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Article 172

Budget

  1. Estimates of all the Office's revenue and expenditure shall be prepared for each financial year and shall be shown in the Office's budget. Each financial year shall correspond to the calendar year.
  2. The revenue and expenditure shown in the budget shall be in balance.
  3. Revenue shall comprise, without prejudice to other types of income, total fees payable under Annex I to this Regulation, total fees as provided for in Regulation (EC) No 6/2002, total fees payable, under the Madrid Protocol, for an international registration designating the Union, and other payments made to Contracting Parties to the Madrid Protocol, total fees payable, under the Geneva Act referred to in Article 106c of Regulation (EC) No 6/2002, for an international registration designating the Union and other payments made to Contracting Parties to the Geneva Act, and, to the extent necessary, a subsidy entered against a specific heading of the Commission section of the general budget of the Union.
  4. Every year the Office shall offset the costs incurred by the central industrial property offices of the Member States, by the Benelux Office for Intellectual Property and by any other relevant authority to be nominated by a Member State, as the result of the specific tasks which they carry out as functional parts of the EU trade mark system in the context of the following services and procedures:
    • (a) opposition and invalidity proceedings before the central industrial property offices of the Member States and the Benelux Office for Intellectual Property involving EU trade marks;
    • (b) provision of information on the functioning of the EU trade mark system through helpdesks and information centres;
    • (c) enforcement of EU trade marks, including action taken pursuant to Article 9(4).
  5. The overall offsetting of the costs identified in paragraph 4 shall correspond to 5 % of the yearly revenue of the Office. Without prejudice to the third subparagraph of this paragraph, on a proposal by the Office and after having consulted the Budget Committee, the Management Board shall determine the distribution key on the basis of the following fair, equitable and relevant indicators:
    • (a) the annual number of EU trade mark applications originating from applicants in each Member State;
    • (b) the annual number of national trade mark applications in each Member State;
    • (c) the annual number of oppositions and applications for a declaration of invalidity submitted by proprietors of EU trade marks in each Member State;
    • (d) the annual number of cases brought before the EU trade mark courts designated by each Member State in accordance with Article 123. For the purpose of substantiating the costs referred to in paragraph 4, Member States shall submit to the Office by 31 March of each year, statistical data demonstrating the figures referred to in points (a) to (d) of the first subparagraph of this paragraph for the preceding year, which shall be included in the proposal to be made to the Management Board. On grounds of equity, the costs incurred by the bodies referred to in paragraph 4 in each Member State shall be deemed to correspond to at least 2 % of the total offsetting provided for under this paragraph.
  6. The obligation by the Office to offset the costs referred to in paragraph 4 and incurred in a given year shall only apply to the extent that no budgetary deficit occurs in that year.
  7. In the event of a budgetary surplus, and without prejudice to paragraph 10, on a proposal by the Office and after having consulted the Budget Committee, the Management Board may increase the percentage laid down in paragraph 5 to a maximum of 10 % of the yearly revenue of the Office.
  8. Without prejudice to paragraphs 4 to 7 and paragraph 10 of this Article and to Article 151 and 152, where a substantive surplus is generated over five consecutive years, the Budget Committee, upon a proposal from the Office and in accordance with the annual work programme and multiannual strategic programme referred to in Article 153(1)(a) and (b), shall decide by a two-thirds majority on the transfer to the budget of the Union of a surplus generated from 23 March 2016.
  9. The Office shall prepare on a biannual basis a report for the European Parliament, the Council and the Commission on its financial situation, including on the financial operations performed under Article 152(5) and (6), and paragraphs 5 and 7 of this Article. On the basis of that report, the Commission shall review the financial situation of the Office.
  10. The Office shall provide for a reserve fund covering one year of its operational expenditure to ensure the continuity of its operations and the execution of its tasks.