++++

PROTOCOL NO 2

ON THE APPLICATION OF FINANCIAL AND TECHNICAL CO-OPERATION

CHAPTER 1

ARTICLE 1

IN THE CONTEXT OF THE OBJECTIVES LAID DOWN IN ARTICLE 40 OF THE CONVENTION , THE CONTRACTING PARTIES AGREE THAT THE PROJECTS AND PROGRAMMES MUST HELP ENSURE ALL OR PART OF THE FOLLOWING EFFECTS :

- GROWTH OF THE NATIONAL INCOME OF EACH ACP STATE ;

- IMPROVEMENT OF THE STANDARD OF LIVING AND THE SOCIO-CULTURAL LEVELS OF POPULATIONS AND OF THE MOST UNDERPRIVILEGED IN PARTICULAR ;

- THE ESTABLISHMENT OF MORE BALANCED ECONOMIC RELATIONS BETWEEN THE ACP STATES AND OTHER COUNTRIES , THEIR GREATER PARTICIPATION IN WORLD TRADE IN GENERAL , INCLUDING , IN PARTICULAR , TRADE IN MANUFACTURED PRODUCTS ;

- IMPROVEMENT AND CONTROL OF THE CONDITIONS OF DEVELOPMENT , IN PARTICULAR PHYSICAL FACTORS AND TECHNICAL KNOW-HOW ;

- DIVERSIFICATION AND INTEGRATION OF THE STRUCTURE OF THE ECONOMY , ON BOTH A SECTORAL AND A GEOGRAPHICAL BASIS ;

- REGIONAL CO-OPERATION BETWEEN ACP STATES AND , WHERE APPROPRIATE , BETWEEN ACP STATES AND OTHER DEVELOPING COUNTRIES .

ARTICLE 2

UPON EXPIRY OF THE CONVENTION , ANY MONIES PROVIDED FOR UNDER THE THIRD INDENT OF POINT 1 ( A ) OF ARTICLE 42 OF THE CONVENTION IN THE FORM OF RISK CAPITAL BUT NOT COMMITTED SHALL BE ADDED TO THOSE PROVIDED FOR IN THE FORM OF SPECIAL LOANS UNDER THE SECOND INDENT OF THE SAME PROVISION ; MONIES PROVIDED FOR UNDER ARTICLE 47 ( 2 ) OF THE CONVENTION FOR FINANCING REGIONAL PROJECTS , BUT NOT COMMITTED FOR THAT PURPOSE , SHALL BE MADE AVAILABLE FOR FINANCING OTHER PROJECTS AND PROGRAMMES .

CHAPTER 2

METHODS OF FINANCING

ARTICLE 3

1 . SPECIAL LOANS SHALL SERVE TO FINANCE ALL OR PART OF PROJECTS OR PROGRAMMES OF GENERAL INTEREST TO THE ECONOMIC AND SOCIAL DEVELOPMENT OF THE ACP STATE OR ACP STATES ON THE TERRITORY OF WHICH THEY ARE TO BE UNDERTAKEN .

2 . AS A GENERAL RULE , THESE LOANS SHALL BE MADE FOR A DURATION OF 40 YEARS , WITH A GRACE PERIOD OF 10 YEARS . THEY SHALL BEAR INTEREST AT THE RATE OF 1 % PER YEAR .

ARTICLE 4

1 . IN ORDER TO ASSIST THE EXECUTION OF INDUSTRIAL , MINING AND TOURISM PROJECTS OF GENERAL INTEREST TO THE ECONOMY OF THE ACP STATE OR ACP STATES CONCERNED , THE COMMUNITY MAY GRANT ASSISTANCE IN THE FORM OF RISK CAPITAL IN ORDER TO STEP UP THE OWN RESOURCES , OR RESOURCES ASSIMILATED THERETO , OF THOSE COUNTRIES' FIRMS , WHERE APPROPRIATE BY THE ACQUISITION OF HOLDINGS IN THE AUTHORIZED CAPITAL OF THOSE FIRMS AND , MORE GENERALLY , BY MEANS OF QUASI-CAPITAL AID .

2 . HOLDINGS ACQUIRED BY THE COMMUNITY IN THE CAPITAL OF FIRMS OR INSTITUTIONS FOR FINANCING THE DEVELOPMENT OF THE ACP STATES SHALL BE IN THE NATURE OF TEMPORARY MINORITY HOLDINGS . SUCH OPERATIONS MAY BE UNDERTAKEN JOINTLY WITH A LOAN FROM THE BANK OR WITH ANOTHER FORM OF RISK CAPITAL ASSISTANCE . AS SOON AS APPROPRIATE THEY SHALL BE TRANSFERRED , PREFERABLY TO NATIONALS OR INSTITUTIONS OF THE ACP STATES .

3 . QUASI-CAPITAL ASSISTANCE MAY TAKE THE FORM OF :

- SUBORDINATED LOANS , WHICH SHALL BE REDEEMED AND IN RESPECT OF WHICH INTEREST , IF ANY , SHALL BE PAID ONLY AFTER THE OTHER BANK CLAIMS HAVE BEEN SETTLED ON MARKET TERMS ;

- CONDITIONAL LOANS , WHICH SHALL BE SERVICED AND IN RESPECT OF WHICH REDEMPTION SHALL BE DUE ONLY AFTER FULFILMENT OF CONDITIONS LAID DOWN WHEN THE LOAN IS MADE BY PARTICULAR REFERENCE TO THE CONDITIONS IN WHICH THE PROJECT IS BEING SET UP .

THESE CONDITIONS SHALL INDICATE THAT THE PROJECT HAS OVERCOME THE PARTICULAR RISKS TO WHICH IT WAS EXPOSED AND HAS ACHIEVED A CERTAIN LEVEL OF PROFITABILITY .

THE TERMS OF SUCH AID SHALL BE DETERMINED ON A CASE-BY-CASE BASIS BY REFERENCE TO THE CHARACTERISTICS OF THE PROJECTS FINANCED ; THE INTEREST RATE MAY NOT BE GREATER THAN THAT OF SUBSIDIZED LOANS FROM THE BANK .

4 . QUASI-CAPITAL ASSISTANCE SHALL AS A GENERAL RULE BE ACCORDED TO INDUSTRIAL , MINING AND TOURISM FIRMS AND TO DEVELOPMENT FINANCING INSTITUTIONS WHERE THE CHARACTERISTICS OF THEIR ACTIVITIES AND MANAGEMENT SO PERMIT . IT MAY ALSO BE ACCORDED TO THE ACP STATES IN ORDER TO ENABLE THEM TO ACQUIRE A HOLDING IN THE CAPITAL OF INDUSTRIAL , MINING AND TOURISM FIRMS WHERE SUCH AN OPERATION COMES UNDER THE FINANCING OF NEW PRODUCTIVE INVESTMENTS AND IS SUPPLEMENTED BY ANOTHER FINANCIAL INTERVENTION BY THE COMMUNITY .

ARTICLE 5

1 . SCRUTINY BY THE BANK OF THE ELIGIBILITY OF PROJECTS , AND THE ACCORDING OF LOANS FROM ITS OWN RESOURCES , SHALL BE EFFECTED IN CONCERT WITH THE ACP STATE OR ACP STATES CONCERNED AND IN ACCORDANCE WITH THE RULES , CONDITIONS AND PROCEDURES PROVIDED FOR IN THE BANK'S STATUTE , CONSIDERATION BEING GIVEN TO THE ECONOMIC AND FINANCIAL SITUATION OF THE ACP STATE OR ACP STATES CONCERNED AND TO THE FACTORS WHICH GUARANTEE THE SERVICING OF REPAYABLE AID .

2 . THE DURATION OF LOANS MADE BY THE BANK FROM ITS OWN RESOURCES SHALL BE GOVERNED BY TERMS STIPULATED ON THE BASIS OF THE ECONOMIC AND FINANCIAL CHARACTERISTICS OF THE PROJECT ; THIS PERIOD MAY NOT EXCEED 25 YEARS .

3 . THE RATE OF INTEREST SHALL BE THE RATE CHARGED BY THE BANK AT THE TIME OF THE SIGNATURE OF EACH LOAN CONTRACT . THIS RATE SHALL GENERALLY BE REDUCED BY 3 % BY MEANS OF AN INTEREST RATE SUBSIDY , EXCEPT WHERE THE LOANS ARE INTENDED FOR INVESTMENT IN THE OIL SECTOR , WHEREVER THESE ARE LOCATED , OR IN THE MINING SECTOR , UNLESS IN THE LATTER CASE THEY ARE SITUATED IN ONE OF THE LEAST DEVELOPED STATES LISTED IN ARTICLE 48 OF THE CONVENTION , OR ARE SITUATED IN COUNTRIES OR CONCERN SECTORS WHICH WILL BE DEFINED AT THE FIRST MEETING OF THE COUNCIL OF MINISTERS . THIS INTEREST RATE SUBSIDY SHALL , HOWEVER , BE AUTOMATICALLY ADJUSTED SO THAT THE INTEREST RATE ACTUALLY BORNE BY THE BORROWER WILL BE NEITHER LESS THAN 5 % NOR MORE THAN 8 % .

4 . THE AGGREGATE AMOUNT OF INTEREST RATE SUBSIDIES , CALCULATED IN TERMS OF ITS VALUE AT THE TIME OF THE SIGNATURE OF THE LOAN CONTRACT AT A RATE AND ACCORDING TO RULES TO BE LAID DOWN BY THE COMMUNITY , SHALL BE CHARGED AGAINST THE AMOUNT OF GRANT AID SPECIFIED IN THE FIRST INDENT OF POINT 1 ( A ) OF ARTICLE 42 OF THE CONVENTION AND SHALL BE PAID DIRECTLY TO THE BANK .

CHAPTER 3

TECHNICAL CO-OPERATION

ARTICLE 6

1 . THE TECHNICAL CO-OPERATION REFERRED TO IN ARTICLE 46 OF THE CONVENTION MAY BE EITHER LINKED WITH INVESTMENTS OR OF A GENERAL NATURE .

2 . TECHNICAL CO-OPERATION LINKED WITH INVESTMENTS COMPRISES :

( A ) PLANNING AND SPECIAL AND REGIONAL DEVELOPMENT STUDIES ;

( B ) TECHNICAL , ECONOMIC AND COMMERCIAL STUDIES , AND RESEARCH AND SURVEYS REQUIRED TO PREPARE PROJECTS ;

( C ) AID IN THE PREPARATION OF DOSSIERS ;

( D ) AID IN THE EXECUTION AND SUPERVISION OF WORK ;

( E ) TEMPORARY AID FOR THE ESTABLISHMENT , LAUNCHING AND OPERATION OF A SPECIFIC INVESTMENT OF INSTALLATIONS , INCLUDING WHERE NECESSARY THE TRAINING OF PERSONNEL FOR THE OPERATION AND MAINTENANCE OF THE INVESTMENT OR INSTALLATIONS ;

( F ) MEETING THE COST OF TECHNICIANS TEMPORARILY AND PROVIDING GOODS NECESSARY TO THE PROPER EXECUTION OF AN INVESTMENT PROJECT .

3 . GENERAL TECHNICAL CO-OPERATION COMPRISES :

( A ) THE GRANT OF SCHOLARSHIPS FOR STUDIES , TRAINING COURSES AND POSTAL TUITION TO PROVIDE , PREFERABLY IN THE ACP STATES , FOR THE VOCATIONAL TRAINING AND FURTHER TRAINING OF THE NATIONALS THEREOF ;

( B ) THE ORGANIZATION OF SPECIFIC TRAINING PROGRAMMES IN THE ACP STATES , IN PARTICULAR FOR THE STAFF OF PUBLIC SERVICES AND INSTITUTIONS OF THE ACP STATES OR OF UNDERTAKINGS THEREIN ;

( C ) AT THE REQUEST OF THE ACP STATES , THE PROVISION OF EXPERTS , ADVISERS , TECHNICIANS AND INSTRUCTORS OF THE MEMBER STATES OR THE ACP STATES FOR SPECIFIC MISSIONS AND FOR LIMITED PERIODS ;

( D ) THE SUPPLY OF INSTRUCTIONAL , EXPERIMENTAL AND DEMONSTRATION EQUIPMENT ;

( E ) THE ORGANIZATION OF SHORT TRAINING COURSES FOR NATIONALS OF THE ACP STATES AND FURTHER TRAINING COURSES FOR CIVIL SERVANTS OF THOSE STATES ;

( F ) SECTORAL STUDIES ;

( G ) STUDIES OF THE PROSPECTS AND OPPORTUNITIES FOR ECONOMIC DEVELOPMENT AND DIVERSIFICATION IN THE ACP STATES , AND OF PROBLEMS OF INTEREST TO GROUPS OF ACP STATES OR TO THE ACP STATES AS A WHOLE ;

( H ) GENERAL INFORMATION AND DOCUMENTATION TO PROMOTE THE ECONOMIC AND SOCIAL DEVELOPMENT OF THE ACP STATES , THE DEVELOPMENT OF TRADE BETWEEN THE COMMUNITY AND THOSE STATES , AND THE ACHIEVEMENT OF THE AIMS OF FINANCIAL AND TECHNICAL COOPERATION .

CHAPTER 4

REGIONAL CO-OPERATION

ARTICLE 7

1 . WITHIN THE MEANING OF THE CONVENTION , REGIONAL CO-OPERATION SHALL APPLY TO RELATIONS EITHER BETWEEN TWO OR MORE ACP STATES OR BETWEEN ONE OR MORE ACP STATES ON THE ONE HAND AND ONE OR MORE NEIGHBOURING NON-ACP COUNTRIES ON THE OTHER .

INTERREGIONAL CO-OPERATION SHALL APPLY TO RELATIONS EITHER BETWEEN TWO OR MORE REGIONAL ORGANIZATIONS OF WHICH ACP STATES FORM PART OR BETWEEN ONE OR MORE ACP STATES AND A REGIONAL ORGANIZATION .

2 . WITHIN THE MEANING OF THE CONVENTION , REGIONAL PROJECTS ARE THOSE WHICH HELP DIRECTLY TO SOLVE A DEVELOPMENT PROBLEM COMMON TO TWO OR MORE COUNTRIES THROUGH JOINT SCHEMES OR CO-ORDINATED NATIONAL SCHEMES .

ARTICLE 8

THE FIELD OF APPLICATION OF REGIONAL AND INTERREGIONAL CO-OPERATION SHALL INCLUDE :

( A ) THE DISTRIBUTION OF INDUSTRIES WITH THE AIM OF ACCELERATING THE INDUSTRIALIZATION OF THE ACP STATES , INCLUDING THE SETTING UP OF REGIONAL AND INTERREGIONAL ENTERPRISES ;

( B ) TRANSPORT AND COMMUNICATIONS : ROADS , RAILWAYS , AIR AND SEA TRANSPORT , INLAND WATERWAYS , POSTAL SERVICES AND TELECOMMUNICATIONS ;

( C ) THE PRODUCTION OF ENERGY AND JOINT EXPLOITATION OF NATURAL RESOURCES ;

( D ) RESEARCH AND TECHNOLOGY APPLIED TO INTENSIFYING REGIONAL AND INTERREGIONAL CO-OPERATION ;

( E ) STOCKBREEDING , AGRICULTURE , INDUSTRY AND THE PROMOTION OF PRODUCTS OF THESE SECTORS ;

( F ) EDUCATION AND TRAINING , INCLUDING THE ESTABLISHMENT OF JOINT INSTITUTIONS OF ADVANCED TECHNOLOGY , IN THE CONTEXT OF TRAINING PROGRAMMES TO ENABLE NATIONALS TO PARTICIPATE FULLY IN ECONOMIC DEVELOPMENT ;

( G ) CO-OPERATION IN TRAVEL AND TOURISM , INCLUDING THE ESTABLISHMENT OF TOURIST PROMOTION CENTRES OR THE STRENGTHENING OF EXISTING ONES ON A REGIONAL BASIS IN ORDER TO INCREASE INTERNATIONAL AND REGIONAL TOURISM ;

( H ) TECHNICAL ASSISTANCE FOR THE ESTABLISHMENT OF REGIONAL CO-OPERATION BODIES OR THE DEVELOPMENT OF NEW ACTIVITIES IN EXISTING REGIONAL BODIES .

ARTICLE 9

AN ACP STATE OR GROUP OF ACP STATES PARTICIPATING WITH NEIGHBOURING NON-ACP COUNTRIES IN A REGIONAL OR INTERREGIONAL PROJECT MAY REQUEST THE COMMUNITY TO FINANCE THAT PART OF THE PROJECT FOR WHICH IT IS RESPONSIBLE .

CHAPTER 5

SPECIAL MEASURES IN FAVOUR OF THE LEAST DEVELOPED ACP STATES

ARTICLE 10

COMMUNITY AID ACCORDED TO THE ACP STATES LISTED IN ARTICLE 48 OF THE CONVENTION SHALL BE COMBINED WITH PARTICULARLY FAVOURABLE TERMS OF FINANCING , HAVING REGARD TO THE ECONOMIC SITUATION SPECIFIC TO EACH ACP STATE .

GENERALLY , SUCH FINANCING SHALL BE IN THE FORM OF GRANTS AND , IN APPROPRIATE CASES , IN THE FORM OF SPECIAL LOANS OR RISK CAPITAL . HOWEVER , LOANS FROM THE BANK'S OWN RESOURCES MAY BE ACCORDED IN THE STATES CONCERNED , HAVING REGARD TO THE CRITERIA DEFINED IN ARTICLE 43 OF THE CONVENTION .

ARTICLE 11

1 . AT THE REQUEST OF THE LEAST DEVELOPED ACP STATES THE COMMUNITY SHALL GIVE SPECIAL ATTENTION TO THE APPLICATION OF THE FOLLOWING AID MEASURES :

( A ) TECHNICAL ASSISTANCE NECESSARY FOR IDENTIFYING , PREPARING AND CARRYING OUT THEIR PROJECTS WHICH COME WITHIN THE FRAMEWORK OF THE PROGRAMMING OF COMMUNITY AID ;

( B ) TRAINING SCHEMES FOR MANAGEMENT AND OTHER STAFF REQUIRED FOR THE ECONOMIC DEVELOPMENT SERVICES AND TECHNICAL DEPARTMENTS OF THOSE STATES . SUCH TRAINING MUST BE CLOSELY LINKED TO THE PRACTICAL OBJECTIVES SET BY THE STATE CONCERNED AND CARRIED OUT , AS FAR AS POSSIBLE , IN THE TERRITORY OF THAT STATE .

2 . THE FOLLOWING SPECIAL AID MEASURES MAY ALSO BE APPLIED TO THOSE STATES :

( A ) SUPPORT FOR RESEARCH AIMED AT FINDING SOLUTIONS TO SOME OF THEIR SPECIFIC ECONOMIC AND SOCIAL DEVELOPMENT PROBLEMS .

( B ) SUPPORT FOR THE DEVELOPMENT OF SMALL - AND MEDIUM-SIZED ENTERPRISES AND FOR CARRYING OUT SMALL RURAL DEVELOPMENT SCHEMES .

3 . BY WAY OF DEROGATION FROM ARTICLE 46 ( 2 ) OF THE CONVENTION AND ON THE BASIS OF AN EXAMINATION OF THE NEEDS AND MEANS OF EACH OF THE ACP STATES CONCERNED , THE COMMUNITY MAY FINANCE , TEMPORARILY AND ON A DIMINISHING SCALE , THE RUNNING COSTS OF OR MAJOR REPAIRS TO INVESTMENTS PREVIOUSLY FINANCED BY THE COMMUNITY WHICH ARE OF SPECIAL IMPORTANCE TO THE ECONOMIC AND SOCIAL DEVELOPMENT OF THE STATE CONCERNED . THIS AID SHALL BE ACCORDED ONLY WHERE SUCH EXPENDITURE ON RUNNING COSTS OR MAJOR REPAIRS PROVES TOO GREAT FOR THE STATE OR OTHER BENEFICIARIES .

ARTICLE 12

THE LEAST DEVELOPED ACP STATES SHALL HAVE A PRIORITY CLAIM TO THE MEASURES FOR THE PROMOTION OF REGIONAL CO-OPERATION SPECIFIED IN ARTICLE 47 OF THE CONVENTION .

CHAPTER 6

SPECIFIC MEASURES IN FAVOUR OF SMALL - AND MEDIUMSIZED NATIONAL FIRMS

ARTICLE 13

1 . WITHIN THE LIMITS OF THE RESOURCES PROVIDED FOR IN ARTICLE 42 OF THE CONVENTION , THE COMMUNITY SHALL FINANCE PROJECTS IN FAVOUR OF SMALL - AND MEDIUM-SIZED FIRMS , CO-OPERATIVES OR LOCAL AUTHORITIES IN THE ACP STATES AND SHALL GENERALLY DO SO THROUGH PUBLIC OR SEMI-PUBLIC FINANCIAL BODIES SPECIALIZED IN DEVELOPMENT , SUCH AS NATIONAL OR REGIONAL DEVELOPMENT BANKS APPROVED BY THE COMMUNITY AND THE ACP STATE OR ACP STATES CONCERNED .

2 . TO THIS END , THE ACP STATE OR ACP STATES CONCERNED SHALL PROVIDE THE COMMUNITY WITH :

- INFORMATION ON THE CAPACITY OF THE FINANCING BODY , ON THE TREND OF AND PROSPECTS FOR ITS ACTIVITIES IN THE FIELD IN QUESTION , AND ON THE GUARANTEES IT CAN OFFER ;

- A PROGRAMME FOR THE PROMOTION OF SMALL FIRMS , INDICATING IN PARTICULAR THE SCOPE AND NATURE OF THE PROJECTS , FINANCING REQUIREMENTS , THE EXISTENCE OF POSSIBLE PROMOTERS AND , WHERE APPROPRIATE , THE TECHNICAL ASSISTANCE THE LATTER ARE TO BE PROVIDED WITH FOR THE PREPARATION AND MANAGEMENT OF THEIR PROJECTS .

3 . WHEN THE COMMUNITY HAS APPROVED THE PROGRAMME IN ACCORDANCE WITH ARTICLE 54 OF THE CONVENTION , IT SHALL OPEN FOR THE APPROVED FINANCIAL BODY A LINE OF CREDIT FINANCED BY A SUITABLE FORM OF AID .

THE LINE OF CREDIT SHALL BE FOR A MAXIMUM AMOUNT OF TWO MILLION UNITS OF ACCOUNT , WHICH MAY BE USED DURING A LIMITED PERIOD OF NOT MORE THAN THREE YEARS . IT MAY BE RENEWED AT THE END OF THAT PERIOD .

4 . THE TERMS GOVERNING THE GRANT OF SUCH AID SHALL IN EACH CASE BE THE SUBJECT OF AN AGREEMENT BETWEEN THE COMMUNITY AND THE FINANCING BODY . THE OUTLINE RULES FOR THE IMPLEMENTATION OF THE AID SHALL BE STIPULATED THEREIN , IN PARTICULAR AS REGARDS :

- THE SCALE OF THE OPERATIONS , WHICH MAY NOT EXCEED AN AMOUNT IN THE ORDER OF 200 000 UNITS OF ACCOUNT PER PROJECT ;

- THE SECTORS ELIGIBLE FOR AID ;

- THE CRITERIA WHICH MUST BE MET BY THE POTENTIAL AID RECIPIENTS ;

- THE CRITERIA AND METHODS OF PROJECT APPRAISAL ;

- THE FINANCIAL TERMS OF FINAL LOANS .

5 . THE PROJECTS SHALL BE APPRAISED BY THE FINANCING BODY . THIS BODY SHALL DECIDE , ON ITS OWN FINANCIAL RESPONSIBILITY , ON FINAL LOANS TO BE ACCORDED ON TERMS ESTABLISHED BY REFERENCE TO THOSE OBTAINING FOR THIS TYPE OF OPERATION IN THE ACP STATE IN QUESTION .

6 . THE FINANCING BODY SHALL FINANCE ITS LOANS BY MOBILIZING THE LINE OF CREDIT TO THE EXTENT REQUIRED . AT THIS STAGE THE COMMUNITY SHALL VERIFY THAT THE LOANS FALL WITHIN THE AGREEMENT REFERRED TO IN PARAGRAPH 4 .

THE FINANCING TERMS ACCORDED BY THE COMMUNITY TO THE FINANCING BODY SHALL TAKE INTO CONSIDERATION THE LATTER'S NEED TO COVER ITS ADMINISTRATIVE COSTS , EXCHANGE AND FINANCIAL RISKS AND THE COST OF TECHNICAL ASSISTANCE GIVEN TO THE FIRMS OR FINAL BORROWERS .

7 . THE FINANCING BODY SHALL BE RESPONSIBLE , WHATEVER THE CIRCUMSTANCES , FOR REPAYMENT TO THE COMMUNITY OF THAT PART OF THE LINE OF CREDIT ACTUALLY MOBILIZED .

IT SHALL PROVIDE THE COMMUNITY ANNUALLY WITH A REPORT ON THE IMPLEMENTATION AND FINANCING OF THE APPROVED PROGRAMME .

CHAPTER 7

MICROPROJECTS

ARTICLE 14

1 . IN ORDER TO RESPOND CONCRETELY TO THE NEEDS OF LOCAL COMMUNITIES WITH REGARD TO DEVELOPMENT , THE FUND SHALL PARTICIPATE AS AN EXPERIMENT IN THE FINANCING OF MICROPROJECTS , WITHOUT PREJUDICE TO THE RANGE OF PROJECTS WHICH ACP STATES MAY INCLUDE IN THEIR NATIONAL PROGRAMMES FOR FINANCING BY THE FUND .

TO THIS END , A SUM OF 20 MILLION UNITS OF ACCOUNT , TO BE DEDUCTED FROM THE GRANT AID PROVIDED FOR IN THE FIRST INDENT OF POINT 1 ( A ) OF ARTICLE 42 OF THE CONVENTION , MAY BE USED TO COVER COMMITMENTS RELATING TO THIS TYPE OF SCHEME .

2 . AT THE END OF THE SECOND YEAR AFTER THE ENTRY INTO FORCE OF THE CONVENTION , THE COUNCIL OF MINISTERS SHALL DECIDE ON THE FOLLOW-UP TO THIS EXPERIMENT .

ARTICLE 15

1 . IN ORDER TO BE ELIGIBLE FOR COMMUNITY FINANCING , MICROPROJECTS MUST :

- MEET A REAL , PRIORITY NEED AT LOCAL LEVEL ;

- ENSURE THE ACTIVE PARTICIPATION OF THE LOCAL COMMUNITY .

THE FUND'S CONTRIBUTION TO EACH MICROPROJECT MAY NOT EXCEED 75 000 UNITS OF ACCOUNT .

2 . MICROPROJECTS SHALL NORMALLY BE CARRIED OUT IN RURAL AREAS . HOWEVER , THE COMMUNITY MAY ALSO ASSIST IN THE FINANCING OF MICROPROJECTS IN URBAN AREAS . THESE PROJECTS SHALL INCLUDE DAMS , WELLS AND WATER SUPPLY SYSTEMS , SILOS AND WAREHOUSES FOR STORING PROVISIONS AND CROPS , RURAL SERVICE TRACKS AND BRIDGES , ANIMAL VACCINATION PENS AND CORRIDORS , PRIMARY SCHOOLS , DISPENSARIES , MATERNITY HOMES , SOCIAL ASSISTANCE CENTRES , MARKET BUILDINGS AND FACILITIES TO ENCOURAGE COMMERCIAL AND INDUSTRIAL ACTIVITY , AND OTHER PROJECTS WHICH MEET THE CRITERIA REFERRED TO IN PARAGRAPH 1 .

ARTICLE 16

EACH PROJECT FOR WHICH COMMUNITY ASSISTANCE IS REQUESTED MUST STEM FROM AN INITIATIVE TAKEN BY THE LOCAL COMMUNITY WHICH WILL BENEFIT THEREFROM .

THE FINANCING OF MICROPROJECTS SHALL IN PRINCIPLE HAVE A TRIPARTITE STRUCTURE AND SHALL STEM FROM :

- THE COMMUNITY BENEFITING , IN THE FORM OF A CONTRIBUTION IN MONEY OR IN KIND ADAPTED TO ITS CAPACITY TO CONTRIBUTE ;

- THE ACP STATE , IN THE FORM OF A FINANCIAL CONTRIBUTION OR A CONTRIBUTION OF PUBLIC WORKS SERVICES ;

- THE FUND .

FOR EACH PROJECT , THE LOCAL COMMUNITY SHALL UNDERTAKE TO PLAY ITS PART IN MAINTAINING AND RUNNING THE PROJECT , IN CONJUNCTION WITH THE NATIONAL AUTHORITIES AS APPROPRIATE .

ARTICLE 17

1 . THE ACP STATE CONCERNED SHALL PREPARE AND SUBMIT TO THE COMMISSION AN ANNUAL PROGRAMME SETTING FORTH THE BROAD OUTLINES OF THE PROJECTS PLANNED .

AFTER EXAMINATION BY THE COMMISSION'S DEPARTMENTS , THESE PROGRAMMES SHALL BE SUBMITTED TO THE RELEVANT BODIES OF THE COMMUNITY FOR FINANCING DECISIONS IN ACCORDANCE WITH ARTICLE 54 OF THE CONVENTION .

2 . WITHIN THE FRAMEWORK OF THE ANNUAL PROGRAMMES THUS DRAWN UP , THE FINANCING DECISIONS RELATING TO EACH MICROPROJECT SHALL BE TAKEN BY THE ACP STATE CONCERNED , WITH THE AGREEMENT OF THE COMMISSION WHICH SHALL BE DEEMED TO BE GIVEN WITHIN ONE MONTH OF NOTIFICATION OF SUCH DECISION , EXCEPT IN SPECIAL CASES .

CHAPTER 8

COMPETITION AND TERMS OF PREFERENCE FOR NATIONAL FIRMS

ARTICLE 18

1 . THE COMMISSION AND THE RELEVANT AUTHORITIES OF THE ACP STATES SHALL TAKE THE NECESSARY IMPLEMENTING MEASURES TO ENSURE EQUALITY OF CONDITIONS FOR PARTICIPATION IN TENDERING PROCEDURES AND OTHER PROCEDURES FOR THE AWARD OF CONTRACTS FINANCED BY THE FUND'S RESOURCES MANAGED BY THE COMMISSION .

2 . TO THIS END , WITHOUT PREJUDICE TO ARTICLE 19 , CARE SHALL BE TAKEN IN PARTICULAR TO :

( A ) ENSURE ADVANCE PUBLICATION IN REASONABLE TIME OF INVITATIONS TO TENDER IN THE OFFICIAL JOURNAL OF THE EUROPEAN COMMUNITIES AND THE OFFICIAL JOURNALS OF THE ACP STATES ;

( B ) ELIMINATE ANY DISCRIMINATORY PRACTICE OR TECHNICAL SPECIFICATION LIABLE TO STAND IN THE WAY OF PARTICIPATION ON EQUAL TERMS BY ALL NATURAL OR LEGAL PERSONS OF THE MEMBER STATES AND THE ACP STATES ;

( C ) ENCOURAGE IN SO FAR AS POSSIBLE , ESPECIALLY WHERE MAJOR WORKS OR THOSE OF A PARTICULAR TECHNICAL NATURE ARE TO BE UNDERTAKEN , CO-OPERATION BETWEEN THE FIRMS OF THE MEMBER STATES AND OF THE ACP STATES FOR EXAMPLE BY MEANS OF PRESELECTION AND THE CREATION OF GROUPS .

ARTICLE 19

FOR CERTAIN OPERATIONS RELATING TO EXCEPTIONAL AID , AND FOR OTHER OPERATIONS WHERE THE URGENCY OF THE SITUATION IS RECOGNIZED OR WHERE THE NATURE , MINOR IMPORTANCE OR PARTICULAR CHARACTERISTICS OF CERTAIN WORKS OR SUPPLIES SO WARRANT , THE RELEVANT AUTHORITIES OF THE ACP STATES MAY , IN AGREEMENT WITH THE COMMISSION , EXCEPTIONALLY AUTHORIZE :

- THE PLACING OF CONTRACTS AFTER RESTRICTED INVITATIONS TO TENDER ;

- THE CONCLUSION OF CONTRACTS BY DIRECT AGREEMENT ;

- THE PERFORMANCE OF CONTRACTS THROUGH PUBLIC WORKS DEPARTMENTS .

FURTHERMORE , FOR SCHEMES COSTING UNDER TWO MILLION UNITS OF ACCOUNT RECOURSE TO PUBLIC WORKS DEPARTMENTS MAY BE AUTHORIZED WHERE THE RECIPIENT ACP STATE HAS SUBSTANTIAL SUITABLE EQUIPMENT AND QUALIFIED STAFF RESOURCES AVAILABLE IN ITS NATIONAL DEPARTMENTS .

ARTICLE 20

TO PROMOTE PARTICIPATION BY NATIONAL FIRMS IN THE PERFORMANCE OF CONTRACTS FINANCED BY THE COMMUNITY FROM THE FUND'S RESOURCES MANAGED BY THE COMMISSION :

( A ) AN ACCELERATED PROCEDURE FOR ISSUING INVITATIONS TO TENDER INVOLVING SHORTER TIME LIMITS FOR THE SUBMISSION OF TENDERS SHALL BE USED WHERE THE WORKS IN QUESTION , BECAUSE OF THEIR SCALE , ARE MAINLY OF INTEREST TO FIRMS OF THE ACP STATES .

THIS ACCELERATED PROCEDURE SHALL BE APPLIED TO INVITATIONS TO TENDER WHOSE VALUE IS ESTIMATED AT LESS THAN TWO MILLION UNITS OF ACCOUNT .

IT MAY BE USED ONLY FOR WORKS CONTRACTS AND SHALL INVOLVE , FOR THE SUBMISSION OF TENDERS , TIME LIMITS FIXED IN ACCORDANCE WITH THE RULES IN FORCE IN THE ACP STATE CONCERNED .

THE USE OF AN ACCELERATED PROCEDURE FOR INVITATIONS TO TENDER WHOSE VALUE IS LESS THAN TWO MILLION UNITS OF ACCOUNT SHALL NOT EXCLUDE THE POSSIBILITY OF THE COMMISSION'S PROPOSING AN INTERNATIONAL INVITATION TO TENDER TO THE AUTHORITIES OF THE ACP STATE FOR AGREEMENT WHERE THE WORKS IN QUESTION , BECAUSE OF THEIR SPECIALIZED NATURE , MIGHT BE OF INTEREST TO INTERNATIONAL COMPETITION ;

( B ) FOR THE EXECUTION OF WORKS WHOSE VALUE IS LESS THAN TWO MILLION UNITS OF ACCOUNT A 10 % PREFERENCE SHALL BE TAKEN INTO ACCOUNT IN FAVOUR OF FIRMS OF THE ACP STATES WHERE TENDERS OF EQUIVALENT ECONOMIC AND TECHNICAL QUALITY ARE COMPARED .

THIS PREFERENCE SHALL BE CONFINED TO NATIONAL FIRMS OF THE ACP STATES WITHIN THE MEANING OF THE NATIONAL LAWS OF THOSE STATES PROVIDED THAT THEIR RESIDENCE FOR TAX PURPOSES AND MAIN BUSINESS ARE ESTABLISHED IN AN APC STATE AND THAT A SIGNIFICANT SHARE OF THE CAPITAL AND MANAGEMENT STAFF ARE SUPPLIED BY ONE OR MORE ACP STATES ;

( C ) FOR THE DELIVERY OF SUPPLIES A 15 % PREFERENCE SHALL BE TAKEN INTO ACCOUNT IN FAVOUR OF MANUFACTURING FIRMS OF THE ACP STATES WHERE TENDERS OF EQUIVALENT TECHNICAL AND ECONOMIC QUALITY ARE COMPARED .

THIS PREFERENCE SHALL BE CONFINED TO NATIONAL FIRMS OF THE ACP STATES WHICH PROVIDE A SUFFICIENT MARGIN OF VALUE ADDED .

ARTICLE 21

THE COMMISSION AND THE RELEVANT AUTHORITIES OF THE ACP STATES SHALL ENSURE THAT ARTICLES 18 TO 20 ARE OBSERVED FOR EACH OPERATION AND THAT THE TENDER SELECTED IS ECONOMICALLY THE MOST ADVANTAGEOUS , TAKING INTO ACCOUNT IN PARTICULAR THE QUALIFICATIONS OF AND THE GUARANTEES OFFERED BY THE TENDERERS , THE NATURE AND CONDITIONS OF EXECUTION OF THE WORKS OR SUPPLIES , AND THE PRICE , UTILIZATION COSTS AND TECHNICAL VALUE OF THOSE WORKS OR SUPPLIES . WHERE TWO TENDERERS ARE ACKNOWLEDGED TO BE EQUIVALENT ON THE BASIS OF THE CRITERIA STATED ABOVE , PREFERENCE SHALL BE GIVEN TO THE ONE WHICH PERMITS THE GREATEST POSSIBLE UTILIZATION OF THE PHYSICAL AND HUMAN RESOURCES OF THE ACP STATES .

THE COMMISSION AND THE RELEVANT AUTHORITIES OF THE ACP STATES SHALL ENSURE THAT ALL THE SELECTION CRITERIA ARE SPECIFIED IN THE INVITATION TO TENDER DOSSIER .

THE RESULT OF INVITATIONS TO TENDER SHALL BE PUBLISHED AT THE EARLIEST POSSIBLE DATE IN THE OFFICIAL JOURNAL OF THE EUROPEAN COMMUNITIES .

ARTICLE 22

THE GENERAL PROVISIONS AND CONDITIONS APPLICABLE TO THE PLACING AND PERFORMANCE OF PUBLIC WORKS CONTRACTS FINANCED BY THE FUND SHALL BE THE SUBJECT OF COMMON RULES ADOPTED , ON A PROPOSAL BY THE COMMISSION , BY A DECISION OF THE COUNCIL OF MINISTERS AT ITS SECOND MEETING FOLLOWING THE DATE OF ENTRY INTO FORCE OF THE CONVENTION .

ARTICLE 23

ANY DISPUTE ARISING BETWEEN THE AUTHORITIES OF AN ACP STATE AND A CONTRACTOR OR SUPPLIER IN THE COURSE OF EXECUTION OF A CONTRACT FINANCED BY THE FUND SHALL BE SETTLED BY ARBITRATION IN ACCORDANCE WITH RULES OF PROCEDURE ADOPTED BY A DECISION OF THE COUNCIL OF MINISTERS NOT LATER THAN ITS SECOND MEETING FOLLOWING THE ENTRY INTO FORCE OF THE CONVENTION .

CHAPTER 9

DRAWING UP , NEGOTIATION AND CONCLUSION OF TECHNICAL CO-OPERATION CONTRACTS

ARTICLE 24

TECHNICAL CO-OPERATION CONTRACTS SHALL BE ARRANGED BY MUTUAL AGREEMENT . CERTAIN CONTRACTS MAY BE AWARDED FOLLOWING COMPETITIVE TENDERING , NOTABLY FOR IMPORTANT , COMPLICATED AND TECHNICALLY DIFFICULT STUDIES WHERE TECHNICAL , ECONOMIC OR FINANCIAL REASONS JUSTIFY RECOURSE TO THIS PROCEDURE .

ARTICLE 25

1 . FOR EACH OPERATION OF TECHNICAL CO-OPERATION WHICH WILL INVOLVE A MUTUAL AGREEMENT PROCEDURE , THE COMMISSION SHALL COMPILE A LIST OF SELECTED CANDIDATES FROM MEMBER STATES OR ACP STATES , SELECTED ACCORDING TO CRITERIA GUARANTEEING THEIR QUALIFICATIONS , EXPERIENCE AND INDEPENDENCE AND TAKING INTO ACCOUNT THEIR AVAILABILITY FOR THE PROPOSED UNDERTAKING .

THE ACP STATE CONCERNED SHALL CHOOSE FREELY THE LISTED CANDIDATE IT WISHES TO DEAL WITH .

2 . WHEN COMPETITIVE TENDERING IS RESORTED TO , THE LIST OF SELECTED CANDIDATES SHALL BE DRAWN UP IN CLOSE COLLABORATION WITH THE COMMISSION AND THE ACP STATE CONCERNED ON THE BASIS OF THE CRITERIA SET OUT IN PARAGRAPH 1 . THE CONTRACT SHALL BE AWARDED TO THE LISTED CANDIDATE THAT SUBMITS THE TENDER JUDGED BY THE COMMISSION AND THE ACP STATE CONCERNED TO BE ECONOMICALLY THE MOST ADVANTAGEOUS .

3 . THE ACP FIRMS WHICH MAY BE TAKEN INTO CONSIDERATION FOR TECHNICAL CO-OPERATION ACTIONS SHALL BE SELECTED BY MUTUAL AGREEMENT BETWEEN THE COMMISSION AND THE ACP STATE OR ACP STATES CONCERNED .

ARTICLE 26

IN THE CONTEXT OF THE COMMON RULES PROVIDED FOR IN ARTICLE 22 AND THE GENERAL CONDITIONS OF PAYMENT ESTABLISHED BY AGREEMENT BETWEEN THE COMMISSION AND THE ACP STATES , THE TECHNICAL CO-OPERATION CONTRACTS SHALL BE PREPARED , NEGOTIATED AND CONCLUDED BY THE APPROPRIATE AUTHORITIES OF THE ACP STATES , IN PARTICIPATION AND AGREEMENT WITH THE DELEGATE OF THE EUROPEAN COMMISSION REFERRED TO IN ARTICLE 31 ( HEREINAFTER CALLED THE " DELEGATE " ) .

ARTICLE 27

THE COMMISSION SHALL , AS FAR AS POSSIBLE , ENCOURAGE CO-OPERATION BETWEEN CONSULTANTS AND EXPERTS OF MEMBER STATES AND ACP STATES , TEMPORARY PARTNERSHIPS , SUB-CONTRACTING AND THE USE OF NATIONAL EXPERTS IN THE TEAMS BELONGING TO CONSULTANTS FROM MEMBER STATES .

ARTICLE 28

WHEN AN ACP STATE HAS , WITHIN ITS ADMINISTRATIVE AND TECHNICAL STAFF , NATIONAL PERSONNEL MAKING UP A SUBSTANTIAL PART OF THE WORK FORCE NECESSARY FOR THE EXECUTION BY THE PUBLIC WORKS DEPARTMENT OF A TECHNICAL CO-OPERATION PROJECT THE COMMUNITY COULD , IN EXCEPTIONAL CASES , CONTRIBUTE TO THE COSTS OF THE PUBLIC WORKS DEPARTMENT BY PROVIDING CERTAIN APPARATUS THAT IT LACKS , OR SUPPLY THE REQUIRED ADDITIONAL STAFF IN THE FORM OF EXPERTS OF ANOTHER STATE .

THE PARTICIPATION OF THE COMMUNITY COULD ONLY COVER COSTS INCURRED BY SUPPLEMENTARY MEASURES STRICTLY CONFINED TO THE PROJECT IN QUESTION AND WOULD EXCLUDE ALL CURRENT OPERATIONAL EXPENDITURE .

CHAPTER 10

EXECUTIVE AGENTS

ARTICLE 29

1 . THE COMMISSION SHALL APPOINT THE CHIEF AUTHORIZING OFFICER OF THE FUND , WHO SHALL ENSURE THAT FINANCING DECISIONS ARE CARRIED OUT .

HE SHALL TAKE ANY ADAPTATION MEASURES AND COMMITMENT DECISIONS WHICH PROVE NECESSARY TO ENSURE THE PROPER EXECUTION OF APPROVED PROJECTS OR PROGRAMMES IN THE BEST ECONOMIC AND TECHNICAL CONDITIONS .

2 . WITHOUT PREJUDICE TO ARTICLE 30 , THE CHIEF AUTHORIZING OFFICER SHALL MANAGE THE FUNDS , AND SHALL ACCORDINGLY COMMIT , CLEAR AND AUTHORIZE EXPENDITURE AND KEEP THE ACCOUNTS OF COMMITMENTS AND AUTHORIZATIONS .

3 . THE CHIEF AUTHORIZING OFFICER SHALL ENSURE EQUALITY OF CONDITIONS FOR PARTICIPATION IN INVITATIONS TO TENDER , AND SEE TO IT THAT THERE IS NO DISCRIMINATION AND THAT THE TENDER SELECTED IS ECONOMICALLY THE MOST ADVANTAGEOUS .

ARTICLE 30

1 . THE GOVERNMENT OF EACH ACP STATE SHALL APPOINT A NATIONAL AUTHORIZING OFFICER TO REPRESENT THE NATIONAL AUTHORITIES IN ALL OPERATIONS RELATING TO PROJECTS FINANCED FROM THE FUND'S RESOURCES .

2 . IN ADDITION TO HIS RESPONSIBILITIES IN CONNECTION WITH THE PREPARATION , SUBMISSION AND APPRAISAL OF PROJECTS , THE NATIONAL AUTHORIZING OFFICER SHALL , IN CLOSE CO-OPERATION WITH THE DELEGATE , ISSUE INVITATIONS TO TENDER , RECEIVE TENDERS , PRESIDE OVER THE EXAMINATION OF TENDERS , ESTABLISH THE RESULTS OF THE INVITATIONS TO TENDER , SIGN CONTRACTS AND RIDERS THERETO AND ESTIMATES AND NOTIFY THE COMMISSION THEREOF . HE SHALL SUBMIT THE INVITATION TO TENDER DOSSIER TO THE COMMISSION FOR AGREEMENT BEFORE ISSUING INVITATIONS TO TENDER .

3 . HE SHALL TRANSMIT TO THE CHIEF AUTHORIZING OFFICER FOR AGREEMENT THE OUTCOME OF THE EXAMINATION OF THE TENDERS AND A PROPOSAL FOR PLACING THE CONTRACT .

4 . AS REGARDS WORKS CONTRACTS SUBJECT TO ACCELERATED PROCEDURE , THE DECISIONS TAKEN BY THE NATIONAL AUTHORIZING OFFICER IN IMPLEMENTATION OF PARAGRAPHS 2 AND 3 SHALL BE DEEMED TO BE APPROVED BY THE COMMISSION WITHIN A PERIOD OF ONE MONTH OF NOTIFICATION THEREOF .

5 . THE NATIONAL AUTHORIZING OFFICER SHALL CLEAR AND AUTHORIZE EXPENDITURE WITHIN THE LIMITS OF THE FUNDS DELEGATED TO HIM . HE SHALL REMAIN FINANCIALLY LIABLE UNTIL THE COMMISSION CLEARS THE OPERATIONS FOR THE EXECUTION OF WHICH HE IS RESPONSIBLE .

6 . DURING THE EXECUTION OF PROJECTS AND SUBJECT TO HIS INFORMING THE DELEGATE AS SOON AS POSSIBLE , THE NATIONAL AUTHORIZING OFFICER SHALL ALSO DECIDE ON :

( A ) TECHNICAL ADJUSTMENTS AND ALTERATIONS ON MATTERS OF DETAIL , SO LONG AS THEY RESPECT THE GENERAL FRAMEWORK OF THE PROJECT AND CONTRACT , ARE AN INDISPENSABLE ELEMENT FOR THE PERFORMANCE OF THE CONTRACT , DO NOT AFFECT THE TECHNICAL SOLUTIONS ADOPTED AND REMAIN WITHIN THE LIMIT OF THE PROVISION FOR MINOR ADJUSTMENTS ;

( B ) MINOR ALTERATIONS TO ESTIMATES DURING EXECUTION ;

( C ) TRANSFERS FROM ITEM TO ITEM WITHIN ESTIMATES ;

( D ) CHANGES OF SITE FOR MULTIPLE-UNIT PROJECTS WHERE JUSTIFIED ON TECHNICAL OR ECONOMIC GROUNDS ;

( E ) APPLICATION 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 MEMBER STATES OR ACP STATES PROVIDED THERE IS NO PRODUCTION OF COMPARABLE GOODS IN THE MEMBER STATES OR ACP STATES ;

( I ) SUB-CONTRACTING ;

( J ) FINAL ACCEPTANCES ; HOWEVER , THE DELEGATE MUST BE PRESENT AT PROVISIONAL ACCEPTANCES AND ENDORSE THE CORRESPONDING MINUTES AND , WHERE APPROPRIATE , HE MUST BE PRESENT AT FINAL ACCEPTANCES , IN PARTICULAR WHERE THE EXTENT OF THE RESERVATIONS RECORDED AT THE PROVISIONAL ACCEPTANCE NECESSITATES MAJOR ADDITIONAL WORK .

ARTICLE 31

1 . FOR THE PURPOSES OF APPLYING THE CONVENTION AND FOR THE PURPOSES OF THE FUND'S RESOURCES WHICH THE COMMISSION MANAGES , THE COMMISSION SHALL BE REPRESENTED IN EACH ACP STATE OR IN EACH REGIONAL GROUPING WHICH EXPRESSLY SO REQUESTS BY A EUROPEAN COMMISSION DELEGATE APPROVED BY THE ACP STATE CONCERNED .

2 . PROVIDED THAT AN EXPRESS REQUEST IS MADE BY AN ACP STATE TO THAT EFFECT , THE DELEGATE SHALL GIVE TECHNICAL ASSISTANCE IN PREPARING AND APPRAISING PROJECTS FINANCED FROM THE FUND'S RESOURCES . TO THIS END , HE MAY PARTICIPATE IN PREPARING DOSSIERS FOR SUBMISSION , IN NEGOTIATING , WITH EXTERNAL TECHNICAL ASSISTANCE , CONTRACTS FOR STUDIES , FOR THE SERVICES OF EXPERTS AND FOR WORKS SUPERVISION , IN SEEKING WAYS TO SIMPLIFY PROJECT APPRAISAL PROCEDURES , AND IN PREPARING GENERAL SPECIFICATIONS AND INVITATION TO TENDER DOSSIERS .

3 . THE DELEGATE SHALL , ON A REGULAR BASIS , AND IN CERTAIN CASES ACTING ON SPECIAL INSTRUCTIONS FROM THE COMMISSION , INFORM THE AUTHORITIES TO WHICH HE IS ATTACHED OF COMMUNITY ACTIVITIES WHICH MAY DIRECTLY CONCERN CO-OPERATION BETWEEN THE COMMUNITY AND THE ACP STATES .

4 . THE DELEGATE SHALL COLLABORATE WITH THE NATIONAL AUTHORITIES IN EXAMINING COMPLETED PROJECTS REGULARLY . REPORTS ON THE OUTCOME OF THE EXAMINATION SHALL BE DRAWN UP BY HIM AND COMMUNICATED TO THE ACP STATE CONCERNED .

5 . EVERY SIX MONTHS THE DELEGATE SHALL ASSESS THE FUND'S OPERATIONS IN THE ACP STATE OR REGIONAL GROUPING IN WHICH HE REPRESENTS THE COMMISSION . REPORTS DRAWN UP IN THIS CONNECTION SHALL BE COMMUNICATED BY THE COMMISSION TO THE ACP STATE OR ACP STATES CONCERNED .

6 . THE DELEGATE SHALL MAKE SURE , ON BEHALF OF THE COMMISSION , THAT THE PROJECTS AND PROGRAMMES FINANCED FROM THE FUND'S RESOURCES ARE EXECUTED PROPERLY FROM THE FINANCIAL AND TECHNICAL ANGLES .

ARTICLE 32

1 . SERVICES PROVIDED IN CONNECTION WITH PROJECTS FINANCED BY THE FUND WITH GRANT AID SHALL BE PAID FOR ON INSTRUCTIONS FROM THE COMMISSION BY DRAWING ON THE FUND'S ACCOUNTS .

2 . FOR THE PURPOSE OF EFFECTING PAYMENTS IN THE NATIONAL CURRENCIES OF THE ACP STATES , ACCOUNTS DENOMINATED IN THE CURRENCY OF ONE OR OTHER OF THE MEMBER STATES SHALL BE OPENED IN EACH ACP STATE ON BEHALF OF THE COMMISSION WITH A FINANCIAL INSTITUTION , CHOSEN BY MUTUAL AGREEMENT BETWEEN THE ACP STATE AND THE COMMISSION , WHICH SHALL EXERCISE THE FUNCTIONS OF PAYING AGENT .

3 . THESE FUNCTIONS MAY BE ASSUMED BY THE CENTRAL BANKS OF THE ACP STATES OR BY ANY OTHER NATIONAL PUBLIC OR SEMI-PUBLIC FINANCIAL INSTITUTION .

4 . THE ACCOUNTS REFERRED TO IN PARAGRAPH 2 SHALL BE REPLENISHED BY THE COMMISSION BY REFERENCE TO ACTUAL CASH REQUIREMENTS . TRANSFERS SHALL BE MADE IN THE CURRENCY OF ONE OR OTHER OF THE MEMBER STATES AND SHALL BE CONVERTED INTO THE NATIONAL CURRENCY OF THE ACP STATE AS AND WHEN PAYMENTS FALL DUE .

5 . THE PAYING AGENT SHALL NOT BE REMUNERATED FOR ITS SERVICES ; NO INTEREST SHALL BE PAYABLE ON DEPOSITED FUNDS .

6 . WITHIN THE LIMITS OF THE FUNDS AVAILABLE , THE PAYING AGENT SHALL MAKE THE DISBURSEMENTS AUTHORIZED AFTER VERIFYING THAT THE SUPPORTING DOCUMENTS PROVIDED ARE SUBSTANTIVELY ACCURATE AND IN ORDER , AND THAT THE DISCHARGE IS VALID .

CHAPTER 11

OTHER PROVISIONS

ARTICLE 33

1 . EXCESS EXPENDITURE INCURRED DURING THE EXECUTION OF A PROJECT FINANCED FROM THE FUND'S RESOURCES MANAGED BY THE COMMISSION SHALL BE BORNE BY THE ACP STATE OR ACP STATES CONCERNED , SUBJECT TO THE FOLLOWING PROVISIONS .

2 . AS SOON AS IT APPEARS LIKELY THAT A PROJECT WILL INVOLVE EXCESS EXPENDITURE , THE NATIONAL AUTHORIZING OFFICER SHALL SO INFORM THE COMMISSION THROUGH THE DELEGATE AND SHALL MAKE KNOWN TO IT THE MEASURES HE INTENDS TO TAKE IN ORDER TO COVER SUCH EXCESS EXPENDITURE , INVOLVING EITHER A REDUCTION IN THE SCALE OF THE PROJECT OR A CALL ON NATIONAL RESOURCES .

3 . IF IT APPEARS IMPOSSIBLE TO REDUCE THE SCALE OF THE PROJECT OR TO COVER THE EXCESS EXPENDITURE BY DRAWING ON NATIONAL RESOURCES , THE COMMUNITY BODY RESPONSIBLE FOR TAKING THE FINANCING DECISIONS MAY , AS AN EXCEPTIONAL MEASURE , TAKE A DECISION TO COMMIT ADDITIONAL FUNDS AND FINANCE THE RELEVANT EXPENDITURE EITHER BY SAVINGS MADE ON OTHER PROJECTS OR BY IMPLEMENTING SUPPLEMENTARY MEASURES WORKED OUT JOINTLY BY THE COMMISSION AND THE ACP STATE OR ACP STATES CONCERNED .

4 . WITHOUT PREJUDICE TO THE ARRANGEMENTS PROVIDED FOR IN PARAGRAPHS 2 AND 3 , THE NATIONAL AUTHORIZING OFFICER SHALL DECIDE , IN CONCERT WITH THE CHIEF AUTHORIZING OFFICER , TO EARMARK UNEXPENDED BALANCES RESULTING FROM SAVINGS SHOWN WHEN THE ACCOUNTS OF PROJECTS ARE CLOSED FOR COVERING EXCESS EXPENDITURE ON ANOTHER PROJECT , PROVIDED THAT SUCH EXCESS EXPENDITURE IS NOT GREATER THAN A FIXED CEILING OF 15 % OF THE TOTAL APPROPRIATION FOR THE PROJECT IN QUESTION .

ARTICLE 34

FINANCING AND ADMINISTRATIVE EXPENSES ARISING OUT OF THE ADMINISTRATION OF THE FUND AND THE COSTS OF SUPERVISING PROJECTS AND PROGRAMMES SHALL BE COVERED BY THE FUND .

ARTICLE 35

A REPRESENTATIVE OF THE BANK SHALL BE PRESENT AT MEETINGS OF THE COUNCIL OF MINISTERS OR COMMITTEE OF AMBASSADORS WHEN MATTERS FROM THE AREAS WHICH CONCERN THE BANK ARE ON THE AGENDA .