Council Regulation (EC) No 1658/98 of 17 July 1998 on co-financing operations with European non-governmental development organisations (NGOs) in fields of interest to the developing countries
Date: 1998-07-17
Institutions: Council of the European Union
Subjects: co-financing, developing countries, development aid, development policy, non-governmental organisation

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(Acts  whose  publication  is  obligatory)

COUNCIL  REGULATION  (EC)  No  1658/98

of  17  July  1998

on  co-financing  operations  with  European  non-governmental  development  organisations
(NGOs)  in  fields  of  interest  to  the  developing  countries

THE  COUNCIL  OF  THE  EUROPEAN  UNION,

Whereas  at  its  meeting  on  28  November  1977,  the
Council  approved  the  general  conditions  and  procedures
proposed  by  the  Commission;

Having  regard  to  the  Treaty  establishing  the  European
Community,  and  in  particular  Article  130w  thereof,

Having  regard  to  the  proposal  from  the  Commission (1),

Acting  in  accordance  with  the  procedure  laid  down  in
Article  189c  of  the  Treaty (2),

Whereas the European Parliament, in its Resolution of 14
in  development
May  1992  on  the  role  of  NGOs 
cooperation (3),  reaffirmed  the  specific  and  irreplaceable
role  of  NGOs  and  the  usefulness  and  effectiveness  of
their  development  operations,  emphasising  in  particular
the key role of NGOs’ work on behalf of marginal social
groups  in  developing  countries,  the  need  to  preserve  the
NGO’s freedom of action, and the vital role of NGOs in
promoting  human  rights  and 
the  development  of
grassroots democracy;

Whereas  the  Commission,  in  its  communication  to  the
Council  of  6  October  1975,  put  forward  guidelines  on
relations 
development
organisations  (NGOs),  together  with  general  conditions
and  procedures  for  the  use  of  funds  intended  for
development  operations  by  such  organisations;

non-governmental 

with 

in 

Whereas, 
its  Resolution  of  27  May  1991  on
cooperation  with  the  NGOs,  the  Council  underlined  the
importance of the autonomy and independence of NGOs;
whereas  it  recognised,  moreover,  that  the  Community
system  of  cooperation  with  the  NGOs  was  necessarily
complementary  to  similar  efforts  at  national  level  and
recognised the need for flexibility in procedures and their
application;

Whereas  the  budgetary  authority  introduced  into  the
1976  budget  an  item  for  co-financing  with  NGOs  and
has  since  steadily  increased  the  volume  of  such  funding
(from  ECU  2,5  million  in  1976  to  ECU  174  million  in
1995)  on  the  basis  of  the  Commission’s  annual  reports
on  the  use  of  these  resources;

(1)  OJ  No  C  251,  27.09.1995,  p.  18.
(2)  Opinion  of  the  European  Parliament  of  15  December  1995
(OJ  C  17,  22.1.1996,  p.  455),  common  position  of  the
Council  of  7  July  1997  (OJ  C  307,  8.10.1997,  p.  1)  and
Decision  of  the  European  Parliament  of  18  December  1997
(OJ  C  14,  19.1.1998,  p.  124).

Whereas,  in  its  conclusions  of  18  November  1992,  the
Council  noted  with  satisfaction  the  criteria  by  the
Commission  when  selecting  development  and  education
projects for co-financing, notably strengthening the fabric
of  democracy  and  respect  for  human  rights  in  the
developing  countries,  and  particularly  welcomed  the  fact
that  the  Commission  had  made  it  clear  that  the  main
criterion remained the quality of the project, an approach
which  it  backed  unreservedly;

(3)  OJ  C  150,  15.6.1992,  p.  273.

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Whereas  administrative  procedures  should  be  established
for  co-financing  operations  with  European  NGOs  in
fields  of  interest  to  the  developing  countries,

HAS  ADOPTED  THIS  REGULATION:

Article  1

1. The  Community  shall  co-finance  operations  in  the
field  with  European  non-governmental  development
organisations (NGOs), as defined in Article 3, to meet the
basic  needs  of  disadvantaged  people 
in  developing
countries.  Priority  shall  be  assigned  to  proposals  for
operations  based  on  an 
in
developing  countries.  Such  operations  shall  be  proposed
by  European  NGOs  and  conducted  in  cooperation  with
their  partners  in  the  developing  countries  and  shall  be
aimed  at  poverty  alleviation  as  well  as  at  enhancing  the
target  group’s  quality  of  life  and  own  development
capacity.

initiative  by  partners 

2. The  Community  shall  also  co-finance  with  European
NGOs,  as  defined  in  Article  3,  public  awareness  and
information  operations  in  Europe  about  development
problems  in  the  developing  countries  and  their  relations
with  the  industrialised  world.  Such  operations  shall  be
proposed  by  European  NGOs  and  shall  be  designed  to
mobilise  public  support  in  Europe  for  development  and
for  strategies  and  operations  benefiting  people  in  the
developing countries.

3. The  Community  shall  also  co-finance  operations
designed  to  reinforce  cooperation  and  coordination
between  NGOs  from  the  Member  States,  and  between
NGOs  from  the  Member  States  and  the  Community
Institutions.

Article  2

in 

1. The  operations  co-financed 
the  developing
countries  under  Article  1(1)  shall  in  particular  concern
local  social  and  economic  development  in  rural  and
urban  areas,  the  development  of  human  resources,
institutional
particularly  by  means  of  training,  and 
support  for  local  partners  in  the  developing  countries.

Within  those  fields  of  activity,  though  the  quality  of  the
operation  is  paramount,  particular  attention  shall  be
given  to  operations  connected  with:

—  the  strengthening  of  civil  society  and  participatory
development,  and  the  promotion  and  defence  of
human  rights  and  democracy,

Particular  attention  shall  also  be  paid  to:

—  the  protection  of  threatened  cultures,  especially

endangered  indigenous  cultures,

—  the  protection  and  improvement  of  the  circumstances
and  of  the  rights  of  children  in  the  developing
countries.

2. Public  awareness  and  information  operations  in  all
Member  States,  to  be  implemented  under  Article  1(2),
shall  be  targeted  at  clearly-defined  groups,  deal  with
clearly  defined  issues,  be  founded  on  a  balanced  analysis
and a sound knowledge of the issues and groups targeted,
and  involve  a  European  dimension.

Though  the  quality  of  operation  is  paramount,  special
attention  shall  be  given  to  public  awareness  operations
which:

—  highlight  the  interdependence  of  the  Member  States

and  the  developing  countries,

—  seek 

to  mobilise 

support 

for  more  equitable

North-South  relations,

—  encourage  cooperation  between  NGOs,

—  enable partners in the developing countries to play an

active  part.

3. The  operations  designed  to  reinforce  coordination
between  NGOs  from  the  Member  States  and  with  the
Community Institutions, to be implemented under Article
1(3),  shall, 
inter  alia,  concern  the  development  of
appropriate  exchange  and  communication  networks.

In  determining  whether  a  proposed  operation  is
4.
suitable  for  Community  co-financing  the  criterion  shall
be  its  expected  developmental  impact  in  the  developing
country  or  countries  concerned.  Attention  shall  be  paid
to:

—  the  sustainable  impact  in  project  design,

—  the  clear  definition  and  monitoring  of  objectives  and

indicators  of  achievement  for  all  projects,

—  consistency  with  other  development  actions  of
decentralised  agents,  while  avoiding  incompatibility
with  other  instruments  of  Community  cooperation.

Article  3

—  the  role  of  women  in  development,

—  sustainable  development.

1. The  agents  of  cooperation  eligible  for  co-financing
under  this  Regulation  shall  be  NGOs  satisfying  the
following  conditions:

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—  they  must 

autonomous
constituted 
non-profit-making organisations in a Member State in
accordance  with  the  laws  of  that  State,

be 

as 

—  they  must have their  headquarters  in a Member State
and  the  headquarters  must  be  the  main  centre  for
decisions  relating  to  the  co-financed  operations,

shall 

systematically  encourage 

3. The  NGO 
the
developing-country  agencies  or  partners  ultimately
benefiting  from  an  operation  to  contribute  in  kind  or
financially,  according  to  their  means  and  the  specific
nature  of  the  operation  concerned.

—  the  majority  of  their  funding  must  originate  in

Europe.

Article  5

In  determining  whether  an  NGO  is  eligible  for

2.
co-financing,  account  shall  also  be  taken  of:

—  its capacity to mobilise genuine solidarity on the part
of  the  European  public  for  its  development  activities;

—  the  priority 

it  accords  to  development  and 

its

experience  in  that  field,

—  its 

administrative 

and 

financial  management

capacities,

—  where  possible,  its  knowledge  of  the  sector  and

country  concerned,

—  its  ability  to  support  the  development  operations
proposed  by  the  partners  in  the  developing  countries
and  the  nature  and  scope  of  its  links  with  similar
organisations  in  the  developing  countries.

Article  4

1. Community  co-financing  for  the  operations  referred
to  in  Article  1  may  cover,  in  foreign  or  local  currency:

—  investment  spending;

—  operational  spending  linked  with  investment,  while
ensuring that projects remain viable after external aid
comes  to  an  end;

—  any 

spending 

smooth
the 
implementation  of 
co-financed  operations,
including  the  administrative  costs  of  NGOs  or  NGO
networks.

necessary 
the 

for 

Community co-financing under this Regulation shall take
the  form  of  grants,  including  contributions  to  working
capital  for  microcredit  projects.

In  the  case  of  microcredit  projects  co-financed  with
European  NGOs  which  provide  that  the  local  partner  in
developing  countries  fully  or  partly  constitute  and
administer  working  capital,  the  amount  of  mini-loans
reimbursed  by  the  final  beneficiaries  to  the  working
capital may be used again for further mini-loans to other
final beneficiaries.

Article  6

to 

shall  appraise,  decide  and
1. The  Commission 
administer  the  co-financing  of  operations  covered  by  this
Regulation  according 
the  budgetary  and  other
procedures  in  force,  and  in  particular  those  laid  down  in
the Financial Regulation applicable to the general budget
of  the  European  Communities,  taking  account  of  the
nature  and  specific  features  of  NGOs,  and  particularly
their 
in
question.

financial  contribution 

the  operations 

to 

As a rule, the decision as to whether an operation is to be
supported should be taken within six months of the date
of  receipt  of  the  application.  If,  in  examining  the  file,  it
emerges that the application is incomplete, the six-month
period  shall  run  from  the  date  of  receipt  of  the
information required. If the decision is negative, verifiable
reasons  shall  be  given  to  the  NGO  concerned.

In  the  specific  instance  in  which  exchange  rates  alter  by
an  exceptionally  large  margin  to  the  detriment  of  the
final  beneficiaries  of  the  projects  in  developing  countries,
the  Commission  may,  at  the  request  of  the  NGO
concerned,  take  appropriate  measures  to  neutralise  the
effects  of  the  alteration.

2. All  co-financing  contracts  concluded  under  this
Regulation  shall  provide  for  the  Commission  and  the
Court  of  Auditors 
to  conduct  on-the-spot  checks
according  to  the  usual  procedures  laid  down  by  the
Commission  under  the  rules  in  force,  and  in  particular
those  of  the  Financial  Regulation  applicable  to  the
general  budget  of  the  European  Communities.

2. An  NGO  with  which  a  co-financing  contract  is
concluded  shall  notify  its  partners  of  the  Community’s
contribution  to  the  operation.

3. The  Community  contribution  shall  not,  as  a  rule,
exceed  50 %  of  the  total  cost  or  75 %  of  total
contributions,  except  in  exceptional  cases.  Even  in  such

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cases,  NGOs  shall  make  a  significant  contribution  to
projects  and  the  Community  contribution  shall  not
exceed  85 %  of  the  total  financial  contributions.

The  votes  of  the  representatives  of  the  Member  States
within the Committee shall be weighted in the manner set
out  in  that  Article.  The  Chairman  shall  not  vote.

4. Decisions  on  the  Community  co-financing  of  projects
and  programmes  (multiannual  programmes,  consortium
operations,  block  grants)  exceeding  ECU  2  million  shall
be  adopted  under  the  procedure  laid  down  in  Article  9.

5. Every three months, the Commission shall inform the
Member  States  of 
the  co-financing  projects  and
programmes  approved,  indicating  their  amounts,  nature,
the  beneficiary  country  and  partner.  That  information
shall  be  accompanied  by  an  Annex  setting  out  clearly
those  projects  or  programmes  which  exceed  ECU  1
million.

Article  7

1. During  the  second  six  months  following  each  budget
year  the  Commission  shall  report  to  the  European
Parliament  and  the  Council,  giving  information  on  the
NGOs  benefiting  from  co-financing,  summarising  the
operations  financed  in  the  course  of  the  previous  budget
year, evaluating the implementation of this Regulation in
that  period  and  proposing  general  guidelines  for  the
following  year.  Where  block  grants  are  concerned,  the
annual  report  shall  contain  a  list  of  the  recipient  NGOs,
while  a  list  of  the  projects  financed  with  these  block
grants  shall  appear  in  the  report  for  the  following  year.
The  report  shall  set  out  the  conclusions  of  any
independent  evaluations  performed.

2. The  Commission,  acting  in  accordance  with  the
procedure  laid  down  in  Article  10,  shall  adopt  the
decisions on the general guidelines for the following year
and  the  revision  of  the  general  conditions.

3.  (a)  The  Commission  shall  adopt 

the  measures

envisaged,  which  shall  apply  immediately.

(b) 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
one  month 
of
communication,

from 

date 

the 

as 

—  the  Council,  acting  by  a  qualified  majority,
may  take  a  different  decision  within  the  time
limit  referred  to  in  the  first  indent.

Article  10

1. Where the procedure laid down in this Article is to be
followed,  the  Commission  shall  be  assisted  by  the
Committee  set  up  under  Article  8.

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  which  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  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 weighted in the manner set
out  in  that  Article.  The  Chairman  shall  not  vote.

Article  8

3.  (a)  The  Commission  shall  adopt 

the  measures

envisaged,  which  shall  apply  immediately.

The  Commission  shall  be  assisted  by  a  Committee
composed  of  the  representatives  of  the  Member  States
and  chaired  by  the  representative  of  the  Commission.

Article  9

1. Where the procedure laid down in this Article is to be
followed,  the  Commission  shall  be  assisted  by  the
Committee  set  up  under  Article  8.

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  which  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  Treaty  in  the  case  of  decisions  which  the  Council  is
required  to  adopt  on  a  proposal  from  the  Commission.

(b) 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  may  defer  application  of  the
measures which it has decided for a maximum
period  of  one  month  from  the  date  of  such
communication,

—  the  Council,  acting  by  a  qualified  majority,
may  take  a  different  decision  within  the  time
limit  referred  to  in  the  first  indent.

Article  11

The  Commission  shall  regularly  evaluate  operations
co-financed  by  the  Community  in  order  to  establish
whether  their  objectives  have  been  attained  and  with  a
view  to  providing  guidelines  for  improving  the  efficiency

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of future operations. The Commission shall submit to the
Committee  referred  to  in  Article  8  a  summary  of  the
evaluations; 
the  evaluations  may  be
examined by the Committee. The evaluation reports shall
be  available  to  the  Member  States  on  request.

if  necessary, 

the  Council  an  overall  evaluation  of  the  operations
financed  by  the  Community  under  this  Regulation,
together  with  suggestions  regarding  the  future  of  this
Regulation and, where necessary, proposals for amending
it.

Article  12

Article  13

Three  years  after  this  Regulation  enters  into  force,  the
Commission shall submit to the European Parliament and

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.

Done  at  Brussels,  17  July  1998.

For  the  Council

The  President

W.  RUTTENSTORFER