17.8.2018
EN
Official Journal of the European Union
C 291/1
OPINION No 1/2018
(pursuant to Article 322 (1) (a) TFEU)
concerning the proposal of 2 May 2018 for a regulation of the European Parliament and of the Council on the protection of the Union’s budget in case of generalised deficiencies as regards the rule of law in the Member States
(2018/C 291/01)
CONTENTS
Paragraph
Page
INTRODUCTION…
1 - 8
2
Background…
1 - 4
2
The Commission’s Proposal…
5 - 8
3
GENERAL REMARKS…
9 - 18
3
Overall aim to protect the Union budget…
9 - 11
3
New mechanism with much discretionary power for the Commission…
12 - 16
4
No specific stakeholder consultation done…
17
4
No impact assessment done…
18
4
SPECIFIC REMARKS…
19 - 30
5
Sources of guidance and criteria are not clearly specified…
19 - 23
5
No deadlines for the Commission…
24
6
No clear obligation for the Commission to assess possibility to lift measures at its own initiative…
25
6
No requirement for the Commission to assess the potential impact on final beneficiaries and the national budget…
26 - 29
6
Cooperation with European Public Prosecutor’s Office not applicable to all Member States…
30
7
THE COURT OF AUDITORS OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union (TFEU), and in particular Article 322 (1) (a) thereof, together with the Treaty establishing the European Atomic Energy Community, and in particular Article 106a thereof,
Having regard to the Commission’s proposal for a regulation of the European Parliament and of the Council on the protection of the Union’s budget in case of generalised deficiencies as regards the rule of law in the Member States (‘the Proposal’) (1),
Having regard to the Commission’s request for an opinion on the above-mentioned Proposal of 3 May 2018, received by the Court on 14 May 2018,
HAS ADOPTED THE FOLLOWING OPINION:
INTRODUCTION
Background
4. The Commission’s Proposal
8. GENERAL REMARKS
Overall aim to protect the Union budget
9. Box 1 — Rule of Law in the Union
The case law of the Court of Justice and of the European Court of Human Rights, as well as documents drawn up by the Council of Europe, building notably on the expertise of the Venice Commission, provide guidance on the core meaning of the rule of law as a common value of the EU in accordance with Article 2 TEU.
Those principles laid down include: legality, which implies a transparent, accountable, democratic and pluralistic process for enacting laws; legal certainty; prohibition of arbitrariness of the executive powers; independent and impartial courts; effective judicial review including respect for fundamental rights; and equality before the law.
11. New mechanism with much discretionary power for the Commission
16. No specific stakeholder consultation done
17. No impact assessment done
18. SPECIFIC REMARKS
Sources of guidance and criteria are not clearly specified
19. Box 2 — Examples of possible guidance sources
The Commission could find sources of guidance from chapter 23 (judiciary and fundamental rights) and chapter 24 (justice, freedom and security) applicable to EU accession negotiations, as well as the Cooperation and Verification Mechanism (CVM) on Bulgaria and Romania, which was deployed to address shortcomings in the fields of judicial reform, corruption or organised crime. Other examples of possible relevant sources or guidance are the Venice Commission’s Rule of Law Checklist, the Council of Europe Recommendation CM/Rec (2010)12 ‘Judges: independence, efficiency and responsibilities’, the Venice Commission Report on the Independence of the Judicial System Part I: the Independence of Judges (CDL-AD(2010)004), and the Venice Commission Report on Part II: the Prosecution Service (CDL-AD(2010)040).
23. Recommendation 1
We recommend that the legislative bodies set clear and specific criteria for defining what constitutes a generalised deficiency as regards the rule of law, which puts sound financial management at risk, and for determining the extent of measures, either in the proposed regulation or in possible implementing rules. When setting the criteria, the sources of guidance, which the Commission used in the context of EU accession negotiations, as well as in the Cooperation and Verification Mechanism to track the progress of a Member State could be taken into consideration.
No deadlines for the Commission
24. Recommendation 2
We recommend that the legislative bodies specify the basis for setting time limits by which the Member State concerned has to provide the required information as well as introducing similar deadlines for the Commission whenever appropriate, for example as regards the lifting of measures in case the underlying generalised deficiencies have ceased to exist.
No clear obligation for the Commission to assess possibility to lift measures at its own initiative
25. No requirement for the Commission to assess the potential impact on final beneficiaries and the national budget
28. Recommendation 3
We recommend that the legislative bodies request the Commission to assess in detail in its proposal to the Council how the legitimate interests of final beneficiaries will be safeguarded. For all measures under Article 4(1) of the Proposal (such as the reduction of commitments or the suspension of commitments or payments), the rights of the final beneficiaries should be safeguarded.
29. Recommendation 4
We recommend that the legislative bodies request the Commission, before deciding on which appropriate measures to propose, assess the possible budgetary implications of a reduction in the EU funding for the national budget of the Member State concerned with due regard to the principles of proportionality and non-discrimination.
Cooperation with European Public Prosecutor’s Office not applicable to all Member States
30. Recommendation 5
We recommend that the legislative bodies clarify that the provisions relating to the European Public Prosecutor’s Office can, after its establishment, only be applicable to the participating Member States.
This Opinion was adopted by the Court of Auditors in Luxembourg at its meeting of 12 July 2018.
For the Court of Auditors
Klaus-Heiner LEHNE
President
(1) COM(2018) 324 final of 2 May 2018.
(2) COM(2014) 158 final of 11 March 2014.
(3) COM(2018) 98 final of 14 February 2018.
(4) European Parliament resolution of 14 March 2018 on the next MFF: Preparing the Parliament’s position on the MFF post-2020 (2017/2052(INI)).
(5) See Commission leaflet ‘EU budget for the future – sound financial management and the rule of law’, https://publications.europa.eu/en/publication-detail/-/publication/20d5496b-526a-11e8-be1d-01aa75ed71a1/language-en
(6) According to Article 59(2) of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (Financial Regulation) (OJ L 298, 26.10.2012, p. 1), ‘when executing tasks relating to the implementation of the budget, Member States shall take all the necessary measures, including legislative, regulatory and administrative measures, to protect the Union’s financial interests, […]’.
(7) Articles 3 (2) TEU and 67 TFEU; COM(2014) 158 final as of 11 March 2014.
(8) Special Report No 10/2016 ‘Further improvements needed to ensure effective implementation of the excessive deficit procedure’ and Special Report No 3/2018 ‘Audit of the Macroeconomic Imbalance Procedure (MIP)’.
(9) See Joined Cases C-74/00 P and C-75/00 P Falck SpA and Acciaierie di Bolzano SpA v Commission of the European Communities, EU:C:2002:524, par. 139-141 http://curia.europa.eu/juris/document/document.jsf?text=&docid=47692&pageIndex=0&doclang=FR&mode=lst&dir=&occ=first&part=1&cid=263967
(10) This reflects point 119 of the European Parliament resolution of 14 March 2018, ‘The next MFF: Preparing the Parliament’s position on the MFF post-2020’, which mentions that ‘final beneficiaries of the Union budget can in no way be affected by breaches of rules for which they are not responsible’.
(11) During our audits in the field of shared management, we found contracts concluded between national authorities and final beneficiaries, which contained conditional clauses linking payments to availability of budgetary funding.
(12) Proposal for a Regulation of the European Parliament and of the Council on the financing, management and monitoring of the common agricultural policy and repealing Regulation (EU) No 1306/2013 (COM(2018)393 final) and the Proposal for a Regulation of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, and the European Maritime and Fisheries Fund and financial rules for those and for the Asylum and Migration Fund, the Internal Security Fund and the Border Management and Visa Instrument (COM(2018)375 final).
(13) See Article 68(1) b) of the proposal for the common provisions regulation.
(14) Depending on the regulation on which basis EU funding is provided, final beneficiaries are also referred to as final recipients.
(15) In its resolution of 14 March 2018, the European Parliament has stated that the ‘Union budget is not the right instrument for addressing the failure to observe Article 2 TEU, and that any possible financial consequence should be borne by the Member State independently of budget implementation’.