COUNCIL REGULATION (EEC) No 3323/80 of 18 December 1980 on the conclusion of the Agreement in the form of an exchange of letters between the European Economic Community and the Portuguese Republic concerning the implementation of pre-accession aid for Portugal

THE COUNCIL OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Economic Community, and in particular Article 235 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament (1),

Whereas the Agreement in the form of an exchange of letters between the European Economic Community and the Portuguese Republic concerning the implementation of pre-accession aid for Portugal should be approved,

HAS ADOPTED THIS REGULATION:

Article 1

The Agreement in the form of an exchange of letters between the European Economic Community and the Portuguese Republic concerning the implementation of pre-accession aid for Portugal is hereby approved on behalf of the Community.

The text of the Agreement is attached to this Regulation.

Article 2

The President of the Council shall carry out the notification procedure provided for in Article 20 of Annex I to the Agreement (2).

Article 3

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

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

Done at Brussels, 18 December 1980.

For the Council

The President

C. NEY

(1) Opinion delivered on 18 December 1980 (not yet published in the Official Journal). (2) The date of entry into force of the Agreement will be published in the Official Journal of the European Communities by the General Secretariat of the Council.

AGREEMENT in the form of an exchange of letters between the European Economic Community and the Portuguese Republic concerning the implementation of pre-accession aid for Portugal

Letter No 1

Sir,

On 7 October 1980 the European Economic Community decided to agree to the Portuguese Republic's request for financial aid in order to undertake, with a view to Portugal's accession to the European Communities, measures of common interest to prepare and facilitate the harmonious integration of the Portuguese economy into the Community economy.

At the negotiations held in Brussels on 17 November 1980 the delegations of the Community and of the Portuguese Republic agreed on the terms and detailed arrangements for implementing this aid, which are set out in Annexes I and II to this letter.

I should be obliged if you would acknowledge receipt of this letter and its annexes and confirm that your Government is in agreement with their contents.

Please accept, Sir, the assurance of my highest consideration.

On behalf of the Council of the European Communities

ANNEX I

Article 1

The Community shall exceptionally participate, on the terms specified hereafter, in the financing of specific operations undertaken by the Portuguese Government in order to facilitate the harmonious integration of the Portuguese economy into the Community after Portugal's accession to the European Communities.

Article 2

1. For the purposes specified in Article 1, and for a period beginning on 1 January 1981 and expiring on the date of entry into force of Portugal's Treaty of Accession, a total amount of 275 million European units of account (EUA) may be committed as follows: (a) 150 million EUA in the form of loans from the European Investment Bank, hereinafter referred to as "the Bank", granted from its own resources;

(b) 125 million EUA in the form of grant aid.

No new financial commitment of these sums may be made after the date of accession.

2. Of the loans referred to in paragraph 1 (a), a maximum amount of 125 million EUA shall attract interest rate subsidies of 3 % per annum, it being understood that the cost to the Community of financing such subsidies must not exceed 25 million EUA.

Article 3

1. The amount indicated in Article 2 (1) (a) shall be used for financing or contributing towards the financing of investment projects which, with the objective inter alia of encouraging regional development in Portugal, help to increase productivity and strengthen the Portuguese economy, and promote in particular the improvement of the country's industrial structures, the modernization of its agriculture and fisheries and the development of infrastructures.

2. Examination of the eligibility of the projects and the granting of loans shall be undertaken in accordance with the detailed rules, conditions and procedures laid down by the Bank's Statute.

3. The duration of the loans granted by the Bank from its own resources shall be established on the basis of the economic and financial characteristics of the projects for which such loans are intended, account being taken of the conditions prevailing on the capital markets in which the Bank finds its resources. The interest rate shall be determined in accordance with the Bank's practice at the time of signature of each loan contract.

However, loans intended for financing capital projects in the small and medium-sized businesses or infrastructures sectors, including the energy sector, or for developing agriculture and fisheries shall attract the 3 % per annum interest rate subsidy referred to in Article 2 (2). This definition of sectors may be amended by mutual agreement between the Community and Portugal.

4. The loans may be granted through the intermediary of the State or appropriate Portuguese bodies, on condition that they onlend the amounts to the recipients on terms decided, by agreement with the Bank, on the basis of the economic and financial characteristics of the projects for which they are intended.

Article 4

The amount indicated in Article 2 (1) (b) shall be used as follows: (a) 25 million EUA for the financing of the interest rate subsidies referred to in Article 2 (2) for loans accorded by the Bank from its own resources;

(b) 100 million EUA for financing or contributing towards the financing of cooperation projects or programmes and of technical assistance operations.

Article 5

When selecting the cooperation projects or programmes referred to in Article 4 (b), special attention shill be given to projects or programmes aimed at encouraging in particular: (a) the restructuring, modernization and development of small and medium-sized businesses;

(b) improvement of production and marketing structures in agriculture and fisheries;

(c) the creation of infrastructures aimed at facilitating a more balanced development between regions;

(d) the establishment of an integrated national vocational training policy based on a network of vocational training centres.

Article 6

In the selection of the technical assistance operations referred to in Article 4 (b), particular attention shall be given to operations preparatory or complementary to the projects or programmes referred to in Articles 3 and 5 and to more specific operations aimed at facilitating Portugal's adoption of the acquis communautaire.

Article 7

The Community's financial contribution, in the form of grant aid, to cooperation projects or programmes may not exceed 50 % of their total cost. For technical assistance operations, Community aid may cover the full cost.

Article 8

Community aid shall be used to cover costs necessarily incurred in carrying out approved projects, programmes (including expenditure on studies, the services of consulting engineers and technical assistance) or operations. It may not be used to cover administrative, maintenance or operational expenditure.

Article 9

Aid contributed by the Community for the execution of investment projects or cooperation projects or programmes may, with the agreement of Portugal, take the form of cofinancing.

Article 10

The Portuguese State, or, with its agreement, public or private undertakings having their registered place of business or a place of business in Portugal, as well as individuals in the framework of cooperation projects or programmes and technical assistance operations, are eligible for Community aid.

Article 11

1. The Portuguese State or, with its agreement, the other beneficiaries referred to in Article 10 shall submit to the Bank their requests for loans and to the Commission of the European Communities their requests for grant aid.

2. Examination of the eligibility of projects, programmes or operations shall be carried out by the Community with a view to preparing Portugal for accession and by taking account of the mutual interests of both Parties concerned.

3. The Community shall appraise the requests for financing in conjunction with the Portuguese State and the beneficiaries and shall inform them of the decisions taken on such requests.

Article 12

The execution, management and maintenance of schemes which are the subject of financing under this Agreement shall be the responsibility of Portugal or of the other beneficiaries referred to in Article 10.

The Community shall ensure that financial aid which it has granted is expended in accordance with the agreed allocations and to the best economic advantage.

Article 13

Participation in tendering procedures and other procedures for the award of contracts eligible for financing shall be open, on equal terms, to all natural or legal persons of Portugal and of the Member States.

Article 14

Portugal shall apply to contracts awarded for the execution of projects, programmes or operations financed under this Agreement, fiscal and customs arrangements at least as favourable as those applied in respect of other international organizations.

Article 15

Portugal shall take the necessary measures to ensure that interest and all other payments due to the Bank in respect of loans granted under this Agreement are exempted from any national or local taxes or levies.

Article 16

Where a loan is accorded to a beneficiary other than the Portuguese State, the provision of a guarantee by the latter may be required by the Bank as a condition for the grant of the loan.

Article 17

Throughout the duration of the loans accorded pursuant to this Agreement, Portugal shall undertake to make available to debtors enjoying such loans or to guarantors of the loans the foreign currency necessary for the payment of interest, commission and other charges and the repayment of principal.

Article 18

The Portuguese authorities shall give all necessary aid and assistance to Community representatives, including those of the Bank, for the purposes of implementing this Agreement.

Article 19

The implementation of the aid may be examined within the Joint Committee referred to in Article 32 of the Agreement between the European Economic Committee and the Portuguese Republic signed on 22 July 1972.

Article 20

This Agreement shall enter into force on the first day of the month following the mutual notification by the Parties of the completion of the procedures necessary to this end.

ANNEX II Declaration by the European Economic Community on the European unit of account referred to in Article 2 of Annex I

The European unit of account used to express the amounts specified in Article 2 of the Annex I is defined as the sum of the following amounts in the currencies of the Member States of the European Economic Community: >PIC FILE= "T0016841">

The value of the European unit of account in any given currency is equal to the sum of the equivalent in that currency of the amounts of currency referred to in paragraph 1. It is calculated by the Commission, using daily market exchanges rates.

The daily values of the European unit of account in the various national currencies are made available every day are published periodically in the Official Journal of the European Communities.

Letter No 2

Sir,

I have the honour to acknowledge receipt of your letter of today's date, accompanied by two Annexes, which reads as follows:

"On 7 October 1980 the European Economic Community decided to agree to the Portuguese Republic's request for financial aid in order to undertake, with a view to Portugal's accession to the European Communities, measures of common interest to prepare and facilitate the harmonious integration of the Portuguese economy into the Community economy.

At the negotiations held in Brussels on 17 November 1980 the delegations of the Community and of the Portuguese Republic agreed on the terms and detailed arrangements for implementing this aid, which are set out in Annexes I and II to this letter.

I should be obliged if you would acknowledge receipt of this letter and its annexes and confirm that your Government is in agreement with their contents."

I have the honour to confirm that my Government is in agreement with the contents of your letter and of its annexes.

Please accept, Sir, the assurance of my highest consideration.

For the Government of the Portuguese Republic

ANNEX I

Article 1

The Community shall exceptionally participate, on the terms specified hereafter, in the financing of specific operations undertaken by the Portuguese Government in order to facilitate the harmonious integration of the Portuguese economy into the Community after Portugal's accession to the European Communities.

Article 2

1. For the purposes specified in Article 1, and for a period beginning on 1 January 1981 and expiring on the date of entry into force of Portugal's Treaty of Accession, a total amount of 275 million European units of account (EUA) may be committed as follows: (a) 150 million EUA in the form of loans from the European Investment Bank, hereinafter referred to as "the Bank", granted from its own resources;

(b) 125 million EUA in the form of grant aid.

No new financial commitment of these sums may be made after the date of accession.

2. Of the loans referred to in paragraph 1 (a), a maximum amount of 125 million EUA shall attract interest rate subsidies of 3 % per annum, it being understood that the cost to the Community of financing such subsidies must not exceed 25 million EUA.

Article 3

1. The amount indicated in Article 2 (1) (a) shall be used for financing or contributing towards the financing of investment projects which, with the objective inter alia of encouraging regional development in Portugal, help to increase productivity and strengthen the Portuguese economy, and promote in particular the improvement of the country's industrial structures, the modernization of its agriculture and fisheries and the development of infrastructures.

2. Examination of the eligibility of the projects and the granting of loans shall be undertaken in accordance with the detailed rules, conditions and procedures laid down by the Bank's Statute.

3. The duration of the loans granted by the Bank from its own resources shall be established on the basis of the economic and financial characteristics of the projects for which such loans are intended, account being taken of the conditions prevailing on the capital markets in which the Bank finds its resources. The interest rate shall be determined in accordance with the Bank's practice at the time of signature of each loan contract.

However, loans intended for financing capital projects in the small and medium-sized businesses or infrastructures sectors, including the energy sector, or for developing agriculture and fisheries shall attract the 3 % per annum interest rate subsidy referred to in Article 2 (2). This definition of sectors may be amended by mutual agreement between the Community and Portugal.

4. The loans may be granted through the intermediary of the State or appropriate Portuguese bodies, on condition that they onlend the amounts to the recipients on terms decided, by agreement with the Bank, on the basis of the economic and financial characteristics of the projects for which they are intended.

Article 4

The amount indicated in Article 2 (1) (b) shall be used as follows: (a) 25 million EUA for the financing of the interest rate subsidies referred to in Article 2 (2) for loans accorded by the Bank from its own resources;

(b) 100 million EUA for financing or contributing towards the financing of cooperation projects or programmes and of technical assistance operations.

Article 5

When selecting the cooperation projects or programmes referred to in Article 4 (b), special attention shill be given to projects or programmes aimed at encouraging in particular: (a) the restructuring, modernization and development of small and medium-sized businesses;

(b) improvement of production and marketing structures in agriculture and fisheries;

(c) the creation of infrastructures aimed at facilitating a more balanced development between regions;

(d) the establishment of an integrated national vocational training policy based on a network of vocational training centres.

Article 6

In the selection of the technical assistance operations referred to in Article 4 (b), particular attention shall be given to operations preparatory or complementary to the projects or programmes referred to in Articles 3 and 5 and to more specific operations aimed at facilitating Portugal's adoption of the acquis communautaire.

Article 7

The Community's financial contribution, in the form of grant aid, to cooperation projects or programmes may not exceed 50 % of their total cost. For technical assistance operations, Community aid may cover the full cost.

Article 8

Community aid shall be used to cover costs necessarily incurred in carrying out approved projects, programmes (including expenditure on studies, the services of consulting engineers and technical assistance) or operations. It may not be used to cover administrative, maintenance or operational expenditure.

Article 9

Aid contributed by the Community for the execution of investment projects or cooperation projects or programmes may, with the agreement of Portugal, take the form of cofinancing.

Article 10

The Portuguese State, or, with its agreement, public or private undertakings having their registered place of business or a place of business in Portugal, as well as individuals in the framework of cooperation projects or programmes and technical assistance operations, are eligible for Community aid.

Article 11

1. The Portuguese State or, with its agreement, the other beneficiaries referred to in Article 10 shall submit to the Bank their requests for loans and to the Commission of the European Communities their requests for grant aid.

2. Examination of the eligibility of projects, programmes or operations shall be carried out by the Community with a view to preparing Portugal for accession and by taking account of the mutual interests of both Parties concerned.

3. The Community shall appraise the requests for financing in conjunction with the Portuguese State and the beneficiaries and shall inform them of the decisions taken on such requests.

Article 12

The execution, management and maintenance of schemes which are the subject of financing under this Agreement shall be the responsibility of Portugal or of the other beneficiaries referred to in Article 10.

The Community shall ensure that financial aid which it has granted is expended in accordance with the agreed allocations and to the best economic advantage.

Article 13

Participation in tendering procedures and other procedures for the award of contracts eligible for financing shall be open, on equal terms, to all natural or legal persons of Portugal and of the Member States.

Article 14

Portugal shall apply to contracts awarded for the execution of projects, programmes or operations financed under this Agreement, fiscal and customs arrangements at least as favourable as those applied in respect of other international organizations.

Article 15

Portugal shall take the necessary measures to ensure that interest and all other payments due to the Bank in respect of loans granted under this Agreement are exempted from any national or local taxes or levies.

Article 16

Where a loan is accorded to a beneficiary other than the Portuguese State, the provision of a guarantee by the latter may be required by the Bank as a condition for the grant of the loan.

Article 17

Throughout the duration of the loans accorded pursuant to this Agreement, Portugal shall undertake to make available to debtors enjoying such loans or to guarantors of the loans the foreign currency necessary for the payment of interest, commission and other charges and the repayment of principal.

Article 18

The Portuguese authorities shall give all necessary aid and assistance to Community representatives, including those of the Bank, for the purposes of implementing this Agreement.

Article 19

The implementation of the aid may be examined within the Joint Committee referred to in Article 32 of the Agreement between the European Economic Committee and the Portuguese Republic signed on 22 July 1972.

Article 20

This Agreement shall enter into force on the first day of the month following the mutual notification by the Parties of the completion of the procedures necessary to this end.

ANNEX II Declaration by the European Economic Community on the European unit of account referred to in Article 2 of Annex I

The European unit of account used to express the amounts specified in Article 2 of the Annex I is defined as the sum of the following amounts in the currencies of the Member States of the European Economic Community: >PIC FILE= "T0016841">

The value of the European unit of account in any given currency is equal to the sum of the equivalent in that currency of the amounts of currency referred to in paragraph 1. It is calculated by the Commission, using daily market exchanges rates.

The daily values of the European unit of account in the various national currencies are made available every day are published periodically in the Official Journal of the European Communities.

Letter No 2

Sir,

I have the honour to acknowledge receipt of your letter of today's date, accompanied by two Annexes, which reads as follows:

"On 7 October 1980 the European Economic Community decided to agree to the Portuguese Republic's request for financial aid in order to undertake, with a view to Portugal's accession to the European Communities, measures of common interest to prepare and facilitate the harmonious integration of the Portuguese economy into the Community economy.

At the negotiations held in Brussels on 17 November 1980 the delegations of the Community and of the Portuguese Republic agreed on the terms and detailed arrangements for implementing this aid, which are set out in Annexes I and II to this letter.

I should be obliged if you would acknowledge receipt of this letter and its annexes and confirm that your Government is in agreement with their contents."

I have the honour to confirm that my Government is in agreement with the contents of your letter and of its annexes.

Please accept, Sir, the assurance of my highest consideration.

For the Government of the Portuguese Republic