COMMISSION OF THE EUROPEAN COMV1UNITIES 
C0MC93) 7 19f i naI 
(94)002(SYN) 
(9A)003(SYN) 
Brussels, 10 January 1994 
PROPOSAL FOR A (94)002(SYN) 
COUNCIL REGULATION (EC) No 
on financial and technical cooperation with the Occupied Territories 
PROPOSAL FOR (94)003(SYN) 
COUNCIL REGULATION (EC) No 
on financial and technical cooperation with the Occupied Territories 
and amending Council Regulation (EEC) No 1763/92 concerning financial 
cooperation in respect of all Mediterranean non-member countries 
(presented by the Commission) 
A 
EXPLANATORY MEMORANDUM 
In view of the progress made in the peace process, it has been agreed to 
step up considerably Community aid to the Palestinians in the form of a 
five-year programme, through which will be channelled ECU 250 million in the 
form of grants. This money will come from the Community budget and will be 
supplemented by an equivalent amount in European Investment Bank loans from 
own resources, which will be underwritten by the Community. The Commission 
notes that the subject of Community support for the Middle East peace 
process is addressed in its communication of 29 September 1993 to the 
Council and Parliament (COM 458/93 final). 
The Commission has attached a proposal for a Regulation laying down the 
detailed arrangements and the rules for the administration of aid financed 
by the Community budget. 
Furthermore, the arrangements for "horizontal" financial cooperation to 
implement the new Mediterranean policy made provision for appropriate 
operations in the Occupied Territories. The Commission has therefore drawn 
up a proposal for a Regulation amending Regulation (EEC) No 1763/92 on 
financial cooperation in order to extend its application to the Occupied 
Territories. The Regulation provides for a five-year programme (1992-96) 
with financing from the Community budget and EIB loans. Some loans 
(environment projects) qualify for interest-rate subsidies. 
(94)0Q2(SYN) 
Proposal for a 
Council Regulation (EC) No 
on financial and technical cooperation with the Occupied Territories 
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, 
In agreement with Parliament, 
Whereas, having regard to the greater requirements that will be generated in 
the territories of the West Bank of the Jordan and the Gaza Strip, 
hereinafter referred to as the "Occupied Territories", as a result of recent 
developments in the Middle East peace process, new measures in the form of 
economic and social cooperation should be implemented in the said 
Territories in order to foster sustainable economic and social development, 
taking account of the experience acquired by the Community as a major 
provider of aid to the Palestinian people; 
Whereas to this end there should be a five-year programme (1994-98); whereas 
this programme should be implemented with financing from the Community 
budget in the form of grants; 
Whereas it is necessary to lay down the detailed arrangements and rules for 
administering the operations financed from the budget, 
HAS ADOPTED THIS REGULATION, 
Article 1 
The Community shall implement financial and technical cooperation with the 
Occupied Territories under a five-year programme (1994-98) with the aim of 
aiding their sustainable economic and social development. 
Article 2 
1. The priority areas for projects and measures implemented under the 
programme referred to in Article 1 shall be: 
infrastructure, production, urban and rural development, education, 
health, the environment, services, foreign trade, and the setting-up and 
improvement of institutions necessary for the proper working of the 
public administration. 
3 
2. Community aid may be given for investment projects, feasibility studies, 
technical assistance and training. 
3. Community financing for operations covered by this Regulation shall be in 
the form of grants. 
Article 3 
The aid referred to in this Regulation may be combined with European 
Investment Bank financing from own resources and may used for cofinancing 
with Member States, non-member countries in the region, multilateral bodies 
or the Occupied Territories themselves. Wherever possible, the Community 
nature of the aid shall be preserved. 
Article 4 
1. Financing decisions on projects and operations under this Regulation 
shall be adopted in accordance with the procedure laid down in Article 5. 
2. Financing decisions on overall allocations for technical cooperation, 
training and trade promotion shall be adopted in accordance with the 
procedures laid down in Article 5. 
The Commission shall inform the Committee referred to in Article 5 of the 
use made of these overall allocations. 
3. Decisions amending decisions adopted in accordance with the procedure 
provided for in Article 5 shall be taken by the Commission where they do not 
entail any substantial amendments or additional commitments in excess of 20% 
of the original commitment. 
Article 5 
1. The Commission shall be assisted by the MED Committee set up under 
Article 6 of Council Regulation (EEC) No 1762/92 of 29 June 1992 on the 
implementation of the protocols on financial and technical cooperation 
concluded by the Community with Mediterranean non-member countries. 
2. The Commission representative shall submit to the Committee a draft text 
setting out measures to be taken. The Committee shall deliver its opinion 
on the draft within a time-limit set by the Chairman taking into account 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 adopted by 
the Council 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 the Article referred to above. The Chairman shall 
not vote. 
3. (a) The Commission shall adopt the proposed measures if they are in 
accordance with the opinion of the Committee; 
M 
(b) If the proposed measures are not in accordance with the opinion of 
the Committee, or if no opinion is delivered, the Commission shall, 
without delay, send the Council a proposal on the measures to be 
taken. The Council shall act by a qualified majority. 
If the Council has not acted within three months from the date on 
which the matter was referred to it, the proposed measures shall be 
adopted by the Commission. 
Article 
1. The Commission shall take stock of the implementation of cooperation 
pursuant to this Regulation and report to Parliament and the Council once a 
year. 
2. The Commission shall evaluate the main projects completed in order to 
establish whether the objectives fixed during the appraisal of these 
projects have been achieved and to establish guidelines for making future 
aid more effective. These evaluation reports shall be sent to the Member 
States. 
Article 7 
This Regulation shall enter into force on the third day following that of 
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. 
For the Council 
The President 
r 
-*r:g- (94)003(SYN) 
PROPOSAL FOR A 
COUNCIL REGULATION (EC) No 
on financial and technical cooperation with the Occupied Territories 
and amending Council Regulation (EEC) No 1763/92 concerning financial 
cooperation in respect of all Mediterranean non-member countries 
THE COUNCIL OF THE EUROPEAN UNION 
Having regard to the Treaty establishing the European Community, and in 
particular Article 130 thereof, 
Having regard to the proposal from the Commission, 
In agreement with Parliament, 
Whereas Council Regulation (EC) No established a programme of financial 
and technical cooperaion with the territories of the West Bank of the Jordan 
and the Gaza Strip, hereinafter referred to as "the Occupied Territories"; 
Whereas, with a view to promoting the economic and social development of the 
Occupied Territories on a sustainable basis and in view of the considerable 
requirements likely to be generated by recent developments in the Middle 
East peace process, this programme should be supplemented by additional 
measures, namely those provided for in Council Regulation (EEC) No 1763/92 
concerning financial cooperation in respect of all Mediterranean non-member 
countries;* 
Whereas the application of the said Regulation should be extended to cover 
the Occupied Territories, 
HAS ADOPTED THIS REGULATION: 
Article 1 
Council Regulation(^EC) No 1763/92 shall apply to the Occupied Territories. 
Article 2 
This Regulation shall enter into force on the third day following that of 
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. 
For the Council 
The President 
1 OJ L 181, 1.7.1992, p. 5. 
<r 
FINANCIAL STATEMENT 
1. TITLE OF OPERATION 
Financial assistance to the West Bank and Gaza 
2. BUDGET HEADING: Article B7-406 
3. LEGAL BASIS: not applicable 
4. DESCRIPTION OP OPERATION: 
4.1 General objective 
Community support for the Middle East peace process. 
4.2 Period covered 
1994 - 1998 
5. CLASSIFICATION OF EXPENDITURE 
5.1 Non-compulsory expenditure 
5.2 Differentiated appropriations 
6. TYPE OF EXPENDITURE OR REVENUE 
(a) Financing 
- 100% grant 
- Possible cofinancing with EIB, Member States, non-member 
countries of the region and multilateral bodies 
(b) Terms and conditions 
Selection of projects and operations in agreement with relevant 
Palestinian organizations. 
(c) Any changes in the level of revenue 
- The proposed operation does not involve any change in revenue. 
- There is no provision for reimbursement. 
7. FINANCIAL IMPACT 
7.1 Method of calculating total cost of operation 
The amount proposed for commitments takes into account past 
experience, obvious needs and absorptive capacity of the 
institutions concerned. It is also the expression of the 
Community's commitment to step up its support for the Occupied 
Territories in line with the declaration of the Strasbourg 
? 
European Council of 7 and 8 December 1989 and the guidelines 
issued by the informal meeting of Foreign Ministers at Aeden 
Biesen on 11-12 September 1993. 
7.2 Itemized breakdown of cost in ECU million 
BREAKDOWN Budget 
1994 
50 Budget 
1995 
50 Budget 
1996 
50 Budget 
1997 
50 Budget 
1998 
50 Total 
250 
The amounts are expressed in current ecus. 
7.3 Indicative schedule of appropriations 
Commitment appropriations 
Payment appropriations 
1994 budget 
1995 budget 
1996 budget 
1997 budget 
1998 budget 
Total Budget 
1994 
50 
30 
15 
5 
PM 
PM 
50 Budget 
1995 
50 
25 
15 
10 
PM 
50 Budget 
1996 
50 
25 
15 
10 
50 Budget 
1997 
50 
25 
15 
40 Budget 
1998 
50 
35 
35 Total 
250 
30 
40 
45 
50 
60 
225 
s 
8. FRAUD PREVENTION MEASURES PROVIDED FOR IN THE PROPOSED OPERATION 
Standard Commission checks 
9. COST-EFFECTIVENESS ANALYSIS 
9.1 
(a) Specific objectives 
The aim of the operation is to improve the living conditions 
of the Palestinian population and to support the peace process 
in the region by financing investment and operating costs in 
the following areas: infrastructure, production (agriculture, 
fisheries, industry), services (incl. tourism), foreign trade, 
urban and rural development, health, the environment, 
institutional and administrative development, training and 
education. It also covers the technical assistance required to 
implement aid of this type and the cost of appraising and 
monitoring projects. 
(b) Target population 
The aid is for the Palestinian population of the West Bank and the 
Gaza Strip. It will be implemented by a variety of bodies: 
chambers of commerce, cooperatives, specialized institutions, etc. 
^•2 Grounds for the operation 
9.2.1 Grounds or need for Community action (subsidiarity) 
The Community needs to step up its long-standing efforts to aid the 
Palestinian people by throwing its weight behind the Middle East 
peace process. The Community has also acquired unequalled 
experience as a result of its past aid. 
9.2.2 Approach chosen 
Spin-off effects: the aim of the operations financed is to develop 
and strengthen economic and institutional autonomy, thereby 
reducing the Territories' dependence on external financing. 
- Multiplier effects (ability to mobilize other sources of finance): 
the effectiveness of operations under this budget heading could be 
further increased by the boost they will provide to the economy of 
the Territories, so attracting local and international capital. 
Coordination with other donors will redound to the benefit of the 
operations financed under this budget heading. 
Js 
9.2.3 Grounds for choice of target population and proposed level of 
expenditure 
The aim is to provide sufficient aid to a population not covered by 
the cooperation agreements with neighbouring countries to achieve 
the overall objective, namely Community support for the peace 
process. 
9.2.4 Main factors of uncertainty that may affect the results of the 
operation 
The political situation is very uncertain. 
9.3 Monitoring and evaluation of the operation 
9.3.1 Performance indicators selected 
Performance indicators have been set for each project (e.g.: 
increase in agricultural production and in the degree of self-
sufficiency in food, level of exports by the territories 
concerned). 
9.3.2 Details and frequency of planned evaluations 
The main sectors financed will be subject to annual evaluation. 
9.3.3 Assessment of the results obtained 
Results so far show that the Community's previous operations have 
slowed down the social and economic decline. 
9.4 Consistency with financial programming 
The purpose is to help achieve economic objectives and to promote 
political stability in the region. 
ISSN 0254-1475 
COM (93) 719 final 
DOCUMENTS 
EN li 
Catalogue number : CB-CO-93-770-EN-C 
ISBN 92-77-63825-7 
Office for Official Publications of the European Communities 
L-2985 Luxembourg