1.9.87 Official Journal of the European Communities No C 235/5 
II 
(Preparatory Acts) 
COMMISSION 
Recommendation for a Council Decision on the conclusion of the Second Protocol on financial 
cooperation between the European Economic Community and the Socialist Federal Republic of 
Yugoslavia 
COM(87) 347 final 
(submitted by the Commission to the Council on 15 July 1987) 
(87/C 235/05) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, and in 
particular Article 238 thereof, 
Having regard to the recommendation from the Commission, 
Having regard to the assent of the European Parliament, 
Whereas the Protocol on financial cooperation between the European Economic Community 
and the Socialist Federal Republic of Yugoslavia signed on ... should be approved, 
HAS DECIDED AS FOLLOWS: 
Article 1 
The Second Protocol on financial cooperation between the European Economic Community 
and the Socialist Federal Republic of Yugoslavia is hereby approved on behalf of the 
Community. 
The text of the Protocol is attached to this Decision. 
Article 2 
The President of the Council shall give the notification provided for in Article 16 paragraph 2 
of the Protocol. 
Article 3 
This Decision shall enter into force on the day following its publication in the Official Journal 
of the European Communities. 
No C 235/6 Official Journal of the European Communities 1.9.87 
Second Protocol on financial cooperation between the Socialist Federal Republic of Yugoslavia 
and the European Economic Community 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
on the one part, and 
THE FEDERAL EXECUTIVE COUNCIL OF THE ASSEMBLY OF THE SOCIALIST FEDERAL 
REPUBLIC OF YUGOSLAVIA, 
on the other part, 
REAFFIRMING their resolve to implement, in the framework of the Mediterranean policy of 
the enlarged Community, cooperation which will contribute to the economic development of 
Yugoslavia and promote the strengthening of relations between the Community and Yugo­
slavia, 
ANXIOUS to pursue to this end the financial cooperation provided for in the Cooperation 
Agreement, 
HAVING DECIDED to conclude this Protocol and to this end have designated as their 
Plenipotentiaries: 
Article 1 
The Community shall participate, within the framework 
of financial cooperation provided for in the Cooperation 
Agreement between the EEC and the Socialist Federal 
Republic of Yugoslavia, and according to the conditions 
specified in this Protocol, in the financing of projects 
designed to contribute to the economic development of 
Yugoslavia and in particular those of common interest to 
Yugoslavia and the Community. 
Article 2 
For the purposes specified in Article 1 and for a period 
expiring on 30 June 1991, an aggregate amount of 550 
million ECU may be committed in the form of loans 
from the European Investment Bank, hereinafter called 
'the Bank' granted from its own resources in accordance 
with the arrangements, conditions and procedures laid 
down in its statute. 
Article 3 
1. The amount fixed in Article 2 shall be used to part 
finance specific capital projects submitted to the Bank 
with the agreement of the Socialist Federal Republic of 
Yugoslavia by banks or organizations of associated 
labour having their seat in Yugoslavia. 
2. The major part of this amount shall be used to 
finance projects concerning transport infrastructures of a 
common interest, in particular the transyugoslav highway including its feeder roads and the remaining part shall be 
used to finance other development projects. 
3. (a) Projects shall be examined for eligibility and loans 
granted in accordance with the detailed rules, 
conditions and procedures laid down by the 
Bank's Statute. 
(b) Loans granted by the Bank shall be subject to 
terms as to duration established on the basis of 
the economic and financial characteristics of 
projects, also taking into account the conditions 
obtaining on the capital markets on which the 
Bank procures its resources. 
(c) The interest rate shall be determined in 
accordance with the Bank's practice at the time of 
signature of each loan contract. 
Article 4 
1. The amounts to be committed each year shall be 
distributed as evenly as possible throughout the period of 
application of this Protocol. During the initial period of 
application, however, a proportionately higher amount 
may, within reasonable limits, be committed. 
2. Any funds not committed by the end of the period 
referred to in Article 2 may be used, until exhausted. In 
that event the funds shall be used under the same 
conditions as provided for in this Protocol. 
1.9.87 Official Journal 
Article 5 
Loans granted by the Bank for the execution of projects 
may take the form of co-financing in which, in 
particular, Yugoslav banks and the credit bodies and 
institutions of Member States or of third States, or inter­
national finance organizations, would take part. 
Article 6 
Organizations of associated Labour established in 
accordance with Yugoslav law, whether or not including 
foreign participations, shall have access on equal terms to 
the financing earmarked for financial cooperation. 
Article 7 
The execution, management and maintenance of projects 
financed within the framework of financial cooperation 
between the Socialist Federal Republic of Yugoslavia and 
the European Economic Community shall be the 
responsibility of the beneficiaries referred to in Article 3 
paragraph 1. 
The Bank shall ensure that its loans are utilized in 
accordance with the agreed allocations and under 
optimum economic conditions. 
Article 8 
All natural and legal persons coming within the scope of 
the Treaty establishing the European Economic 
Community and all legal persons of the Socialist Federal 
Republic of Yugoslavia may participate on equal terms in 
tendering procedures and other procedures for the 
award of contracts likely to be financed. Such legal 
persons formed in accordance with the law of a Member 
State of the EEC or of the Socialist Federal Republic of 
Yugoslavia must have their registered offices, their 
administrative head offices or their principal 
establishments in the teritories in which the Treaty 
establishing the EEC is applied or in the Socialist Federal 
Republic of Yugoslavia; however, where only their 
registered ofices are in those territories or in the Socialist 
Federal Republic of Yugoslavia, the activities of such 
legal persons must be effectively and continuously linked 
with the economy of those territories or of the Socialist 
Federal Republic of Yugoslavia. 
Article 9 
Yugoslavia shall apply to contracts awarded for the 
execution of projects financed within the framework of 
financial cooperation fiscal and customs arrangements at 
least as favourable as those applied in respect of most 
favoured state or most favoured international organiz­
ation in the field of development. European Communities No C 2 3 5 / 7 
Article 10 
Yugoslavia shall take the necessary measures to ensure 
that interest and all other payments due to the Bank in 
respect of loans granted in the context of financial 
cooperation are exempted from any taxes or levies 
imposed by the federal authorities, the republics, the 
autonomous provinces or the communal authorities. 
Article 11 
The provision of a guarantee by the Socialist Federal 
Republic of Yugoslavia or other sufficient guarantees 
shall be required by the Bank as a condition for granting 
loans. 
Article 12 
Throughout the duration of the loans accorded pursuant 
to this Protocol, Yugoslavia shall undertake to take all 
necessary measures in conformity with its national 
legislation to make available to debtors enjoying such 
loans and to guarantors of the loans the foreign currency 
necessary for the payment of interest, commission and 
other charges and repayment of the principal. 
Article 13 
The results of financial cooperation may be examined 
within the Cooperation Council. 
Article 14 
One year before the expiry of this Protocol, the 
Contracting Parties shall examine what arrangements 
could be made for financial cooperation during a 
possible further period. 
Article 15 
This Protocol shall be annexed to the Cooperation 
Agreement between the European Economic Community 
and the Socialist Federal Republic of Yugoslavia signed 
in Belgrade on 2 April 1980. 
Article 16 
1. This Protocol shall be subject to approval in 
accordance with the Contracting Parties' own pro­
cedures; the Contracting Parties shall notify each other 
that the procedures necessary to this end have been 
completed. 
2. This Protocol shall enter into force on the first day 
of the second month following the date on which the 
notifications provided for in paragraph 1 have been 
given. . 
Article 17 
This Protocol is drawn up in two original copies in the 
Danish, Dutch, English, French, German, Greek, Italian, 
Portuguese, Spanish and Serbo-Croat languages, each of 
these texts being equally authentic.