of staff of the institutions;(d) administer and check the use of the reserve lists established on the basis of Interinstitutional competitions;(e) submit annual reports to the institutions on its activities.Article 2Responsibilities of the institutionsThe appointing authority of each institution shall make available to the Office a sufficient number of selection board members, examiners and invigilator on the basis of the "quota" approved by the Management Board as provided for in Article 6(i), to enable the selection procedures to proceed smoothly in accordance with Article 3 of Annex III to the Staff Regulations.Article 3Other services1. Under an agreement between the Head of the Office and any body, office or agency, the Office may organise selection procedures for staff to be recruited by such bodies, offices or agencies. Before concluding such an agreement, the Head of the Office shall seek the approval of the Management Board. Any such agreement shall cover the financial arrangements relating to the services provided by the Office.2. Where requested, the Office may provide technical support for internal competitions organised by individual institutions, bodies, offices or agencies.3. At the request of individual institutions, the Office shall organise the selection procedure for other servants with a view to drawing up reserve lists of suitable applicants and/or databases from which the individual institutions may recruit other servants.4. These activities shall be included in the Office's work programme in accordance with Article 6(f), provided that the request is submitted in a timely manner by the institution in question.Article 4Complaints and requests1. The Head of the Office shall exercise the powers conferred on the appointing authority under Article 90 of the Staff Regulations in respect of all requests or complaints relating to the tasks of the Office.2. In the event of any such complaints, the Head of the Office shall consult the Chairman of the Management Board where he or she intends to endorse the original decision.3. The Office shall answer requests from the European Ombudsman concerning any matter falling within its area of responsibility under this Decision.Article 5Management Board1. A Management Board shall be set up for the Office, comprising one member appointed by each institution and three staff representatives with observer status appointed by common assent by the staff committees of the institutions.2. The Management Board shall elect a Chairman for a two-year term by a simple majority from among its members.3. The Management Board shall adopt its Rules of Procedure by a simple majority after submitting them to the institutions.4. The Management Board shall meet at the initiative of the Chairman or at the request of one of its members.5. Where the Management Board takes a decision by a simple majority, each institution shall have one vote. Where votes are tied, the Chairman shall have the casting vote.6. Where the Management Board takes a decision by a qualified majority, the votes allotted to the institutions shall be as follows: Commission, 18 votes; European Parliament, seven votes; Council, seven votes; Court of Justice, three votes; Court of Auditors, two votes; Economic and Social Committee, two votes; Committee of the Regions, two votes; European Ombudsman, one vote. A qualified majority shall be 24 votes cast in favour.Article 6Tasks of the Management BoardIn the common interest of the institutions, the Management Board shall:(a) acting by a qualified majority, approve the rules governing the running of the Office;(b) acting by a simple majority on a proposal from the Head of the Office, approve the organisational structure of the Office;(c) acting by a qualified majority on proposals from the Head of the Office, in compliance with the Agreement to be concluded between the Secretaries-General of the European Parliament, the Council, the Commission, the Registrar of the Court of Justice, the Secretaries-General of the Court of Auditors, the Economic and Social Committee and the Committee of the Regions and the representative of the European Ombudsman on the common principles for a shared selection and recruitment policy and the principles for managing reserve lists, together with the relevant provisions of the Staff Regulations, approve the principles governing the selection policy to be followed by the Office;(d) acting by a simple majority under the budget procedure on the basis of a draft drawn up by the Head of the Office, draw up an estimate of the Office's revenue and expenditure and send it to the Commission with a view to the drawing-up of the estimate of the Commission's revenue and expenditure; at the same time it shall propose to the Commission any adjustments to the Office's establishment plan that it deems necessary;(e) acting by a simple majority, approve the type of and the rates chargeable for additional services that the Office may perform against payment for the institutions, bodies, offices and agencies and the conditions under which the Office may perform them;(f) acting unanimously on a proposal from the Head of the Office, approve the work programme, and in particular the scheduling of and timetable for competitions to be organised. The work programme shall also cover services not relating to open competitions organised for the institutions, bodies, offices and agencies;(g) acting by a qualified majority on the basis of a draft prepared by the Head of the Office, approve an annual management report covering all individual revenue and expenditure headings relating to work performed and services provided by the Office. Before 1 May each year, it shall send the institutions the report on the preceding financial year, drawn up in the light of the analytical accounts;(h) acting by a simple majority, approve a fair, balanced breakdown of the variable and direct costs to be charged for analytical purposes to the individual institutions and update it every three years;(i) acting by a simple majority on the basis of recruitment needs, agree on rules whereby each institution is to make a suitable number of selection board members, examiners and invigilator available to the Office;(j) acting by a simple majority, approve the conditions under which the Office may grant agreement to the institutions to organise their own competitions in accordance with Article 2(1) of the Decision of the institutions.Article 7Appointment of staff1. The Office shall be administered by a Head appointed by the Commission after the Management Board has issued a favourable opinion by a simple majority. The Management Board shall be closely involved in the procedures to be followed before the Head of the Office is appointed, and in particular in the drafting of a notice of vacancy and the consideration of the applications.2. The Head of the Office shall be the Appointing Authority for the staff of the Office.3. The Commission, as far as the Head of the Office is concerned, and the Head of the Office, as far as the staff for whom the latter is the Appointing Authority are concerned, shall inform the Management Board of appointments made, contracts signed, promotions granted and disciplinary proceedings initiated against officials or other servants.4. The officials of all Community institutions shall be informed of posts vacant within the Office as soon as the Appointing Authority decides to fill those posts.5. The Head of the Office shall be appointed for a term of five years, renewable for one further term.Article 8Tasks of the Head of the Office; management of staff1. The Head of the Office shall be responsible for the smooth running of the Office. Within the area of responsibility of the Management Board, he or she shall act under the authority of the latter. He or she shall provide secretarial services for the Management Board, shall report to it on the performance of his or her duties and shall submit to it any suggestion for the smooth running of the Office.2. Administrative procedures connected with the day-to-day management of personnel, such as salaries, leave, and sickness, accident and retirement insurance, shall be carried out under the same conditions as for the officials and other servants of the Commission. That list shall not be exhaustive and the Office may extend it to cover other areas in agreement with the Commission.Article 9Financial matters1. The appropriations allocated to the Office, the total amount of which shall be entered in a separate budget heading within the section of the budget relating to the Commission, shall be set out in detail in an Annex to that section. That Annex shall take the form of a statement of revenue and expenditure, subdivided in the same way as the sections of the budget.2. The establishment plan of the Office shall be annexed to the Commission's establishment plan.3. On the basis of a proposal from the Management Board, the Commission shall, as regards the appropriations for the Office entered in the Annex, delegate the powers of authorising officer to the Head of the Office and shall set the limits and conditions applying to that delegation of powers. At the end of the financial year the Management Board shall inform the budgetary authority of the breakdown of amounts obtained in return for extra services provided by the Office, within the budget heading in the Annex.4. The Office's accounts shall be drawn up in accordance with the accounting rules and methods laid down by the Commission accounting officer. The Office shall keep separate accounts of revenue from payments for services provided.Article 10ReviewThis Decision shall be reviewed after a period of three years following the establishment of the Office.Article 11Effective dateThis Decision shall take effect on the day of its publication in the Official Journal of the European Communities.For the European ParliamentThe Secretary-GeneralJ. PriestleyFor the CouncilThe Deputy Secretary-GeneralP. De BoissieuFor the CommissionThe Secretary-GeneralD. O'SullivanFor the Court of JusticeThe RegistrarR. GrassFor the Court of AuditorsThe Secretary-GeneralM. HervéFor the Economic and Social CommitteeThe Secretary-GeneralP. VenturiniFor the Committee of the RegionsThe Secretary-GeneralV. FalconeThe European OmbudsmanJ. Søderman(1) OJ L 56, 4.3.1968, p. 1.(2) See page 53 of this Official Journal.

Summary: European Personnel Selection Office (EPSO) European Personnel Selection Office (EPSO) SUMMARY OF Decision 2002/620/EC setting up a personnel selection office for the EU institutions Decision 2002/621/EC on the organisation and operation of the personnel selection office for the EU institutions WHAT IS THE AIM OF THESE DECISIONS? Decision 2002/620/EC sets up the European Personnel Selection Office (EPSO) responsible for recruiting staff for the EU institutions, agencies and bodies. Decision 2002/621/EC sets out the rules on the organisation and operation of EPSO. KEY POINTS Duties EPSO is responsible for operating the staff selection process for EU institutions, agencies and bodies. It does this by organising open competitions, the results of which permit it to draw up reserve lists of suitable candidates. It works closely with the institutions so as to assess future staffing needs and prepares a programme of competitions to meet those needs. It develops selection methods and techniques that are based on best practice and are in line with the required skills profiles. It manages and monitors the use of the reserve lists drawn up following the competitions. Selection procedures Each EU institution has to make a sufficient number of selection board members, examiners and supervisors available to EPSO to allow the selection procedures to proceed smoothly. The decision to nominate successful candidates is taken by the appointing authorities of the relevant EU institutions, agencies and bodies. Additional services EPSO may also do the following. Agree to organise selection procedures for staff recruited by any body, office or agency. Before agreeing to do so, the head of EPSO needs the approval of EPSO’s management board. Any such agreement must cover the financial arrangements relating to the services provided by EPSO. Provide technical support for internal competitions organised by individual institutions, offices, agencies and bodies. Organise selection procedures for categories other than officials, such as contract agents and temporary agents, and draw up reserve lists of suitable applicants. Management board EPSO has a management board which comprises one member per institution and three staff representatives with observer status appointed by the institutions’ staff committees (trade unions). The management board’s main tasks include: approving the rules governing EPSO’s operation and its organisational structure;approving the principles governing EPSO’s selection policy;approving the rates chargeable for EPSO’s additional services;agreeing rules whereby each institution is to make a suitable number of selection board members, examiners and supervisors available to EPSO. Appointment of EPSO staff The European Commission appoints the head of EPSO once the management board has issued a favourable opinion in regard to the candidate. The head is responsible for EPSO’s smooth operation and for appointing its staff. The head is appointed for a 5-year term which may be renewed once. Budget and accounts EPSO’s budget falls within the section of the EU’s budget relating to the European Commission. EPSO’s accounts must be drawn up in line with the Commission’s accounting rules and methods. It must keep separate accounts of revenue from payments for services provided. FROM WHEN DO THE DECISIONS APPLY? Decisions 2002/620/EC and 2002/621/EC have applied since 26 July 2002. BACKGROUND For more information, see: European Personnel Selection Office (Europa). MAIN DOCUMENTS Decision 2002/620/EC of the European Parliament, the Council, the Commission, the Court of Justice, the Court of Auditors, the Economic and Social Committee, the Committee of the Regions and the European Ombudsman of 25 July 2002 establishing a European Communities Personnel Selection Office — Declaration by the Bureau of the European Parliament (OJ L 197, 26.7.2002, pp. 53-55) Decision 2002/621/EC of the Secretaries-General of the European Parliament, the Council and the Commission, the Registrar of the Court of Justice, the Secretaries-General of the Court of Auditors, the Economic and Social Committee and the Committee of the Regions, and the Representative of the European Ombudsman of 25 July 2002 on the organisation and operation of the European Communities Personnel Selection Office (OJ L 197, 26.7.2002, pp. 56-59) Successive amendments to Decision 2002/621/EC have been incorporated into the original document. This consolidated version is of documentary value only. last update 07.11.2017


EUR-Lex - 32003R0058 - EN Avis juridique important | 32003R0058 Council Regulation (EC) No 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes Official Journal L 011 , 16/01/2003 P. 0001 - 0008 Council Regulation (EC) No 58/2003of 19 December 2002laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmesTHE 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(1),Having regard to the opinion of the European Parliament(2),Having regard to the opinion of the Court of Auditors(3),Whereas:(1) An increasing number of programmes are being created in a wide range of fields targeting a variety of categories of beneficiaries, as part of the activities provided for in Article 3 of the Treaty. The Commission is, as a rule, responsible for adopting measures to implement such programmes (Community programmes).(2) Implementation of the Community programmes concerned is financed, at least in part, from appropriations entered in the general budget of the European Union.(3) Under Article 274 of the Treaty, the Commission is responsible for implementing the budget.(4) If the Commission is to be properly accountable to citizens, it must focus primarily on its institutional tasks. It should therefore be able to delegate some of the tasks relating to the management of Community programmes to third parties. Outsourcing certain management tasks could, moreover, be a way of achieving the goals of such Community programmes more effectively.(5) Outsourcing of management tasks should nevertheless stay within the limits set by the institutional system as laid out in the Treaty. This means that tasks assigned to the institutions by the Treaty which require discretionary powers in translating political choices into action may not be outsourced.(6) Outsourcing should, moreover, be subject to a cost-benefit analysis taking account of a number of factors such as identification of the tasks justifying outsourcing, a cost-benefit analysis which includes the costs of coordination and checks, the impact on human resources, efficiency and flexibility in the implementation of outsourced tasks, simplification of the procedures used, proximity of outsourced activities to final beneficiaries, visibility of the Community as promoter of the Community programme concerned and the need to maintain an adequate level of know-how inside the Commission.(7) One form of outsourcing consists in using Community bodies which have legal personality (executive agencies).(8) In order to ensure uniformity of executive agencies in institutional terms, their statute should be laid down, in particular as regards certain essential aspects of their structure, tasks, operation, budget system, staff, supervision and responsibility.(9) As the institution responsible for implementing the various Community programmes, the Commission is best qualified to assess whether and to what extent it is appropriate to entrust management tasks relating to one or more specific Community programmes to an executive agency. Recourse to an executive agency does not, however, relieve the Commission of its responsibilities under the Treaty, and in particular Article 274 thereof. It must therefore be able closely to circumscribe the action of each executive agency and maintain real control over its operation, and in particular its governing bodies.(10) This means that the Commission must have the power to decide to create and, where appropriate, wind up an executive agency in accordance with this Regulation. Since the decision to set up an executive agency is a measure of general scope within the meaning of Article 2 of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission(4), such decisions should be adopted in accordance with Decision 1999/468/EC.(11) The Commission must also be able to appoint both the members of the Steering Committee of each executive agency and its director, to ensure that in delegating tasks which are its own prerogative to an executive agency, the Commission does not thereby relinquish control of it.(12) The activities performed by an executive agency must also fully comply with the programming which the Commission defines for the Community programmes in the management of which the agency is involved. The agency's annual work programme must therefore be subject to the Commission's approval and comply with budgetary decisions.(13) To ensure that outsourcing is effective and that full benefit is drawn from the expertise of an executive agency, the Commission must be allowed to delegate to it all or some of the implementing tasks for one or more Community programmes, except for those requiring discretionary powers in translating political choices into action. Tasks which may be delegated include managing all or some of the phases in the lifetime of a given project, implementing the budget, gathering and processing information to be forwarded to the Commission and preparing recommendations for the Commission.(14) Since the budget of an executive agency is intended to finance only its running costs, its revenue should consist chiefly of a subsidy entered in the general budget of the European Union, to be determined by the budgetary authority, and drawn from the financial allocation to the Community programme in the management of which the agency is involved.(15) With a view to the application of Article 274 of the Treaty, the operational appropriations of the Community programmes which an executive agency is involved in managing must continue to be entered in the general budget of the European Union and must be implemented by direct charging to that budget. The financial operations relating to these appropriations must therefore be carried out in accordance with Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities(5).(16) An executive agency may be entrusted with implementing tasks relating to the management of programmes which are financed from sources other than the general budget of the European Union. However, this should not lead even indirectly to extra administrative costs, which should be covered by additional appropriations entered in the general budget concerned. In such cases, this Regulation should apply, subject to specific provisions in the basic acts relating to the Community programmes concerned.(17) The objective of transparency and reliability in the management of executive agencies requires that internal and external checks be made on their operation. To this end, executive agencies should be made accountable for their actions and the Commission should exercise administrative supervision over the executive agency, without ruling out the possibility of an audit by the Court of Justice.(18) The public should have access to the documents held by the executive agencies, on terms and within limits similar to those in Article 255 of the Treaty.(19) Each executive agency must collaborate intensively and continuously with the Commission departments responsible for the Community programmes which it is involved in managing. To facilitate such collaboration as much as possible, each executive agency should be located at the place where the Commission and its departments are located in accordance with the Protocol on the location of the seats of the institutions and of certain bodies and departments of the European Communities and of Europol annexed to the Treaty on European Union and to the Treaties establishing the European Community, the European Coal and Steel Community and the European Atomic Energy Community.(20) For the adoption of this Regulation, the Treaty does not provide for powers other than those conferred by Article 308,HAS ADOPTED THIS REGULATION:Article 1AimThis Regulation lays down the statute of executive agencies to which the Commission, under its own control and responsibility, may entrust certain tasks relating to the management of Community programmes.Article 2DefinitionsFor the purpose of this Regulation:(a) "executive agency" means a legal entity established in accordance with this Regulation;(b) "Community programme" means any activity, set of activities or other initiative which the relevant basic instrument or budgetary authorisation requires the Commission to implement for the benefit of one or more categories of specific beneficiaries, by committing expenditure.Article 3Setting-up and winding-up of executive agencies1. The Commission may decide, after a prior cost-benefit analysis, to set up an executive agency with a view to entrusting it with certain tasks relating to the management of one or more Community programmes. It shall determine the lifetime of the executive agency.The cost-benefit analysis shall take into account a number of factors such as identification of the tasks justifying outsourcing, a cost-benefit analysis which includes the costs of coordination and checks, the impact on human resources, possible savings within the general budgetary framework of the European Union, efficiency and flexibility in the implementation of outsourced tasks, simplification of the procedures used, proximity of outsourced activities to final beneficiaries, visibility of the Community as promoter of the Community programme concerned and the need to maintain an adequate level of know-how inside the Commission.2. At the date determined when setting up the executive agency, the Commission may extend the duration of its lifetime for a period not exceeding that originally provided for. Such extension may be renewed. Where the Commission considers that it no longer requires the services of an executive agency which it has set up, or that its existence no longer complies with the principles of sound financial management, it shall decide to wind it up. In that event, it shall appoint two liquidators. The Commission shall determine the conditions for liquidation of the executive agency. The net result after liquidation shall be taken up in the general budget of the European Union. The decision to extend its lifetime, renew such extension or wind up the agency shall be taken on the basis of the cost-benefit analysis referred to in paragraph 1.3. The Commission shall adopt the decisions referred to in paragraphs 1 and 2 in accordance with the procedure laid down in Article 24(2). They shall be amended in accordance with the same procedure. The Commission shall forward to the Committee referred to in Article 24(1) all the information necessary in this context, in particular the cost-benefit analysis referred to in paragraph 1 of this Article and the evaluation reports referred to in Article 25.4. When adopting a Community programme, the Commission shall inform the budgetary authority of whether it intends to set up an executive agency to implement the programme.5. All executive agencies set up under paragraph 1 of this Article must comply with this Regulation.Article 4Legal status1. An executive agency is a Community body with a public service role.2. An executive agency shall have legal personality. In each of the Member States, it shall enjoy 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. To this end, it shall be represented by its Director.Article 5Location1. An executive agency shall be located at the place where the Commission and its departments are located, in accordance with the Protocol on the location of the seats of the institutions and of certain bodies and departments of the European Communities and of Europol.2. It shall organise its departments according to the management needs of the Community programmes for which it is responsible and according to the criteria of sound financial management.Article 6Tasks1. To attain the objective set out in Article 3(1), the Commission may entrust an executive agency with any tasks required to implement a Community programme, with the exception of tasks requiring discretionary powers in translating political choices into action.2. Executive agencies may in particular be entrusted with the following tasks:(a) managing some or all of the phases in the lifetime of a project, in relation with specific individual projects, in the context of implementing a Community programme and carrying out the necessary checks to that end, by adopting the relevant decisions using the powers delegated to it by the Commission;(b) adopting the instruments of budget implementation for the revenue and expenditure and carrying out all activities required to implement a Community programme on the basis of the power delegated by the Commission, and in particular activities linked to the awarding of contracts and grants;(c) gathering, analysing and transmitting to the Commission all the information needed to guide the implementation of a Community programme.3. The terms, criteria, parameters and procedures with which an executive agency must comply when performing the tasks referred to in paragraph 2 and the details of the checks to be performed by the Commission departments responsible for Community programmes in the management of which an agency is involved shall be defined by the Commission in the instrument of delegation.Article 7Structure1. An executive agency shall be managed by a Steering Committee and a director.2. An executive agency's director shall have authority over its staff.Article 8Steering Committee1. The Steering Committee shall consist of five members appointed by the Commission.2. The term of office of the members of the Steering Committee shall be two years in principle and shall take into account the length of time fixed for implementation of the Community programme, management of which has been entrusted to the executive agency. The appointment may be renewed. On expiry of their term of office, or should they resign, the members shall remain in office until their appointment is renewed or they have been replaced.3. The Steering Committee shall choose a chairperson and deputy-chairperson from among its members.4. The Steering Committee shall meet when convened by the chairperson, at least four times a year. It may also be convened at the request of its members, by at least a simple majority, or at the request of the director.5. Any member of the Steering Committee unable to attend a meeting may be represented by another member specially empowered for the meeting concerned. Each member may represent only one other member. Should the chairperson be unable to attend, the Steering Committee shall be chaired by the deputy-chairperson.6. The Steering Committee's decisions shall be adopted by a simple majority of votes. In the event of a tie, the chair shall have the casting vote.Article 9Tasks of the Steering Committee1. The Steering Committee shall adopt its own rules of procedure.2. On the basis of a draft submitted by the director and after approval by the Commission, the Steering Committee shall, no later than the beginning of each year, adopt the executive agency's annual work programme comprising detailed objectives and performance indicators. The work programme must comply with the programming defined by the Commission in accordance with the instruments establishing the Community programmes in the management of which the executive agency is involved. The annual work programme may be amended during the year following the same procedure, in particular to take account of Commission decisions relating to the Community programmes concerned. The projects included in the annual work programme shall be accompanied by an estimate of the necessary expenditure.3. The Steering Committee shall adopt the executive agency's administrative budget by the procedure laid down in Article 13.4. The Steering Committee shall obtain the Commission's agreement before deciding to accept any gifts, legacies and grants from sources other than the Community.5. The Steering Committee shall decide on the organisation of the departments of the executive agency.6. The Steering Committee shall adopt any special rules needed to implement the right of access to the executive agency's documents in accordance with Article 23(1).7. No later than 31 March of each year, the Steering Committee shall adopt and submit to the Commission an annual activity report together with financial and management information. The report shall be drawn up in accordance with Article 60(7) of Regulation (EC, Euratom) No 1605/2002. The report shall cover both implementation of the operating appropriations corresponding to the Community programme managed by the executive agency and the implementation of its administrative budget.The Commission shall no later than 15 June each year send to the budgetary authority a summary of executive agencies' annual reports for the previous year, to be attached to that referred to in Article 60(7) of Regulation (EC, Euratom) No 1605/2002.8. The Steering Committee shall adopt and apply measures to combat fraud and irregularities.9. The Steering Committee shall perform the other tasks entrusted to it by this Regulation.Article 10Director1. The director of the executive agency shall be appointed by the Commission, which shall to that end appoint an official within the meaning of the Staff Regulations of officials and the conditions of employment of other servants of the European Communities laid down by Council Regulation (EEC, Euratom, ECSC) No 259/68(6), hereafter referred to as "Staff Regulations".2. The director shall be appointed for a term of four years in principle and shall take into account the length of time fixed for implementation of the Community programme, management of which had been entrusted to the executive agency. This appointment may be renewed. After receiving the opinion of the Steering Committee, the Commission may remove the director from office before expiry of the term of office.Article 11Tasks of the director1. The director shall represent the executive agency and shall be responsible for its management.2. The director shall prepare the work of the Steering Committee, in particular the draft annual work programme of the executive agency. The director shall participate, without voting, in the work of the Steering Committee.3. The director shall ensure that the annual work programme of the executive agency is implemented. In particular, the director shall be responsible for performance of the tasks referred to in Article 6 and shall take the relevant decisions to that effect. The director shall act as the executive agency's authorising officer by delegation as regards implementation of the operational appropriations relating to the Community programmes in the management of which the executive agency is involved, where the Commission has delegated powers to the agency to perform budget implementation tasks.4. The director shall draw up the provisional statement of revenue and expenditure and, as authorising officer, shall implement the executive agency's administrative budget in accordance with the Financial Regulation referred to in Article 15.5. The director shall be responsible for preparing and publishing the reports which the executive agency must present to the Commission. These are the annual reports on the activities of the executive agency referred to in Article 9(7) and all other reports, of a general or specific nature, which the Commission asks the executive agency to produce.6. The director shall be empowered under the arrangements applicable to other servants of the European Communities to conclude employment contracts in respect of staff of the executive agency. The director shall be responsible for all other matters relating to personnel management within the executive agency.7. In accordance with the financial Regulation applicable to the general budget of the European Communities, the director shall set up management and internal control systems adapted to the tasks entrusted to the executive agency to ensure the operations it performs are lawful, comply with the rules and are effective.Article 12Operating budget1. Forecasts of all the executive agency's revenue and expenditure shall be prepared for each financial year, which shall be the same as the calendar year, and shall be shown in its operating budget. The forecasts, which shall include the establishment plan of the executive agency, shall be sent to the budgetary authority with the documents relating to the preliminary draft general budget of the European Union. The establishment plan, consisting only of temporary posts and specifying the number, grade and category of the staff employed by the executive agency during the financial year concerned, shall be approved by the budgetary authority and published in an annex to Section III - Commission - of the general budget of the European Union.2. The revenue and expenditure of the executive agency's operating budget shall be in balance.3. The executive agency's revenue shall include a subsidy entered in the general budget of the European Union, without prejudice to other revenue to be determined by the budgetary authority, drawn from the financial allocation to the Community programmes which the agency is involved in the management of.Article 13Preparation of the operating budget1. Each year the director shall draw up a draft operating budget for the executive agency covering the agency's running costs for the following financial year and shall submit it to the Steering Committee.2. No later than 1 March each year, the Steering Committee shall adopt the draft operating budget, including the establishment plan, for the following financial year and shall submit it to the Commission.3. On the basis of this draft budget and in the light of the Commission's programming for the Community programmes in the management of which the executive agency is involved, the Commission shall propose, as part of the annual budget procedure, the annual subsidy to the executive agency's operating budget.4. At the beginning of each financial year, the Steering Committee shall adopt the executive agency's operating budget, on the basis of the annual subsidy thus determined by the budgetary authority, at the same time as it adopts the annual work programme, adjusting the budget in accordance with the different contributions granted to the executive agency and any funds from other sources.5. The operating budget of the agency may not be adopted definitively until the general budget of the European Union has been finally adopted.6. When the Commission contemplates setting up an executive agency, it shall inform the budgetary authority in accordance with the budgetary procedure and respecting the principle of transparency:(a) of the resources in terms of appropriations and jobs required to run the executive agency;(b) of planned secondments of officials from the Commission to the executive agency;(c) of administrative resources freed by transferring tasks from the Commission departments to the executive agency, and the re-allocation of those freed administrative resources.7. In accordance with the Financial Regulation referred to in Article 15, all amendments to the operating budget, including the establishment plan, shall be submitted in an amending budget adopted in accordance with the procedure provided for in this Article.Article 14Implementation of the operating budget and discharge1. The director shall implement the executive agency's operating budget.2. The executive agency's accounts shall be consolidated with those of the Commission in accordance with the procedure laid down in Articles 127 and 128 of Regulation (EC, Euratom) No 1605/2002 and in accordance with the following:(a) each year, the director shall submit detailed provisional accounts of all revenue and expenditure for the previous financial year to the Steering Committee, which shall forward them, by 1 March at the latest, to the Commission's accounting officer and to the Court of Auditors;(b) the final accounts shall be sent to the Commission's accounting officer and the Court of Auditors by 1 July of the following year at the latest.3. The European Parliament, acting on a recommendation from the Council, shall grant a discharge to the executive agency for the implementation of its budget no later than 29 April of year n+2 after examination of the report by the Court of Auditors.Such discharge shall be granted together with that relating to implementation of the general budget of the European Union.Article 15Financial Regulation applicable to the operating budgetThe standard financial regulation applicable to the operating budget of an executive agency shall be adopted by the Commission. That standard regulation may deviate from the financial Regulation applicable to the general budget of the European Communities only if the specific operating requirements of the executive agencies so require.Article 16Financial Regulation applicable to the operational appropriations1. Where the Commission has delegated tasks to the executive agency relating to the budget implementation of operational appropriations for Community programmes in accordance with Article 6(2)(b), such appropriations shall be entered in the general budget of the European Union and shall be implemented by direct charging to that budget under the responsibility of the Commission.2. The director shall act as the executive agency's authorising officer by delegation as regards implementation of these operational appropriations and shall comply to that end with the obligations laid down in the financial Regulation applicable to the general budget of the European Communities.3. Discharge in respect of implementation of the operational appropriations shall be given within the framework of the discharge given in respect of the general budget of the European Union, in accordance with Article 276, of which it is an integral part.Article 17Programmes financed from sources other than the general budget of the European UnionArticles 13 and 16 shall apply without prejudice to specific provisions laid down in the basic instruments relating to programmes financed from sources other than the general budget of the European Union.Article 18Staff1. The executive agency's staff shall consist of Community officials seconded as temporary staff members by the institutions to positions of responsibility in the executive agency, and of other temporary staff members directly recruited by the executive agency, as well as of other servants recruited by the executive agency on renewable contracts. The nature of the contract, governed by either private law or public law, its duration and the extent of the servants' obligations vis-à-vis the agency, and the appropriate eligibility criteria shall be determined on the basis of the specific nature of the tasks to be performed, and shall comply with the Staff Regulations as well as with current national legislation.2. Subject to permanent activities and regardless of the type of secondment of the official, the institution of origin:(a) shall not, for the duration of the secondment, fill the posts vacated by that secondment;(b) shall take into account in the standard abatement the expenses of the officials transferred to the executive agencies.Nevertheless, the total number of posts concerned by paragraph 1 and the first subparagraph of paragraph 2 shall not exceed the number of posts necessary for performance of the tasks conferred upon the executive agency by the Commission.3. The Steering Committee, in agreement with the Commission, shall adopt the necessary implementing rules for personnel management within the executive agency, if necessary.Article 19Privileges and immunitiesThe Protocol of 8 April 1965 on the privileges and immunities of the European Communities shall apply to both the executive agency and its staff, insofar as it is subject to the Staff Regulations.Article 20Supervision1. Implementation of the Community programmes entrusted to executive agencies shall be supervised by the Commission. Such supervision shall follow the procedures it shall adopt in accordance with Article 6(3).2. The function of internal auditor shall be performed in the executive agencies by the internal auditor of the Commission.3. The Commission and the executive agency shall implement the recommendations of the internal auditors, each according to their respective powers.4. The European Anti-Fraud Office (OLAF) set up by Commission Decision 1999/352/EC, ECSC, Euratom of 28 April 1999(7) shall enjoy the same powers in respect of executive agencies and their staff as it enjoys in respect of Commission departments. As soon as the executive agency is set up, it shall subscribe to the Interinstitutional Agreement of 25 May 1999 between the European Parliament, the Council of the European Union and the Commission of the European Communities concerning internal investigations by the European Anti-Fraud Office (OLAF)(8). The Steering Committee shall formalise this acceptance and adopt the provisions needed to facilitate internal inquiries conducted by OLAF.5. The Court of Auditors shall examine the executive agency's accounts in accordance with Article 248 of the Treaty.6. All acts of the executive agency, and in particular all decisions adopted and contracts concluded by it, must provide explicitly that the Commission's internal auditor, OLAF and the Court of Auditors may conduct on-the-spot inspections of the documents of all contractors and sub-contractors which have received Community funds, including at the premises of the final beneficiaries.Article 21Liability1. The contractual liability of the executive agency shall be governed by the law applicable to the contract in question.2. In the case of non-contractual liability, the executive agency shall make good any damage caused by the agency or its servants in the performance of their duties, in accordance with the general principles common to the laws of the Member States. The Court of Justice shall have jurisdiction in disputes relating to compensation for any such damage.3. The personal liability of staff towards the executive agency shall be governed by the rules applicable to them.Article 22Legality of acts1. Any act of an executive agency which injures a third party may be referred to the Commission by any person directly or individually concerned or by a Member State for a review of its legality.Administrative proceedings shall be referred to the Commission within one month of the day on which the interested party or Member State concerned learnt of the act challenged.After hearing the arguments adduced by the interested party or by the Member State concerned and those of the executive agency, the Commission shall take a decision on the administrative proceedings within two months of the date on which proceedings were instituted. Without prejudice to the Commission's obligation to reply in writing giving grounds for its decision, the failure by the Commission to reply within that deadline shall be taken as implicit rejection of the proceedings.2. On its own initiative the Commission may review any act of an executive agency. It shall decide within two months of the day on which that review, after having heard the arguments adduced by the agency.3. Where an act is referred to the Commission in accordance with paragraphs 1 or 2, the Commission may suspend implementation of the act at issue or prescribe interim measures. In its final decision the Commission may uphold the executive agency's act or decide that the agency must modify it either in whole or in part.4. Executive agencies must take the necessary measures within a reasonable period to comply with the Commission's decision.5. An action for annulment of the Commission's explicit or implicit decision to reject the administrative appeal may be brought before the Court of Justice, in accordance with Article 230 of the Treaty.Article 23Access to documents and confidentiality1. Executive agencies shall be subject to Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 on public access to European Parliament, Council and Commission documents(9) when it receives a request for access to a document in its possession.The Steering Committee shall adopt any special rules needed to implement these provisions no later than six months after the setting-up of the executive agency.2. The members of the Steering Committee, the director and members of staff and all persons involved in the activities of the executive agency shall be required, even after their duties have ceased, not to disclose information of the kind covered by the obligation of professional secrecy.Article 24Committee1. The Commission shall be assisted by a committee, hereinafter referred to as the "Committee for Executive Agencies".2. Where reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall apply.The period laid down in Article 5(6) of Decision 1999/468/EC shall be set at three months.3. The Committee shall adopt its rules of procedure.Article 25Evaluation1. An external evaluation report on the first three years of operation of each executive agency shall be drawn up by the Commission and submitted to the steering committee of the executive agency, to the European Parliament, to the Council and to the Court of Auditors. It shall include a cost-benefit analysis as referred to in Article 3(1).2. The evaluation shall subsequently be repeated every three years under the same conditions.3. Further to the evaluation reports, the executive agency and the Commission shall take all appropriate steps to resolve any problems identified.4. If, further to an evaluation, the Commission finds that the very existence of an executive agency is no longer justified with a view to sound financial management, the Commission shall decide to wind up that agency.Article 26Interim measuresAs far as executive agencies have already been set up:(a) the annual activity report referred to in Article 9(7) shall be drawn up for the first time for the 2003 financial year;(b) the deadline referred to in Article 14(2)(b) for transmission of the final accounts shall apply for the first time to the 2005 financial year;(c) for the financial years prior to 2005 the deadline for transmission of the final accounts shall be 15 September.Article 27Entry into forceThis Regulation shall enter into force on the 10th day following that of its publication in the Official Journal of the European Communities.This Regulation shall be binding in its entirety and directly applicable in all Member States.Done at Brussels, 19 December 2002.For the CouncilThe PresidentL. Espersen(1) OJ C 120 E, 24.4.2001, p. 89 and OJ C 103 E, 30.4.2002, p. 253.(2) Opinion delivered on 5 July 2001 (not yet published in the Official Journal).(3) OJ C 345, 6.12.2001, p. 1.(4) OJ L 184, 17.7.1999, p. 23.(5) OJ L 248, 16.9.2002, p. 1.(6) OJ L 56, 4.3.1968, p. 1. Regulation as last amended by Regulation (EC, ECSC, Euratom) No 490/2002 (OJ L 77, 20.3.2002, p. 1).(7) OJ L 136, 31.5.1999, p. 20.(8) OJ L 136, 31.5.1999, p. 15.(9) OJ L 145, 31.5.2001, p. 43.

Summary: The EU's executive agencies The EU's executive agencies SUMMARY OF: Regulation (EC) No 58/2003 - EU executive agencies SUMMARY WHAT DOES THIS REGULATION DO? It lays down the statute of the executive agencies which have been charged with managing EU programmes. In particular, it governs certain essential aspects concerning their — structure, — tasks, — operation, — budget system, — staff, — supervision and — responsibility. KEY POINTS The European Commission has delegated responsibility for the implementation of some EU programmes to third-party bodies known as ‘executive agencies’ . There are 6 executive agencies: — Consumers, Health, Agriculture and Food Executive Agency (CHAFEA) — Education, Audiovisual and Culture Executive Agency (EACEA) — European Research Council Executive Agency (ERCEA) — Executive Agency for Small and Medium-sized enterprises (EASME) — Innovation & Networks Executive Agency (INEA) — Research Executive Agency (REA) Setting up an executive agency The Commission decides whether to establish an executive agency, extend its period of operation or wind it up on the basis of a cost-benefit analysis. The cost-benefit analysis takes account of several factors, including: — identification of the tasks justifying outsourcing — an assessment of benefits and costs, including human resources — efficiency and flexibility in implementation — simplification of the procedures used — proximity of the activities to the final beneficiaries. If the Commission finds that an agency is no longer necessary or that it no longer complies with the principles of sound financial management, it will decide to wind that agency up. Tasks Executive agencies may be responsible for: — managing all the phases of projects — adopting budget implementation measures and awarding contracts and grants — gathering, analysing and passing on to the Commission all the information needed to implement the programmes. They may not perform tasks that may involve making political choices. In the official instrument of delegation, the Commission identifies the terms, criteria, parameters and procedures with which executive agencies must comply. Structure Executive agencies are managed by a steering committee and a director. — The steering committee is made up of 5 members appointed by the Commission for 2 years (renewable). It draws up the annual work programme, adopts the operating budget and the annual activity report and implements measures to combat fraud and irregularities. — The director is appointed by the Commission for 4 years (renewable) and is an EU civil servant. — Their staff consists of EU civil servants temporarily re-assigned, as well as contract staff recruited by the agency. Supervision Executive agencies are supervised by: — the Commission, in particular its internal auditor; — the European Anti-Fraud Office (OLAF); — the Court of Auditors. An external evaluation report is drawn up by the Commission every 3 years and submitted to each executive agency's steering committee, the European Parliament, the Council and the European Court of Auditors. BACKGROUND Agencies and other EU bodies ACT Council Regulation (EC) No 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes (OJ L 11, 16.1.2003, pp. 1–8) last update 25.11.2015