Proposal for a Council Decision on the principles, priorities, intermediate objectives and conditions contained in the Accession Partnership with Cyprus
Date: 2001-11-13
Institutions: European Commission
Subjects: Cyprus, European Union, accession to the European Union, aid system, cooperation policy

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 13.11.2001
COM(2001) 652 final

Proposal for a

COUNCIL DECISION

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

(presented by the Commission)

EXPLANATORY MEMORANDUM

At  its  meeting  in  Luxembourg  in  December  1997,  the  European  Council  decided  that  the
Accession  Partnership  would  be  the  key  feature  of  the  enhanced  pre-accession  strategy,
mobilising all forms of assistance to the candidate countries within a single framework. In this
manner, the Community targets its assistance towards the specific needs of each candidate so
as to provide support for overcoming particular problems with a view to accession.

The  first  Accession  Partnership  for  Cyprus  was  decided  in  March  2000.  In  line  with  the
provisions laid down in Regulation (EC) No. 622/981 (article 2), and based on the analysis of
the Commission's 2001 Regular Report on progress  made by  Cyprus towards accession, the
Commission considers that the time has come for a revision of the priorities and intermediate
objectives  identified  in  the  Accession  Partnership.  The  present  proposal  for  such  a  revision
takes into account the  findings of the Commission's 2001 Regular  Report  on  progress made
by Cyprus towards accession.

The attached decision does not have financial implications.

In view of the above, the Commission invites the Council to adopt the attached decision.

1

Council  Regulation  (EC)  No  622/98  of  16  March  1998  on  assistance  to  the  applicant  States  in  the
framework  of  the  pre-accession  strategy,  an  in  particular  on  the  establishment  of  the  Accession
Partnerships (OJ L 85, .20.3.1998, p. 1), as complemented by Council Regulation (EC) No 555/2000 of
13 March 2000 on the implementation of operations in the framework of the pre-accession strategy for
the Republic of Cyprus and the Republic of Malta (OJ L 68, 16.3.2000, p. 3).

2

                                                
Proposal for a

COUNCIL DECISION

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

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 framework of the pre-accession strategy for the Republic
of Cyprus and the Republic of Malta,2

Having regard to the proposal from the Commission,

Whereas:

(1) 

(2) 

(3) 

(4) 

(5) 

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;

Regulation (EC) No 555/2000 complements Regulation (EC) No. 622/983 which sets
out that the Council is to decide, by a qualified majority and following a proposal from
the  Commission,  on  the  principles,  priorities,  intermediate  objectives  and  conditions
contained  in  the  individual  Accession  Partnerships,  as  they  are  submitted  to  each
applicant State, as well as on subsequent significant adjustments applicable to them;

Community  assistance  is  conditional  on  the  fulfilment  of  essential  elements,  and  in
particular on the respect of the commitments contained in the Association Agreement
and  on  progress  towards  fulfilment  of  the  Copenhagen  criteria;  where  an  essential
element is lacking, the Council, acting by a qualified majority on a proposal from the
Commission, may take appropriate steps with regard to any pre-accession assistance;

The  2001  Commission's  Regular  Report  presents  an  objective  analysis  on  Cyprus's
preparations for membership and identifies a number of priority areas for further work;

In  order  to  prepare  for  membership,  Cyprus  should  continue  to  update  its  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;

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

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(6) 

Cyprus needs to ensure that the appropriate legal and administrative structures needed
for  the  programming,  coordination,  management,  control  and  evaluation  of  EC  pre-
accession funds are in place;

HAS DECIDED AS FOLLOWS:

Article 1

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

Article 2

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

Article 3

This Decision shall take effect on the third day following that of its publication in the Official
Journal of the European Communities.

Done at Brussels,

For the Council
The President

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ANNEX

1. 

INTRODUCTION

At  its  meeting  in  Luxembourg  in  December  1997,  the  European  Council  decided  that  the
Accession  Partnership  would  be  the  key  feature  of  the  enhanced  pre-accession  strategy,
mobilising al forms of assistance to the candidate countries within a single framework. In this
manner, the Community targets its assistance towards the specific needs of each candidate so
as to provide support for overcoming particular problems with a view to accession.

The first Accession Partnership for Cyprus was decided in March 2000. The present revision
is based on a proposal by the Commission following consultation with Cyprus, and draws on
the analysis of the Commission's 2001 Regular Report on progress made by Cyprus towards
accession.

2. 

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 2001 Regular Reports on the progress made
by  Cyprus  towards  membership  of  the  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  States  in  their  preparations  for  membership.  These  include  inter
alia the updated National Programme for the Adoption of the acquis prepared by Cyprus, the
pre-accession fiscal surveillance procedure, the Pre-accession Economic Programme, the Pre-
accession pact on organised crime, a national employment strategy in line with the European
Employment  Strategy,  and  sectoral  plans  necessary  for  the  participation  in  the  Structural
Funds after membership. Each of these instruments is different in nature and is prepared and
implemented  according  to  specific  procedures  and  may  be  supported  by  pre-accession  aid.
They  are  not  an  integral  part  of  this  Partnership  but  the  priorities  they  contain  will  be
compatible with it.

3. 

PRINCIPLES

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

– 

– 

– 

that the candidate State 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 in 1995, the European Council stressed the need  for the candidate
States to adjust their administrative structures to ensure harmonious operation of Community
policies  after  accession  and  at  Luxembourg,  in  1997,  it  stressed  that  incorporation  of  the
acquis into legislation is necessary, but not in itself sufficient; it is necessary to ensure that it

5

is  actually  applied.  The  Feira  and  Gothenburg  European  Councils  in  2000  and  2001
respectively confirmed the vital importance of the applicant countries’ capacity to implement
and  enforce  the  acquis,  and  added  that  this  required  important  efforts  by  the  applicants  in
strengthening and reforming their administrative and judicial structures.

4. 

PRIORITIES AND INTERMEDIATE OBJECTIVES

The Commission’s Regular Reports have highlighted, besides the progress already made, the
extent of the efforts which still have to be made in certain areas by candidate States 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
states  concerned,  the  achievement  of  which  will  condition  the  degree  of  assistance  granted
and  the  progress  of  the  negotiations  under  way  with  Cyprus.  The  priorities  listed  in  the
revised Accession Partnership have been selected on the basis that it is realistic to expect that
Cyprus  can  complete  or  take  them  substantially  forward  over  the  next  two  years  (2002  –
2003). Within this list, issues that require particularly urgent action have been highlighted as
such.  The  progress  made  in  meeting  the  priorities  of  the  2000  Accession  Partnership  is
assessed  in  the  2001  Regular  Report.  This  assessment  has  been  used  in  formulating  the
priorities for the current Partnership.

Cyprus  submitted  an  updated  version  of  its  National  programme  for  the  Adoption  of  the
Acquis (NPAA) in September 2000. The NPAA  sets  out a timetable for  achieving priorities
and  intermediate  objectives,  based  on  the  2000  Accession  Partnership,  as  well  as  necessary
administrative structures and financial resources.

The Accession Partnership indicates the priority areas for Cyprus’s membership preparations.
Cyprus will nevertheless have to address all issues identified in the 2001 Regular Report. It is
also  important  that  Cyprus  fulfils  the  commitments  of  legislative  approximation  and  the
implementation  of  the  Acquis  in  accordance  with  the  commitments  made  under  the
Association  Agreement,  and  in  the  context  of  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  2001 Regular Report, the  following priorities
and intermediate objectives have been identified for Cyprus. These priorities are presented in
accordance with the structure of the Regular Report.4

Efforts for a political settlement

–   Maximise efforts to support a settlement under the auspices of the UN.

Economic criteria

–  Accelerate  liberalisation  of  a  number  of  protected    sectors  of  the  economy,  including

telecommunications, air transport, and energy.

4 The order of presentation is that used as from the 2000 Regular Reports.

6

                                                
Improve  conditions  for  enterprise  and  development,  with  particular  attention  to  sectoral
diversification and SMEs.

Ability to assume the obligations of membership

Free movement of goods

–  In  need  of  particularly  urgent  action:  Adopt  framework 

legislation  for 

the

implementation of  the New and Global Approach principles.

–  Pursue  implementation  of  New  Approach  directives  on  the  basis  of  this  framework
legislation;  pursue  alignment  of  remaining  traditional  sectoral  legislation,  in  particular  in
the field of pharmaceuticals for veterinary use, cosmetics and foodstuffs.

–  Reinforce horizontal administrative infrastructure and implementing capacity in the sectors

covered by product specific legislation.

–  Develop and implement a market surveillance strategy.

–  Align  legislation  on  public  procurement  with  the  acquis  concerning  coverage  and  the

review system.

–  Proceed  with  screening  of  legislation  in  the  non-harmonised  area  to  ensure  that  it  is  in
compliance  with  Articles  28-30  of  the  EC  Treaty  and  complete  administrative
arrangements for the future monitoring in this area.

Free movement of persons

–  Complete alignment of mutual recognition of professional qualifications and diplomas and
further develop required administrative structures, education and training programmes.

–  With respect to professional qualifications obtained before harmonisation, Cyprus should
give  priority  to  introducing    measures  to  ensure  that  all  its  professionals  can,  from
accession, meet the requirements laid down by the directives.

–  Reinforce the administrative structures for the co-ordination of social security.

Freedom to provide services

–  Proceed with bringing the co-operative and credit societies sector in line with the acquis.

–  Reinforce supervision of financial services.

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.

–  Liberalise foreign participation in financial services and tourism.

–  Ensure compliance with the recommendations of the Financial Action Task Force.

7

Company law

–  Align  and  enforce  trademark,  copyright  and  neighbouring  rights  legislation;  reinforce
administrative  capacity  especially  by  strengthening  border  controls.  Maintain  sustained
efforts  on  enforcement  of  intellectual  property  rights  in  particular  on  the  fight  against
piracy  and  counterfeiting.  Improve  co-operation  among  enforcement  bodies;  intensify
training for enforcement bodies including judges and prosecutors.

Competition

–  In  need  of  particularly  urgent  action:  Complete  the  legislative  framework;  bring  state
aid  to  international  business  enterprises  (offshore)  under  the  scope  of  the  Public  Aid
Control  Law;  strengthen  the  administrative  capacity  (both  with  respect  to  anti-trust  and
State  aid  control);  ensure  enforcement  of  the  rules  in  antitrust  and  State  aid;  maintain  a
comprehensive State aid inventory and annual report; bring the existing aid schemes in line
with  the  acquis  well  before  accession;  increase  awareness  of  the  rules  among  all  market
participants and aid grantors; intensify the training of the judiciary in the specific fields of
antitrust and State aid.

Agriculture

–  Set up the  administrative structures needed  for  the  design,  implementation,  management,

monitoring, control and evaluation of EC funded rural development programmes;

–  Complete  preparations  for  the  enforcement  and  practical  application  of  the  management
mechanisms  of 
Integrated
Administration and Control System and the Paying Agency; bring the status and operation
of the current monopolies in line with the acquis.

the  Common  Agricultural  Policy, 

in  particular 

the 

–  Continue  alignment  of  veterinary  and  phytosanitary  legislation  and  upgrade  inspection

arrangements.

Fisheries

–  Complete the establishment of adequate administrative structures and equipment at central
and  regional  level  that  can  ensure  the  implementation  of  the  Common  Fisheries  Policy,
including  the  market  policy,  structural  programmes  co-financed  by  the  Financial
Instrument for Fisheries Guidance, and a fishing vessel register.

–  Reduce  the  number  of  fishing  vessels  operating  outside  the  Mediterranean  Sea  in

accordance with agreed objectives and timetable.

Transport policy

–  In  need  of  particularly  urgent  action:  Complete  alignment  and  implementation  of
maritime transport legislation, in particular  enforce maritime safety standards and further
strengthen  the  administrative  capacity  of  the  Department  of  Merchant  Shipping  ,  in
accordance with  the Department’s  2000-2002 Action Plan in order to improve  the flag
State performance of the Cypriot fleet.

–  Continue alignment  and strengthen administrative capacity  in  road transport, in particular

transport of  dangerous goods, and in aviation (particularly air safety).

8

Taxation

–  Ensure due alignment of  the tax acquis, with particular attention to alignment of the VAT
and  excise  duty  regimes,  including  the  transitional  VAT  regime.    In  need  of  particular
urgent  action:    Proceed  with  alignment  of  VAT  and  excise  duty  rates  to  that  of  the
Community  acquis  and  elimination  of  discriminatory  measures  against  imports  from  the
EC.

–  Ensure that existing and future tax legislation complies with the principles of the Code of

Conduct for Business Taxation.

–  Strengthen  administrative  capacity  including  control  and  enforcement    procedures,  and

administrative co-operation and mutual assistance.

–  In  need  of  particularly  urgent  action:  Develop  IT  systems  so  as  to  allow  for  the

exchange of electronic  data with  the Community and its Member States.

Statistics

–  Further improve quality and coverage of statistics; ensure adequate resources are available

to further strengthen statistical capacities.

Social policy and employment

–  Continue to support social partners' capacity building efforts, in particular with a view to
their  future  role  in  the  elaboration  and  implementation  of  EU  employment  and  social
policy, including the European Social Fund, notably through autonomous social dialogue.
Strengthen administrative capacity in the fields of labour law and equal opportunities.

–  Complete  alignment  and  ensure  proper  implementation  of  EC  legislation  in  particular  in
the field of equal treatment for women and men. Strengthen the related administrative and
enforcement  structures,  including  the  labour  inspectorates  and  establish  an  independent
guarantee  fund  for  employees  in  the  case  of  employer's  insolvency.  Adopt  legislation
against discrimination and develop a timetable for its implementation.

–  Complete alignment and implement  EC legislation on public health, and adapt the national
structures  for  surveillance  and  control  of  communicable  diseases  and  health  monitoring
and information

–  Prepare a national strategy, including data collection, with a view to future participation in

the European strategy on social inclusion.

Energy

–  Continue  alignment  of    oil  stocks  requirements;  make  progress  in  ensuring  the  actual
constitution  of the stocks, including the necessary investments in storage capacity, towards
the level of 90 days; develop the administrative structure.

–  Prepare  for  participation  in  the  international  energy  market,  notably  concerning  the
electricity  directive;  eliminate  remaining  price  distortions;  establish  a  regulator  and    a
common system operator for both transmission and distribution.

9

–  Improve  energy  efficiency:  enhance  the  use  of  renewable  energy,  and  strengthen  the

relevant institutions in this area.

–  Implement the recommendations contained in the Council report on “Nuclear safety in the

Context of Enlargement" with due regard to the priorities assigned in the report.

Telecommunications and information technologies

–  Adopt new law on telecommunications and postal services  and introduce a comprehensive
regulatory  framework,  in  particular  in  the  fields  of  licensing,  interconnection,    universal
service, numbering and data protection; terminate monopoly  for mobile voice telephony.

Regional policy and co-ordination of structural instruments.

–  In need of particularly urgent action: Establish  a territorial organisation   allowing for

the effective implementation of the Structural Funds regulations.

–  Prepare a coherent development plan as required by the Structural Funds regulation; define
the  implementation  structures  of  the  final  plan;  define  the  Managing  and  Paying
authorities; improve the administrative capacity, in particular in terms of recruitment and
training.

–  Set up the required monitoring and  evaluation systems  for Structural  Funds, in particular
for  ex-ante  evaluation  and  for  the  collection  and  processing  of  the  relevant  statistical
information and indicators.

–  Align  with the specific financial management and control procedures for future Structural

and Cohesion Funds under the relevant EC Regulations.

–  Develop the technical preparation of projects  eligible for  Structural and Cohesion Funds

assistance  (project pipeline).

Environment

–  Complete transposition of the acquis, with special emphasis on waste management.

–  Continue  implementation  of  the  acquis,  with  special  emphasis  on  urban    waste  water
treatment and packaging waste; develop an implementation plan for the Water Framework
Directive.

–  Continue strengthening the administrative and enforcement capacity, with special emphasis

on nature protection legislation.

–  Continue  integration  of  environmental  protection  requirements  into  the  definition  and
implementation  of  all  other  sectoral  policies  with  a  view  to  promoting  sustainable
development.

Co-operation in the fields of justice and home affairs

–  Continue  efforts  aiming  at  a  fair  and  effective  application  of  the  Law  on  Asylum,  in
particular  the  provision  for  manifestly  unfounded  claims.  Ensure  that  an  independent
authority examines the asylum applications in appeal; ensure that implementing rules and
regulations are drafted in accordance with international and European standards;  enhance

10

administrative  capacities  in  the  domain  and  improve  overall  conditions  in  reception
centres; establish a system for the integration of refugees.

–  Ensure    due  implementation  of  the  Schengen  Action  Plan,  and  continue  preparation  for
future participation in the Schengen Information System by developing national databases
and registers.

–  Ensure due implementation of immigration legislation, in particular the proper application

of immigration procedures.

–  Review the re-admission agreements with neighbouring countries and their implementation
in  conformity  with  the  principle  of  “non-refoulement”.    Continue  efforts  to  reinforce  the
technical equipment for border control.

–  Maintain sustained efforts in the fight against money laundering, ensuring sufficient human

resources and qualified staff as well as training.

–  Continue efforts to implement the data protection legislation.

–  Improve  the  internal  co-operation  within  the  police  and  with  other  law  enforcement
agencies  and  with  the  judiciary  in  particular  to  strengthen  capacities  to  fight  organised
crime.

–  Take  the  necessary  steps  in  order  to  ensure  the  implementation  of  the  Community

instruments in the area of judicial co-operation in civil matters.

–  Ensure  that  the  pre-requirements  to  the  conclusion  of  a  cooperation  agreement  with

Europol are met.

–  Take the necessary steps to align the legislation with the Convention on the Protection of

the Communities’ Financial Interests and its Protocols.

Customs Union

–  Accelerate  legislative  harmonisation  including  as  regards  the  introduction  of  all  customs
regimes with economic impact and simplified procedures; strengthen the institutional and
administrative  capacity.  Implement  the  Reform  and  Modernisation  Programme  of  the
Customs Department.

–  In need of particularly urgent action: Continue the implementation of the IT strategy of
the Cypriot customs administration. Develop IT systems so as to allow for the exchange of
computerised data between the EC and Cyprus.

External relations

–  Take  the  necessary  measures  to  ensure  that  any  international  treaty  or  agreement

incompatible with the acquis is renegotiated or terminated by accession.

Financial Control

–  Further  develop  functional  independence  for  internal  controllers/auditors  at  both  central
and decentralized levels; complete work on an audit manual and on developing audit trails
for the control of EC funds.

11

–  Strengthen  public  financial  control  functions  through  the  provision  of  adequate  staff,

training and equipment.

–  Confirm  a  suitable  contact  point  for  OLAF  for  the  protection  of  the  Communities’

financial interests, and start cooperation with OLAF through this contact point.

–  Strengthen the fight against fraud.

–  Continue efforts to ensure the correct  use, control, monitoring  and evaluation  of EC  pre-
accession funding as a key indicator of Cyprus’ ability to implement the financial control
acquis.

5. 

PROGRAMMING

After the expiry on 31.12.99 of the 4th Financial Protocol concluded with Cyprus, the Council
regulation  555/2000  of  13  March  2000  replaced  the  financial  protocols  from  2000  onwards
for a period of five years. The total budget allocated to Cyprus for the period 2000-2004 adds
up to € 57 Million, of which 1/3 of each annual allocation is to be used for financing the so
called bi-communal projects. The programming exercise for each year has to be submitted for
opinion to the PHARE Management Committee.

Activities  financed  under  this  new  regulation  will  focus  assistance  on  priority  operations  to
prepare  for  accession  as  defined  within  this  and  the  previous  accession  partnership  with
Cyprus, as well  as the  participation  in  certain  Community  programs  and  agencies  including
Research and Technological Development Framework Programmes.

The    2000  budget  (€  9  Mio)    has  been  programmed  to  support  activities  in  the  following
sectors:  internal  market  (taxation  and  customs);  justice  and  home  affairs;  administrative
cooperation;  participation  in  Community  programs  in  the  sector  of  education  (Leonardo,
Socrates, Youth); and bi-communal activities (Nicosia Master Plan).

Cyprus  is  still  participating  in  the  multi-country  activities  of  the  MEDA  program,  and  also
receives EIB support.

6. 

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 revised
Accession Partnership. 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.

7. 

MONITORING

The  implementation  of  the  Accession  Partnership  is  monitored  in  the  framework  of  the
Association Agreement and in particular in the Association Committee.

Council  Regulation  EC/555/2000  stipulates  that  “the  Commission  shall  be  assisted  by  the
Committee  provided  for  in  Article  9(1)  of  Council  Regulation  (EEC)  No  3906/89”.  This

12

means  that  the  Management  Committee  that  shall  supervise  the  pre-accession  programmes
with Cyprus is the same as for the PHARE programme.

The  Accession  Partnership  will  continue  to  be  amended  as  necessary  in  accordance  with
Article 2 of Regulation (EC) No 622/98.

13