98/453/EC: Council Decision of 6 July 1998 concerning exceptional assistance for the heavily indebted ACP countries
Date: 1998-07-06
Institutions: Council of the European Union
Subjects: ACP countries, EU aid, aid system

L 198/40

EN

Official Journal of the European Communities

15. 7. 98

II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 6 July 1998

concerning exceptional assistance for the heavily indebted ACP countries

(98/453/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Internal Agreement on the
financing and administration of Community aid within
the framework of the fourth ACP-EC Convention, signed
on 16 July 1990, hereinafter referred to as ‘the Internal
Agreement', and in particular Article 9 thereof (1),

Having regard to the proposal from the Commission,

Whereas the Council on 12 February 1998 adopted the
conclusions of the report to Coreper of 18 December
1997 on the European Community’s contribution to the
debt initiative for the heavily indebted poor countries;

Whereas a debt initiative for the heavily indebted poor
countries (hereinafter referred to as the ‘HIPC Initiative')
was presented by the International Monetary Fund and
the World Bank at their April 1996 meetings and sub-
sequently endorsed in the autumn of 1996 by the Interim
and Development Committees at the annual meetings of
the International Monetary Fund and the World Bank;

Whereas the Community and its Member States are
firmly committed to participating in the HIPC Initiative
by providing exceptional assistance to the countries
which implement economic reform programmes and
quality for this initiative;

Whereas all the countries to which there is Community
exposure eligible for HIPC debt relief are ACP States;

Whereas the implementation of this Decision shall be in
accordance with Financial Regulation 91/491/EEC of 29
July 1991 applicable to cooperation for the financing of

development according to the fourth ACP-EC Conven-
tion (2),

HAS DECIDED AS FOLLOWS:

Article 1

The European Community shall fully participate in the
HIPC Initiative by assisting the countries which will
qualify for this initiative, with a view to helping them
reduce the net present value of their external financial
obligations towards the Community. For this purpose, the
Community shall make available grant resources to be
utilised by the eligible countries to meet outstanding debt
and debt service obligations towards the Community.
This assistance, together with resources provided by other
creditors, shall allow the eligible countries to achieve their
country-specific debt sustainability target agreed within
the framework of the HIPC Initiative.

Article 2

The assistance referred to in Article 1 shall primarily be
used by the beneficiary countries to pre-pay outstanding
special loans on a net present value basis. If such action is
not sufficient to attain the agreed level of net present
value debt reduction, the beneficiary country shall use the
allocated grant to meet any outstanding risk capital ob-
ligations towards the Community.

(1) OJ L 229, 17. 8. 1991, p. 288.

(2) OJ L 266, 21. 9. 1991, p. 1.

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Official Journal of the European Communities

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Article 3

The Commission shall take, on a case-by-case basis, a
specific decision providing assistance to each eligible
ACP country, in accordance with the rules and procedures
laid down in Chapter IV of the Internal Agreement.

The Commission’s decision on the amount of assistance
to be provided in each case shall allow for the necessary
reduction in the net present value of
that country’s
outstanding debt toward the Community and be consis-
tent with the HIPC Initiative methodology. The country-
specific decisions shall also take into account the struc-
ture of the country’s exposure towards the Community,
the desire to choose the simplest administrative proposals
and the need to ensure an equitable and fair treatment
between the eligible countries in full respect for the de-
cisions reached among all the creditors. Each country’s
decision shall make explicit the arrangements, terms and
conditions for the implementation of this Decision.

Article 4

1.
The assistance referred to in Article 1 shall be
financed from interest accrued on the funds deposited
with the paying agents in Europe referred to in Article
319(4) of the fourth ACP-EC Convention, to the extent
that such revenue is available and after due account has
been taken of the need to reserve such revenue for the
purposes provided for in Article 9(2) of
the Internal
Agreement. An initial amount of ECU 40 million shall be
reserved from this interest for the purpose of financing
this assistance, intended primarily for the countries which
fulfil the eligibility criteria for 1997 and 1998. Insofar as
resources are insufficient, this amount will, as a matter of
priority, be supplemented by further allocations from
interest, following approval of the EDF Committee in
accordance with Article 9 of the Internal Agreement.

2.
To the extent that such revenue is not sufficient to
cover the decisions referred to in Article 3, and awaiting
possible further resources made available under future
agreements with the ACP States, the Member States shall

examine whether resources could be provided from the
payments made to the accounts held in the name of the
Member States at
the European Investment Bank in
respect of special loans and risk capital operations. The
allocation of such payments for the purpose of financing
this exceptional assistance shall, on the basis of a
Commission proposal, be subject to a unanimous decision
by the Council, in accordance with Article 9(1) of the
Internal Agreement.

Article 5

1.
In the course of 1998, the Commission shall present,
in due time, a report to the European Parliament and to
the Council containing a review of
the remaining
financing needs arising from the Community’s participa-
tion in this initiative. On the basis of this report, the
Council shall take a decision regarding the Community’s
further participation in the HIPC Initiative.

2.
The Commission shall report periodically to the
European Parliament and to the Council on the imple-
mentation of this Decision.

The Monetary Committee will be kept informed on

3.
the implementation of this Decision.

Article 6

This Decision will enter into force on the day of its
adoption.

Done at Brussels, 6 July 1998.

For the Council

The President

R. EDLINGER