Amended proposal for a Council Regulation on assistance for Albania, Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia and the former Yugoslav Republic of Macedonia and amending Regulation (EEC) No 3906/89, Decision 97/256/EC and Regulation (EEC) No 1360/90
Date: 2000-10-04
Institutions: European Commission
Subjects: European Agency for Reconstruction, cooperation agreement, economic reconstruction, financial aid, third country

27.2.2001

EN

Official Journal of the European Communities

C 62 E/131

Amended proposal for a Council Regulation on assistance for Albania, Bosnia and Herzegovina,
Croatia, the Federal Republic of Yugoslavia and the former Yugoslav Republic of Macedonia and
amending Regulation (EEC) No 3906/89, Decision 97/256/EC and Regulation (EEC) No 1360/90

(2001/C 62 E/08)

COM(2000) 628 final (cid:15) 2000/0111(CNS)

(Submitted by the Commission pursuant to Article 250(2) of the EC Treaty on 12 October 2000)

THE COUNCIL OF THE EUROPEAN UNION,

objectives for the region and, particularly, to ensure that it
contributes to the Stabilisation and Association Process.

Having regard to the Treaty establishing the European
Community, and in particular Article 308 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas:

(1) The Community provides assistance for Albania, Bosnia
Federal Republic of
former Yugoslav Republic of

and Herzegovina, Croatia,
Yugoslavia
and
Macedonia.

the

the

(2) Most of

this assistance is currently provided under
Council Regulation (EC) No 1628/96 of 25 July 1996
relating to aid for Bosnia and Herzegovina, Croatia, the
Federal Republic of Yugoslavia and the former Yugoslav
Republic of Macedonia (1) (Obnova), as last amended by
Regulation (EC) No 2454/1999 (2) and under Council
Regulation (EEC) No 3906/89 of 18 December 1989 on
economic aid to certain countries of Central and Eastern
Europe (3)
(Phare), as last amended by Regulation (EC)
No 1266/1999 (4). This means that
the assistance is
subject to different sets of procedures, which encumbers
management. In the interests of efficiency it is therefore
desirable to establish a single legal framework for this
assistance. It is therefore appropriate to repeal Regulation
(EC) No 1628/96 and to amend Regulation (EEC)
No 3906/89. However, in order to ensure the continuity
of
the European Agency for Recon-
struction, the provisions of Regulation (EC) No 1628/96
which concern the establishment of the Agency should be
incorporated in another Regulation which should enter
into force on the date of that repeal.

the activities of

(3) The European Council which met in Lisbon on 23 and
24 March 2000 confirmed that
its overall objective
remained the fullest possible integration of the countries
of the region into the political and economic mainstream
of Europe and that
the Stabilisation and Association
Process was the centrepiece of its policy in the Balkans.

(4) The existing financial assistance should be expanded and
redirected to adjust it to the European Union’s political

(1) OJ L 204, 14.8.1996, p. 1.
(2) OJ L 299, 20.11.1999, p. 1.
(3) OJ L 375, 23.12.1989, p. 11.
(4) OJ L 161, 26.6.1999, p. 68.

(5) Assistance will therefore be focussed mainly on building
up an institutional,
legislative, economic and social
framework directed at the values and models subscribed
to by the European Union.

(6) A precondition of

the
respect democratic principles, human and

receiving assistance

recipients
minority rights and other fundamental freedoms.

that

is

(7) The regional dimension of such assistance must be given
special attention, with a view to stepping up regional
cooperation and supporting the European Union’s role
within the Stability Pact.

(8) In view of the political situation in some areas and the
nature of the various entities that have responsibility for
implementing assistance there, it is desirable to provide
that the assistance can be supplied in some cases directly
to recipients other than the State.

(9) To make the assistance more effective and ensure it is
properly implemented,
the Commission should adopt
general guidelines in accordance with the management
procedure laid down in this Regulation.

(10) To promote cooperation within the region, provision
should be made for all the candidate countries and the
countries covered by the TACIS and MEDA programmes
to participate in the tendering procedures and contracts.

(11) Provision should be made for checks and for

the
protection of
interests inter
the Community’s financial
alia by enabling the Commission, the Court of Auditors
and OLAF to exercise their respective powers pursuant to
Council Regulation (Euratom, EC) No 2185/96 of
11 November 1996 concerning on-the-spot checks and
inspections carried out by the Commission in order to
protect
interests
financial
irregularities (5) and Council
against
Regulation (EC, Euratom) No 2988/95 of 18 December
1995 on the protection of the European Communities’
financial interests (6).

the European Communities’
fraud and other

(5) OJ L 292, 15.11.1996, p. 2.
(6) OJ L 312, 23.12.1995, p. 1.

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27.2.2001

(12) The assistance will be governed by annual and multi-
annual programming, which will be put
to the
management committee set up by this Regulation for an
opinion. This will
assistance within a
medium-term outlook, and will make it possible to
ensure that Community assistance complements and
remains consistent with that of the Member States.

situate

the

Article

are management measures within
of
of

(13) The measures necessary for the implementation of this
the
Regulation
meaning
Decision
2
No 1999/468/EC of 28 June 1999 laying down the
implementing powers
procedures
conferred on the Commission (1) and should be adopted
in accordance with the management procedure provided
for in Article 4 of that Decision.

the exercise of

Council

for

(14)

In the case of Kosovo, provision should be made for the
Commission to be able to adopt programmes for recon-
struction in Kosovo put to it by the European Agency for
Reconstruction.
In other cases, programmes should be
adopted using the management procedure.

(15)

In the light of the scope of this Regulation, consequent
changes will need to be made to Council Regulation (EEC)
No 3906/89 of 18 December 1989 on economic aid to
certain countries of Central and Eastern Europe (Phare), as
last amended by Regulation (EC) No 1266/1999,
to
Council Decision 97/256/EC (2) of 14 April 1997
to the European
granting a Community guarantee
Investment Bank against losses under loans for projects
outside the Community (Central and Eastern Europe
countries, Mediterranean countries, Latin American and
the Former Yugoslav
Asian countries, South Africa,
Republic of Macedonia and Bosnia and Herzegovina), as
last amended by Decision 98/729/EC (3) and to Council
Regulation (EEC) No 1360/90 (4) of 7 May 1990 estab-
lishing a European Training Foundation, as last amended
by Regulation (EC) No 1572/98 (5).

(16) The operations covered by this Regulation are part of the
Community’s Western Balkans policy and are needed to
implement one of the Community’s objectives. The Treaty
does not provide, for the adoption of this Regulation,
powers other than those under Article 308,

HAS ADOPTED THIS REGULATION:

Article 1

1.
The Community shall provide financial assistance, here-
inafter referred to as CCommunity assistanceD, to Albania, Bosnia

(1) OJ L 184, 17.7.1999, p. 23.
(2) OJ L 102, 19.4.1997.
(3) OJ L 346, 22.12.1998.
(4) OJ L 131, 23.5.1990.
(5) OJ L 206, 23.7.1998.

and Herzegovina, Croatia,
Macedonia and the Federal Republic of Yugoslavia.

the former Yugoslav Republic of

The following shall be directly eligible for Community
2.
assistance: the State, federal, regional and local bodies, public
and semi-public bodies, organisations providing support
to
businesses, cooperatives, mutual societies, associations, foun-
dations and non-governmental organisations.

3.
Authorities established by the international community to
act as the civil administration in some areas, such as the High
Representative in Bosnia and the United Nations
Interim
Administration Mission in Kosovo, shall be duly consulted on
implementation of the Community assistance in their areas.
Any programmes or projects they implement shall be eligible
for Community assistance under this Regulation, except in the
case of those entities’ running costs. Where appropriate, such
costs may draw on a grant provided under Council Regulation
(EC) 1080/2000 (6) of 22 May 2000 on support for the United
Nations Interim Mission in Kosovo (UNMIK) and the Office of
the High Representative in Bosnia and Herzegovina (OHR).

Article 2

1.
The main purpose of the Community assistance is to
support participation by the recipient countries in the Stabili-
sation and Association Process.

2.

The Community assistance is for, inter alia:

(a) reconstruction, the return of refugees and stabilisation of

the region;

(b) the creation of an institutional and legislative framework to
law and human and

the rule of

underpin democracy,
minority rights;

(c) sustainable economic and social development and market-

economy orientated economic reform;

(d) the development of

relations among recipient
countries, between them and the European Union, and
between them and countries which are candidates for
accession to the European Union;

closer

(e) fostering regional,

trans-national, cross-border and inter-
regional cooperation among the recipient countries and
between them and the European Union, and between the
recipient countries and other countries of the region.

(6) OJ L 22, 24.5.2000.

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The Community assistance shall be implemented by
3.
financing investment and institution-building programmes in
accordance with the programming principles set out in the
general guidelines adopted in accordance with the procedure
referred to in Article 10(2).

freedoms is an essential element for the application of this
Regulation and a precondition of eligibility for Community
assistance. If these principles are not respected, the Council,
acting by qualified majority on a proposal
from the
Commission, may take appropriate measures.

Article 3

Save in exceptional, duly justified cases, assistance shall be
1.
provided as part of national and multi-beneficiary programmes
drawn up on the basis of indicative multiannual programmes
and annual action programmes adopted in accordance with the
procedure referred to in Article 10(2).

broad

indicative programmes shall
and
they shall

lay down the
2. Multiannual
for Community
main objectives
include indicative financial estimates.
assistance;
Before adopting indicative programmes for the countries in
question, the Commission shall examine with the Committee
referred to in Article 10 the strategy framework (country
strategy paper) on which programming is to be based.

guidelines

shall be based on the
3.
Annual action programmes
indicative programmes and shall set out,
for a given oper-
ational year, the aims being pursued, the fields of action and
the budget provided for.

Article 4

1.
By way of derogation from Article 3, where assistance for
Kosovo is implemented by the European Agency for Recon-
struction, that assistance shall be provided under the annual
programme for reconstruction.

2.
The Governing Board of the European Agency for Recon-
struction shall examine the strategy framework (restricted to
assistance only) presented by the Commission, on which the
annual programme for reconstruction is to be based.

The Director of the Agency shall submit the draft annual
in
the Regulation (on the

3.
programme
accordance with Article 4(10)(b) of
Agency).

reconstruction to the Commission,

for

The Commission may adopt the programme as submitted by
the Agency. In other cases, the programme shall be adopted in
accordance with the procedure laid down in Article 10(2).

The procedure laid down in Article 10(2) shall also be used to
adopt programmes of assistance for Kosovo which are not due
to be implemented by the Agency and which do not therefore
figure in the annual programme for reconstruction.

Article 5

Community assistance shall also be subject

to the
2.
conditions defined by the Council
in its conclusions of
29 April 1997 (1), in particular as regards the recipients’ under-
taking to carry out democratic, economic and institutional
reforms.

Article 6

1.

Community assistance shall be in the form of grants.

Community financing may be used to cover expenditure
and

2.
on preparing,
evaluating projects and programmes, and on information.

implementing, monitoring,

checking

Community financing may be used for cofinancing. Cofi-
investment projects financed by loans from the
financial

3.
nancing of
European Investment Bank or other
institutions may take the form of interest rate subsidies.

international

4.
In the event of the occurrence or threat of a serious
political and economic crisis in one of the recipient countries
and/or entities,
the Community may provide exceptional
budget assistance targeted on clearly identified items of expen-
diture. The Commission shall decide on such assistance, using
the procedure laid down in Article 10(2).

Such assistance shall not take the place of macro-economic
assistance (macro-financial and exceptional financial assistance),
which shall be provided, where applicable, on the basis of
specific instruments.

Community financing may not be used for paying taxes,

5.
duties or charges or for acquiring immovable property.

Article 7

The Commission shall

the Community
1.
assistance
Financial Regulation
applicable to the general budget of the European Communities.

in accordance with the

implement

2.
Participation in invitations to tender and contracts shall
be open on equal terms to all natural and legal persons from
Member States, States which are recipients under this Regu-
lation, candidate countries and countries which are recipients
under the TACIS and MEDA programmes.

In the

case of

the Commission may
cofinancing,
3.
authorise participation in invitations to tender and contracts
by nationals of other countries on a case-by-case basis.

1.
Respect for the principles of democracy and the rule of
law and for human and minority rights and fundamental

(1) Bulletin 4-1997, point 2.2.1.

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Article 8

Article 13

1.
Financing decisions and any agreements or contracts
resulting therefrom shall expressly provide for monitoring
and financial control by the Commission and audits by the
Court of Auditors, if necessary on the spot.

and inspections

In addition, the Commission may carry out on-the-spot
2.
checks
in accordance with Regulation
(Euratom, EC) No 2185/96. Measures taken by the Commission
in accordance with the procedures referred to in Article 10(2)
shall provide for adequate protection of the financial interests
of the Community as required by Regulation (EC, Euratom)
No 2988/95.

In the Annex to Regulation (EC) No 3906/89,
CBosnia and HerzegovinaD, CAlbaniaD,
Republic of MacedoniaD and CYugoslaviaD are deleted.

the names
CCroatiaD, Cformer Yugoslav

Article 14

The second subparagraph of Article 1a(5) of Council Decision
97/256/EC is replaced by the following:

CFinancial decisions
relating to this Decision shall be
adopted in accordance with the procedures laid down in
Regulation (CARDS).D

Article 9

Article 15

Decisions amending decisions taken in accordance with the
procedure referred to in Article 10(2) shall be adopted by the
Commission without consulting the Committee where they do
not comprise substantial changes to the nature of the original
programmes and operations and, as regards
the financial
element, where they do not exceed 20 % of the total amount
allocated for the programme or operation in question. The
Committee shall be notified of all revised decisions.

Article 10

The Commission shall be assisted by a management
1.
committee composed of
the Member
States and chaired by the representative of the Commission.

the representatives of

reference

2. Where
the
management procedure laid down in Article 4 of Decision
1999/468/EC shall apply,
in compliance with Article 7(3)
thereof.

to this paragraph,

is made

The period provided for in Article 4(3) of Decision

3.
1999/468/EC shall be one month.

The Committee may examine

4.
any other question
concerning the implementation of
this Regulation which is
submitted to it by the Chairman, whether or not at
the
the representative of a Member State, and in
request of
particular any question relating to the programming or
general implementation of measures or to cofinancing.

Article 11

In the interests of making the assistance cohesive and
1.
more efficient and complementary,
the Member States and
the Commission shall exchange any relevant information on
the operations they intend to implement.

2.
Every year the Commission shall submit a progress report
to the European Parliament and the Council on implementation
of the Community assistance.

Article 12

Regulation (EC) No 1628/96 is repealed.

The first subparagraph of Article 1 of Council Regulation (EEC)
No 1360/90 is replaced by the following:

CThis Regulation hereby establishes the European Training
Foundation, hereinafter referred to as the GFoundationH,
whose objective shall be to contribute to the development
of the vocational training systems of:

I the countries of Central and Eastern Europe designated
as eligible for economic aid by the Council in Regu-
lation (EEC) No 3906/89 or in any subsequent relevant
legal act,

I the New Independent States of the former Soviet Union
and Mongolia which are the beneficiaries of
the
programme to assist economic reform and recovery
pursuant to Regulation (Euratom, EC) No 1279/96 or
any subsequent relevant legal act,

I the Mediterranean non-member countries and terri-
tories which are the beneficiaries of the financial and
technical measures to accompany the reform of their
economic and social structures pursuant to Regulation
(EC) No 1488/96 or any subsequent relevant legal act
and

I the countries which are beneficiaries under Regulation

(CARDS) or any subsequent relevant legal act.

Those countries shall be hereinafter referred to as the
Geligible countriesH.D

Article 16

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

It shall apply until 31 December 2006.

This Regulation shall be binding in its entirety and directly
applicable in all Member States.