Proposal for a COUNCIL REGULATION (Euratom, ECSC, EC) determining the powers and obligations of agents authorized by the Commission pursuant to Article 18 (2) and (3) of Regulation (EEC, Euratom) No 1552/89
COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 10. 01. 1997 COM(96) 717 final 96/ 0016 (CNS) Proposal for a COUNCIL REGULATION (Euratom. ECSC. EQ determining the powers and obligations of agents authorized by the Commission pursuant to Article 18(2) and (3) of Regulation (EEC, Euratom) No 1552/89 (presented by the Commission) / SUMMARY The purpose of this proposal is to replace Council Regulation (EEC, Euratom, ECSC) No 165/74 determining the powers and obligations of agents authorized by the Commission to undertake controls on the Community's own resources in order to take account of developments in regulations and administrative practices at Community level firstly by extending the scope of the regulation to cover on-the-spot inspections and secondly by making it possible for the Commission to authorize both officials and other categories of staff for on-the-spot and other inspections. 1. Explanatory Memorandum 1. 1 Council Regulation (EEC, Euratom) No 1552/89 of 29 May 1989 implementing Decision 88/376/EEC, Euratom on the system of the Communities' own resources1 took effect on 1 January 1989. One of its innovations - in Article 18(3) - was to confer on the Commission itself the right to carry out inspections on the spot, whereas the Regulations it superseded ' had allowed the Commission only to be associated with inspections organized by the Member States themselves. 2 3 As regards the powers and obligations of the officers authorized by the Commission for own resources inspections, Regulation (EEC, Euratom, ECSC) No 165/744 was adopted before the introduction of the new inspection arrangement and therefore did not make provision for on-the-spot inspections by the Commission itself. The inspections provided for in Article 18(3) of Regulation No 1552/89 therefore need to be covered explicitly. 1. 2 The various formalities required when organizing and actually carrying out these on-the-spot inspections need to be stated explicitly. The proposed new Regulation lays down that although the inspections carried out by the Commission itself are under the direction of its authorized agents, contacts with national departments and, if necessary, with taxable persons must be handled through officers of the Member State where the inspection is conducted. The proposed regulation also includes provisions applying to Commission officials or other staff in the execution of VAT and GNP resources controls. OJ No L 155, 7. 6. 1989, p 1. This regulation was amended by Council Regulation (Euratom, EC) No 1355/96 of 8 July 1996, OJ No L 175, 13. 7. 1996, p 3. Council Regulation (EEC, Euratom, ECSC) No 2/71, OJ No L 3, 5. 1. 1971, p. 1. Council Regulation (EEC, Euratom, ECSC) No 2891/77, OJ No L 336, 27. 12. 1977, p 1. OJ No L 20, 24. 1. 1974. p. 1. 1. 3 As regards the status of the agents authorized by the Commission for inspections carried out in association with the responsible national departments, Regulation No 165/74 limits the possibility of authorization to Commission officials. However, administrative structures at the Commission have changed greatly since this Regulation was adopted. To perform the tasks assigned to it, the Commission now also makes use of temporary staff and seconded national experts. It is also envisaged that, with the agreement of the Member State concerned, the Commission could request the assistance of officials from other Member States as observers and call in outside agencies under its own responsibility to provide technical assistance. Extending the range of staff from whom authorized agents may be drawn also appears justified when existing Community law is considered. There is no provision restricting participation to Commission officials (within the meaning of the Staff Regulations) in the case of Community controls in other areas — for instance, ECSC inspections under Decision 379/84/ECSC and EAGGF inspections under Regulation (EEC) No 729/70. Similarly the Regulation implementing Articles 85 and 86 of the EC Treaty contains no such restriction regarding investigations in the field of competition. 1. 4 It is therefore proposed that Regulation No 165/74 be replaced to take account of developments in regulations and administrative practice by broadening its scope to cover inspections on the spot and by giving the Commission the possibility of authorizing officials and other categories of staff for all types of inspection. 2. Article-by-article commentary Article 1 The scope of Article 1 of Regulation No 165/74 has been extended in the proposed new Article 1 to cover inspections on the spot carried out by the Commission itself, as provided for in Article 18(3) of Regulation (EEC, Euratom) No 1552/89. Regulation No 165/74 limits the choice of authorized agent to Commission officials. In line with existing Community legislation in other, similar areas — where there is no such restriction — and to meet the need for a wider potential circle of staff to carry out the specialized work of inspections, it is proposed that provision be made for allowing not only permanent officials within the meaning of the Staff Regulations but also other servants to be audiorized as officers for inspections. Article 2 The first part of the first paragraph of Article 2 of Regulation No 165/74 is superfluous since the scope and limits of inspections are clearly laid down in Regulation No 1552/89. The second part of die first paragraph, dealing with the obligation to communicate a list of the national inspection departments, has been rendered superfluous by the wording of Article 4(1 )(a) of Regulation No 1552/89, as amended by Council Regulation (EC, Euratom) No 1355/96 of 8 July 1996. 5 The proposed new paragraph 1 of Article 2 reproduces the second paragraph of Article 2 of Regulation No 165/74, except that the reference to Regulation No 2/71 has been amended to reflect the fact that it has been successively replaced by Regulations No 2891/77 and No 1552/89. The proposed new paragraph 2 reproduces the third paragraph of Article 2 of Regulation 165/74, with the addition of a reference to on-the-spot inspections by the Commission. The proposed new paragraph 3 essentially reproduces the fourth paragraph of Article 2 of Regulation No 165/74. 5 OJ No L 175. 13. 7. 1996, p. 3. Article 3 Points (a) and (b) of the proposed new Article 3(1) reproduce the corresponding provisions of Regulation No 165/74, amended to cover on-the-spot inspections by the Commission. Point (c) also amends the wording of its counterpart in the old Regulation to cover both types of inspection, on-the-spot inspections by the Commission being under the direction of its authorized agents (see the proposed new Article 3(3)). Paragraph 2, on the direction of associated inspections of traditional own resources, reproduces the corresponding paragraph in Regulation No 165/74; the reference to the legal base is amended. Paragraph 3 of the proposal is the counterpart to paragraph 2: on-the-spot inspections carried out by the Commission are under the direction of its authorized agents. They must, however, seek the assistance of officers designated by the Member State in question to establish contacts with the national departments where the inspections are carried out and, if necessary, with the taxpayers concerned. Article 4 In paragraph 1 of Article 4, the term "collecting" is inserted and "officials" is replaced by "authorized agents", which is defined in the proposed new Article 1. Since the substance of Article 4(2) of Regulation No 165/74 is now incorporated in Regulation No 1552/89, there is no need for this provision in the implementing regulation. The proposed new paragraph 2 spells out the formalities (designating national officers participating, informing the Commission, etc. ) which the Member States must carry out in preparation for an on-the-spot inspection by the Commission. Article 5 The changes made do not affect the substance. They involve: (1) amending the references to the applicable Regulation; (2) replacing the term "Communities" by "Community"; (3) the inclusion of on-the-spot inspections. Article 6 The proposed new paragraph 1 incorporates Article 6(1) of Regulation No 165/74, amended to cover on-the-spot inspections by the Commission. In addition, the time limit for producing reports on inspection findings and the time given to the Member States to submit their observations is extended from 2 to 3 months. Experience has shown that the complexity of the issues covered and the need for effective coordination within departments warrant extending the time limit for both the Commission and the Member States. Under the proposal the Commission may also, for duly substantiated reasons, request Member States to submit their observations on specific points; in this case the time limit will be one month. Member States may decline to respond, in which case they must inform the Commission of their reasons. Article 7 The provision in Article 7 of Regulation No 165/74 which states that the Regulation does not apply to VAT own resources is deleted, since Article 11(2) of Council Regulation (EEC, Euratom) No 1553/89 of 29 May 1989 on the definitive uniform arrangements for the collection of own resources accruing from value added tax states that Regulation No 165/74 also applies to VAT resources controls. 6 OJ No L 155, 7-6. 1989, p. 9 However, since these controls are carried out by the Commission in the relevant national departments, in accordance with Article 11(1) of Council Regulation (EEC, Euratom) No 1553/89, the provisions in this proposal for a regulation relating to on-the-spot inspections, as defined by Article 18(3) of Council Regulation (EEC, Euratom) No 1552/89, cannot apply to VAT resources controls. The new text of Article 7 stipulates, therefore, which of the provisions of the regulation apply to officials or other servants of the Commission in the performance of VAT resources controls. These provisions also apply to checks on calculations and basic statistics in the field of GNP which the Commission may carry out at the national statistics institutes in the Member States pursuant to Article 19 of Regulation No 1552/89. Regulation No 165/74 Proposal for a Regulation replacing Reg. 165/74 Article 1 Article 1 The Commission shall be associated with the measures of control referred to in Article 14 of Regulation (EEC, Euratom, ECSC) No 2/71 in the person of those of its officials whom it has specifically appointed for this purpose. 1. For the purposes of: (a) inspection measures with which the as associated, is in Article 18(2) of Euratom) (EEC, Commission provided for Regulation No 1552/89; (b) inspection measures carried out by the Commission itself on the spot, as in Article 18(3) of provided for Regulation Euratom) (EEC, No 1552/89; the Commission shall be represented by the officials or other servants whom it has this to as purpose, hereinafter referred "authorized agents ". specifically authoiized for the National experts Commission may be present at such inspection measures. seconded to the Member the 2. The Commission may, with agreement of State concerned, request officers from other Member States to act as observers, and employ outside agencies, acting under its responsibility, technical assistance. to provide Tfie Commission shall ensure that these officers and agencies provide all the necessary assurances with respect to technical competence, independence and professional secrecy. Article 2 Article 2 Deleted and establishment The measures of control referred to in Article 1 shall be all those required for the making the available of own resources, both being provided (EEC, Euratom, ECSC) No 2/71. They shall be carried out by the departments, agencies or national authorities, a list of which shall be notified to the Commission at the latter's request. in Regulation for Member States and the Commission shall regularly maintain those contacts likely to facilitate the implementation of Article 14(2) of Regulation (EEC, Euratom, ECSC) No 2/71. 1. Member States and the Commission to shall maintain regular contacts facilitate the implementation of the provisions referred to in Article 1. has requested Each inspection visit, with which the Commission to be associated, shall be preceded by contacts between the Member States concerned and the Commission in order to lay down detailed procedures. For each visit, the Commission officials must be given written terms of reference by the Commission stating their identity and official capacity. 2. Every the inspection with which Commission is associated or which it carries out itself on the spot shall be preceded by contacts between the Member State concerned and the Commission in order to lay down detailed procedures. shall give The Commission its authorized agents written terms of reference for every such inspection, stating identity and official capacity. their 10 Article 3 Article 3 1. When the Commission is associated with the measures of control carried out by the the Member States, officials which it has appointed: 1. The authorized agents: (a) shall conduct themselves during the inspections in a manner compatible with the rules and usages prescribed for officials of the Member States with which they are associated; (a) shall conduct themselves during all inspections in a manner compatible with the rules and usages prescribed for officials of the Member State concerned; (b) shall be bound by professional secrecy, under the conditions laid down in Article 5 below; (b) shall be bound by professional secrecy, as laid down in Article 5; civil (c) shall be entitled to have contact with debtors only through the responsible the national the that understanding competent national administration to determine where such contacts may take place. servant, it on is for (c) may have contact with taxable the officers persons only responsible in the Member State where the inspections are carried out. through in involved 2. As regards organization of work and, more generally, relations with the the departments measures, the measures of control shall be under the direction of the department the designated Member State pursuant to Article 2 to carry out the measures of control provided in Article 14 of Regulation (EEC, Euratom, ECSC) No 2/71. for by departments with 2. As regards the organization of work and, more generally, relations with concerned, the inspections the Commission is associated shall be under the direction of the department the Member State designated by pursuant to Article 4(1). which 3. relations with Inspections which the Commission itself carries out on the spot shall be under the direction of its authorized agents; as regards the organization the of work, departments concerned and, where necessary, with the taxable persons establish concerned, appropriate contacts with the officers designated by the Member State concerned pursuant to Article 4(2). shall they Article 4 Article 4 11 or for establishing departments 1. The Member States shall ensure that agencies the and responsible making available their own resources and the authorities which they have instructed to carry out measures of the control in this respect afford by officials the assistance Commission their necessary duties. appointed every for carrying out or 1. The Member States shall ensure that agencies departments the establishing, for responsible collecting and making available own resources and the authorities which they have instructed to carry out inspections in this respect afford the authorized agents Commission's every assistance necessary for carrying out their task. 2. Such officials may be associated with national measures of control relating to: Deleted (a) establishment, based on information available the national departments, of own resources, accounting therefor and making available thereof; to the operations (b) conformity of making and establishing available own resources with the Community rules laid down in the Decision of 21 April 1970 and Regulation (EEC, Euratom, ECSC) No 2/71; (c) the existence of the supporting documents provided in Article 3 of Regulation (EEC, Euratom, ECSC) No 2/71, and their conformity with the above operations. for In the case of inspections carried out by the Commission on the spot, the Member State in question shall inform the Commission in good time of the identity and official capacity of the officers it has designated to take part in the inspection and to provide the Commission's authorized agents with every assistance necessary for carrying out their task. Article 5 12 Article 5 1. AU subject information gathered on the measures of control dealt with in this Regulation to shaU be professional secrecy. It may not be communicated to persons other than those within the institutions of the institutions Communities or whose duty it is to know, or be used for purposes other than those which are laid down in Regulation (EEC, Euratom, ECSC) No 2/71 unless prior consent has been given by the Member State which originally provided the information. the 1. All in information gathered the context of inspection measures covered by this Regulation shall be subject to professional secrecy. It may not be divulged to any persons except those in the institutions of the Community or of the Member States whose duty it is to know, nor used for purposes other than those laid down in Regulation (EEC, Euratom) No 1552/89, unless prior consent has been given by the Member State which the information. originally provided 2. This Article shall apply officials and Communities. servants to all the of 2. This Article shall apply to all officials and servants of the Community. Article 6 Article 6 Save as otherwise provided in Article 5: Save as otherwise provided in Article 5: The results of the measures of control carried out shall be brought to the the Member State attention of concerned through the appropriate channels within a period of two months, and the Member State may submit its observations within the two months following receipt of the communication. The findings of inspections carried out shall be communicated to the Member State concerned through the appropriate channels within three months, and the Member State may submit its observations within three months of receiving them. However, the Commission may, for duly substantiated reasons, request the Member State to submit its observations on specific points within one month of receiving the inspection findings. The Member State may decline the Commission's request, in which case it shall inform the Commission of its reasons. accede to to 13 2. Following the procedure provided for in paragraph 1, these results and observations shall be made known to the other Member States within the the on Committee Advisory Communities' Own Resources. 2. Following the procedure provided for in paragraph 1, these results and observations shall be made known to the other Member States within the the on Committee Advisory Communities' Own Resources. Article 7 Article 7 Subject to provisions to be adopted at the appropriate time pursuant to Article 1 of Regulation (EEC, Euratom, ECSC) No 2/71, this Regulation shall not apply to own resources derived from Value Added Tax. The provisions laid down in Articles 2(2), 2(3), 3(1) (a), 3(1) (b), 3(3), 4(1), 5 and 6 shall also apply to inspections carried out by officials or other servants of the Commission pursuant to Article 11(1) of Regulation (EEC, Euratom) No 1553/89 and Article 19 of Regulation (EEC, Euratom) No 1552/89. Article 8 Article 8 Regulation No 165/74 is repealed. (EEC, Euratom, ECSC) References to the repealed Regulation shall be construed as references to this Regulation. Aj-ticle 9 This Regulation shall enter into force on the day following its publication in the the European of Official Communities. Journal This Regulation shall enter into force on the day following its publication in the the European of Official Communities. Journal This Regulation shall be binding in its entirety and directly applicable in all Member States. 1^ Proposal for a Council Regulation (Euratom, ECSC, EC) determining the powers and obligations of agents authorized by the Commission pursuant to Article 18(2) and 18(3) of Regulation (EEC, Euratom) No 1552/89 THE COUNCIL OF THE EUROPEAN UNION Having regard to the Treaty establishing the European Coal and Steel Community, and in particular Article 78h thereof, Having regard to the Treaty establishing the European Community, and in particular Article 209 thereof, Having regard to the Treaty establishing the European Atomic Energy Community, and in particular Article 183 thereof, Having regard to Council Decision 94/728/EC, Euratom of 31 October 1994 on the system of the Communities' own resources , and in particular Article 8(2) thereof, Having regard to Council Regulation (EEC, Euratom) No 1552/89 of 29 May 1989 implementing Decision 88/376/EEC, Euratom on the system of the Communities' own resources,2 as amended by Council Regulation (Euratom, EC) No 1355/96 of 8 July 1996,3 and in particular Article 18 thereof, Having regard to the Commission's proposal,4 Having regard to the opinion of the European Parliament, 1 OJ No L 293. 12. 11. 1994, p. 9. 2 OJ No L 155, 7. 6. 1989. p. 1. 3 OJ No L 175, 13. 7. 1996, p 3. 4 OJNo 5 OJNo K Having regard to the opinion of the Court of Auditors, Whereas Article 18(1) of Regulation (EEC, Euratom) No 1552/89 requires Member States to conduct the checks and enquiries concerning the establishment and making available of the own resources referred to in Article 2(l)(a) and (b) of Decision 94/728/EC, Euratom, Whereas, on the basis of Article 18(2) of that Regulation, Member States are required to associate the Commission, at its request, with these inspection measures; whereas this obligation covers inspection measures initiated by the Member States and additional inspections undertaken in response to a reasoned request from the Commission; whereas, on the basis of Article 18(3), the Commission may itself carry out inspection measures on the spot; Whereas Council Regulation (EEC, Euratom, ECSC) No 165/74 of 21 January 19747 determined the powers and obligations of officials appointed by the Commission in connection with inspections; whereas this regulation, which preceded Regulation (EEC, Euratom) No 1552/89, concerns only inspection measures carried out in association with the Member States; whereas Article 18(3) of Regulation No 1552/89 introduces a new inspection procedure giving the Commission the power to carry out on-the-spot inspections on its own initiative; Whereas the scope of Regulation (EEC, Euratom, ECSC) No 165/74 should therefore be extended to cover this new inspection procedure by laying down the arrangements for the conduct of on-the-spot and associated inspections and defining the conditions which authorized agents must observe in the performance of their task; Whereas the inspection measures referred to in Article 18(2) and (3) of Regulation (EEC, Euratom) No 1552/89 are without prejudice to inspections undertaken by Member States in accordance with their own provisions laid down by law, regulation or administrative action; 6 OJNo 7 OJ No L 20. 24. 1. 1974. p. 1. /<r Whereas certain provisions of the Regulation also apply to inspections conducted by the Commission in the area of VAT own resources and inspections relating to GNP; Whereas in view of the scale of the changes to be made, Regulation (EEC, Euratom, ECSC) No 165/74 should be replaced, HAS ADOPTED THIS REGULATION: Article 1 1. For the purposes of: (a) inspection measures with which the Commission is associated, as provided for in the second indent of Article 18(2) of Regulation (EEC, Euratom) No 1552/89; (b) inspection measures carried out by the Commission itself on die spot, as provided for in Article 18(3) of Regulation (EEC, Euratom) No 1552/89; the Commission shall be represented by the officials or other servants whom it has specifically authorized for this purpose, hereinafter referred to as "authorized agents". National experts seconded to the Commission may be present at such inspection measures. 2. The Commission may, with the agreement of the Member State concerned, request officers from other Member States to act as observers, and employ outside agencies, acting under its responsibility, to provide technical assistance. The Commission shall ensure that these officers and agencies provide all the necessary assurances with respect to technical competence, independence and professional secrecy. I? • Article 2 1. Member States and the Commission shall maintain regular contacts to facilitate the implementation of the provisions referred to in Article 1. 2. Every inspection with which the Commission is associated or which it carries out itself on the spot shall be preceded by contacts between the Member State concerned and the Commission in order to lay down detailed procedures. 3. - The Commission shall give its authorized agents written terms of reference for every such inspection, stating their identity and official capacity. Article 3 1. The authorized agents: (a) shall conduct themselves during all inspections in a manner compatible with the rules and usages prescribed for officials of the Member State concerned; (b) shall be bound by professional secrecy, as laid down in Article 5; (c) may have contact with taxable persons only through the officers responsible in the Member State where the inspections are carried out. 2. As regards the organization of work and, more generally, relations with the departments concerned, inspections with which the Commission is associated shall be under the direction of the department designated by the Member State pursuant to Article 4(1). n 3. Inspections which the Commission itself carries out on the spot shall be under the direction of its authorized agents; as regards the organization of work, relations with the departments concerned and, where necessary, with the taxable persons concerned, they shall establish appropriate contacts with the officers designated by the Member State concerned pursuant to Article 4(2). Article 4 1. The Member States shall ensure that the departments or agencies responsible for establishing, collecting and making available own resources and the authorities which they have instructed to carry out inspections in this respect afford the Commission's authorized agents every assistance necessary for carrying out their task. 2. In the case of inspections carried out by the Commission on the spot, the Member State in question shall inform the Commission in good time of the identity and official capacity of the officers it has designated to take part in the inspection and to provide the Commission's authorized agents with every assistance necessary for carrying out their task. Article 5 1. All information gathered in the context of inspection measures covered by this Regulation shall be subject to professional secrecy. It may not be divulged to any persons except those in the institutions of the Community or of the Member States whose duty it is to know, nor used for purposes other than those laid down in Regulation (EEC, Euratom) No 1552/89, unless prior consent has been given by the Member State which originally provided the information. 2. This Article shall apply to all officials and servants of the Community. o4b • Article 6 Save as otherwise provided in Article 5: 1. The findings of inspections carried out shall be communicated to the Member State concerned through the appropriate channels within three months, and the Member State may submit its observations within three months of receiving them. However, the Commission may, for duly substantiated reasons, request the Member State to submit its observations on specific points within one month of receiving the inspection findings. The Member State may decline to accede to the Commission's request, in which case it shall inform the Commission of its reasons. 2. On completion of the procedure laid down in paragraph 1, the findings and observations shall be made known to the other Member States within the Advisory Committee on the Communities' Own Resources. Article 7 The provisions laid down in Articles 2(2), 2(3), 3(l)(a), 3(l)(b), 3(3), 4(1), 5 and 6 shall also apply to inspections carried out by officials or other servants of the Commission pursuant to Article 11(1) of Regulation (EEC, Euratom) No 1553/89 and Article 19 of Regulation (EEC, Euratom) No 1552/89. Article 8 Regulation (EEC, Euratom, ECSC) No 165/74 is repealed. References to the repealed Regulation shall be construed as references to this Regulation. Article 9 This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities. This Regulation shall be binding in its entirety and directiy applicable in all Member States. <2& ISSN 0254-1475 COM(96) 717 final DOCUMENTS EN 01 Catalogue number : CB-CO-96-730-EN-C ISBN 92-78-14102-X Office for Official Publications of the European Communities L-2985 Luxembourg