2002R2304 — EN — 21.12.2002 — 000.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COMMISSIONREGULATION(EC)No2304/2002
of20December 2002
implementingCouncilDecision2001/822/EContheassociationoftheoverseascountriesandterri-
torieswiththeEuropeanCommunity('Overseas AssociationDecision')
(OJ L 348, 21.12.2002, p. 82)
Corrected by:
►C1Corrigendum, OJ L 8, 14.1.2003, p. 46 (2304/2002/EC)
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COMMISSIONREGULATION(EC)No2304/2002
of20December 2002
implementing Council Decision 2001/822/EC on the association of
the overseas countries and territories with the European Commu-
nity('Overseas AssociationDecision')
THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Community,
Having regard to Council Decision 2001/822/EC (1), and in particular
Article 23 thereof,
Having regard to the Internal Agreement between Representatives of
the Governments of the Member States, meeting within the Council,on the Financing and Administration of Community Aid under theFinancial Protocol to the PartnershipAgreement between the African,
Caribbean and Pacific States and the European Community and its
Member States signed in Cotonou (Benin) on 23 June 2000 and theallocation of financial assistance for the Overseas Countries and Terri-tories to which Part Four of the EC Treaty applies (
2),
Having regard to the Council Regulation on a Financial Regulation for
the European Development Fund(3) (EDF Financial Regulation),
Whereas:
(1)Decision 2001/822/EC (Overseas Association Decision) requires
the Commission to adopt implementing provisions concerningPart III and Annexes II(A) to (D) in cooperation with the over-
seas countries and territories (OCT) within the framework of the
partnership procedure. In particular, Article 4 lays down thatOCT shall have primary responsibility for the preparation ofSingle Programming Documents (SPD) and cooperationprogrammes.
(2)The provisions adopted by the Commission pursuant to Article
23 of the Overseas Association Decision should be consistent
with the principles of sound financial management, partnership,complementarity and subsidiarity and ensure ownership by theOCT of the development process as well as adequate monitoringand auditing by the OCT themselves and the Commission.
(3)Taking into account the specific needs, capabilities andconstraints of the OCT, financial assistance should be granted
to the OCT as budgetary support, provided the OCT manage-
ment of public expenditure presents sufficient transparency,accountability and effectiveness. In addition, the public procure-ment procedures there should satisfy to the standards of the EDFFinancial Regulation as to transparency and openness. Alterna-tively to budgetary support, financial assistance may be
provided as support for projects or programmes when this is
deemed to ensure a more effective or safer implementation.
(4)Provisions should be established for the preparation of the SPD,its follow-up, audit, evaluation, review and implementation, aswell as for reporting and financial corrections. Such provisionsshould cover the participation of the Commission in those activ-ities. Subject to any necessary adaptation to the specific OCT
situation, they should be consistent with the corresponding ones
in the context of structural funds, in order to enhance and facil-itate the effectiveness of the Commission participation.
(5)In order to facilitate regional cooperation and integrationbetween the OCT and the ACP countries, identical rules shouldin principle apply. However, taking into account the geogra-phical situation of certain OCT, which in practice cannot2002R2304 — EN — 21.12.2002 — 000.001 — 2
(1) OJ L 314, 30.11.2001, p. 1.
(2) OJ L 317, 15.12.2002, p. 355.
(3) Not yet published — COM (2002)290 final, 11.06.2002.
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establish close cooperation with ACP countries or other OCT,
the possibility should also be provided for regional funds to beallocated at the request of only one OCT.
(6)The measures provided for in this Regulation have been subject
to consultation with the OCTs.
(7)The measures provided for in this Regulation are in accordance
with the opinion of the EDF-OCT Committee established byArticle 24 of the Overseas Association Decision,
HAS ADOPTED THIS REGULATION:
PART 1
SUBJECTMATTERANDPRINCIPLES
Article 1
Subjectmatter
This Regulation lays down the procedures for the programming, imple-
mentation and control of the Community financial assistance to the
OCT managed by the Commission under the Ninth European Develop-
ment Fund (EDF), in accordance with the provisions of the OverseasAssociation Decision and the EDF Financial Regulation.
Article 2
Complementarityandpartnership
1. The programming, implementing, monitoring and evaluation of
EDF support shall be carried out in close consultation between the
OCT, the Member States concerned and the Commission.
2. The OCT shall ensure that all the actors of cooperation listed in
Article 5(1), second and third indent of the Overseas Association Deci-
sion are adequately consulted during the programming process.
3. The OCT, the Member States concerned and the Commission
shall promote coordination and consistency between both measuresundertaken pursuant to this Regulation, measures undertaken with
contributions from the Community budget, and operations undertaken
by the European Investment Bank, other international institutions andthe Member States concerned.
PART II
PROGRAMMABLEANDNON-PROGRAMMABLEAID
CHAPTER 1
Programmable aid
Article 3
Territorial programming
Operations financed by non-repayable aid within the framework of the
Overseas Association Decision shall be programmed as soon aspossible after the entry into force of this Regulation by means of theadoption of a Single Programming Document (SPD) following the
model in the Annex to the present Regulation.
Article 4
PreparationoftheSPD
1. The competent OCT authorities shall prepare a proposal for the
SPD following consultations with the widest possible range of stake-holders in the development process, and shall draw on lessons learnedand best practices.2002R2304 — EN — 21.12.2002 — 000.001 — 3
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Each proposal for a SPD shall be adapted to the needs and respond to
the specific circumstances of each OCT. It shall prioritise activities andbuild local ownership of cooperation programmes.
The proposal shall be submitted to the Commission not later than 12
months after the entry into force of this Regulation.
2. The proposal for the draft SPD shall be the subject of an
exchange of views between the OCT and Member State concernedand the Commission, via, if applicable, the relevant Delegation.
The OCT shall provide all the necessary information, including the
results of any feasibility studies, to make the appraisal of the draftSPD by the Commission as effective as possible.
3. The OCT authorities shall, in particular, indicate to the Commis-
sion at the earliest possible stage whether they require that EDFfinancial allocation be provided as budgetary support.
Any divergences between the country's own analysis and the Commu-
nity's shall be noted.
Article 5
Commission'sappraisaloftheSPD
The Commission shall appraise the proposal for the SPD to determine
whether it contains all the elements required and is consistent with theaims of the Overseas Association Decision, this Regulation and the
relevant Community policies. It shall inform the European Investment
Bank on the draft received.
In particular, the Commission shall decide whether EDF financial assis-
tance is to be granted by means of budgetary support, subject to a
preliminary assessment of the transparency, accountability and effec-tiveness of public expenditure management and of the openness andtransparency of public procurement in accordance with the standardsset out in the EDF Financial Regulation, or as support for programmesor projects.
Article 6
Regionalprogrammes
1. The financial support for regional cooperation and integration laid
down in Article 1(1)(a)(ii) of Annex II(A) to the Overseas Association
Decision shall be allocated on the basis of programme proposals
submitted by one or more OCT in accordance with Article 16 of the‘Overseas Association’ Decision.
2. Proposals shall be the result of an exchange of views between the
Commission and the OCT Territorial Authorising Officers appointed inaccordance with Article 14 of this Regulation or their representatives,including, where appropriate, consultation with eligible non-Stateactors.
They shall be submitted to the Commission by 30 September 2003.In its assessment of the proposals, the Commission shall take particular
account of the anticipated impact on the integration of the beneficiaryOCT within the region to which they belong. Commitment of expendi-ture shall be preceded by a Commission financing decision coveringsupport for projects and programmes.
3. Where any balance remains after the first allocation, additional
proposals may be submitted twice a year, except in cases of particularurgency, and for the first time by 31 December 2003 and 30 June 2004
respectively.
4. In order to achieve an adequate scale and to increase efficiency,
regional and territorial funds may be mixed for financing regional
programmes with a distinct territorial component.
5. Articles 8 and 16 to 30 apply to regional programmes mutatis
mutandis.2002R2304 — EN — 21.12.2002 — 000.001 — 4
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CHAPTER 2
Non-programmable aid
Article 7
Useofthereserve 'C'
1. The Commission shall allocate the resources from the reserve 'C'
for the purposes referred to in Article 3(3)(b) or (c) of Annex II(A) to
the Overseas Association Decision on the basis of the mid-term review
referred to in Article 22 of this Regulation, or, in the case of Green-land, the mid-term review referred to in Article 3(2) of Annex II tothe Overseas Association Decision. The Commission shall adjust theindicative allocations in Article 3(4) of Annex II(A) to the OverseasAssociation Decision accordingly and inform the OCTs and the
Member States of its decision regarding the new allocations.
2. For the purposes of committing the resources laid down in Article
28 and Annex II D of the Overseas Association Decision, any OCTwhich considers itself to be eligible for the support laid down thereinshall submit a complete request on the forms made available by theCommission and include all the information needed for it to be
assessed.
The request shall be submitted to the Commission at the latest by 30
April of the year following the year for which the additional supportis required.
The Commission shall inform the OCT within the shortest possible
time of its decision.
PART III
IMPLEMENTATION
CHAPTER 1
Financial procedures
Article 8
Commitments
1. Expenditure on financial assistance for the OCT shall be
committed by the Commission in accordance with the EDF FinancialRegulation.
2. Within the scope of the SPD, commitment of expenditure shall be
preceded by a Commission financing decision covering budgetary
support or support for projects and programmes.
3. Outside the scope of the SPD, expenditure related to the non-allo-
cated reserve ‘C’ set aside in accordance with Article 3(3) of AnnexII(A) to the Overseas Association Decision shall be committed by theCommission and implemented in accordance with Article 15 and 54 ofthe EDF Financial Regulation.
Article 9
Payingagents
The financial institutions in the OCT with which the Commission
opens accounts in accordance with Part I, Title III, Chapter 3, Section
4 of the EDF Financial Regulation for the purposes of implementing
cooperation with the OCT shall exercise the functions of ‘PayingAgents’.
Interest shall be payable on funds deposited with Paying Agents in the
Community.
The Paying Agents shall receive no remuneration for their services and
no interest shall be payable on deposited funds.2002R2304 — EN — 21.12.2002 — 000.001 — 5
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CHAPTER 2
Contracts
Article 10
General regulationsforcontracts
1. The procedures governing the award of contracts shall be indi-
cated in the financing agreements.
2. Where financial assistance is granted by means of budgetary
support, the procedures for public procurement of the OCT in questionshall apply.
3. In all other cases, award of contract shall follow the provisions
laid down in Article 75 (1)(1) of the EDF Financial Regulation.
Article 11
Taxandcustomsarrangements
1. OCT shall apply for contracts implementing programmes or
projects financed by EDF tax and customs arrangements no lessfavourable than the arrangements they apply to the most favoured
States or international development organisations with which they
have relations. For the purposes of determining the most-favoured-nation (MFN) treatment, account shall not be taken of arrangementsapplied by the OCT concerned to other OCT or ACP States, or to otherdeveloping countries.
2. Subject to paragraph 1, the following shall apply to contracts
financed by the Community:
(a) the contract shall not be subject in the beneficiary OCT to stampor
registration duties or to fiscal charges having equivalent effect,
whether such charges already exist or are to be instituted in the
future; however, such contracts shall be registered in accordancewith the laws in force in the OCT and a fee corresponding to theservice rendered may be charged therefor;
(b) profits and/or income arising from the performance of contracts
shall be taxable according to the internal fiscal arrangements ofthe OCT concerned, provided that the natural or legal personswho realise such profit and/or income have a permanent place ofbusiness in that State, or that the performance of the contract takeslonger than six months;
(c) enterprises having to import professional equipment in order to
carry out works contracts shall, if they so request, benefit fromthe system of temporary admission as laid down by the nationallegislation of the beneficiary OCT in respect of the said equipment;
(d) any professional equipment needed to carry out the tasks defined in
a service contract shall be temporarily admitted into the beneficiaryOCT in accordance with its national legislation free of customsduties, taxes or fiscal charges having equivalent effect where suchduties and charges do not constitute remuneration for services
rendered;
(e) imports under supply contracts shall be admitted into the benefi-
ciary OCT without customs duties, taxes or fiscal charges havingequivalent effect. The contract for supplies originating in the OCTconcerned shall be concluded on the basis of the ex-works price of
the supplies, to which may be added such internal fiscal charges as
may be applicable to those supplies in the OCT;
(f) fuels, lubricants and hydrocarbon binders and all materials used in
the performance of works contracts shall be deemed to have beenpurchased on the local market and shall be subject to fiscal rules
applicable under the national legislation in force in the beneficiary
OCT; and
(g) personal and household effects imported for use by natural persons,
other than those recruited locally, engaged in carrying out the tasksdefined in a service contract, as well as members of their families,2002R2304 — EN — 21.12.2002 — 000.001 — 6
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shall be exempt from customs or import duties, taxes and other
fiscal charges having equivalent effect, within the limit of thenational legislation in force in the beneficiary OCT.
3. Any matter not covered by paragraphs 1 and 2 on tax and
customs arrangements shall remain subject to the legislation of the
OCT concerned.
CHAPTER 3
Management and executing agents
Article 12
Implementingprocedures
Without prejudice to the procedures for implementing budgetary
support referred to in Articles 8(2) and 10(2), programmes and projectsfinanced according to this Regulation shall be implemented in accor-dance with Articles 13, 14 and 15.
Article 13
Delegations
1. Where the Commission is represented by a Delegation under the
authority of a Head of Delegation, it shall inform the OCT concernedaccordingly. In such cases, Articles 22(2) and 67 of the EDF Financial
Regulation concerning authorising officers and accounting officers by
subdelegation shall apply.
2. The Head of Delegation, in close cooperation with the Territorial
Authorising Officer, shall:
(a) at the request of the OCT concerned, participate and give assis-
tance in the preparation of projects and programmes and innegotiating technical assistance contracts;
(b) participate in appraising projects and programmes, preparing
tender dossiers and seeking ways to simplify project andprogramme appraisal and implementation procedures;
(c) prepare financing proposals;
(d) approve, before the Territorial Authorising Officer issues them, the
local open invitation to tender and the emergency assistancecontract dossiers within 30 days of receiving them from the Terri-torial Authorising Officer;
(e) be present at the opening of tenders and receive copies of them
and of the results of their examination;
(f) approve, within 30 days, the Territorial Authorising Officer's
proposal for the placing of local open tenders, direct agreement
contracts, emergency assistance contracts, service contracts and
works contracts with a value less than EUR 5 million and supplycontracts with a value less than EUR 1 million;
(g) for all other contracts not covered by the above, approve, within
30 days, the Territorial Authorising Officer's proposal for the
placing of the contract wherever the following conditions arefulfilled:
(i) the tender selected is the lowest of those conforming to the
requirements of the tender dossier;
(ii) the tender selected meets all the selection criteria stated in the
tender dossier; and
(iii) the tender selected does not exceed the sum earmarked for the
contract;
(h) where the conditions set out in paragraph g are not fulfilled,
forward the proposal to the Chief Authorising Officer, who shalldecide thereon within 60 days of receipt from the Head of Delega-tion. Where the price of the selected tender exceeds the sumearmarked for the contract, the Chief Authorising Officer shall,2002R2304 — EN — 21.12.2002 — 000.001 — 7
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upon giving approval to the award, make the necessary financial
commitment;
(i) endorse contracts and estimates in the case of direct labour, riders
thereto as well as payment authorisations issued by the TerritorialAuthorising Officer;
(j) ensure that the projects and programmes financed from the
resources of the Fund managed by the Commission are properly
implemented from a financial and technical viewpoint;
(k) cooperate with the authorities of the OCT where he represents the
Commission in evaluating operations on a regular basis;
(l) provide the OCT with all the information and relevant documents
on the procedures for implementing development finance coopera-
tion, especially as regards appraisal criteria and tender evaluationcriteria; and
(m) inform the OCT authorities, on a regular basis, of Community
activities which may directly concern cooperation between the
Community and the OCT.
3. Any further delegation of administrative and/or financial powers
to the Head of Delegation other than described in this Article shall be
notified to the Territorial Authorising Officers.
Article 14
Territorial AuthorisingOfficer
1. The Government of each OCT shall appoint a Territorial Author-
ising Officer to represent it in all operations financed from the
resources of the Fund managed by the Commission and the Bank. TheTerritorial Authorising Officer may delegate some of these functionsand shall inform the Chief Authorising Officer of any such delegation.
2. The functions of the Territorial Authorising Officer shall be as
follows:
(a) in close cooperation with the Head of Delegation, be responsible
for the preparation, submission and appraisal of projects andprogrammes;
(b) in close cooperation with the Head of Delegation, issue invitations
for local open tenders, receive tenders, both local and international(open and restricted), preside over the examination of tenders,establish the results of this examination, sign contracts and ridersthereto and approve expenditure;
(c) submit, before issuing local open invitations to tender, the invita-
tion to tender dossier to the Head of Delegation, who shall givehis agreement within 30 days;
(d) complete the evaluation of tenders within the tender validity
period, taking into consideration the period required for the
approval of contracts;
(e) transmit the results of the examination of and a proposal for
placing the contract to the Head of Delegation for his approvalwithin the time limits set out in Article 15(f);
(f) clear and authorise expenditure within the limits of the funds
assigned to him; and
(g) during the execution of operations, make any adaptation arrange-
ments necessary to ensure proper implementation of approved
projects or programmes from an economic and technical viewpoint.
3. During the execution of operations and subject to the requirement
to inform the Head of Delegation the Territorial Authorising Officer
shall enjoy decision-making powers on the following:
(a) technical adjustments and alterations in matters of detail so long as
they do not affect the technical solution adopted and remain withinthe limits of the reserve for adjustments;
(b) alterations to estimates during execution;2002R2304 — EN — 21.12.2002 — 000.001 — 8
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(c) transfers from item to item within estimates;
(d) changes of site for multiple-unit projects or programmes where
justified on technical, economic or social grounds;
(e) imposition or remission of penalties for delay;
(f) acts discharging guarantors;
(g) purchase of goods, irrespective of their origin, on the local market;
(h) use of construction equipment and machinery not originating in the
OCT, Member States or ACP States provided there is no produc-
tion of comparable equipment and machinery in the OCT,Member States or ACP States;
(i) subcontracting;(j) final acceptance, provided that the Head of Delegation is present at
provisional acceptance, endorses the corresponding minutes and,where appropriate, is present at the final acceptance, in particularwhere the extent of the reservations recorded at the provisionalacceptance necessitates major additional work; and
(k) hiring of consultants and other technical assistance experts.
4. In addition the Territorial Authorising Officer shall:
(a) draw up and, after obtaining the approval of the Monitoring
Committee, submit to the Commission the annual implementationreport;
(b) carry out the mid-term review referred to in Article 22;
(c) ensure that those bodies taking part in the management and imple-
mentation of EDF programmes maintain either a separateaccounting system or an adequate accounting code for all transac-
tions relating to the assistance; and
(d) take any necessary measures to ensure the implementation of Arti-
cles 16, 19, 24 and 30.
5. When the annual implementation report referred to in Article 21
is submitted, the Commission and the Territorial Authorising Officershall review the main outcomes of the previous year.
After this review, the Commission may make comments to the Terri-
torial Authorising Officer. The Territorial Authorising Officer shallinform the Commission of any action taken on these comments. Wherein duly substantiated cases the Commission considers that the measures
taken are inadequate, it may make recommendations to the OCT and
the Territorial Authorising Officer for adjustments aimed at improvingthe effectiveness of the monitoring or management arrangements,together with the reasons for any such recommendations.
On receiving any such recommendations, the Territorial Authorising
Officer shall subsequently demonstrate the steps taken to improve themonitoring or management arrangements or shall explain why no suchsteps have been taken.
Article 15
Regionalstakeholders
1. Proposals for a regional programme shall be submitted by:
(a) at least two OCT Territorial Authorising Officers; or
(b) exceptionally, one OCT Territorial Authorising Officer where only
one OCT is involved in an action mentioned in Article 16(1)(b) to
(e) of the ‘Overseas Association’ Decision.
2. Regional programmes shall be implemented by the Territorial
Authorising Officer or organisation designated in the proposal.2002R2304 — EN — 21.12.2002 — 000.001 — 9
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PART IV
MONITORING,REVIEW,AUDITINGANDEVALUATION
CHAPTER 1
Monitoring
Article 16
OCTresponsibility
1. Without prejudice to the Commission's responsibility for imple-
menting the Community financial support, the OCT shall take
responsibility in the first instance for the financial control of suchsupport.
To that end, the Territorial Authorising Officer shall:
(a) set upand imp lement management and control arrangements in
such a way as to ensure that Community funds are being used effi-
ciently and correctly. Appropriate internal and external financial
controls are to be carried out in accordance with internationallyaccepted audit standards by the competent financial controlauthority, which must be independent for the purposes ofperforming this function;
(b) provide the Commission with a description of these arrangements;
(c) guarantee that assistance is managed in accordance with all the
applicable rules and that the funds placed at their disposal are
used in accordance with the principles of sound financial manage-ment;
(d) certify that the declarations of expenditure presented to the
Commission are accurate and that they result from accountingsystems based on verifiable supporting documents;
(e) present to the Commission, when each programming period is
wound up, a declaration drawn up by a person or department
having a function independent of the designated managingauthority. This declaration shall summarise the conclusions of thechecks carried out during previous years and shall assess thevalidity of the application for payment of the final balance and
the legality and regularity of the transactions covered by the final
certificate of expenditure. The OCT may attach their own opinionto this certificate if they consider it necessary;
(f) cooperate with the Commission to ensure that EDF resources are
used in accordance with the principles of sound financial manage-ment;
(g) prevent, detect and correct irregularities, notify these to the
Commission, in accordance with the rules, and keepthe Commis-
sion informed of the progress of administrative and legalproceedings;
(h) recover any amounts lost as a result of an irregularity detected and,
where appropriate, charge interest on late payments;
(i) take all the necessary measures to ensure compliance with the
provisions of the indicative programme, including that the time-
table of commitments and disbursements agreed at the time of
programming is met; and
(j) investigate any causes of delay in implementation and propose
suitable measures to remedy the situation.
2. Each year an audit plan and a summary of the findings of the
audits carried out shall be sent to the Commission.
Audit reports will be at the disposal of the Commission.2002R2304 — EN — 21.12.2002 — 000.001 — 10
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Article 17
Coordination
1. The Commission and the OCT, represented by the Territorial
Authorising Officer, shall cooperate and coordinate plans, methodsand implementation of checks so as to maximise the usefulness of thechecks carried out. They shall immediately exchange the results of thechecks carried out.
2. At least once a year the following shall be examined and
assessed:
(a) the results of the checks carried out by the OCT and the Commis-
sion;
(b) any comments made by other national or Community control
bodies or institutions;
(c) the financial impact of any irregularities noted, the steps already
taken or still required to correct them and, where necessary, adjust-
ments to the management and control systems.
3. Following the examination and assessment under paragraph 2,
and without prejudice to the measures to be taken immediately by theOCT under Article 16, the Commission may make observations, parti-cularly regarding the financial impact of any irregularities detected.
These observations shall be addressed to the Territorial Authorising
Officer of the OCT concerned and be accompanied, where necessary,by requests for corrective measures to remedy the management short-comings found and address those irregularities detected which have
not already been corrected.
The OCT shall have the opportunity to comment on these observations.
Article 18
MonitoringCommittees
1. A Monitoring Committee shall supervise the implementation of
each SPD.
The OCT authorities shall set upthe Monitoring Committee no more
than three months after the approval of the SPD.
2. The Monitoring Committee shall be chaired by the Territorial
Authorising Officer or his representative.
A representative of the Commission, and, where appropriate, of the
European Investment Bank, may participate in the work of the Moni-toring Committee in an advisory capacity.
The authorities or bodies designated by the OCT, the Commission, the
Member State concerned and, where appropriate, the European Invest-ment Bank and/or any other co-financing institution shall be
represented in the committee. Where regional and local authorities
and private enterprises are responsible for the implementation of aproject and where they are directly concerned by a project, they shallalso be represented in such committees.
3. The Monitoring Committee shall draw upits own rules of p roce-
dure within the institutional, legal and financial framework of the OCTconcerned and agree on them with the Territorial Authorising Officer.
4. For the meetings of the monitoring committee the Territorial
Authorising Officer shall submit progress reports in accordance withthe standard model provided by the Commission. The report shall bereceived by the Commission 15 working days ahead of the scheduled
meeting.
5. In order to verify the effectiveness and quality of the implementa-
tion of assistance the Monitoring Committee shall:
(a) periodically review the progress made towards achieving the
specific objectives of the SPD;2002R2304 — EN — 21.12.2002 — 000.001 — 11
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(b) examine the mid-term review referred to in Article 22 before it is
sent to the Commission;
(c) consider and approve the annual and final implementation reports
before they are sent to the Commission;
(d) consider and approve any proposal to amend the contents of the
SPD.
Article 19
Monitoringindicators
The Territorial Authorising Officer and the Monitoring Committee
shall carry out the monitoring by reference to indicators specified inthe SPD.
The indicators shall take account of the indicative methodology made
available by the Commission.
They shall relate to the specific character of the projects and their
objectives and show:
(a) inputs, outputs, outcome and as far as possible impacts;
(b) the stage reached in assistance in terms of physical implementation;
(c) the progress of the financing plan.
CHAPTER 2
Review
Article 20
Reviewprocess
1. Financial cooperation shall be sufficiently flexible to ensure that
operations are kept constantly in line with the objectives of the Over-
seas Association Decision and take account of any changes occurringin the economic situation, priorities and objectives of the OCTconcerned, in particular by means of the annual implementation reportand the mid-term or, if applicable, the annual review SPD referred to inArticle 21(5).
2. In the exceptional circumstances referred to in the provisions on
humanitarian and emergency assistance, the review may be carried outat the request of either Party.
Article 21
Annualimplementation report
1. The Territorial Authorising Officer shall submit annual imple-
mentation reports to the Commission within three months of the endof each full year of implementation from the adoption of the SPD.
2. The annual implementation report on the SPD shall consist of a
joint assessment of the implementation of the programme and takeinto account the results of the relevant activities of monitoring andevaluation.
3. This report shall be made locally and shall be finalised between
the Territorial Authorising Officer, the Monitoring Committee and, if
applicable, the Head of Delegation concerned within a period of 60
days.
4. It shall in particular include an assessment of:
(a) the results achieved in the focal sector(s) measured against the
identified targets and impact indicators and sectoral policy commit-ments;
(b) any projects and programmes outside the focal sector(s) and/or part
of multi-annual programmes;
(c) the use of any resources set aside for non-State actors;2002R2304 — EN — 21.12.2002 — 000.001 — 12
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(d) the effective implementation of current operations and the extent to
which the timetable for commitments and payments has been met;and
(e) any extension of programming to cover the years ahead.
5. Where appropriate, an annual review shall be carried on the basis
of the report at the occasion of a partnership meeting, as laid down in
Article 7 of the Overseas Association Decision.
Article 22
Mid-term review
1. The mid-term review shall be organised to examine the initial
results of the SPD, their relevance and the extent to which the targets
have been attained.
It shall also assess the use made of financial resources and the opera-
tion of monitoring and implementation.
2. The mid-term review shall be carried out under the responsibility
of the Commission, in cooperation with the Territorial AuthorisingOfficer and the Member State concerned.
It shall be carried out in general between 24 and 36 months after the
entry into force of this Regulation by an independent assessor,submitted to the Monitoring Committee and then sent to the Commis-
sion. A different deadline may be set in the SPD, in particular in
respect of the indicators adopted in the event of budgetary support.
3. The Commission shall examine the relevance and quality of the
review on the basis of criteria defined in the SPD, including in respect
of the EDF financial allocation.
CHAPTER 3
Audits
Article 23
Audits
1. Without prejudice to checks carried out by beneficiary countries,
the Commission and the Court of Auditors may, through their own staffor duly authorised representatives, carry out on-the-spot technical or
financial audits, including sample checks and final audits on the opera-
tions financed by the EDF and on management and control systems ata minimum of one working day's notice.
The Commission shall give notice to the OCT concerned with a view
to obtaining all the assistance necessary. Officials or servants of theOCT concerned may take part in such checks. The Commission mayrequire the OCT concerned to carry out an on-the-spot check to verifythe correctness of one or more transactions. Commission officials orservants may take part in such checks.
2. The beneficiary countries shall assist the Commission services
and the Court of Auditors in the performance of audits relating to theutilisation of EDF resources.
Article 24
Audittrail
1. OCT management and control systems shall provide a sufficient
audit trail, in accordance with the conditions laid down in each finan-
cing agreement.
2. A sufficient audit trail is present where:
(a) accounting records kept at the appropriate management level
provide detailed information of expenditure actually incurred inEDF-financed operations. The accounting records show the datethey were created, the amount of each item of expenditure, the2002R2304 — EN — 21.12.2002 — 000.001 — 13
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nature of the supporting documents and the date and method of
payment. The necessary documentary evidence (e.g. invoices) isattached;
(b) the technical specifications and financial plan of the operation,
progress reports, the documents concerning the grant approval and
tendering and contracting procedures, and reports on inspections ofthe products and services financed are also kept at the appropriatemanagement level;
(c) in the case of computerised transfer of accounting data, all the
authorities and bodies concerned obtain sufficient information
from the lower level to justify their accounting records and the
sums reported upwards, so as to ensure a sufficient audit trailfrom the total summary amounts certified to the Commissiondown to the individual expenditure items and the supporting docu-ments at the level of the final beneficiaries and the bodies andfirms carrying out the operations;
3. the Territorial Authorising Officer shall take any measures needed
to implement this Article.
CHAPTER 4
Evaluation
Article 25
Evaluation
1. The evaluation of the SPD shall cover the utilisation of resources,
the effectiveness and efficiency of the assistance and its impact and
shall draw conclusions and recommendations, using notably evaluation
results already available.
It shall cover the factors contributing to the success or failure of imple-
mentation and achievements and results, including their sustainability.
2. Evaluations of the SPD shall be the responsibility of the Commis-
sion, in coordination with the Monitoring Committee.
3. The evaluation programme should be outlined in the SPD.Evaluations shall, in particular:
(a) provide regular and independent assessments of the Fund's opera-
tions and activities by comparing planned results and objectiveswith actual achievements; and thereby
(b) enable OCT, Member States and the Commission to feed the
lessons of experience back into the design and execution of future
policies and operations.
4. The results of the evaluation shall be made available to the
public.
Article 26
Evaluationprocedures
Without prejudice to evaluations carried out by the OCT or the
Commission, evaluations of programmes, projects or other activities
implementing the SPD may be performed jointly by the OCT and the
Commission, in cooperation with the Member State concerned.
PART V
FINANCIALADAPTATIONS
Article 27
AdaptationofEDFallocations
Using the results of monitoring, audit and evaluations as a basis and
taking account of the comments of the Monitoring Committee, theCommission may adjust the amounts and conditions of the initial SPD2002R2304 — EN — 21.12.2002 — 000.001 — 14
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on its own initiative or on a proposal from the OCT concerned in the
light of the current needs and performance of that OCT.
This adaptation shall normally take place on the occasion of the mid-
term review, in accordance with the procedure laid down in Article 24of the Overseas Association Decision, between 24 and 36 months afterthe entry into force of this Regulation or, in the case of irregularities, in
the shortest possible time.
Article 28
Suspensionofpayments
1. The Commission shall suspend the payments and, stating its
reasons, request that the OCT submit its comments and, where appro-priate, carry out any corrections, within a specified period of time
where, after completing the necessary checks, it concludes that:
(a) an OCT has not complied with its obligations; or
(b) all or part of the SPD justifies neither part nor the whole of the
EDF contribution; or
(c) there are serious failings in the management or control systems
which could lead to systemic irregularities.
2. The period of time within which the OCT concerned may respond
to a request to submit its comments and, where appropriate, makecorrections, shall be two months, except in duly justified cases wherea longer period may be agreed by the Commission.
3. Where the OCT objects to the observations made by the Commis-
sion, the OCT and the Member State concerned shall be invited to apartnership meeting by the Commission, in which all sides shall try toreach an agreement on the observations and the conclusions to be
drawn from them.
Whenever the OCT objects to the observations made by the Commis-
sion and an ad hoc partnership meeting takes place, the three-month
period under paragraph 5 within which the Commission may take a
decision shall begin to run from the date of the partnership meeting.
4. Where the Commission proposes financial corrections, the OCT
shall be given the opportunity to demonstrate, through an examination
of the files concerned, that the actual extent of irregularity was less
than the Commission's assessment.
Except in duly justified cases, the time allowed for this examination
shall not exceed a further period of two months after the two-month
period referred to in paragraph 1.
The Commissions shall take account of any evidence supplied by the
OCT within the time limits.
5. At the end of the period set out in paragraph 2, the Commission
shall, where no agreement has been reached and the OCT has not madethe corrections, take account of any comments made by the OCT andMember States and decide within three months to:
(a) reduce the payments; or
(b) make the financial corrections required by cancelling all or part of
the EDF allocation.
6. Without prejudice to paragraphs 1 to 5, the Commission may,
after due verification, suspend all or part of an interim payment whereit finds that the expenditure concerned is linked to a serious irregularitywhich has not been corrected and that immediate action is needed.
The Commission shall inform the OCT concerned of the action taken
and the reasons for it. Where, after five months, the reasons for thesuspension persists or the OCT concerned has not notified the Commis-sion of the measures taken to correct the serious irregularity, theprovisions laid down in Article 30 shall apply.2002R2304 — EN — 21.12.2002 — 000.001 — 15
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Article 29
Recovery andrepayments
1. Any repayment due to be made to the Commission shall be made
by the due date indicated in the order for recovery drawn upin accor-
dance with Article 45 of the EDF Financial Regulation. This due date
shall be the last day of the second month following the issuing of theorder.
2. Any delay in effecting repayment shall give rise to interest on
account of late payment, starting on the due date referred to in para-graph 1 and ending on the date of actual payment. The rate of suchinterest shall be one and a half percentage points above the rate applied
by the European Central Bank in its main refinancing operations on the
first working day of the month in which the due date falls.
3. The Territorial Authorising Officer shall keepan account of
amounts recoverable from payments of Community assistance alreadymade, and ensure that the amounts are recovered without unjustifieddelay.
The beneficiary shall repay any amount to be recovered, together with
interest received on account of late payment, by deducting the amounts
concerned from its next statement of expenditure and request forpayment to the Commission, or, where this is insufficient, by makinga refund to the Community.
The Territorial Authorising Officer shall send the Commission a state-
ment once a year of the amounts awaiting recovery at that date,classified by the year of initiation of the recovery proceedings.
PART VI
FINALPROVISIONS
Article 30
Informationandpublicity
1. OCT shall ensure that adequate publicity is given to the EDF
programmes with a view to:
(a) making the general public aware of the role played by the Commu-
nity in relation to those programmes;
(b) making potential beneficiaries and professional organisations aware
of the possibilities afforded.
2. Beneficiary countries shall ensure, in particular, that directly
visible display panels are erected showing physical projects financedby the Community, together with the Community logo, and that repre-sentatives of the Community institutions are duly involved in the most
important public activities connected with EDF-supported programmes.
Article 31
Entryintoforce
This Regulation shall enter into force on the day of its publication in
theOfficial Journal of the European Communities .
This Regulation shall be binding in its entirety and directly applicable
in all Member States.2002R2304 — EN — 21.12.2002 — 000.001 — 16
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ANNEX
STANDARD STRUCTURE FOR SINGLE PROGRAMMING DOCU-
MENTSFOROVERSEASCOUNTRIESANDTERRITORIES
PartA:Cooperationstrategy
Executive summary
Chapter 1: EC cooperationobjectivesChapter 2: Policy agenda of OCTChapter 3: Assessment of the political, economic and social situationChapter 4: Assessment of past and ongoing EC cooperation
Chapter 5: Response strategy
PartB:Indicativeprogramme
Chapter 6: Indicative programme
The full text, including the executive summary and chapters 1 to 6, should be
limited to approximately 10 pages plus annexes.
PART A: COOPERATION STRATEGY
Executivesummary
SPDs should begin with a half-page executive summary. This should include the
major challenges facing OCT in the medium and long term, the main objective
of the SPD, the principal reasons for the choice of focal area and the overall
distribution of funds.
Chapter1:ECcooperationobjectives
In this section, the broad EC cooperation objectives are explicitly stated, as
determined by the EC Treaty, EC regulations, international agreements and the
recent Statement on EC Development Policy.
Chapter2:PolicyagendaofOCT
This section should provide a concise statement of the aims and objectives of
the government, as set out in official policy documents, in medium or long-
term plans, reform strategies or development programmes. This should be
completed by an indication as to how the Government proposes to achieve theseobjectives.
Chapter3:Assessmentofthepolitical,economic andsocialsituation
Major domestic policy developments/issues and relevant aspects of the external
context should be covered, including the political situation, trade aspects, the
economic and social situation, environmental aspects and finally, the sustain-
ability of current policies and medium-term challenges. Particular attention
should be given to the assessment of public expenditure management and public
procurement.
This should be an analytical and not merely descriptive exercise. The analysis
should be dialogue-driven, prepared in close cooperation with other donors (if
applicable) and involving non-State actors.
Chapter4:AssessmentofpastandongoingECcooperation
This section should contain a brief account of the results and ‘lessons learned’
from past and ongoing EC cooperation. Recommendations from relevant evalua-
tions on the OCT, specific sectors or projects should be considered.
A coherence paragraph (EC policy mix) should assess the linkages between the
SPD and other Community policies, resources and instruments. Programmes of
EU Members States and other donors (if applicable) should be outlined.
Chapter5:Responsestrategy
This section should set out the strategic choices for EC cooperation, specifying
in which area/sector assistance will concentrate. That choice should flow logi-
cally from:
—E Cpolicyobjectives ;2002R2304 — EN — 21.12.2002 — 000.001 — 17
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— an analysis of the OCT situation and its developmentstrategy , determining
therelevance andsustainability of the support strategy;
— conclusions reached in the context of any ‘policy mix’ /coherence analysis
exercise;
— the indicative volume of fundsavailable;
—lessonslearned from past and ongoing EC activities;
—complementarity with assistance from other major donors and the Govern-
ment's own programmes. Community assistance should be focused in areas
where it hascomparativeadvantage or particularexpertise .
PART B: INDICATIVE PROGRAMMEChapter6:Indicativeprogramme
This Chapter is a presentation of the OCT Indicative programme, which is based
on and fully consistent with the strategic analysis. The indicative programme is
an integral part of the SPD and should be composed of the following sections:
Financing envelopes
This section should include a breakdown of the indicative amounts set aside
under the ninth EDF for the focal area and (if appropriate) other areas. Any
uncommitted balances remaining from preceding EDFs should also be included
and used to support the priorities outlined in the strategy. The indicative
programme may also indicate that, in addition, specific action may be financed
via budget lines and may identify areas of such support, while clarifying that
financing via budget lines is subject to specific rules and regulations and depend
on the availability of funds. Finally, it should be clarified that the ninth EDF
also includes the ‘Investments Facility’ as a financing instrument managed by
the European Investment Bank, but that the Investment Facility does not form
part of the Indicative programme. All amounts should be denominated in euro.
Focal area
This section should contain information on the specific objectives and expected
results for the focal area and (if appropriate) other areas, as well as the major
assistance planned. It should also include the policy/accompanying measures to
be taken by the Government as a contribution to the implementation of the
response strategy. The amount earmarked for each area should be indicated.
An analysis should be made of the merits of a budgetary support approach as
opposed to other methods, and a judgement reached on what method would be
most effective. A conclusion in principle in favour of a budgetary support
mechanism (whether direct or via a trust fund or other system) would still be
subject to an appraisal of public financial management, and of public procure-
ment in the focal area, which would need to be conducted before a financing
proposal could be presented.
Indicators
Input, output, outcome, and, as far as possible, impact indicators should be iden-
tified on policy areas covered by the focal area. Indicators should take into
account the SMART criteria (specific, measurable in the short/medium term,
achievable, realistic and time-bound) and include a starting level, a target and
a clear time-horizon, to allow for comparisons at the time of annual, mid- and
end-of-term reviews.
Cross-cutting issues
Attention needs to be paid to the mainstreaming of cross-cutting issues (gender,
environment, institutional development and capacity building) in the areas of
assistance.
The indicative programme should be complemented by a set of tables:
—a nassistanceframework for the focal area, detailing indicators, sources of
verification and assumptions. Input, output, outcome, and, as far as possible,
impact indicators should be identified on policy areas covered by the focal
area. Indicators should take into account the SMART criteria (specific,
measurable in the short/medium term, achievable, realistic and time-bound)
and include a starting level, a target and a clear time-horizon, to allow for
comparisons at the time of annual, mid- and end-of-term reviews,
—a nindicativetimetable forcommitmentsanddisbursements ,
—atimeline ofactivities .2002R2304 — EN — 21.12.2002 — 000.001 — 18