* ft COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 20 12.1995 
COM(95) 686 final . 
94/0190 (SYN) 
Re-examined proposal for a 
COUNCIL REGULATION (EC) 
on the implementation of the EC Investment Partners financial instrument 
for the countries of Latin America, Asia, the Mediterranean region 
and South Africa 
(presented by the Commission pursuant to Article 189 c (d) 
of the EC Treaty) 

- s\ -
I. BACKGROUND. 
On 22nd September 1994 the Commission proposed by means of a Council Regulation to 
reinforce and continue the EC Investment Partners financial instrument for investment promotion 
in Asia, Latin America, the Mediterranean and South Africa. The text of the proposed regulation 
maintains the essential characteristics of the existing Council Regulation (319/92) and proposes 
improvements in the conditions of finance available under all of the facilities. The Commission 
proposal also includes specific provisions for reinforcement of the Commission's management, 
control and audit of funds, of its ongoing monitoring of actions financed and of its co-ordination 
of ECBP with other EC instruments for economic co-operation. A strengthened and obligatory 
anti-fraud reimbursement clause is proposed for all ECIP Framework Agreements. 
On 28th October 1994 the European Parliament approved in First Reading (Doct N° A4-0036/94 
published in O.J. N° 323 of 21st November 1994) making amendments. On 22nd May 1995, 
(Published in O.J. N° C160 of 26th June 1995) the Council gave its Common Position which 
approves the essentials of the Commission's proposal with certain specific amendments. In its 
Communication to the Parliament dated 10th July 1995 (SEC(95) 1171 final) the Commission 
accepted many of the Council's amendments but maintained two substantial reserves on the 
Council's two amendments as regards the period of validity of the regulation, and the Council's 
"Financial Reference Amount". While the Commission had proposed an open-ended validity for 
the Regulation, the Council, in agreement with the Parliament, has proposed only a five year 
validity 1995-99. After over 7 years operations of ECEP on a pilot and then a trial basis the 
Commission maintains its proposal for an open-ended Regulation. The Council has inserted a 
financial reference amount into the Regulation. Since the matter is not subject to co-decision, 
the Commission rejects this provision and declares that the amount inserted is only of an 
illustrative nature. 
While expressing its two substantial reserves on (i) the five year period, and (ii) the financial 
reference amount, the Commission proposes to the Council to adopt the text of the Council's 
Common Position published on 26th June 1995 and the Commission communicates to the 
Parliament and Council its rejection of the seven Second Reading Amendments of the Parliament 
which were already rejected at First Reading. 
- 2 -
II. COMMISSION OPINION ON EUROPEAN PARLIAMENTS SECOND 
READING AMENDMENTS. 
Already during the previous discussions in cooperation procedure with the Parliament and the 
Council since 1994 the Commission has accepted verbatim or incorporated into the substance of 
the texts many of the Parliament's substantive First Reading amendments so that they are now in 
the Council's Common Position. In particular, firstly, the Parliament's wishes to take more 
explicitly into account human rights, working conditions, women's working conditions and 
exclusion of unacceptable working practices are included in the preamble. Secondly, the 
Council has incorporated into its Common position "the five year period 1995-99 for ECIP", as 
recommended by the Parliament - although the Commission does not agree. Thirdly, the 
Commission and Council have accepted to include "the good repute" of promoters, as requested 
by the Parliament, into the ECIP appraisal criteria. Fourth, the Commission has accepted to 
report annually on "... the economic impact, total investment, and the number of joint ventures 
created". Fifth, the Commission has accepted that the independent appraisers will assess "... the 
principles of good financial management, economy and cots/benefit analysis". 
However, the seven amendments still proposed by the Parliament in Second Reading would 
make the ECIP procedures more cumbersome and complex (the Parliament had already proposed 
them at its First Reading Approval of 28th October 1994 and they were rejected by the, 
Commission at that stage). They are as follows, followed by the Commission's Position (which 
is unchanged from the Commission's reply to the First Reading) :-
AMENDMENT N° 2 
Article 6. para 2 
The Parliament wants to add "without neglecting democracy and human rights and taking into 
consideration the necessity to improve working conditions". 
Commission Position: No. The Council has proposed a text for the preamble (the thirteenth 
"whereas") which covers the Parliament's wishes and the Commission accepts the Council's text. 
AMENDMENT N° 3 
Article 9. para 2 
As regards Comitology the Commission proposed, as in the existing regulation (319/92), to use 
the existing ALAMED committees (Type III A) and used the same text as in the previous 
regulation to explain their operating procedures. The Council agreed unanimously. The 
Parliament has proposed a Consultative Committee of Type I, as foreseen in Article 2 of the 
Council's Decision N° 87/373 (establishing the procedures for exercising the responsibilities 
given to the Commission). 
Commission Position: The Commission appreciates the Parliament's proposal but does not alter 
its own proposal since the existing committee works well in practice. 
AMENDMENT N° 4 
Article 9. para 3. introduction 
The Commission's proposed text, carried over from the previous regulation' referred to the 
procedures for the committee while the Parliament's text refers to its responsibilities. 
Commission Position: No. But the Commission "could" accept this amendment if it were 
slightly rephrased to say quote "the Committee referred to in the above paragraph sh.all assist the 
Commission with regard to the following ..." unquote. 
AMENDMENT N° 5 
Article 9. para 4 
As regards Comitology the Commission proposed, as in the existing regulation (319/92), to use 
the existing ALAMED committees (Type III A) and used the same text as in the previous 
regulation to explain their operating procedures. The Council agreed unanimously. The 
Parliament has proposed a Consultative Committee of Type I, as foreseen in Article 2 of the 
Council's Decision N° 87/373 (establishing the procedure for exercising the responsibilities 
given to the Commission). 
Commission Position: The Commission appreciates the Parliament's proposal but does not alter 
its proposal. 
AMENDMENT N° 6 
Article 9. para 6 
The Commission proposed: 
"In order to ensure consistency of co-operation and to improve complementarity, between 
operations, the Commission and the European Investment Bank shall exchange any relevant 
information on financing that they envisage granting." 
and the Parliament request that the Commission and EEB "... shall inform the budgetary authority 
thereof." 
Commission Position: No. The Commission rejects this amendment. 
Such a prior information mechanism would render ECIP unmanageable. Also the matters to be 
dealt with are often a banking and a commercial confidentiality (especially as regards the EIB) 
and highly technical. 
Appropriate (non-confidential) information on these matters will be provided to the Parliament 
ex post in the Annual Reports provided for at Article 10.1. 
AMENDMENT N° 7 
Article 10. para 1 
The Parliament requests that the Annual Report on ECIP "... be accompanied by an up-dated 
financial statement." 
Commentary: these financial statements are established: 
a) in the context of the proposals for new policies in order to estimate the costs foreseen 
(see Annex VI to the Commission's Proposal for ECIP); and 
b) annually in the framework of the proposal and negotiation of the annual budget. 
Commission Position: No, the Commission rejects this amendment. It does not think it is 
appropriate to "update" these financial statements in April each year. The Commission does, 
however, assure the Parliament and the Council that it will annex to the Annual Reports a copy 
of the financial statement established in the budgetary procedure for the year when the report is 
presented. 
AMENDMENT N° 8 
Article 10. para 4 
The Parliament asks that the costs of this technical assistance "... be estimated each year within 
the framework of the budgetary procedure." 
Commission Position: No. The Commission rejects this amendment. The technical assistance 
proposed by the Commission is essential to the continuity and sound financial management of the 
instrument. Any risk in the framework of the annual budgetary procedure of the non-
continuation of this technical assistance is unacceptable. It is proposed to allocate a maximum of 
5% of the ECIP credits to the financing of these items, on condition that the actions financed be 
directly linked to the special nature of the ECIP instrument and that they are of benefit to the 
ALAMEDSA countries. AH these actions will be financed after tender procedures following the 
usual and required Community procedures. The figure of 5% featuring in the Article is a ceiling. 
The costs in question will be real costs which can only be precisely communicated at the end of 
each year. The Commission will at the request of the Council and the Parliament, provide" in its 
annual reports (Article 10.1) detailed information on the credits allocated for these actions in the 
Annual Budget, but the Commission is not in a position to accept this amendment. 
III. TWO MAJOR CHANGES INTRODUCED BY THE COUNCIL AND THE 
EUROPEAN PARLIAMENT AND THE COMMISSION'S POSITION ON 
THEM. 
The Commission has accepted many of the Council's and Parliament's amendments but maintains 
its substantial reserves on the two major amendments in the Council's Common Position as 
regards: (a) the period of validity of the regulation, and (b) the Council's "Financial Reference 
Amount". 
- •> -
(a) While the Commission proposed an open-ended validity for the Regulation the Council, 
in agreement with the Parliament, has proposed only a five year validity 1995-99. After 
over seven years operations of ECIP on a pilot and then a trial basis the Commission 
maintains its proposal for an open-ended Regulation. 
(b) The Council has inserted a financial reference amount into the Regulation.' Since the 
matter is not subject to co-decision, the Commission regrets this provision and declares that 
quote: 
"The Commission remarks that according to the terms of the joint 
declaration by the European Parliament, the Council and Commission 
of 6th March 1995, legislative acts concerning multiannual 
programmes which are not subject to co-decision do not carry an 
estimated necessary amount. 
The Commission's proposal regarding the continuation of ECIP 
(COM(94) 358 final 94/0190 SYN) does not provide for a financial 
reference amount. The insertion of a financial reference amount is the 
Council's responsibility and does not affect the responsibilities of the 
budgetary authority." unquote. 
and that the financial reference amount inserted is only of an illustrative nature. 
IV. CONCLUSION. 
While expressing the above two substantial reserves the Commission accepts the text of the 
Council's unanimous Common Position published 26th June 1995 and communicates to the 
Council and Parliament its rejection of the seven amendments tabled by the European Parliament 
in Second Reading. . .. 
Annex: 
1. Comparative table showing Commission's Proposal, Parliament First Reading 
Amendments, Council Common Position, Parliament's Second Reading 
Amendments and Common Position thereon. 
2. Council common position (EC) N° 6/95 of 22nd May 1995, published in the Official 
Journal on 26th June 1995 (N° C160). 
Reference documents : 
1. Commission's proposal : 
22nd September 1994, COM(94)358 final - 94/0190 (SYN) published in O.J. N° C287 of 
15th October 1994 pages 7 to 10. 
2. European Parliament's first reading approval : 
28th October 1994 approval document N° A-0036/94 published in O.J. N° C323 of 21st 
November 1994 pages 494 to 497. 
3. Communication from the Commission to the European Parliament (SEC(95)1171 final 
10 July 1995) on the Council's Common position (EC) N° 6/95 on ECIP. 
4. Decision of the European Parliament on the Common Position of the Council: 
26th October 1995, reference PE 165.548. 
ECIP 
PROPOSITION DE REGLEMENT 
Amendments in 2nd Reading adopted 26th October 1995 
by the European Parliament 
N°<» 
2 
3 Amendments (Pit) 
2nd Reading 
Financing decisions to respect 
considerations of democracy and 
human rights 
COMITOLOGY 
Parliament proposes a type I 
Consultative Committee Considering 
Article*2) 
6(2) 
9(2) Pit 1st Reading 
Amendments 
Financing decisions to 
respect considerations 
of democracy and 
human rights 
COMITOLOGY 
Parliament proposed a 
type I Consultative 
Committee Revised 
Proposition 
Not accepted here, 
because new 11 th 
preamble covers this 
matter. 
The Commission 
originally proposed, as 
in the existing 
regulation (319/92), lo 
use the existing 
ALAMED committees 
(Type III A) and used 
the same text as in the 
previous regulation to 
explain their operating 
procedures. Since in 
prncticc this works well 
the Commission does 
not alter its position. Common Position 
Council 
Not accepted here, 
because new 11th 
preamble covers this 
matter. 
Not accepted. Proposed Commission 
Position 
No. While the substance is 
accepted in principle since this 
matter is now dealt with in a new 
11th preamble to the common 
position which covers these 
questions so the Commission 
does not accept this text in 
Article 6(2). 
No. The Commission originally 
proposed, as in the existing 
regulation (319/92), to use the 
existing ALAMED committees 
(Type III A) and used the same 
text as in the previous regulation 
to explain their operating 
procedures. Since in practice 
this works well the Commission 
does not alter its position. 
G> 
(l> Numbering of amendments according to EP document "Decision of the European Parliament in Seconal Reading" document PE 165.548, 26th October 
<2) Numbering of articles according to Council's Common Position of 22 May 1995, OJ N° C160 of 26.6.95. 1995. 
N°c) 
4 
5 
6 Amendments (Pit) 
2nd Reading 
Parliament's amended text "The 
Committee referred to in the 
above paragraph shall be 
responsible for the following:". 
*• 
Parliament requests deletion of 
this article. 
The Parliament requests that the 
Commission "shall inform the 
budgetary authority" of its 
coordination with the European 
Investment Bank. Considering 
Articled 
9(3) 
9(4) 
9(6) Pit 1st Reading 
Amendments 
Parliament's amended 
text "The Committee 
referred to in the above 
paragraph shall be 
responsible for the 
following:" 
Parliament requested 
deletion of this article. 
The Parliament 
requests that the 
Commission "shall 
inform the budgetary 
authority" of its 
coordination with the 
European Investment 
Bank Revised 
Proposition 
Not revised. 
Not accepted. 
Not accepted. Common Position 
Council 
Not accepted. 
Not accepted. 
Not accepted. Proposed Commission 
Position 
The Commission "could" accept 
this amendment if it were slightly 
rephrased lo say quote: "the 
Committee referred to in the 
above paragraph shall assist the 
Commission with regard to the 
following ..." unquote. 
No. On this matter, the 
Commission and the Parliament 
agree on the substance, but the 
Commission's text is more 
explicit as regards the operating 
modalities of the Committee and 
should be maintained. 
No - Such a prior information 
mechanism would render ECIP 
unmanageable. Also the matters 
to be dealt with are often a 
banking and a commercial 
confidentiality (especially as 
regards the EIB) and highly 
technical. 
Appropriate (non-confidential) 
information on these matters will -
be provided to the Parliament ex 
post in the Annual Reports 
provided for at Article 10.1. 
(1) Numbering of amendments according to EP document "Decision of the European Parliament in Second Reading" document PE 165.548, 26th October 1995.. 
[2) Numbering of articles according to Council's Common Position of 22 May 1995, OJ N° CI60 of 26.6.95. 
N°(') 
7 
8 Amendments (Pit) 
2nd Reading 
The Parliament requests that the 
Annual Report on ECIP "... be 
accompanied by an up-dated 
financial statement." 
The Parliament asks that the costs 
of this technical assistance "... be 
estimated each year within the 
framework of the budgetary 
procedure." Considering 
Article*2) 
10(1) 
t 
10(4) Pit 1st Reading 
Amendments 
The Parliament 
requests that the 
Annual Report on 
ECIP "... be 
accompanied by an up­
dated financial 
statement." 
The Parliament asks 
that the costs of this 
technical assistance "... 
be estimated each year 
within the framework 
of the budgetary 
procedure." Revised 
Proposition 
Not accepted. 
Not accepted. Common Position 
Council 
Not accepted. 
Not accepted. Proposed Commission 
Position 
No - These statements are 
established in the framework of 
the annual budget. The 
Commission does not think it is 
appropriate to "update" these 
financial statements in April each 
year. The Commission does, 
however, assure the Parliament 
and the Council that it will annex 
to the Annual Reports a copy of 
the financial statement 
established in the budgetary 
procedure for the year when the 
report is presented. 
No - The Commission rejects this 
amendment. It can provide the 
Parliament and the Council 
information cxpost in the Annual. 
Report (10.1) on credits affected 
lo these actions. 
&Z 
<l) Numbering of amendments according to EP document "Decision of the European" Parliament in Second Reading!' document PE 165.548, 26th October 1995. 
(2> Numbering of articles according to Council's Common Position of 22 May 1995, OJ N° C160 of 26.6.95. 
No C 160/8 9 
Official Journal of the European Communities .26. 6. 95 
COMMON POSITION (EC) No 6/95 
adopted by the Council on 22 May 1995 
with a view to adopting Regulation (EC) No .. 795 on the implementation of the 'European 
Communities Investment Partners Financial Instrument' for the countries of Latin America, 
Asia, the Mediterranean region and South Africa 
(95/C 160/02) 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European 
Community, and in particular Article 130w thereof, 
Having regard to the proposal from the Commission ('), 
Acting in accordance with the procedure of Article 189c 
of the Treaty (2), 
Whereas the Community is implementing financial, 
technical and economic cooperation with the developing 
countries of Latin America, Asia and the Mediterranean 
region, and with South Africa; 
Whereas in order to strengthen such cooperation, it is 
necessary, inter alia, to encourage mutually beneficial 
investment, particularly by - small and . medium-sized 
enterprises (SMEs); 
Whereas the Council has/reached a consensus on die 
importance of die role of the private sector in the 
development process; Whereas the Court of Auditors delivered an opinion in 
December 1993 pursuant to Article 9 (3) of Regulation 
(EEC) No 319/92 on the implementation of ECIP, which 
concluded that it meets a real need of which the market 
takes no or only inadequate account, and made specific 
recommendations for improvements in its management; 
Whereas the European Parliament and the Council have 
considered the results of the independent appraisal 
forwarded to them in March 1994 in conformity with 
Ankle 9 (2) of Regulation (EEC) No 319/92 which 
concluded that ECIP has met its principal objective of 
promoting mutually beneficial investment by Community 
and local operators in EC/local joint ventures in the 
countries of Asia, Latin America and the Mediterranean, 
and that the ECIP instrument should be further 
continued and reinforced; 
Whereas the Council adopted on 25 February 1992 
Regulation (EEC) No 443/92 on financial and technical 
assistance to, and economic cooperation with, the 
developing countries in Asia and Latin America (4) and 
on 29 June 1992 Regulation- (EEC) No 1763/92 
concerning financial cooperation in respect of all 
Mediterranean non-member countries (3); 
Whereas joint ventures and investment by Community 
undertakings in developing countries can bring certain 
benefits for. these countries, including the transfer of 
capital, know-how, employment, ûie transfer of training 
and expertise, increased export possibilities and the 
meeting of local needs; 
Whereas a three-year pilot scheme was launched in 1988 
to promote, via a European Communities Investment 
Partners (ECIP) financial instrument, the creation of joint 
ventures between the Community and countries of Latin 
America, Asia and the Mediterranean region and was 
continued and extended for a further three-year trial 
period from 1 January 1992 by Regulation (EEC) 
No'319/92 ('); 
(') OJ No C 2S7, 15. 10. 1994, p. 7. 
(;) Opinion of the European Parliament of 28 October 1994 (OJ 
No C 323, 21. 11. 1994, p. 497), Council Common Position 
(not yet published in the Official Journal) and of 
Decision ol the European Parliament of 
published in the Official Journal) 
(') OJ No L 35, 12. 2. 1992, p. 1. (not yet Whereas the continuation and: extension of the 
instrument is therefore necessary in order that full use 
may be made of the possibilities of mutually beneficial 
action in the countries of Latin America, Asia and the 
Mediterranean region; 
Whereas the Council on 19 April 1994 concluded that to 
encourage Community investments in SMEs in. South 
Africa, advantages equivalent to the ECIP or its 
follow-up instrument could be granted to South Africa, 
and that specific financing of this instrument would be 
provided to that end; 
Whereas it is necessary to 'take account of democracy and 
human rights issues, and to promote investments which 
improve working conditions, in particular for women, do 
H OJ No L52, 27. 2. 1992, p. 1. 
(*) OJ No L 181, 1. 7. 1992, p. 5. Regulation as amended by 
Regulation (EC) No 1735/94 (OJ No L 1S2, 16. 7. 1994, 
p. o). 
26. 6. 95 EN Official Journal-of "the European Communities No C 160/9 
not exploit employees and exclude unacceptable practices 
such as forced labour and slavery; 
Whereas the broadest possible participation by 
undertakings in all Member States should be 
encouraged; 
Whereas all the Member States should be encouraged to 
participate in the promotion of their investments in the 
countries of Latin America, Asia, the Mediterranean 
region and South Africa through financial institutions 
specializing in development; 
Whereas a financial reference amount, within the 
meaning of point 2 of the Statement .of 6 March 1995 by 
the European Parliament, Council and Commission has 
been inserted in this Regulation for the entire duration of 
the programme, without the budget authority's powers as 
defined in the Treaty being thereby affected, 2. interest-free advances for feasibility studies and other 
action by operators intending to set up joint,ventures 
or to invest, not exceeding 50% of the cost up to a 
ceiling of ECU 250 000, within which prc-fcasibility 
travel costs of ECU 10 000 'maximum may be 
financed by grant (Facility No 2); 
3. capital requirements of a joint venture or a local 
company with iicensing agreements, in order to meet 
investment risks peculiar to developing countries, 
through participation in.the provision of equity or by 
equity loans not exceeding 20% of the joint venture's 
capital up to a ceiling of ECU 1 million (Facilitv 
No 3); 
4. interest-free advances and grants not exceeding 50 % 
of the cost up to a ceiling of ECU 250 000, for 
training, technical assistance or management expertise 
of an existing joint venture, or joint venture about to 
be set up, or of a local company with a licensing 
agreement (Facility No 4). 
HAS ADOPTED THIS REGULATION: The aggregate amount made available under Facilities 
'Nos 2, 3 and 4 may not exceed ECU 1 million per 
project. 
Article 1 
1. As part of its economic cooperation with the 
countries of Latin America, Asia, the Mediterranean 
region, and South Africa, the Community shall operate 
for the period 1995—-1999 special cooperation schemes 
aimed at promoting mutually beneficial investment by 
Community operators, particularly in the form of joint 
ventures with local operators in the countries eligible 
including tripartite operations with other developing 
countries to promote regional integration. 
2. Account being taken of their respective possibilities 
and needs, SMEs will receive priority^in application of 
the scheme, while large multinational undertakings will 
be ineligible. Article 3 
-1. The financial institutions shall be selected by the 
Commission, further to the opinion of the Committee, • 
defined in Article 9, from among development banks, 
commercial banks, merchant banks and investment 
promotion bodies. 
2. Financial institutions which have submitted 
proposals in accordance with the criteria defined in 
Article '6 will receive fees in accordance with 
arrangements to be determined by the Commission. 
Article 2 
The European Communities Investment Partners (ECIP) 
financial instrument, hereinafter referred to as the 
'instrument', shall offer four kinds of financing facility 
covering: 
1. grants for the identification of projects and partners, 
not exceeding 50% of the cost of the operation up to 
a ceiling of ECU 100 000; however, where the 
operation relates to the preparation of a privatization, 
or a 'Build, Operate and Transfer' (BOT) or a 'Build, 
Operate and Own' (BOO) scheme in infrastructure, 
utilities or environmental services where an eligible-
country government or public agency is the 
beneficiary this facility may be increased to 100% of 
the cost of the operation up to a ceiling of ECU 
200 000 (Facility No 1); Article 4 
1. With regard to Facility No 1 set out in Article 2, 
financing applications may be submitted either directly to 
the Commission by the institution, association or body 
carrying out the identification of partners and projects, or 
through a financial institution. 
2. In the case of Facilities Nos 2, 3 and 4 set out in 
Article 2, applications may be submitted by the 
undertakings concerned solely through the financial 
institutions defined in Article 3. Community funds for the 
participating undertakings shall be applied for and 
provided exclusively through the financial institution. 
3. With regard to Facility No 2 set out in Article 2, 
the financial institutions and undertakings shall be 
required to share the project risk; where the action is 
/7^1 
No C 160/10 EN Official Journal of the European Communities 26. 6. 95 
successful, however, the Community contribution may be 
more than 50% and up to 100% of the cost for SMEs. 
4. In the case of Facility No 3 set out in Article 2, the 
financial institutions shall provide financing at least equal 
to that provided by the Community. This facility shall be 
reserved, where the Community is concerned, for SMEs; 
exceptions will be possible in cases for which specific 
justification is provided having particular significance for 
development policy, for instance technology transfer. 
5. In the case of Facility No 4 set out in Article 2, 
interest-free advance finance will be provided as regards 
the costs of training, technical assistance and 
management expertise, and, for SMEs only, the costs of 
training, technical assistance and management expertise 
provided by external sources or by the European partner 
to the joint venture shall be eligible for grant finance 
under this facility. 
6. Framework agreements signed by the Commission 
with the financial institutions shall explicitly stipulate 
that the Court of Auditors has the power, in accordance 
with Article 188c of the Treaty, to audit the operations 
of these institutions with respect to financial projects 
funded by the general budget of the European 
Communities. '. 2. For Facility No 2 set out in Article 2, interest-free 
advances shall be reimbursed according "to the 
arrangements to be determined by the Commission, on 
the understanding that the final repayment periods are to 
be as short as possible and shall in no instance exceed 
five years. Such advances shall not be refundable where 
the actions have produced negative results. 
3. For Facility No 3 set out in Article 2, participations 
by virtue of this instrument shall be disposed of at the 
earliest opportunity once the project becomes viable, 
having regard to the Community's rules of sound 
financial management. 
4. Equity loan and advance repayments, the realization 
of participations, and interest and dividend payments will 
be accounted for by recovery orders and paid back to the 
general budget of the European Communities. This will 
be done on an annual basis after the annual audit 
provided for in Article 10 (3), in reconciliation with the 
budget accounts as at 31 December of that year, and the 
amounts involved will be reported in the progress report 
for that year provided for at Article 10 (1). All assets 
held by the financial institution are to be paid back to the 
Community if the institution ceases to be associated with 
the instrument or if the instrument ceases to operate. 
Article 5 Article 6 
1. Contributions awarded under the instrument shall, 
depending upon the circumstances and pursuant to 
Article 2, be either grants or interest-free advances, or 
participations in the provision of equity or equity loans. 
Participation in the equity or equity loans shall in 
principle .be acquired or provided by the financial 
institutions on their own behalf. However, in exceptional 
cases, 
— where the financial institution cannot intervene in its 
own name for regulatory or legal reasons or because 
of its statutes, or 
— where the Community's direct financial participation 
is necessary to reinforce in a decisive manner the 
capacity of the promoters to raise other financial 
resources which could not normally be mobilized due 
to the particular political situation or to specific legal 
obstacles in the host country of the joint venture, -
the Commission may authorize a financial institution to 
hold a direct participation on the Community's behalf. 
Only projects with a particular development or 
environmental impact or significance for technology 
transfer shall qualify for such direct participation. 
The commercial, industrial, investment and financial 
decisions' of the joint undertakings set up under the 
instrument shall be taken exclusively by those 
undertakings. 1. Projects shall be.selected by the financial institution 
or, in the case of Facility No 1 set out in Article 2, by the 
Commission and the financial institution, in the light of 
the appropriations adopted by the budget authority and 
on the basis of the following criteria: 
(a) the anticipated soundness of the investment and the 
quality and good repute of the promoters; 
(b). the contribution to development, in particular in 
terms of: 
— impact on the local economy, 
—. creation of added value, 
— promotion of local entrepreneurs, 
— transfer of technology and know-how and 
development of the techniques used, 
— acquisition of training and expertise by managers 
and local staff, 
— implications for women and improvement of 
their working conditions, 
— creation of local jobs with conditions of work 
which do not involve exploiting employees. 
— impact on the balance of trade and balance of 
payments; 
— impact on the environment, 
s)Z 
26. 6. 95 EN Official Journal of the European Communities No C 160/11 
— manufacture and supply to the local market 
of products hitherto difficult to obtain or 
substandard, 
— use of local raw materials and resources. 
2. The final financing decision shall be taken by the 
Commission, which shall verify compliance with the 
criteria set out in paragraph 1 and compatibility with 
Community policies, in particular development 
cooperation policy, and the mutual benefit to - the 
Community and the developing country "concerned. 
Article 7 submit to the Committee a draft of the measures to be 
taken. The Committee shall deliver its opinion on the 
draft within a rime limit which the Chairman may lay 
down according to the urgency of the matter. The 
opinion shall be delivered by the majority laid down in 
Article 148 (2) of the Treaty in the case'of decisions 
which the Council is required to adopt on a proposal 
from the Commission. The votes of the representatives of 
the Member States, within the Committee shall be 
weighted in the manner set out ,in that Article. • The 
Chairman shall not vote. 
The Commission shall adopt the measures envisaged 
if they are in accordance with the opinion of the 
Committee. 
Countries eligible shall be the developing countries of 
Latin America, Asia and the Mediterranean regions which 
benefit from Community development cooperation 
measures or which have concluded regional or bilateral 
cooperation or association -agreements with the 
Community, and South Africa. 
Article 8 
The financial reference amount for the implementation of 
this programme, for the period 1995 to 1999, is ECU 
250 million. 
Annual appropriations shall be authorized by the 
budgetary authority within the limit of the financial 
perspective. 
Article 9 
1. The Commission shall implement the instrument in 
accordance with this Regulation. 
2. In carrying out this task, the Commission shall be 
assisted, as appropriate, by. the Committee set up under 
Article 15 of Regulation (EEC) No 443/92 or by the 
Committee referred to in Article 7 (1) of Regulation 
(EEC) No 1763/92, and these Committees shall also deal, 
for the purposes of ECIP, with matters related to South 
Africa, in the absence of a specific Committee. 
3. The following shall be adopted under the procedure 
laid down in paragraph 4: 
— the choice of financial institutions in the light of their 
experience and aptitude for making a preliminary 
selection of the projects in accordance with the 
criteria set out in Article 6, 
— revision of the amounts and/or financing conditions 
under each facility and the aggregate amount 
available under Facilities 2, 3 and 4 as laid down in 
Article 2 in a way consistent with other provisions of 
this Regulation. 
4. • With regard to the matters mentioned in 
paragraph 3, the representative of the Commission shall If the measures envisaged are not in accordance with the 
opinion of the Committee, or if no opinion is delivered, 
the Commission shall, without delay, submit- to the 
Council a proposal relating to the measures to be taken. 
The Council shall act by a qualified majority. 
If, on the expiry of one month from the date of referral 
to the Council, the Council has not acted^ the proposed 
measures shall be adopted by the Commission. 
5. Furthermore, the Committee may examine, at the 
Commission's initiative or at the request of one of 
its members, any question connected with the 
implementation of this Regulation, in particular: 
— information on the projects funded over the previous 
year, 
—. the terms of reference of the independent appraisal 
provided for in Article 10, 
— any other information which the Commission wants 
to submit to it. 
6. In order to ensure consistency of cooperation and 
to improve complementarity between operations, the 
Commission and the European Investment Bank shall 
. exchange any relevant information on financing that they 
envisage granting. 
7. The Commission will ensure that due account 
is taken of relevant information concerning the 
implementation of ECIP as...-well as comparable 
instruments of the Community such as JOPP, Alinvest, 
Medinvest, and others as appropriate, in order to 
establish a coordinated approach to promote private 
investment in developing countries. 
Article 10 
1. The Commission shall send to the European 
Parliament and to the Council, by 30 Aprii each year at 
the latest, a progress report showing the projects selected 
and their economic impact,, notably total investment, the 
number of joint ventures and jobs created as well as the 
appropriations granted and the repayments to the general 
budget of the European Communities and including 
annual statistics for the previous year. 
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No C 160/12 EN Official Journal of die European Communities 26. 6. 95 
2. TIK Commission shall forward the results of an 
independent appraisal of the instrument to the European 
Parliament and the Council before* the end of 1998. 
This report must permit an assessment of the 
implementation of the principles of good financial 
management, economy and a cost/benefit analysis of the 
instrument. 
3. Without prejudice to the responsibilities of the 
Commission and the Court of Auditors as laid down in 
the Financial Regulation applicable to the General Budget 
of the European Communities, the Commission shall 
obtain each year an independent financial audit of the 
financial institutions and of the Facility 1 beneficiary 
organizations, as regards the ECIP funds that they have 
received. The Commission shall make specific provision 
in the framework and specific financing agreements for 
anti-fraud measures, in particular a mechanism for the 
recover)' of advances which arc not fully justified after 
such audit. 
4. Use of external technical assistance may be made, as 
appropriate, on condition that the technical assistance financed is directly linked to the special nature of the 
ECIP instrument and is of direct' benefit to the Alamed 
countries and South Africa. The costs of such technical 
assistance shall be limited to 5 % of the budgetary credits 
available, not including the, fees paid to the financial 
institution^ which shall be imputed to the credits 
allocated to each individual action financed. 
Article 11 
This Regulation shall enter into force on the day 
following that of its publication in the Official Journal 
of the European Communities and shall expire on 
31 December 1999. 
This Regulation shall be binding in its entirety and 
directly applicable in all Member States. 
Done at ... 
For the Council 
The President 
ISSN 0254-1475 
COM(95) 686 final 
DOCUMENTS 
EN 11 
Catalogue number : CB-CO-95-702-EN-C 
ISBN 92-77-97795-7 
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