Ensuring sound financial management of the EU budget

SUMMARY OF:

Decision (EU) 2018/1220 on the rules of procedure of the panel referred to in Article 143 of the EU’s financial regulation

WHAT IS THE AIM OF THE DECISION?

It establishes the rules of procedure for the interinstitutional panel established by Article 143 of Regulation (EU, Euratom) 2018/1046 (see summary on financial regulation).
The panel is the central point across all European Union (EU) institutions, bodies and agencies to assess whether participants and recipients and other persons and entities applying for EU funds should be excluded from EU funding or be subject to a financial penalty, and whether these sanctions should be published.
While ensuring the right to be heard of persons and entities concerned, it bases its recommendations on facts and findings from various sources, including European Anti-Fraud Office (OLAF) and European Public Prosecutor’s Office (EPPO) investigations and decisions adopted by national authorities or international organisations.
It is also competent (under Article 93 of the financial regulation) to issue opinions and recommendations on financial irregularities resulting from an act or omission of an EU staff member.

KEY POINTS

The European Commission appoints a high-level independent Chair of the panel for a non-renewable 5-year term. This person must be either a former member of the Court of Justice of the European Union or the European Court of Auditors, or a former director-general of an EU institution other than the Commission. The Chair is deputised by a Vice-Chair.

The Chair:

represents the panel, chairs and schedules its meetings and organises its work;
is assisted by a permanent secretariat;
convenes the panel when it is asked to give a recommendation on a case.

The Chair is deputised by a Vice-Chair who is appointed under the same conditions and replaces the Chair in case he/she is prevented from attending to his/her duties.

The panel also includes:

two permanent members: the director of the central financial service of the Directorate-General for Budget and another person designated by the Director-General for Budget;
the requested authorising officer;
observers, including:
- from the Commission’s legal service, which attends all of the panel’s meetings;
- from OLAF and/or the EPPO, where the case concerns information they have provided;
- authorising officers from whichever EU institution, body or agency is concerned by the case;
- other observers invited by the Chair.

The permanent secretariat is under the Chair’s authority and:

is staffed by officials from the Directorate-General for Budget;
organises the panel’s work;
draws up documents for the panel;
verifies the documentation and information submitted;
identifies individuals who are potentially involved in a case;
keeps a register of all of the panel’s recommendations.

Any member of the panel or the secretariat who considers they may have a conflict of interest in a case does not participate in the proceedings.

Participation of OLAF:

OLAF cooperates closely with the panel to respect procedural and fundamental rights and to protect whistle-blowers;
OLAF is consulted before the panel notifies a person or entity concerned, where a case is based on information transmitted by OLAF — this is done to avoid damaging the confidentiality of legal proceedings or ongoing investigations.

Participation of the EPPO:

The EPPO cooperates with the panel according to the arrangements for cooperation set out in the agreement referred to in Article 103(1) of Council Regulation (EU) 2017/1939;
The EPPO participates as an observer in Panel meetings where the request of the referring authority is based, in whole or in part, on information transmitted by the EPPO.

Referring cases to the panel. Any authorising official in an EU institution, agency or body:

may refer, using a confidential email address, a case to the panel for its recommendation;
must inform the panel as soon as they become aware of information which could exclude a person or entity from EU funds;
provides all the necessary information they have detected.

Right to be heard. Economic operators*:

may submit their comments on the case, except where there are compelling legitimate grounds to preserve the confidentiality of the investigation or judicial proceedings;
receive a letter and documentation setting out the facts of the case;
send by email their comments, limited to 10 pages and within 3 weeks (these conditions can be more flexible in complex cases).

The panel:

aims for consensus when giving its recommendation on a case involving a person or entity;
decides by majority vote in the absence of a consensus, with one vote for the Chair, one vote for the two permanent members (shared vote) and one vote for the authorising officer involved;
notifies its recommendation to the observers and the institution, body or agency which referred the case;
makes a recommendation within 3 months of receiving a case unless the Chair decides to extend this term, especially in order to ensure the right to be heard of the natural or legal persons concerned;
members, the secretariat staff and all other persons involved in the proceedings and its preparation must respect the strictest confidentiality.

EU staff members. The panel:

may give an opinion as to whether an EU staff member has committed a financial irregularity;
includes, in such circumstances, three extra members (one from the disciplinary body of the institution concerned, one from its staff committee and one from its legal service).

The adversarial procedure is held by the referring authority before the case is examined by the panel.

The decision repeals Commission decisions C(2011) 6109 final and (EU) 2015/2463 which had set out rules of procedure for earlier panels.

The decision was amended on 3 July 2021 by Decision (EU) 2021/1081, in order to ensure the panel’s continuity and to include the mention to the arrangements between the EPPO and the Commission.

FROM WHEN DOES THE DECISION APPLY?

It has applied since 2 August 2018.

BACKGROUND

For more information, see:

Modern and simpler — the new EU financial rules take effect today — press release (European Commission).

KEY TERMS

Economic operator: a person, entity, business or other organisation which supplies goods, works or services.

MAIN DOCUMENT

Commission Decision (EU) 2018/1220 of 6 September 2018 on the rules of procedure of the panel referred to in Article 143 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (OJ L 226, 7.9.2018, pp. 7-16)

Successive amendments to Commission Decision (EU) 2018/1220 have been incorporated in the original text. This consolidated version is of documentary value only.