# EUR-Lex - 52011PC0840 - EN

*|*

# 52011PC0840

**Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a financing instrument for development cooperation /* COM/2011/0840 final - 2011/0406 (COD) */**

			*

			*

EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

The number of people
living in poverty continues to be a major problem in developing countries.
While significant progress has been achieved, most developing countries remain
off-track for the achievement of the Millennium Development Goals (MDGs) and
are not able to successfully embark on the path of sustainable development in
all its senses, economic, social and environmental, the latter including
climate change mitigation and adaptation.

To aggravate the
situation, global challenges continue to be prominent and developing countries
were hit hard by the succession of recent crises resulting inter alia in social
and economic instability, increased migration, food insecurity and an increased
vulnerability to external shocks, among other effects. It is increasingly
recognised that environmental and natural resources, vital for sustainable
socio-economic growth, are increasingly at risk from climate change and rapid
population growth. This may exacerbate an already fragile situation in many
developing countries and risk undoing certain development achievements.

The EU remains committed
to helping developing countries to reduce and ultimately eradicate poverty. To
achieve this objective, the Development Cooperation Instrument (DCI) Regulation
was established for the 2007-2013 period with the primary and overarching
objective of eradicating poverty in partner countries and regions. It consists
of three categories of programmes: (i) bilateral and regional geographic
programmes covering cooperation with Asia, Latin America, Central Asia, the
Middle East and South Africa; (ii) thematic programmes covering the following
issues: investing in people, environment and sustainable management of natural
resources including energy, non-State actors and local authorities, food
security, and migration and asylum; and (iii) accompanying measures for
sugar-producing countries.

The current DCI
regulation expires on 31 December 2013. The various reviews undertaken of the
DCI have acknowledged its overall added value and its contribution to the
achievement of the MDGs, but have also highlighted certain shortcomings. New
challenges, together with the priorities set out in the Europe 2020 Strategy
and the latest EU development policy, have prompted the Commission to make a
proposal to review and adapt the DCI Regulation in line with the communication
“A Budget For Europe 2020” of 29 June 2011 and with the communication
"Increasing the Impact of EU Development Policy: An Agenda for Change"
of 13 October 2011.

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

Public Consultation

The Commission held a public consultation
on future funding for EU external action between 26 November 2010 and 31
January 2011. This process was based on an online questionnaire accompanied by
a background paper 'What funding for EU external action after 2013?'. In
general, the replies did not suggest the need for a substantial change in the
current structure of the existing instruments. Nevertheless, several issues
were identified and were accordingly taken into account in the drafting of the
new DCI Regulation:

·
A majority of the respondents (around 70%) stated
that EU financial intervention provided a substantial added value. Respondents stated
that the EU should make good use of its comparative advantage linked to its
global field presence, its wide-ranging expertise, its supranational nature and
its role as a facilitator of coordination.

·
Nearly all respondents (92%) supported a more
differentiated approach, tailored to the situation of the beneficiary country,
in order to increase the impact of EU financial instruments. In line with this,
differentiation between the beneficiary countries is strengthened.

·
There was wide support among respondents for
exploring conditionality based on the beneficiary country's respect for human
rights, minorities, good governance and diversity of cultural expressions
(78%), and on the quality of its policies and of its ability and willingness to
implement sound policies (63%). The proposed Regulation recognises the
importance of national development plans as well as jointly developed EU
strategies as the basis for cooperation. It also emphasises the basic EU values
and principles and thus strengthens the conditionality and mutual
accountability.

·
A significant majority of respondents support
increased flexibility in implementation, in particular for tackling
transregional challenges, which is seen as being hampered by the ‘geographical
limitation’ of individual instruments (EDF being limited to ACP countries, the DCI
to Latin America, Asia, Central Asia, Middle East and South Africa, and the
ENPI to neighbourhood countries). The proposed Regulation provides for implementing
activities of trans-regional importance and groups the different thematic axes
to increase flexibility and simplify the implementation.

·
A majority of respondents agreed that joint
programming and co-financing with Member States (and possibly with the
beneficiary countries) could increase the impact and coherence of EU external
action, simplify the delivery of aid and reduce overall transaction costs. This
is duly addressed in the proposed Regulation.

Collection and use of Expertise

The Commission performed an internal review
of different reports (evaluations, audits, studies, mid-term reviews). The
review looked at what worked and what did not work, and drew lessons for the drafting
of the financial instruments.

The review showed that the current DCI
contributed to progress towards the MDGs in developing countries. The DCI's
implementation modalities, such as budget support and the "sector-wide
approach", have allowed deeper cooperation with partner countries and more
efficient division of labour through co-financing between donors.

Nevertheless, the review identified several
shortcomings.

·
Different internal EU policies are increasingly
becoming part of the EU's external action. In line with the "Europe 2020 Strategy"
and the Lisbon Treaty, mutual reinforcement of internal and external actions
was needed. The existing architecture was inadequate to allow the Commission to
intervene effectively on a sufficient scale. Grouping different thematic axes
under one heading will significantly improve the situation.

·
In some cases the thematic programmes were too
fragmented to respond to global crises (e.g. the food price crisis, avian flu)
or to international commitments made at the highest political level (e.g.
biodiversity and climate change). The use of the thematic envelope therefore
needed more flexibility through grouping the different thematic programmes and
allow for a more coherent and comprehensive long-term engagement with global
public goods and challenges, and to react to the various shocks affecting the
poorest.

·
The current DCI Regulation covers a wide range
of developing countries, from the Least Developed Countries to Upper Middle
Income Countries. The recent increase of economic and social disparities
amongst partner countries and the development of new objectives call for
improved differentiation. The proposed new Regulation provides further guidance
on differentiation by allowing the EU to concentrate grant aid where it is
needed most and where it will have greatest impact. To complete the policy mix,
the Commission proposes creating a new instrument (Partnership Instrument) to
address the objectives that go beyond pure development assistance.

·
Supporting cross-regional initiatives has proved
difficult given the current architecture of external assistance instruments.
This was particularly the case in implementing the Joint Africa-EU Strategy.
The new DCI regulation provides a better legal basis for the implementation of
the Joint-Africa EU Strategy.

·
In the present DCI Regulation, the provisions on
fragile states and countries in post-crisis situations are insufficient: they
underestimate the need to support political processes that strengthen the rule
of law and governance. Addressing transition challenges requires a set of
responses at country level, based on specific needs and related to a common
strategy (a holistic approach). The new Regulation takes better account of these
challenges and tackles the rigidity of the decision-making process in fund
allocation, programming and implementation.

·
The current DCI Regulation contains indicative
allocations for each region, without any unallocated funds. This reduces the
scope for mobilising resources to respond to unforeseen needs (new political
priorities, natural or man-made disasters, etc.). The new Regulation proposes
leaving some funds unallocated to be used as a response to unforeseen events.

·
Finally, the current programming and
implementation process for the DCI was assessed as too complex. It does not allow
the EU programming cycle to be aligned to those of its partners, it does not facilitate
joint programming with Member States and it does not allow swift adjustments if
required. All these shortcomings have been directly addressed in the new DCI
Regulation.

Impact Assessment

The Commission carried out an Impact
Assessment (IA) that considered 3 basic policy alternatives: maintaining the
DCI Regulation without any amendment (option 1) and two alternatives for
amending the DCI on each problem identified in the current DCI (Options 2A and
2B).

Option 1 was not accepted because it would
not solve the problems identified. Sub-options A and B under Option 2 solve the
identified problems to different extents, each having particular political and
other implications. The IA concluded that sub-options B is better as it:

·
brings the DCI objectives into line with the
latest trends in EU development policy;

·
differentiates clearly amongst partner
countries;

·
enshrines good governance, democracy, human
rights and the rule of law in EU assistance;

·
facilitates the implementation of the Joint
Africa-EU Strategy;

·
streamlines the thematic programmes to provide
the necessary flexibility;

·
ensures flexible mechanisms to facilitate a more
effective EU response to rapidly evolving situations in crisis, post-crisis and
fragile states;

·
enhances the flexibility of fund allocations;
and

·
improves the effectiveness of EU aid by
simplifying and making programming and implementation procedures more flexible,
facilitating joint programming and aligning EU assistance with partner
countries' programming cycles.

3.           LEGAL ELEMENTS OF THE
PROPOSAL

Part Five, Title III, Chapter 1 of the Treaty
of the Functioning of the European Union, provides the legal framework for
cooperation with partner countries and regions. The proposed DCI Regulation is
based in particular on Article 209(1) of the Treaty, and is presented by the
Commission in accordance with the procedure laid down in Article 294. The Joint
Statement by the Council and the Representatives of the Governments of the
Member States meeting within the Council, the European Parliament and the
Commission on European Union Development Policy: ‘The European Consensus’, of
20 December 2005, the communication of 13 October 2011 "Increasing the
impact of EU development Policy - An Agenda for Change" as well as any
future communication establishing basic orientations and principles for the
Union's development policy, and any subsequent conclusions or modifications
thereto, will provide the general framework, orientations and focus for the
implementation of this Regulation.

The EU is in a uniquely impartial position to
deliver part of the EU's external assistance on behalf of and with Member
States, giving it enhanced credibility in the countries where it operates. Many
Member States do not have the capacity and/or the willingness to develop global
external instruments. Intervention at EU level is therefore the best way of promoting
EU overall interests and values globally and ensuring a worldwide EU presence.
With 27 Member States acting with common policies and strategies, the EU has the
critical mass to respond to global challenges, in particular in relation to
achieving the MDGs. Since the objectives of the proposed Regulation cannot be
sufficiently achieved by the Member States alone and can therefore, by reason
of the scale and coverage of the action, be better achieved at EU level, the EU
may adopt measures, in accordance with the principle of subsidiarity as set out
in Article 5 of the Treaty.

The proposed new Regulation also
strengthens the coordination capacity and facilitates joint programming with
the Member States, ensuring efficient division of labour and effective aid
delivery. The EU's development policy and that of the Member States must
complement and reinforce each other. To that end, EU assistance should focus
where it can have greatest impact, having regard to its capacity to act at a
global scale and respond to global challenges. In accordance with the principle
of proportionality, as set out in Article 5 of the Treaty, the proposed new Regulation
does not go beyond what is necessary to achieve its objectives.

The proposed new Regulation will operate
taking into consideration the external dimension of EU sectoral policy
priorities, ensuring coordination and enhancing synergies, in line with the
objectives laid down in the Regulation, and in compliance with the
aforementioned legal and policy framework.

4.           BUDGETARY IMPLICATION

The Commission proposes to allocate €96
billion for the 2014-2020 period for the external instruments[1]. The allocation proposed for
DCI is €23 294.7 million. The indicative yearly budget commitments for the DCI
are given in the table below. The indicative financial allocations per
individual DCI programme are given in Annex VII of the Regulation. It is
planned that no less than 50% of the programme for Global Public Goods and
Challenges will be spent on climate change and environmental objectives[2] and at least 20% on social
inclusion and human development. Globally, in line with the Communication
"Increasing the impact of EU Development Policy: an Agenda for
Change", a continued support for social inclusion and human development is
foreseen through at least 20% of the Union's development aid. Finally, this
Regulation intends to contribute to addressing at least 20% of the Union's
budget to creating low carbon and climate resilient societies, as provided for
in the Commission communication "A Budget for Europe 2020".

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 programming of the DCI, 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"[3]
will apply to the use of those funds.

Development Cooperation Instrument* || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || 2014-2020

2 716,7 || 2 903.1 || 3 100.3 || 3 308.7 || 3 525.3 || 3 751.7 || 3 989 || 23 294.7

*Current prices in
million €

5.           MAIN ELEMENTS

Simplification

A priority for the Commission in this new
Regulation, as in other programmes within the context of the Multiannual
Financial Framework (MFF), is to simplify the regulatory environment and
facilitate the access of Union assistance to partner countries and regions,
civil society organisations, SMEs, etc to the extent that they contribute to
the objectives of the Regulation.

External instruments will be simplified by
delineating them more clearly and reducing overlaps between them, so they are
individually identified with clearly defined policy objectives.

Simplification and reduction of transactional
costs for partner countries and regions will also be achieved through flexible
programming procedures allowing for the application of the principles of Aid
Effectiveness. For instance, the Union may align to the national development
plans of partner countries, thus eliminating the need for partner countries to
negotiate EU-specific strategy papers to be adopted by the Commission and
enabling a more focused analysis which could be included in the multi-annual
programming document. Likewise, donor coordination and division of labour may
be reinforced through joint programming with Member States.

The implementation rules are contained in the
Regulation (EU) No [--] of the European Parliament and of the Council of [--]
establishing the common rules and procedures for the implementation of the
Union's instruments for external action.

Differentiation

The differentiated approach set out in the
communication "Increasing the Impact of EU Development Policy: An Agenda
for Change" intends to enhance the impact of EU development cooperation by
targeting its resources where they are needed most to address poverty reduction
and where they could have the greatest impact. This should be implemented first
in terms of eligibility to bilateral development cooperation programmes; and secondly
in terms of aid allocation.

In principle, high income, upper middle
income and other large middle income countries, which are on a sustainable
development path and/or have access to large domestic and external resources to
finance their own development strategies, would graduate out of bilateral aid
programmes. The world is developing: the OECD/DAC list of ODA recipients
(revised in 2011) shows that more than 20 countries have graduated from
low-income to middle-income or from lower-middle income to upper-middle income
categories, based on GNI per capita. Obviously this is only one indicator among
others and application of the differentiation principle must also take account
of human development, aid dependency and other aspects, including the dynamics
of the development process.

In particular, many middle income countries
are playing a new and growing role at regional and/or global levels. The EU
should therefore adapt the nature of our relations with them, including our
cooperation priorities and instruments. This should not lead to a weakening of
our relationships, but rather to a more modern set of instruments. The EU
should engage in new partnerships with countries that graduate from bilateral
aid programmes, notably on the basis of regional and thematic programmes under
the new DCI, thematic financial instruments for EU external action and the new
Partnership Instrument.

Delegated Acts

It is proposed that flexibility be reinforced
by using delegated acts in accordance with Article 290 of the Treaty to make it
possible to amend certain non-essential elements of the Regulation that affects
the subsequent programming (e.g. annexes on eligible countries, areas for
cooperation and indicative financial allocation per programme for 2014-2020).

Detailed explanation

This section provides a detailed commentary,
explaining the main ideas of the new DCI Regulation under each of the proposed
articles.

(0)          Subject matter and
Scope (Article1 Title I)

The only proposed change in Article 1 is to
include the Pan-African Programme in the scope of the Regulation.

The Regulation thus covers all the
developing countries, territories and regions except: the countries eligible
for the Pre-Accession Instrument.

(1)          Objectives and General
Principles (Title II) – Articles 2 and 3

Article 2 (Objectives and eligibility
criteria) sets out the primary and overarching
objectives of the Regulation and the characteristics of the Union’s geographic
and thematic development cooperation. The objectives are in line with Article
208 of the Treaty, the aforementioned Commission’s communications "A Budget For Europe 2020 and “Increasing the Impact of EU
Development Policy: An Agenda for Change”.

The Article provides for support for all
forms of cooperation with developing countries. It requires fulfilling the
criteria for Official Development Assistance (ODA) established by the OECD/DAC,
subject to possible exceptions for the thematic and Pan-African programmes. For
these programmes a 10% flexibility for non-ODA activities is foreseen to cover
for expenditure which; although not strictly speaking ODA-compliant, may be
required for the adequate implementation of actions under these programmes.

Article 3 (General Principles) sets out the main principles governing the implementation of the
Regulation, which are democracy, respect for human rights and fundamental
freedoms and the rule of law; differentiated approach towards the partner
countries, taking into account their needs, capacities, commitments and
performance, and potential EU impact; key cross-cutting issues (such as gender
equality and women empowerment); strengthened coherence of EU external action;
improved coordination with the Member States and other bilateral or
multilateral donors; and a partner country-led and region-led development
process with mutual accountability, through an inclusive and participatory
approach to development, using effective and innovative cooperation modalities
in line with OECD/DAC best practices and thus improving the impact of aid and
reducing overlap and duplication.

(2)          Geographic and Thematic
Programmes (Title III) – Articles 4 to 9

Article 4 (Implementation of Union’s
Assistance) describes that the type of programmes
under which EU assistance will be delivered.

Article 5 (Geographic Programmes) covers the possible areas for cooperation and distinguishes between
regional and bilateral cooperation. The principle of differentiation laid down
in Article 3 will be applied. As a consequence, bilateral development
assistance would be provided to those partner countries which need it the most,
and lack the required financial capacities for their own development. Also, the
differentiation principle takes into account the potential impact of the Union
assistance in partner countries. Partner countries that shall benefit from
bilateral development assistance are listed in Annex III. This Annex does not
include countries "graduated" according to the following criteria:
partner countries representing more than 1% of the world's GDP and/or upper
middle income countries according to the list of recipients of Official
Development Aid (ODA) of the OECD/DAC are in principle excluded; however,
additional criteria relating to their need and capacity is used, such as Human
Development Index, the Economic Vulnerability Index and aid dependency, as well
as economic growth and foreign direct investment. Also the reliability of the
available data is taken into consideration.

All partner countries included in Annex I,
however, would still benefit from regional and thematic programmes.

The Regulation does not restrict the areas
of EU cooperation or intervention. Any listing of such areas is purely
illustrative. Areas may be chosen because they are pertinent to achieving the
aims laid down in the Treaty, to the EU's international obligations and
commitments or to the specific objectives provided for in the agreements with
partner countries and regions. They should nevertheless be proposed with
reference to the EU's objective of concentrating assistance, with a view to
ensuring that the EU's policy and the policies of the Member States complement
each other as required under Article 208 of the Treaty[4] and in the light of the
Commission’s communications (in particular the Commission communication An
Agenda for Change) and the appropriate Council and Parliament resolutions.

Article 6 (Thematic Programmes) covers the thematic programmes, whose general objectives and reach
will be coherent with the overall purpose and scope of this Regulation, and the
conditions under which the thematic programmes will be implemented.

Article 7 (Global Public Goods and
Challenges) describes the Global Public Goods and
Challenges thematic programme, which will target the main global goods and
challenges in a flexible and cross cutting manner. The main fields of
activities that will be pursued by this programme are further outlined in Annex
V, and include, inter alia, environment and climate change, sustainable energy[5], human development (including
health, education, gender equality, employment, skills, social protection and
social inclusion as well as economic development-related aspects such as
growth, jobs, trade and private sector engagement), food security and migration
and asylum. This thematic programme will enable swift response in view of
unforeseen events and global crises (e.g. the food price crisis, avian flu). It
will reduce the fragmentation of the EU development cooperation and will allow
for appropriate reinforcement and consistency of internal and external actions.

Article 8 (Civil Society Organisations
and Local Authorities) describes the Civil Society
Organisations (CSOs) and Local Authorities (LAs) thematic programme, which
bases itself on the former Non-State Actors and Local Authorities programme.
The focus of this programme has been sharpened with more attention given to
capacity development of CSOs and LAs. The programme will promote an inclusive
and empowered civil society and local authorities, increase awareness and
mobilisation on development issues, and strengthen the capacity for policy
dialogue on development.

Article 9 (Pan-African Programme) describes the Pan-African Programme that is being set up to implement
the Joint Africa-EU Strategy (JAES). The programme will be complementary and
coherent with other financial instruments, notably the ENI, the EDF and the
thematic programmes under DCI. While ENI and EDF focus on interventions at the
regional or national level in Africa, the Pan-African programme shall be used
to provide specific support for the objectives of the JAES, supporting in
particular activities of trans-regional, continental and trans-continental
nature, as well as relevant JAES initiatives in the global arena. The
Pan-African Programme will work in close cooperation/concertation with other
instruments, and will concentrate on specific initiatives agreed in the
framework of JAES and its Action Plans for which no alternative source of
funding can be mobilised, thus ensuring the necessary coherence and synergy and
preventing duplications and overlappings.

(3)          Programming and
Allocation of Funds (Title IV) – Articles 10 to 14

Article 10 (General Framework for
Programming and Allocating Funds) lays down the
general framework for geographical and thematic programming, as well as for the
allocation of the funds under this Regulation. In doing so, the allocation
criteria identified in article 3(2) will be used. To ensure synergies and
complementarity of the Union’s measures and those of the Member States, the
Member States will be fully involved in the programming process. Consultation
process will also include other donors and development actors as well as civil
society and regional and local authorities.

Paragraph 4 foresees leaving a certain
amount of funds unallocated in order to increase the flexibility of the
instrument and the possibility of reacting to unforeseen events (new political
priorities, natural or man-made disasters, etc.).

Article 11 (Programming documents for
geographic programmes outlines the requirement and
principles for preparing strategy papers for the countries and regions
receiving an indicative allocation under this Regulation and, based on these,
multiannual indicative programmes. The article also lists exceptions for when a
strategy paper would not need to be prepared in order to simplify the
programming process as well as to favour joint programming with Member States
and alignment to the national programmes of development countries.

To ensure country ownership and principles
of aid effectiveness, the strategy papers will be drafted in dialogue with the
partner countries and regions, with relevant involvement of the civil society
and regional and local authorities. Member States, as well as other donors,
will be involved in line with Article 10(3).

The article also introduces the possibility
of having a Joint Framework Document that would lay down a comprehensive Union
strategy, of which development policy would be part of.

The prepared Multiannual Indicative
Programmes (MIP) could be based on any programming documents identified in this
article, except when the total allocation would not exceed 30 million EUR. MIPs
can be adjusted through a mid term or ad hoc review, in view of achieved
objectives as well as in light of newly identified needs, such as those
resulting from crisis, post-crisis or fragility situations.

Article 12 (Programming for countries in
crisis, post-crisis or fragility situation) emphasises
the special needs and circumstances of countries in crisis, post-crisis or
fragility situation, which ought to be considered at the time of drafting of
all programming documents. Paragraph 2 of the Article 12 highlights the
potential need for a swift response in such countries and foresees a special
procedure (ex post comitology, Article 14(3)) for an ad hoc review of the
strategy paper and of the multiannual indicative programme.

Article 13 (Programming documents for
thematic programmes) describes the requirements and
procedure for drafting the thematic programming documents. The Article also
foresees a possibility of a mid term or ad hoc review, as necessary.

Article 14 (Approval of Strategy Papers
and adoption of Multiannual Indicative Programmes) provides
that multiannual programming documents (i.e. strategy papers, multiannual
indicative programmes for partner countries and regions, and thematic strategy
papers) will be adopted by the Commission after obtaining the opinion of a
committee made up of representatives of the Member States and chaired by a
Commission representative (the committee being established under Article 24 of
this Regulation).

The Article also provides flexibility and
simplification for cases in which there can be a derogation from the standard
comitology procedures (e.g. no comitology used in case of technical adjustments
or minor alterations of the overall allocations) and for cases where the
comitology procedures could be applied after the adoption and implementation of
Commission’s amendments (e.g. cases of crisis, post-crisis and fragility or in
the cases of threats to democracy and human rights).

(4)          Final provision (Title
V) – Articles 15 to 22

To make Union assistance more coherent and
effective, and in particular to avoid programmes being split up among several
different instruments, Article 15 (Participation by a third country not
eligible under this Regulation) lays out the possibility to extend the
eligibility of this Regulation to include all third countries, territories and
regions, insofar as this contributes to the general objectives of the
Regulation.

Article 16 (Suspension of assistance) lays down the procedure to be applied in the event of
non-compliance with the principles set out in Title II and eventual suspension
of assistance under this Regulation.

Articles 17 and 18 (Delegation of powers
to the Commission) introduce the possibility of
empowering the Commission to adopt delegated acts to amend or supplement the annexes
I to VI(I) to this Regulation. Article 28 describes the characteristics and
procedures of this delegation of power. The European Parliament and the Council
will be notified simultaneously and instantly when the Commission adopts such a
delegated act, and the act shall enter into force only if no objection has been
expressed by the two institution within the period of 2 months (extendable by
additional 2 months) from the notification.

Article 19 (Committee) establishes the relevant committee assisting the Commission in the
implementation of this Regulation[6].

Article 20 (Financial provisions) sets the financial reference amount for the implementation of the
Regulation.

Article 21 (European External Action Service)
highlights that this Regulation is to be applied in accordance with the Council
Decision establishing the organisation and functioning of the European External
Action Service[7],
in particular Article 9 thereof.

Article 22 (Entry into force) provides for the entry into force of the Regulation and its
application from 1 January 2014, without setting an expiration date.

2011/0406 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

establishing a financing instrument for
development cooperation

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 209(1) thereof,

Having regard
to the proposal from the Commission,

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

Acting in
accordance with the ordinary legislative procedure,

Whereas:

(1)
This Regulation constitutes one of the
instruments providing direct support for the European Union's external
policies. It will replace the Regulation of the European Parliament and of the
Council No 1605/2006 of 18 December 2006 establishing a financing instrument
for development cooperation[8]
which expires on 31 December 2013.

(2)
The fight against poverty remains the primary
objective of the development policy of the European Union, as laid down in
Title V, Chapter 1 of the Treaty on European Union and Title III, Chapter 1 of
Part Five of the Treaty on the Functioning of the European Union, in line with the
Millennium Development Goals (MDGs)[9],
or other objectives accepted by the Union and its Member States.).

(3)
The European Consensus on Development[10] and Commission communications "Increasing
the impact of EU development Policy - An Agenda for Change"[11], and "The future approach
of EU budget support to third countries"[12],
as well as any future communication establishing basic orientations and
principles for the Union's development policy, and their subsequent conclusions,
provide the general policy framework, the orientations and the focus to guide
the implementation of this Regulation.

(4)
The Union is founded on the values of democracy,
the rule of law, the universality and indivisibility of and respect for human
rights and fundamental freedoms, respect for human dignity, the principles of
equality and solidarity and respect for the principles of the UN Charter and international
law. It seeks to develop and consolidate commitment to these values in partner
countries and regions through dialogue and cooperation.

(5)
The Union also aims to ensure coherence with
other areas of its external action. This should be ensured when formulating the
Union's development cooperation policy and its strategic planning programming
and implementation of measures.

(6)
More effective aid, greater complementarity and
better harmonisation, alignment with partner countries, and coordination of
procedures, both between the Union and its Member States and in relations with
other donors and development actors, are essential for ensuring the consistency
and relevance of aid whilst at the same time reducing the costs borne by
partner countries. Through its development policy, the Union is committed to
implementing those conclusions of the Declaration on Aid Effectiveness adopted
by the High Level Forum on Aid Effectiveness, held in Paris, on 2 March 2005,
the Accra Agenda for Action adopted on 4 September 2008 and their follow-up
Declaration adopted in Busan on 1st December 2011. The objective of achieving a
joint programming amongst the Union and its Member States should be reinforced.
These commitments have lead to a number of conclusions of the Council and of
the Representatives of the Governments of the Member States meeting with the
Council such as the EU Code of Conduct on Complementarity and Division of
Labour in Development Policy[13],
and the Operational Framework on Aid Effectiveness[14].

(7)
Union assistance should support the Joint
Africa-EU Strategy[15]
and its successive Actions Plans which forms the framework for broad and
mutually beneficial cooperation within a Strategic Partnership characterised by
the pursuit of common objectives on an equal footing.

(8)
The Union and the Member States should improve
the consistency and the complementarity of their respective policies on
development cooperation, in particular by responding to partner countries' and
regions' priorities at country and regional level. To ensure that the Union's
development cooperation policy and that of the Member States complement and
reinforce each other, it is appropriate to provide for joint programming
procedures which should be implemented whenever possible and relevant.

(9)
The Union's policy and international action for
development cooperation are guided by the MDGs, such as the eradication of
extreme poverty and hunger, including any subsequent modifications thereto, and
by the development objectives and principles approved by the Union and its
Member States, including in the context of their cooperation within the United
Nations (UN) and other competent international organisations in the field of
development cooperation.

(10)
The Union should promote a comprehensive
approach in response to crisis and disaster and to conflict-affected and
fragile situations, including those of transition. This should in particular
build on the Council conclusions on Security
and Development[16]  on an EU
response to situations of fragility[17] on conflict prevention[18]
as well as any relevant subsequent conclusions. This should provide the
necessary mix of approaches, responses and instruments in particular by
ensuring an appropriate balance between the security-oriented, development and
humanitarian approaches, and by linking short-term reaction with the long term
support.

(11)
Union assistance should focus where it has more
impact, having regard to its capacity to act on a global scale and respond to
global challenges such as poverty eradication, sustainable and inclusive
development and worldwide promotion of democracy, good governance, human rights
and the rule of law, its long-term and predictable commitment to development
assistance and its role in coordinating with its Member States. To ensure such
impact, the principle of differentiation should be applied not only at the
level of funds allocation, but also at the level of programming, to ensure that
bilateral development cooperation targets partner countries most in need,
including fragile states and states with high vulnerability, and with limited
capacity to have access to other sources of financing for supporting their own
development, having regard to the potential impact of the Union assistance in
partner countries. As a consequence, bilateral programming would target such
countries, pursuant to the application of objective criteria based on the needs
and capacities of these countries, as well as the impact of EU assistance.

(12)
This Regulation should provide an enabling
framework for programming, allowing enhanced consistency between Union policies
by using a joint framework document as a basis for programming. It should enable
full alignment with partner countries and regions by relying, where
appropriate, on national development plans or similar comprehensive development
documents; and pursue a better coordination amongst donors, in particular
between the Union and its Member States, through joint programming.

(13)
Since the objectives of this Regulation cannot
be sufficiently achieved by the Member States and can therefore, by reason of
the scale of the action, be better achieved at Union level, the Union may adopt
measures, in accordance with the principle of subsidiarity and proportionality
as set out in Article 5 of the Treaty of the European Union. In accordance with
the principle of proportionality, as set out in that Article, this Regulation
does not go beyond what is necessary to achieve those objectives.

(14)
In a globalised world, different internal EU
policies such as environment, climate change, employment (including decent work
for all), gender equality, energy, water, transport, health, education, justice
and security, research and innovation, information society, migration,
agriculture and fisheries, are increasingly becoming part of the EU's external
action. Commission Communication ‘Europe 2020: A strategy for smart,
sustainable and inclusive growth’[19]
underlines the commitment of the Union to promote in its internal and external
policies smart, inclusive and sustainable growth bringing together three
pillars: economic, social and environmental.

(15)
Fighting climate change and protecting the
environment are among the great challenges which face the Union and where the
need for international action is urgent. In accordance with the intent stated
in Commission Communication "A budget for Europe 2020" of 29 June
2011[20],
this Regulation should contribute to the objective of addressing at least 20%
of the EU budget to low carbon and climate resilient society, and the global
public goods and challenges programme should use at least 25% of its funds to
cover climate change and environment. Actions in these two areas should, wherever
possible, be mutually supportive in order to reinforce their impacts.

(16)
Commission communication "Increasing the
impact of EU Development Policy: an Agenda for Change"[21] envisages continued support
for social inclusion and human development through at least 20% of the Union's
development aid. To contribute to that end, at least 20% of the global public
goods and challenges programme should support that area of development.

(17)
The lists of partner countries under this
Regulation should be adapted on the basis of possible changes to their status
as established by the Development Assistance Committee of the Organization for
Economic Cooperation and Development (OECD/DAC), as well as important changes
in human development, aid dependency, crisis situations, vulnerability and
other aspects including the dynamics of the development process. Such updates, reviews
of the partner countries eligible for bilateral development cooperation and
modifications in the definitions of detailed areas of cooperation and
activities, and adjustments of the indicative financial allocation per
programme, constitute non-essential elements of this Regulation. Consequently,
in order to adapt its scope to the rapidly evolving reality in third countries,
the power to adopt acts in accordance with Article 290 of the Treaty of the
Functioning of the European Union should be delegated to the Commission for updating
the Annexes of this Regulation which includes the list of partner countries and
regions eligible for Union financing, the definition of detailed areas of
cooperation under geographic and thematic programmes and the indicative
allocations per programme. 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.

(18)
In order to ensure uniform conditions for the
implementation of this Regulation, implementing powers should be conferred on
the Commission.

(19)
The implementing powers relating to strategy
papers and multiannual indicative programmes laid down in Articles 11 to 14 of
this Regulation should be exercised in accordance with Regulation (EU) No
182/2011 of the European Parliament and of the Council of 16 February 2011
laying down the rules and general principles concerning mechanisms for control
by Member States of the Commission's exercise of implementing powers[22]. Taking into account the
nature of those implementing acts, in particular their policy orientation
nature or their budgetary implications, the examination procedure should in
general be used for their adoption, except for measures of a small financial
scale. The Commission should adopt immediately applicable implementing acts
where, in duly justified cases relating to the need for a swift response from
the Union, imperative grounds of urgency so requires.

(20)
Common rules and procedures for the implementation
of the Union's instruments for external action are laid down in Regulation (EU)
No .../...of the European Parliament and of the Council of ....[23], hereinafter 'the Common Implementing Regulation'.

(21)
The organisation and functioning of the European
External Action Service are described in Council Decision 2010/427/EU[24],

HAVE ADOPTED THIS REGULATION:

TITLE
I

INTRODUCTION

Article 1

Subject
matter and scope

1.
Under this Regulation, the Union may finance:

(a)
geographic programmes aimed at supporting
cooperation with developing countries, territories and regions set out in Annex
I (hereinafter referred to as 'partner countries and regions'), which are
included in the list of recipients of Official Development Assistance (ODA) of
the OECD/DAC set out in Annex II. Partner countries that shall benefit from
bilateral development assistance are set out in Annex III.

(b)
thematic programmes to address global public
goods and challenges and support civil society organisations and local
authorities in countries, territories and regions eligible for Union funding
under geographic programmes, in accordance with Annex I of this Regulation,
Regulation (EU) No [.../...] of the European Parliament and the Council
establishing a European Neighbourhood Instrument[25], and Council Decision
[2001/822/EC of 27 November 2001 on the association of the overseas countries
and territories[26]],
and in African, Caribbean and Pacific (ACP) countries signatories to the ACP-EU
Partnership Agreement signed in Cotonou on 23 June 2000.

(c)
a Pan-African programme to support the Joint
Africa-EU Strategy in the countries, territories and regions covered by that
Strategy.

2.
For the purposes of this Regulation, a region is
defined as a geographical entity comprising more than one developing country.

TITLE
II

OBJECTIVES
AND GENERAL PRINCIPLES

Article 2

Objectives
and eligibility criteria

1.
Within the framework of the principles and
objectives of the Union's external action.

(a)
the primary objective of cooperation under this
Regulation shall be the reduction and, in the long term, the eradication of
poverty;

(b)
cooperation under this Regulation will also
contribute to the achievement of other objectives of EU external action, in
particular:

(i)         fostering sustainable economic,
social and environmental development, and

(ii)         promoting democracy, the rule of
law, good governance and respect for human rights.

The achievement of these objectives shall be
measured using relevant indicators, in particular MDG 1 for subparagraph (a)
and MDGs 1 to 8 for subparagraph (b), and other indicators agreed by the Union
and its Member States.

2.
Actions under geographic programmes shall be
designed so as to fulfil the criteria for ODA established by the OECD/DAC.

Actions under the Pan-African and thematic
programmes shall be designed so as to fulfil the criteria for ODA established
by the OECD/DAC, unless:

(a)
the characteristics of the beneficiary require
otherwise, or

(b)
the action implements a global initiative, a
Union policy priority or an international obligation or commitment of the
Union, as referred to in Article 6, and the action does not have the
characteristics to fulfil the criteria for ODA.

Without prejudice to point (a), at least 90 %
of the expenditure foreseen under the Pan-African and thematic programmes shall
fulfil the criteria for ODA established by the OECD/DAC.

3.
Actions covered by Council Regulation (EC) No
1257/96 of 20 June 1996 concerning humanitarian aid[27] and eligible for funding under
that Regulation shall not, in principle, be funded under this Regulation,
except where there is a need to ensure continuity of cooperation from crisis to
stable conditions for development.

Article 3

General
principles

1.
The Union seeks to promote, develop and
consolidate the principles of democracy, the rule of law and respect for human
rights and fundamental freedoms on which it is founded, through dialogue and
cooperation with partner countries and regions.

2.
In the implementation of this Regulation and
with the purpose to ensure high impact of Union assistance, a differentiated
approach amongst partner countries shall be pursued, in order to ensure that they
are provided with specific, tailor-made cooperation based on their:

(a)
needs;

(b)
capacities to generate and access financial
resources and absorption capacities; and

(c)
commitments and performance.

The differentiated approach shall also be
pursued having regard to the potential impact of the Union assistance in
partner countries.

The countries most in need, in particular the least
developed countries, low income countries and countries in crisis, post-crisis,
fragile and vulnerable situation, shall be given priority in the resource
allocation process.

3.
The following cross-cutting issues shall be mainstreamed
in all programmes: the promotion of human rights, gender equality, women
empowerment, non-discrimination, democracy, good governance, the rights of the
child and indigenous peoples' rights, social inclusion and the rights of
persons with disabilities, environmental sustainability including addressing
climate change and combating HIV/AIDS.

4.
Particular attention shall be given to
strengthening the rule of law, improving access to justice and supporting civil
society, trade and sustainable development, access to ICTs, health and food
security, as well as promoting dialogue, participation and reconciliation, and
institution-building.

5.
In implementing this Regulation, consistency
shall be ensured with other areas of Union external action and with other
relevant Union policies. To this end, measures financed under this Regulation,
including those managed by the EIB, shall be based on the cooperation policies
set out in instruments such as agreements, declarations and action plans
between the Union and the third countries and regions concerned, and on the
Union’s decisions, specific interests, policy priorities and strategies.

6.
The Commission and the Member States shall seek
regular and frequent exchanges of information, including with other donors, and
promote better donor coordination and complementarity by working towards joint
multiannual programming, based on partner countries' poverty reduction or
equivalent strategies, by common implementation mechanisms including shared
analysis, by joint donor-wide missions and by the use of co-financing and
delegated cooperation arrangements.

7.
Within their respective spheres of competence,
the Union and the Member States shall promote a multilateral approach to global
challenges and, where appropriate, foster cooperation with international
organisations and bodies and other bilateral donors.

8.
The Union shall promote effective cooperation
with partner countries and regions in line with international best practice. It
shall increasingly align its support with partners' national or regional
development strategies, reform policies and procedures. It shall contribute to
strengthening the process of mutual accountability between partner governments
and institutions and donors and promote local expertise and local employment.
To that end, it shall promote:

(a)
a development process that is partner country or
region led and owned;

(b)
inclusive and participatory approaches to
development and a broad involvement of all segments of society in the
development process and in national and regional dialogue, including political
dialogue;

(c)
effective and innovative cooperation modalities
and instruments as set out in Article 4 of the Common Implementing Regulation ,
such as blending grants and loans and other risk-sharing mechanisms in selected
sectors and countries and private-sector engagement, in line with OECD/DAC best
practices. These modalities and instruments shall be adapted to the particular
circumstances of each partner country or region, with a focus on
programme-based approaches, on delivery of predictable aid funding, on the
mobilisation of private resources, on the development and use of country
systems and on results-based approaches to development including, where
appropriate, internationally agreed targets and indicators such as those of the
MDGs; and

(d)
improved impact of policies and programming
through coordination and harmonisation between donors to reduce overlap and
duplication, to improve complementarity and to support donor-wide initiatives.

(e)
Coordination shall take place in partner
countries and regions using agreed guidelines and best practice principles on
coordination and aid effectiveness.

9.
The Union will support inter alia the
implementation of bilateral, regional and multilateral cooperation and
dialogue, partnership agreements and triangular cooperation.

10.
The Commission shall seek regular exchanges of
information with civil society.

TITLE
III

GEOGRAPHIC
AND THEMATIC PROGRAMMES

Article 4

Implementation
of Union assistance

Consistently with the overall purpose and
scope, objectives and general principles of this Regulation, Union assistance
shall be implemented through geographic, thematic and the Pan-African
programmes and in accordance with the Common Implementing Regulation.

Article 5

Geographic
programmes

1.
Union cooperation activities under this Article
will be implemented for activities of national, regional, trans-regional and
continental nature.

2.
Without prejudice to Article 1(1)(a), a
geographic programme shall encompass cooperation in appropriate areas of
activity,

(a)
regionally with partner countries set out in
Annex I, and

(b)
bilaterally with partner countries set out in
Annex III.

3.
Geographic programmes may be drawn from the
areas of cooperation contained in the "European Consensus", amongst
others, in order to attain the objectives provided for in Article 2(1).

Common areas of cooperation and specific areas
of cooperation for each region are set out in Annex IV.

4.
Within each country programme, the Union will in
principle concentrate its assistance on three sectors.

Article 6

Thematic
programmes

Consistent with the overall purpose and
scope, objectives and general principles of this Regulation, actions undertaken
through thematic programmes shall add value to and, be complementary to,
actions funded under geographic programmes.

The following conditions shall apply to the
programming of thematic actions:

(a)
Union policy objectives under this Regulation
cannot be achieved in an appropriate or effective manner through geographic
programmes;

(b)
the actions address global initiatives
supporting internationally agreed goals, or global public goods and challenges,
in which case, by way of derogation from Article 9 of the Common Implementing Regulation,
they may include actions in Member States, candidate countries and potential
candidates and other third countries, as envisaged in the relevant thematic
programme;

and/or

(c)
the actions are of the following nature:

–
multi-regional and/or cross-cutting;

–
innovative policies and/or initiatives with the
objective of informing future actions;

–
actions in cases where there is no agreement on
the action with the partner government(s);

–
actions which reflect a Union policy priority or
an international obligation or commitment of the Union; and

–
where appropriate, actions in cases where there
is no geographic programme or where it has been suspended.

Article 7

Global
public goods and challenges

1.
The objective of Union assistance under the programme
‘Global public goods and challenges’ shall be to support actions in areas such
as the environment and climate change, sustainable energy, human development,
food security, and migration and asylum.

2.
Detailed areas of activities to be pursued by the
Union assistance under this Article are set out in Annex V.

Article 8

Civil
society organisations and local authorities

1.
The objective of the programme on civil society
organisations and local authorities in development shall be to finance
initiatives in the area of development by or for civil society organisations
and local authorities originating from partner countries, the Union, candidate
countries and potential candidates.

2.
Detailed areas of activities to be pursued by
the Union assistance under this Article, as well as an indicative list of
categories of civil society organisations and local authorities, are set out in
Annex V.

Article 9

Pan-African
programme

1.
Union assistance shall support the
implementation of the Joint Africa-EU Strategy, and in particular its
successive Action plans, to cover activities of a trans-regional, continental or
global nature.

The Pan-African programme will further promote
complementarity and consistency with other financial instruments of the Union's
external action, notably the European Development Fund and the European
Neighbourhood Instrument.

2.
Detailed areas of cooperation to be pursued by
Union assistance under this Article are set out in Annex VI.

3.
The multiannual indicative programme for the
Pan-African programme shall be drawn up on the basis of the Joint Africa-EU
Strategy and its Action plans.

TITLE
IV

PROGRAMMING
AND ALLOCATION OF FUNDS

Article 10

General
framework for programming and allocating funds

1.
For geographic programmes, multiannual
indicative programmes for partner countries and regions shall be drawn up on
the basis of a strategy document, as provided for in Article 11.

For thematic programmes, multiannual indicative
programmes shall be drawn up as provided for in Article 13.

The Commission shall adopt the implementing
measures laid down in Article 2 of the Common Implementing Regulation on the
basis of the programming documents referred to in Articles 11 and 13. In
particular circumstances, however, Union support may also take the form of measures
not covered in these documents, as provided for in the Common Implementing Regulation..

2.
The Union and its Member States shall consult
each other, and other donors and development actors including representatives
of civil society and regional and local authorities, at an early stage of the
programming process in order to promote complementarity and consistency among
their cooperation activities. This consultation may lead to joint programming
between the Union and its Member States.

3.
The Commission shall determine the multiannual
indicative allocations within each geographic programme in accordance with the
general principles of this Regulation, based on the criteria laid down in
Article 3(2), and taking into account, alongside the specificity of the
different programmes, the particular difficulties faced by countries or regions
that are in crisis, vulnerable, fragile, in conflict or disaster prone.

4.
Funds may be left unallocated. Subject to their
subsequent allocation or re-allocation as provided for in Articles 11(5) and 13,
the use of these funds shall be decided later in accordance with the Common
Implementing Regulation.

Article 11

Programming
documents for geographic programmes

1.
Strategy papers are documents drawn up by the
Union to provide a coherent framework for development cooperation between the
Union and the partner country or region concerned, consistent with the overall
purpose and scope, objectives, principles and policy of the Union.

The preparation and implementation of strategy
papers shall comply with the principles of aid effectiveness: national
ownership, partnership, coordination, harmonisation, alignment with recipient
country or regional systems, mutual accountability and results orientation as
laid down in Article 3(5) to (8).

To that end, strategy papers shall, in
principle, be based on a dialogue between the Union and the partner country or
region, involving where appropriate, the relevant Member States, and the
partner country or region, involving civil society and regional and local
authorities, so as to ensure that the country or region concerned takes
sufficient ownership of the process and to encourage support for national
development strategies, particularly those for reducing poverty.

2.
Strategy papers may be reviewed at their mid-term,
or ad hoc if necessary, in accordance, as appropriate, with the principles and
procedures laid down in the partnership and cooperation agreements concluded
with the partner countries and regions.

3.
Strategy papers shall be drawn up for the
relevant partner countries or regions, unless a joint framework document laying
down a comprehensive Union strategy, including development policy, has been drawn
up for the partner country or region concerned.

No strategy paper will be required for:

(a)
countries having a national development strategy
in the form of a national development plan or a similar development document
accepted by the Commission as a basis for the corresponding multiannual
indicative programme, when adopting of the latter document;

(b)
countries or regions for which a joint
multiannual programming document between the Union and Member States has been
agreed;

(c)
regions having a jointly agreed strategy with
the EU.

4.
Strategy papers shall not be required for the countries
or regions receiving an allocation of Union funds under this Regulation not
exceeding EUR 50 million for the 2014-2020 period.

5.
Multiannual indicative programmes shall be drawn
up for each of the countries or regions receiving an indicative allocation of
Union funds under this Regulation Except for countries or regions mentioned in paragraph
4, these documents shall be drawn up on the basis of the strategy papers or
similar documents referred to in this Article.

For the purpose of this Regulation, where it complies
with the principles and conditions established in this paragraph, including an indicative
allocation of funds, and with the procedures provided for in Article 14, the
joint multiannual programming document provided for in paragraph 3(b) may be
considered as the multiannual indicative programme.

Multiannual indicative programmes shall set out
the priority areas selected for Union financing, the specific objectives, the
expected results, the performance indicators and the indicative financial
allocation, both overall and per priority area. Where appropriate, this allocation
may be given in the form of a range and/or some funds may be left unallocated.

The multiannual indicative programmes should be
adjusted where necessary, taking into account any mid-term or ad hoc reviews of
the strategy document on which they are based.

Pursuant to the principle of mutual
accountability in the pursuit and fulfilment of agreed objectives, including
those referring to good governance, democracy and respect for human rights and
to the rule of law, indicative allocations may be increased or decreased as a
result of reviews, particularly in the light of special needs such as those
resulting from a crisis, post-crisis or fragility situation, or where performance
has been exceptional or unsatisfactory.

Article 12

Programming
for countries in crisis, post-crisis or fragility situations

1.
When drawing up the programming documents for
countries in crisis, post-crisis, or fragility situations, due account shall be
taken of the vulnerability, special needs and circumstances of the countries or
regions concerned.

Proper attention should be given to conflict
prevention, state and peace building, post-conflict reconciliation and
reconstruction measures.

Where partner countries or groups of partner
countries are directly involved in, or affected by, a crisis, post-crisis or
fragility situation, special emphasis shall be placed on stepping up
coordination between relief, rehabilitation and development to help them make
the transition from an emergency situation to the development phase. Programmes
for countries and regions in fragility or regularly subject to natural
disasters shall provide for disaster preparedness and prevention and for
managing the consequences of such disasters.

2.
In cases of crises, post crisis and fragility
situations or threats to democracy, the rule of law, human rights or
fundamental freedoms requiring a swift response by the Union, the urgency
procedure provided for in Article 15(4) of the Common Implementing Regulation may
be used to modify the document referred to in Article 11 following an ad hoc
review of the country's or region's cooperation strategy.

Such reviews may propose a specific and adapted
strategy to ensure the transition to long-term cooperation and development,
promoting a better coordination and transition between the humanitarian and
development policy instruments.

Article 13

Programming
documents for thematic programmes

1.
Multiannual indicative programmes for thematic
programmes shall set out the Union's strategy for the theme concerned, the priorities
selected for financing by the Union, the specific objectives, the expected
results, the performance indicators, the international situation and the
activities of the main partners. Where applicable, resources and intervention
priorities shall be laid down for participation in global initiatives. Multiannual
indicative programmes shall be consistent with the documents referred to in Article
11(3).

2.
The multiannual indicative programmes shall give
the indicative financial allocation, both overall and by priority area. Where
appropriate, this allocation may, be given in the form of a range, and/or some funds
may be left unallocated. Multiannual indicative programmes should be adjusted
where necessary for an effective policy implementation, taking into account any
mid-term or ad hoc reviews.

3.
The Commission and the Member States shall
consult each other, as well as other donors and development actors including
representatives of civil society and local authorities, at an early stage of
the programming process in order to promote complementarity among their
cooperation activities.

Article 14

Approval
of strategy papers and adoption of multiannual indicative programmes

1.
Strategy papers shall be approved and
multiannual indicative programmes shall be adopted by the Commission in
accordance with the examination procedure referred to in Article 15(3) of the
Common Implementing Regulation. This procedure shall also apply to substantial
reviews which have the effect of significantly modifying the strategy or its
programming.

2.
The procedure referred to in paragraph 1 shall
not apply to non-substantial modifications to strategy papers and multiannual
indicative programmes, making technical adjustments, reassigning funds within
the indicative allocations per priority area, or increasing or decreasing the
size of the initial indicative allocation by less than 20%, provided that these
modifications do not affect the priority areas and objectives set out in these
documents. In such case, adjustments shall be communicated to the European
Parliament and to the Council within one month.

3.
On duly justified imperative grounds of urgency
relating inter alia to the circumstances referred to in Article 12(2),
the Commission may modify strategy papers and multiannual indicative programmes
in accordance with the urgency procedure referred in Article 15(4) of the
Common Implementing Regulation.

TITLE
V

FINAL
PROVISIONS

Article 15

Participation
by a third country non eligible under this Regulation

In duly justified circumstances and in
order to ensure the coherence and effectiveness of Union financing or to foster
regional or trans-regional cooperation, the Commission may decide, without
prejudice to Article 2(3), to extend the eligibility of actions to countries,
territories and regions which otherwise would not be eligible for financing
pursuant to Article 1, where the action to be implemented is of a global,
regional, trans-regional or cross border nature. Notwithstanding the provisions
of Article 8(1) of the Common Implementing Regulation, natural and legal
persons from countries, territories and regions concerned may participate in the
procedures implementing such actions.

Article 16

Suspension
of assistance

Without prejudice to the provisions on
suspension of aid in partnership and cooperation agreements with partner
countries and regions, where a partner country fails to observe the principles
referred to in Article 3(1), the Union shall invite the partner country to hold
consultations in view of finding a solution acceptable to both parties, except
in cases of special urgency. Where consultations with the partner 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.

Article 17

Delegation
of powers to the Commission

The Commission shall be empowered to adopt
delegated acts in accordance with Article 18 to amend or supplement the Annexes
I to VII to this Regulation.

Article 18

Exercise
of the delegation

1.
The delegation of powers referred to in Article 17
shall be conferred for the period of validity of this Regulation.

2.
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 power specified in that decision. It
shall take effect 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.

3.
As soon as it adopts a delegated act, the
Commission shall notify it simultaneously to the European Parliament and the
Council.

4.
Except for the cases mentioned in paragraph 5, a
delegated act adopted shall enter into force only if no objection has been
expressed either by the European Parliament or the Council within a period of 2
months of notification of the 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.

5.
The non-objection period for aligning Annex I,
II and III to the decisions of the OECD/DAC reviewing the list of recipients
laid down in Article 1(a) shall be one week.

Article 19

Committee

The Commission shall be assisted by the DCI
committee. That committee shall be a committee within the meaning of Regulation
(EU) No 182/2011.

Article 20

Financial
reference amount

1.
The financial reference amount for the
implementation of this Regulation over the period 2014-2020 is EUR 23 294 700 000.

2.
The indicative minimum amounts allocated to each
programme referred to in Articles 5 to 9 for the period 2014-2020 are laid down
in Annex VII. The amounts may be reallocated between programmes by a delegated
act in accordance with Article 18. The amounts within the global public goods
and challenges programme may be reallocated between subheadings by Commission
decision which shall be communicated to the European Parliament and to the
Council within one month of its adoption.

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 21

European
External Action Service

The application of this Regulation shall be
in accordance with Council Decision 2010/427/EU, establishing the organisation
and functioning of the European External Action Service.

Article
22

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.

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

It shall
apply from 1 January 2014.

Done at Brussels,

For the European Parliament                       For
the Council

The President                                                 The
President

ANNEX I

PARTNER COUNTRIES AND REGIONS ELIGIBLE UNDER ARTICLE 1(1)(a)

Latin
America

1. Argentina

2. Bolivia

3. Brazil

4. Chile

5. Colombia

6. Costa Rica

7. Cuba

8. Ecuador

9. El Salvador

10. Guatemala

11. Honduras

12. Mexico

13. Nicaragua

14. Panama

15. Paraguay

16. Peru

17. Uruguay

18. Venezuela

Asia

19. Afghanistan

20. Bangladesh

21. Bhutan

22. Cambodia

23. China

24. India

25. Indonesia

26. Democratic
People's Republic of Korea

27. Laos

28. Malaysia

29. Maldives

30. Mongolia

31.
Myanmar/Burma

32. Nepal

33. Pakistan

34. Philippines

35. Sri Lanka

36. Thailand

37. Viet Nam

Central Asia

38. Kazakhstan

39. Kyrgyz
Republic

40. Tajikistan

41. Turkmenistan

42. Uzbekistan

Middle East

43. Iran

44. Iraq

45. Yemen

SouthAfrica

46. South
Africa

ANNEX II

OECD/DAC LIST OF ODA RECIPIENTS

Effective for reporting on 2011, 2012 and 2013 flows

ANNEX III

PARTNER COUNTRIES AND REGIONS WITH A BILATERAL COOPERATION ACCORDING TO ARTICLE 5(2)

The following partner countries benefit
from bilateral development assistance under this Regulation pursuant to Article
5(2):

1. Bolivia

2. Cuba

3. El Salvador

4. Guatemala

5. Honduras

6. Nicaragua

7. Paraguay

8. Afghanistan

9. Bangladesh

10. Bhutan

11. Cambodia

12. Democratic
People's Republic of Korea

13. Laos

14. Mongolia

15.
Myanmar/Burma

16. Nepal

17. Pakistan

18. Philippines

19. Sri Lanka

20. Viet Nam

21. Kyrgyz
Republic

22. Tajikistan

23.
Turkmenistan

24. Uzbekistan

25. Iraq

26. Yemen.

27. South
Africa

ANNEX IV

AREAS OF COOPERATION UNDER GEOGRAPHIC PROGRAMMES

A. COMMON AREAS
OF COOPERATION UNDER GEOGRAPHIC PROGRAMMES

Geographic
programmes may be drawn, inter alia, from the areas of cooperation
identified hereafter, which should not be read to equate with sectors. Priorities
will be established in accordance with the Communication from the Commission to
the European Parliament, the Council and the European Economic and Social
Committee and the Committee of the Regions "Increasing the impact of EU
Development Policy: an Agenda for Change" and with the subsequent
conclusions from the Council institutions.

I. Human rights, democracy and other key elements of good
governance

(a)          Democracy, human rights and the rule
of law;

(b)          Gender equality and the
empowerment of women;

(c)          Public sector management;

(d)          Tax policy and administration;

(e)          Corruption;

(f)           Civil society and local
authorities;

(g)          Natural resources; and

(h)          Development-security nexus.

II.
Inclusive and sustainable growth for human development

(a)          Social protection, health,
education and jobs;

(b)          Business environment, regional
integration and world markets; and

(c)          Sustainable agriculture and
energy.

III. Other areas of significance for Policy Coherence for Development

(a)          Climate change and environment;

(b)          Migration and asylum; and

(c)          Transition from humanitarian aid
and crisis response to long-term development cooperation.

B. SPECIFIC
AREAS OF COOPERATION PER REGION

European Union
assistance shall support actions and sectoral dialogues consistent with Article
5 and with the overall purpose and scope, objective and general principles of
this Regulation. Appropriate consideration shall be given to the
areas described below, reflecting jointly-agreed strategies, partnership,
cooperation and trade agreements. Priorities will be established in accordance
with the Communication "An Agenda for Change" and with the subsequent
conclusions of the Council.

Latin
America

(a)          encouraging social cohesion, in
particular social inclusion, decent work and equity, gender equality and women
empowerment;

(b)          addressing governance issues and
supporting policy reforms, in particular in the areas of social policies,
public finance management and taxation, security (including drugs, criminality
and corruption), reinforcement of good governance and public institutions (including
through innovative mechanisms for the provision of technical cooperation, e.g.
TAIEX and twinning), protection
of human rights, including the indigenous peoples' and afro-descendents’
rights, environment, fight against discrimination, and fight against
production, consumption and trafficking of drugs;

(c)          supporting various processes of
regional integration and interconnection of network infrastructures, while
ensuring complementarity with activities supported by European Investment Bank
(EIB) and other institutions;

(d)          addressing the
security-development nexus;

(e)          supporting policies in the area
of education and the development of a common Latin American higher education
area;

(f)           addressing economic
vulnerability and contributing to structural transformation by establishing a
strong partnerships around trade, investments, know-how and research,
innovation and technology, and promoting sustainable and inclusive growth in
all its dimensions, with particular attention to the challenges of migratory
flows, food security (including sustainable agriculture and fisheries), climate
change, sustainable energies and the protection and enhancement of biodiversity
and ecosystem services, including water and forests, as well as on productive
investment for more and better jobs in the green economy;

(g)          ensuring an appropriate follow up
to short term emergency measures addressing post-disaster or post-crisis
recovery implemented through other financial instruments.

Asia

(a)          encouraging social cohesion, in
particular social inclusion, decent work and equity and gender equality;

(b)          establishing inclusive
partnerships around trade, investment, aid, migration, research, innovation and
technology;

(c)          building and strengthening
legitimate, effective and accountable public institutions and bodies, through
promotion of institutional reforms (including on good governance and
anti-corruption, public financial management, taxation and public
administration reform) and legislative, administrative and regulatory reforms
in line with international standards, in particular in fragile states and
countries in conflict and post-conflict situations;

(d)          supporting an active and
organised civil society for development and fostering public private
partnerships;

(e)          supporting climate change
mitigation and adaptation, the promotion of sustainable consumption and production
as well as investments in clean technologies, sustainable energies, transport,
sustainable agriculture and fisheries, the protection of and enhancement of
biodiversity and ecosystem services, including water and forests, and decent
job creation in the green economy;

(f)           encouraging greater regional
integration and cooperation in a result-oriented way through support to
different processes of regional integration and dialogue;

(g)          contributing to preventing and
responding to health risks, including those originating at the interface
between animals, humans and their various environments;

(h)          in the context of the security
and development nexus, fighting against corruption and organised crime, production,
consumption and trafficking of drugs and against other forms of trafficking,
and supporting efficient border management and cross-border co-operation;

(i)           supporting disaster preparedness
and post disaster long term recovery, including in the field of food and
nutrition security and assistance to uprooted people.

Central
Asia

In line with
the common objectives set out in the EU Central Asia Strategy for a New
Partnership adopted in 2007:

(a)          promoting constitutional reform
and legislative, regulatory and administrative approximation with the Union,
including further democratisation and organised civil society, support for the
rule of law, good governance, taxation and strengthening of national
institutions and bodies, such as election bodies, parliaments, public
administration reform and public financial management;

(b)          promoting inclusive and sustainable
economic growth, addressing social and regional inequalities, and supporting
policies in areas such as education, research, innovation and technology, health,
decent work, sustainable energy, agriculture and rural development, fostering
SMEs, while stimulating the development of a market economy, trade and
investment, including regulatory reforms and the support for integration into
the WTO;

(c)          supporting efficient border
management and cross-border cooperation to promote sustainable economic, social
and environmental development in border regions; in the context of the security
and development nexus, fighting organized crime and all forms of trafficking,
including the fight against production and consumption of drugs as well as
negative effects thereof, including HIV/AIDS;

(d)          promoting bilateral and regional
cooperation, dialogue and integration including with countries covered by the
European Neighbourhood Instrument and other Union instruments to support policy
reforms, including through public capacity building through institution
building, technical assistance (e.g. TAIEX) , information exchange and
twinning, and by key investments through appropriate mechanisms to mobilise EU
financial resources in the education, environment and energy sectors,
water/sanitation, low emissions development/resilience to climate change
impacts, as well as improving the security and safety of international energy
supply and transport operations, interconnections, networks and their operators,
including through activities supported by the EIB.

Middle
East

(a)          addressing governance (including
in tax area), human rights and political equality issues in particular in
fragile states so as to help build legitimate, democratic, effective and
accountable public institutions and an active and organised civil society;

(b)          encouraging social cohesion, in
particular social inclusion, decent work and equity and gender equality;

(c)          promoting sustainable economic
reform and diversification, trade, the development of a market economy, productive
and sustainable investment in the main sectors (such as energy, including
renewable energy), public private partnerships, and partner countries'
integration in the WTO;

(d)          promoting regional cooperation,
dialogue and integration, including with countries covered by the European
Neighbourhood Instrument and the Gulf States covered by the Partnership
Instrument and other EU instruments inter alia by supporting integration
efforts within the region, indicatively on economy, energy, water, transportation
and refugees;

(e)          complementing resources deployed
under this instrument by coherent work and support through other EU
instruments, which may focus on wider regional integration, promoting the EU’s
interests in fields such as economy, energy, research, innovation and
technology, fighting against production, consumption and trafficking of drugs
in the context of the security and development nexus, as well as managing
migration and helping displaced persons and refugees in the context of the
development and migration nexus.

South
Africa

(a)          supporting the consolidation of a
democratic society, good governance and a state governed by the rule of law and
contributing to regional and continental stability and integration;

(b)          providing support to the
adjustment efforts triggered by the establishment of various free-trade areas;

(c)          promoting decent work, supporting
the fight against poverty, inequality and exclusion, including by addressing
the basic needs of the previously disadvantaged communities;

(d)          overcoming economic vulnerability
and achieving structural transformation with emphasis on decent employment
through sustained and inclusive economic growth, a low carbon green economy and
sustainable development in all its dimensions (including sustainable
agriculture and fisheries) and enhancement of biodiversity and ecosystem
services;

(e)          addressing sexual and gender based violence and
health issues: including HIV/AIDS and its
impacts on society.

ANNEX V

AREAS
OF ACTIVITY UNDER THEMATIC PROGRAMMES

A. PROGRAMME
ON GLOBAL PUBLIC GOODS AND CHALLENGES

In compliance
with the conditions laid down in Article 6, the Global public goods and
challenges programme aims at strengthening cooperation, exchange of knowledge
and experience and partner countries' capacities. The programme may be drawn inter
alia from the following areas of cooperation, ensuring a maximum synergy
amongst them in light of their strong interconnection:

Environment
and climate change

(a)          to contribute to the
implementation of the international environmental and climate dimension of the
EU’s 2020 vision;

(b)          working upstream in assisting
developing countries to achieve the MDGs related to the sustainable use of
natural resources and environmental sustainability;

(c)          promoting implementation of Union
initiatives and agreed commitments at international and regional level and/or
of a transboundary character particularly in the areas of climate change
through the promotion of climate resilient strategies especially adaption
strategies with biodiversity co-benefits, biodiversity and ecosystems services,
forests including FLEGT, desertification, integrated water resource management,
natural resource management, sound chemical and waste management, resource
efficiency and the green economy;

(c)          contributing to increasing the integration
and mainstreaming of climate change and environmental objectives in EU aid
cooperation through support for methodological and research work including
monitoring, reporting and verification mechanisms, ecosystem mapping,
assessment and valuation, enhancing environmental expertise and promoting
innovative actions and policy coherence;

(d)          strengthening environmental
governance and supporting international policy development, including also by
working for coherence between the environmental and the other pillars of
international governance for sustainable development, by assisting regional and
international environmental monitoring and assessment, and by promoting effective
compliance and enforcement measures for multilateral environmental agreements.

Sustainable
Energy

(a)          promoting access to secure,
affordable, clean and sustainable energy services as a key driver for poverty
eradication and inclusive growth, with a special emphasis on the use of local
energy sources;

(b)          fostering
greater use of renewable energy technologies, energy
efficiency and
promoting low emission development strategies;

(c)          promoting energy security through
e.g. diversification of sources and routes, considering price volatility
issues, emission reduction potential, improving markets and fostering energy
interconnections and trade.

Human
development

(a)          Growth, jobs and private
sector engagement

Promoting actions aiming at creating more and
better jobs, in areas such as developing the competitiveness and resilience of
local MSMEs and their integration into the global economy, assisting developing
countries to integrate into the multilateral trading system, developing the
private sector and improving the business environment, supporting the
definition and implementation of industrial innovation and technology policies
and of trade policies and agreements, supporting regional integration efforts,
promoting investment relations between the EU and partner countries and regions
and leveraging private and public investment and cooperation through innovative
financial instruments. Promoting the green economy, resource efficiency and
sustainable consumption and production processes. Promoting the use of electronic
communications as a tool to support growth across all sectors in order to
bridge the digital divide, to achieve an adequate policy and regulatory
framework in this area and promoting the development of necessary
infrastructure and the use of services and applications based on ICT.

(b)          Employment, skills, social protection
and social inclusion:

(i) Supporting high levels of productive and
decent employment notably with support for sound employment policies and
strategies, vocational training for employability relevant to labour market needs
and perspectives, working conditions including in the informal economy, promotion
of decent work, including fight against child labour, and social dialogue as
well as facilitation of labour mobility while respecting migrants' rights;

(ii) strengthening social cohesion in
particular with the setting-up/strengthening of sustainable social protection
systems including related fiscal reform;

(iii) strengthening social inclusion with
cooperation on equitable access to basic services, employment for all,
empowerment and respect of rights of specific groups, notably youth, persons
with disabilities, women and minority groups to let all population participate
and benefit from wealth creation and cultural diversity.

(c)          Gender equality and women
empowerment:

(i) Supporting country level programmes to
promote women's economic and social empowerment and political participation;

(ii) supporting national, regional and global
initiatives to promote the integration of this issue in the aid effectiveness
agenda.

(d)          Health

(i) Improving the health and well-being of
people in developing countries through increasing access to, and equitable
provision of, good quality essential public health services and more
specifically:

(ii) supporting and shaping the policy agenda
of global initiatives of direct significant benefit to partner countries,
considering result orientation, aid effectiveness and effects on health systems,
including supporting partner countries to better engage with these initiatives;

(iii) supporting specific initiatives
especially at regional and global level, which strengthen health systems and
help countries develop and implement sound, evidence-based national health
policies, and in priority areas (e.g., maternal health and sexual and
reproductive health and rights, access to family planning; global public goods
and response to global health threats).

(e)          Education, knowledge and
skills:

(i) Supporting the achievement of
internationally agreed goals in education through global initiatives and partnerships,
with special emphasis on promoting knowledge, skills and values for sustainable
and inclusive development;

(ii) promoting exchange of experience, good practice
and innovation, based on a balanced approach to the development of education
systems;

(iii) improving equal access and quality of
education, including for vulnerable groups, women and girls, and countries
furthest from achieving global targets.

Food
security and sustainable agriculture

The programme
will strengthen cooperation, exchange of knowledge and experience and partner
countries' capacities on the four pillars of food security: food availability
(production), access (including markets, safety nets and gender awareness),
utilisation (nutrition interventions in socially aware ways) and stability,
while prioritising four dimensions: smallholder agriculture, governance,
regional integration and assistance mechanisms for vulnerable populations.

(a)          Promoting the development of sustainable
smallholder agriculture through ecosystem-based, low carbon and
climate-resilient secure access to technology (including information and
communication technologies), and through extension and technical services,
rural development schemes, productive investment measures, land and natural
resource management, protection of genetic diversity, in an enabling economic
environment;

(b)          supporting environmentally and
socially aware policy making and governance of the relevant sectors, the role
of the public and non-public actors in its regulation and the use of public
goods, its organisational capacity, professional organisations and institutions;

(c)          strengthening food and nutrition security
through adequate policies, including the protection of biodiversity and
ecosystem services, climate adaption policies, information systems, crisis
prevention and management, and nutrition strategies directed to vulnerable
populations;

(d)          fostering safe and sustainable
practices throughout the food and feed supply chain.

Migration
and Asylum

(a)          Promoting migration governance at
all levels;

(b)          ensuring better management of
migratory flows in all their dimensions;

(c)          maximising the development impact
of the increased regional and global mobility of people, while promoting and
protecting the rights of migrants, through support to the formulation and
implementation of sound regional and national migration and asylum policies and
through integration of the migration dimension into other regional and national
policies;

(d)          improving a common understanding
of the migration and development nexus, including social and economic
consequences of government policies be they in migration/asylum or in other
sectors.

B. PROGRAMME
ON CIVIL SOCIETY ORGANISATIONS AND LOCAL AUTHORITIES

In line with
the reaffirmed support of the EU to democracy, human rights and good
governance, the Programme on civil society organisations and local authorities
in development will strengthen cooperation, exchange of knowledge and
experience and capacities of civil society organisations and local authorities
in partner countries in support of internationally agreed development goals.

In compliance with the conditions laid down
in Article 6, the programme shall contribute to:

(a)          an inclusive and empowered
society in partner countries through strengthened civil society organisations
and local authorities and basic services delivered to populations in need;

(b)          increased level of awareness of
the European citizens regarding development issues and mobilising active public
support in the Union, potential candidate and candidate countries for poverty
reduction and sustainable development strategies in partner countries;

(c)          increased capacity of European
and Southern civil society and local authority networks to ensure a substantive
and continued policy dialogue in the field of development.

Activities
supported by this programme will encompass:

(a)          interventions in partner
countries which support vulnerable and marginalised groups in least developed
countries by providing basic services delivered through civil society organisations
and local authorities;

(b)          capacity development of the
targeted actors complementary to support granted in the framework of the
national programme, actions aiming at:

(i) strengthen the capacity of civil society
organisations to participate effectively in the development process;

(ii) facilitate better interaction between
civil society organisations, the State and other development actors in the
context of development;

(iii) strengthen the capacity of local
authorities to participate effectively in the development process acknowledging
their particular role and specificities;

(c)          raising public awareness of
development issues and promoting formal and informal education for development
in the Union, in candidate and potential candidate countries, to anchor
development policy in European societies, to mobilise greater public support
for action against poverty and for more equitable relations between developed
and developing countries, to raise awareness of the issues and difficulties
facing developing countries and their peoples, and to promote the social
dimension of globalisation;

(d)          coordination, capacity
development and institutional strengthening of civil society and local
authority networks, within their organisations and between different types of
stakeholders active in the European public debate on development as well as
coordination, capacity development and institutional strengthening of Southern
networks of civil society organisations and local authorities and umbrella
organisations.

Civil society organisations are non-State, non-profit making actors operating on an independent
and accountable basis which include: non governmental organisations,
organisations representing indigenous peoples, organisations representing
national and/or ethnic minorities, local traders' associations and citizens'
groups, cooperatives, employers associations and trade unions (social
partners), organisations representing economic and social interests,
organisations fighting corruption and fraud and promoting good governance,
civil rights organisations and organisations combating discrimination, local
organisations (including networks) involved in decentralised regional
cooperation and integration, consumer organisations, women's and youth organisations,
environmental, teaching, cultural, research and scientific organisations,
universities, churches and religious associations and communities, the media
and any non governmental associations and independent foundations, including
independent political foundations, likely to contribute to the implementation
of the objectives of this Regulation.

Local authorities encompass a large variety of sub-national levels and branches of
government, i.e. municipalities, communities, districts, counties, provinces,
regions etc.

***

ANNEX VI

AREAS
OF ACTIVITY UNDER THE PAN-AFRICAN PROGRAMME

The Pan-African
programme shall support the objectives and general principles of the Joint
Africa-EU Strategy, in particular:

(a)          provide support for the
objectives, initiatives and activities agreed in the Joint Africa-EU Strategy and
its successive action plans, which cover inter alia the areas of: peace and
security, democratic governance and human rights, trade, regional integration
and infrastructure (including transport), MDGs, energy, climate change and
environment, migration, mobility and employment, science, information society
and space, as well as its cross-cutting issues.

(b)          provide support to other relevant
initiatives and activities agreed through the working arrangements established
under the Joint Strategy;

(c)          apply the principle of 'treating
Africa as one', and promote coherence between regional and continental levels,
focusing in particular on activities of a cross-regional, continental or global
nature, and support joint Africa-EU initiatives in the global arena.

ANNEX VII

INDICATIVE FINANCIAL ALLOCATION FOR THE PERIOD 2014-2020

(IN EUR MILLION)

Geographic
programmes       13 991.5 €

Global
public goods and challenges thematic programme   6 303.2 €

Of which:

– Environment and climate change – Sustainable Energy – Human development – Food security and sustainable agriculture – Migration and asylum || 31.8%[28] 12.7% 20.0% 28.4% 7.1%

At least 50%
of the funds, prior to the use of the markers based on OECD methodology (Rio
markers), will serve for climate action and environment-related objectives.

Civil
Society Organisations and Local Authorities thematic programme   2 000 €

Pan African
programme         1 000 €

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

Proposal for a Regulation of the European Parliament and of the
Council establishing a financing instrument for development cooperation

1.2.
Policy area(s) concerned in the ABM/ABB
structure[29][30]

Title 19: External relations

19 02: Cooperation with third countries in the area of
migration and asylum

19 09: Relations with Latin America

19 10: Relations with Asia, Central Asia and Middle East
(Iraq, Iran, Yemen)

Title 21: Development and relations with African, Caribbean and
Pacific (ACP) States

21 02: Food security

21 03: Non-State actors in development

21 04: Environment and sustainable management of natural
resources, including energy

21 05: Human and social development

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[31]

 ̈ 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 present Regulation aims at fostering sustainable and inclusive
development in partner countries and regions, with the primary aim of
eradicating poverty, and the promotion of democracy, the rule of law, good
governance and respect for human rights, as foreseen in the TEU, in Latin
America, Africa and Asia, while ensuring consistence with the Commission
Communication on the EU development policy "Increasing the impact of EU
Development Policy: An Agenda for Change".

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

This Regulation establishes the essential elements and the basis for
EU intervention. The translation of the objectives of the Regulation within the
different programmes (geographic programmes, global public goods and
challenges thematic programme, civil society organisations and local authorities
thematic programme and the Pan African programme) into specific objectives are
defined through multiannual programming and annual action programmes detailing
the activities to be carried out by the EU, including the expected results and
impact pursued by the actions in question. Specific objectives are therefore fixed
at that moment, having in mind the particularities of the action in question.

The Millennium Development Goals, or the internationally agreed
poverty alleviation goals replacing them after 2015, will provide
well-established performance indicators:

No. 1: MDG1 – End poverty and hunger

–
Halve the proportion of people whose income is
less than $1 a day

–
Achieve full and productive employment and
decent work for all, including women and young people

–
Halve the proportion of people who suffer from
hunger

No. 2: MDG2 - Universal Education

Ensure that children everywhere, boys and girls alike, will be able
to complete a full course of primary schooling.

No. 3: MDG3 – MDG3 - Gender equality

Eliminate gender disparity in primary and secondary education, and
in all levels of education.

No. 4: MDG4 – Child health

Reduce by two thirds the mortality rate of children under five.

No. 5- MDG5 - Maternal health

–
Reduce by three quarters the maternal mortality
ratio

–
Achieve, by 2015, universal access to
reproductive health

No. 6: MDG6 - Combat HIV/AIDs, malaria
and other diseases

–
Halt and begin to reverse the spread of HIV/AIDS

–
Achieve universal access to treatment for
HIV/AIDS for all those who need it

–
Halt and begin to reverse the incidence of
malaria and other major diseases

No. 7- MDG 7 - Environmental sustainability

–
Integrate the principles of sustainable
development into country policies and programmes and reverse the loss of
environmental resources

–
Reduce biodiversity loss, achieving a
significant reduction in the rate of loss

–
Halve the proportion of the population without
sustainable access to safe drinking water and basic sanitation

–
Achieve, by 2020, a significant improvement in
the lives of at least 100 million slum dwellers

No. 8 - MDG 8 – Global partnership for development

–
Develop further an open, rule-based,
predictable, non-discriminatory trading and financial system

–
Address the special needs of least developed
countries, landlocked countries and small island developing states

–
Deal comprehensively with developing countries’
debt

–
In cooperation with pharmaceutical companies,
provide access to affordable, essential drugs in developing countries

–
In cooperation with the private sector, make
available benefits of new technologies, especially Information and
Communications Technologies

ABM/ABB activity(ies) concerned

19 02 : Cooperation with third countries in the area of migration
and asylum

19 09 : Relations with Latin America

19 10 : Relations with Asia, Central Asia and Middle East (Iraq,
Iran, Yemen)

21 02 : Food security

21 03 : Non-State actors in development

21 04 : Environment and sustainable management of natural resources,
including energy

21 05 : Human and social development

1.4.3.
Expected result(s) and impact

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

This Regulation establishes the essential elements and the basis for
EU intervention. The exact actions are defined through multiannual programming
and annual action programmes detailing the activities to be carried out by the
EU, including the expected results and impact pursued by the actions in
question. Specific indicators are fixed at that moment, having in mind the
particularities of the action in question.

1.4.4.
Indicators of results and impact

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

This Regulation establishes the essential elements and the basis for
EU intervention. The exact actions are defined through multiannual programming
and annual action programmes detailing the activities to be carried out by the
EU, including the expected results and impact pursued by the actions in
question. Specific indicators are fixed at that moment, having in mind the
particularities of the action in question.

Internationally agreed targets and indicators on the MDGs and
climate change are already known. Clear benchmarks, monitoring and reporting
rules for all relevant EU policy instruments need to be established. The
disaggregation of indicators will be important in monitoring the achievement of
equitable outcomes for the most vulnerable groups in society for social
inclusion.

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

See Impact Assessment and Explanatory Memorandum.

The EU remains committed to helping developing countries to reduce
and ultimately eradicate poverty in partner countries and regions pursuant to
the objectives of development cooperation provided for in the Treaties.

1.5.2.
Added value of EU involvement

The EU is in a uniquely neutral and impartial position to deliver on
external action on behalf of and with Member States, giving enhanced
credibility in the countries where it works. The EU alone has the critical mass
to respond to global challenges, such as poverty reduction and climate change.
Thanks to its large scale and the existing network of international agreements,
it can deliver our help to the poor in some of the world's most remote areas,
both implementing aid and coordinating.

In its role as a promoter of inclusiveness and multilateralism, the
Union can do more than other international organisation.

Acting as one, Union can have greater impact and more leverage in
policy dialogue and donor cooperation.

Working with the EU is also more cost effective, with lower
administrative costs than the average.

1.5.3.
Lessons learned from similar experiences in the
past

The evaluations, Court of Auditors reports, as well as mid-term
reviews of the geographic programmes, show that progress towards several MDGs
in the developing DCI countries was achieved with DCI support. However,
pursuant to the principle of ownership it is for the beneficiary governments to
adopt and implement the necessary reforms and policies that were the driving
force of these achievements.

The new implementation modalities in the DCI, such as budget support
and sector-wide approach, have allowed for a deeper level of cooperation with
partner countries: there is a clear link between the level of policy dialogue
with beneficiary countries and the modality of delivering assistance. Also, the
new implementing modalities have rendered possible a more efficient division of
labour by allowing co-financing amongst donors.

Thematic programmes provided the Commission additional flexibility
in dealing with specific challenges and also provided a useful instrument to
complement the geographic programmes.

In a globalised environment, a mutual reinforcement of internal and
external actions is needed. The starting point is that integration, and not
duplication, must be the key word. The existing architecture was not adequate
enough to allow the Commission to intervene swiftly on a sufficient scale even
though this was critical to ensuring the effectiveness of internal EU policies.

In some cases the thematic programmes were not sufficiently flexible
to respond to recent global crises (e.g. the food price crisis, avian flu) or
to international engagements taken at the highest political level (e.g.
biodiversity and climate change). The thematic envelope therefore needs more
flexibility in order to allow for a more predictable long-term engagement in
response to global public goods and challenges, and to react to the various
shocks affecting the poorest population.

Development cooperation still remains too fragmented and
over-ambitious. Furthermore, complementarity between geographic and thematic
programmes should be strengthened.

The specific needs of countries in crisis, post-crisis and fragile
situations were not sufficiently taken into account and the rigidity of the
decision-making process for fund-allocation, programming and implementation
made it difficult for the EU to swiftly respond to a rapidly evolving situation.

The DCI had indicative allocations per region, without keeping any
unallocated envelope, thus leaving limited possibility to mobilise resources to
respond to unforeseen needs.

Finally, the current programming and implementation process foreseen
for the DCI is too complex, does not permit the alignment of the EU programming
cycle to those of its partners, and also does not sufficiently facilitates
joint programming with Member States. Also, there is no clear legal framework
for using innovative instruments being used by other donors, such as blending
and use of private-public partnerships.

1.5.4.
Coherence and possible synergy with other
relevant instruments

The revised instrument is an integral part of the overall
architecture of external action financial instruments which will be organised
around four main chapters: a policy-based chapter aiming primarily at
cooperation with partner countries within and outside the budget; working on
cross-cutting priorities and values; humanitarian assistance and civil protection;
and crisis management.

Moreover for every country, development cooperation will be
complementary to the new “Partnership Instrument”. Interaction between the DCI,
EDF and the ENPI will be particularly strong under the DCI thematic envelope
for civil society/local authorities and thematic envelope for global goods and
challenges, since these envelopes will cover and/or complement actions in the
geographical zones covered by these respective instruments in the field of:
support to civil society and local authorities, climate change, energy, food
security, human development and migration.

Interaction with the Trade policy, in particular GSP/GSP plus and
Everything But Arms schemes, but also trade agreements will remain particularly
important with Aid for Trade / Trade Related Assistance actions funded under
DCI, both at bilateral and regional level.

In a globalised environment different internal EU policies (such as
environment, climate change, employment (including decent work), gender
equality, energy, water, transport, justice and security, research, information
society, immigration, fisheries) are increasingly becoming part of the EU's
external action, and in line with the EU 2020 agenda and the Lisbon Treaty a
mutual reinforcement of internal and external actions is needed. The starting
point is that integration, and not duplication, must be the key priority. The
main arguments are: i) coherence of our external action; ii) aid effectiveness,
notably the commitment to reduce the number of actors and programmes; and iii)
maximising synergies between policy objectives.

1.6.
Duration and financial impact

x Proposal/initiative of limited
duration

–
 ̈  Proposal/initiative

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

–
x Proposal/initiative of unlimited
duration in effect from 01/01/2014

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

–
followed by full-scale operation.

1.7.
Management mode(s) envisaged[32]

x Centralised direct management by the Commission

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

–
x executive agencies

–
x bodies set up by the Communities[33]

–
x 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

 ̈ Shared management with the Member States

x Decentralised management with third countries

x Joint management with international organisations (to be specified)

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

Comments

The actions
to be financed under this Regulation will be implemented under direct
centralised management by the Commission from Headquarters and/or through the
devolved Union Delegations and under any other management method foreseen by
the Financial Regulation in order to better achieve the objectives of the
Regulation.

Joint
management may be foreseen, where appropriate, for specific actions with UN
agencies and bodies, European or international financial institutions such as
the European Investment Bank, the European Bank for Reconstruction and
Development, the World Bank or the African Development Bank, and other
international organisations active in the field of development.

2.
MANAGEMENT MEASURES
2.1.
Monitoring and reporting rules

Specify frequency
and conditions.

The
European Commission's Monitoring and Evaluation systems are increasingly
focussed on results. They involve internal staff as well as external expertise.

Task
Managers in Delegations and 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 corrective action.

External,
independent experts are contracted to assess the performance of EU external
actions through three different 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
all use the internationally-recognised OECD-DAC evaluation criteria including
(potential) impact.

Firstly,
at the project level, the Headquarters-managed Results Oriented Monitoring
(ROM) system provides a brief, 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.

Project-level
evaluations, which are managed by the EU Delegation in charge of the project,
deliver a more detailed, in depth analysis and help project managers to improve
ongoing interventions and prepare future ones. External, independent experts
with thematic and geographic expertise are hired to conduct the analysis and
gather feedback and evidence from all stakeholders, not least the final
beneficiaries.

The
Commission also conducts strategic evaluations of its policies, from
programming and strategy to the implementation of interventions in a specific
sector (such as health, education etc), in a country or region, or of a
specific instrument. These evaluations are an important input to the
formulation of policies and the design of instruments and projects. These
evaluations are all published on the Commission's website and a summary of the
findings is included in the Annual Report to the Council and the European
Parliament.

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

Risk environment

The operational environment of aid under this instrument is
characterised by the following risks of not achieving the instrument's
objectives, suboptimal financial management and/or of not complying with the
applicable rules (legality and regularity errors):

–
economic/political instability and/or natural
disaster may lead to difficulties and delays in the design and implementation
of interventions, particularly in fragile states;

–
a lack of institutional and administrative
capacity in partner countries may lead to difficulties and delays in the design
and implementation of interventions;

–
geographically dispersed projects and programmes
(covering approximately many states/territories/regions) may pose
logistical/resource challenges to monitoring - particularly any 'on-the-spot'
follow-up of activities;

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

–
poor quality and quantity of available data on
the outcomes and impact of external aid / national development plan
implementation in partner countries may hinder the Commission's ability to
report on and be accountable for results;

Expected level of risk of non-compliance with applicable rules

The compliance objective for the instrument is to maintain the
historic level of risk of non-compliance (error rate) for EuropeAid portfolio
which is a residual 'net' level of error (on a multi-annual basis after all
planned controls and corrections have been executed on closed contracts) of
less than 2%. This has traditionally implied an estimated error range of 2-5%
in terms of an annual randomised sample of transactions undertaken by the
European Court of Auditors for the purposes of the annual Statement of
Assurance (DAS). EuropeAidconsiders this to be the lowest risk of non
compliance achievable in relation to its high risk environment and taking into
account the administrative burden and necessary cost effectiveness of
compliance controls.

2.2.2.
Control method(s) envisaged

EuropeAid Internal Control architecture

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

Effectiveness and efficiency

To ensure the effectiveness and efficiency of its operations (and to
mitigate the high level of risk in its external aid 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, EuropeAid will continue to have a tailored aid
management framework in operation under all its instruments which will include:

–
A devolved management of the majority of
external aid by EU delegations in the field.

–
Clear and formalised lines of financial
accountability (from the Delegated Authorising officer (Director General)) by
means of a subdelegation from the Subdelegated Authorising Officer (Director)
at HQ to the Head of Delegation;

–
Regular reporting from EU Delegations to HQ
(External Assistance Management Reports) including an annual Statement of
Assurance by the Head of Delegation;

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

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

–
Regular 'verification' visits to 'devolved'
delegations every 3 to 6 years;

–
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.

Financial Reporting and Accounting

EuropeAid will continue to pursue the highest standards of
accounting and financial reporting 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, compliance control methods are set out in section 2.3
(measures to prevent fraud and irregularities)

2.3.
Measures to prevent fraud and irregularities

Specify existing or
envisaged prevention and protection measures.

Given the high risk environment in which EuropeAid operates, its
systems need to anticipate a significant occurrence of potential compliance
errors (irregularities) in transactions and build in a high level of
prevention, detection and correction controls as early as possible in the
payment process. This means in practice that EuropeAid's compliance controls
will place most reliance on significant ex-ante checks on a multi-annual basis
by both external auditors and Commission staff in the field before final
project payments (while still executing some ex-post audits and checks), going
well beyond the financial safeguards required by the Financial Regulation. EuropeAid's
compliance framework is made up inter alia of the following significant
components:

Preventative measures

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

- Provision of guidance (including via internet) including the
Practical Guide to Contracts, the EuropeAid Companion and the Financial
Management Toolkit (for implementing partners);

- Ex-ante 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 under under joint and decentralised
management);

- Ex-ante screening of the anti-fraud mechanisms available in the
partner 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);

- The Commission signed the International Aid Transparency
Initiative (IATI) in Accra in 2008, agreeing on a standard for aid transparency
which ensures more timely, detailed and regular data on aid flows and
documents.

- The Commission implements since 14 October 2011 the first phase of
the IATI standard for publishing aid information transparency before the
next High Level Forum on aid effectiveness in Busan in November 2011. In
addition, the Commission will work in cooperation with the EU Member States on
a joint web-based IT application called TR-AID which transforms the EU aid data
provided through the IATI and other sources into user-friendly aid information.

Detective and corrective measures

- External audits and verifications (both mandatory and risk based)
including the European Court of Auditors;

- Retrospective checks (on a risk basis) and recoveries;

- Suspension of EU funding where there is a serious fraud case,
including large scale corruption, until the authorities have taken appropriate
action with a view to correcting and preventing such fraud in the future

EuropeAid will further devise its anti-fraud strategy in line with
the Commission's new anti-fraud strategy (CAFS) adopted on 24 June 2011 in
order to ensure inter alia that:

- EuropeAid's internal anti-fraud related controls are fully aligned
with the CAFS;

- EuropeAid's fraud risk management approach is geared to identify
fraud risk areas and adequate responses;

- The systems used for spending EU funds in third countries enable
relevant data to be retrieved with a view to feeding this data into fraud risk
management (e.g. double funding);

- Where necessary, networking groups and adequate IT tools dedicated
to analysing fraud cases related to the external aid sector could be set up.

2.4.
Estimate of the costs and benefits of the
controls

For the EuropeAid portfolio as a whole, internal control /
management costs total an estimated annual average of € 658 million in
commitments in the 2014-2020 budget planning. This figure includes the
management of the EDF which operates in an integrated way within the management
structure of EuropeAid. These 'non operational' costs represent approximately 6,4
% of the estimated annual average of € 10.2 billion planned for the
overall (operational + administrative) commitments by DEVCO on its expenditure
portfolio financed by the General Budget of the EU and the European Development
Fund for the period 2014-2020.

These management costs take into account all EuropeAid staff at HQ
and in Delegations, infrastructure, travel, training, monitoring, evaluation
and audit contracts (including those launched by beneficiaries).

EuropeAid plans to reduce the management / operational activities
ratio over time under the improved and simplified arrangements of the new
instruments, building on changes likely to come in under the revised Financial
Regulation. The key benefits of these management costs are realised in terms of
meeting policy objectives, efficient and effective use of resources, and the
exercise of robust cost-effective preventative measures and other checks to
ensure the legal and regular use of funds.

While improvements in the nature and targeting of management activities
and compliance checks in relation to the portfolio will continue to be pursued,
these costs are globally necessary to effectively and efficiently achieve the
objectives of the instruments at a minimal risk of non compliance (below 2%
residual error). They are significantly less than risks involved in removing or
scaling back internal controls in this high risk area.

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

Heading IV Global Europe || DA/NDA ([34]) || from EFTA[35] countries || from candidate countries[36] || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation

19 || 19 01 04 Administrative expenditure of ‘External relations’ policy area DCI || DNA || NO || NO || NO || NO

19 || 19 02: Cooperation with third countries in the area of migration and asylum || DA || NO || NO || NO || NO

19 || 19 09: Relations with Latin America || DA || NO || NO || NO || NO

19 || 19 10: Relations with Asia, Central Asia and Middle East (Iraq, Iran, Yemen) || DA || NO || NO || NO || NO

19 || 19 11: Policy strategy and coordination for the ‘External relations’ policy area || DA || NO || NO || NO || NO

21 || 21 01 04 Administrative expenditure of ‘Development and relations with ACP States’ policy area || DNA || NO || NO || NO || NO

21 || 21 02: Food security || DA || NO || NO || NO || NO

21 || 21 03: Non-State actors in development || DA || NO || NO || NO || NO

21 || 21 04: Environment and sustainable management of natural resources, including energy || DA || NO || NO || NO || NO

21 || 21 05: Human and social development || DA || NO || NO || NO || NO

· New budget lines requested [37]

In order of multiannual financial framework
headings and budget lines.

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

Number [Heading............................................] || Diff./non-diff. || from EFTA countries || From candidate countries || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation

|| [XX.YY.YY.YY] || || YES/NO || YES/NO || YES/NO || YES/NO

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 || Number ||

DG: DEVCO || || || Year N[38] 2014 || Year N+1 2015 || Year N+2 2016 || Year N+3 2017 || Year N+4 2018 || Year N+5 2019 || Year N+6 2020 || TOTAL

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

Development Cooperation Instrument (19.02, 19.09, 19.10, 21.02, 21.03, 21.04, 21.05, 21.06) || Commitments || (1) || 2.606,815 || 2.788,125 || 2.980,045 || 3.182,977 || 3.390,185 || 3.614,782 || 3.846,274 || 22.409,105

Payments || (2) || 411,383 || 579,190 || 1.206,218 || 1.765,760 || 2.383,491 || 3.257,677 || 12.805,385 || 22.409,105

Appropriations of an administrative nature financed from the envelop of specific programs[39] || || || || || || || ||

Number of budget line 19.0104 01 and 21.010401 || || (3) || 109,885 || 114,975 || 120,254 || 125,723 || 135,115 || 136,918 || 142,726 || 885,595

TOTAL appropriations for DG DEVCO || Commitments || =1+3 || 2.716,700 || 2.903,100 || 3.100,300 || 3.308,700 || 3.525,300 || 3.751,700 || 3.989,000 || 23.294,700

Payments || =2+3 || 521,268 || 694,165 || 1.326,472 || 1.891,483 || 2.518,606 || 3.394,595 || 12.948,111 || 23.294,700

Ÿ TOTAL operational appropriations || Commitments || (4) || 2.606,815 || 2.788,125 || 2.980,045 || 3.182,977 || 3.390,185 || 3.614,782 || 3.846,274 || 22.409,105

Payments || (5) || 411,383 || 579,190 || 1.206,218 || 1.765,760 || 2.383,491 || 3.257,677 || 12.805,385 || 22.409,105

Ÿ TOTAL appropriations of an administrative nature financed from the envelop of specific programs || (6) || 109,885 || 114,975 || 120,254 || 125,723 || 135,115 || 136,918 || 142,726 || 885,595

TOTAL appropriations under HEADING <4> of the multiannual financial framework || Commitments || =4+ 6 || 2.716,700 || 2.903,100 || 3.100,300 || 3.308,700 || 3.525,300 || 3.751,700 || 3.989,000 || 23.294,700

Payments || =5+ 6 || 521,268 || 694,165 || 1.326,472 || 1.891,483 || 2.518,606 || 3.394,595 || 12.948,111 || 23.294,700

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

EUR million (to 3 decimal places)

|| || || Year N 2014 || Year N+1 2015 || Year N+2 2016 || Year N+3 2017 || Year N+4 2018 || Year N+5 2019 || Year N+6 2020 || TOTAL

DG: DEVCO ||

Ÿ Human resources || 85,041 || 84,182 || 83,329 || 82,480 || 82,480 || 82,480 || 82,480 || 582,473

Ÿ Other administrative expenditure || 3,909 || 3,818 || 3,781 || 3,755 || 3,755 || 3,755 || 3,755 || 26,528

TOTAL DG DEVCO || Appropriations || 88,950 || 88,000 || 87,110 || 86,235 || 86,235 || 86,235 || 86,235 || 609,001

TOTAL appropriations under HEADING 5 of the multiannual financial framework || (Total commitments = Total payments) || 88,950 || 88,000 || 87,110 || 86,235 || 86,235 || 86,235 || 86,235 || 609,001

EUR million (to 3 decimal places)

|| || || Year N 2014 || Year N+1 2015 || Year N+2 2016 || Year N+3 2017 || Year N+4 2018 || Year N+5 2019 || Year N+6 2020 || TOTAL

TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || 2.805,650 || 2.991,100 || 3.187,410 || 3.394,935 || 3.611,535 || 3.837,935 || 4.075,235 || 23.903,701

Payments || 610,218 || 782,165 || 1.413,582 || 1.977,718 || 2.604,841 || 3.480,830 || 13.034,346 || 23.903,701

3.2.2.
Estimated impact on operational appropriations

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

–
ý  The proposal/initiative requires the use of operational appropriations,
as explained below:

Commitment appropriations in EUR million (to 3 decimal
places)

Indicate objectives and outputs ò || || || Year N || Year N+1 || Year N+2 || Year N+3 || Year N+4 to N+7 || TOTAL

OUTPUTS

|| || || Cost || Cost || Cost || Cost || Cost || Cost || Total cost

Geographic Programmes[40]... || || || || || || || || .

Sub-total || 1 631,732 || 1 743,689 || 1 862,134 || 1 987,305 || 2 117,402 || 2 253,384 || 2 395,938 || 13 991,50

Global public goods and challenges thematic programme... || || || || || || || || || || || || || || || ||

Sub-total || 735,099 || 785,536 || 838,895 || 895,285 || 953,894 || 1 015,154 || 1 079,375 || 6 303,20

Civil society organisations and local authorities thematic programme... || || || || || || || || || || || || || || || ||

Sub-total || 233,246 || 249,250 || 266,181 || 284,073 || 302,670 || 322,108 || 342,485 || 2 000,00

Pan African programme || || || || || || || || || || || || || || || ||

Sub-total || 116,623 || 124,625 || 133,090 || 142,037 || 150,335 || 161,054 || 171,242 || 1 000,00

TOTAL COST || 2 716,700 || 2 903,100 || 3 100,300 || 3 308,700 || 3 525,300 || 3 751,700 || 3 989,000 || 23 294.,70

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:

EUR million (to 3
decimal places)

|| Year N [41] 2014 || Year N+1 2015 || Year N+2 2016 || Year N+3 2107 || Year N+4 2018 || Year N+5 2019 || Year N+6 2020 || TOTAL

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

Human resources || 85,041 || 84,182 || 83,329 || 82,480 || 82,480 || 82,480 || 82,480 || 582,473

Other administrative expenditure || 3,909 || 3,818 || 3,781 || 3,755 || 3,755 || 3,755 || 3,755 || 26,528

Subtotal HEADING 5 of the multiannual financial framework || 88,950 || 88,000 || 87,110 || 86,235 || 86,235 || 86,235 || 86,235 || 609,001

Outside HEADING 5[42] of the multiannual financial framework || || || || || || || ||

Human resources || 97,417 || 101,668 || 106,059 || 110,589 || 115,154 || 119,788 || 124,527 || 775,203

Other expenditure of an administrative nature || 12,467 || 13,307 || 14,195 || 15,134 || 19,961 || 17,129 || 18,199 || 110,392

Subtotal outside HEADING 5 of the multiannual financial framework || 109,885 || 114,975 || 120,254 || 125,723 || 135,115 || 136,918 || 142,726 || 885,595

TOTAL || 198,835 || 202,976 || 207,364 || 211,958 || 221,350 || 223,152 || 228,961 || 1.494,596

3.2.3.2.
 Estimated requirements of human resources

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

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

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

|| || Year N || Year N+1 || Year N+2 || Year N+3 || Year N+4 2018 || Year N+5 2019 || Year N+6 2020

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

|| XX 01 01 01 (Headquarters and Commission’s Representation Offices) || 357,2 || 353,6 || 350,1 || 346,6 || 346,6 || 346,6 || 346,6

|| XX 01 01 02 (Delegations) || 157,8 || 156,2 || 154,6 || 153,0 || 153,0 || 153,0 || 153,0

|| XX 01 05 01 (Indirect research) || || || || || || ||

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

|| Ÿ External personnel (in Full Time Equivalent unit: FTE)[43] ||

|| XX 01 02 01 (CA, INT, SNE from the "global envelope") || 24,1 || 23,9 || 23,6 || 23,4 || 23,4 || 23,4 || 23,4

|| XX 01 02 02 (CA, INT, JED, LA and SNE in the delegations) || || || || || || ||

|| XX 01 04 yy [44] || - at Headquarters[45] || 146,3 || 143,5 || 140,6 || 137,9 || 135,2 || 132,5 || 129,9

|| - in delegations || 985,7 || 1032,7 || 1081,2 || 1131,2 || 1181,7 || 1232,9 || 1285,3

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

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

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

|| TOTAL || 1.671,1 || 1.709,8 || 1.750,1 || 1.792,1 || 1.839,8 || 1.888,4 || 1.938,1

XX is the
policy area or budget title concerned.

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 ||

External personnel ||

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[46].

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[47]

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]               EDF,
Global Climate and Biodiversity Fund and Emergency Aid Reserve are additional
to this and remain outside the EU budget..

[2]               Sustainable
energy-related activities will be one of the key areas for climate change
expenditure. Likewise, in view of a key role of healthy ecosystem services for
food production, biodiversity, especially when also contributing to climate
resilience, will be one of the key areas under food security and sustainable
agriculture.

[3]               OJ
L ...

[4]               “The
Union’s development cooperation policy and that of the Member States complement
and reinforce each other” (Article 208).

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

[6]               Regulation
(EU) No 182/2011

[7]               Council
Decision (EU) 2010/427

[8]               OJ
L 378, 27.12.2006, p. 41-71

[9]               United
Nations' Millennium Declaration, Resolution adopted by the General Assembly, 18
September 2000.

[10]             Joint
declaration by the Council and the representatives of the governments of the
Member States meeting within the Council, the European Parliament and the
Commission on the development policy of the European Union entitled "The
European Consensus", OJ C 46, 24.2.2006, p. 1.

[11]             Communication
of 13 October 2011, not yet published in the OJ.

[12]             Communication
of 13 October 2011, not yet published in the OJ.

[13]             Council
Conclusions of 15 May 2007 on "EU Code of Conduct on Complementarity and
Division of Labour in Development Policy" (doc. 9558/07).

[14]             Council
Conclusions of 17 November 2009 on an Operational Framework on Aid
Effectiveness (doc. 15912/09), enlarged and consolidated 11 January 2011 (doc.
18239/10).

[15]             THE
AFRICA-EU STRATEGIC PARTNERSHIP A Joint Africa-EU Strategy, adopted at the
Lisbon Summit, 9 December 2007.

[16]             Security and Development - Conclusions of the Council and the
Representatives of the Governments of the Member States meeting within the
Council of 20 November 2007 (doc.15097/07).

[17]             An
EU response to situations of fragility - Conclusions of the Council and the
Representatives of the Governments of the Member States meeting within the
Council of 20 November 2007 (doc. 11518/07).

[18]             Council
conclusions on conflict prevention, 3101st Foreign Affairs Council meeting, Luxembourg,
20 June 2011.

[19]             COM(2010)
2020 final

[20]             COM(2011)
500 final

[21]             COM(2011)
637 final

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

[23]             OJ
L....

[24]             OJ
L 201, 3.8.2010, p. 30

[25]             OJ
L ...

[26]             OJ
L 314 of 30.11.2001, p. 1.

[27]             OJ
L 163, 2.7.1996, p. 1.

[28]             In
principle, funds would be evenly allocated between environment and climate
change.

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

[30]             DEVCO will request a modification of the Policy Areas in parallel
for the 2014 budgetary exercise.

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

[32]             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

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

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

[35]             EFTA:
European Free Trade Association.

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

[37]             To be filled in at a later stage

[38]             Year
N is the year in which implementation of the proposal/initiative starts.

[39]             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.

[40]             As
described in Section 1.4.2. "Specific objective(s) – Only the different
programmes of the Regulation are included in the table..."

[41]             Year
N is the year in which implementation of the proposal/initiative starts.

[42]             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.

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

[44]             Under the ceiling for external personnel from operational appropriations (former "BA"
lines).

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

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

[47]             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.