30.12.2006 Official Journal of the European Union L 390/1 (Acts whose publication is obligatory) COUNCIL REGULATION (EC, EURATOM) No 1995/2006 of 13 December 2006 amending Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Commu- nity, and in particular Article 279 thereof, Having regard to the Treaty establishing the European Atomic Energy Community, and in particular Article 183 thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament (), Having regard to the opinion of the Court of Auditors (), Having regard to the opinion of the European Economic and Social Committee (?), Whereas: 1 Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities () (hereinafter the Financial Regulation), lays down the legal foundations of the financial management reform. As such, its essential elements should be maintained and strength- ened. Transparency, in particular, should be reinforced by providing for information on beneficiaries of Community funds. Moreover, the budgetary principles established by the Financial Regulation should be respected in all legislative acts and derogations should be kept to a strict minimum. In the light of practical experience, certain amendments should be made to the Financial Regulation in order to facilitate budget implementation and the attainment of the underlying policy objectives and to adjust certain proce- dural and documentary requirements so as to make them more proportionate to the risks and cost involved, in accordance with the principle of proportionality as set out in the third subparagraph of Article 5 of the EC Treaty. Opinion delivered on 6 July 2006 (not yet published in the Official Journal). 0OJ C 13, 18.1.2006, p. 1. O] C 28, 3.2.2006, p. 83. OJ L 248, 16.9.2002, p. 1. All amendments should contribute to achieving the objectives of the Commission’s reforms and help improve or ensure sound financial management, thus contributing to obtaining a reasonable assurance of the legality and regularity of financial operations. Account should be taken of provisions implementing the revenue and expenditure of the budget, contained in the basic legal acts adopted for the period 2007 to 2013, in order to ensure coherence between those acts and the Financial Regulation. It should be clarified that sound financial management requires effective and efficient internal control, and the main features and objectives of internal control systems should be defined. In order to ensure the transparency of the use of funds deriving from the budget, it is necessary to make available information on the beneficiaries of these funds within certain limits necessary to protect legitimate public and private interests and taking into account the particular accounting period for the European Agricultural Guarantee Fund. As regards the principle of unity of the budget, the rule governing interest generated by pre-financing should be simplified. The administrative burden involved in the recovery of that interest is disproportionate to the objective pursued and it would be more efficient to allow interest to be set off against the final payment to the beneficiary. With regard to the principle of annuality, more flexibility and transparency should be introduced to respond to functional needs. The carry-over of appropriations should exceptionally be permitted in the case of expenditure on direct payments to farmers under the European Agricultural Guarantee Fund (EAGF) set up by Council Regulation (EC)