2000/248/EC: Council Decision of 20 March 2000 on the principles, priorities, intermediate objectives and conditions contained in the Accession Partnership with the Republic of Cyprus
Date: 2000-03-20
Institutions: Council of the European Union
Subjects: Cyprus, European Union, accession to the European Union, cooperation policy

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II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 20 March 2000

on the principles, priorities, intermediate objectives and conditions contained in the Accession
Partnership with the Republic of Cyprus

(2000/248/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 555/2000 of 13
March 2000 on the implementation of operations in the frame-
work of the pre-accession strategy for the Republic of Cyprus
and the Republic of Malta (1).

Having regard to the proposal from the Commission,

Whereas:

majority on a proposal from the Commission, may take
appropriate steps with regard to any pre-accession assis-
tance.

(4)

(5)

The 1999 Commission's regular report presented an
objective analysis on the Republic of Cyprus' prepara-
tions
for membership and identified a number of
priority areas for further work.

In order to prepare for membership, the Republic of
Cyprus should prepare a national programme for the
adoption of the acquis. This programme should set out a
timetable for achieving the priorities and intermediate
objectives established in the Accession Partnership,

(1)

(2)

(3)

The Luxembourg European Council stated that
the
Accession Partnership is a new instrument and the key
feature of the enhanced pre-accession strategy.

HAS DECIDED AS FOLLOWS:

Regulation (EC) No 555/2000 complements Regulation
(EC) No 622/98 (2) which provides that the Council is to
decide, by a qualified majority and following a proposal
from the Commission, on the principles, priorities, inter-
mediate objectives and conditions contained in the indi-
vidual Accession Partnerships, as they will be submitted
to each applicant country, as well as on subsequent
significant adjustments applicable to them.

Community assistance is conditional on the fulfilment of
essential elements, and in particular on progress towards
fulfilment of the Copenhagen criteria. Where an essential
element is lacking, the Council, acting by a qualified

Article 1

In accordance with Article 1(2) of Regulation (EC) No 555/
2000 the principles, priorities,
intermediate objectives and
conditions contained in the Accession Partnership for the
Republic of Cyprus are set out in the Annex hereto, which
forms an integral part of this Decision.

Article 2

(1) OJ L 68, 16.3.2000, p. 3.
(2) Council Regulation (EC) No 622/98 of 16 March 1998 on assi-
stance to the applicant States in the framework of the pre-accession
strategy, and in particular on the establishment of Accession Part-
nerships (OJ L 85, 20.3.1998, p. 1).

The implementation of
the Accession Partnership shall be
examined in the Association Agreement bodies as appropriate,
and through the competent Council bodies to which the
Commission shall report regularly.

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This Decision shall enter into force on the third day following its publication in the Official Journal of the
European Communities.

Article 3

Done at Brussels, 20 March 2000.

For the Council

The President

J. GAMA

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ANNEX

CYPRUS: 1999 ACCESSION PARTNERSHIP

1. OBJECTIVES

The purpose of the Accession Partnership is to set out in a single framework the priority areas for further work
identified in the Commission's 1999 regular report on the progress made by Cyprus towards membership of the
European Union, the financial means available to help Cyprus implement these priorities and the conditions which
will apply to that assistance. This Accession Partnership provides the basis for a number of policy instruments which
will be used to help the candidate countries in their preparations for membership. These include, inter alia, the
national programme for the adoption of the acquis, the joint assessment of medium-term economic policy priorities,
the pact against organised crime as well as the national development plans and other sectoral plans necessary for the
participation in Structural Funds after membership. Each of these instruments is different in nature and is prepared
and implemented according to specific procedures. They are not an integral part of this Partnership but the priorities
they contain will be compatible with it.

2.

PRINCIPLES

The main priority areas identified for each candidate country relate to their ability to assume the obligations of
meeting the Copenhagen criteria which state that membership requires:

— that the candidate country has achieved stability of institutions guaranteeing democracy, the rule of law, human

rights and respect for and protection of minorities,

— the existence of a functioning market economy, as well as the capacity to cope with competitive pressure and

market forces within the Union,

— the ability to take on the obligations of membership, including adherence to the aims of political, economic and

monetary union.

At its meeting in Madrid, the European Council stressed the need for the candidate countries to adjust their
administrative structures to ensure the harmonious operation of Community policies after accession and at
Luxembourg, it stressed that incorporation of the acquis into legislation is necessary, but not in itself sufficient; it is
necessary to ensure that it is actually applied.

3.

PRIORITIES AND INTERMEDIATE OBJECTIVES

The Commission's regular reports have highlighted the extent of the efforts which still have to be made in certain
areas by the candidate countries to prepare for accession. This situation requires the definition of intermediate stages
in terms of priorities, each to be accompanied by precise objectives to be set in collaboration with the countries
concerned, the achievement of which will condition the degree of assistance granted and the progress of the
negotiations under way with some countries and the opening of new negotiations with the others. The priorities and
intermediate objectives are divided into two groups — short- and medium-term. Those listed under the short term
have been selected on the basis that it is realistic to expect that Cyprus can complete or take them substantially
forward by the end of 2000. The priorities listed under the medium term are expected to take more than one year to
complete although work should, wherever possible, also begin on them during 2000.

Cyprus has been invited to prepare a national programme for the adoption of the acquis (NPAA). It will set out a
timetable for achieving priorities and intermediate objectives, based on the Accession Partnership, as well as
necessary administrative structures and financial resources.

The Accession Partnership indicates the priority areas for Cyprus' membership preparations. Cyprus will nevertheless
have to address all issues identified in the regular report. It is also important that Cyprus fulfils the commitments of
legislative approximation and implementation of the acquis in accordance with the commitments made under the
Association Agreement, the screening exercise and the negotiation process. It should be recalled that incorporation
of the acquis into legislation is not in itself sufficient; it will also be necessary to ensure that it is actually applied to
the same standards as those which apply within the Union. In all of the areas listed below there is a need for credible
and effective implementation and enforcement of the acquis.

Drawing on the analysis of the Commission's regular report, the following short- and medium-term priorities and
intermediate objectives have been identified for Cyprus.

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3.1. Short term (2000)

Political criteria

— maximise efforts to support a settlement under the auspices of the UN.

Economic criteria

— correct the widening of the fiscal and current account deficits,

— strengthen effectiveness of monetary policy and effective liberalisation of capital movement by abolishing the

interest rate ceiling on all

lending operations,

— bring the cooperative credit and savings societies sector in line with the acquis and international accounting

standards.

Internal Market

— public procurement: further harmonise legislation with regard to publication, time limits and review bodies;

extend the law to local authorities and bodies governed by public law,

— industrial and intellectual property rights: align and enforce trade mark, copyright and neighbouring rights
legislation; reinforce administrative capacity and the fight against counterfeiting especially by strengthening
border controls,

— free movement of goods: adopt horizontal legislation on standardisation and certification; transpose sectoral
legislation in the field of motor vehicles, pharmaceuticals, chemicals, cosmetics and hygiene requirements in
foodstuffs; accelerate adoption of EN standards; strengthen administrative structures in particular on standards,
certification and accreditation and continue transposition of new approach Directives,

— free movement of capital: continue to align rules on medium- and long-term capital operations and prepare the
way for subsequent liberalisation of short term operations, notably by introduction of market interest rates,

— competition: complete anti-trust legislation; align State aid legislation and increase transparency of indirect aid,

— telecommunications: develop new law on telecommunications to align with the acquis; establish an independent

regulatory authority,

— taxation: pursue VAT harmonisation diminishing the zero-rate extension and abolishing special VAT regime for
offshore companies; abolish all excise duty discrimination against imports from the EU, introduce tax warehouse
system and the movement procedures of excisable goods; ensure that new tax measures comply with the
principles of the code of conduct for business taxation,

— customs: adopt a pre-accession strategy for the harmonisation of the Cypriot customs legislation; accelerate

computerisation process.

Agriculture

— prepare measures required to implement and establish administrative structures for the common agricultural

policy and rural development policies,

— continue alignment of veterinary and phytosanitary legislation; upgrade inspection arrangements, in particular at

future external borders.

Fisheries

— align legislation further with the acquis in the field of licensing for fishing vessels under Cypriot flag; further
strengthen the administrative capacity notably in the areas of inspection and control of the fishing vessels and the
establishment of a separate fishing fleet register.

Environment

— complete transposition and enforce the environmental

impact assessment Directive,

— adopt a strategy and detailed directive-specific programme for the transposition, implementation and enforce-

ment of the EU environmental acquis,

— accelerate transposition, particularly in the fields of water quality, waste management and air quality,

— develop a plan for financing investments (directive specific), based on estimations of costs of alignment and

realistic sources of public and private finance year-by-year.

Employment and social affairs

— support social partners' capacity-building efforts to develop and implement the acquis,

— strengthen administrative capacity in the fields of labour law, equal opportunities and coordination of social

security,

— strengthen enforcement structures in the fields of health and safety at work (in particular the Labour Inspec-

torate).

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Transport

— align maritime transport legislation and enforce safety standards (reduce the high detention rate of Cyprus flag
vessels); adopt an action plan on monitoring classification societies and improving performance of the Cyprus
flag register.

Justice and home affairs

— adopt and implement asylum legislation in accordance with the EU acquis,

— ensure regular and complete reporting by the offshore banking sector,

— upgrade border control equipment and improve training of personnel to prevent illegal immigration, ensure

further progress in the detection of forged documents,

— ratify the European Convention on Mutual Assistance and its protocol and the European Criminal Law

Convention on Corruption, sign the OECD Convention on bribery,

— regarding money laundering, reinforce administrative structure; increase resources in the unit for combating
money laundering particularly on the prevention side; increase its strategic analysis function especially regarding
data on suspicious transactions provided by the Central Bank and other financial

institutions.

Reinforcement of administrative and judicial capacity including capacity to manage and control EU funds

— complete the legislative framework for internal and external financial control; set up a central organisation within
the government for harmonising internal audit/control functions; set up internal audit/control units in spending
centres; introduce ‘functional independence’ for national, internal controllers/auditors at both central and decen-
tralised levels and ex-ante financial control; issue an audit manual and develop audit trails for the control of EU
funds,

— make available GDP/capita data in accordance with EU methodology.

3.2. Medium term

Economic criteria

— implement programme for liberalisation of utilities,

— complete the structural reform programme,

in particular in the financial sector,

— liberalise further capital account operations regarding direct investment, real estate investment, portfolio transac-
tions, financial credits and the opening of deposits abroad; liberalise foreign participation in financial services, oil
refining, tourism and trading,

— continue efforts to improve the conditions for enterprise creation and development, with particular attention to

small- and medium-sized enterprises,

— continue efforts to restructure the textile sector,

— establish an annual fiscal surveillance procedure aimed to bring the reporting, monitoring and control of public
in line with EU procedures.

finances, specifically fiscal positions,

Internal Market

— public procurement: remove the preferential treatment clause in favour of local production by end of 2002,

— company law: transpose second and twelfth company law Directives; further align with the first, third and sixth
Directives; implement the acquis on balance sheets and profit/loss accounts; align with EU accounting rules for
private exempt companies,

— data protection: adopt national

legislation, including establishment of an independent supervisory authority,

— free movement of goods: continue transposition in the field of

lifts,
construction products, gas appliances, electrical equipment, medical devices and personal protective equipment;
complete transposition of new approach directives,

legal metrology and for machines,

— free movement of capital: abolish remaining restrictions and authorisation procedures,

— free movement of persons: complete alignment of mutual recognition of diplomas,

— competition: reinforce competition authorities; ensure compliance of the State aid legislation,

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— telecommunication: complete alignment of regulatory framework, in particular in the fields of licensing, intercon-
nection and universal service, numbering and data protection; complete the creation of an independent regula-
tory authority by end of 2002; terminate monopoly of voice telephony,

— taxation: complete the alignment of VAT system and increase the excise duties rates to the EU minimum levels;

review existing laws and ensure compatibility with the code of conduct for business taxation,

— consumer protection: continue alignment and strengthen market surveillance and enforcement authorities,

— customs: accelerate the legislative harmonisation including introduction of customs regimes with economic
impact and simplified procedures; strengthen the institutional and administrative capacity; continue fight against
fraud and corruption.

Agriculture

— continue preparations for implementation of the common agricultural policy and rural development policies.

Environment

— complete transposition; continue to strengthen the institutional, administrative and monitoring capacity to

ensure environmental protection,

— implement waste management strategy,

— integrate sustainable development principles into the definition and implementation of all other sectoral policies.

Energy

— align oil-stock requirements; incorporate national regulatory energy objectives for emission control in power
stations and use of unleaded gasoline, as well as the use of low sulphur diesel into the legal framework; further
improve energy efficiency,

— prepare for the internal energy market, notably the electricity and gas Directives (including adaptation of energy

prices to cost levels and the establishment of a regulator),

— continue to improve energy efficiency.

Employment and social affairs

— transpose and implement EU legislation in the field of occupational health and safety, labour law, equal treatment
of women and men and public health; reinforce related administrative structures and those required for the
coordination of social security,

— prepare a national employment strategy, with the help of the joint employment policy review, with a view to

later participation in the European employment strategy.

Economic and social cohesion

— develop a national policy for economic and social cohesion with a view to diminishing internal disparities and
preparing for Structural Funds implementation including pluriannual budgeting procedures and establishing
structures for monitoring appraisal and evaluation.

Transport

— complete alignment and implement legislation on road transport (market access, road safety, rules for dangerous
goods and taxation), maritime transport legislation and aviation (particularly air safety and air traffic manage-
ment).

Justice and home affairs

— further upgrade law enforcement bodies and the judiciary (staff numbers, training and equipment) to continue
the fight against organised crime, trafficking in women and children, drug trafficking and corruption, ensure
better coordination between law enforcement bodies,

— continue progressive alignment of visa legislation and practice with that of the EU,

— ensure effective application of international instruments on judicial cooperation, especially the European Conven-
tion on Mutual Assistance in Penal Matters and its additional Protocol, the European Criminal Law Convention
on Corruption, as well as the Hague Convention on Civil Procedure and on Access to Justice.

Reinforcement of administrative and judicial capacity including capacity to manage and control EU funds

— strengthen public financial control functions through the provision of adequate staff, training and equipment.

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4.

PROGRAMMING

The fourth Financial Protocol (30 October 1995 to 31 December 1998) was extended by one year (until the end of
1999). The Protocol is the sole EU financial instrument (apart from EIB loans) to support activities resulting from
Cyprus' pre-accession strategy.

In 1998, EUR 4,65 million were committed and for 1999, EUR 5 million are available. Under these national
allocations, Cyprus can also fund part of its participation in Community programmes including in the fifth research
and technological development framework programme.

Financial assistance from the year 2000 will be determined once the draft regulation on pre-accession finance has
been adopted by the Council.

Activities financed as from the year 2000, will focus assistance on the adoption of the Community acquis on the
basis of the priorities set out in this Accession Partnership as well as on promoting joint activities between the
Greek-Cypriot and Turkish-Cypriot communities on the island.

Cyprus is eligible for EIB loan finance under the Euro-Med mandate and the pre-accession facility. Moreover, there
are also EUR 50 million of EIB loans available under the fourth Financial Protocol between Cyprus and the EU.

5.

CONDITIONALITY

Community assistance for financing projects is conditional on respect by Cyprus of its commitments under the
Association Agreement, further steps towards satisfying the Copenhagen criteria and in particular progress in
meeting the specific priorities of this Accession Partnership in 2000. Failure to respect these general conditions could
lead to a decision by the Council on the suspension of financial assistance on the basis of Article 4 of Regulation
(EC) No 622/98.

6. MONITORING

The implementation of the Accession Partnership is monitored in the framework of the Association Agreement and
in particular in the Association Committee. The Accession Partnership will be amended as necessary in accordance
with Article 2 of Regulation (EC) No 622/98.