# EUR-Lex - 52011PC0838 - EN

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# 52011PC0838

**Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the Instrument for Pre-accession Assistance (IPA II) /* COM/2011/0838 final - 2011/0404 (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

This proposal should be viewed in the
context of all proposed financial instruments for the financial perspective
2014-2020 as outlined in the Communication 'A Budget for Europe 2020'[1]. The Communication sets the
budgetary framework for EU external action instruments under the Heading 4
(Global Europe), including the Instrument for Pre-accession Assistance (IPA).
On this basis, the Commission is presenting a draft regulation laying down the
legislative framework for the new IPA, together with an assessment of the
impact of alternative scenarios for the instrument.

Article 49 of the Treaty on European Union
provides that any European State which respects the EU values referred to in
Article 2 of the Treaty and is committed to promoting them may apply to become
a member of the Union.

For the past 50 years the EU has simultaneously pursued integration and enlargement, increasing from 6 to the
present 27 Member States and from a population of less than 200 million to more
than 500 million people. A review[2], five years after the fifth
enlargement of the EU in 2004, concluded that: the latest enlargements had
brought greater prosperity for all EU citizens and made Europe a stronger
player in the world economy; the institutional and legal frameworks and the
common policies of the EU played a vital role in ensuring success;
entrepreneurs and citizens experienced clear benefits; and the enlarged EU was
better prepared to address current and future challenges.

The rationale for continuing with the
enlargement of the EU was recalled most recently in the Council conclusions of
14 December 2010: 'Enlargement reinforces peace, democracy and stability in
Europe, serves the EU’s strategic interests, and helps the EU to better achieve
its policy objectives in important areas which are key to economic recovery and
sustainable growth'. The Council conclusions reiterated that with the
Lisbon Treaty entering into force, the EU can at the same time pursue its
enlargement agenda and maintain the impetus of deeper integration.

Currently, the EU is dealing with 5
candidate countries[3]
and 4 potential candidates[4].
By 2014, only Croatia is foreseen to become a Member State. Socio-economic
indicators show that, with the exception of Iceland, enlargement countries are
still well below the EU average and even below the level of the weakest Member
States. This low level of socio-economic development calls for
substantial investments to bring these countries closer to EU standards
and allow them to take on board the obligations of membership and to withstand
the competitive pressures of the single market. Furthermore, these countries
need to be prepared to withstand global challenges such as climate change and
to align with the EU's efforts to address this complex issue. The EU 2020
Strategy for smart, sustainable, and inclusive growth includes addressing
climate change and renewable energy targets among its 5 headline objectives.
The EU has confidence in the low-carbon growth model and this must be projected
externally, also in the process of enlargement.

In addition, the countries in the Western
Balkans are still relatively young states formed after the disintegration of
the former Yugoslavia. Political stability, the full establishment of the
principles of democracy and respect for human rights and good governance — all
fundamental values of the EU — still need to be strengthened.

These countries cannot sustain alone all
the efforts and cost of meeting the criteria for joining the EU. Most lack the
capacity to finance by themselves the institutional reforms and public
investments necessary to stabilise their societies and economies and put them onto a sustainable
development path.

Technical and financial assistance to
the Enlargement countries is currently provided through the Instrument for Pre-accession Assistance (IPA)[5]. This
instrument will expire at the end of 2013. With a view to future accessions,
the EU should continue to offer candidate countries and potential candidates
technical and financial assistance to overcome their difficult situation and
develop sustainably.

The new pre-accession instrument should
continue to focus on delivering on the Enlargement Policy, which is one
of the core priorities of EU External Action, thus helping to promote
stability, security and prosperity in Europe. To that end, the new instrument
should continue to pursue the general policy objective of supporting candidate
countries and potential candidates in their preparations for EU membership and
the progressive alignment of their institutions and economies with the
standards and policies of the European Union, according to their specific needs
and adapted to their individual enlargement agendas. In doing so, the coherence between the financial assistance and the overall
progress made in the implementation of the pre-accession strategy should be
strengthened.

In addition, future pre-accession
assistance needs to be even more strategic, efficient and better
targeted than has been the case so far, aiming for more sustainable results in
improving the readiness of these countries for membership. The new instrument
needs to operate more flexibly and to leverage more funds from other donors or
the private sector by using innovative financing instruments, while pursuing
simplification and reduction of the administrative burden linked to managing
the financial assistance.

Consistency with other policies

The enlargement process extends the
internal policies of the EU to the beneficiary countries. It contributes to expansion
of the internal market, the European Area of Justice and Freedom, the
trans-European energy and transport networks, the enhancement of
employment opportunities, skills development, education and social inclusion,
poverty reduction, protection of the environment and reduction of
trans-boundary air and water pollution, alignment with the Common Agricultural
Policy and the Common Fisheries Policy, the efforts to diversify energy sources[6], achieve resource efficiency,
improve disaster resilience and risk prevention and management, and attain a
more integrated and strategic approach to maritime policies, scientific
excellence and the digital agenda, among other things. In addition, convergence
with the EU's climate policy and legislation will bring significant benefits to
the beneficiary countries through low-carbon development and greener jobs in a
region highly vulnerable to the impact of climate change.

Through its Stabilisation and Association
Agreements and other agreements with candidate countries and potential
candidates, the EU actively encourages enlargement countries to establish
competition regimes. Future pre-accession assistance will also be devoted to strengthening research and innovation capacity as well as
information and communications technologies (ICTs), which in turn will
facilitate realisation of the Innovation Union, underpin the other Europe 2020
strategy objectives and support compliance with EU technical requirements and
standards in many other policies (e.g. public health, food security, climate
action and the environment, including biodiversity and eco-systems).

Making Europe a safer place is high on the
EU's agenda as defined in the Stockholm Programme. The improved strategic
orientation of financial assistance for pre-accession will help support
enlargement countries in preventing and tackling organised crime and corruption
and in strengthening their law enforcement, border management and migration
control capabilities.

Enlargement gives the EU greater weight and
strengthens its voice in international fora. With the entry into force of the
Lisbon Treaty, the EU now has the means to pull its weight on the global scene.
The EU’s role in adopting the UN General Assembly Resolution on Kosovo is an
example of this potential. The fifth enlargement gave a new impetus to the EU’s
relations with its eastern and southern neighbours and led it to explore ways
of developing initiatives in the Baltic and Black Sea regions. The accession
process with countries in the Western Balkans and Turkey gives the EU a still
greater interest and influence in the Mediterranean and Black Sea regions and
in the Danube basin. Provided that Turkey’s role in its own region is developed
as a complement to its accession process and in coordination with the EU, it can
add to the weight of both parties in world affairs, not least in the Middle
East and the Southern Caucasus. By acting together, the EU and Turkey can
strengthen energy security, address regional conflicts, and prevent divisions
developing along ethnic or religious lines, and improve cooperation on maritime
issues especially in the Black Sea. Iceland and the EU can together play an
important role in addressing energy, environmental, climate change, maritime
and security issues in the Arctic.

2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS

Stakeholders consultation on future
pre-accession assistance

The proposal for the new Instrument for
Pre-accession Assistance is based on extensive consultation with stakeholders
which started at the conference on 'IPA: sustainable results and impact',
organised by the Commission in Brussels on 6 and 7 December 2010. This was
followed by a series of consultations with stakeholders throughout the first
part of 2011, which provided input to an ex-ante evaluation in
preparation of the future pre-accession assistance instrument. Those
consultations included:

·
An online survey, obtaining 338 responses
from: Member State representatives; public administrations and non-public
stakeholders of candidate countries and potential candidates benefiting from
IPA assistance; Commission staff; donors and international financing
institutions; other international organisations; non-governmental organisations
(NGOs), researchers, experts and interest groups.

·
A series of focus groups, in particular:
one high-level working group; four mixed groups comprising Commission officials
and external stakeholders; three special focus groups on IPA assistance for
cross-border cooperation, regional development, human resources development and
rural development; two meetings with Member State representatives in the
technical committee that assists the Commission in implementing pre-accession
assistance; and a meeting with authorities of the Western Balkans focussing on
options for future cross-border cooperation at borders within the Western
Balkans.

·
Consultations
with: individual Commission officials at headquarters and EU Delegations in
beneficiary countries; structures providing technical assistance or policy
support to the beneficiary countries; offices of the National IPA Coordinators
of the beneficiary countries; multilateral and bilateral donors; international
and regional organisations (United Nations agencies, Regional Cooperation
Council, OSCE, etc); and, NGOs (European Stability Initiative, International
Crisis Group, Open Society Foundation etc) at EU level.

·
A working-level meeting organised by the
Commission in cooperation with the Hungarian Presidency of the EU in Zagreb on
10-11 May, where the preliminary results of the consultation were presented and
discussed with all IPA stakeholders.

Analysis of the positions emerging from the
stakeholder consultation showed support for:

–
Continuing with the instrument with similar levels of resources covering both institutional
development and socio-economic development;

–
Tailoring assistance to the needs and characteristics of each country;

–
Strengthening the sector approach, with a more coherent longer-term planning process resulting
in a strategic instrument for donor coordination and for steering
private-sector investment;

–
Introducing multi-annual planning to cover the duration of the next multi-annual financial framework,
with a mid-term review, and developing further multi-annual
programming also for transition assistance and
institution-building actions, together with better
beneficiary involvement in programming, led by
stronger national authorities in charge of IPA coordination;

–
Rewarding good performance based on absorption and on achieving strategic targets; using
conditionalities in a more strict and systematic way at country, sector
strategy and project level;

–
Making access to the various types of
assistance no longer subject to status as
candidate/potential candidate, but dependent on readiness to implement,
combined with a phased approach to decentralising the management of assistance;

–
Re-examining the current component structure, including better coordination between policy areas;

–
Continuing cooperation with IFIs and leveraging
IFI and other donor funds;

–
Adopting a three-tier approach to monitoring
and evaluation, assessing progress
relative to i) the path to accession; ii) national strategies and iii)
achieving results at the level of programmes, sectors and measures.

Internal consultation on future
pre-accession assistance

Within the Commission, preparations for the
new IPA post-2013 involved extensive discussions within and between the four
services involved in managing the assistance, i.e. the Directorates-General
for: Enlargement; Regional Policy; Employment, Social Affairs and Inclusion;
and Agriculture and Rural Development, as well as with the EU Delegations or
Liaison Office in Iceland, the Western Balkans and Turkey.

Public consultation on all external
action instruments

The future of pre-accession assistance was
also the subject of a broader public consultation on future funding for EU
external action held by the Commission between 26 November 2010 and 31 January
2011. The consultation was based on an online questionnaire accompanied by a
background paper ‘What funding for EU external action after 2013?’ prepared by
the Commission and the EEAS services involved. The 220 contributions received
reflect the broad and diverse structures and views of the external action
community.

Among the responses more specifically
covering development assistance, the following were also relevant for
pre-accession assistance:

·
A majority of respondents confirmed that EU
intervention provides a substantial added value in the main policy areas
supported through the financial instruments for external action[7]. The EU added value was
mentioned by many respondents as the main driver for the future: the EU should
exploit its comparative advantage linked to its global field presence, its
wide-ranging expertise, its supranational nature, its role as facilitator of
coordination, and economies of scale.

·
Nearly all respondents supported a more
differentiated approach, tailored to the situation of the beneficiary
countries, based on sound criteria and efficient data collection, as a way to increase
the impact of EU financial instruments.

·
Regarding the simplification of instruments, as
concerns the balance between geographic and thematic instruments, opinions were
mixed regarding a review of EU thematic programmes and a possible reduction in
number. Increasing the geographic flexibility of the EU instruments was
supported by a significant majority of respondents as a way to respond to
inter-regional challenges.

Use of
expertise

Two expert
studies were commissioned by DG Enlargement to assess the intervention logic
and draw lessons from the current IPA programme (IPA meta-evaluation), as well
as to prepare an ex-ante evaluation of future pre-accession assistance
post-2013. Both studies are available on the DG Enlargement website at the
following address:
http://ec.europa.eu/enlargement/how-does-it-work/financial-assistance/phare/evaluation/interim_en.htm

Impact
assessment

As part of the preparation of the proposal
for the new pre-accession instrument, the Commission carried out an impact
assessment considering the following options:

Option 1 - ‘No
change’.

Option 2 - ‘Amend the existing
Regulation’, with the following alternatives:

–
Sub-option 2.1 - ‘Reduce scope and keep
implementation arrangements’, focusing on the
necessary legal and institutional changes needed to comply with the accession
criteria, without committing any significant funds for co-financing public
investment for socio-economic development.

–
Sub-option 2.2 - ‘Keep
the component structure and add more focus on investments’ in order to
increase the socio-economic impact in the beneficiary countries and to speed up
their preparation for managing structural, cohesion and rural development
funds.

–
Sub-option 2.3: ‘Maintain
the scope and adjust implementation arrangements’, covering both compliance
with the accession criteria and support for socio-economic development. In
addition, adjust aspects of the current IPA set-up and implementation
modalities.

Option 3: ‘Design
a new instrument’. This option was not analysed in detail.

The economic impact of the various
options was assessed in terms of the likelihood that the options would: i)
delay or accelerate enlargement and therefore the positive economic impact of
the expansion of the internal market; ii) maintain or reduce costs to the EU
and Member States in terms of security measures and risks, border controls and
irregular migration; iii) constrain or improve the possibilities for better
economic integration, e.g. through improved integration with the Trans-European
Networks; iv) affect positively or negatively the confidence of donors and
investors in the beneficiary countries.

The social impact of the various
options was assessed in terms of the likely effect on poverty and exclusion in
the enlargement countries linked to progress towards accession and the creation
of conditions for improved economic performance and policy measures that could
address these issues. Likely effects in terms of risks that rights in the area
of justice and the rule of law could be jeopardised in the beneficiary
countries as a consequence of delays in and risks to accession were also
considered.

The environmental impact of the
options was assessed in terms of the likelihood that environmental costs would
accrue if enlargement was delayed or put at risk, due to lower environmental
standards being used to obtain competitive advantage in the beneficiary
countries and/or due to delays in implementing the expensive investments needed
to align with the EU environmental acquis.

Option 2.1
was assessed to have likely negative impacts on all aspects. Positive
impacts compared to option 1 were expected to accrue from options 2.2
and 2.3, with different scores for the individual aspects. The improved
modalities for delivering assistance under option 2.3, by increasing its
focus, efficiency, effectiveness, leverage and impact, were assessed as likely
to have overall a more positive impacts than the increased investments in
socio-economic development under option 2.2.

3.           LEGAL ELEMENTS OF THE PROPOSAL

Enlargement policy is based on Article 21
of the Treaty on European Union, which provides that ‘the Union’s action on the
international scene shall be guided by the principles which have inspired its
own creation, development and enlargement, and which it seeks to advance in the
wider world: democracy, the rule of law, the universality and indivisibility of
human rights and fundamental freedoms, respect for human dignity, the
principles of equality and solidarity, and respect for the principles of the
United Nations Charter and international law’.

The legal base for financial assistance for
pre-accession is Article 212(2) of the Treaty on the Functioning of the
European Union.

The proposal for the new Instrument for
Pre-accession Assistance is in line with the principles of subsidiarity and
proportionality under Article 5 of the Treaty on European Union.

In terms of subsidiarity, action at EU
level brings crucial added value, linked to a number of factors:

–
The successive enlargement of the EU is by its
very nature a common task which can be pursued only at EU level. Only
the Member States acting together can decide on accession requests by new
candidates. The pre-accession assistance provided through the EU budget is
designed to help candidate countries and potential candidates prepare for
future membership: the IPA is designed to give countries a ‘test run’ of the
obligations of membership before accession (such as putting in place
institutions for managing post-accession EU funds, and/or adopting the acquis
and EU standards). No other multilateral or bilateral instrument can
provide such a comprehensive toolbox, and in any case only the EU can define
what kind of assistance is needed to prepare for taking over the acquis.

–
With 27 Member States acting within common
policies and strategies, the EU alone has the critical weight to respond to
global challenges. The action of individual Member States can be limited and
fragmented, with projects often too small to make a sustainable difference in
the field. Streamlining the work of Member States through the EU enables better
coordination and makes EU work more effective.

–
In recent years EU Member States have been
reducing the level of their bilateral assistance to candidate countries and
potential candidates, acknowledging that coordinated action at EU level is more
effective. About half of the overall financial assistance of the EU to the
enlargement countries in 2009 came from the EU budget. Multilateral donor
organisations have largely phased out their support and those that remain have
now aligned their programmes with the EU priorities. Working with the EU is
also cheaper. Administrative costs are lower than the average administrative
costs of the principal donors of bilateral aid.

–
Pre-accession assistance is an investment in the
future of the EU, supporting the stability and prosperity of
neighbouring countries and ensuring the effective capacity of candidate
countries to implement the acquis upon accession, including to manage
the structural, cohesion, agricultural and rural development, maritime and
fisheries funds and policies of the Union. Technical and financial assistance
speeds up the process of preparation and creates incentives for the necessary
transformation of society, the legal system and the economy. Such assistance helps
meet the objectives of the internal policies of the EU, creates opportunities
for EU businesses and provides tangible return on investment. Without the
intensive involvement and closer partnership embodied in pre-accession
assistance the EU would certainly have to spend more on combating illegal
migration, securing the external borders of the EU, ensuring the security of
energy supplies and safe and hygienic food imports for its citizens, and
combating climate change and pollution.

In line with the principle of
proportionality, the proposed Regulation does not go beyond what is necessary
to achieve its objectives.

4.           BUDGETARY IMPLICATION

In its Communication of June 2011 ‘A Budget
for Europe 2020’ the European Commission proposed to allocate an amount of EUR
14 110 100 000 (current prices) to the new Instrument for
Pre-accession Assistance for the period 2014-2020.

The detailed estimated financial impact of
the proposal is presented in the Legislative Financial Statement enclosed with
this proposal. The indicative yearly budget commitments* are given in the table
below.

Instrument for Pre-Accession || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || 2014-2020

1898.0 || 1935.9 || 1974.6 || 2014.1 || 2054.4 || 2095.5 || 2137.4 || 14110.1

*Current
prices in million €

To ensure its predictability, funding for
higher education activities in third countries in the context of "Erasmus
for All" programme will be made available, in line with EU external action
objectives, through 2 multi annual allocations only covering the first 4 years
and the remaining 3 years respectively. This funding will be reflected in the
multiannual indicative strategy papers of the IPA, in line with the identified
needs and priorities of the countries concerned. The allocations can be revised
in case of major unforeseen circumstances or important political changes in
line with the EU external priorities. The provisions of the "Erasmus for
All" Regulation (EU) No [--] of the European Parliament and of the Council
establishing "Erasmus for All"[8]
will apply to the use of those funds.

Financial
assistance to the Turkish Cypriot community will continue to be provided until
the adjustment foreseen in the second paragraph of article 11 of the Council
Regulation laying down the multiannual financial
framework for the years 2014-2020 has taken place. Such financial
assistance shall continue to be governed by the provisions of Regulation (EC)
No 389/2006 of 27 February 2006 establishing an instrument of financial support
for encouraging the economic development of the Turkish Cypriot community. Financial
needs for the support to the Turkish Cypriot community will be covered from the
overall envelope allocated to the Instrument for Pre-accession Assistance.

5.           OPTIONAL ELEMENTS

Simplification

A priority for the Commission in this new
Regulation, as in other programmes under the Multiannual Financial Framework
(MFF), is to simplify the regulatory environment and facilitate Union
assistance to beneficiary countries and regions, civil society organisations,
SMEs, etc.

This proposal pursues simplification
primarily by streamlining the component
structure around principal policy areas. This
translates into simplification of the legislative framework for the instrument
and the future implementing rules, with streamlined provisions. Linked to the
streamlining of the components structure, undifferentiated access to
assistance under each policy area means that beneficiary countries will no
longer need to be identified separately in the legal basis of the instrument.
As a result, it will no longer be necessary to go through a cumbersome
procedure to reflect a beneficiary’s change of status, thus reducing the gap between the political
decisions on financial assistance and implementation on the ground. Similarly,
should a new country become a potential candidate for EU accession, the
procedural requirements for including that country among the beneficiaries of
assistance would be considerably simplified.

Different Commission services will remain
responsible for managing and implementing the assistance in the different
policy areas. However, coordination, communication and implementation on the
ground will be further improved through simplification of a number of aspects,
including closer joint monitoring of the progress of implementation in the beneficiary countries and fewer processes for accreditation and
conferral of management powers. Increasing the coherence of action by the Commission should also
substantially reduce the cost and burden of coordination incurred by
beneficiary countries, on account of the different communication channels and
procedures used by the Commission.

The proposal also envisages that strategic
decisions on the allocation of assistance are made through comprehensive country and multi-country strategy papers covering the full period of the new financial framework
(2014-2020) and reviewed once at mid-term, replacing the current system of
three-year rolling indicative planning documents revised each year. This will
reduce, for all stakeholders involved, the administrative burden related to the
yearly review of each document and possible ensuing revisions. Similarly, less
administration for all and quicker delivery of assistance will follow from
introducing multi-annual programming for transition and capacity-building
assistance as well.

More simplification should also result from
introducing, where the relevant conditions are in place, a sector-based
approach to the allocation of assistance for those sectors. In addition to improving
the effectiveness and impact of the assistance, this approach could translate
into a lower number of projects/contracts, thus reducing the administrative
burden related to project/contract management. If conditions allow, the sector
approach could also entail the use of budget support, again reducing the
administrative burden compared to project support.

Detailed provisions on joint monitoring and
the accreditation processes will be set out in separate implementing rules.
These rules will pursue further simplification in cross-border cooperation
between candidate countries and potential candidates,
by further aligning programming and implementation with the Structural Funds
approach.

Simplification
and flexible procedures in the implementation of the new Regulation, will allow
swifter adoption of implementing measures and delivery of EU assistance.
Furthermore, the revision of the Financial Regulation, in particular the
special provision for external actions, will help facilitate the participation of
civil society organisations and small businesses in funding programmes, for
example by simplifying rules, reducing the costs of participation and
accelerating award procedures. In implementing this Regulation, the Commission will
use the simplified procedures provided for in the new Financial Regulation.

Detailed
explanation of specific provisions of the proposal

Overall, the current proposal and future
implementing rules envisage the following revisions to the design of the
instrument and its implementation modalities (in addition to the simplification
already mentioned above):

1.
The delivery of assistance will be made more
coherent, strategic and result-oriented, by:

·
Addressing policy areas through comprehensive
multi-annual country (and multi-beneficiary) strategy papers reflecting the political
priorities of the Enlargement Strategy and covering, for each policy area, all necessary institution building, acquis
compliance and investment actions. The scope will be based on a needs
assessment and will be adapted to the country context.

·
Reinforcing (co-)financing of agreed sector
strategies contributing to the policy objectives, as opposed to individual
projects, thus moving away from purely grant-financed projects and increasing
the share of assistance funded through
support at sector level (including sector budget support for selected policy
areas based on effectively targeted conditionalities). Nevertheless, support
for acquis compliance will remain available through project support or
other implementation modalities such as dedicated facilities, when not covered
by overarching sector strategies.

·
More systematic multi-annual programming
also for policy objectives pursued by transition and institution-building
assistance (e.g. public administration reform; reform of justice systems,
etc.), supporting effective implementation of the related sector strategies and
ultimately attainment of the related objectives.

·
Making financial
assistance more directly conditional on improved
governance and growing ownership by the beneficiary
countries. Elements of flexibility will be introduced to cater for emerging
needs and give incentives to improve performance.

2.
The delivery of assistance will be made more flexible and tailored to address needs, by:

·
Allowing un-differentiated access to
assistance (irrespective of candidate or potential candidate status),
albeit with a different scope or intensity, on the basis of needs and technical
and administrative capacity. The needs of the beneficiary countries would be
the starting point for determining the sectors/policy areas for assistance.

·
Envisaging a more progressive, phased
approach to the management of financial assistance, whereby management
would be by the Commission or by the beneficiary country, with or without ex-ante
controls by the Commission, depending on
accession status/perspective, sector/policy area of assistance, and administrative, technical and management capacity.
The creation of management structures and procedures mirroring those
that need to be in place post-accession would continue to be the aim in
relevant sectors in preparation for accession.

·
Linking progress along different management
phases to political priorities, as reflected in
progress reports, the achievement of negotiation benchmarks or the track record
in implementing the Association Agreements.

·
Increasing flexibility between priorities for a
more result-oriented delivery of the assistance, allowing allocations to be
transferred between policy areas, with the possibility to carry over
funds from one year to another, where allowed by the new Financial
Regulation.

3.
The deployment of assistance will be made more efficient and effective by:

·
Pursuing further the identification and use of innovative
financial instruments that could leverage more private funds and looking
into the possibility to exploit synergies with
innovative financial instruments developed for internal policies, on the basis
of a coordinated approach to and coordinated rules for using the EU budget in
such instruments.

·
Also as part of the move towards greater
sector-level support, increasing cooperation with other donors and
International and other financial institutions at strategic level, agreeing
on policy priorities and on a clearer division of labour;

·
Continuing to support regional
programmes/projects that bring added value by encouraging knowledge and
experience sharing, harmonisation of policies, agreement on joint priorities
and building of mutual trust. Regional programmes also have the potential to
enhance the effectiveness of policies, e.g. in transport, energy, environment,
climate change, statistics, the fight against organised crime and migration
issues.

·
Streamlining the rules for the procurement of
twinning assistance and introducing mechanisms to
ensure the suitability of recruited experts, while also adding a possibility to
draw funds from a dedicated facility to respond to needs as they arise.

Delegated acts

Considering
that the discretionary policy decisions on the status of applicant countries
should be taken at another level, it is proposed that amendments made to the
list of beneficiary countries in Annex to the proposed Regulation to reflect
such decisions should be adopted by way of a delegated act in accordance with
Article 290 of the Treaty on the Functioning of the European Union, since such
amendments will not actually affect an essential element of the Regulation.

It is also
proposed that the Commission should be conferred delegated powers to adopt
detailed rules establishing uniform conditions for implementing the proposed
Regulation, in particular as regards management structures and procedures. Such
rules are needed to complement the common rules and procedures for the
implementation of the Union's instruments for external action established by
the Common Implementing Regulation. They should take into account the lessons
learnt from the management and implementation of past pre-accession assistance
and be adapted to the evolution of the situation in the beneficiary countries.

2011/0404 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

on the Instrument for Pre-accession
Assistance (IPA II)

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 212(2) thereof,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national Parliaments,

Having regard to the opinion of the
European Economic and Social Committee[9],

Having regard to the opinion of the
Committee of the Regions[10],

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)
In the Communication from the Commission to the
European Parliament, the Council, the European Economic and Social Committee
and the Committee of the Regions “A Budget for Europe 2020”[11], the Commission sets the
budgetary framework for the external action instruments of the Union, including
the Instrument for Pre-accession Assistance (IPA).

(2)
As Council Regulation (EC) No 1085/2006 of 17
July 2006 establishing an Instrument for Pre-Accession Assistance (IPA)[12] expires on 31 December 2013
and in order to make the external action of the Union more effective, a
framework for planning and delivering external assistance should be maintained
for the period 2014–2020. The enlargement policy of the Union should continue
to be supported by a specific financial instrument. The Instrument for
Pre-accession Assistance (IPA) should therefore be renewed.

(3)
Article 49 of the Treaty on European Union provides
that any European State which endorses the values of respect for human dignity,
freedom, democracy, equality, the rule of law and respect for human rights may
apply to become a member of the Union.

(4)
A European State which has applied to join the
Union can become a member only when it has been confirmed that it meets the
membership criteria agreed at the Copenhagen European Council in June 1993 and
provided that the accession does not overstretch the capacity of the Union to
integrate the new member. These criteria relate to the stability of
institutions guaranteeing democracy, the rule of law, respect of human rights
and respect for, and protection of, minorities, the development of the economy
that must be sufficient to withstand the competitive pressure in the internal
market, and the ability to assume not only the rights but also the obligations
under the Treaties.

(5)
The accession process is based on objective
criteria and the application of the principle of equal treatment of all
applicant countries. Progression towards accession depends on the capacity of
the applicant country to undertake the necessary reforms to align its
political, institutional, legal, administrative and economic systems with the
rules, standards, policies and practices in the Union.

(6)
The European Council has granted the status of
candidate country to Iceland, Montenegro, the former Yugoslav Republic of
Macedonia and Turkey. It has confirmed the European perspective for Albania,
Bosnia and Herzegovina, Serbia as well as Kosovo[13], which are considered
potential candidates.

(7)
Financial assistance under this Regulation
should be granted to both candidate countries and potential candidates (the
‘beneficiary countries’) listed in the Annex to this Regulation, irrespective
of their status.

(8)
Assistance under this Regulation should be
provided in accordance with the enlargement policy framework defined by the
Union for each beneficiary country reflected in the annual enlargement package
of the Commission, which includes the Progress Reports and the Enlargement
Strategy, in the Stabilisation and Association agreements and in the European
or Accession Partnerships. Assistance should mainly focus on a limited number
of policy areas that will help beneficiary countries strengthen democratic
institutions and the rule of law, reform the judiciary and public
administration, respect fundamental rights and promote gender equality and
non-discrimination. It should also enhance their economic and social
development, underpinning a smart, sustainable and inclusive growth agenda in
line with the Europe 2020 strategy and to align progressively with the
Copenhagen criteria. The coherence between the financial assistance and the
overall progress made in the implementation of the pre-accession strategy
should be strengthened.

(9)
Candidate countries and potential candidates
need to be better prepared to withstand global challenges, such as sustainable
development and climate change, and align with the Union’s efforts to address
these issues. Union assistance under this Regulation should also contribute to
the goal of raising the climate-related proportion of the Union budget to at
least 20 %.

(10)
The Commission and the Member States should
ensure the compliance, coherence, and complementarity of their assistance, in
particular through regular consultations and frequent exchanges of information
during the different phases of the assistance cycle.

(11)
In order to ensure coherence between the
accession process and the financial and technical assistance provided under
this Regulation and achieve the objectives of the accession agenda, a common
strategic framework for using the Instrument for Pre-Accession Assistance
should be established by the Commission. This framework should define, inter
alia, the list of key actions which may be supported under this Regulation
and the criteria for the allocation of funds. The common strategic framework
should constitute the reference framework for the country and multi-country strategy
papers.

(12)
The objectives of the assistance should be
defined in indicative country and multi–country strategy papers established by
the Commission for the duration of the Union’s Multi-annual Financial Framework
in partnership with the beneficiary countries, based on their specific needs
and enlargement agenda. The strategy papers should identify the policy areas
for assistance and, without prejudice to the prerogatives of the budgetary
authority, lay down the indicative allocations of funds per policy area, broken
down per year, including an estimate of climate related expenditure. Sufficient
flexibility should be built in to cater for emerging needs and to give
incentives to improve performance. The strategy papers should ensure coherence
and consistency with the efforts of beneficiary countries as reflected in their
national budgets and should take into account the support provided by other
donors. In order to take into account internal and external developments, the
multiannual indicative strategy papers should be revised as appropriate.

(13)
It is in the Union’s interest to assist
beneficiary countries in their efforts to reform their systems in order to
align them to those of the Union. Since the objective of this Regulation cannot
be sufficiently achieved by the Member States and can be better achieved at
Union’s level, the Union may adopt measures in accordance with the principle of
subsidiarity as set out in Article 5 of the Treaty on European Union. In
accordance with the principle of proportionality as set out in that Article,
this Regulation does not go beyond what is necessary in order to achieve this
objective.

(14)
In order for this Regulation to be able to
reflect swiftly the results of political decisions made by the Council, the
power to adopt acts in accordance with Article 290 of the Treaty on the
Functioning of the European Union should be delegated to the Commission for
updating the list of beneficiary countries in the Annex to this Regulation.

(15)
While Regulation (EU) No .../...of the European
Parliament and of the Council of ....[14]
(hereinafter "the Common Implementing Regulation") establishes common
rules and procedures for the implementation of the Union's instruments for
external action, delegated powers to adopt more detailed rules establishing
uniform conditions for implementing this Regulation, in particular as regards
management structures and procedures, should also be conferred on the
Commission. Such rules should take into account the lessons learnt from the
management and implementation of past pre-accession assistance and be adapted
to the evolution of the situation in the beneficiary countries.

(16)
With regard to these delegated acts, it is of
particular importance that the Commission should carry out appropriate
consultations during its preparatory work, including at expert level. The
Commission, when preparing and drawing up delegated acts, should further ensure
a simultaneous, timely and appropriate transmission of relevant documents to
the European Parliament and Council.

(17)
Assistance should continue to make use of the
structures and instruments that have proved their worth in the pre-accession
process. The transition from direct management of pre-accession funds by the
Commission to decentralised management delegated to the beneficiary countries
should be progressive and in line with each beneficiary country’s capacities.

(18)
The implementing powers relating to the IPA
common strategic framework and the strategy papers should be exercised in
accordance with Regulation (EU) No 182/2011 of the European Parliament and of
the Council laying down the rules and general principles concerning mechanisms
for control by Member States of the Commission’s exercise of implementing
powers[15].
Taking into account the nature of those implementing acts, in particular their
policy orientation nature or their financial implications, the examination
procedure should in principle be used for their adoption, except for technical
implementing measures of a small financial scale.

(19)
The committees established under this Regulation
should be also competent for acts relating to the implementation of the
previous Instrument for Pre-Accession Assistance, as well as for the
implementation of financial assistance to the Turkish Cypriot community.

(20)
Where a beneficiary country violates the
principles on which the Union is founded, or fails to respect the commitments
contained in the relevant agreements concluded with the Union, or makes
insufficient progress with respect to the accession criteria, the Council, on a
proposal from the Commission, should be able to take appropriate measures to
redress the situation.

(21)
Given the objectives and scope of the assistance
provided under this Regulation, the European Economic and Social Committee and
the Committee of the Regions should be consulted before its adoption,

HAVE ADOPTED THIS REGULATION:

TITLE
I
GENERAL PROVISIONS

Article 1
General objective

The Instrument for Pre–accession Assistance
(‘IPA’) aims to support candidate countries and potential
candidates (‘beneficiary countries’) listed in the Annex in implementing the
political, institutional, legal, administrative, social and economic reforms
required to bring the countries closer to Union values and to progressively
align to Union rules, standards, policies and practices with a view to Union
membership.

Article 2
Specific objectives

1.
Assistance under this Regulation shall pursue
the following specific objectives according to the needs of each beneficiary
country and their individual enlargement agenda:

(a)
Support for political reforms, inter alia:

(i).     strengthening of democratic
institutions and the rule of law, including its implementation;

(ii).     promotion and protection of human
rights and fundamental freedoms, enhanced respect for minority rights,
promotion of gender equality, non-discrimination and freedom of the press, and
promotion of good neighbourly relations;

(iii).    the fight against corruption and
organised crime;

(iv).    public administration reform and good
governance;

(v).    the development of civil society and
social dialogue;

(vi).    reconciliation, peace building and
confidence building measures.

(b)
Support for economic, social and territorial
development, with a view to a smart, sustainable and inclusive growth, inter
alia through:

(i).     the achievement of Union standards in
the economy and economic governance;

(ii)      economic reforms necessary to cope
with competitive pressure and market forces within the Union, while pursuing
economic, social and environmental goals;

(iii).    fostering employment and developing
human capital;

(iv).    social and economic inclusion, in
particular of minorities and vulnerable groups;

(v).    development of physical capital, the
improvement of connections with Union and regional networks.

(c)
Strengthening of the ability of beneficiary
countries to fulfil the obligations stemming from membership by supporting
progressive alignment with and adoption, implementation and enforcement of the acquis
communautaire, structural, cohesion, agricultural and rural development
funds and policies of the Union.

(d)
Regional integration and territorial cooperation
involving beneficiary countries, Member States and, where appropriate, third countries
within the scope of Regulation (EU) No [...] establishing a European
Neighbourhood Instrument[16].

2.
Progress towards
achievement of the specific objectives set out in paragraph 1 shall be assessed
through indicators that cover inter alia:

–
Progress in the areas of democracy, the rule of
law, the respect of human rights and fundamental freedoms, the justice system
and the level of administrative capacity;

–
Progress in economic reforms; the soundness and
effectiveness of social and economic development strategies, progress towards
smart, sustainable and inclusive growth, including through public investments
supported by IPA;

–
The body of legislation aligned with the acquis;
progress in Union-related institutional reform, including transition to
decentralised management of the assistance provided under this Regulation;

–
The relevance of regional and territorial cooperation
initiatives and the evolution of trade flows.

The indicators shall be used for monitoring,
evaluation and review of performance, as appropriate.

Article 3
Policy areas

1.
Assistance under this Regulation shall mainly
address the following policy areas:

(a)
the transition process towards Union membership
and capacity building;

(b)
regional development;

(c)
employment, social policies and human resources
development;

(d)
agriculture and rural development;

(e)
regional and territorial cooperation.

2.
Assistance under the policy areas referred to in
paragraph 1 shall support the beneficiary countries in attaining the general
and specific objectives set out in Articles 1 and 2.

3.
Assistance under the policy areas referred to in
points (b) to (d) of paragraph 1 may include inter alia financing of the
type of actions provided for under Regulation (EU) XXXX/201X of the European
Parliament and of the Council of MM/DD/YYYY on specific provisions concerning
the European Regional Development Fund and the Investment for growth and jobs
goal[17],
Regulation (EU) XXXX/201X of the European Parliament
and of the Council of DD/MM/YYYY on the Cohesion Fund[18], Regulation (EU) XXXX/201X of the European Parliament and of the
Council of MM/DD/YYYY on the European Social Fund[19], Regulation (EU) XXXX/201X of
the European Parliament and of the Council of DD/MM/YYYY on specific provisions
for the support from the European Regional Development Fund to the European
territorial cooperation goal[20]
and Regulation (EU) XXXX/201X of the European Parliament and of the Council of
DD/MM/YYYY on support for rural development by the European Agricultural Fund
for Rural Development (EAFRD)[21].

4.
Assistance under the policy area referred to in
point (e) of paragraph 1, may in particular finance multi-country or horizontal
actions as well as cross-border, transnational and interregional cooperation
actions.

Article 4
Compliance, coherence and complementarity

1.
Financial assistance under this Regulation shall
be consistent with Union policies. It shall comply with the agreements
concluded by the Union with the beneficiary countries and respect commitments
under multilateral agreements to which the Union is a party.

2.
The Commission, the Member States and the
European Investment Bank shall ensure coherence between assistance provided
under this Regulation and other assistance provided by the Union, the Member
States and the European Investment Bank.

3.
The Commission and the Member States shall
ensure coordination of their respective assistance programmes to increase
effectiveness and efficiency in the delivery of assistance and to prevent
double funding in line with the established principles for strengthening
operational coordination in the field of external assistance, and for the
harmonisation of policies and procedures. Coordination shall involve regular
consultations and frequent exchanges of information during the different phases
of the assistance cycle, in particular at field level and shall constitute a
key step in the programming processes of the Member States and the Union.

4.
In order to increase effectiveness
and efficiency in the delivery of assistance and to prevent double funding,
the Commission shall, in liaison with the Member States, take the necessary
steps to ensure better coordination and complementarity with multilateral and
regional organisations and entities, such as international financial
institutions, United Nations agencies, funds and programmes, and non-Union
donors.

5.
When preparing, implementing and monitoring
assistance under this Regulation, the
Commission shall in principle act in partnership with the beneficiary
countries. The partnership shall involve, as appropriate, competent national,
regional and local authorities, economic and social partners, civil society and
non-state actors.

TITLE
II
STRATEGIC PLANNING

Article 5
IPA Common Strategic Framework

1.
The Commission shall establish a Common
Strategic Framework for the Instrument for Pre-accession Assistance. The IPA
Common Strategic Framework shall translate the political priorities of the
enlargement policy into key actions which can receive assistance under this
Regulation.

2.
The IPA Common Strategic Framework shall inter
alia include:

(a)
the criteria to be used for the allocation of
funds to beneficiary countries as well as to multi-country and territorial
cooperation actions;

(b)
the types of actions which can be financed by
the IPA;

(c)
the common guidelines for management and
implementation of the IPA.

3.
The Commission shall approve the IPA Common
Strategic Framework and any revision thereof in accordance with the examination
procedure referred to in Article 15(3) of the Common Implementing Regulation.

Article 6
Strategy Papers

1.
Assistance under this Regulation shall be
provided on the basis of country or multi-country indicative strategy papers
(hereinafter "strategy papers"), established for the duration of the
Union’s Multi-annual Financial Framework, by the Commission in partnership with
the beneficiary country or countries concerned.

2.
The strategy papers shall specify the
appropriate mix of policy areas as referred to in Article 3 which will receive
financial assistance under this Regulation to reflect needs and priorities in
accordance with the objectives referred to in Article 2, with the IPA Common
Strategic Framework referred to in Article 5, and with the national strategies,
as appropriate.

3.
The strategy papers shall include the indicative
allocation of Union funds per policy area, as applicable, broken down per year,
in line with the criteria set in the IPA Common Strategic Framework referred to
in Article 5. The indicative allocation of funds shall duly take account of the
needs, absorption capacity and administrative capacity of the beneficiary
countries. It shall also allow for addressing emerging needs and include
incentives to enhance the performance of the beneficiary countries with regard
to the objectives set in the multi-annual indicative strategies.

4.
The strategy papers shall be reviewed at
mid-term and revised as appropriate. They may be revised at any time at the
initiative of the Commission.

5.
The Commission shall adopt the strategy papers
and any revision thereof in accordance with the examination procedure referred
to in Article 15(3) of the Common Implementing Regulation.

TITLE
III
IMPLEMENTATION

Article 7
General Framework

Union assistance under this Regulation
shall be implemented through programmes and measures as referred to in Articles 2 and 3 of the
Common Implementing Regulation and in accordance with specific rules
establishing uniform conditions for implementing the present Regulation, in
particular as regards management structures and procedures, which the
Commission shall adopt in accordance with Articles 10 and 11 of the present
Regulation. Implementation shall, as a rule, take the form of annual or
multiannual, country specific or multi-country programmes established in
accordance with the strategy papers referred to in Article 6 and drawn up by
the beneficiary countries and/or the Commission, as appropriate.

Article 8
Framework and subsidiary agreements

1.
The Commission and the beneficiary countries
shall conclude framework agreements on the implementation of assistance.

2.
Subsidiary agreements concerning the
implementation of assistance may be concluded between the Commission and the
beneficiary country or its implementing authorities, as required.

Article 9
Cross-instrument provisions

1.
In duly justified circumstances and in order to
ensure the coherence and effectiveness of Union financing or to foster regional
cooperation, the Commission may decide to extend the eligibility of programmes
and measures referred to in Article 7 to countries, territories and regions
which otherwise would not be eligible for financing pursuant to Article 1,
where the programme or measure to be implemented is of a global, regional or
cross border nature.

2.
The European Regional Development Fund shall
contribute to programmes or measures established under this regulation for
cross–border cooperation between beneficiary countries and Member States. The
amount of the contribution from the European Regional Development Fund shall be
determined pursuant to Article 4 of Regulation (EU) No ...of the European
Parliament and of the Council of ... on specific provisions for the support from
the European Regional Development Fund to the European territorial cooperation
goal. The provisions of the present Regulation shall apply to the use of this
contribution.

3.
Where appropriate, the IPA may contribute to
transnational and interregional cooperation programmes or measures that are
established and implemented under the provisions of the Regulation (EU) No ... [on
specific provisions for the support from the European Regional Development Fund
to the European territorial cooperation goal] and in which IPA beneficiary
countries participate.

4.
Where appropriate, the IPA may contribute to
cross-border cooperation programmes or measures that are established and
implemented under the Regulation (EU) No ... of the European Parliament and of
the Council of ... establishing a European Neighbourhood Instrument and in which
IPA beneficiary countries participate.

TITLE
IV
FINAL PROVISIONS

Article 10
Delegation of powers to the Commission

The Commission shall be empowered to adopt
delegated acts in accordance with Article 11 to amend the Annex to this
Regulation and to complement the Common Implementing Regulation with specific
rules establishing uniform conditions for implementing this Regulation.

Article11
Exercise of the powers delegated to the Commission

1.
The power to adopt delegated acts is conferred
on the Commission subject to the conditions laid down in this Article.

2.
The delegation of powers shall be conferred on
the Commission for the period of validity of this Regulation.

3.
The delegation of powers may be revoked at any
time by the European Parliament or by the Council. A decision of revocation
shall put an end to the delegation of the power specified in that decision. It
shall take effect on the day following the publication of the decision in the Official
Journal of the European Union or at a later date specified therein.
It shall not affect the validity of any delegated acts already in force.

4.
As soon as it adopts a delegated act, the
Commission shall notify it simultaneously to the European Parliament and to the
Council.

5.
A delegated act shall enter into force only if
no objection has been expressed either by the European Parliament or by the
Council within a period of 2 months of notification of that act to the European
Parliament and the Council or if, before the expiry of that period, the
European Parliament and the Council have both informed the Commission that they
will not object. That period shall be extended by 2 months at the
initiative of the European Parliament or the Council.

Article 12
Committee

1.
The Commission shall be assisted by the IPA Committee.
This committee shall be a committee within the meaning of Regulation (EU) No
182/2011.

2.
For programmes addressing the policy areas
referred to in points (b) and (c) of Article 3 and implemented indirectly by
the beneficiary countries, the Commission shall be assisted by the Coordination
Committee of the Funds referred to in Article 143 of Regulation (EU) No [....] of
the European Parliament and of the Council of ... laying down common provisions
on the European Regional Development Fund, the European Social Fund, the
Cohesion Fund, the European Agricultural Fund for Rural Development and the
European Maritime and Fisheries Fund covered by the Common Strategic Framework
and laying down general provisions on the European Regional Development Fund,
the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No
1083/2006[22].
For programmes addressing the policy area referred to in point (d) of Article 3
and implemented indirectly by the beneficiary countries, the Commission shall
be assisted by the Rural Development Committee referred to in Article 91 of
Regulation (EU) No [....] of the European Parliament and of the Council of ... on
support for rural development by the European Agricultural Fund for Rural
Development (EAFRD)[23].
In such cases, the IPA committee shall be informed without delay of the opinion
delivered by the other committee(s).

3.
The committees referred to under paragraphs 1
and 2 shall be competent for legal acts and commitments under Regulation (EC)
No 1085/2006 of 17 July 2006 establishing an Instrument for Pre-Accession
Assistance[24].
In addition, the IPA committee shall also be competent for the implementation
of Article 3 of Regulation (EC) No 389/2006 of 27 February 2006 establishing an
instrument of financial support for encouraging the economic development of the
Turkish Cypriot community and amending Council Regulation (EC) No 2667/2000 on
the European Agency for Reconstruction[25].

Article 13
Suspension of Union support

Without
prejudice to the provisions on suspension of aid in partnership and cooperation
agreements with partner countries and regions, where a
beneficiary country fails to respect the principles of democracy, the rule of
law, human rights, minority rights and fundamental freedoms, or the commitments
contained in the relevant agreements concluded with the Union, or where
progress towards fulfilment of the accession criteria is insufficient, the
Union shall invite the beneficiary country to hold consultations with a view to
finding a solution acceptable to both parties, except in cases of special
urgency. Where consultations with the beneficiary country do not lead to a
solution acceptable to both parties, or if consultations are refused or in
cases of special urgency, the Council may take
appropriate measures in accordance with Article 215(1) of the Treaty on the
Functioning of the European Union, which may include
full or partial suspension of Union assistance. The European Parliament shall
be fully and immediately informed of any decisions taken in this respect.

Article 14
Financial reference amount

1.           The financial reference
amount for the implementation of this Regulation for the period from 2014 to
2020 shall be EUR 14 110 100 000 (current prices). Up to 3%
of the financial reference amount shall be allocated to cross-border
cooperation programmes between beneficiary countries and EU Member States.

2.           The annual appropriations
shall be authorised by the budgetary authority within the limits of the Union
Multi-annual Financial Framework.

3.           As referred to in Article
13, paragraph 2 of the "Erasmus for All" Regulation, in order to
promote the international dimension of higher education, an indicative amount
of EUR 1 812 100 000 from the different external
instruments (Development Cooperation Instrument, European Neighbourhood
Instrument, Instrument for Pre-accession Assistance, Partnership Instrument and
the European Development Fund), will be allocated to actions of learning mobility
to or from non EU countries and to cooperation and policy dialogue with
authorities/institutions/organisations from these countries. The provisions of
the "Erasmus for All" Regulation will apply to the use of those
funds.

The funding will be made available through 2
multiannual allocations only covering the first 4 years and the remaining 3
years respectively. This funding will be reflected in the multiannual
indicative programming of these instruments, in line with the identified needs
and priorities of the countries concerned. The allocations can be revised in
case of major unforeseen circumstances or important political changes in line
with the EU external priorities.

Article 15
Entry into force

This Regulation shall enter into force on
the third day following that of its publication in the Official Journal of
the European Union.

It shall apply from 1 January 2014.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament                       For
the Council

The President                                                 The
President

ANNEX

–
Albania

–
Bosnia and Herzegovina

–
Iceland

–
Kosovo*

–
Montenegro

–
Serbia

–
Turkey

–
The former Yugoslav Republic of Macedonia

*Under UNSCR 1244/1999

LEGISLATIVE FINANCIAL STATEMENT
FOR PROPOSALS

1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1.    Title of the proposal/initiative

1.2.    Policy
area(s) concerned in the ABM/ABB structure

1.3.    Nature
of the proposal/initiative

1.4.    Objective(s)

1.5.    Grounds
for the proposal/initiative

1.6.    Duration
and financial impact

1.7.    Management
method(s) envisaged

2.           MANAGEMENT MEASURES

2.1.    Monitoring
and reporting rules

2.2.    Management
and control system

2.3.    Measures
to prevent fraud and irregularities

3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE

3.1.    Heading(s)
of the multiannual financial framework and expenditure budget line(s) affected

3.2.    Estimated
impact on expenditure

3.2.1. Summary of
estimated impact on expenditure

3.2.2. Estimated impact
on operational appropriations

3.2.3. Estimated impact
on appropriations of an administrative nature

3.2.4. Compatibility
with the current multiannual financial framework

3.2.5. Third-party
participation in financing

3.3.    Estimated impact on revenue

LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS

1.
FRAMEWORK OF THE PROPOSAL/INITIATIVE
1.1.
Title of the proposal/initiative

Instrument for Pre-accession Assistance (IPA)

1.2.
Policy area(s) concerned in the ABM/ABB
structure[26]

Enlargement

1.3.
Nature of the proposal/initiative

x The proposal/initiative relates to
a new action

 ̈ The proposal/initiative relates to a
new action following a pilot project/preparatory action[27]

 ̈ The proposal/initiative relates to the
extension of an existing action

 ̈ The proposal/initiative relates to an
action redirected towards a new action

1.4.
Objectives
1.4.1.
The Commission's multiannual strategic
objective(s) targeted by the proposal/initiative

The general
objective of the enlargement policy is to implement Article 49 of the Treaty on
the European Union, which offers a European perspective to all European
countries that respect the fundamental values of the EU and are committed to
promoting them.

The
enlargement policy promotes stability, security and prosperity in Europe and
increases the weight of the EU on the international scene.

The
enlargement policy helps to consolidate democracy and the rule of law in
Europe. It enhances economic opportunities and increases the weight of the EU
in tackling global challenges such as climate change, competitiveness and the
regulation and supervision of financial markets, and helps to mobilise for the
common effort to address the goals of Europe 2020. The accession process
provides strong encouragement for political and economic reform.

Closer
integration through the enlargement process also helps the EU to achieve its
objectives in a number of areas which are key to social and economic reform for
smart, sustainable and inclusive growth, including energy, transport, the
protection of the environment, disaster resilience and efforts to address climate
change. New applications for membership demonstrate the EU’s power of
attraction and its role in promoting stability, security and prosperity.

The EU’s
enlargement policy allows for a carefully managed process where candidates and
potential candidates approach the EU in line with the pace of their political
and economic reforms as well as their capacity to assume the obligations of
membership in accordance with the Copenhagen criteria. In the Western Balkans,
regional cooperation remains key and constitutes a central element of the
Stabilisation and Association Process.

Once the
Council has decided to open accession negotiations with an applicant country,
the progress of the applicant country towards meeting European standards is
reflected in the chapters of the acquis opened and closed.

Over the
last five years, the enlarged EU has demonstrated its capacity to work together
to address the important challenges it faces. Over this period, progress with
reforms in the enlargement countries has allowed them to move through
successive stages in the accession process.

The EU's
enlargement process is moving forward at a pace which is largely determined by
the capacity of the aspirant countries to take on the obligations of
membership. This requires durable reforms as well as legislative and
institutional adaptations which are credible and convincing. As the countries
concerned meet the standards which have been set, including notably those
linked to democracy, the rule of law and fundamental rights and freedoms, the
EU is committed to working with them to advance to the next steps in the
process.

A single
integrated pre-accession instrument is proposed as the financial pillar of the
Enlargement Strategy, encompassing all dimensions of internal policies and thematic
issues.

The aim
will be to ensure that candidate countries and potential candidates are fully
prepared for eventual accession. Emphasis will be put on good governance,
administrate capacity, socio-economic development, regional cooperation,
adopting and implementing the acquis, and preparing for managing internal policies upon accession. It will
be implemented through national/multi-beneficiary programmes agreed with the
beneficiaries and will also mirror the Structural Funds, the Cohesion Fund and
the European Agricultural Fund for Rural Development (EAFRD), including their
refocusing on delivering public goods.

In
addition, political and financial crisis-related instruments (Macro Financial
Assistance, Instrument for Stability) will continue to be available for use in
enlargement countries, when needed.

1.4.2.
Specific objective(s) and ABM/ABB activity(ies)
concerned initiative

Specific objective No.

(a)
Support to political reforms

(b)
Support to economic, social and territorial
development and reforms, aiming at a sustainable, smart
and inclusive growth

(c)
Increase beneficiary countries' ability to
assume the obligation of membership by supporting progressive alignment with,
adoption, implementation and enforcement of the acquis communautaire including
preparation for the implementation and management of EU structural, cohesion,
agricultural and rural development funds.

(d)
Regional integration and territorial cooperation

ABM/ABB
activity(ies) concerned

04.06 Instrument
for Pre-Accession Assistance (IPA) — Human resources development

05.05 Pre-accession
measures in the field of agriculture and rural development

13.05 Pre-accession
operations related to the structural policies

22.02
Enlargement process and strategy

22.04.02 Information
and communication programmes for non-member countries

1.4.3.
Expected result(s) and impact

Specify the effects which the
proposal/initiative should have on the beneficiaries/groups targeted.

The new pre-accession instrument will continue to focus on
delivering on the Enlargement Policy that is one of the core priorities of
the EU External Action, thus contributing to promote stability, security and
prosperity in Europe. To that end, the new instrument will pursue the general
policy objective of supporting candidate countries and potential candidates in
their preparations for EU membership and the progressive alignment of their
national systems/economies with the standards and policies of the European
Union, according to their specific needs and adapted to their individual
enlargement agenda.

In terms of results and impacts to be achieved, the new
instrument will address i) the development gap/challenges in the beneficiary
countries, ii) the limited capacity to overcome these from own resources and
the weak public institutions and/or administrative capacity in the beneficiary
countries, and iii) reduce disparities among beneficiary countries, through
achieving:

(i)         better functioning democratic institutions, in
particular for ensuring the respect of the rule of law, and human rights, and
the inclusion of minorities; reduction of corruption and organized crime;
reformed and modernised the public administration ;

(ii)        EU standards in the economy and economic
governance; improved capacity to compete within the market forces in the Union;
improved employment rates, increasingly skilled human resources and reduced
social disparities; increased research and innovation capacity

(iii)       laws progressively aligned with the EU acquis,
adopted and enforced; improved capacity to implement and manage EU structural,
agricultural and rural development funds; increased participation in selected
EU programmes and agencies.

(iv)       increased economic integration in the region, including
through cross-border energy and transport infrastructure, closer and reinforced
neighbourly relations among the beneficiary countries and with the EU.

Making progress in these specific policy objectives will also
contribute to the implementation of broader EU policy frameworks such as the
Europe 2020 strategy, the EU Climate and Energy Package and the Innovation
Union.

1.4.4.
Indicators of results and impact

Specify
the indicators for monitoring implementation of the proposal/initiative.

Progress towards the specific objectives of the new instrument can
be assessed through three main macro-indicators:

·
Progress toward meeting the accession benchmarks
(chapters opened/closed) or positive track record in implementing the
Association Agreements as reflected i.a. by positive Progress Reports,
survey-based indices compiled by reputable international organisations for
areas such as government effectiveness; political stability and absence of
violence; the rule of law;

·
Socio-economic evolution, as measured by impact indicators such as the UNDP's human
development index as a general measure of prosperity; unemployment rates;
foreign direct investment inflows; trade balances;

·
Regional cooperation and integration, as measured by survey-based indices reflecting perceptions on the
level (trend) of security and stability; political, economic and cultural
interactions.

Relevant targets and milestones related to these macro-indicators
may include, inter alia, the following: receipt of the application for EU
membership, adoption by the Commission of a positive opinion on the application
or recommendation to grant candidate country status, recommendations to open
accession negotiations, opening or provisional closure of negotiation chapters,
overall closure of accession negotiations, degree of compliance with the
Copenhagen criteria, entry into force of visa liberalisation and readmission
agreement, conferral of management powers of the IPA assistance, waiver of
ex-ante controls on management of IPA assistance, entry into force of
customs/trade agreement and removal of obstacles/technical barriers to trade,
participation in regional initiatives, resolution of bilateral issues, progress
in the integration of Trans European Networks.

At operational level, progress could be measured in relation to operational
objectives corresponding to the specific objectives i. to iv. identified for
the future pre-accession instrument. Operational objectives include:

(a)
to improve perceptions of democracy and the
justice system and with respect to human rights and non-discrimination; reduce
outstanding court caseload and the number of infringements of fundamental
rights; increase capacities for law enforcement and generally administrative
capacity, reduce staff turnover.

(b)
to develop sound and effective social and
economic development strategies; to improve skills and qualification levels and
strengthen labour market services; to support public investment; establish
management structures for EU structural, cohesion and rural development funds
upon accession, achieving accreditation and conferral of management;

(c)
to improve the legislative framework; align
legislation with the acquis, create and strengthen institutions and enforcement
structures; join and deepen participation to EU programmes.

(d)
to encourage deeper cooperation.

Operational objectives will need to be customized to the situation
in each beneficiary and would be set in the programming documents based on the
identified challenges.

The ex-ante evaluation has also highlighted the need to provide
detailed guidance and to build capacities in the beneficiary countries to
systematically collect the requisite data that will be needed to assess
progress at the operational level. Previous enlargements have led to increased
priority being given to programme level monitoring and evaluation and ‘evidence
based’ policy making in new Member States. Shifts towards resource allocations
based on performance and meeting conditions as well as needs should also
encourage a similar tendency amongst candidate countries and potential
candidates.

With relation to climate mainstreaming, a tracking system will be
put in place to identify where programmes promote climate action or energy
efficiency so that the EU would be able to set out clearly how much of its
spending relates to such issues. Clear benchmarks, monitoring and reporting
rules will be established. Tracking of climate-related expenditure will be
performed based on the established OECD methodology (‘Rio markers’). In line
with the Commission's broader commitment to mainstreaming, the OECD DAC
marker will also be applied for tracking progress on biodiversity and desertification
mainstreaming".

Future monitoring and evaluations will have to take into account
that results and impacts will vary across beneficiary countries, given their
differences and the varying needs and positions on the ‘path to accession. As
the instrument will continue to operate alongside the political negotiation
process and other interventions with a bearing on accession, it will be
difficult to identify progress resulting exclusively from the instrument,
except at the level of specific activities. Many of the ‘results’ of the
future programme – such as progress in meeting the political criteria for
accession - will be by their nature difficult to measure: to some extent
the objectives of the instrument may be achieved through the status conferred
on the beneficiary as much as through the results of the EU financial
interventions.

1.5.
Grounds for the proposal/initiative
1.5.1.
Requirement(s) to be met in the short or long
term

Beneficiaries of the assistance are candidate countries and
potential candidates for EU membership in the Western Balkans, Iceland and
Turkey.

In 1999,
the EC set out a vision for
relations between the EU and the Western Balkans, moving from its previous Regional Approach to a new tool, the Stabilisation and Association Process (SAP). Apart from aiming for political and economic stability and
regional cooperation, SAP has gradually incorporated enlargement instruments to
bring the countries of the region closer to the values and standards of the EU.

The Feira
European Council in June 2000 acknowledged that Western Balkan countries
participating in the SAP were 'potential candidates' for EU membership. The
European perspective of these countries was further confirmed by the
Thessaloniki European Council in June 2003 which endorsed the
"Thessaloniki Agenda for the Western Balkans”. This agenda remains the
cornerstone of the EU policy towards the region. At the Sarajevo EU-Western
Balkans ministerial meeting on 2 June 2010, the EU reiterated its commitment to
the European perspective of the Western Balkans and stressed that the future of
these countries lies in the EU.

Of those
countries that initially came under the SAP, Croatia, the former Yugoslav
Republic of Macedonia and recently Montenegro gained candidate status, while
Albania, Bosnia and Herzegovina, Kosovo[28]
and Serbia are potential candidates. Other countries that were given an EU
accession perspective include Turkey, which applied already in 1987 and which
was granted applicant status in 1999; and Iceland, which applied in 2009 and
was granted candidate status in 2010.

The three
key requirements for accession are set out in the conclusions of the European
Council in Copenhagen in 1993 (the so-called “Copenhagen criteria”). These are:

(i)
Stability of institutions guaranteeing democracy, the rule of law, human rights
and respect for and protection of minorities;

(ii) The
existence of a functioning market economy, as well as the capacity to cope with
competitive pressure and market forces within the Union; and

(iii) The
ability to take on the obligations of membership including adherence to the
aims of political, economic and monetary union)

Also, the
Madrid European Council in December 1995 referred to the need "to create
the conditions for the gradual, harmonious integration of [the applicant]
countries, particularly through the development of the market economy, the
adjustment of their administrative structures and the creation of a stable
economic and monetary environment".

Prospective
members have to meet the Copenhagen criteria before membership negotiations can
begin. The alignment of beneficiaries with accession
criteria requires considerable efforts in terms of public investment and access
to in-depth knowledge and expertise. The EU support is designed to assist
candidates in order to help them meet these criteria.

1.5.2.
Added value of EU involvement

Enlargement policy is part of the external action and contributes to
meeting the common objectives in terms of global challenges, global response
and global leadership.

The successive enlargement of the EU is by its very nature a common
task which can be pursued only at EU level. Only the Member States acting
together can decide on the accession requests by new candidates. The
pre-accession assistance provided through the EU budget is designed to help
candidate countries/potential candidates prepare for future membership: IPA is
built to give countries a “test run” of obligations of membership before
accession (such as put in place institutions for managing post-accession EU
funds, and/or adopting the acquis and EU standards). No other
multilateral or bilateral instrument can provide such a comprehensive toolbox,
and in any case only the EU can define what kind of assistance is needed to
prepare for taking over the acquis.

Pre-accession assistance is an investment in the future of the EU,
supporting the stability and prosperity of neighbouring countries and
ensuring the effective capacity of candidate countries to implement the acquis
upon accession. Technical and financial assistance speeds up the process of
preparation and creates incentives for the necessary transformation of the
society, the legal systems and the economy. Such assistance helps meet the
objectives of the internal policies of the EU, creates opportunities for EU
businesses and provides tangible return on investment. Without the intensive
involvement and closer partnership embodied in pre-accession assistance the EU
would certainly have to spend more on combating illegal migration, securing the
external borders of the EU, ensuring security of energy supply as well as safe
and hygienic food imports for its citizens, combating climate change and
pollution, addressing cross-border effects of disasters and providing EU
solidarity to countries with low level disaster resilience.

In recent years EU Member States have been reducing the level of
their bilateral assistance to candidate countries and potential candidates,
acknowledging that coordinated action at EU level is more effective. About half
of the overall financial assistance of the EU to the enlargement countries in
2009 came from the EU budget. Multilateral donor organisations have largely
phased out their support and those that remain have now aligned their
programmes to the EU priorities. It should be noted that, given its specific
development objectives and impact, pre-accession assistance is also accounted
as official development aid of the EU (ODA).

1.5.3.
Lessons learned from similar experiences in the
past

A mid-term meta evaluation of IPA, completed in
February 2011 and focused mainly on the IPA strategic framework (MIPDs) and
programming (mainly technical assistance and institution building component),
assessed the intervention logic and the performance (actual or expected) of the
assistance, particularly as regards its relevance, efficiency, effectiveness,
impact and sustainability.

Regarding the intervention logic (i.e. how assistance is planned and
programmed), the evaluation concluded that the MIPDs are key programming
documents which provide essential direction and focus to the programming
process and are clearly better than the equivalent programming documents for
past pre-accession assistance programmes. The evaluation found also that the
quality of objectives and indicators in the MIPDs and the programming documents
had improved over time. Nevertheless, further improvements were recommended.

The evaluation found that IPA produced good and meaningful results.
Effectiveness was found to be strongest in acquis related areas, while
some horizontal areas, such as public administration reform, were found to be
particularly challenging. The beneficiary countries' financial needs,
particularly for infrastructure, clearly exceed available IPA (and other
donors') funding. Therefore, a key challenge for the future was to use IPA
funds efficiently and continue to play a leverage role for other financing
sources. It was also found that projects were generally well targeted on EU
accession requirements, but focusing institution building assistance on a more
limited number of priority sectors could further enhance effectiveness and
impact. The evaluation found that the mechanisms for donor coordination and
harmonisation of assistance were well established and that a determining factor
in terms of achieving impact and sustainability was the beneficiary
countries' ownership of the reform agenda and the capacity of their
administration, which need to be strengthened.

The evaluation concluded that adopting a multi-annual/Sector Based
Approach (SBA)[29]
for planning and programming should facilitate prioritisation and
sequencing of assistance, donor coordination and enhance beneficiary countries'
ownership.

A two–phase interim evaluation of the first eight IPA Cross Border Cooperation programmes at intra-Western Balkans borders was completed in May 2011. The
evaluation concluded that stakeholders perceive improved neighbourly relations
as a consequence of the programme and view it as fundamental for future
cooperation, and that conditions were mature for increased cooperation. The evaluation recommended that the socio-economic analysis should
be strengthened with a more updated statistical basis, a better explanation of
criteria used as well as better alignment with statistical areas. It also
recommended that the application package and the evaluation
procedure should be streamlined and simplified.

Ex-ante evaluations of operational
programmes for regional, human resources and rural development were conducted to support and streamline the programming process.
Recommendations to strengthen the analysis underpinning the programmes
orientation as well as to improve further the output, results and impact
indicators were common to all programmes. Interim evaluations are ongoing.

An ex-ante evaluation of the pre-accession
financial instruments post-2013 concluded that there is strong
rationale for continuing
financial assistance at EU-level in support for the enlargement process. The
need to ensure continuity with the current instrument emerged clearly,
since structures and systems necessary to manage EU assistance are already
being set up. However, in light of the differences amongst beneficiary
countries (in socio-economic terms, with regard to the development of their
institutions and public administration and their accession perspective), the
consultation recommended a more tailor-made approach, simplified
implementing rules, more flexibility and enhanced strategic orientation in
the allocation of assistance, and a more systematic use of multiannual
programming.

1.5.4.
Coherence and possible synergy with other
relevant instruments

The proposal maintains a dedicated and integrated instrument for
pre-accession assistance as the financial pillar of the Enlargement Strategy
that encompasses all dimensions of internal policies and thematic issues. This
is because the Enlargement policy is primarily about helping partners to
gradually take over the acquis and EU relations with candidate countries
and potential candidates cover practically all thematic issues (prosperity,
security, trade, human rights, etc.). For the sake of coherence, efficiency,
effectiveness and impact, internal policies and thematic issues should
therefore be mainstreamed in coherent country strategies and achieved through
country, multi-beneficiary or cross-border programmes agreed with the beneficiary
countries. In line with the EU Policy Coherence for Development agenda, the
fact that IPA covers all internal policies allows to better take into account
the external impacts of internal policies on pre-accession countries, where EU
development objectives are concerned. This is important notably in areas such
as trade, climate change, migration or energy.

However, where the nature of the action warrants (i.e. technical,
global reach, as opposed to primarily accession focus), where fundamental
European values (such as respect of human rights) are not complied with by a
beneficiary country, or where an internal policy instrument has a particularly
important external dimension, other instruments could intervene in the
enlargement region (e.g. European Instrument for Democracy and Human Rights,
the Instrument for Nuclear Safety Cooperation, the Instrument for Stability and
Macro-financial Assistance, Connecting Europe Facility, ...).

1.6.
Duration and financial impact

x Proposal/initiative of limited
duration

x      Proposal/initiative in effect from 01/01/2014

x      Financial impact from 01/01/2014 to 31/12/2020

 ̈ Proposal/initiative of unlimited
duration

–
Implementation with a start-up period from YYYY
to YYYY,

–
followed by full-scale operation.

1.7.
Management mode(s) envisaged[30]

ý Centralised direct management by the Commission

ý Centralised indirect management with the delegation of implementation tasks to:

–
ý         executive agencies

–
 ̈         bodies set up by the Communities[31]

–
ý         national public-sector bodies/bodies with public-service
mission

–
 ̈         persons entrusted with the implementation of specific
actions pursuant to Title V of the Treaty on European Union and identified in
the relevant basic act within the meaning of Article 49 of the Financial
Regulation

ý Shared management with the Member States: cross border cooperation programmes between
EU Member States and IPA beneficiary countries will be implemented by managing
authorities from EU Member States under shared management.

ý Decentralised management with third countries

ý Joint management with international organisations: joint management will essentially
involve international financial institutions (such as EIB, EBRD, World Bank,
CoEDB) s well as specialised UN agencies as the case may be.

If more than one management mode is indicated,
please provide details in the "Comments" section.

Comments

The ultimate aim of the regulation is that assistance is managed
under the full responsibility of beneficiary countries, under decentralised
management. However, this objective will be implemented progressively, as the
administrative capacity of the beneficiary countries evolves, and the
conditions for conferring management powers are met. During the initial phases,
the Commission will retain management control, and/or entrust implementation to
specialised bodies under indirect or joint management as the case may be.
Centralised management will also be the primary method for multi-country
programmes.

Joint management will also be used for actions with international and European financial institutions, with
a view to leverage additional funding, essentially for investment in the
necessary social or economic infrastructure.

Finally, shared management will continue to be used for territorial cooperation objectives involving EU member
states.

2.
MANAGEMENT MEASURES
2.1.
Monitoring and evaluation arrangements

Specify frequency and conditions.

Monitoring and evaluation arrangements will be reinforced in
comparison to the current situation, with an improved focus on results. They
will provide for the definition of specific, measurable, achievable objectives
as well as for appropriate indicators.

The European Commission's Monitoring and Evaluation systems are
already increasingly focussed on results. They involve internal staff as well
as external expertise. Task managers in EU Delegations and at Headquarters
continuously monitor the implementation of projects and programmes in various
ways, including wherever possible through field visits. Monitoring provides
valuable information on progress, it helps managers to identify actual and
potential bottlenecks and to take timely corrective action where appropriate.

In addition, external, independent experts are contracted to assess
the performance of EU external actions through various complementary systems. These
assessments contribute to accountability and to the improvement of ongoing
interventions; they also draw lessons from past experience to inform future
policies and actions. The tools used are in line with
internationally-recognised OECD-DAC evaluation criteria including (potential)
impact.

The Commission also supports beneficiary countries to build their
own capacity to monitor and evaluate spending. Under the new instrument,
responsibility on monitoring and evaluation will be further delegated to beneficiary
countries. In particular, where the Commission manages
the assistance on behalf of the beneficiary, the Commission will retain primary
responsibility for monitoring and evaluation. On the other hand, where
beneficiary countries manage the assistance under their own responsibility
(decentralised management) the Commission will have a mainly supervisory role
(apart from ex-ante and ex-post evaluations), and primary responsibility will
rest with the beneficiary.

Project level monitoring reports on the progress
against plans, particularly concerning: (i) contracting/grant awards and (ii)
delivery of outputs. Task managers are also supported by the Results Oriented
Monitoring (ROM) system which provides a focused snapshot of the quality of a
sample of interventions. Using a highly structured, standardised methodology,
independent ROM experts attribute grades which highlight the strengths and
weaknesses of the project and
give recommendations on how to improve effectiveness.

In addition to monitoring, project-level evaluations may also
be undertaken under the management of EU Delegation or the operational services
in charge of the project. Project level evaluations are intended to complement
existing monitoring systems and should provide a more detailed in depth
analysis. They should also help project managers to improve ongoing
interventions or to confirm their results and sustainability.

At sector and programme level, monitoring committees
co-chaired by beneficiary countries and the Commission provide the structure to
assess progress against plans. These committees are supported by the findings
of both monitoring reports and evaluations. Under the new instrument, the role
of monitoring committees will be strengthened for both candidate countries and
potential candidates, to ensure that the implementation of the financial
assistance properly feeds into the policy dialogue and that committees'
conclusions and recommendations are more systematically complied with and followed up.

Evaluations at a level higher than project (sector, programme, strategic, thematic, etc) are mostly managed by
the Commission services. Some evaluations, in particular interim evaluations
intended to support the decision making process, are progressively delegated to
beneficiary countries for ownership and capacity building purposes.

The results of evaluations or summary findings are regularly
communicated to the IPA Committee, to the Council and the European Parliament
as part of the IPA Annual Report, and are published on the Commission's
website.

2.2.
Management and control system
2.2.1.
Risk(s) identified

The
operational environment of IPA is characterised by the following risks to
achieving the instrument's objectives:

–
IPA is primarily designed to run under a
decentralised management mode, as an integral part of preparations for EU
membership. This implies a higher inherent risk, as the ultimate manager (the
Commission) has no direct authority over the decentralised manager’s
implementation structure;

–
regular changes to the implementation environment
which are inherent in accession processes, e.g. from centralised management to
decentralised, then waiver of ex ante controls, put unusually high demands on
organisational coordination, as well as on staff adaptability, training, and
judgment, as they in turn require regular changes to the internal control and
organisational setup on the Commission side;

–
diversity of potential beneficiaries with their
diverse internal control structures and capacities can fragment and therefore
reduce the Commission's available resources to support and monitor
implementation;

–
deficiencies of the institutional and
administrative capacity in beneficiary countries may lead to long drawn out
decentralisation processes compromising the timely use of committed funds and /
or to difficulties and delays in the design and implementation of individual
interventions;

–
poor quality and quantity of available data on
the outcomes and impact of pre-accession aid in beneficiary countries may
hamper the Commission's ability to report on and be accountable for results;

–
economic/political difficulties may lead to
difficulties and delays in the design and implementation of interventions,
particularly in beneficiary countries where institutions are still young and
fragile;

–
unresolved constitutional, institutional, and
border issues within and between beneficiary countries can block the
implementation of key assistance projects and lead to the loss of significant
funds;

–
a lack of administrative credits may lead to
insufficient resources to properly manage the instrument.

2.2.2.
Control method(s) envisaged

The
internal control / management process of the DG's involved in IPA are designed
to provide reasonable assurance regarding the achievement of objectives in the
effectiveness, efficiency and economy of its operations, the reliability of its
financial reporting and compliance with the relevant legislative and procedural
framework.

To ensure
the effectiveness, efficiency, and economy of its operations (and to mitigate
the high level of risk in its pre-accession environment), in addition to all
the elements of the Commission wide Strategic Policy and Planning process,
internal audit environment and other requirements of the Commission's Internal
Control Standards, DG ELARG (other IPA DGs use similar or slightly modified
control arrangements optimised for the transition to the control framework for
EU structural and agricultural funds) will continue to have a tailored
financial assistance management framework in operation under all its
instruments, which is enshrined in a regularly updated Internal Control
Strategy document. This will include:

–
Decentralised management by national
implementing agencies upon which management powers are conferred by the
Commission after a careful process of setting strict management standards and
assessing them through i.a. comprehensive systems audits.

–
Ex ante controls by EU delegations in the field
on all assistance files approved by the national implementing systems until
these systems are assessed ready and mature for such ex ante controls to be
waived safely. This assessment of the national systems’ track record involves
i.a. the file rejection rate trends.

–
Clear lines of financial and results
accountability from national implementing systems to the Commission Authorising
Officer (Director) sub-delegated by the AOD, including irregularity reporting,
an annual statement of assurance by national authorising officers and audit
opinions by the national audit authorities;

–
A programme of sub-systems audits carried out by
Commission auditors to check continued compliance with management standards
following conferral of management;

–
Defined clearance of accounts procedures
including additional verifications and a structured policy for financial
correction of transaction and systemic errors detected by national and
Commission auditors;

–
Devolved management of the bulk of pre-accession
aid by EU delegations in the field until management powers can be conferred
upon national implementing agencies.

–
Clear lines of financial accountability for
management devolved to EU delegations via sub-delegation from the Sub-delegated
Authorising Officer (Director) at HQ to the Head of Delegation;

–
Establishment and annual update of assurance
strategies by EU Delegations to their sub-delegating officers (Directors)
including detailed, risk assessed control and audit plans;

–
Regular reporting from EU Delegations to HQ
(AOSD / Management Reports) on the implementation of the assistance and the
assurance strategies, including an annual Statement of Assurance by the
sub-delegated AOSDs / Heads of Delegation;

–
Regular internal audits of delegations, both
delegations supervising decentralised implementation and devolved delegations;

–
Ex post controls of finalised programmes to
ascertain that all levels of the management and control systems meet the
standards required;

–
Provision of a substantial programme of training
for staff both at HQ and in delegations,

–
Significant HQ/Delegation support and guidance
(including via internet);

–
A project and programme cycle management
methodology including:

–
Quality support tools for the design of the
intervention, its delivery method, financing mechanism, management system,
assessment and selection of any implementing partners etc.

–
Programme and project management, monitoring and
reporting tools for effective implementation including regular external
on-the-spot monitoring of projects.

–
Significant evaluation and audit components.

DG ELARG
will continue to pursue the highest standards of accounting and financial
reporting to ensure a continued unqualified opinion from its external auditors
(the European Court of Auditors) using the Commission's accruals based
accounting system (ABAC) as well as external aid specific tools such as the
Common Relex Information System (CRIS).

In relation
to compliance with the relevant legislative and procedural framework, control
methods are set out in section 1.3 (measures to prevent fraud and
irregularities)

2.2.3.
Costs and Benefits of Envisaged Controls
2.2.3.1.
Costs of Control

The control
setup proposed for the new IPA instrument does not differ significantly from
the one applying under the current instrument. Its cost structure will
therefore be similar. Nevertheless, the redesign of the instrument is expected
to reduce to some appreciable extent the likelihood of compliance errors.
Aspects such as more flexible programming allowing for optimised project
selection and the broader use of innovative financing instruments (e.g.
leveraging IFIs and other donors) should contribute to this.

Expected
costs of controls presented below are current price-based and based on
following assumptions:

–
Current staffing levels in the IPA DGs stable
over the period

–
Average cost of civil servant = €127,000
(doubled for EU Delegation postings)

–
Average cost of contract agent = €64,000

Costs
incurred by national systems in countries implementing IPA under decentralised
management are not included. It should be noted that a significant share of the
investment and training costs incurred to set up such systems is financed by
IPA operational expenditure.

Overall IPA management and control costs per year (Staff: allocated to Programme or Budgetary management and anti-fraud) Fixed costs (at current and planned levels of operational expenditure) Officials in DG ELARG HQ Contract agents in DG ELARG HQ Officials in EU Delegations Contract Agents in EU Delegations Costs of Local Agents, local costs for Contract Agents, and other costs of running Delegations Officials and Contract Agents in other IPA DGs External staff from other IPA DGs in EU Delegations Variable costs (estimate of current overall annual cost) Contracted audit and ex post control costs Contracted evaluation costs Contracted monitoring costs (ROM) Audit certificates (contracted by beneficiaries) On-the-spot controls and other contracted additional controls part of financial circuit checks  Total control costs (IPA) per annum || M€ 11.2 7.3 9.4 6.5 28.5 2.0 6.0 1.0 3.0 2.0 2.0 0.8 79.7

The costs
presented in the table are management and control costs, and amount to approx.
€80 million, or approx. 4% of annual expenditure planned for 2014-2020. They
include the whole management structure for the instrument, from planning to
programming to implementation. By a narrower definition of control including
only the cost of checks directly impacting on the regularity of transactions,
total costs would be reduced by ca. €30 million, i.e., would amount to
approximately €50 million (approx. 2.5% of annual expenditure planned for
2014-2020).

The final
five rows are variable costs. Their annual value will depend on the intensity
of controls decided by AOSDs in their assurance strategies. That intensity is
based on a thorough risk assessment of all outstanding contracts, taking into
account available budgetary resources. The annual values indicated in the table
are based on current practice.

For
variable costs, the following approximate average unitary costs of individual
contracted control actions apply:

Audit
certificates:

Approximate
average cost of audit per grant: 0.2% of contract value

Approximate
average cost of audit per service contract: 0.1% of contract value

Ex Post
Controls:

Average
cost of ex post control covering on average €22 million of underlying
transactions (€17 million EU financed): €50,000 (= €2,300 / €3,000 per audited million)

On the Spot
Controls:

Average
contract cost for a coverage of €175 million worth of underlying transactions:
€75,000 (€430 per checked million).

2.2.3.2.
Benefits of Control

The control
setup used for pre-IPA and IPA programmes has consistently yielded error rates
below 2% of expenditure. By end 2010, accumulated recoveries from finalised
programmes under decentralised management added up to €29 million out a total
audited amount of €3,500 million (0.82%).

One
possible method to estimate the benefit of the control setup in place in the
case of decentralised management is to use the values and trends of the
rejection rate indicator. As national systems mature and can be considered for
a waiver of ex ante controls on procurement files, the rate of files rejected
by the EU Delegation in such ex ante controls should decrease to a very low
level.

In a
country now coming close to accession (Croatia), rejection rates have in 2010
decreased to levels between 14% and 20% (depending on type of file). In a
country still with some way to go before waiver of ex ante controls can be
considered (Turkey), rates vary between 19% and over 60%.

Files can
be rejected on a number of grounds, frequently, but not always, on legality and
regularity issues. Assuming half the rejections are regularity-based, it can
reasonably be inferred from experience that the ex ante control on
procurement-based setup allows reducing the level of error from between 10% to
30% to below 2%. This does not take into account differences which might arise
if file values rather than file numbers were used in the analysis.
Nevertheless, it is safe to assume that the current control setup in
decentralised management is approximately correctly balanced to keep errors
within the Commission’s internal control objective of no more than 2% error.

Even though
IPA is designed to evolve to decentralised management as soon as possible,
centralised management may represent a significant share of total IPA
expenditure if conferral of management is simultaneously delayed in a number of
countries. This was the case in 2010/11, and is likely to remain so until 2013.

In 2010,
350 corrections (deductions or recoveries) were made to payments in centralised
and joint management in DG ELARG, for a value of approx. €6 million. This is
approx. 1% of total centralised payments in 2010, and may be used as a rough
indicator of the benefit accrued from additional checks within and on top of
the basic financial circuit checks.

Similarly
to decentralised management, this is consistent with the notion that the
control setup currently used for IPA is approximately balanced for the set
internal control objective.

2.2.3.3.
Expected level of Non Compliance with Applicable
Rules

Until 2006,
pre-accession transactions were consistently rated by the Court of Auditors as
unaffected by material error (below 2% of error), bearing out management’s
views of the effectiveness of the control setup used.

From 2007,
pre-accession transactions ceased to be audited by the Court to a separate,
fully representative sample. The Court’s assessment has since merged the
pre-accession population with that of all other external aid instruments. No
statistical extrapolation has therefore been possible specifically for the
pre-accession policy area and control setup since.

Overall the
Court has found overall errors in the range of 2 to 5% for the external aid
instruments in the years since.

Taking into
account the elements reported in 2.2.3.2 above, it is therefore reasonable to
expect that the control setup used for the pre-accession instrument strikes a
correct balance between costs and benefits of controls and should ensure that
the internal control objective of less than 2% errors on overall expenditure
can be consistently met in the future.

Furthermore,
the elements of simplification and added flexibility proposed for the new
instrument should strengthen this assumption, as they reduce the likelihood of
compliance errors.

Conversely,
new risks will arise as countries with relatively weak administrative capacity
come in line for conferral of management in the next years.

Even if it
is difficult to quantify the combined impact of both the enhancements to the
instrument’s design and the added risks, it is plausible to assume a target
range for the overall internal control objective similar to current results.

In
conclusion, the control setup seems finely balanced. Through finely tuned
control plans expressed in managers’ risk-based annual assurance strategies, it
allows for increases or decreases in variable costs as required by the evolving
risk landscape, ensuring a steady cost-benefit balance.

But the
overall control setup is likely to be very sensitive to negative variations in
the fixed control costs, especially as these are not proposed to increase in
line with overall expenditure.

2.3.
Measures to prevent fraud and irregularities

Specify existing or envisaged prevention and
protection measures.

Given the
risk environment in which DG ELARG operates, its systems need to anticipate the
occurrence of potential compliance error in transactions and build in
prevention, detection and correction controls as early as possible in the
procurement and payment process. This
means in practice that DG ELARG’s compliance controls will place most reliance
on significant ex-ante checks by Commission staff on procurement
transactions, as well as on
systematic systems audits of decentralised payment systems (while
still executing some ex-post audits and checks), going well beyond the
financial safeguards required by the Financial Regulation. DG ELARG compliance
framework is made up of the following significant components:

-
Preventive measures

-
Compulsory core training covering fraud issues for aid management staff;

-
Provision of guidance (including via internet) including the Practical Guide to
Contracts, and the management instructions provided under the Control Strategy
framework of DG ELARG;

-
Ex-ante audit of national implementing authorities prior to conferral of
management, including an assessment to ensure that appropriate anti-fraud measures
to prevent and detect fraud in the management of EU funds are in place in the
authorities managing the relevant funds,

-
Ex-ante screening of the anti-fraud mechanisms available in the beneficiary
country as part of the assessment of the eligibility criterion of public
finance management for receiving budget support (i.e. active commitment to
fight fraud and corruption, adequate inspection authorities, sufficient
judicial capacity and efficient response and sanction mechanisms),

-
Ex-ante controls of all nationally procured contracts; waived after national
systems meet stringent management and control benchmarks;

- Detective
and corrective measures

-
Ex-ante transaction checks performed by Commission staff;

-
Internal and external audits and verifications, including by the European Court
of Auditors;

-
Retrospective checks and recoveries.

In addition
where irregularity is suspected to be intentional (fraud) DG ELARG has other
measures as its disposal including:

-
Suspension of time-limit for payments and notification to the entity;

-
Specific audits (ad hoc/forensic audit);

-
Early Warning System & reinforced monitoring of contracts;

-
Suspension/termination of contract;

-
Exclusion procedure.

-
Suspension of servicing requests for funds by national funds;

-
Suspension or removal of conferral of management

DG ELARG
will further devise its anti-fraud strategy in line with the Commission's new
anti-fraud strategy (CAFS) adopted on 24 June 2011.

3.
ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
3.1.
Heading(s) of the multiannual financial
framework and expenditure budget line(s) affected

–
Existing expenditure budget lines

In order of
multiannual financial framework headings and budget lines.

Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution

Number [Description] || DA/NDA ([32]) || from EFTA[33] countries || from candidate countries[34] || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation

Heading 4 || 04 01 04 13 Instrument for Pre-Accession Assistance (IPA) - Human resources component - Expenditure on administrative management || NDA || NO || NO || NO || NO

Heading 4 || 04 06 01 Instrument for Pre-Accession Assistance (IPA) - Human resources development || DA || NO || NO || NO || NO

Heading 4 || 05 01 04 03 Pre-accession assistance in the field of Agriculture and Rural Development (IPARD) — Expenditure on administrative management || NDA || NO || NO || NO || NO

Heading 4 || 05 05 02 Instrument for Pre-accession Assistance for Rural Development (IPARD) || DA || NO || NO || NO || NO

Heading 4 || 13 01 04 02 Instrument for Pre-Accession Assistance (IPA) - Regional development component – Expenditure on administrative management || NDA || NO || NO || NO || NO

Heading 4 || 13 05 02 Instrument for Pre-Accession Assistance (IPA) - Regional development component || DA || NO || NO || NO || NO

Heading 4 || 13 05 03 01 Cross-border cooperation (CBC) - Contribution from Subheading 1-b || DA || NO || NO || NO || NO

Heading 4 || 13 05 03 02 Cross-border cooperation (CBC) and participation of candidate and potential candidate countries in Structural Funds’ transnational and interregional cooperation programmes — Contribution from Heading 4 || DA || NO || NO || NO || NO

Heading 4 || 22 01 04 01 Pre-accession assistance — Expenditure on administrative management || NDA || NO || NO || NO || NO

Heading 4 || 22 01 04 04 Technical Assistance and Information Exchange (TAIEX) facility for pre-accession — Expenditure on administrative management || NDA || NO || NO || NO || NO

Heading 4 || 22 01 04 30 Education, Audiovisual and Culture Executive Agency — Contribution from programmes under heading 4 in the Enlargement’ policy area || NDA || NO || NO || NO || NO

Heading 4 || 22 02 01 Transition and institution building assistance to candidate countries || NDA || NO || NO || NO || YES

Heading 4 || 22 02 02 Transition and institution building assistance to potential candidate countries || NDA || NO || NO || NO || YES

Heading 4 || 22 02 03 Interim civilian administrations in the western Balkans || NDA || NO || NO || NO || NO

Heading 4 || 22 02 04 01 Cross-border cooperation (CBC) between IPA countries and participation in ERDF transnational/ interregional programmes and ENPI sea basins programmes || NDA || NO || NO || NO || NO

Heading 4 || 22 02 04 02 Cross-border cooperation (CBC) with Member States || NDA || NO || NO || NO || NO

Heading 4 || 22 02 06 Technical Assistance and Information Exchange (TAIEX) facility for pre-accession || NDA || NO || NO || NO || NO

Heading 4 || 22 02 07 01 Regional and horizontal programmes || NDA || NO || NO || NO || NO

Heading 4 || 22 02 07 02 Evaluation of results of Union aid, follow-up and audit measures || NDA || NO || NO || NO || NO

Heading 4 || 22 02 10 02 Information and communication for third countries || NDA || NO || NO || NO || NO

Heading 4 || 22 02 07 03 Financial support for encouraging the economic development of the Turkish Cypriot community || NDA || NO || NO || NO || NO

Heading 4 || 32 04 11 Energy Community || NDA || NO || NO || NO || NO

–
New budget lines requested

In order of
multiannual financial framework headings and budget lines.

The budget for IPA II will be organised
according to article 41 of the Financial Regulation. While the total allocation
for this legal instrument serves the enlargement policy, the management of the
relevant activities is shared between DG ELARG, DG REGIO, DG EMPL and DG AGRI.
Each of these services is to assume responsibility for their respective policy
area(s), without prejudice to the overall coordination role of DG ELARG.

To that purpose, the total IPA II
allocations will be shared out between the policy areas, ensuring an
appropriate policy mix, in line with the needs of the beneficiary countries and
in common agreement between the four DG's. Where necessary for ensuring
efficient implementation of the strategic documents and of the budget,
transfers between policy areas will be possible, in agreement with the
service(s) responsible for the policy area(s) concerned.

A seamless transition from IPA to IPA II
for an effective and efficient completion of assistance under IPA will be
ensured.

Details on the budget structure to ensure
consistency with the activity-based budgeting and management principles will be
proposed in the draft budget 2014.

3.2.
Estimated impact on expenditure
3.2.1.
Summary of estimated impact on expenditure

EUR
million (to 3 decimal places)

Heading of multiannual financial framework: || 4 || Global Europe

DG: AGRI/ELARG/EMPL/REGIO || || || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || TOTAL

Ÿ Operational appropriations || || || || || || || ||

22 02 Financial assistance to candidate countries/potential candidates 04 06 01 Human resources 05 05 02 Rural development 13 05 02 Regional development 13 05 03 CBC 32 04 11Energy community || Commitments || (1) || 1842,5 || 1879,4 || 1917,0 || 1955,3 || 1994,4 || 2034,3 || 2075,6 || 13698,6

Payments[35] || (2) || 368,5 || 1112,9 || 1872,2 || 1909,6 || 1947,8 || 1986,8 || 2026,6 || 11224,4

22 02 07 03 Financial support for encouraging the economic development of the Turkish Cypriot community[36] || Commitments || (1a) || pm || pm || pm || pm || pm || pm || pm ||

Payments || (2a) || pm || pm || pm || pm || pm || pm || pm ||

Appropriations of an administrative nature financed  from the envelope of specific programs[37] || || || || || || || ||

22 01 04 01/04/30 04 01 04 13 05 01 04 03 13 01 04 02 || || (3) || 55,4 || 56,5 || 57,7 || 58,8 || 60,0 || 61,2 || 61,8 || 411,4

TOTAL appropriations for DG ELARG/AGRI/EMPL/REGIO || Commitments || =1+1a +3 || 1898,0 || 1935,9 || 1974,6 || 2014,1 || 2054,4 || 2095,5 || 2137,4 || 14110,1

Payments || =2+2a +3 || 423,9 || 1169,4 || 1929,8 || 1968,4 || 2007,8 || 2048,0 || 2088,5 || 11635,8

Ÿ TOTAL operational appropriations || Commitments || (4) || 1842,5 || 1879,4 || 1917,0 || 1955,3 || 1994,4 || 2034,3 || 2075,6 || 13698,6

Payments || (5) || 368,5 || 1112,9 || 1872,2 || 1909,6 || 1947,8 || 1986,8 || 2026,6 || 11224,4

Ÿ TOTAL appropriations of an administrative nature financed from the envelop of specific programs || (6) || 55,4 || 56,5 || 57,7 || 58,8 || 60,0 || 61,2 || 61,8 || 411,4

TOTAL appropriations under HEADING 4 of the multiannual financial framework || Commitments || =4+ 6 || 1898,0 || 1935,9 || 1974,6 || 2014,1 || 2054,4 || 2095,5 || 2137,4 || 14110,1

Payments || =5+ 6 || 423,9 || 1169,4 || 1929,8 || 1968,4 || 2007,8 || 2048,0 || 2088,5 || 11635,8

Heading of multiannual financial framework: || 5 || Administrative expenditure

EUR
million (to 3 decimal places)

|| || || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || TOTAL

DG: ELARG/AGRI/REGIO/EMPL ||

Ÿ Human resources || 27,0 || 26,1 || 25,7 || 25,7 || 25,7 || 25,7 || 25,7 || 181,5

Ÿ Other administrative expenditure || 0,8 || 0,8 || 0,8 || 0,8 || 0,8 || 0,8 || 0,8 || 5,3

TOTAL DG ELARG/ AGRI/REGIO/EMPL || || 27,7 || 26,8 || 26,5 || 26,4 || 26,4 || 26,4 || 26,4 || 186,8

TOTAL appropriations under HEADING 5 of the multiannual financial framework || (Total commitments = Total payments) || 27,7 || 26,8 || 26,5 || 26,4 || 26,4 || 26,4 || 26,4 || 186,8

EUR
million (to 3 decimal places)

|| || || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || TOTAL

TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || 1925,7 || 1962,7 || 2001,1 || 2040,6 || 2080,9 || 2122,0 || 2163,9 || 14296,8

Payments || 451,7 || 1196,2 || 1956,3 || 1994,9 || 2034,2 || 2074,4 || 2114,9 || 11822,6

3.2.2.
Estimated impact on operational appropriations

Costs are at this
stage uncertain or variable, due to the upcoming stage of programming, of which
we can not prejudge the results. Therefore, estimation of unit costs cannot be
provided at this stage. Outputs cannot be quantified in purely numeric terms,
as progress is measured related to the progress of the countries in their path
for EU accession. Estimates of costs and unit costs will be provided based on a
needs assessment once country and multi-country strategy documents are prepared
and approved.

 ̈      The proposal/initiative does not require the use of
operational appropriations

ý      The proposal/initiative requires the use of operational
appropriations

3.2.3.
Estimated impact on appropriations of an
administrative nature
3.2.3.1.
Summary

 ̈      The proposal/initiative does not require the use of
administrative appropriations

x      The proposal/initiative requires the use of administrative
appropriations, as explained below:

To be noted: Figures for Heading 5 include data
regarding DG ELARG and EU Delegations and DG AGRI/REGIO/EMPL. Figures for
Heading 4 include data regarding DG ELARG/EMPL/AGRI/REGIO.

EUR million (to 3 decimal places)

|| 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || TOTAL

HEADING 5 of the multiannual financial framework || || || || || || || ||

Human resources || 27,0 || 26,1 || 25,7 || 25,7 || 25,7 || 25,7 || 25,7 || 181,5

Other administrative expenditure || 0,8 || 0,8 || 0,8 || 0,8 || 0,8 || 0,8 || 0,8 || 5,3

Subtotal HEADING 5 of the multiannual financial framework || 27,7 || 26,8 || 26,5 || 26,4 || 26,4 || 26,4 || 26,4 || 186,8

Outside HEADING 5[38] of the multiannual financial framework || || || || || || || ||

Human resources || 49,9 || 50,9 || 52,0 || 53,0 || 54,1 || 55,1 || 55,7 || 370,6

Other expenditure of an administrative nature || 5,5 || 5,6 || 5,7 || 5,8 || 5,9 || 6,1 || 6,2 || 40,8

Subtotal outside HEADING 5 of the multiannual financial framework || 55,4 || 56,5 || 57,7 || 58,8 || 60,0 || 61,2 || 61,8 || 411,4

TOTAL || 83,2 || 83,3 || 84,1 || 85,3 || 86,4 || 87,6 || 88,3 || 598,2

3.2.3.2.
Estimated requirements of human resources

 ̈      The proposal/initiative does not require the use of human
resources

ý      The proposal/initiative requires the use of human resources,
as explained below:

To be noted: Numbers of Heading 5 staff include
data regarding DG ELARG and EU Delegations, DG AGRI/EMPL/REGIO headquarters and
also include the reduction of posts related to the Phasing out of the Croatia
delegations. ].

Numbers of Heading 4 staff include data
regarding DG ELARG/EMPL/AGRI/REGIO

Estimate to be expressed in full amounts (or at most to one decimal
place)

|| 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020

|| Ÿ Establishment plan posts (officials and temporary agents) ||

22 01 01 01 (Headquarters and Commission’s Representation Offices) || 108,0 || 107,0 || 105,0 || 105,0 || 105,0 || 105,0 || 105,0

04 01 01 01 (Headquarters and Commission’s Representation Offices) || 10,9 || 10,9 || 10,5 || 10,5 || 10,5 || 10,5 || 10,5

05 01 01 01 (Headquarters and Commission’s Representation Offices) || 9 || 9 || 9 || 9 || 9 || 9 || 9

13 01 01 01 (Headquarters and Commission’s Representation Offices) || 13 || 13 || 13 || 13 || 13 || 13 || 13

22 01 01 02 (Delegations)[39] || 46,0 || 40,0 || 40,0 || 40,0 || 40,0 || 40,0 || 40,0

22 01 05 01 (Indirect research) || na || na || na || na || na || na || na

10 01 05 01 (Direct research) || na || na || na || na || na || na || na

Ÿ External personnel (in Full Time Equivalent unit: FTE)[40] ||

22 01 02 01 (CA, INT, SNE from the "global envelope") || 18,6 || 18,5 || 18,3 || 18,1 || 18,1 || 18,1 || 18,1

04 01 02 01 (CA, INT, SNE from the "global envelope") || - || - || - || - || - || - || -

05 01 02 01 (CA, INT, SNE from the "global envelope") || 2,9 || 2,9 || 2,9 || 2,9 || 2,9 || 2,9 || 2,9

13 01 02 01 (CA, INT, SNE from the "global envelope") || 3.5 || 3.5 || 3.5 || 3.5 || 3.5 || 3.5 || 3.5

22 01 02 02 (CA, INT, JED, LA and SNE in the delegations) || 17,7 || 17,5 || 17,3 || 17,2 || 17,2 || 17,2 || 17,2

22 01 04 01/04 [41] || - at Headquarters[42] || 102,3 || 100,1 || 98 || 96 || 93,9 || 91,9 || 90

- in delegations || 399,5 || 400,6 || 401,7 || 402,8 || 403,9 || 404,9 || 405,9

04 01 04 13 in delegations || 13,2 || 13,3 || 13,3 || 13,3 || 13,4 || 13,4 || 13,4

05 01 04 03 in delegations || 5 || 5 || 5 || 5 || 5 || 5 || 5

13 01 04 02 in delegations || 39,7 || 39,8 || 39,9 || 40,0 || 40,1 || 40,2 || 40,3

22 01 05 02 (CA, INT, SNE - Indirect research) || na || na || na || na || na || na || na

10 01 05 02 (CA, INT, SNE - Direct research) || na || na || na || na || na || na || na

Other budget lines (specify) || na || na || na || na || na || na || na

TOTAL || 789,3 || 781 || 777,3 || 776,2 || 775,3 || 774,5 || 773,7

The human resources
required will be met by staff from the DG who are already assigned to
management of the action and/or have been redeployed within the DG, together if
necessary with any additional allocation which may be granted to the managing
DG under the annual allocation procedure and in the light of budgetary
constraints.

Description of tasks
to be carried out:

Officials and temporary agents || Planning, programming, management and monitoring of financial assistance

External personnel || Planning, programming, management and monitoring of financial assistance

3.2.4.
Compatibility with the multiannual financial
framework 2014-2020

ý      Proposal/initiative is compatible the multiannual financial
framework 2014-2020.

 ̈      Proposal/initiative will entail reprogramming of the relevant
heading in the multiannual financial framework.

Explain what reprogramming is required, specifying the budget lines
concerned and the corresponding amounts.

 ̈      Proposal/initiative requires application of the flexibility
instrument or revision of the multiannual financial framework[43].

Explain what is required, specifying the headings and budget lines
concerned and the corresponding amounts.

3.2.5.
Third-party contributions

ý      The proposal/initiative does not provide for co-financing by
third parties

 ̈      The proposal/initiative provides for the co-financing
estimated below:

Appropriations
in EUR million (to 3 decimal places)

|| Year N || Year N+1 || Year N+2 || Year N+3 || ... enter as many years as necessary to show the duration of the impact (see point 1.6) || Total

Specify the co-financing body || || || || || || || ||

TOTAL appropriations cofinanced || || || || || || || ||

3.3.
Estimated impact on revenue

ý      Proposal/initiative has no financial impact on revenue.

 ̈      Proposal/initiative has the following financial impact:

 ̈      on own resources

 ̈      on miscellaneous revenue

EUR
million (to 3 decimal places)

Budget revenue line: || Appropriations available for the ongoing budget exercise || Impact of the proposal/initiative[44]

Year N || Year N+1 || Year N+2 || Year N+3 || ... insert as many columns as necessary in order to reflect the duration of the impact (see point 1.6)

Article ............. || || || || || || || ||

For miscellaneous assigned revenue, specify the
budget expenditure line(s) affected.

Specify the method for calculating the impact
on revenue.

[1]               Communication from the Commission to the European
Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions A Budget for Europe 2020, COM(2011)500 final,
29.6.2011

[2]               “Five years of an enlarged
EU – economic achievements and challenges” -
Communication from the Commission to the Council, Parliament, European Economic
and Social Committee, Committee of the Regions and the ECB, 20 February 2009

[3]               Croatia, the former Yugoslav Republic of Macedonia,
Iceland, Montenegro and Turkey

[4]               Albania, Bosnia and Herzegovina, Serbia as well as
Kosovo under UNSCR 1244/99

[5]               Council Regulation 1085/2006 of 17 July 2006

[6]               On security of energy supply and international
co-operation - "The EU Energy Policy: Engaging with Partners beyond our
borders".COM(2011) 539 of 7.09.2011

[7]               i.e. peace and security, poverty reduction,
humanitarian aid, investing in stability and growth in enlargement and
neighbourhood countries, tackling global challenges, promoting EU and
international standards and values, and supporting growth and
competitiveness abroad

[8]               OJ L ...

[9]               OJ C , , p. .

[10]               OJ C , , p. .

[11]               Communication from the Commission to the European
Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions A Budget for Europe 2020, COM(2011)500 final,
29.6.2011.

[12]               OJ L 210, 31.7.2006, p. 82.

[13]               Under UNSCR No 1244/1999

[14]               OJ L .....

[15]               OJ L 55, 28.2.2011, p. 13.

[16]               OJ L...

[17]               OJ L ....

[18]             OJ L ....

[19]             OJ L ....

[20]             OJ L ....

[21]             OJ L ....

[22]             OJ L...

[23]             OJ L...

[24]             OJ L 210, 31.7.2006, p. 82-93

[25]             OJ L 65, 7.3.2006, p. 5

[26]             ABM: Activity-Based Management – ABB: Activity-Based
Budgeting.

[27]             As referred to in Article 49(6)(a) or (b) of the
Financial Regulation.

[28]             Under UNSCR 1244/1999

[29]             A sector approach to planning
and programming of the assistance is based on country sector strategies,
combines resources from different donors and aims to achieve broader policy
objectives

[30]             Details of management modes and references to the
Financial Regulation may be found on the BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html

[31]             As referred to in Article 185 of the Financial
Regulation.

[32]             DA= Differentiated appropriations / DNA=
Non-Differentiated Appropriations

[33]             EFTA: European Free Trade Association.

[34]             Candidate countries and, where applicable, potential
candidate countries from the Western Balkans.

[35]             Payments related to the new IPA instrument only

[36]             Until the adjustment foreseen in the second paragraph
of article 11 of the Council Regulation laying down the multiannual financial
framework for the years 2014-2020 has taken place, financial needs for the
support to the Turkish Cypriot community will be covered from the overall
envelope allocated to the Instrument for Pre-accession Assistance.

[37]             Technical and/or administrative assistance and
expenditure in support of the implementation of EU programmes and/or actions
(former "BA" lines), indirect research, direct research.

[38]             Technical and/or administrative assistance and
expenditure in support of the implementation of EU programmes and/or actions
(former "BA" lines), indirect research, direct research.

[39]             Including 5 FTE for the completion and monitoring of
IPA assistance in Croatia in 2014.

[40]             CA= Contract Agent; INT= agency staff ("Intérimaire");
JED= "Jeune Expert en Délégation" (Young Experts in
Delegations); LA= Local Agent; SNE= Seconded National Expert;

[41]             Under the ceiling for external personnel from
operational appropriations (former "BA" lines).            
This budget line also includes a provision of 22 FTE for the implementation,
monitoring and phasing out of assistance to the Turkish Cypriot community. This
provision will be discontinued and transferred to the relevant title of the
budget once the adjustment foreseen in the second paragraph of article 11 of
the Council Regulation laying down the multiannual financial framework for the
years 2014-2020 has taken place.

[42]             Essentially for Structural Funds, European Agricultural
Fund for Rural Development (EAFRD) and European Fisheries Fund (EFF).

[43]             See points 19 and 24 of the Interinstitutional
Agreement.

[44]             As regards traditional own resources (customs duties,
sugar levies), the amounts indicated must be net amounts, i.e. gross amounts
after deduction of 25% for collection costs.