Protocol on financial and technical cooperation between the European Community and the Republic of Cyprus
Date: 1995-06-12
Institutions: Cyprus, European Community
Subjects: Cyprus, accession to the European Union, association agreement (EU), economic integration, financial cooperation, technical cooperation













EUR-Lex - 21995A1121(02) - EN






Avis juridique important




|



21995A1121(02)

Protocol on financial and technical cooperation between the European Community and the Republic of Cyprus  


Official Journal L 278 , 21/11/1995 P. 0023 - 0029 





PROTOCOLon financial and technical cooperation between the  European Community and the Republic of CyprusTHE COUNCIL OF THE EUROPEAN UNION, of the one part, andTHE GOVERNMENT OF THE REPUBLIC OF CYPRUS, of the other part, ANXIOUS to promote the development of the Cypriot economy and the objectives of the Agreement  establishing an Association between the European Economic Community and the Republic of Cyprus, and  to facilitate Cyprus's economic transition with a view to its accession to the European Union, DESIROUS of showing their support for the United Nations' efforts to promote a general settlement  of the Cyprus question, HAVE DECIDED to conclude this Protocol and to this end have designated as their Plenipotentiaries: THE COUNCIL OF THE EUROPEAN UNION: Michel BARNIER, Minister with responsibility for European Affairs, Ministry for Foreign Affairs, President-in-Office of the Council of the European Union, Hans VAN DEN BROEK, Member of the Commission of the European Communities; THE GOVERNMENT OF THE REPUBLIC OF CYPRUS: Alecos P. MICHAELIDES, Minister for Foreign Affairs; WHO, having exchanged their full powers, found in good and due form, HAVE AGREED AS FOLLOWS: Article 1Within the framework of the financial and technical cooperation  provided for in the Agreement establishing an Association between the European Economic Community  and the Republic of Cyprus, the Community shall participate, on the terms set out in this Protocol,  in the financing of projects and schemes to contribute to the economic and social development of  Cyprus, facilitate its economic transition with a view to accession to the European Union, and  support efforts to promote a general settlement of the Cyprus question. Article 21. For the purposes specified in Article 1, and for a period expiring on 31 December  1998, an aggregate amount of ECU 74 million may be committed as follows: (a) ECU 50 million in the form of loans from the European Investment Bank, hereinafter referred to  as 'the Bank', made from its own resources; (b) ECU 22 million from the Community's budgetary resources, in the form of grants; (c) ECU 2 million from the Community's budgetary resources, in the form of contributions to risk  capital formation. 2. The risk capital referred to in paragraph 1 (c) shall contribute to the cooperation objectives  and operations defined in Article 3, in particular those indicated in the first indent of paragraph  2 of that Article. It shall be used primarily to make equity capital or the like available to Cypriot industrial and  commercial undertakings, in particular those with which natural or legal persons who are nationals  of a Community Member State are associated. It shall be granted and administrated by the Bank and may take the form of: (a) subordinated loans, where repayment and payment of any interest will not be made until other  bank claims have been settled; (b) conditional loans, where repayment or duration will depend on the fulfilment of conditions  specified at the time the loan is granted; (c) acquisition of temporary minority holdings on behalf of the Community in the capital of  undertakings established in Cyprus; (d) finance for the acquisition of holdings, in the form of conditional loans granted to Cyprus or,  with the Cypriot Government's agreement, to Cypriot undertakings, either directly or through the  intermediary of Cypriot financial institutions. Article 31. The total amount fixed in Article 2 shall be used primarily for the financing or  part-financing of cooperation projects or operations intended to help gear the Cypriot economy to  integration into the European Community. To this end, part of the grants shall be for technical  assistance to help Cyprus adopt the acquis communautaire. Another portion of the grants shall be for projects to promote the development of the whole  island. A total of ECU 12 million in grants will be made available for potential initiatives agreed jointly  in Cyprus to promote a general settlement of the Cyprus question. Loans from the Bank's own resources shall go to finance the investment, particularly in  infrastructure, needed to enable Cyprus to adapt its economy. Financing may also be provided for investments which complement the said cooperation projects. 2. Priority shall be given to those of the eligible projects and operations having the following  aims: - in the industrial, agricultural and service sectors, restructuring and modernization of the  Cypriot economy, direct contacts, exchange of information, promotion of investment and  private-capital flows, cooperation in and support for vocational training and development of human  resources and support for small and medium-sized enterprises, including craft businesses, in order  to promote employment, - in the field of science and technology, the creation or strengthening of links between training  and research establishments in Cyprus and the European Community, and the participation of  businesses or research centres, in accordance with the conditions and arrangements laid down by  Council Decisions 94/761/Euratom, 94/762/EC and 94/763/EC (1) concerning the rules for the  participation of undertakings, research centres and universities in the specific programmes of  research and technological development and demonstration of the European Community, - in the trade sector, diversification and promotion of exports, support for policies and reforms  to help the economy become more fully integrated with that of the European Community, and the  organization of contacts between businesses in Cyprus and the European Community, - in the environmental sector, developing and strengthening cooperation in protection and  management of natural resources and support for the harmonization of policies, - promoting participation by Cyprus in Community framework programmes, specific programmes,  projects or other actions, according to specific arrangements to be negotiated and concluded in  accordance with the procedures adopted by each party, - promoting and coordinating, where this is of mutual interest, joint efforts and activities in the  field of cooperation with third countries of the region, - in the priority areas referred to above, technical assistance and training schemes to help Cyprus  adopt the acquis communautaire. 3. The Community's financial contributions shall be used to cover internal and external costs  necessarily incurred in carrying out approved projects or operations (including costs in respect of  studies, consultants and technical assistance). They may not be used to cover regular administrative, maintenance or other operational  expenditure. Article 41. Capital projects shall be eligible for financing by loans from the Bank, risk  capital, or grants or a combination of these means. 2. Technical and economic cooperation shall normally be financed by grants. Article 51. The amounts to be committed each year shall, as far as possible, be distributed  throughout the period of application of this Protocol. 2. Should Cyprus accede to the European Union during the period covered by this Protocol,  appropriate arrangements will be adopted to ensure a harmonious transition as regards financial aid  from the system for associate countries to that for Member States. Article 61. Loans granted by the Bank from its own resources shall be made in accordance with  the arrangements, conditions and procedures laid down in its statute. They shall, as regards their  duration, be subject to terms established on the basis of the economic and financial  characteristics of the projects for which these loans are intended, also taking into account the  conditions obtaining on the capital markets on which the Bank procures its resources. The interest  rate shall be determined in accordance with the Bank's practice at the time of signature of each  loan contract. 2. The terms and arrangements for contributions to risk capital shall be determined on a  case-by-case basis. 3. Aid financed from the Community's budget resources, other than that intended for risk capital  operations, shall be granted and administered by the Commission. 4. The funds referred to in Article 2 may be granted through the intermediary of the State or  appropriate Cypriot bodies, on condition that they allocate the amounts to the recipients on terms  decided, by agreement with the Community, on the basis of the economic and financial  characteristics of the projects and operations for which they are intended. Article 7Aid contributed by the Community for the execution of certain projects may, with the  agreement of Cyprus, take the form of co-financing in which, in particular, credit and development  bodies and institutions of Cyprus, of Member States or of third States or international finance  organizations would take part. Article 8The following shall be eligible for financial and technical cooperation: (a) in general: - the State of Cyprus; (b) with the agreement of the Cypriot Government, for projects or operations approved by it: - official Cypriot development agencies, - private agencies working in Cyprus for economic and social development, - undertakings carrying on their activities in accordance with industrial and business management  methods and set up as legal persons within the meaning of Article 12, - groups of producers who are nationals of Cyprus and, exceptionally, where no such groups exist,  the producers themselves, - scholarship holders and trainees sent by Cyprus under the training schemes referred to in Article  3. Article 91. With a view to making optimum use of the instruments and means provided for in this  Protocol and achieving the objectives laid down in Article 3, the Community and the Government of  Cyprus shall, by mutual agreement on the basis of information provided by the latter, draw up an  indicative programme committing both parties and determining the specific objectives of financial  and technical cooperation, the priority sectors for intervention and the action programmes  envisaged by reference to the priorities set out in Cyprus's development plan. 2. The indicative programme may be reviewed by mutual agreement to take account of any changes in  Cyprus's economic situation or in the objectives and priorities laid down by its development plan. 3. The Community and Cyprus shall continue their exchanges of views within the appropriate bodies  and shall, at least once during the period of implementation of this Protocol and at the latest by  the end of the third year following its entry into force, make an assessment of the implementation  of the indicative programme. Article 101. Within the framework laid down in accordance with Article 9, the State of Cyprus  or, with the agreement of its Government, the other possible beneficiaries referred to in Article  8, shall submit their requests for financial aid to the Community. 2. The Community shall appraise the requests for financing in collaboration with the competent  Cypriot authorities and other beneficiaries, in accordance with the objectives referred to in  Article 9, and shall inform them of the decisions taken on such requests. Article 111. The execution, management and maintenance of schemes that are the subject of  financing under this Protocol shall be the responsibility of Cyprus or of the other beneficiaries  referred to in Article 8. The Community shall make sure that this financial aid is expended in accordance with the agreed  allocations and to the best economic advantage. 2. The projects and action programmes shall be the subject of appropriate evaluation, the outcome  of which shall be communicated to both parties, which shall take appropriate measures by mutual  agreement. 3. Certain rules for administering the financial aid granted by the Community shall be the subject  of an exchange of letters or a Framework Agreement between the Commission and the Government of  Cyprus upon conclusion of this Protocol. Article 121. All natural and legal persons falling within the scope of the Treaty establishing  the European Community and all natural and legal persons of the Republic of Cyprus may participate  on equal terms in tendering procedures and other procedures for the award of contracts likely to be  financed. Any such legal person formed in accordance with the law of a Member State of the European  Community or of Cyprus must have its registered office, its administrative head office or its  principal establishment in the territories in which the Treaty establishing the European Community  is applied or in Cyprus; however, where only its registered office is in the said territories or in  Cyprus, the activities of such legal person must be effectively and continuously linked with the  economy of those territories or of Cyprus. 2. In agreement with Cyprus, natural and legal persons who are nationals of developing countries  associated with the Community by comprehensive cooperation or association agreements may  exceptionally, on a case-by-case basis, be authorized by the Community to participate in the  operations referred to in paragraph 1 which are financed by the Community. The eligibility of such  natural or legal persons shall be assessed, mutatis mutandis, on the terms set out in paragraph 1. Article 13To promote participation by Cypriot undertakings in the performance of contracts and  to ensure the rapid and effective implementation of projects and operations financed from resources  administered by the Commission: 1. An accelerated procedure for issuing invitations to tender involving shorter time limits for the  submission of tenders may be used by Cyprus in agreement with the Commission for works contracts  which, because of their scale, are mainly of interest to Cypriot undertakings. The organization of this accelerated procedure shall not rule out the possibility of issuing an  international invitation to tender where it appears that the nature of the works to be carried out  or the usefulness of widening participation justifies recourse to international competition. 2. In urgent cases or where the nature, small scale or particular characteristics of certain works  or supplies so warrant, Cyprus may, exceptionally, in agreement with the Commission, authorize the  placing of contracts following restricted invitations to tender, the conclusion of contracts by  direct agreement and the performance of contracts through public works departments. The procedures referred to in point 1 and 2 may be used for operations with an estimated cost of  less than ECU 3 million. Article 141. Cyprus shall apply to contracts awarded for the execution of projects or schemes  financed by the Community fiscal and customs arrangements no less favourable than those applied  vis-à-vis the most favoured State or the most favoured international development organization. 2. The content of the arrangements referred to in paragraph 1 shall be established by means of an  exchange of letters between the Parties. Article 15The Government of Cyprus shall take the necessary measures to ensure that interest and  all other payments due to the Bank in respect of transactions concluded under this Protocol are  exempted from any national or local tax or levy. Article 16Where, as provided for under Article 8, a loan is accorded with the agreement of the  Cyprus Government to a beneficiary other than the State, the provision of a guarantee by the latter  or of other adequate guarantees shall be required by the Bank as a condition of the loan. Article 17Throughout the duration of the loans and risk capital operations provided for in  Article 2, Cyprus shall undertake to: (a) place at the disposal of the beneficiaries or of their guarantors the currency necessary for  the payment of interest and commission and amortization of loans and risk capital aid granted for  the implementation of operations on its territory; (b) make available to the Bank the foreign currency necessary for the transfer of all sums received  by it in national currency which represent the net revenue and proceeds from transactions involving  the acquisition by the Community of holdings in the capital of companies or firms. Article 18The results of financial and technical cooperation may be examined within the  Association Council, which shall establish, where appropriate, the general guidelines for such  cooperation. Should, before the expiration of this Protocol, the amount fixed in the third subparagraph of  Article 3 (1), not have been committed, the parties will jointly agree within the Association  Council on the appropriate use of the remaining funds. Article 19One year before the expiry of this Protocol, the Contracting Parties shall examine  what arrangements could be made for financial and technical cooperation during a possible further  period. Article 20This Protocol shall be annexed to the Agreement establishing an Association between  the European Economic Community and the Republic of Cyprus. Article 211. This Protocol shall be subject to approval in accordance with the Contracting  Parties' own procedures; the Contracting Parties shall notify each other that the procedures  necessary to this end have been completed. 2. The Protocol shall enter into force on the first day of the second month following the date on  which the notifications provided for in plaragraph 1 have been given. Article 22This Protocol is drawn up in two original copies in Danish, Dutch, English, Finnish,  French, German, Greek, Italian, Portuguese, Spanish and Swedish languages, each of these texts  being equally authentic. En fe de lo cual los plenipotenciarios abajo firmantes suscriben el presente  protocolo. Til bekraeftelse heraf har undertegnede befuldmaegtigede underskrevet denne protokol. Zu Urkund dessen haben die unterzeichneten Bevollmaechtigten ihre Unterschriften unter dieses  Protokoll gesetzt. AAéò ðssóôùóç ôùí áíùôÝñù, ïé õðïãaaãñáììÝíïé ðëçñaaîïýóéïé Ýèaaóáí ôéò õðïãñáoeÝò ôïõò óôï ðáñueí  ðñùôueêïëëï. In witness whereof, the undersigned Plenipotentiaries have signed this Protocol. En foi de quoi, les plénipotentiaires soussignés ont apposé leurs signatures au bas du présent  protocole. In fede di che, i plenipotenziari sottoscritti hanno apposto le loro firme in calce al presente  protocollo. Ten blijke waarvan de ondergetekende gevolmachtigden hun handtekening onder dit Protocol hebben  gesteld. Em fé do que, os plenipotenciários abaixo assinados apuseram as suas assinaturas no final do  presente protocolo. Taemaen vakuudeksi alla mainitut taeysivaltaiset edustajat ovat allekirjoittaneet taemaen poeytaekirjan. Till bekraeftelse haerav har undertecknade befullmaektigade ombud undertecknat detta protokoll. Hecho en Luxemburgo, el doce de junio de mil novecientos noventa y cinco. Udfaerdiget i Luxembourg den tolvte juni nitten hundrede og femoghalvfems. Geschehen zu Luxemburg am zwoelften Juni neunzehnhundertfuenfundneunzig. ¸ãéíaa óôï Ëïõîaaìâïýñãï, óôéò aeþaeaaêá Éïõíssïõ ÷ssëéá aaííéáêueóéá aaíaaíÞíôá ðÝíôaa. Done at Luxembourg on the twelfth day of June in the year one thousand nine hundred and  ninety-five. Fait à Luxembourg, le douze juin mil neuf cent quatre-vingt-quinze. Fatto a Lussemburgo, addì dodici giugno millenovecentonovantacinque. Gedaan te Luxemburg, de twaalfde juni negentienhonderd vijfennegentig. Feito no Luxemburgo, em doze de Junho de mil novencentos e noventa e cinco. Tehty Luxemburgissa kahdentenatoista paeivaenae kesaekuuta vuonna  tuhatyhdeksaensataayhdeksaenkymmentaeviisi. Som skedde i Luxemburg den tolfte juni nittonhundranittiofem. Por la Comunidad EuropeaFor Det Europaeiske FaellesskabFuer die Europaeische GemeinschaftÃéá ôçí  AAõñùðáúêÞ ÊïéíueôçôáFor the European CommunityPour la Communauté européennePer la Comunità  europeaVoor de Europese GemeenschapPela Comunidade EuropeiaEuroopan yhteisoen puolestaFoer  Europeiska gemenskapen>REFERENCE TO A FILM>Por el Gobierno de la República de ChipreFor  regeringen for Republikken CypernFuer die Regierung der Republik ZypernÃéá ôçí êõâÝñíçóç ôçò  ÊõðñéáêÞò AEçìïêñáôssáòFor the Government of the Republic of CyprusPour le gouvernement de la  république de ChyprePer il governo della Repubblica di CiproVoor de Regering van de Republiek  CyprusPelo Governo da República de ChipreKyproksen tasavallan hallituksen puolestaFoer Republiken  Cyperns regering>REFERENCE TO A FILM>(1) OJ No L 306, 30. 11. 1994, pp. 1, 5  and 8.