Proposal for a Council Decision concerning the Community position within the Association Council on the participation of Estonia in the financial instrument of the Community for the environment (LIFE)
Date: 2000-09-06
Institutions: European Commission
Subjects: Association Council (EU), EU environmental policy, EU programme, Estonia, financial instrument

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 06.09.2000
COM(2000) 506 final

2000/0216 (ACC)

Proposal for a

COUNCIL DECISION

concerning the Community position within the Association Council on the participation
of Estonia in the financial instrument of the Community for the environment (LIFE)

(presented by the Commission)

EXPLANATORY MEMORANDUM

The Helsinki European Council of December 1999 confirmed the enlargement process
launched at its meeting of December 1997 in Luxembourg. The enhanced Pre-Accession
Strategy defined in 1997 has been reiterated, which includes the participation of the 13
candidate States in Community programmes as an important part of this strategy.

With regard to the ten candidate countries of Central and Eastern Europe (CEECs),
participation in Community programmes is provided in their respective Europe Agreements.
Pursuant
the conditions and modalities of these countries’
participation are defined by the respective Association Councils.

to the Europe Agreements,

In the case of the environment, Estonia asked to participate in the third phase of LIFE.

The third phase of LIFE (2000-2004) will shortly replace the second phase (1996-1999).

The Regulation establishing the LIFE third phase provides that LIFE should be open to the
participation of the CEECs (art 6) from 2000; however, because of the delay incurred in
adoption by the Parliament and the Council, such participation will only be feasible
from 2001.

Estonia has already confirmed its willingness to participate in the new LIFE third phase from
2001, as an important element in the country pre-accession process, and to pay its financial
contribution partly from its national budget, and partly from its annual Phare allocation.

The main issues addressed in the proposed Decision of the Association Councils are the
following:

• projects and actions submitted by participants from Estonia shall be subject to the same
conditions, rules and procedures pertaining to LIFE as are applied to Member States,
regarding, in particular, the submission, assessment, and selection of applications, the
responsibilities of the national authorities in the implementation and the activities related to
the monitoring of the financed projects;

• Estonia will pay each year a contribution, as established in the relevant Association
Council decision. This contribution will not be reimbursed to Estonia if, at the end of the
year, the results fall short of the contribution paid;

• As provided in the conclusions of the meeting of the European Council in Luxembourg,
Estonian experts will be invited to attend the LIFE Committees as observers, for the points
which concern them;

• the decision will apply for the duration of the LIFE Third phase and will enter into force

the day of its adoption.

2

The early adoption of the Association Council decision would allow Estonia to be actively
involved in this internal Community instrument, as part of a reinforced pre-accession strategy.
It is, therefore, of considerable political importance.

Accordingly, the Council is invited to adopt the annexed proposal for a Decision concerning
the Community position within the Association Council concerned.

3

2000/0216 (ACC)

Proposal for a

COUNCIL DECISION

concerning the Community position within the Association Council on the participation
of Estonia in the financial instrument of the Community for the environment (LIFE)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles
175(1), in conjunction with Article 300(2) thereof,

Having regard to the proposal from the Commission,

Whereas:

(1)

(2)

(3)

The Europe Agreement
establishing an association between the European
Communities and their Member States, of the one part, and the Republic of Estonia, of
the other part, entered into force on 1 February 1998;

According to Article 108 of the Europe Agreement and to its Annex X, Estonia may
participate in Community framework programmes, specific programmes, projects or
other actions notably in the field of environment and the terms and conditions for the
participation of Estonia in these activities shall be decided by the Association Council;

Regulation (EC n°…/2000) of … 2000 of the European Parliament and the Council
concerning the financial instrument for the environment (LIFE)1, and in particular
Article 6 thereof, provides that LIFE shall be open to the participation of the accession
candidate Central and Eastern European countries in accordance with the conditions
set out in the Association Agreements, and on the basis of the provisions set up in the
decisions of the respective Association Councils;

HAS DECIDED AS FOLLOWS:

1

OJ L …, ….2000, p..

4

The position to be taken by the Community within the Association Council established by the
Europe Agreement between the European Communities and their Member States, of the one
part, and the Republic of Estonia, of the other part, concerning the participation of Estonia in
the financial instrument for the environment (LIFE), is the attached draft decision of the
Association Council.

Done at Brussels,

For the Council
The President

5

Draft

DECISION N° …/ 2000 OF THE ASSOCIATION COUNCIL

between the European Communities and their Member States, of the one part, and the
Republic of Estonia, of the other part

adopting the terms and conditions for the participation of the Republic of Estonia in the
financial instrument for the environment (LIFE)

THE ASSOCIATION COUNCIL

Having regard to the Europe Agreement between the European Communities and their
Member States, of the one part, and the Republic of Estonia, of the other, and in particular
Article 108 thereof2;

Whereas:

(1)

(2)

According to Article 108 of the Europe Agreement and its Annex X, Estonia may
participate in Community framework programmes, specific programmes, projects or
other actions notably in the field of environment ;

According to the same Article the terms and conditions for the participation of Estonia
in these activities shall be decided by the Association Council ;

HAS DECIDED AS FOLLOWS:

Article 1

instrument for the
Estonia shall, as from 1 January 2001, participate in the financial
environment (hereinafter called LIFE) according to the terms and conditions set out in
Annexes I and II which shall form an integral part of this Decision.

This Decision shall apply for
1 January 2001.

the duration of

the LIFE third phase, starting from

Article 2

Article 3

Proposals submitted to the Commission by Estonia before the 31 October 2000 for Life
Nature and before the 30 November 2000 for Life Environment will be eligible for
evaluation.

2

OJ L 51, 26.2.1999, p. 3.

6

Article 4

This Decision shall enter into force the day of its adoption by the Association Council.

Done at Brussels,

For the Association Council
The President

7

1.

2.

3.

4.

5.

6.

7.

8.

ANNEX I

Terms and conditions for the participation of the Republic of Estonia
in the financial instrument for the environment (LIFE).

Estonia will participate in all actions of LIFE in accordance with the objectives,
criteria, procedures and deadlines laid down in Regulation (EC n°…/2000) of …
2000 of the European Parliament and of the Council concerning this financial
instrument.

To participate in the programme, Estonia will pay each year a contribution to the
general budget of the European Union according to the modalities described in
Annex II.

If necessary in order to take into account LIFE developments, or the evolution of
Estonia’s absorption capacity, the Association Committee is entitled to adapt this
contribution, so as to avoid budgetary imbalance in the implementation of LIFE.

the submission, assessment and selection of
The terms and conditions for
applications related to eligible institutions, organisations and individuals of Estonia
will be the same as those applicable to eligible institutions, organisations and
individuals of the Community.

Estonian experts may be taken into consideration by the Commission when
appointing independent experts according to the relevant provisions of the decision
establishing the programme to assist it in the project evaluation.

To reflect the Community dimension of LIFE, transnational projects and activities
proposed by Estonia should, whenever relevant, include at least a partner from one of
the Member States of the Community.

The Member States of the Community and Estonia will make every effort, within the
framework of existing provisions, to facilitate the free movement and residence of
experts and other eligible persons moving between Estonia and the Member States of
the Community for the purpose of participating in activities covered by this Decision.

Activities covered by this Decision shall be exempt from imposition by Estonia of
indirect taxes, customs duties, prohibitions and restrictions on imports and exports in
respect of goods and services intended for use under such activities.

Without prejudice to the responsibilities of the Commission of the European
Communities and the Court of Auditors of the European Communities in relation to
the monitoring and evaluation of the programme pursuant to Article 9 of the Reg.
EEC…2000 (LIFE),
the participation of Estonia in the programme will be
continuously monitored on a partnership basis involving the Commission of the
European Communities and Estonia. Estonia will take part in any other specific
activities set out by the Community in that context.

conformity with

contractual
In
arrangements concluded with entities of Estonia shall provide for controls and audits
to be carried out by, or under the authority of, the Commission and the Court of

the Community’s Financial Regulations,

8

Auditors. As far as financial audits are concerned, they may be carried out with the
related to the
purpose of controlling such entities’
contractual obligations towards the Community. In a spirit of co-operation and
mutual interest, the relevant authorities of Estonia shall provide any reasonable and
feasible assistance as may be necessary or helpful under the circumstances to
perform such controls and audits.

income and expenditure,

Without prejudice to the procedures referred to in Article 3 paragraph 7 and in
Article 11 of the Regulation EC n°…/2000, representatives of Estonia will, for the
points which concern them, participate as observers in the relevant committees. The
committees shall meet without the presence of representatives of Estonia at the time
of voting.

The language to be used in all contacts with the Commission, as regards the
application process, contracts, reports to be submitted and other administrative
arrangements for the programmes, will be one of the official languages of the
Community.

The Community and Estonia may terminate activities under this Decision at any time
upon twelve months’ notice in writing. Projects and activities in progress at the time
of termination shall continue until their completion under the conditions laid down in
the appropriate agreements.

9.

10.

11.

9

ANNEX II

Financial contribution of the Republic of Estonia to LIFE

1.

2.

The financial contribution to be paid by Estonia to the budget of the European Union
to participate in LIFE will be
600.000 for each of the first two budgetary years.
Supplementary costs of an administrative nature are included in the above-mentioned
amount.

€

The contribution to be paid by Estonia for the following period will be decided by
the Association Council in the course of the year 2002.

Estonia will pay the contribution mentioned above, partly from the Estonian national
budget, and partly from Estonia’s PHARE National Programme. Subject
to a
separate PHARE programming procedure, the requested PHARE funds will be
transferred to Estonia by means of a separate Financing Memorandum. Together
with the part coming from Estonia’s State budget,
these funds will constitute
Estonia’s national contribution, out of which it will make payments in response to
annual calls for funds from the Commission.

3.

PHARE funds will be requested according to the following schedule :

€

€

–

–

285.000 for the contribution to LIFE for the first year 2001;

285.000 for the second year.

The remaining part of the contribution of Estonia will be covered from the Estonian
State budget.

4.

The financial regulation applicable to the general budget of the European Union will
apply, notably to the management of the contribution of Estonia.

Travel costs and subsistence costs incurred by representatives and experts of Estonia
for the purposes of taking part as observers in the work of the committee referred to
in Annex I, point 9, or other meetings related to the implementation of LIFE shall be
reimbursed by the Commission on the same basis as, and in accordance with, the
procedures currently in force for non-governmental experts of the Member States of
the European Union.

5.

After the entry into force of this Decision and at the beginning of each following
year, the Commission will send to Estonia a call for funds corresponding to its
contribution to LIFE under this Decision.

This contribution shall be expressed in Euro and paid into an Euro bank account of
the Commission.

Estonia will pay its contribution according to the call for funds:

–

by 1 April for the part financed from its national budget, provided that the call
for funds is sent by the Commission before 1 March, or at the latest one month
after the call for funds is sent if later;

10

–

by 1 April for the part financed from PHARE, provided that the corresponding
amounts have been sent to Estonia by this time, or at the latest in a period of 30
days after these funds have been sent to Estonia.

Any delay in the payment of the contribution shall give rise to the payment of
interest by Estonia on the outstanding amount from the due date. The interest rate
corresponds to the rate applied by the European Central Bank, on the due date, for its
operations in Euro, increased by 1.5 percentage points.

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FINANCIAL STATEMENT

1.

TITLE OF OPERATION

Participation of Estonia in the financial instrument for the environment (LIFE).

2.

BUDGET HEADINGS INVOLVED

B 4-3200A, B 4-3201A and B7-030 (Economic aid to the associated countries of
Central and Eastern Europe) and 6091 (Revenue accruing from the participation of
the candidate countries in Community programmes)

3.

LEGAL BASIS

Treaty establishing the European Community, and in particular Articles 175(1), in
conjunction with Article 300(2) thereof;

The Europe Agreement with Estonia (Article 108), providing for the participation in
Community programmes;

Regulation of the European Parliament and of the Council (EC n°..…/2000) of the…
2000 concerning the financial
in
particular, Article 6 thereof.

instrument for the environment (LIFE) and,

4.

4.1

DESCRIPTION OF OPERATION

General objective

The Europe Agreement: In accordance with Article 108 of the Europe Agreement,
establishing an association between the European Communities and their Member
States, of the one part, and the Republic of Estonia, of the other part, which came
into force on 1 February 1998 and to its Annex X, Estonia may participate in
Community framework programmes, specific programmes, projects or other actions
notably in the field of environment and the terms and conditions for the participation
of Estonia in these activities shall be decided by the Association Council;

In line with the Commission communication “Agenda 2000” of 16 July 1997 and of
the conclusions of the European Council in Luxembourg, Estonia’s participation in
LIFE has been part of the reinforced preaccession strategy which assists this country
in its preparation for future accession to the Union.

Its participation in LIFE will not only contribute to preparing it for its future
accession to the Union and towards the implementation of the provisions relating to
economic and environmental co-operation in the Europe Agreement, but will also
enable Estonia to familiarise itself with the procedures and methods used in
Community programmes.

This new draft Association Council Decision aims at allowing the Estonian
participation in the new third phase of LIFE to be as efficient as possible. This

12

decision lays down conditions, notably as concerns Estonia’s financial contribution,
and practical arrangements for participating in LIFE.

4.2

Period covered and arrangements for renewal

Until the end of the Community programme concerned, i.e. 31 December 2004.

5.

5.1

5.2

5.3

CLASSIFICATION OF EXPENDITURE OR REVENUE

Non-compulsory expenditure

Differentiated appropriations

Type of revenue involved

Since Article 108 of the Europe Agreement stipulates that Estonia itself will meet the
costs resulting from its participation, it will be invited to pay a contribution for
participating in the programme. As the same article states that the Community may
supplement Estonia’s contribution, Estonia will contribute only part from its national
budget. The remaining part of its contribution will be taken from its PHARE
National Programme. The required PHARE funds will be charged to heading
B7-030 and transferred to Estonia by means of a separate Financing Memorandum.
Together with the part coming from Estonia’s state budget,
these funds will
constitute Estonia’s national contribution, out of which it will make payments in
response to annual calls for funds from the Commission. The total contribution, once
paid by Estonia, will be transferred to item 6091 of the EU’s budget receipts.

6.

TYPE OF EXPENDITURE OR REVENUE

–

–

–

–

100% subsidy;

Subsidy for joint financing with other sources in the public and/or private
sector;

No provision for all or part of the Community contribution to be reimbursed;

As far as revenue is concerned, provision for Estonia’s contribution to cover
the cost of its participation is made under item 6091. The revenue will be
allocated to the items for expenditure on the programme in question and, where
appropriate, to the relevant items of operating expenditure. The total revenue
expected is given under item 7.4.

7.

7.1

FINANCIAL IMPACT

Method of calculating total cost of operation (link between individual and total
costs)

the financial and budgetary
Based on the Europe Agreement with Estonia,
arrangements for the programme concerned are as follows: Estonia’s contribution
takes into account two elements;

13

–

–

the foreseeable operational costs, which have been estimated on the basis of the
GDP per capita weighted with purchasing power parity in relation to the LIFE
budget (the draft preliminary budget for LIFE 2000), the country’s estimated
take-up capacity and previous experience of its participation in LIFE;

the foreseeable administrative costs, corresponding to the meetings and
missions;

These estimated administrative costs amount yearly to
participation in meetings
(chapter B).

(chapter A) and

€

12.000 for missions and
18.000 for project monitoring

€

(Estonia will use part of its national PHARE annual programme as a complement to
its state budget to finance its contribution to the operational costs.)

7.2

Itemised breakdown of costs

Origin: national budget

Of which administrative costs part A
(see point 10)

Of which administrative costs part B
(see point 7.3)

Origin: PHARE

Total contribution

€

)

2001 (

315 000

12 000

€

)

2002 (

315 000

12 000

18 000

18 000

285 000

600 000

285 000

600 000

7.3

Operational expenditure for studies, experts etc. included in Part B of the
budget

Up to a maximum in proportion to the appropriations of that kind in the EUR 15
allocation for the programme (5% max), but within the limits allowed by the part of
the contribution which came from the country's national budget.

7.4

Schedule of commitment and payment appropriations

Amounts to be charged to item B7-030:
€

285.000 in 2001 and the same amount for 2002, in commitment appropriations and

in payment appropriations.

The foreseeable annual receipts for 2001 and 2002 are as follows:
€

€

600.000, of which

570.000 for the operational costs, and

€

30.000 for the

administrative costs

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8.

FRAUD PREVENTION MEASURES

All the Commission’s contracts, agreements and other legal commitments provide
for on-the-spot checks by the Commission and Court of Auditors. Amongst others,
the beneficiaries of the operations are obliged to file reports and financial statements.
These are analysed from the point of view of their content and the eligibility of the
expenditure in line with the objective of Community financing.

The anti-fraud provisions of the basic budget headings apply to this heading too
when adapted to the case of the countries of Central Europe.

9.

9.1

ELEMENTS OF COST-EFFECTIVENESS ANALYSIS

Specific and quantified objectives; target population

The aim of opening up the financial instrument LIFE to Estonia is to bring about
similar benefit as for Member States of the Community.

Where LIFE Nature is concerned, the specific objective is to promote, as a matter of
priority, the measures needed for the identification, maintenance or re-establishment
of natural habitats and for the conservation of wild fauna and flora of Community
and/ or European importance.

Where measures other than those relating to nature protection are concerned, the
objectives are, in particular:

–

–

–

Help define the most appropriate infrastructure investments needed to
implement Community environmental legislation and undertake demonstration
actions to increase the efficiency of community aid for the environment;

Contribute to the sustainable development
demonstration projects using innovative clean techniques and methods;

in industry by promoting

Promote better land use by integrating environmental consideration on the
environment and on sustainable development in order to achieve cleaner socio-
economic activities, in particular in urban areas.

Lastly, where the accompanying measures are concerned, the aim is to ensure a
better cost-benefit ratio for assistance from the instrument and to prevent any fraud.

As illustrated by the past experience of LIFE, target beneficiaries are the following:

–

–

–

–

–

Private sector (SMEs, business partnerships) such as new technologies, and
waste recycling;

Public sector (local and central authorities);

Partnership between private and public sector;

Non-governmental organisations and associations, particularly at regional/local
level;

Universities (mainly for nature conservation).

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9.2

Grounds for the operation

– Need for Community financial aid

In view of the high cost of participation in the programme and Estonia’s
precarious budgetary situation, assistance from PHARE is essential.

– Choice of ways and means

With a contribution from the national budget, supplemented by one from PHARE,
Estonia’s participation in LIFE will allow the Estonian stakeholders to co-operate
with the aim of
familiarising them with the EU environmental "acquis".
Consequently LIFE will serve the dual purpose of providing Estonia with an
adequate preparatory grounding in this field and of integrating Estonian bodies in
Community networks in order to make a definite contribution to Estonia 's future
membership

– Main factors of uncertainty which could affect the specific results of the operation

Since projects will be selected according to qualitative criteria, it will only be
possible to measure the real impact on the basis of Estonian firms, bodies and non
governmental organisations’ capacity to respond to the calls for proposals
launched by the Commission under LIFE.

9.3

Monitoring and evaluation of the operation

The control and monitoring procedures for LIFE (as provided for in the LIFE
regulation) will also apply to Estonian beneficiaries.

10.

ADMINISTRATIVE EXPENDITURE (SECTION III, PART A OF THE BUDGET)

The actual mobilisation of the necessary administrative resources will depend on the
Commission’s annual decision on the allocation of resources, taking into account the number
of staff and additional amounts authorised by the budgetary authority.

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10.1

Effect on the number of posts

Type of post

Staff to be assigned to managing
the operation

Source

Duration

Permanent
posts

Temporary
posts

Officials or
temporary staff

A
B
C

Total

0.2

0.2

0.2

0.2

Existing
resources in
the DG or
department
concerned

0.2

0.2

10.2

Overall financial impact of the human resources

Additional
resources

2000-2004

0.2

0.2

€

Amounts

Method of calculation (total cost for the period 2001-2004)

€

Officials (*)

86 400

0.2 man x 4 years x 108.000

Total

86 400

(*) By using existing resources required to manage the operation (Calculation based on titles
A1, A2, A4, A5 and A6)

10.3

Increase in other administrative expenditure as a result of the operation

Budget heading

€

Amounts

Method of calculation (yearly cost of the action)

€

A 7010 - missions

4.400

1.100 x 4 yearly missions

A 7031 - committees

4.400

Travel allowance and subsistence allowance for 1 participant in 4
two-day meetings (2 LIFE nature -2 LIFE environment)

A 7030 - other meetings

3.200

Travel allowance and subsistence allowance for 1 participant in 3
one-day meetings

Total

12.000

The above expenditure will be met from the receipts (article 4, paragraph 2, third indent of the
financial regulation) received from Estonia (see points 5.3 and 7.4 of the financial statement).

17