Council Regulation (EC) No 876/2002 of 21 May 2002 setting up the Galileo Joint Undertaking
Date: 2002-05-21
Institutions: Council of the European Union
Subjects: EU programme, joint venture, research programme, satellite communications, satellite navigation

28.5.2002

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Official Journal of the European Communities

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 876/2002

of 21 May 2002

setting up the Galileo Joint Undertaking

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 171 thereof,

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

Having regard to the opinion of the European Parliament (2),

Having regard to the opinion of the Economic and Social
Committee (3),

(7)

(8)

(9)

Whereas:

(1)

(2)

(3)

(4)

(5)

(6)

On 13 January 1999 the European Parliament adopted a
Resolution on the Communication from the Commis-
sion to the Council and the European Parliament
‘Towards a trans-European Positioning and Navigation
Network: including a European Strategy for Global Navi-
gation Satellite Systems (GNSS)’ (4).

On 10 February 1999 the Commission adopted the
Communication ‘Galileo — Involving Europe in a new
generation of satellite navigation services’.

The conclusions of the European Council in Cologne (3
and 4 June 1999), Feira (19 and 20 June 2000), Nice (7
to 11 December 2000), Stockholm (23 and 24 March
2001), Laeken (14 and 15 December 2001) and Barce-
lona (15 and 16 March 2002) make reference to Galileo.

On 19 July 1999 the Council adopted a Resolution on
the involvement of Europe in a new generation of satel-
lite navigation services — Galileo — Definition phase (5).

On 22 November 2000 the Commission adopted a
Communication to the European Parliament and the
Council on Galileo.

The Council adopted a Resolution on Galileo on 5 April
2001 (6).

(1) OJ C 270 E, 25.9.2001, p. 119.
(2) OJ C 48, 21.2.2002, p. 42.
(3) Opinion delivered on 7 February 2002 (not yet published in the

Official Journal).

(4) OJ C 104, 14.4.1999, p. 73.
(5) OJ C 221, 3.8.1999, p. 1.
(6) OJ C 157, 30.5.2001, p. 1.

On 26 March 2002, the Council adopted conclusions on
Galileo.

The first research contracts and feasibility studies were
funded
framework
programmes for research and development.

fourth

under

fifth

and

the

The technological development phase was funded from
the appropriations assigned to the trans-European trans-
port networks on the basis of Article 4(g) of Decision
No 1692/96/EC of the European Parliament and of the
Council of 23 July 1996 on Community guidelines for
trans-European transport
the development of
network (7), which provides for the possibility of funding
for research and development, and Article 17 of Council
Regulation (EC) No 2236/95 of 18 September 1995
granting of
rules
laying down general
Community financial aid in the field of trans-European
networks (8).

the

the

for

(10) At

the management of

the beginning of 2001,

the
Galileo satellite radio-navigation programme, hereinafter
referred to as the ‘Galileo programme’, entered its devel-
opment phase aimed at verifying and testing the
assumptions made during the definition phase, in partic-
ular with regard to the various components of the archi-
tecture of the system.

(11)

(12)

The development phase should be followed by the
deployment phase consisting of the production of satel-
lites and terrestrial components, satellite launching and
the installation of terrestrial stations and equipment in
order to enable the system to be operational in 2008.

Taking into account the number of players who will
need to be involved in this process, and the financial
resources and technical expertise needed, it is vital to set
up a legal entity capable of ensuring the coordinated
management of
the funds assigned to the Galileo
programme during its development phase. For reasons
of legal certainty, it should be specified that this entity,
which is not designed to fulfil an economic purpose and
research
is

for managing

responsible

public

a

(7) OJ L 228, 9.9.1996, p. 1. Decision as amended by Decision No

1346/2001/EC (OJ L 185, 6.7.2001, p. 1).

(8) OJ L 228, 23.9.1995, p. 1. Regulation as amended by Regulation
(EC) No 1655/1999 of the European Parliament and of the Council
(OJ L 197, 29.7.1999, p. 1).

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programme of European interest, must be considered as
an international organisation within the meaning of the
second indent of Article 15(10) of the Sixth Council
Directive 77/388/EEC of 17 May 1977 on the harmoni-
sation of the laws of the Member States relating to
turnover taxes (1) and the second indent of Article 23(1)
of Council Directive 92/12/EEC of 25 February 1992 on
the general arrangements for products subject to excise
duty and on the holding, movement and monitoring of
such products (2).

The Stockholm European Council noted that ‘the private
sector is ready to supplement the public budgets for the
development phase’. The representatives of the main
industries concerned signed a Memorandum of Under-
standing in March 2001 whereby they committed them-
selves
to indicating their contribution to the total
amount of EUR 200 million for the development phase
of the Galileo programme by subscribing to the capital
of the Joint Undertaking or contributing in some other
form.

It is therefore necessary to set up a Joint Undertaking
under Article 171 of
the Treaty, since the Galileo
programme involves a major research and development
component which justifies and will continue to justify
the use of funds assigned to the research and develop-
ment
this
programmes.
programme should make it possible to make consider-
able progress in the development of satellite navigation
technologies.

framework

addition,

In

The Joint Undertaking's main task should be, in accord-
ance with Council decisions, successfully to complete
the development of the Galileo programme during its
development phase by combining public and private
sector funding. In addition, it should make it possible to
the management of major demonstration
ensure
projects.

regulations should
The Joint Undertaking's financial
respect the broad principles and rules as laid down in
the Financial Regulation of 21 December 1977 applic-
able to the general budget of the European Communi-
ties (3).

the Joint Undertaking,

In formulating its proposal for the nomination of the
Director of
the Commission
that he/she be appointed on the
should consider
grounds of merit and managerial skills, as well as
competence and relevant experience, and should be
independent of any undertaking in the performance of
his/her duties,

(13)

(14)

(15)

(16)

(17)

(1) OJ L 145, 13.6.1977, p. 1. Directive as last amended by Directive

2001/115/EC (OJ L 15, 17.1.2002, p. 24).

(2) OJ L 76, 23.3.1992, p. 1. Directive as last amended by Directive

2000/47/EC (OJ L 193, 29.7.2000, p. 73).

(3) OJ L 356, 31.12.1977, p. 1. Regulation as last amended by Regula-

tion (EC) No 762/2001 (OJ L 111, 20.4.2001, p. 1).

HAS ADOPTED THIS REGULATION:

Article 1

For the implementation of
the
Galileo programme, a Joint Undertaking within the meaning of
Article 171 of the Treaty is hereby set up for a period of four
years.

the development phase of

The aim of the Joint Undertaking shall be to ensure the unity
of the administration and the financial control of the project
for the research, development and demonstration phase of the
Galileo programme, and to this end mobilise the funds
assigned to that programme.

The Joint Undertaking shall be considered as an international
organisation within the meaning of
the second indent of
Article 15(10) of Directive 77/388/EEC and the second indent
of Article 23(1) of Directive 92/12/EEC.

Its seat shall be located in Brussels.

Article 2

The Statutes of the Joint Undertaking, as set out in the Annex
hereto, are hereby adopted.

Article 3

1.
In order to ensure an adequate flow of information and
effective political control by Member States of the implementa-
tion of the development phase of the Galileo programme, a
Supervisory Board shall be established. It shall be composed of
one representative of each Member State of
the European
Union, and of the representative of the Commission at the
Administrative Board of the Joint Undertaking.

The Supervisory Board shall be chaired by the repres-
2.
entative of the Member State which holds the Presidency of the
Council of the European Union.

In due time, and at least 15 days before each meeting of
3.
the Administrative Board, the Commission shall convene the
Supervisory Board and submit all documents to its members
convening the issues on the agenda for that meeting.

The Supervisory Board shall take a decision on all issues that
are on the agenda of the upcoming meeting of the Adminis-
trative Board and may put other items on that agenda. The
Commission shall, when carrying out its functions on the
Administrative Board, do everything possible to ensure that
decisions taken by the Administrative Board reflect the deci-
sions and views of the Supervisory Board.

4.
The Supervisory Board shall take its decisions by qualified
majority of the votes of the representatives of the Member
States, these votes being weighted in accordance with Article
205(2) of the Treaty. The representative of the Commission
shall not participate in the vote.

5.

The Supervisory Board shall adopt its rules of procedure.

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Article 4

Article 6

Every year, the Commission shall present to the Council the
annual report on the progress of the Galileo programme as
well as the programme development plan, including the finan-
cial aspects.

At the end of 2003, the Commission shall inform the Council
of the results of the tendering procedure launched by the Joint
Undertaking in accordance with Article 4 of its Statutes.

Article 5

The Commission shall report to the Council on the accession
of new members.

Any participation of new members, including the participation
of members from third countries, shall be submitted to the
Council for approval.

The Joint Undertaking shall be subject to the rules contained in
Council Decision 2001/264/EC of 19 March 2001 adopting
the Council's security regulations (1).

Article 7

1.
In order to deal with security matters regarding the
Galileo system, a Security Board shall be established. It shall be
composed of one representative of each Member State of the
European Union and of a representative of the Commission.

2.

The Security Board shall adopt its rules of procedure.

Article 8

This Regulation shall enter into force on the day of its publica-
tion in the Official Journal of the European Communities.

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

Done at Brussels, 21 May 2002.

For the Council

The President

R. DE MIGUEL

(1) OJ L 101, 11.4.2001, p. 1.

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ANNEX

STATUTES OF THE GALILEO JOINT UNDERTAKING

Article 1

The name of the Joint Undertaking shall be: ‘Galileo Joint

1.
Undertaking’.

2.

Its seat shall be located in Brussels.

3.

(a) The following shall be founding members of the Joint

Undertaking:

— the European Community,

represented by the

Commission,

— the European Space Agency.

(b) The following may become members of

the Joint

Undertaking:

— the European Investment Bank,

— any undertaking, after the Commission has, under
Article 4 of Council Regulation (EC) No 876/2002
of 21 May 2002 setting up the Galileo Joint
Undertaking (1),
the
informed the Council of
outcome of
the tendering procedure, and after
approval in accordance with the procedure set out
in Article 5 of that Regulation.

4.
The capital of the Joint Undertaking shall be made up of
assets brought in by its members. Assets in kind may be
brought in. They shall be subject to an evaluation of their value
and their utility to the carrying-out of the activities of the Joint
Undertaking.

the
The founding members shall subscribe their shares of
capital to the extent of the amounts indicated in their respec-
tive commitments of EUR 520 million for
the European
Community and EUR 50 million for the European Space
Agency.

Once the Commission has informed the Council of
the
outcome of the tendering procedure, the Administrative Board
shall
immediately invite the undertakings mentioned in the
second indent of paragraph 3(b) to subscribe. Undertakings
need to subscribe EUR 5 million within a period of one year.
That amount shall be reduced to EUR 250 000 for undertak-
ings, subscribing individually or collectively, which may be
regarded as small or medium-sized enterprises within the
meaning of the Commission Recommendation of 3 April 1996
concerning the definition of small and medium-sized enter-
prises (2).

The Administrative Board shall decide on the amounts of this
capital which should be released in proportion to the share of
the capital subscribed by each member. Any member of the

(1) OJ L 138, 28.5.2002, p. 1.
(2) OJ L 107, 30.4.1996, p. 4.

to meet

Joint Undertaking which fails
its commitments
concerning the bringing-in of assets in kind or which does not
release the amount due within the prescribed time-limits shall
be, as a first step, disqualified from voting in the Administrative
Board and, after six months, membership shall be repealed
until such time as its obligations have been met.

Financial commitments of
exceed the amount of capital at its disposal.

the Joint Undertaking shall not

Article 2

The main tasks of the Joint Undertaking shall be the following:

1. to oversee the optimal integration of the European Geosta-
tionary Navigation Overlay Service (EGNOS) in the Galileo
programme and the implementation of the Galileo develop-
ment and validation phase and help prepare for the deploy-
ment and operational phase;

2. to launch, in cooperation with the European Space Agency
in accordance with Article 3 and through contractual
arrangements with private sector entities, the research and
development activities needed successfully to complete the
phase of development and coordination of national activities
in this area; to launch, through the European Space Agency
in accordance with Article 3, a first series of satellites to
finalise the technological developments that have occurred
and ensure the large-scale demonstration of the capabilities
and reliability of the system;

3. in cooperation with the Commission, the European Space
Agency and the private sector, to help to mobilise the public
and private sector funds needed to make proposals to the
for the management structures for the various
Council
successive phases of the programme, on the basis of the
following activities:

— it shall draw up a business plan covering all the phases
of the Galileo programme, on the basis of data to be
supplied by the Commission, concerning the services
that can be offered by Galileo, the revenue that they may
generate and the necessary accompanying measures,

— it shall negotiate, by way of a competitive tendering
process with the private sector, an overall agreement for
the financing of the deployment and operational phases
that sets out the responsibilities, roles and risks to be
shared between the public and private sectors;

4. to supervise the carrying-out of all programmes, if necessary
with the assistance of a consultant, and to make any neces-
sary adjustments in the light of developments occurring
during the development phase.

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Article 3

governmental
authority that developed the cryptographic method.

cryptography stays with the governmental

The Joint Undertaking shall conclude an agreement with the
European Space Agency by which:

— it charges to it the carrying-out of the activities required
during the development phase with regard to the space
segment and the earth segment associated with the system,
and to that end the Joint Undertaking shall make available
the funds at its disposal for that phase. The European Space
Agency shall be responsible for administering them in
accordance with procedures to be set out in the agreement
to be concluded with the Joint Undertaking and based on
the principles of non-discrimination, transparency and fair
distribution of work, taking into account the Community
character of the programme. In this context, an adequate
participation of small and medium enterprises shall be
aimed at,

interests of

— the Commission shall have the right to ensure that the
the Community are protected by
financial
carrying out effective controls. Should the Commission
discover any irregularities,
to
reduce or suspend any subsequent payment to the Joint
Undertaking. The reduced or suspended amount shall be
the irregularities actually
equivalent
discovered by the Commission. Any disputes shall be
settled on the basis of the provisions of the agreement,

it shall reserve the right

to the amount of

— the procedures for carrying out the Galileo programme are
defined, in particular, the activities launched by the Euro-
pean Space Agency relating to the programme and financed
from funds not assigned to the Joint Undertaking.

Article 4

Without prejudice to Article 3, and following an invitation to
tender, the Joint Undertaking may conclude a contract for the
provision of services with undertakings or a consortium of
undertakings, in particular to carry out the activities provided
for in point 3 of Article 2.

The Joint Undertaking shall ensure that the contract provides
for the right of the Commission to carry out, on behalf of the
Joint Undertaking, controls in order to ensure that the financial
interests of the Community are protected and, in the event of
the detection of irregularities, to impose dissuasive and propor-
tionate penalties.

Article 5

The Joint Undertaking shall have legal personality. In all the
Member States of the European Community, it shall enjoy the
most extensive legal capacity accorded to legal persons under
in particular, acquire or
It may,
the laws of
dispose of movable and immovable property and be a party to
legal proceedings.

those States.

Article 6

The Joint Undertaking shall own all the tangible and intangible
assets created or transferred to it for the development phase of
the Galileo programme. If applicable, the right of ownership of

Article 7

The bodies of the Joint Undertaking shall be the Adminis-

1.
trative Board, the Executive Committee and the Director.

The Administrative Board may seek the advice of an

2.
Advisory Committee.

Article 8

1.

Composition of the Administrative Board, voting rights:

(a) the Administrative Board shall be composed of

the

members of the Joint Undertaking;

(b) unless otherwise provided for in these Statutes, decisions of
the Administrative Board shall be adopted by a simple
majority of the votes cast. Each member of the Joint Under-
taking shall have a number of votes in proportion to the
share of the capital subscribed by them. The Commission
and the European Space Agency shall have the same
number of votes and, in any case, at least 40 % of the total
of votes each.

2.

Functions of the Administrative Board:

(a) the Administrative Board shall take the decisions necessary
implementing the programme and exercise overall

for
supervision of the execution of the programme;

(b) the Administrative Board shall

in particular:

— appoint
chart,

the Director and approve the organisation

— designate the members of the Advisory Committee,

— adopt the financial regulations of the Joint Undertaking

in accordance with Article 14(3),

— in accordance with Article 13, approve the annual
budget, including the staff establishment plan, the devel-
opment plan for the programme development phase,
and the programme cost estimates,

— approve the annual accounts and balance-sheet,

— decide on any acquisition, sale and mortgaging of land
and other titles to real property, as well as on the giving
of any sureties or guarantees, the taking-out of shares in
other undertakings or institutions, and on any granting
or taking of loans,

— approve, by a majority of 75 % of

the votes, any
involving a significant change in the imple-

proposal
mentation of the Galileo programme,

— adopt the annual reports on the progress of the Galileo
programme and its financial situation referred to in
Article 16(2),

— exercise such other powers and perform such other
functions,
including the establishment of subsidiary
bodies, as may be necessary for the purposes of the
Galileo programme,

— adopt

the
Committee.

terms of

reference of

the Executive

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3. Meetings, rules of procedure of the Administrative Board:

(a) the Administrative Board shall meet at least twice a year.
Extraordinary meetings shall be convened at the request of
either one-third of
the Administrative
the members of
Board representing at least 40 % of the voting rights or its
Chairman or the Director. The meetings shall normally take
place at the seat of the Joint Undertaking. The Adminis-
trative Board shall elect
its Chairman from among its
members. Unless otherwise decided in particular cases, a
representative of the Executive Committee and the Director
shall participate in the meetings;

(b) the Administrative Board shall adopt its rules of procedure.

(b) subject to the approval of the Administrative Board, the
Executive Committee shall draw up its rules of procedure.

4.

Treatment of documents:

the Executive Committee shall adopt rules on the treatment of
documents,
in order to conciliate the purposes of security,
commercial secret, and public access. These rules shall take into
account, where appropriate, the principles and limits laid down
in Regulation (EC) No 1049/2001 of the European Parliament
and of the Council of 30 May 2001 regarding public access to
European Parliament, Council and Commission documents (1).

Article 9

Article 10

1.

Composition of the Executive Committee, voting rights:

(a) the Executive Committee shall be composed of a repres-
entative of the Commission, a representative of the Euro-
pean Space Agency and, as soon as undertakings are
involved, a representative of industries designated by the
Administrative Board;

(b) the Executive Committee shall meet in the presence of the
the Member State
Director and of a representative of
holding the Presidency of the Council of the European
Union;

1.
The Director shall be the chief executive responsible for
the day-to-day management of the Joint Undertaking and be its
legal representative. He/she shall be appointed by the Adminis-
trative Board on a proposal from the Commission. He/she shall
perform his/her duties with complete independence.

the execution of

He/she shall direct

2.
the programme
within the guidelines established by the Administrative Board
to which he/she shall be responsible. He/she shall supply the
Administrative Board, the Executive Committee, the Advisory
Committee and all other subsidiary bodies with all the informa-
tion necessary for the performance of their functions.

(c) decisions of the Executive Committee shall be taken unani-

3.

The Director shall

in particular:

mously, unless these statutes state otherwise.

2.

Functions of the Executive Committee:

(a) the Executive Committee shall assist

the Administrative

Board in the preparation of its decisions;

(b) the Executive Committee shall

in particular:

— advise the Administrative Board and the Director on the
progress of the Galileo programme on the basis of
regular reports,

— comment and make recommendations to the Adminis-
trative Board on the programme cost estimates and the
including the staff establishment plan
draft budget,
drawn up by the Director,

— approve the tendering procedures and the procedures
for the award of contracts in accordance with the rules
on the award of contracts to be established by the
Administrative Board, which may not
influence the
execution of decisions to be taken by the Executive
Committee,

— perform tasks entrusted or delegated to it by the

Administrative Board,

— organise, direct and supervise the staff of the Joint Under-

taking,

— submit

to the Administrative Board his/her proposals

concerning the organisation chart,

— draw up and regularly update the programme development
plan and the programme cost estimates, in accordance with
the financial regulations, and submit them to the Adminis-
trative Board,

— draw up, in accordance with the financial regulations, the
draft annual budget, including the staff establishment plan,
and submit them to the Administrative Board,

— ensure that the obligations with regard to the Commission
pursuant to the contract concluded between the latter and
the Joint Undertaking are met, and in particular its provi-
sions allowing representatives of the Commission to carry
out effective controls and, in the event of the detection of
irregularities, impose dissuasive and proportionate penalties,

— submit

the annual accounts and balance-sheet

to the

Administrative Board,

— submit to the Administrative Board any proposal involving
the Galileo

in the design of

significant

change

a
programme,

— approve the release of funds set out under the agree-

ment concluded in accordance with Article 3.

— be responsible for security and take all the measures needed

to meet security requirements,

3. Meetings, rules of procedure of the Executive Committee:

(a) the Executive Committee shall meet at least once a month.
The meetings shall normally take place at the seat of the
Joint Undertaking;

— draw up the annual report on the progress of the Galileo
programme and its financial situation, and such other
reports as may be requested by the Administrative Board,
and submit them to the latter.

(1) OJ L 145, 31.5.2001, p. 43.

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Article 11

— the implementation of

the annual budget and internal

The staff complement shall be determined in the estab-

1.
lishment plan that will be set out in the annual budget.

The members of the staff of the Joint Undertaking shall
2.
have a fixed-term contract based on the conditions of employ-
ment of other servants of the European Communities.

3.

All staff costs shall be borne by the Joint Undertaking.

The Administrative Board shall adopt

4.
implementing arrangements.

the necessary

Article 12

All the revenue of the Joint Undertaking shall be applied to
promoting the tasks defined in Article 2. Subject to Article 21,
no payment by way of division of any excess revenue over
expenditure shall be paid to the members of the Joint Under-
taking.

Article 13

1.

The financial year shall correspond to the calendar year.

2.
Before 31 March of each year, the Director shall transmit
to the members the programme cost estimates as approved by
the Administrative Board. The programme cost estimates shall
include a forecast of annual expenditure for the following two
years. Within this forecast, the estimates of revenue and expen-
diture for the first of those two financial years (preliminary
draft budget) shall be drawn up in such detail as is necessary
for the internal budgetary procedure of each member regarding
its
to the Joint Undertaking. The
Director shall supply the members with all supplementary
information needed for this purpose.

financial contributions

shall

The members

3.
forthwith communicate to the
Director their comments on the programme cost estimates, and
in particular on the estimates of revenue and expenditure for
the following year.

4.
Based on the approved programme cost estimates, and
taking into account the comments received from members, the
Director shall prepare the draft budget for the following year
and submit it to the Administrative Board for adoption, by a
majority of 75 % of the votes, before 30 September.

Article 14

Financial regulations shall be adopted by the Adminis-

1.
trative Board by a majority of 75 % of the votes.

2.
The purpose of the financial regulations is to ensure the
sound and economic financial management of the Joint Under-
taking.

The financial regulations shall in particular include the

3.
principal rules on:
— the presentation and structure of the programme cost esti-

mates and the annual budget,

financial control,

— the method of payment of contributions by the members of

the Joint Undertaking,

— the keeping and presentation of accounts and inventory
records as well as the drawing up and presentation of the
annual balance-sheet,

— the procedure regarding calls for tender, based on non-
discrimination between the countries of the members of the
Joint Undertaking and the Community character of the
project,
the placing and the terms and conditions of
contracts and orders on behalf of the Joint Undertaking.

The detailed implementing rules enabling the Commis-
4.
sion to ensure compliance with its obligations pursuant to
Article 274 of
European
Community shall be set out in an agreement between the Joint
Undertaking and the Commission.

the Treaty

establishing

the

Article 15

Within two months of the end of each financial year, the
Director shall submit the annual accounts and balance-sheets
for the preceding year to the Court of Auditors of the Euro-
pean Communities. The audit executed by the Court of Audi-
tors shall be based on records and performed on the spot. The
Director shall present the annual accounts and balance-sheet,
together with the report of the Court of Auditors, to the
Administrative Board for approval by a majority of 75 % of the
votes. The Director is entitled and, if requested by the Adminis-
trative Board, obliged to comment on the report. The Court of
Auditors shall send its report to the members of the Joint
Undertaking.

Article 16

1.
The programme development plan shall specify the plan
for the execution of all elements of the programme. It shall
cover the whole term of the Joint Undertaking and be updated
regularly.

2.
The annual report shall show the progress of the Galileo
programme, in particular with regard to the timetable, costs
and performance of the programme.

Article 17

The Joint Undertaking shall be solely responsible for

1.
meeting its obligations.

2.
The contractual liability of the Joint Undertaking shall be
governed by the relevant contractual provisions and by the law
applicable to the contract in question.

3.
Any payment by the Joint Undertaking for covering the
liability referred to in paragraph 2 and the costs and expenses
incurred in connection therewith shall be considered as expen-
diture of the Joint Undertaking.

4.
The Director shall propose to the Administrative Board
any necessary insurance, and the Joint Undertaking shall take
out such insurance as the Administrative Board may direct.

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Article 18

Article 20

The Joint Undertaking shall ensure the protection of sensitive
information whose non-authorised disclosure could damage
the interests of the contracting parties. The Joint Undertaking
shall apply the security principles and minimum standards set
in force by Council Decision 2001/264/EC of 19 March 2001
adopting the Council's security regulations (1).

The Joint Undertaking shall take into account the experience of
the Galileo System Security Board (GSSB). It shall also follow
the rules of the Security Board referred to in Article 7 of
Regulation (EC) No 876/2002 for all questions relating to the
security of the system.

Article 19

The Joint Undertaking is open for accession by members

1.
other than those referred to in Article 1(3)(a).

Any request

2.
for accession shall be addressed to the
Director, who shall transmit it to the Administrative Board. The
Administrative Board shall decide whether the Joint Under-
taking shall start negotiations with the applicant on the condi-
tions of accession, in particular taking into account security
aspects. In the case of a positive decision, the Joint Undertaking
shall negotiate the conditions of accession and submit them to
the Administrative Board which shall act by a majority of 75 %
of the votes expressed.

3. Membership of the Joint Undertaking may not be trans-
ferred to a third party unless the prior and unanimous agree-
ment of the Administrative Board is given. Any unauthorised
transfer shall entail the immediate termination of membership
of the Joint Undertaking and liability for any damage caused to
the Joint Undertaking.

The Joint Undertaking shall be established for a period of four
years as from the publication of these Statutes in the Official
Journal of the European Communities.

According to the progress in achieving the tasks of the Joint
Undertaking, as defined in Article 2,
that period may be
extended by amending these Statutes in accordance with the
provisions of Article 23. The period shall,
in any event, be
extended until such time as the obligations arising from the
agreement referred to in Article 3 are met.

Article 21

For the purpose of conducting the proceedings involved in
winding up the Joint Undertaking, the Administrative Board
shall appoint one or more liquidators, who shall comply with
the decisions of the Administrative Board taken by a majority
of 75 % of the votes.

Article 22

In any matter not covered by these Statutes, the law of the
State where the seat of the Joint Undertaking is located shall
apply.

Article 23

Any member of the Joint Undertaking may submit proposals
for the amendment of these Statutes to the Administrative
Board.

If the Administrative Board agrees to such proposals by a
majority of 75 % of the votes, the Commission shall make a
proposal to the Council for their approval in accordance with
the procedure provided for in the first subparagraph of Article
172 of the Treaty establishing the European Community.

(1) OJ L 101, 11.4.2001, p. 1.