No C 280/6 Official Journal of the European Communities 31. 10.81 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Financial Regulation on the application 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 
(Submitted by the Commission to the Council on 25 March 1981) 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES, 
Having regard to the Treaty establishing the 
European Economic Community, and in particular 
Article 209 thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European 
Parliament, 
Having regard to the opinion of the Court of 
Auditors, 
Whereas the European Economic Community and 
the Portuguese Republic have concluded an 
Agreement in the form of an exchange of letters 
concerning the implementation of pre-accession aid 
for Portugal, hereinafter referred to as 'the 
Agreement' ('); 
Whereas this Agreement fixes the total amount of 
pre-accession aid provided by the Community for 
Portugal at 275 million ECU, made up of 125 million 
ECU in the form of grant aid and 150 million ECU 
in the form of loans accorded by the European 
Investment Bank, hereinafter referred to as 'the 
Bank', from its own resources; 
Whereas it is necessary to lay down implementing 
and administrative rules which, while based on those 
(') OJ No L 349, 23. 12. 1980, p. 1. established in respect of the Agreements and 
Protocols concluded by the Community with certain 
Mediterranean countries, take account of the specific 
objectives of pre-accession aid; 
Whereas the rules for the management of aid should 
be established, the procedure for examining and 
approving the projects, programmes or schemes 
provided for in the Agreement should be determined, 
and the detailed rules for supervising the use of the 
aid should be defined; 
Whereas a Committee of representatives of the 
Member States should be set up under the auspices of 
the Commission in respect of operations administered 
by the Commission; 
Whereas it should be stipulated that financing 
applications for operations not covered from the 
Bank's own resources be submitted for opinion to a 
Committee of representatives of the Governments of 
the Member States and to the Commission; 
Whereas the work done by the Commission and the 
Bank to apply the Agreement should be harmonized, 
HAS ADOPTED THIS FINANCIAL REGULATION: 
Article 1 
In implementing the aid to Portugal, the Commission 
shall ensure that the general guidelines and objectives 
of the Agreement are applied. 
31. 10.81 Official Journal of the European Communities \o C 280/7 
Article 2 
1. The appropriations for the financing of aid not 
covered from the Bank's own resources shall be 
administered by the Commission, in accordance with 
the Financial Regulation applicable to the general 
budget of the European Communities, without 
prejudice to the Bank's powers in administering 
certain froms of aid. 
2. However, the Commission shall adopt detailed 
administrative rules, having particular regard to the 
appointment of financial implementing bodies and 
conditions guaranteeing equal competition, to the 
extent that such rules are necessary for the purpose of 
implementing the Agreement. 
Article 3 
1. A mandate .shall be given to the Bank, on behalf 
of the Community, to administer the interest rate 
subsidies for loans from its own resources. 
The Commission shall administer grants for the 
cooperation projects or programmes and technical 
assistance operations, referred to respectively in 
Articles 5 and 6 of the Agreement. 
2. The mandate given to the Bank in accordance 
with paragraph 1 above, and in particular the 
provisions concerning movements of funds and the 
remuneration for executing the mandate, shall be the 
subject of an agreement between the Commission and 
the Bank. This agreement shall include the provisions 
set out in Articles 8 to 10. 
Article 4 
The implementation of the aid shall be discussed 
periodically by representatives of the Member States, 
the Commission and the Bank. These discussions shall 
cover in particular the information obtained by the 
Commission and the Bank from Portugal on the 
financing sought and on the operations which the 
Commission and the Bank intend to submit for 
opinions in accordance with Articles 6 to 10. 
Article 5 
1. A committee, hereinafter referred to as the 
'Article 5 Committee', consisting of representatives of 
the Member States, shall be set up under the auspices 
of the Commission. 
The Article 5 Committee shall be chaired by a re­
presentative of the Commission; its secretarial shall 
be provided by the Commission. A representative of the Bank shall attend its meetings. 
2. The Committee shall adopt its own rules of 
procedure. 
3. Within the Article 5 Committee, the votes of the 
Member States shall be weighted in accordance with 
Article 148 (2) of the Treaty. 
The Article 5 Committee shall act by a majority of 45 
votes. 
Article 6 
1. The Article 5 Committee shall give its opinion 
on draft financing decisions for cooperation projects 
or programmes and technical assistance schemes in 
Portugal submitted to it by the Commission. 
2. The draft financing decisions for projects, 
programmes or schemes shall explain their relevance 
in the context of Portugal's preparation for accession 
and shall assess the effectiveness of each project, 
programme or scheme by setting the effects it is 
expected to produce against the resources to be 
invested in it. 
3. The assessment by the Article 5 Committee shall 
relate inter alia tp the conformity of the projects, 
piirogrammes or schemes with the aid objectives laid 
down in the Agreement. 
Article 7 
The draft financing decisions referred to in Article 6, 
together with the opinion of the Article 5 Committee, 
shall be submitted to the Commission for a decision. 
The Commission shall adopt decisions which shall 
apply immediately. However, if the Committee has 
not delivered a favourable opinion, these decisions 
shall forthwith be communicated by the Commission 
to the Council. In that event, the Commission shall 
defer application of the decisions which it has 
adopted for not more than two months from the date 
of such communication. The Council, acting by a 
qualified majority, may take a different decision 
within two months. 
Article 8 
1. A Committee consisting of representatives of the 
Governments of the Member States, hereinafter 
referred to as the 'Article 8 Committee', shall be set 
up under the auspices of the Bank. 
No C 280/8 Official Journal of the European Communities 31.10.81 
The Article 8 Committee shall be chaired by the 
representative of the Government of the Member 
State currently holding the presidency of the Board of 
Governors of the Bank; its secretarial services shall be 
provided by the Bank. 
A representative of the Commission shall attend its 
meetings. 
2. The Council, acting unanimously, shall adopt 
the rules of procedure of the Article 8 Committee. 
3. Within the Article 8 Committee, the votes of the 
Member States shall be weighted as specified in 
Article 148 (2) of the Treaty. 
The Article 8 Committee shall act by a majority of 45 
votes. 
Article 9 
1. Applications for loans with an interest rate 
subsidy, submitted by the Portuguese Government, or 
on which that government has expressed a favourable 
opinion, shall be transmitted by the Bank to the 
members of the Article 8 Committee and to the 
Commission, accompanied by any relevant comments. 
2. The loan application shall be considered 
acceptable if the Bank does not receive — within two 
months from the date of transmission of the 
application — any request for consultation of the 
Article 8 Committee from a member of the Article 8 
Committee or from the Commission. 
3. If such a request is received, the Article 8 
Committee shall examine the loan application and 
give its opinion thereon. 
The Commission representative shall state the 
Commission's position on the application. 
4. The Commission's position and the Committee's 
assessment shall cover inter alia the conformity of the 
application with the aid objectives laid down in the 
Agreement. 
5. In addition, the Article 8 Committee shall be 
informed by the Bank of loans without an interest 
rate subsidy which it intends to grant from its own 
resources. 
Article 10 
1. The document in which the Bank submits loan 
applications to the Article 8 Committee shall, in 
particular, explain the relevance of the project in the context of Portugal's preparation for accession and, 
where appropriate, indicate the situation as regards 
loans granted by the Community. 
The Commission and the Bank shall make a joint 
selection of the branches of activity eligible for loans 
carrying an interest rate subsidy. 
2. Where, in respect of an application for a loan 
with an interest rate subsidy, the procedure provided 
for in Article 9 results either in tacit agreement or in 
a favourable opinion form the Article 8 Committee, 
the application shall be submitted for a decision to the 
Board of Directors of the Bank, which shall act in 
accordance with the Bank's Statute. 
In the absence of a favourable opinion from the 
Article 8 Committee, the Bank shall either withdraw 
the application or decide to maintain it. In the latter 
case, the application, together with a reasoned 
opinion of the Committee, shall be submitted for a 
decision to the Board of Directors of the Bank, which 
shall act in accordance with the provisions of its 
Statute. 
Article 11 
1. The Commission shall ascertain from the Bank 
that the mandate provided for in Article 3 is carried 
out. It shall also ascertain how the aid which id 
administers is used by Portugal or by any other 
recipients referred to in Article 10 of Agreement. 
2. It shall ascertain too, in close collaboration with 
the relevant authorities in Portugal, how projects 
financed with Community aid are used by the 
recipients. 
3. When carrying out the examinations provided 
for in paragraphs 1 and 2, the Commission shall, 
together with the Bank, examine to what extent the 
objectives of the aid have been attained. 
4. The Commission shall inform the Council and 
the European Parliament, at their request and at least 
once a year, of its findings pursuant to paragraphs 1, 
2 and 3. 
Article 12 
This Regulation shall enter into force on the third 
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.