OPINION OF THE COMMISSION pursuant to Article 251 (2) (c) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL concerning the financial instrument for the environment (Life) AMENDING THE COMMISSION PROPOSAL pursuant to Article 250(2) of the EC Treaty

EXPLANATORY MEMORANDUM

Article 251(2)(c) of the Treaty establishing the European Community states that the Commission shall issue an opinion on the amendments proposed by the European Parliament at second reading.

The Commission's opinion on the 14 amendments proposed by Parliament is given below. In accordance with Article 250(2) of the EC Treaty, an amended proposal is enclosed, incorporating all or part of the nine Parliamentary amendments accepted by the Commission.

1. Background

Proposal sent to the European Parliament and the Council 10.12.1998 (COM(1998) 720 final)

Opinion of the European Parliament at first reading 14.04.1999 (confirmed after changing the legal basis 06.05.1999)

Opinion of the Economic and Social Committee 26.05.1999

Amended proposal sent to the European Parliament and 15.06.1999 the Council (COM(1999) 305 final)

Committee of the Regions opinion 15.09.1999

Adoption of common position by the Council 22.10.1999

Declaration on the common position sent to the European Parliament 10.11.1999 and the Council (SEC(1999)1762 final)

The Commission annexed to this last-mentioned document a declaration which stressed that the type of committee chosen to assist the Commission in the implementation of Life was inconsistent with the criteria set out in Article 2 of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission.

2. Aim of the proposal

The proposal concerns the third phase of Life, between 2000 and 2004, with refocused objectives, reinforcement of the link between the financing of individual projects and the objectives of Community environment policy and reinforced dissemination of the results of the projects funded.

The proposal provides for an indicative budget of EUR613 million for the period 2000-2004, subdivided into 47% for nature conservation (Life-Nature), 47% for the integration of the environment in the context of economic activities and land-use development (Life-Environment) and 6% for technical assistance to Mediterranean third countries and Baltic Russia, other than the candidate countries (Life-Third Countries). In each component, 5% of the budget is set aside for accompanying measures (expert reports, monitoring, dissemination of results, exchange of experience, preparation of multinational projects for Life-Nature).

3. Opinion on the Parliamentary amendments

Fourteen amendments were adopted by Parliament. The Commission is prepared to accept eight amendments (1, 2, 7, 8, 9, 10, 11 and 13) in their entirety and one amendment (4) in principle. The Commission cannot accept amendments 3, 5, 6, 12 and 14. The Commission's position on the amendments adopted by Parliament is as follows:

3.1. Amendments accepted by the Commission

Amendments 1, 2, 7, 8, 9, 10, 11 and 13 lay down new procedures for the two committees assisting the Commission in the implementation of Life: the committee provided for in Article 20 of Directive 92/43/EEC for Life-Nature, the committee set up under Article 11 of the Life Regulation for Life-Environment and Life-Third Countries. The following procedures are envisaged: - management procedure, within the meaning of Article 4 of Council Decision 1999/468/EC, for measures relating to the projects for which financial support is planned; - consultative procedure, within the meaning of Article 3 of Council Decision 1999/468/EC, for the Life-Environment guidelines, calls for expression of interest and other questions concerning the implementation of Life. These amendments conform both to the spirit and to the letter of Council Decision 1999/468/EC laying down the procedures for the exercise of implementing powers conferred on the Commission. They take account of the objection raised by the Commission to the choice of regulatory procedure set out in the common position; this objection was the subject of a declaration issued in conjunction with the adoption of the common position. Furthermore, these amendments render explicit the consultative procedure implicit in the common position and provide for this procedure to be applied in defining the guidelines for the Life-Environment demonstration projects (a logical step given their indicative nature). These amendments are fully acceptable to the Commission. Amendment 4 makes explicit the notion of Life-Environment support for the development of clean technologies which was implicit in the wording of Article 4(2), subparagraph a, second indent. The Commission accepts the principle of this explanation but feels that it should appear in the second indent and not the fourth as proposed in the amendment.

3.2. Amendments rejected by the Commission

Amendment 3 seeks to establish mechanisms for the transmission, towards other Community funding sources, of projects for the conservation of sites of Community interest within the meaning of Directive 92/43/EEC that cannot be funded either by Life-Nature or by Life-Environment and to make provision for a report to be submitted annually to Parliament on projects not funded even after transmission. It would not be possible to put these provisions into practice for the following reasons: - each Community financial instrument has its own specific field of application. Consequently, projects for the conservation of sites of Community interest, within the meaning of Directive 92/43/EEC, cannot be funded by Life-Environment and cannot necessarily be funded by another Community financial instrument; - each Community financial instrument has its own specific submission procedures. In the event of it being possible for the projects covered by amendment 3 to be funded by an instrument other than Life, such projects should be submitted to that other Community financial instrument in accordance with the rules on submission applicable to that instrument and not simply by transmission between Commission departments; - the search, in respect of each project covered by amendment 3, for other potential funding sources, the monitoring of transmission and, where appropriate, of funding decisions by other Community financial instruments, would require the Commission to make available additional human resources which it does not possess. For the various reasons indicated, amendment 3 cannot be accepted. Amendments 5 and 6 provide for the addition of two indents to Article 4(2), subparagraph a, defining the demonstration projects eligible for Life-Environment aid. These indents introduce into the field of application of Life-Environment the sustainable exploitation of surface and underground water (amendment 5) and the reduction of greenhouse-effect atmospheric pollutants (amendment 6). The Commission feels that these topics are already largely covered within the field of application of Life-Environment, as defined in the common position. Listing these topics separately is inconsistent with the aim of the Commission proposal, which was to focus the Life actions on a number of priority topics. Furthermore, there is the risk that such an approach may lead to unjustified cross-checks between Life and other Community instruments, notably the 5th Framework Programme for research, technological development and demonstration activities, and the Community Initiative Programmes applicable to topics closely related to those covered by Life. Rather than list these topics separately in the Regulation, the Commission feels that it would be better to list them in the guidelines provided for in Article 4(4), thereby making it possible to detail the topics provided for in the Regulation and to draw as clear a distinction as possible between Life activities and the activities of other Community financing sources. Consequently, amendments 5 and 6 cannot be accepted. Amendment 12 provides for the allocation to Life of a total appropriation of 850 million euros for the period 2000-2004. This figure is substantially higher than the figure of 613 million provided for in the financial statement accompanying the Commission proposal and accepted by the Council in the common position. The figure of 850 million is not compatible with the financial perspective for Heading 3 of Part B of the Community budget (Internal policies), to which the Life instrument belongs. Consequently, amendment 12 cannot be accepted. Under amendment 14 the Commission is required to submit to the Council and to the European Parliament proposals for a fourth phase of Life. The Commission understands and appreciates the fact that, by this amendment, Parliament is demonstrating its commitment to the continuity of Life beyond the third phase. The wording of Article 12(1) of the common position already hinted at the possibility of a Life IV proposal, and this has been accepted by the Commission. However, the Life Regulation is not entitled to make this possibility into an obligation, as this would conflict with the Commission's right of initiative. Consequently, amendment 14 cannot be accepted.

Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL concerning the financial instrument for the environment (Life) AMENDING THE COMMISSION PROPOSAL pursuant to Article 250(2) of the EC Treaty

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community and in particular Article 175(1) thereof,

Having regard to the proposal from the Commission, [1]

[1] OJ C 15, 20.1.1999, p. 4.

Having regard to the opinion of the Economic and Social Committee, [2]

[2] OJ C 209, 22.7.1999, p. 14.

Having regard to the opinion of the Committee of the Regions, [3]

[3] OJ C 374, 23.12.1999, p 45.

Acting in accordance with the procedure laid down in Article 251 of the Treaty, [4]

[4] Opinion of the European Parliament of 14 April 1999 (OJ C 219, 30.7.1999, p. 265), common position of the Council of 22 October 1999 (OJ C 346, 2.12.1999, p. 1) and European Parliament Decision of ............(not yet published in the Official Journal).

Whereas:

(1) Council Regulation (EEC) No 1973/92 of 21 May 1992 establishing a financial instrument for the environment (Life) [5] was adopted with a view to contributing to the implementation and development of Community environmental policy and legislation.

[5] OJ L 206, 22.7.1992, p. 1.

(2) Given that Council Regulation (EEC) No 1973/92 has been substantially amended by Council Regulation (EC) No 1404/96 [6] with a view to the continued promotion of the implementation, updating and development of Community environmental policy and legislation, in particular as regards the integration of the environment into other policies, while at the same time contributing to sustainable development in the Community, it is therefore necessary to amend Council Regulation (EEC) No 1973/92 which, for reasons of clarity, needs to be recast and replaced by the present Regulation.

[6] OJ L 181, 20.7.1996, p. 1.

(3) The financial instrument for the environment (Life) is being implemented in phases, with the second phase due to end on 31 December 1999.

(4) Given the positive contribution of Life to the attainment of the objectives of Community policy on the environment and in accordance with Article 14 of Regulation (EEC) No 1973/92, a third phase for a period of five years ending on 31 December 2004 should be set in motion.

(5) Life should be reinforced as a specific financial instrument, complementary with other Community instruments, without however limiting Life interventions to areas not covered by other Community financial instruments.

(6) Steps should be taken to improve the efficiency and transparency of the various procedures relating to Life by identifying clearly the three component parts which constitute the instrument.

(7) Guarantees must be provided to ensure the effective monitoring and assessment of Life actions.

(8) The experience gained with Life during the second phase has highlighted the need to concentrate efforts by specifying more clearly the areas of activity able to benefit from Community financial aid, simplifying the management burden and improving the measures to disseminate information concerning the experience gained, and the results achieved and their long-term impact, with a view to promoting the transfer of those results.

(9) The elaboration of Community environmental policy must take account of the results obtained and the experience gained in the context of the various Life actions undertaken.

(10) Account should be taken of the migration routes and of the role of the buffer zones in the context of projects contributing to the implementation of "Natura 2000".

(11) Preparatory projects ought to be concerned with the development of new actions and Community instruments and/or the updating of environmental policies and legislation.

(12) European Parliament and Council Decision No 2179/98/EC on the review of the European Community programme of policy and action in relation to the environment and sustainable development "Towards sustainability" [7] provides, in the context of the Community's priority objectives, for the formulation of programmes seeking to promote greater awareness of environmental problems in industrial circles, including in particular small and medium-sized enterprises (SMEs), and this Decision gives priority to the SMEs with reference to the technical and financial obstacles standing in the way of development and the use of clean technologies in the field of the environment.

[7] OJ L 275, 10.10.1998, p. 1.

(13) Account should be taken, where appropriate, of the possible impact on employment of the proposals considered in terms of their eligibility for financial support under Life-Environment.

(14) As regards third countries bordering on the Mediterranean or the Baltic Sea other than the Central and Eastern European countries that have concluded association agreements with the European Community, assistance measures must be taken to create capacities and administrative structures in the field of the environment.

(15) The European agreements between the European Communities and their Member States, of the one part, and the accession candidate Central and Eastern European countries, of the other part, provide for the participation of those countries in Community programmes, in particular in the field of the environment.

(16) While the abovementioned Central and Eastern European countries should normally themselves meet the costs arising from their participation, the Community may decide, if necessary, for specific cases and in conformity with the rules applicable to the general budget of the European Union and the relevant association agreements, to supplement the national contribution of the country concerned.

(17) The other accession candidate countries may, where they make a financial contribution to Life, participate on conditions equivalent to those laid down for the accession candidate Central and Eastern European countries.

(18) Receipts from third countries constitute budgetary resources earmarked for the instrument in question and will be entered as such in the corresponding expenditure heading.

(19) Selection mechanisms should be established so that Community assistance may be adapted to the particular features of the projects to be supported; there should be guidelines to promote synergy between demonstration actions and the guiding principles of Community environmental policy with a view to ensuring sustainable development.

(20) A committeeshould be set up to assist the Commission in implementing this Regulation; since the measures necessary to implement this act are management measures within the meaning of Article 2 of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission, [8] these measures should be taken on the basis of the management procedure laid down in Article 4 of that Decision or of the consultative procedure laid down in Article 3 thereof, depending on whether or not the measures to be taken have significant budgetary implications.

[8] OJ L 184, 17.7.1999, p. 23.

(21) This Regulation lays down, for the entire duration of the third phase, a total appropriation which, within the meaning of item 33 of the Interinstitutional Agreement of 6 May 1999 between the European Parliament, the Council and the Commission, [9] constitutes the principal point of reference for the budgetary authority during the annual budgetary procedure.

[9] OJ C 172, 18.6.1999, p. 1.

(22) The European Parliament and the Council should examine the advisability of continuing the Life action beyond the third phase, acting on the basis of a proposal from the Commission.

HAVE ADOPTED THIS REGULATION:

Article 1

General objective

A financial instrument for the environment, hereinafter referred to as Life, is hereby established.

The general objective of Life shall be to contribute to the implementation, updating and development of Community environmental policy and legislation, in particular as regards the integration of the environment into other policies, while at the same time contributing to sustainable development in the Community.

Article 2

Thematic components and general criteria

Life shall consist of the three thematic components Life-Nature, Life-Environment and Life-Third Countries.

The projects financed by Life shall meet the following general criteria:

a) be of Community interest by making a significant contribution to the general objective set out in Article 1;

b) be carried out by technically and financially sound participants;

c) be feasible in terms of technical proposals, timetable, budget and value for money.

Priority may be given to projects based on a multinational approach, when this is likely to contribute more effectively to the achievement of the objectives, taking into account feasibility and costs.

Article 3

Life-Nature

1. The specific objective of Life-Nature shall be to contribute to the implementation of Council Directive 79/409/EEC of 2 April 1979 on the conservation of wild birds [10] and Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora [11] and, in particular, of the Natura 2000 European network established under the last mentioned Directive.

[10] OJ L 103, 25.4.1979, p. 1, as last amended by Council Directive 97/49/EC (OJ L 223, 13.8.1997, p. 9).

[11] OJ L 206, 22.7.1992, p. 7, as last amended by Council Directive 97/62/EC (OJ L 305, 8.11.1997, p. 42).

2. The following shall be eligible for Life-Nature:

a) nature conservation projects which further the specific objective set out in paragraph 1 and contribute to maintaining or restoring natural habitats and/or species populations to a favourable conservation status within the meaning of Directive 92/43/EEC.

b) accompanying measures which further the specific objective set out in paragraph 1 and which are necessary for:

i) the preparation of projects involving partners in several Member States ("starter" measure);

ii) the exchange of experiences between projects ("co-op" measure);

iii) the monitoring and evaluation of projects and dissemination of their results, including the results of projects decided upon during the preceding phases of Life ("assist" measure).

3. Financial assistance shall be provided by co-financing of actions. The maximum rate shall be:

a) 50% for nature conservation projects; 100% for accompanying measures;

b) by way of exception, the rate of 50% provided for in item (a) shall be increased to a maximum of 75% for projects concerning priority natural habitats or priority species within the meaning of Directive 92/43/EEC or species of birds for which funding is regarded as a Life-Nature priority by the committee set up under Article 16 of Directive 79/409/EEC.

4. Proposals for projects to be financed pursuant to paragraph 2(a) shall be submitted to the Commission by the Member States. Where projects involve more than one Member State, proposals shall be submitted by the Member State in which the project co-ordinating body is located.

Proposals shall be submitted to the Commission before 31 October of each year. The Commission shall decide on these proposals, in accordance with paragraph 7, before the following 30 April. The proposals for 2000 shall be submitted to the Commission before 31 March 2000. The Commission shall decide on these proposals, in accordance with paragraph 7, before 31 October 2000.

5. Proposals shall be considered for financial support, in accordance with paragraph 7, only if they satisfy the requirements of Article 2 and of paragraph 2(a|) of this Article and meet the following criteria:

a) projects in the European territory of the Member States relating to:

i) a site proposed by a Member State under Article 4 of Directive 92/43/EEC, or,

ii) a site classified pursuant to Article 4 of Directive 79/409/EEC, or

iii) a species in Annex II or IV to Directive 92/43/EEC or in Annex I to Directive 79/409/EEC;

b) projects in accession candidate countries to which Article 6 applies relating to:

i) a site of international importance hosting a type of habitat mentioned in Annex I or a species mentioned in Annex II to Directive 92/43/EEC, or a type of habitat or species not present in the Community but classified in the pertinent Bern Convention resolutions as being in need of specific conservation measures, or,

ii) a site of international importance hosting a species of bird mentioned in Annex I to Directive 79/409/EEC, or a species of migratory bird present in the Community or a species of bird not present in the Community but classified in the pertinent Bern Convention resolutions as being in need of specific conservation measures, or,

iii) a species mentioned in Annex II or IV to Directive 92/43/EEC or in Annex I to Directive 79/409/EEC or a species not present in the Community but classified in Annex I or IV of the Bern Convention.

6. A summary of the proposals received shall be submitted to the Member States by the Commission. Upon request, it shall place the original documents at the disposal of the Member States for consultation.

7. The projects for which financial support is planned under LIFE-Nature shall go through the committee provided for in Article 20 of Directive 92/43/EEC, in accordance with the management procedure laid down in Article 4 of Decision 1999/468/EC and in compliance with the provisions of Article 8 thereof. The period provided for in Article 4(3) of that Decision shall be three months.

An outline decision by the Commission shall be sent to the Member States on the projects which have been accepted, and individual decisions shall be sent to the beneficiaries laying down the amount of financial assistance, the financial procedures and controls, and the specific technical conditions of the project approved.

8. At the Commission's initiative,

a) and following consultations with the committee referred to in Article 20 of Directive 92/43/EEC, in accordance with the consultative procedure laid down in Article 3 of Decision 1999/468/EC, the accompanying measures to be financed pursuant to paragraph 2(b)(i) and (ii) shall be the subject of calls for expression of interest. The Member States may submit to the Commission proposals for accompanying measures.

b) the accompanying measures to be financed pursuant to paragraph 2(b)(iii) shall be the subject of calls for expression of interest.

All calls for expression of interest shall be published in the Official Journal of the European Communities, where the specific criteria to be met will be indicated.

Article 4

Life-Environment

1. The specific objective of Life-Environment is to contribute to the development of innovative and integrated techniques and methods and to the more thorough development of Community environmental policy.

2. The projects and/or measures indicated below shall be eligible for Life-Environment:

a) demonstration projects which further the objective set out in paragraph 1, and

- integrate considerations on the environment and on sustainable development in land-use development and planning, including urban areas and coastal regions, or,

- minimise the environmental impact of economic activities by placing the emphasis on prevention, notably through the development of clean technologies, or,

- prevent, reuse, recover and recycle waste of all kinds and ensure the sound management of waste streams, or,

- reduce the environmental impact of products through an integrated approach throughout the various production, distribution, consumption and end-of-life processing stages, in particular by developing environment-friendly products;

b) projects paving the way for the development of new actions and new Community instruments in the field of the environment and/or the updating of Community environmental legislation and policies.

c) accompanying measures necessary for:

i) the dissemination of information with a view to promoting the exchange of experience between projects;

ii) the evaluation, monitoring and promotion of the actions undertaken during this phase of the implementation of the Life instrument and of its first two phases, the dissemination of information on the experience gained in the course of these actions and the transfer of the results obtained.

3. Financial assistance shall be provided by co-financing of projects.

The level of Community financial support shall be a maximum of 30% of the eligible cost of the project for projects generating significant net proceeds. In this case, the beneficiaries' contribution to the financing shall be at least as much as the Community support.

The rate of Community financial support for all other applicants shall be a maximum of 50 % of the eligible cost of the project.

The rate of Community financial support for the accompanying measures shall be a maximum of 100 % of the cost of these actions.

4. As far as demonstration projects are concerned, guidelines will be established by the Commission, on completion of the procedure provided for in Article 11, paragraphs 3b and 3c, and published in the Official Journal of the European Communities. These guidelines shall promote synergy between demonstration actions and the guiding principles of Community environmental policy with a view to sustainable development.

5. Proposals for projects to be financed pursuant to paragraph 2(a) shall be submitted to the Commission by the Member States. Where projects involve more than one Member State, proposals shall be submitted by the Member State in which the project coordinating body is located.

Proposals shall be submitted to the Commission before 31 January of each year. The Commission shall decide on these proposals, in accordance with paragraph 10, before 31 July. The proposals for 2000 shall be submitted to the Commission before 31 March 2000. The Commission shall decide on these proposals, in accordance with paragraph 10, before 31 October 2000.

6. Proposals shall be considered for financial support, in accordance with paragraph 10, only if they satisfy the requirements of Article 2 and of paragraph 2(a|) of this Article and meet the following criteria:

a) they must provide solutions to a problem which arises very often in the Community, or is of great concern to some Member States,

b) they must be innovative by virtue of the technology or the method applied;

c) they must set an example and represent progress compared with the current situation;

d) they must be capable of promoting widespread dissemination and the widest possible application of practices, technologies and/or products conducive to environmental protection;

e) they must aim at developing and transferring know-how which can be used in identical or similar situations;

f) they must promote co-operation in the environmental field;

g) they must provide satisfactory value for money from an environmental point of view;

h) they must promote the integration of environmental considerations into activities pursuing objectives of a mainly social and economic nature.

In examining these proposals, account should also be taken, where appropriate, of their impact on employment.

7. The following costs shall be considered ineligible:

a) land purchase;

b) studies not specifically addressing the objective aimed at by the financed projects;

c) investments in major infrastructures or investments of a non-innovative structural nature, including activities already confirmed on an industrial scale;

d) research and technological development activities.

8. At the Commission's initiative,

a) and after having gone through the procedure provided for in Article 11, paragraphs 3b and 3c, the projects to be financed under paragraph 2(b) and the accompanying measures financed under paragraph 2(c)(i) shall be the subject of calls for expression of interest. Proposals for projects to be financed pursuant to paragraph 2(b) may be submitted to the Commission by the Member States;

b) the accompanying measures to be financed pursuant to paragraph 2(c)(ii) shall be the subject of calls for expression of interest.

All calls for expression of interest shall be published in the Official Journal of the European Communities, where the specific criteria to be met will be indicated.

9. A summary of the main points and of the content of the proposals received under paragraph 2(a) and (b) shall be submitted to the Member States by the Commission. Upon request, it shall place the original documents at the disposal of the Member States for consultation.

10. Projects for which financial support is planned shall be subjected to the procedure provided for in Article 11, paragraphs 2 to 3a.

11. An outline decision by the Commission shall be sent to the Member States on the projects which have been accepted, and individual decisions shall be sent to the beneficiaries laying down the amount of financial assistance, the financial procedures and controls, and the specific technical conditions of the project approved.

Article 5

Life-Third Countries

1. The specific objective of Life-Third Countries shall be to contribute to the establishment of capacities and administrative structures needed in the environmental sector and in the development of environmental policy and action programmes in third countries bordering on the Mediterranean and the Baltic Sea other than the Central and Eastern European countries that have concluded association agreements with the European Community and are referred to in Article 6(1).

2. The following shall be eligible for Life-Nature:

a) technical assistance projects which further the objective set out in paragraph 1;

b) accompanying measures necessary for the evaluation, monitoring and promotion of the actions undertaken during this phase of the implementation of the Life instrument and of its first two phases, the exchange of experience between projects, the dissemination of information on the experience gained in the course of these actions and the transfer of the results obtained.

3. Financial assistance shall be provided by co-financing of projects and accompanying measures. The rate of Community financial support shall be a maximum of 70% of the cost of the projects referred to in paragraph 2(a) and a maximum of 100% of the cost of the accompanying measures referred to in paragraph 2(b).

4. Proposals for projects to be financed under paragraph 2(a) shall be submitted to the Commission by the national authorities of the third countries concerned. Where projects involve more than one country, proposals shall be submitted by the country in which the project co-ordinating authority is located or by the international organisation acting to protect the environment in the geographical area concerned.

Proposals shall be submitted to the Commission before 31 January of each year. The Commission shall decide on these applications in accordance with paragraph 7 before 31 July. The proposals for 2000 shall be submitted to the Commission before 31 March 2000. The Commission shall decide on these proposals, in accordance with paragraph 7, before 31 October 2000.

5. Proposals shall be considered for financial support, in accordance with paragraph 7, only if they satisfy the requirements of Article 2 and of paragraph 2(a) of this Article and meet the following criteria:

a) be of interest to the Community, notably through their contribution to implementing regional and international guidelines and agreements;

b) contribute to an approach promoting sustainable development at international, national or regional level;

c) provide solutions to major environmental problems in the region and the relevant sector;

Priority shall be given to projects likely to promote cooperation at the transfrontier, transnational or regional level.

6. A summary of the main points and the content of the proposals received from the third countries shall be submitted to the Member States by the Commission.

Upon request, it shall place the original documents at the disposal of the Member States for consultation.

7. Projects for which financial support is planned shall be subjected to the procedure provided for in Article 11, paragraphs 2 to 3a. Without prejudice to the abovementioned procedure, the committee set up under Article 20 of Directive 92/43/EEC shall be consulted, in accordance with the consultative procedure laid down in Article 3 of Decision 1999/468/EC, before any decision on nature conservation projects is adopted. The Commission shall adopt a decision concerning the list of projects selected.

8. The projects approved shall give rise to a contract between the Commission and the beneficiaries setting out the amount of financial assistance, the financial procedures and controls, as well as all the specific technical conditions of the approved project. The list of proposals accepted shall be sent to the Member States.

9. At the Commission's initiative, the accompanying measures to be financed under paragraph 2(b) shall be the subject of calls for expression of interest published in the Official Journal of the European Communities and setting out the specific criteria to be met.

Article 6

Participation of accession candidate countries

1. Life shall be open to the accession candidate Central and Eastern Europe countries in accordance with the conditions referred to in the association agreements concluded with those countries and on the basis of the provisions of the decision of the Association Council competent for each country concerned.

2. The national authorities of the countries concerned shall transmit to the Commission the proposals for projects to be financed under Life-Nature and Life-Environment within the time limits stipulated in Article 3(4) and Article 4(5) respectively. Where projects involve more than one country, proposals shall be submitted by the country in which the project coordinating body is located.

3. Proposals which meet the general criteria set out in Article 2 and the specific criteria set out in Article 3(5)(b) and Article 4(6) and (8) shall be taken into consideration for Community financial support.

4. A summary of the main points and the content of the proposals received from the national authorities of the countries concerned shall be submitted to the Member States by the Commission. Upon request, it shall place the original documents at the disposal of the Member States for consultation.

5. The projects for which financial support is planned under LIFE shall go through either the committee provided for in Article 20 of Directive 92/43/EEC, in accordance with the management procedure laid down in Article 4 of Decision 1999/468/EC and in compliance with the provisions of Article 8 thereof, or the procedure provided for in Article 11, paragraphs 2 to 3a of this Regulation, depending on the type of project proposed. The period provided for in Article 4(3) of Decision 1999/468/EC shall be three months.

6. The projects approved shall give rise to a contract or an agreement between the Commission and the beneficiaries setting out the amount of financial assistance, the financial procedures and controls, as well as all the specific technical conditions of the approved action. The list of proposals accepted shall be sent to the Member States.

7. Where conditions and provisions equivalent to those referred to in paragraph 1 have been established for the other accession candidate countries, Life will be open for participation by those countries in accordance with the provisions of paragraphs 2 to 6. Countries participating in the programme on the basis of this Article are not entitled to do so on the basis of Article 5.

8. The annual breakdown of appropriations devoted to the cofinancing of this instrument by the countries referred to in paragraphs 1 and 7 is published in the general budget of the European Union, Section III, Part B, Annex IV.

Article 7

Consistency between financial instruments

1. Without prejudice to the conditions for accession candidate countries set out in Article 6, projects receiving aid provided for under the Structural Funds or other Community budget instruments shall not be eligible for financial assistance under this Regulation.

2. The Commission shall ensure that actions undertaken in the framework of this Regulation are consistent with those undertaken under the Structural Funds, research, technological development and demonstration programmes or other Community financial instruments.

Article 8

Duration of the third phase and budgetary resources

1. Life shall be implemented in phases. The third phase shall start on 1 January 2000 and shall end on 31 December 2004. The total appropriation for the implementation of the third phase, covering the period from 2000 to 2004, shall be 613 million euros.

2. The budgetary resources allocated to the actions provided for in this Regulation shall be entered in the annual appropriations of the general budget of the European Union. The available annual appropriations shall be determined by the budgetary authority within the limits of the financial perspective.

3. The amount of resources to be allocated to each of the areas of activity shall be as follows:

a) 47% for actions undertaken under Article 3;

b) 47% for actions undertaken under Article 4;

c) 6% for actions undertaken under Article 5.

The accompanying measures shall be limited to 5% of the available appropriations.

Article 9

Monitoring of projects

1. For any project financed by Life, the beneficiary shall submit to the Commission - and, upon request, to the Member State concerned - technical and financial reports on the progress of the work. Reports sent to the Member States may take the form of a summary. A final report shall also be sent to the Commission and to the Member State concerned within three months of completion of the project.

The Commission shall determine the form and content of the reports. The report shall be based on the physical and financial indicators set out in the Commission Decision approving the projects or in the contract or agreement concluded with the beneficiaries. These indicators shall be such as to indicate the progress of the work and the objectives to be attained within a specified time limit.

2. Without prejudice to the audits carried out by the Court of Auditors in liaison with the competent national audit bodies or departments pursuant to Article 248 of the Treaty, or any inspection carried out pursuant to Article 279(c) of the Treaty, officials and other staff of the Commission may carry out on-the-spot checks, including sample checks, on projects financed under Life.

Before carrying out an on-the-spot check, the Commission shall inform the beneficiary and the beneficiary's Member State, unless there are good reasons to suspect fraud and/or improper use.

3. For a period of five years following the last payment in respect of an action, the beneficiary of financial assistance shall keep available for the Commission all the supporting documents regarding expenditure on the action.

4. On the basis of the results of the monitoring reports and sample checks referred to in paragraphs 1 and 2, the Commission shall, if necessary, adjust the scale or the conditions of allocation of the financial assistance originally approved and also the timetable for payments.

5. The Commission shall take whatever other steps are necessary to verify that the projects financed are carried out properly and in compliance with the provisions of this Regulation.

Article 10

Protection of Community financial interests

1. The Commission may reduce, suspend or recover the amount of financial assistance granted for a project if it finds irregularities, including non-compliance with the provisions of this Regulation or the individual decision or the contract or agreement granting the financial support in question, or if it transpires that, without Commission approval having being sought, the project has been subjected to a major change which conflicts with the nature or implementing conditions of the project.

2. If the time limits have not been observed or if only part of the allocated financial assistance is justified by the progress made with implementing a project, the Commission shall request the beneficiaries to submit their observations within a specified period. If the beneficiary does not give a satisfactory answer, the Commission may cancel the remaining financial assistance and demand repayment of sums already paid.

3. Any undue payment must be repaid to the Commission. Interest may be added to any sums not repaid in good time. The Commission shall lay down detailed rules for the implementation of this paragraph.

Article 11

LIFE Committee

1. For Life-Environment and Life-Third Countries, the Commission shall be assisted by a committee consisting of the representatives of the Member States and chaired by the representative of the Commission, and hereinafter referred to as the "Life Committee".

Management procedure

2. The representative of the Commission shall submit to the Life Committee a draft of the measures to be taken relating to the projects for which financial support is planned under Article 4(2)(a) and (b) and under Article 5(2)(a).

3. The LIFE Committee shall deliver its opinion on this project and the Commission shall adopt the measures envisaged, in accordance with the provisions of Article 4 of Decision 1999/468/EC and in compliance with the provisions of Article 8 thereof.

3a. The period provided for in Article 4(3) of Decision 1999/468/EC shall be three months.

Consultative procedure

3b. The representative of the Commission shall submit to the Life Committee a draft of the measures to be taken concerning:

(a) the guidelines to be drawn up under Article 4(4),

(b) the calls for expression of interest in respect of the projects to be financed under Article 4(2)(b) and the accompanying measures under paragraph 2(c)(i),

(c) any other matter relating to the implementation of this programme.

3d. The Life Committee shall deliver its opinion in accordance with the provisions of Article 3 of Decision 1999/468/EC.

Article 12

Evaluation of the third phase and continuation of Life

1. Not later than 30 September 2003, the Commission shall submit a report to the European Parliament and the Council on the implementation of this Regulation, its contribution to the development of Community environmental policy and the use made of the appropriations, and shall, where appropriate, make proposals for any adjustments to be made with a view to continuing the action beyond the third phase.

2. The European Parliament and the Council, acting in accordance with the Treaty, shall decide by 1 July 2004 at the latest on the implementation of the fourth phase as from 1 January 2005.

Article 13

Repeal of Council Regulation (EEC) No 1973/92

1. Council Regulation (EEC) No 1973/92 is hereby repealed without prejudice to decisions taken and contracts or agreements concluded concerning the granting of financial assistance pursuant to that Regulation.

2. References to the repealed Regulation shall be understood as referring to this Regulation, in accordance with the table of equivalence set out in the Annex thereto.

Article 14

Entry into force

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.

Done at

For the European Parliament For the Council

The President The President

ANNEX

TABLE OF EQUIVALENCE

Regulation (EEC) No 1973/92 // This Regulation

Article 1 // Article 1

Article 2(1)(a) // Article 3(1) and (2)(a)

Article 2(1)(b)(i)(ii) // Article 4(1) and (2)(a)

Article 2(1)(b)(iii), first subparagraph // Article 4(1) and (2)(b)

Article 2(1)(b)(iii), indents 1, 2, 3, 4 // -

Article 2(2)(a) // Article 5(1) and (2)(a)

Article 2(2)(b)(c) // -

Article 2(3) // Article 3(2)(b), Article 4(2)(c), Article 5(2)(b)

Article 4(a) // Article 3(3), first sentence, Article 4(3), first subparagraph, Article 5(3), first sentence

Article 4(b) // -

Article 5 // Article 7(1)

Article 6 // Article 7(2)

Article 7(1), first subparagraph // Article 8(1), first and second sentences

Article 7(1), second subparagraph // Article 8(1), third sentence

Article 7(1), third subparagraph // Article 8(2), second sentence

Article 7(2) // -

Article 7(3) // -

Article 8(1) // Article 8(3)

Article 8(2) // Article 3(3)(a), first part, and (b) and Article 4(3), second and third subparagraphs

Article 8(3) // Article 3(3)(a) second part, Article 4(3), fourth subparagraph and Article 5(3), second sentence

Article 9(1) // Article 3(4) and (8)(a) and Article 4(5) and (8)(a)

Article 9(2) // Article 5(4)

Article 9(3) // -

Article 9(4) // Article 3(6), Article 4(9), and Article 5(6)

Article 9(5), first subparagraph // Article 3(7), first subparagraph, and (8)(a), first sentence, Article 4(8)(a) and (10) and Article 5(7)

Article 9(5), second subparagraph, first indent // Article 3(7), second subparagraph, and Article 4(11)

Article 9(5), second subparagraph, second indent // Article 5(8)

Article 9(6) // Article 3(7), second subparagraph, Article 4(11) and Article 5(8)

Article 9a(1)(a) // Article 2

Article 9a(1)(b)(i) // Article 3(5)(a)

Article 9a(1)(b)(ii) and (iii) // Article 4(6)

Article 9a(1)(b)(iv) // -

Article 9a(1)(c) indents 1,2,3,4 // Article 5(5)

Article 9a(1)(c) indents 5 and 6 // Article 2, second subparagraph, (b) and (c)

Article 9a(2) // -

Article 9b // Article 4(7)(b), (c) and (d)

Article 10(1), first indent // Article 9(5)

Article 10(1), second and third indents // -

Article 10(2) // Article 9(2)

Article 10(3) // Article 9(3)

Article 11(1) // Article 10(1)

Article 11(2) // Article 10(2)

Article 11(3) // Article 10(3)

Article 12(1) // -

Article 12(2) // Article 9(1)

Article 12(3) // Article 9(4)

Article 12(4) // -

Article 13 // Article 11

Article 13a // Article 6

Article 14 // Article 12

Article 15 // -

Article 16 // -

Article 17 // Article 14