Proposal for a Council Regulation (Euratom EC) concerning the provision of assistance to economic reform and recovery in the New Independent States and Mongolia (95/C 134/09) COM(95) 12 final - 95/0056(CNS)

(Submitted by the Commission on 18 April 1995) THE COUNCIL OF THE EUROPEAN UNION

Having regard to the Treaty establishing the European Community, and in particular Article 235 thereof,

Having regard to the Treaty establishing the European Atomic Energy Community, and in particular Article 203 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas pursuant to the European Council in Dublin and in Rome in 1990 the European Community introduced a technical assistance programme in favour of economic reform and recovery in the former Union of Soviet Socialist Republics;

Whereas Council Regulation (Euratom, EEC) No 2053/93 of 19 July 1993 concerning the provision of technical assistance to economic reform and recovery in the New Independent States of the former Soviet Union and Mongolia (1) laid down the conditions for the provision of this technical assistance and foresaw such an operation from 1 January 1993 to 31 December 1995;

Whereas such assistance will be fully effective only in the context of progress towards free and open democratic systems that respect human rights, and towards market-oriented economic systems;

Whereas such assistance has already generated significant impact on reform in the New Independent States and Mongolia, and further assistance is still required to ensure that this reform becomes sustainable, it is necessary to continue this effort;

Whereas the implementation of such assistance should enable conditions favourable to private investment to be established;

Whereas it is appropriate to establish priorities for this assistance;

Whereas Community assistance will be all the more effective where it can be implemented on a decentralized basis within each partner country;

Whereas the development of inter-State economic links and trade flows conducive to economic reform and restructuring should be encouraged;

Whereas in order to properly meet the most acute needs of the New Independent States and Mongolia at the present stage of their economic transformation, it is necessary to permit a limited amount of the financial allocation to be used for small scale infrastructure projects in the context of border-crossing facilities;

Whereas the development of small and medium-sized entreprises is a priority in all New Independent States and Mongolia, and it is therefore appropriate to provide equity funding for such companies;

Whereas the integration of environmental aspects into the programme would guarantee the long term sustainability of the economic reforms;

Whereas the European Council at its meeting in Rome also stressed the importance of effective coordination by the Commission of the efforts made in the former Union of Soviet Socialist Republics by the Community and its Member States acting individually;

Whereas it is appropriate that the Commission be assisted in the implementation of Community aid by a committee made up of Member States' representatives;

Whereas the requirements of economic reform and restructuring now in progress, and the effective management of this programme, require a multiannual approach;

Whereas assistance for economic reform and recovery may require specific types of expertise particularly available in the Phare partner countries and in certain other States;

Whereas the continued provision of assistance will contribute to the attainment of the Community's objectives, notably in the Partnership and Cooperation Agreements;

Whereas the Treaties have not provided, for the adoption of this Regulation, powers other than those of Article 235 of the EEC Treaty and Article 203 of the EAEC Treaty,

HAS ADOPTED THIS REGULATION:

Article 1

1. A programme to assist economic reform and recovery in the partner States listed in Annex I (hereinafter called 'the partner States`) shall be implemented by the Community from 1 January 1996 in accordance with the criteria laid down in this Regulation.

2. Assistance shall be concentrated on sectors and, where appropriate, on geographic areas in which the partner States have already taken concrete measures to promote reform and/or for which they can present a time-schedule. The modalities of assistance shall be decided upon in accordance with the procedure provided for in Article 6 (2) and (3).

Article 2

1. The programme referred to in Article 1 shall mainly take the form of technical assistance in support of the economic reform in progress in the partner States for measures aimed at bringing about the transition to a market economy and reinforcing democracy, inter alia through the encouragement of the dialogue between the social partners. It shall also, case by case and in accordance with the procedure set out in Article 6 (2) and (3), cover reasonable costs of supplies required in support of the implementation of the technical assistance. In particular cases, such as nuclear safety programmes, a significant supply element may be included.

The cost of the project in local currency shall be covered by the Community only to the extent strictly necessary.

2. On a case by case basis and subject to the procedure referred to in Article 6 (2), assistance may cover costs related to small-scale infrastructure projects in the context of border-crossing facilities referred to in Article 2 (9).

3. The programme shall promote industrial cooperation and support the establishment of joint ventures through the funding of equity investment in small and medium-sized companies.

4. The assistance shall also cover costs related to the preparation, implementation, monitoring, audit and evaluation of the execution of these operations, as well as costs concerning information.

5. The assistance shall be concentrated in particular in the indicative areas referred to in Annex II taking into account the evolving needs of the beneficiaries. In addition, environmental aspects shall be integrated into the preparation and implementation of the programme. This shall further be done, inter alia, by assisting partner countries to strengthen environmental institutions, legislation and training. Particular emphasis shall be laid on nuclear safety issues.

6. Due regard shall be taken of the promotion of the participation of women in social and economic life, when designing and implementing programmes.

7. Operations to be financed pursuant to this Regulation shall be selected taking account, inter alia, of the recipients' preferences and on the basis of an assessment of their effectiveness in achieving the objectives aimed at by the Community assistance.

8. The assistance shall be implemented on a decentralized basis as far as possible. To this end, the final recipients of Community assistance shall be closely involved in the preparation and execution of the projects, and once the National Authorities of the partner States have agreed on sectoral policies and strategies, as well as the geographical concentration areas, the identification and preparation of the measures to be supported shall be carried out directly at regional level, wherever possible.

Regular coordination shall be established between the Commission and the Member States, including on-the-spot coordination in their contacts with the partner States, both in the programme definition and in the programme implementation stage.

9. Assistance may be provided to support measures aimed at promoting inter-state, inter-regional and cross-border cooperation. Particular attention will be paid to border-crossing facilities on borders between the N.I.S. and the Union, and the N.I.S. and Central Europe, to the cooperation on the level of large geographic regions as well as to measures complementary to those undertaken in this field within the Union and the Phare countries.

10. When an essential element for the continuation of cooperation through assistance is missing, in particular in cases of violation of democratic principles and human rights, the Council may, on a proposal from the Commission, acting by a qualified majority, decide upon appropriate measures concerning the assistance to a partner State.

Article 3

1. Community assistance shall take the form of grants which shall be released in tranches as projects materialize.

2. Financing decisions and any contracts resulting therefrom shall expressly provide for supervision by the Commission and the Court of Auditors to be carried out on the spot, if necessary.

Article 4

1. Indicative programmes covering three-year periods shall be established for each of the partner States in accordance with the procedure provided for in Article 6. These programmes shall define the principal objectives of and guidelines for Community assistance in the indicative areas referred to in Article 2, and could include financial estimates. They may be amended in accordance with the same procedure during the period of their application. Before the establishment of indicative programmes, the Commission shall inform the Committee referred to in Article 6, on the priorities identified with the partner States.

2. Action programmes based on these indicative programmes shall be adopted on an annual basis in accordance with the procedure provided for in Article 6 (2) and (3). These action programmes shall include a list of the main projects to be financed within the indicative areas referred to in Article 2. The content of the programmes shall be determined in detail so as to provide the Member States with the relevant information to enable the Committee referred to in Article 6 to deliver its opinion.

Article 5

1. The Commission shall implement operations in accordance with the action programmes referred to in Article 4 (2).

2. Supply and works contracts shall be awarded by means of open invitations to tender except in the cases provided for in Article 116 of the Financial Regulation applicable to the general budget of the European Communities.

Service contracts shall, as a general rule, be awarded by restricted invitations to tender and by private treaty for operations up to ECU 300 000.

Participation in invitations to tender and contracts shall be open on equal terms to all natural and legal persons in the Member States and in the partner States.

Participation by natural and legal persons from the countries benefiting from Phare as well as in specific cases from Mediterranean countries with traditional economic, trade or geographical links may be authorized by the Commission on a case-by-case basis if the programmes or projects concerned require specific forms of assistance specifically available in such countries.

3. Taxes, duties and the purchase of immovable property shall not be funded by the Community.

4. In the case of co-financing, the participation of third countries concerned in invitations to tender and contracts may be authorized by the Commission, but on a case-by-case basis. In these cases participation of undertakings from third countries shall only be acceptable if reciprocity is granted.

Article 6

1. The Commission shall be assisted by a committee composed of the representatives of the Member States and chaired by the representative of the Commission (hereinafter referred to as the 'Committee`) to be known as the 'Management Committee for the assistance to the Independent States and Mongolia`.

2. The representative of the Commission shall submit to the Committee a draft of the measures to be taken. The Committee shall deliver its opinion on the draft within a time limit 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 EEC 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 weighed in the manner set out in that Article. The chairman shall not vote.

3. The Commission shall adopt measures, which shall apply immediately. However, if these measures are not in accordance with the opinion of the Committee, they shall be communicated by the Commission to the Council forthwith. In that event, the Commission shall defer application of the measures which it has decided for a period of six weeks.

The Council, acting by a qualified majority, may take a different decision within the period laid down in the first subparagraph.

4. The Committee may examine any other question relating to the implementation of this Regulation which may be put to it by its chairman, possibly at the request of the representative of a Member State and, in particular, any question relating to general implementation, the administration of the programme, co- financing and the coordination referred to in Article 7.

5. The Committee shall adopt its rules of procedure by qualified majority.

6. The Commission shall keep the Committee regularly informed, supplying specific, detailed information on the contracts awarded for the implementation of the projects and programmes. Moreover, for projects expected to be put out for restricted invitations to tender in accordance with Article 5 (2), the Commission shall, before drawing up short-lists, provide in good time advance information which shall include selection and evaluation criteria so as to facilitate participation by economic operators.

7. The European Parliament shall also be kept regularly informed of the implementation of the Tacis programmes.

Article 7

The Commission shall, together with the Member States, ensure the effective coordination of the assistance efforts undertaken in the partner States by the Community and individual Member States on the basis of the information supplied by the Member States.

In addition coordination and cooperation with the international financial institutions and other donors shall be encouraged.

In the framework of the assistance provided pursuant to this Regulation, the Commission shall promote co-financing with public or private bodies in the Member States.

Article 8

Each year the Commission shall present a progress report on the implementation of the assistance programme. This report shall also include, to the extent feasible, an evaluation of the assistance already provided. This report shall be addressed to the Member States, the European Parliament, the Council and the Economic and Social Committee.

Article 9

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.

(1) OJ No L 187, 29. 7. 1993, p. 1.

ANNEX I

Partner States referred to in Article 1

Armenia

Azerbaijan

Belarus

Georgia

Kazakhstan

Kyrgyzstan

Moldova

Russian Federation

Tajikistan

Turkmenistan

Ukraine

Uzbekistan

Mongolia

ANNEX II

Indicative areas referred to in Article 2 (5)

Assistance shall give priority to the following areas:

1. Human Resources Development:

- education and training including manpower training,

- restructuring of public administration,

- employment services and social security advice,

- strengthening of the civic society,

- policy and macroeconomic advice,

- legal assistance including approximation of legislation.

2. Enterprise restructuring and development:

- support for the development of small and medium-sized enterprises,

- conversion of defence related industries,

- privatization and restructuring,

- financial services.

3. Infrastructure:

- transport,

- telecommunication.

4. Energy, including nuclear safety.

5. Food production, processing and distribution.

Proposal for a Council Regulation (Euratom EC) concerning the provision of assistance to economic reform and recovery in the New Independent States and Mongolia (95/C 134/09) COM(95) 12 final - 95/0056(CNS)

(Submitted by the Commission on 18 April 1995) THE COUNCIL OF THE EUROPEAN UNION

Having regard to the Treaty establishing the European Community, and in particular Article 235 thereof,

Having regard to the Treaty establishing the European Atomic Energy Community, and in particular Article 203 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas pursuant to the European Council in Dublin and in Rome in 1990 the European Community introduced a technical assistance programme in favour of economic reform and recovery in the former Union of Soviet Socialist Republics;

Whereas Council Regulation (Euratom, EEC) No 2053/93 of 19 July 1993 concerning the provision of technical assistance to economic reform and recovery in the New Independent States of the former Soviet Union and Mongolia (1) laid down the conditions for the provision of this technical assistance and foresaw such an operation from 1 January 1993 to 31 December 1995;

Whereas such assistance will be fully effective only in the context of progress towards free and open democratic systems that respect human rights, and towards market-oriented economic systems;

Whereas such assistance has already generated significant impact on reform in the New Independent States and Mongolia, and further assistance is still required to ensure that this reform becomes sustainable, it is necessary to continue this effort;

Whereas the implementation of such assistance should enable conditions favourable to private investment to be established;

Whereas it is appropriate to establish priorities for this assistance;

Whereas Community assistance will be all the more effective where it can be implemented on a decentralized basis within each partner country;

Whereas the development of inter-State economic links and trade flows conducive to economic reform and restructuring should be encouraged;

Whereas in order to properly meet the most acute needs of the New Independent States and Mongolia at the present stage of their economic transformation, it is necessary to permit a limited amount of the financial allocation to be used for small scale infrastructure projects in the context of border-crossing facilities;

Whereas the development of small and medium-sized entreprises is a priority in all New Independent States and Mongolia, and it is therefore appropriate to provide equity funding for such companies;

Whereas the integration of environmental aspects into the programme would guarantee the long term sustainability of the economic reforms;

Whereas the European Council at its meeting in Rome also stressed the importance of effective coordination by the Commission of the efforts made in the former Union of Soviet Socialist Republics by the Community and its Member States acting individually;

Whereas it is appropriate that the Commission be assisted in the implementation of Community aid by a committee made up of Member States' representatives;

Whereas the requirements of economic reform and restructuring now in progress, and the effective management of this programme, require a multiannual approach;

Whereas assistance for economic reform and recovery may require specific types of expertise particularly available in the Phare partner countries and in certain other States;

Whereas the continued provision of assistance will contribute to the attainment of the Community's objectives, notably in the Partnership and Cooperation Agreements;

Whereas the Treaties have not provided, for the adoption of this Regulation, powers other than those of Article 235 of the EEC Treaty and Article 203 of the EAEC Treaty,

HAS ADOPTED THIS REGULATION:

Article 1

1. A programme to assist economic reform and recovery in the partner States listed in Annex I (hereinafter called 'the partner States`) shall be implemented by the Community from 1 January 1996 in accordance with the criteria laid down in this Regulation.

2. Assistance shall be concentrated on sectors and, where appropriate, on geographic areas in which the partner States have already taken concrete measures to promote reform and/or for which they can present a time-schedule. The modalities of assistance shall be decided upon in accordance with the procedure provided for in Article 6 (2) and (3).

Article 2

1. The programme referred to in Article 1 shall mainly take the form of technical assistance in support of the economic reform in progress in the partner States for measures aimed at bringing about the transition to a market economy and reinforcing democracy, inter alia through the encouragement of the dialogue between the social partners. It shall also, case by case and in accordance with the procedure set out in Article 6 (2) and (3), cover reasonable costs of supplies required in support of the implementation of the technical assistance. In particular cases, such as nuclear safety programmes, a significant supply element may be included.

The cost of the project in local currency shall be covered by the Community only to the extent strictly necessary.

2. On a case by case basis and subject to the procedure referred to in Article 6 (2), assistance may cover costs related to small-scale infrastructure projects in the context of border-crossing facilities referred to in Article 2 (9).

3. The programme shall promote industrial cooperation and support the establishment of joint ventures through the funding of equity investment in small and medium-sized companies.

4. The assistance shall also cover costs related to the preparation, implementation, monitoring, audit and evaluation of the execution of these operations, as well as costs concerning information.

5. The assistance shall be concentrated in particular in the indicative areas referred to in Annex II taking into account the evolving needs of the beneficiaries. In addition, environmental aspects shall be integrated into the preparation and implementation of the programme. This shall further be done, inter alia, by assisting partner countries to strengthen environmental institutions, legislation and training. Particular emphasis shall be laid on nuclear safety issues.

6. Due regard shall be taken of the promotion of the participation of women in social and economic life, when designing and implementing programmes.

7. Operations to be financed pursuant to this Regulation shall be selected taking account, inter alia, of the recipients' preferences and on the basis of an assessment of their effectiveness in achieving the objectives aimed at by the Community assistance.

8. The assistance shall be implemented on a decentralized basis as far as possible. To this end, the final recipients of Community assistance shall be closely involved in the preparation and execution of the projects, and once the National Authorities of the partner States have agreed on sectoral policies and strategies, as well as the geographical concentration areas, the identification and preparation of the measures to be supported shall be carried out directly at regional level, wherever possible.

Regular coordination shall be established between the Commission and the Member States, including on-the-spot coordination in their contacts with the partner States, both in the programme definition and in the programme implementation stage.

9. Assistance may be provided to support measures aimed at promoting inter-state, inter-regional and cross-border cooperation. Particular attention will be paid to border-crossing facilities on borders between the N.I.S. and the Union, and the N.I.S. and Central Europe, to the cooperation on the level of large geographic regions as well as to measures complementary to those undertaken in this field within the Union and the Phare countries.

10. When an essential element for the continuation of cooperation through assistance is missing, in particular in cases of violation of democratic principles and human rights, the Council may, on a proposal from the Commission, acting by a qualified majority, decide upon appropriate measures concerning the assistance to a partner State.

Article 3

1. Community assistance shall take the form of grants which shall be released in tranches as projects materialize.

2. Financing decisions and any contracts resulting therefrom shall expressly provide for supervision by the Commission and the Court of Auditors to be carried out on the spot, if necessary.

Article 4

1. Indicative programmes covering three-year periods shall be established for each of the partner States in accordance with the procedure provided for in Article 6. These programmes shall define the principal objectives of and guidelines for Community assistance in the indicative areas referred to in Article 2, and could include financial estimates. They may be amended in accordance with the same procedure during the period of their application. Before the establishment of indicative programmes, the Commission shall inform the Committee referred to in Article 6, on the priorities identified with the partner States.

2. Action programmes based on these indicative programmes shall be adopted on an annual basis in accordance with the procedure provided for in Article 6 (2) and (3). These action programmes shall include a list of the main projects to be financed within the indicative areas referred to in Article 2. The content of the programmes shall be determined in detail so as to provide the Member States with the relevant information to enable the Committee referred to in Article 6 to deliver its opinion.

Article 5

1. The Commission shall implement operations in accordance with the action programmes referred to in Article 4 (2).

2. Supply and works contracts shall be awarded by means of open invitations to tender except in the cases provided for in Article 116 of the Financial Regulation applicable to the general budget of the European Communities.

Service contracts shall, as a general rule, be awarded by restricted invitations to tender and by private treaty for operations up to ECU 300 000.

Participation in invitations to tender and contracts shall be open on equal terms to all natural and legal persons in the Member States and in the partner States.

Participation by natural and legal persons from the countries benefiting from Phare as well as in specific cases from Mediterranean countries with traditional economic, trade or geographical links may be authorized by the Commission on a case-by-case basis if the programmes or projects concerned require specific forms of assistance specifically available in such countries.

3. Taxes, duties and the purchase of immovable property shall not be funded by the Community.

4. In the case of co-financing, the participation of third countries concerned in invitations to tender and contracts may be authorized by the Commission, but on a case-by-case basis. In these cases participation of undertakings from third countries shall only be acceptable if reciprocity is granted.

Article 6

1. The Commission shall be assisted by a committee composed of the representatives of the Member States and chaired by the representative of the Commission (hereinafter referred to as the 'Committee`) to be known as the 'Management Committee for the assistance to the Independent States and Mongolia`.

2. The representative of the Commission shall submit to the Committee a draft of the measures to be taken. The Committee shall deliver its opinion on the draft within a time limit 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 EEC 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 weighed in the manner set out in that Article. The chairman shall not vote.

3. The Commission shall adopt measures, which shall apply immediately. However, if these measures are not in accordance with the opinion of the Committee, they shall be communicated by the Commission to the Council forthwith. In that event, the Commission shall defer application of the measures which it has decided for a period of six weeks.

The Council, acting by a qualified majority, may take a different decision within the period laid down in the first subparagraph.

4. The Committee may examine any other question relating to the implementation of this Regulation which may be put to it by its chairman, possibly at the request of the representative of a Member State and, in particular, any question relating to general implementation, the administration of the programme, co- financing and the coordination referred to in Article 7.

5. The Committee shall adopt its rules of procedure by qualified majority.

6. The Commission shall keep the Committee regularly informed, supplying specific, detailed information on the contracts awarded for the implementation of the projects and programmes. Moreover, for projects expected to be put out for restricted invitations to tender in accordance with Article 5 (2), the Commission shall, before drawing up short-lists, provide in good time advance information which shall include selection and evaluation criteria so as to facilitate participation by economic operators.

7. The European Parliament shall also be kept regularly informed of the implementation of the Tacis programmes.

Article 7

The Commission shall, together with the Member States, ensure the effective coordination of the assistance efforts undertaken in the partner States by the Community and individual Member States on the basis of the information supplied by the Member States.

In addition coordination and cooperation with the international financial institutions and other donors shall be encouraged.

In the framework of the assistance provided pursuant to this Regulation, the Commission shall promote co-financing with public or private bodies in the Member States.

Article 8

Each year the Commission shall present a progress report on the implementation of the assistance programme. This report shall also include, to the extent feasible, an evaluation of the assistance already provided. This report shall be addressed to the Member States, the European Parliament, the Council and the Economic and Social Committee.

Article 9

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.

(1) OJ No L 187, 29. 7. 1993, p. 1.

ANNEX I

Partner States referred to in Article 1

Armenia

Azerbaijan

Belarus

Georgia

Kazakhstan

Kyrgyzstan

Moldova

Russian Federation

Tajikistan

Turkmenistan

Ukraine

Uzbekistan

Mongolia

ANNEX II

Indicative areas referred to in Article 2 (5)

Assistance shall give priority to the following areas:

1. Human Resources Development:

- education and training including manpower training,

- restructuring of public administration,

- employment services and social security advice,

- strengthening of the civic society,

- policy and macroeconomic advice,

- legal assistance including approximation of legislation.

2. Enterprise restructuring and development:

- support for the development of small and medium-sized enterprises,

- conversion of defence related industries,

- privatization and restructuring,

- financial services.

3. Infrastructure:

- transport,

- telecommunication.

4. Energy, including nuclear safety.

5. Food production, processing and distribution.