Proposal for a Regulation of the European Parliament and of the Council concerning Community cooperation with Asian and Latin American countries and amending Council Regulation (EC) No 2258/96
Date: 2002-07-02
Institutions: European Commission
Subjects: Asia, EU aid, Latin America, action programme, aid policy, aid system, cooperation policy, decision-making, development aid, exchange of information

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Proposal for a Regulation of the European Parliament and of the Council concerning Community
cooperation with Asian and Latin American countries and amending Council Regulation (EC)
No 2258/96

(2002/C 331 E/02)

COM(2002) 340 final — 2002/0139(COD)

(Submitted by the Commission on 2 July 2002)

EXPLANATORY MEMORANDUM

1. Introduction

The proposed Regulation is aimed at providing a new legal framework for Community cooperation with
the countries of Latin America and Asia. The new Regulation will replace Regulation (EEC) No 443/92
adopted on 25 February 1992.

The proposed Regulation is not intended to provide political or strategic orientations with respect to the
beneficiary regions. It lays down instead clear and simple rules and procedures for effective programming
and decision-making for the purposes of Community cooperation with the partner countries.

The rules being the same for both regions, the Commission has decided to submit a proposal for a single
Regulation.

2. The objectives of Community cooperation

The objectives of cooperation are defined in a broad way, to make it possible to intervene in all areas of
cooperation covered by the agreements between the Community and the partner countries and under the
policy and cooperation guidelines adopted in the relevant forums.

It is during the programming exercise that sectors and cooperation activities will be precisely defined,
according to the characteristics and needs of each partner country or region. The proposed Regulation
does not prejudge these choices. It should be flexible enough to answer the priorities of the moment.

In general terms, cooperation and assistance under the proposed Regulation will have to take account of
the objectives of development policy as defined in Article 177 of the Treaty, and further developed in the
Conclusions of the Development Council and in the joint statement of the Council and the Commission of
10 November 2000, which in turn reflect the Millennium Development Goals adopted at the 55th Session
of the UN General Assembly. Community cooperation and assistance will also support the priorities set
out in the agreements between the European Community and the beneficiary countries, and in the
Commission Communication on Asia of 4 September 2001 and in the conclusions of the EU-LAC
Summit held in Madrid on 17 May 2002, which constitute the overall strategic framework for relations
with Asia and Latin America respectively.

In this context, the proposed Regulation, when setting out the broad objectives of assistance, refers in
particular, to sustainable development, to poverty reduction, to the integration of the partner countries in
the world economy, to trade and investment, to regional
integration and to strengthening the links
between the partner regions and the European Union. Similarly, the modernisation and improvement of
institutional capacities is included as an essential principle of cooperation. This will contribute,
in
particular, to the promotion of democratic principles, of the rule of law and of human rights as well
as to the improvement of the fight against terrorism, drug trafficking and organised crime.

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3. Programming

Within the framework of the reform of the management of external aid, the Commission considers a key
objective to strengthen multiannual programming in order to reflect the political objectives and the
priorities of the EU.

The proposed Regulation establishes clear principles for programming: a strategy paper will serve as a basis
for establishing multiannual indicative programmes, which will in turn make it possible to draw up annual
action plans. These principles are of general application, except in particular cases.

The establishment of a rigorous and coherent programming system will improve the effectiveness of aid,
link Community cooperation better to reform programmes pursuing short and medium term objectives
and ensure its complementarity with the assistance provided by other donors.

4. Comitology

In accordance with the criteria established in Council Decision 1999/468/EC, the Committee provided for
in the proposed Regulation will act according to the management procedure provided for in Article 4 of
the aforementioned decision.

The strengthening of the programming and definition of a strategic framework will enable Member States,
within the management committee, to provide their opinion on priorities and strategic cooperation
guidelines.

The guidelines on the reform of external aid recommend that the contribution of the committees should
concentrate on the programming phase, rather than on specific projects.
is during the
programming phase that the crucial questions of policy and strategy have to be addressed.

Indeed,

it

Thus strategy papers, multiannual programmes and annual action plans will be referred to the Committee
for its opinion.

This proposal is consistent with the provisions adopted in this matter by the Council under the MEDA and
CARDS Regulations.

The new simplified framework for the adoption of strategy papers, multiannual indicative programmes and
annual action plans is expected to result in a significant reduction in the overall number of financing
decisions approved by the Committee and adopted by the Commission, thereby releasing resources for
redeployment on priority tasks, including ensuring effective and timely delivery of external assistance.

5. Access to public procurement

With regard to the participation in public tenders, the proposed Regulation provides for the untying of aid
at the regional level, in accordance with the Commission Decision of 11 April 2001 and the statement of
the Commission at the OECD/DAC meeting of 25/26 April 2001. It also provides for the participation of
the candidate countries.

Specific provisions allow other countries to participate, on a case-by-case basis,
purposes of cofinancing and of regional cooperation in Asia.

in particular, for the

In accordance with the aforementioned statement of the Commission of 25 April 2001, the participation
of other countries in the procurement of services and products for the fight against communicable diseases
such as AIDS, tuberculosis and malaria is also authorised on a case by case basis.

With regard to the untying of assistance for the less developed countries, the proposed Regulation provides
for aid to be untied for the categories and within the limits envisaged in the recommendation of the DAC.

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This is consistent both with the commitment made by the Commission to explore ways of implementing
the DAC's recommendations and with the objective of increasing the effectiveness of aid by allowing
broader competition. Moreover, the possibility of allowing operators from certain Central Asian countries
currently receiving Community assistance under the TACIS programme to take part in public tendering for
assistance to the less developed countries will contribute to strengthening regional cooperation. Untying
aid is of course based on the principle of reciprocity.

6. Reconstruction and rehabilitation, aid to uprooted people

With a view to simplifying and reducing the number of legal bases, the proposed Regulation encompasses
aid activities for uprooted people. It also introduces the possibility of financing rehabilitation activities.
This will make it possible to handle issues relating to the transition between relief, rehabilitation and
development in a more coherent way.

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community and in particular Article 179(1) thereof,

Having regard to the proposal from the Commission,

Acting in accordance with the procedure laid down in Article
251 of the Treaty,

Whereas:

(1) The Community has since 1992 been pursuing a policy of
financial, technical and economic cooperation with the
countries of Asia and Latin America in the framework
of Council Regulation (EEC) No 443/92 of 25 February
1992 on financial and technical assistance to, and
economic cooperation with, the developing countries in
Asia and Latin America (1). This policy should be
continued and intensified.

(2) Agreements between the Community and the countries
and regions of Asia and Latin America define domains
of cooperation for each country and subregion.

(3) The Heads of State and Government of the European
Union, of Latin America and of the Caribbean, meeting
in Rio de Janeiro in June 1999, adopted an action plan
defining a broad range of cooperation activities with a
view to developing a strategic partnership. They updated
and consolidated this action plan at their second summit,
which was held in Madrid on 17 May 2002.

(4) The Commission communication of 4 September 2001
‘Europe and Asia: a strategic framework for enhanced
partnerships’ (2)
framework for
relations with Asia. The core objective is to strengthen
the European Union's political and economic presence

an overall

sets out

(1) OJ L 52, 27.2.1992, p. 1.
(2) COM(2001) 469 final.

across the region and raise it to a level commensurate
with the
an enlarged
growing
European Union. The Council
endorsed that
communication in conclusions adopted on 27 December
2001.

global weight of

fully

(5) The Heads of State and Government of the European
Union and the Commission reached a consensus at the
55th Session of the United Nations General Assembly and
adopted the United Nations Millennium Declaration
setting out
In
the Community will be
striving to reach these goals,
the devel-
guided by the principles and objectives of
opment policy
the
the Council
by
defined
Commission in their joint statement of 10 November
2000.

the Millennium Development Goals.

and

(6) The members of the World Trade Organisation (WTO)
committed themselves at the 4th Ministerial Conference
in Doha to mainstreaming trade in development strategies
and to providing trade-related technical and capacity-
building assistance to help developing countries take
part
their
in new trade negotiations and implement
results.

a new generation of

(7) The Commission plans to support the preparation and
economic
implementation of
reforms in the countries of Asia and Latin America,
in
line with the Council Resolution of 18 May 2000 on
economic reforms and structural adjustment in developing
countries. In so doing, it will ensure proper coordination
with other donors, in particular Member States and the
Bretton Woods Institutions.

(8) Without prejudice to the decisions which will be taken
during the programming phase, it is necessary to define
the broad objectives of Community cooperation in order
to allow the implementation of activities in all the sectors
covered by the agreements concluded with the beneficiary
countries and the pursuit of the priorities defined in the
European Union's strategic guidelines with respect
to
Latin America and Asia.

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(9) In order to simplify and rationalise the rules governing
cooperation,
this Regulation should incorporate both
operations related to rehabilitation and reconstruction
and those concerning aid to uprooted people. Regulation
(EC) No 2130/2001 of the European Parliament and of
the Council of 29 October 2001 on operations to aid
uprooted people in Asian and Latin American developing
countries (1) should therefore be repealed and Council
Regulation (EC) No 2258/96 of 22 November 1996 on
rehabilitation and reconstruction operations in developing
countries (2) should be amended accordingly.

(10) Community cooperation should be governed by a
strategic framework and by annual and multiannual
programming as defined in the Commission communi-
cation of 16 May 2000 ‘Reform of the Management of
External Assistance’ and referred to in the Council's
conclusions of 10 November 2000. This will place
Community cooperation in a medium-term context and
make it possible to ensure that
it complements and
remains consistent with that of the Member States.

(DAC)

recommendation

least developed countries

(11) To promote economic relations within the two regions
and in conformity with the OECD Development
Assistance Committee's
of
26 April 2001 on untying official development aid to
the
and the Commission
declaration annexed to it, provision should be made for
opening up participation in invitations to tender and
to Asian and Latin
contracts, on a regional basis,
American partner countries,
the
content of the above-mentioned declaration in the field
of services and products essential
in the fight against
HIV/AIDS, tuberculosis and malaria. In addition, partici-
pation in invitations
for
Community
developed
countries eligible under this Regulation is fully opened
up for the categories specified in that recommendation.

cooperation with the

taking into account

and contracts

to tender

least

(12) The measures necessary for the implementation of this
Regulation should be
adopted in accordance with
Council Decision 1999/468/EC of 28 June 1999 laying
down the procedures for the exercise of implementing
powers conferred on the Commission (3).

(13) This Regulation establishes a financial framework for the
period 2003 to 2006 which is to be the principal point of
reference for the budgetary authority, within the meaning
of point 33 of the Interinstitutional Agreement of 6 May
1999 between the European Parliament, the Council and

Commission

on
the
improvement of the budgetary procedure (4).

budgetary

discipline

and

this Regulation.

(14) The protection of the Community's financial interests and
the fight against fraud and irregularities form an integral
part of
In particular, agreements and
contracts concluded pursuant to this Regulation should
authorise the Commission to carry out
the measures
in Council Regulation (Euratom, EC)
provided for
No 2185/96 of 11 November 1996 concerning
on-the-spot checks and inspections carried out by the
Commission
European
to
interests against fraud and other
Communities' financial
irregularities (5).

protect

order

the

in

(15) In view of the establishment under this Regulation of a
new framework for cooperation, it is necessary to repeal
Regulation (EEC) No 443/92. At the same time, to avoid
any disruption in the action of the Community,
is
important to provide for transitional measures,

it

HAVE ADOPTED THIS REGULATION:

CHAPTER I

SUBJECT MATTER, PURPOSE, AND UNDERLYING PRINCIPLES

Article 1

This Regulation establishes a framework for the implemen-
tation of a Community policy of cooperation through the
financing of projects and programmes, hereinafter referred to
‘Community cooperation’, with the Asian and Latin
as
the
American (ALA) countries, hereinafter
‘Asian partners’ and ‘Latin American partners’,
listed in
Annex I.

referred to as

Article 2

Community cooperation under this Regulation shall be
1.
pursued with the overall objectives of
strengthening the
relationship between the Community and its Asian and Latin
American partners, reducing poverty, promoting sustainable
development and contributing to prosperity,
security and
stability.

2. Without prejudice to the eligibility of the sectors included
in agreements with the partner countries, Community coop-
eration shall in particular:

(a)

foster the sustainable economic and social development of
partner countries, and their smooth and gradual integration
into the world economy;

(1) OJ L 287, 31.10.2001, p. 3.
(2) OJ L 306, 28.11.1996, p. 1.
(3) OJ L 184, 17.7.1999, p. 23.

(4) OJ L 172, 18.6.1999, p. 1.
(5) OJ L 292, 15.11.1996, p. 2.

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(b) strengthen the institutional and legislative framework,

in
particular to underpin democratic principles, the rule of
law and respect and protection for human rights and
fundamental freedoms;

(c) promote economic and trade cooperation,

strengthen
investment relations, and foster the integration of Asian
and Latin American countries into the multilateral trading
system and the implementation of WTO agreements;

(d) support

the fight against organised crime, money-laun-
illegal migration and trafficking
dering, terrorism, drugs,
in human beings, and measures aiming at confidence-
building and conflict prevention;

(e)

integration and cooperation in Asia and
favour regional
Latin America, and support
the development of closer
relations between Asian and Latin American partners and
the European Union, so as to enable mutually beneficial
social, cultural,
exchanges, notably between economic,
educational, technological and scientific entities;

(f) support rehabilitation, reconstruction and aid to uprooted
people, with particular attention to the transition between
emergency and development.

follow a

appropriate

sector-wide
3.
Community cooperation shall
approach wherever possible. In this context,
it shall support
sectoral policies and economic reform programmes, through
budgetary
the most
In
support, subject
exceptional
and
programmes are not yet
in place, budgetary support may
also be provided for specific and clearly identified measures,
subject to strict monitoring and conditionality.

to strict monitoring and conditionality.

circumstances, where

instruments,

including

policies

such

(a) strategy papers;

(b) multiannual indicative programmes;

(c) annual action plans.

2.
Strategy papers for Asian and Latin American partner
countries, regions or subregions shall be established for a
period of five to seven years.

They shall define the long-term objectives for cooperation and
identify the strategic priorities and the specific fields of action.
They shall be revised if circumstances so require.

A separate three-year strategy paper covering the whole of Asia
and Latin America shall be drawn up for crises involving
uprooted people.

3.
Three-year multiannual indicative programmes based on
the strategy papers shall be drawn up for each country, region
or subregion eligible for Community cooperation.

They shall contain a description of sectoral and cross-cutting
priorities, specific objectives and expected results.

They shall give indicative amounts (overall and for each
priority
the
programme concerned.

and set out

funding

criteria

sector)

for

They shall reflect the priorities identified and agreed with the
Asian and Latin American partners concerned. They shall be
updated as necessary.

action

Annual

4.
the multiannual
programmes shall be drawn up for each country, region or
subregion eligible for Community cooperation.

based

plans

on

Article 3

They shall set out, as precisely as possible, for a given oper-
ational year, the aims being pursued, the fields of action and
the budget provided.

Respect for the principles of democracy and the rule of law
and for human and minority rights and fundamental freedoms
is an essential element for the application of this Regulation.
Failure to respect these principles may give grounds for the
adoption of appropriate measures.

They shall contain a list of cooperation activities to be financed
by the Community. They shall specify the maximum amount
of the Community financial contribution for each project and
programme.

In particular situations, specific cooperation measures not

5.
covered by annual action plans may be approved.

CHAPTER II

PROCEDURES

FOR THE IMPLEMENTATION OF COOP-

Article 5

ERATION ACTIVITIES

1.

Community financing shall be in the form of grants.

Article 4

1.
As a general rule, the framework for the programming
and identification of Community cooperation activities under
this Regulation shall consist of:

2.
Community financing may be used to cover in particular
expenditure for preparing, implementing, monitoring, checking
and evaluating projects and programmes and for information
on cooperation activities.

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Community financing may be used for cofinancing,
3.
which should be sought whenever feasible, particularly when
it can lever other funding to contribute to the objectives set in
Article 2.

Community financing may not be used to pay taxes,

4.
duties or charges.

Community financing may cover investment expenditure,
5.
including the purchase of
is
necessary for the direct implementation of the operation and
provided that ownership is transferred to the recipient's local
partners or the ultimate beneficiaries of the operation once the
latter has come to an end.

real estate, when the latter

cooperation and integration in Asia, of the Asian countries
and territories listed in Annex II.

In the event of cofinancing,

3.
the Commission may
authorise participation in invitations to tender and contracts
by natural and legal persons of the other financing countries
on a case-by-case basis, provided that reciprocity is granted.

its procurement of

The Commission may also open up, on a case-by-case
4.
basis,
services and sanitary products
essential to the fight against communicable diseases such as
HIV/AIDS,
tuberculosis and malaria to natural and legal
persons of other countries.

Article 6

The Commission shall

implement Community coop-
1.
eration in accordance with the budgetary and other procedures
in force, in particular those laid down in the Financial Regu-
lation applicable to the general budget of
the European
Communities.

2.
In taking financing decisions under this Regulation, the
Commission shall have regard to the principles of sound
financial management laid down in the Financial Regulation.

Article 7

for the implementation of
The financial reference amount
Community cooperation under this Regulation for the period
2003 to 2006 shall be EUR 2 523 million for cooperation
with Asia and EUR 1 270 million for cooperation with Latin
America.

Annual appropriations shall be authorised by the budgetary
authority within the limits of the financial perspective.

Article 8

financial

In addition to national and federal governments, partners
eligible for
this Regulation may
support under
(including
include regional and international organisations
United Nations agencies), non-governmental organisations,
national, provincial and local administrations and agencies,
community-based organisations, and public or private institutes
and operators.

Article 9

Participation in invitations to tender and contracts shall
1.
be open on equal terms to all natural and legal persons from
the Member States, candidate countries for accession to the
European Union and, for the purposes of cooperation activities
in their respective regions, from the Asian and Latin American
partners.

2.
The Commission may, on a case-by-case basis, extend
participation to natural and legal persons of other developing
in the case of programmes fostering regional
countries and,

5.
In addition, natural and legal persons of any third
country shall be eligible to participate in invitations to tender
and contracts for projects and programmes in favour of the
countries listed in Annex I, which are classified as least
in the
developed in the OECD/DAC list of aid recipients,
following
programme
assistance,
import and commodity
services contracts, and assistance to
support, commercial
the partici-
In these cases,
non-governmental organisations.
pation of undertakings from third countries shall only be
admissible if reciprocity is granted.

areas:
sectoral
investment project aid,

and multisectoral

This provision applies only to activities with a value of more
than SDR 700 000 or,
investment-related
technical cooperation, SDR 130 000. Free-standing technical
cooperation and food aid are not covered by this provision.

in the case of

Article 10

Any agreement or contract concluded pursuant to this Regu-
lation shall expressly provide for monitoring and financial
control by the Commission, including the European Anti-Fraud
Office (OLAF), and audits by the Court of Auditors, if necessary
on the spot. They shall authorise the Commission to carry out
on-the-spot checks and inspections in accordance with Regu-
lation (Euratom, EC) No 2185/96.

CHAPTER III

DECISION MAKING PROCEDURE

Article 11

The strategy papers, multiannual indicative programmes
1.
and annual action plans referred to in Article 4 shall be
adopted in accordance with the procedure referred to in
Article 12(2). Decisions on annual action plans are to be
considered
and
programmes specified in those annual action plans.

financing

decisions

projects

the

for

Amendments to decisions referred to in the first subparagraph
shall be adopted in accordance with the same procedure,
except where amendments do not exceed 20 % of the global
amount allocated to the annual action plan or do not
substantially change the nature of the projects or programmes
contained in the annual action plan.
the
amendments will be adopted by the Commission, which shall
inform the committee set up in Article 12(1).

In that case,

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Financing decisions on projects and programmes not
2.
covered by annual
action plans and amounting to or
exceeding EUR 5 million shall be individually adopted in
accordance with the procedure referred to in Article 12(2).

Amendments to those decisions shall be adopted in accordance
with the same procedure, except where amendments do not
exceed 20 % of
the amount allocated to the projects and
programmes or do not substantially change the projects or
programmes in question. In the latter case, amendments will
be adopted by the Commission, which shall
inform the
committee set up in Article 12(1).

Financing decisions below EUR 5 million and amendments
thereto shall be adopted by the Commission, which shall
inform the committee set up in Article 12(1).

Article 12

1.
The Commission shall be assisted by a committee,
referred to as ‘the ALA Committee’, composed of represen-
tatives of the Member States and chaired by a representative
of the Commission.

2. Where reference is made to this paragraph, Articles 4 and
7 of Decision 1999/468/EC shall apply, having regard to the
provisions of Article 8 thereof.

The period laid down in Article 4(3) of Decision 1999/468/EC
shall be 30 days.

3.

The Committee shall adopt its rules of procedure.

The Committee may examine

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

CHAPTER IV

COORDINATION, REPORTING AND FINAL PROVISIONS

Article 13

1.
In the interests of the consistency, efficiency and comple-
mentarity of Community cooperation, the Member States and
including on the spot, a
the Commission shall organise,
frequent
information on the
exchange of
and regular
operations they intend to implement. They shall keep each
other
their programme strategy, priority
sectors, evaluations and their ongoing and future cooperation.

informed about

cooperation with international
Nations agencies and other donors.

financial

institutions, United

3.
The necessary measures shall be taken to emphasise the
Community character of cooperation activities carried out
under this Regulation.

Article 14

Every year the Commission shall submit, in its annual report
on Community external assistance to the European Parliament
and the Council, information on the operations financed under
this Regulation.

Article 15

The Commission shall take the measures necessary to ensure
effective and continuous monitoring of the implementation of
Community cooperation activities under this Regulation.

Every five years the Commission shall submit to the European
Parliament and the Council an evaluation report, together with
suggestions regarding the future of this Regulation and, where
necessary, proposals for amending it.

Article 16

Regulations (EEC) No 443/92 and (EC) No 2130/2001

1.
are hereby repealed.

In Article 1(2) of Regulation (EC) No 2258/96, the words

2.
‘the countries of Latin America and Asia’ are deleted.

3. Without prejudice to paragraphs 1 and 2, Regulations
(EEC) No 443/92, (EC) No 2130/2001 and (EC) No 2258/96
shall remain applicable to projects and programmes for which
the procedures leading to the Commission financing decision
have been started but have not yet been completed at the time
of entry into force of this Regulation.

Strategy papers, multiannual

4.
indicative programmes,
annual action plans and projects adopted by the Commission
under Regulation (EEC) No 443/92 with the favourable opinion
of the Committee set up in Article 15 thereof shall be deemed
to have been adopted in accordance with this Regulation.

Article 17

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

2.
The Commission may, in liaison with the Member States,
take any initiative necessary to ensure proper coordination and

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

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ANNEX I

Argentina

Bolivia

Brazil

Chile

Colombia

Costa Rica

Cuba

Ecuador

El Salvador

Guatemala

Honduras

Mexico

Nicaragua

Panama

Paraguay

Peru

Uruguay

Venezuela

ANNEX II

Afghanistan

Bahrain

Bangladesh

Bhutan

Burma/Myanmar

Cambodia

China

East Timor

India

Indonesia

Iran

Iraq

Korea, Democratic People's Republic

Laos

Malaysia

Maldives

Mongolia

Nepal

Oman

Pakistan

Philippines

Saudi Arabia

Sri Lanka

Thailand

Vietnam

Yemen

Brunei Darussalam

Chinese Taipei

Hong Kong

Korea, Republic of

Kuwait

Japan

Macao

Qatar

Singapore

United Arab Emirates