Proposal for a Council Regulation (EC) relating to aid for reconstruction and rehabilitation in Bosnia-Herzegovina, Croatia, the Federal Republic of Yugoslavia and the Former Yugoslav Republic of Macedonia

(96/C 179/06)

(COM(96) 123 final - 96/0096(CNS)

(Submitted by the Commission on 29 April 1996)

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 proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas economic development, the restoration of civil society and cooperation between the republics of former Yugoslavia are a prerequisite for peace and stability in the Balkans;

Whereas it is appropriate to start repair work and renovate infrastructure while pressing ahead with political and economic reforms;

Whereas the European Community has decided to contribute to these operations under the conditions indicated by the Council on 30 October 1995;

Whereas it intends to make its support contingent on adherence to the political and economic terms of the peace agreements signed in Paris on 14 December 1995, notably respect for human rights;

Whereas to foster reconciliation between the various parties and prevent any resurgence of fighting, special attention should be accorded to operations aimed at achieving economic and social objectives, in particular employment, the restoration of civil society and the return and reintegration of refugees and displaced persons;

Whereas it is necessary to provide a selection procedure for projects, programmes and actions which is both flexible and rigorous and consequently a consultative committee on reconstruction/rehabilitation in former Yugoslavia, made up of representatives of the Member States and the Commission with responsibility for giving an opinion on the choices made by the Commission is established;

Whereas a multiannual approach should be adopted to enable effective management of the measures provided for in this Regulation and untertake medium-term operations;

Whereas implementation of these operations will help achieve the Community's objectives; whereas the Treaty does not provide, for the operations in question, powers other than those set out in Article 235,

HAS ADOPTED THIS REGULATION:

Article 1

The Community shall implement aid measures comprising projects, programmes and cooperation schemes for reconstruction, return of refugees and displaced persons and for economic and regional cooperation in Bosnia-Herzegovina, Croatia, the Federal Republic of Yugoslavia and the Former Yugoslav Republic of Macedonia in accordance with the criteria set out in this Regulation.

These operations shall be funded as part of the indicative multiannual programming (1996 to 1999) for cooperation with the republics of former Yugoslavia. The annual appropriations shall be authorized by the budgetary authority within the limits of the financial perspectives.

Community funding under this Regulation shall take the form of grants.

Article 2

Regional and international organizations, public and semi-public bodies, organizations providing support to businesses, private operators, cooperatives, mutual societies, associations, foundations and non-governmental organizations, shall be eligible for Community aid for projects, programmes and cooperation schemes.

Article 3

1. The aim of the projects, programmes and cooperation schemes shall be to underpin the reconstruction process, to encourage the return of refugees, reconciliation and regional economic cooperation, and to create the economic and social conditions that will lay the foundations for the development of the recipient countries.

2. They shall cover the following fields:

- the consolidation of civil society and the reinforcement of non-governmental organizations as well as cultural institutions and teaching establishments,

- the rebuilding of infrastructure and other individual or collective facilities damaged in the fighting,

- the return of refugees,

- the integration or reintegration of refugees, displaced persons and former soldiers into working life,

- the preparation of the production apparatus for economic recovery,

- the development of the private sector, notably small businesses, and promotion of investment,

- regional cooperation projects.

Article 4

The granting or continuation of community aid shall be subject to certain conditions, notably:

- application of the clauses of the peace agreement,

- respect for human rights, the rights of minorities and the right of all refugees and displaced persons to return home,

- in relation to the Federal Republic of Yugoslavia (Serbia-Montenegro) the granting within that State of a wide measure of autonomy to Kosovo,

- observance of the principles of a market economy,

- cooperation with the International War Crimes Tribunal.

Article 5

The measures to be financed shall be subject to a selection process that takes account of the potential recipients' requests, their urgency, the actual aid take-up capacity and their impact on the return of refugees and displaced persons and on reconciliation between the parties through participation in common projects.

Article 6

1. In order to ensure the consistency of cooperation projects and improve their complementarity and effectiveness, Member States and the Commission shall exchange all useful information on the financing they intend to make available. Scope for cofinancing shall be sought as part of this exchange of information, which shall also be used to explore the scope for complementarity, notably by means of cofinancing or parallel financing.

2. Member States and the Commission shall also communicate, in particular within the Committee referred to in Article 12 any information they may have on other bilateral and multilateral aid schemes for the states concerned by this Regulation. To that end, Member States and the Commission shall maintain a mutual information system.

Article 7

Financing decisions and agreements and contracts stemming therefrom shall among other things provide for monitoring and financial control by the Commission and audits by the Court of Auditors, where necessary on the spot.

Article 8

1. The operations referred to in this Regulation may cover expenditure relating to the importation of goods and services and the local expediture necessary to complete the projects and programmes. Taxes, duties and charges and the acquisition of real estate shall be excluded from Community financing.

Agreement and contracts for the implementation of the operations financed by the Community pursuant to this Regulation shall benefit in the recipient State from tax and customs arrangements which are not less favourable than those which that State applies to the most favoured State or international organization responsible for promoting economic development.

2. Project running and maintenance costs on the ground may be covered by Community financing within a limit set in advance for each measure on the understanding that those costs may be covered only during the start-up phase and that they shall decrease progressively.

3. With regard to investment projects, Community financing shall be combined with the recipient's own resources or with other sources of funding. Community cofinancing shall not exceed 80 % of the total cost of the investment.

Article 9

Invitations to tender and contracts shall be open without discrimination to all natural and legal persons in the Member States and the recipient States. The following shall be considered to be legal persons of a Member State or recipient State: legal persons established in accordance with the legislation of a Member State or recipient State and having their central administration or principal establishment in the territories in which the Treaty establishing the European Community applies or in the recipient States, or which have their registered office there, where their activity has an actual and continuous link with the economy of the said territories or States.

In the event of cofinancing, participation in invitations to tender and contracts by nationals of other countries may be authorized by the Commission on a case-by-case basis. In the latter case, the participation of companies of third countries shall not be taken into account unless reciprocity is applied by those countries towards the Community.

Service contracts shall be awarded by restricted invitations to tender with the exception of operations not exceeding ECU 200 000 which may be awarded by private treaty.

Article 10

1. Financing decisons exceeding ECU 2 million shall be adopted in accordance with the procedure provided for in Article 12 (2). The Committee provided for in Article 12 shall be informed of operations involving financing of less than ECU 2 million.

2. Decisions amending decisions adopted in accordance with the procedure provided for in Article 12 shall be adopted by the Commission without consulting the Committee where they do not comprise substantial changes to the nature of the original projects and operations or, as regards the financial element, where they do not exceed 20 % of the total amount of the initial commitment.

Article 11

1. Operations covered by this Regulation which are financed from the Community budget shall be managed by the Commission in accordance with the Financial Regulation of 21 December 1977 applying to the general budget of the European Communities, as last amended by Regulation No 2335/95 of 18 September 1995.

2. In presenting the financing proposals submitted to the Committee referred to in Article 12 and the evaluation referred to in Article 13, the Commission shall take account of the principles of sound financial management, in particular the principles of economy and cost-effectiveness referred to in Article 2 of the Financial Regulation.

Article 12

The Commission shall be assisted by a committee of an advisory nature composed of the representatives of the Member States and chaired by the representative of the Commission.

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 which the chairman may lay down according to the urgency of the matter, if necessary by taking a vote.

The opinion shall be recorded in the minutes; in addition, each Member State shall have the right to ask to have its position recorded in the minutes.

The Commission shall take the utmost account of the opinion delivered by the Committee. It shall inform the Committee of the manner in which its opinion has been taken into account.

Article 13

1. The Commission shall supervise implementation of the aid and the conditions in which ongoing projects and operations financed by that aid are being implemented by the recipients.

2. In the course of the supervision provided for in paragraph 1 above, the Commission shall carry out an evaluation of the main projects completed so as to ascertain whether the objectives defined at the project appraisal stage have been achieved and to draw up guidelines for enhancing the effectiveness and profile of future activities.

3. The Commission shall submit to Parliament and to the Council, by 30 April of each year at the latest, a report on the implementation of the aid, in particular on the evaluation referred to in paragraph 2.

Article 14

This Regulation shall enter into force . . .

This Regulation shall be binding in its entirety and directly applicable in all Member States.