In reaching agreement on the joint guideline on the above Regulation on 29 June 1995 (see Press Release 8243/95, Presse 199), the Council had decided to consult the European Parliament again in view of the amendments made to the Commission proposal. The European Parliament delivered its new opinion on 30 November 1995 and proposed a series of amendments. However, the Council was unable to reach unanimous agreement on any of these amendments and formally adopted the Regulation as it stood following its discussions on 29 June 1995. As the Regulation was adopted as an ‘A’ item by the Council, the Commission was unable to defend orally the amendments it had taken over.

The Council: - referring to the Ecofin Council conclusions of 11 July 1994, particularly as regards the need to increase the effectiveness and equivalence of control mechanisms and systems of administrative penalties in the various areas of the budget, and to the conclusions of the European Council meeting in Essen on 9 and 10 December 1994 on the adoption as soon as possible of the Regulation on protection of the Community’s financial interests; 1. reiterates its statement to the effect that the principle of subsidiarity cannot reduce the need to enact, in Community legislation, appropriate provisions enabling the Commission and the Member States to ensure that Community law is properly applied and to fulfil their obligations to protect Community revenue and expenditure; 2. stresses the need to strengthen protection of the Communities’ financial interests; 3. notes that further progress is required in devising a broad legal concept of abuse of Community rules, as proposed by the Commission, in order to reduce the risk of transactions with no valid economic rationale being carried out solely to take advantage of benefits available under Community financial rules; 4. highlights the desirability of upholding and consolidating the acquis communautaire ; 5. calls for the swift and clearest possible definition of the relationship between Community administrative penalties and national administrative and criminal ­law penalties, having regard to the objective of ensuring effective and dissuasive protection of the Communities’ financial interests while complying with general legal principles; 6. calls for consideration to be given, in drawing up a list of Community administrative penalties, to the objective of establishing a suitable framework for penalties; 7. calls for proceedings to be expedited, on the basis of the Commission proposal and taking into account the Presidency’s suggestions and delegations’ comments, with a view to the adoption as soon as possible of the Regulation on protection of the Communities’ financial interests; 8. calls for all preparatory work to be completed in time for the Council to proceed with final enactment at its meeting in May 1995.

PURPOSE: to protect the Community’s financial interests.

PROPOSED ACT: Council Regulation.

CONTENT: This proposed regulation was designed to give stronger protection to the Community's financial interests by introducing Community administrative penalties against fraud, abuses and other irregularities against the Community's financial interests, including the budget and any other revenue managed by or for a Community institution.

The Member States were required to apply equal penalties for fraud against their national interests and fraud against the Community's interests. Various administrative penalties could be applied: fines, the withdrawal of some or all of a benefit granted under Community rules, exclusion from or withdrawal of the benefit for a period following the irregularity, temporary or permanent withdrawal of an authorisation or recognition required to participate in a Community aid scheme, etc.

The penalties would apply to both natural and legal persons. A five-year limitation period after the irregularity was proposed for a decision to be reached on a penalty, together with the same period for its application once it was adopted.

No penalty could be applied unless provided for in a Community act prior to the irregularity.

The proposal was accompanied by a draft agreement between the Member States on the introduction of penal sanctions.

PURPOSE: to protect the Community’s financial interests.

PROPOSED ACT: Council Regulation.

CONTENT: This proposed regulation was designed to give stronger protection to the Community's financial interests by introducing Community administrative penalties against fraud, abuses and other irregularities against the Community's financial interests, including the budget and any other revenue managed by or for a Community institution.

The Member States were required to apply equal penalties for fraud against their national interests and fraud against the Community's interests. Various administrative penalties could be applied: fines, the withdrawal of some or all of a benefit granted under Community rules, exclusion from or withdrawal of the benefit for a period following the irregularity, temporary or permanent withdrawal of an authorisation or recognition required to participate in a Community aid scheme, etc.

The penalties would apply to both natural and legal persons. A five-year limitation period after the irregularity was proposed for a decision to be reached on a penalty, together with the same period for its application once it was adopted.

No penalty could be applied unless provided for in a Community act prior to the irregularity.

The proposal was accompanied by a draft agreement between the Member States on the introduction of penal sanctions.