Financial regulation of 27 March 2003 applicable to the 9th European Development Fund
Date: 2003-03-27
Institutions: Council of the European Union
Subjects: ACP countries, European Development Fund, European Investment Bank, agreement (EU), financial management, financial regulation

1.4.2003

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I

(Acts whose publication is obligatory)

FINANCIAL REGULATION

of 27 March 2003

applicable to the 9th European Development Fund

THE COUNCIL OF THE EUROPEAN UNION

Having regard to the Treaty establishing the European
Community,

Having regard to the Partnership Agreement between the
members of the African, Caribbean and Pacific Group of States
of the one part, and the European Community and its Member
States, of
the other part, signed in Cotonou on 23 June
2000 (1) (hereinafter referred to as the ‘ACP-EC Agreement’),

Having regard to Council Decision 2001/822/EC of 27
November 2001 on the association of the overseas countries
and territories with the European Community (‘Overseas Asso-
ciation Decision’) (2),

Having regard to the Internal Agreement between Representa-
tives of the Governments of the Member States, meeting within
the Council, on the Financing and Administration of Commu-
nity Aid under the Financial Protocol to the Partnership Agree-
ment between the African, Caribbean and Pacific States and the
European Community and its Member States signed in Cotonou
(Benin) on 23 June 2000 and the allocation of financial assis-
tance for the Overseas Countries and Territories to which Part
Four of the EC Treaty applies (3) (hereinafter referred to as the
‘Internal Agreement’) and in particular Article 31 thereof,

Having regard to the proposal from the Commission (4),

Having regard to the opinion of the Court of Auditors (5),

Having regard to the opinion of
Bank,

the European Investment

Whereas:

(1)

(2)

(3)

It is necessary to determine the detailed rules for the
payment of contributions by the Member States to the
9th European Development Fund (hereinafter ‘the EDF’),
set up by the Internal Agreement, and to the allocation
of financial assistance for the Overseas Countries and
Territories to which Part Four of the EC Treaty applies.

It is necessary to lay down the conditions in accordance
with which the Court of Auditors is to exercise its
powers in respect of the EDF.

The provisions concerning scrutiny by the Court of
Auditors of the resources managed by the EIB comply
with the contractual nature of the Tripartite Agreement
provided for in Article 248 of the Treaty.

(1) OJ L 317, 15.12.2000, p. 3.
(2) OJ L 314, 30.11.2001, p. 1.
(3) OJ L 317, 15.12.2000, p. 355.
(4) OJ C 262 E, 29.10.2002, p. 533.
(5) OJ C 12, 17.1.2003, p. 19.

(4)

(5)

(6)

(7)

(8)

(9)

Rules should be laid down for the treatment of any
balances remaining from previous EDFs, in particular as
regards the detailed arrangements for their transfer to
the 9th EDF, their allocation to the various cooperation
instruments provided for by the ACP-EC Agreement or
by the Overseas Association Decision, and the rules
applicable for their implementation.

It is necessary to ensure consistency as between this
Regulation and the measures adopted by the Commis-
sion for the implementation of the Overseas Association
Decision.

It is appropriate to ensure the proper, prompt and effi-
cient execution of programmes and projects financed
under the ACP-EC Agreement and to establish manage-
ment procedures which are transparent and easy to
apply, and which facilitate the decentralisation of tasks
and responsibilities.

Decision 2/2002 of the ACP-EC Council of Ministers of
7 October 2002 on the implementation of Articles 28,
29 and 30 of Annex IV to the Cotonou Agreement (6)
has specified the general regulations and general condi-
tions applicable to works, supply and service contracts
financed by the EDF, as well as the rules governing
procedure, conciliation and arbitration in relation to
such contracts.

It is necessary to establish the detailed rules in accor-
dance with which the Chief Authorising Officer of the
EDF, to be appointed by the Commission with responsi-
bility inter alia for the clearance of expenditure under the
EDF, has, in close cooperation with the National Author-
ising Officer, to make such arrangements as prove neces-
sary to ensure the proper execution of operations.

As far as possible, Council Regulation (EC, Euratom) No
1605/2002 of 25 June 2002 on the Financial Regulation
applicable to the general budget of
the European
Communities (7), (hereinafter referred to as the ‘General
Financial Regulation’) should, as the cornerstone of the
reform of the Commission's internal management, be
taken into account in drawing up the Financial Regula-
tion for the EDF, particularly with a view to the possible
integration of EDF resources into the general budget of
the Communities. In the light of the experience acquired
from the
the
Commission may propose amendments thereto,

implementation of

this Regulation,

(6) OJ L 320, 23.11.2002, p. 1.
(7) OJ L 248, 16.9.2002, p. 1.

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HAS ADOPTED THIS FINANCIAL REGULATION:

PART ONE

MAIN PROVISIONS

TITLE I

CHAPTER 2

GENERAL PROVISIONS

PRINCIPLE OF THE UNIT OF ACCOUNT

CHAPTER 1

SUBJECT MATTER AND SCOPE

Article 1

Article 2

EDF resources shall be established and implemented in euro
and the accounts shall be presented in euro.

However, for the treasury management purposes referred to in
Article 26, the accounting officer may carry out operations in
euro, in other currencies and in national currencies.

This Regulation lays down the rules for the establishment

1.
and financial implementation of the resources of the 9th EDF.

2.
The Commission shall assume the Community's responsi-
bilities defined in Article 57 of the ACP-EC Agreement and in
the Overseas Association Decision. To that end, it shall under-
take the financial
implementation of operations carried out
with EDF resources allocated in the form of non-repayable aid,
excluding interest rate subsidies, and make payments in accor-
dance with this Regulation.

In applying this Regulation, the Commission shall act on its
own responsibility and within the limits of the resources allo-
cated.

The EIB, acting on behalf of

3.
the Community, shall
manage the Investment Facility, as well as interest rate subsi-
dies, and shall conduct operations thereunder,
in accordance
with the rules set out in Part Two. In that context, the EIB shall
act on behalf of and at the risk of the Community.

The EIB shall undertake the financial implementation of opera-
tions carried out by means of loans from its own resources,
where applicable combined with interest rate subsidies drawn
from the EDF's grant resources.

The provisions of this Part, together with those of Part
4.
Three, shall apply exclusively to the financial implementation
of
the EDF resources managed by the Commission. Those
provisions may not be interpreted as giving rise to any obliga-
tions on the Commission's part in respect of the financial
implementation of EDF resources managed by the EIB.

5.
Unless otherwise specified, references in this Regulation
to the ACP States shall be deemed to refer also to the bodies or
representatives defined in Articles 13 and 14 of Annex IV to
the ACP-EC Agreement, which they may duly mandate to exer-
cise their responsibilities under that Agreement.

The financial year shall begin on 1 January and end on

6.
31 December.

CHAPTER 3

PRINCIPLE OF SPECIFICATION

Article 3

The resources of
the EDF shall be earmarked for specific
purposes according to the main instruments of cooperation, as
described in the Financial Protocol of the ACP-EC Agreement
and the Overseas Association Decision.

In respect of the African, Caribbean and Pacific States, (herein-
after referred to as ‘the ACP States’), those instruments are laid
down by the Financial Protocol set out in Annex I to the ACP-
EC Agreement. Earmarking of resources shall also be based on
the provisions of the Internal Agreement and shall take account
of the non-allocated reserve provided for in Article 2(2) of that
Agreement and of the resources reserved for costs linked to
implementation under Article 4 thereof.

In respect of the Overseas Countries and Territories, (herein-
after referred to as ‘the OCTs’), those instruments are laid down
in Annex II A to the Overseas Association Decision.
Earmarking of those resources shall also take account of the
non-allocated reserve provided for in Article 3(3) of that Annex
and of the resources reserved for studies or technical assistance
measures under Article 1(1)(c) thereof.

CHAPTER 4

PRINCIPLE OF SOUND FINANCIAL MANAGEMENT

Article 4

1.
EDF resources shall be used in accordance with the prin-
ciples of sound financial management, that is to say, in accor-
dance with the principles of economy, efficiency and effective-
ness.

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The principle of economy requires that the resources used
2.
for the pursuit of activities be made available in due time, in
appropriate quantity and quality and at the best price.

shall be credited to one or more bank accounts opened in the
name of the Commission, and shall be used in accordance with
Article 9 of the Internal Agreement and with this Regulation.

The principle of efficiency is concerned with the best relation-
ship between resources employed and results achieved.

The principle of effectiveness is concerned with attaining the
specific objectives set and achieving the intended results.

3.
Objectives shall be set and achievement of those objec-
tives shall be monitored by means of measurable indicators. To
that end, the use of EDF resources must be preceded by an ex
ante evaluation of the operation to be undertaken and the
operation must be submitted to an ex post evaluation with a
view to ensuring that the intended results justify the means
deployed.

Programmes or operations shall be periodically examined,
4.
particularly in relation to the estimates of calls for contribu-
tions referred to in Article 38(1), so that it can be established
that they are justified.

The breakdown of allocations laid down by the ACP-EC
3.
Agreement and by the Internal Agreement is indicated in the
Annex to this Regulation for information purposes.

Article 7

The amount laid down in Article 4 of the Internal Agreement
shall be reserved for the financing of costs linked to implemen-
tation incurred by the Commission in the framework of the
ACP-EC Agreement. It shall be utilised in accordance with the
principles set out in Article 9 of the Internal Agreement.

Those resources shall be used inter alia to reinforce the adminis-
trative capacities of the Commission and its Delegations in
order to ensure the smooth preparation and implementation of
operations financed from the EDF.

CHAPTER 5

PRINCIPLE OF TRANSPARENCY

Article 5

1.
The resources of the EDF shall be established and imple-
mented and the accounts presented in compliance with the
principle of transparency.

2.
The annual estimates of commitments and payments
under Article 10 of the Internal Agreement, together with the
EDF accounts referred to in Article 96 of this Regulation, shall
be published in the Official Journal of the European Union.

TITLE II

RESOURCES AND ADMINISTRATIVE EXPENDITURE

CHAPTER 1

COMPOSITION OF EDF RESOURCES

Article 6

1.

The EDF shall consist of:

CHAPTER 2

CONTRIBUTIONS TO THE EDF

Article 8

1.
Each year, the Commission shall establish and communi-
cate to the Council, by 15 October at the latest, a statement of
the payments to be made in the following financial year and a
the
schedule of
Commission shall take into account the estimates submitted to
it by the EIB, in accordance with Article 121 concerning opera-
tions, including interest rate subsidies, managed by the EIB.

the calls for contributions.

In so doing,

The Commission shall justify the amount requested on the basis
of its capacity to deliver the proposed level of resources effec-
tively. The EIB shall justify the amount requested on the basis
of its operational requirements. The Council shall decide on
those justifications and on each call for contributions in accor-
dance with the rules referred to in Article 10 of the Internal
Agreement and laid down in Article 38 of this Regulation.

As regards balances remaining from previous EDFs which
2.
are transferred to the 9th EDF in accordance with Article 6, the
contributions of each Member State shall be calculated in
proportion to the contribution of that State to the EDF in ques-
tion.

(a) the amount laid down in Article 1 of the Internal Agree-

ment;

The Commission's annual estimates of contributions shall

3.
cover:

(b) pursuant to Article 1(2)(b) of the Internal Agreement, any
balances remaining from previous EDFs as defined in Title I
of Part Three of this Regulation.

2.
The revenue accruing from interest on the funds referred
to in paragraph 1 deposited with the paying agents in Europe
referred to in Article 37 of Annex IV to the ACP-EC Agreement

(a) its estimates of commitments for the following financial

year, and those of the EIB;

(b) its estimates of commitments and disbursements for each
of the four years following the year relating to the call for
contributions, and those of the EIB. The schedule shall be
approved and reviewed annually by the Council.

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The financial information on the EDF provided by the Commis-
sion to the budgetary authority in the context of the annual
budget procedure, including the estimates of contributions for
the current and the following financial year, shall be made
available to the Council by 15 June. This information serves as
a basis for an intermediate estimate of commitments and
disbursements.

4.
Should the contributions prove insufficient to meet the
EDF's actual needs in the financial year in question, any supple-
mentary payments may be decided upon in accordance with
Article 10(4) of the Internal Agreement.

Payments of contributions by the Member States shall be

5.
made in accordance with Article 38.

TITLE III

IMPLEMENTATION OF EDF RESOURCES

CHAPTER 1

GENERAL PROVISIONS

Article 9

The Commission may, within its own departments, delegate its
powers to implement EDF resources, in accordance with the
conditions laid down by this Regulation and within the limits
set by the Commission in the instrument of delegation. Dele-
gates may act only within the limits of the powers expressly
conferred upon them.

Article 10

All financial actors as defined in Chapter 3 shall be prohibited
from taking any measures implementing EDF resources which
may bring their own interests into conflict with those of the
Community. Should such a case arise, the actor in question
shall refrain from such measures and refer the matter to the
competent authority.

Article 11

1.
In accordance with the procedures laid down for finan-
cing proposals in Articles 24(1) and (3) of the Internal Agree-
ment, and in order to speed up those procedures, the Commis-
sion shall submit financing proposals concerning the authorisa-
tion of overall amounts allocated to the financing of the activ-
ities referred to in Article 16(7) of Annex IV to the ACP-EC
Agreement. After the proposal has been adopted, the Commis-
sion may take financing decisions on the basis of the global
authorisation.

The financing proposals referred to in paragraph 1 shall
2.
specify the objectives and, where appropriate,
the intended
impact of the Community contribution. They shall also describe
the viability of the activities, previous experience and earlier
evaluations, and coordination with other donors.

CHAPTER 2

METHODS OF IMPLEMENTATION

Article 12

The Commission shall undertake the financial implementation
of EDF resources by means of decentralised management with
the ACP States in accordance with the conditions set out in the
ACP-EC Agreement and applying the breakdown of responsibil-
ities provided for in Article 57 of that Agreement and Articles
34, 35 and 36 of Annex IV thereto.

The Commission shall undertake the financial implementation
of EDF resources by means of decentralised management with
the OCTs in accordance with the conditions set out in the
Overseas Association Decision and in the measures imple-
menting that Decision.

In the cases provided for in the ACP-EC Agreement,
in the
Internal Agreement, in the Overseas Association Decision and
in the measures implementing that Decision, the Commission
may undertake the financial implementation of EDF resources
by centralised management.

In certain specific cases provided for in the ACP-EC Agreement,
in the Internal Agreement, in the Overseas Association Deci-
sion and in the measures implementing that Decision,
the
Commission may undertake the financial
implementation of
EDF resources by means of joint management with interna-
tional organisations.

EDF resources may also be associated with funds from other
sources in order to achieve a joint objective.

Article 13

In the context of decentralised management, the Commis-
1.
sion shall undertake the financial
implementation of EDF
resources in accordance with the detailed rules laid down in
paragraphs 2, 3 and 4.

The Commission and the beneficiary ACP States or OCTs

2.
shall:

(a) check regularly that the operations financed by the EDF

have been properly implemented;

(b) take appropriate measures to prevent

irregularities and
fraud and if necessary bring prosecutions to recover funds
wrongly paid.

3.
In order to ensure that funds are used in accordance with
the applicable rules and within the limits of powers thereby
conferred upon it, the Commission shall implement clearance
of account procedures or financial correction mechanisms
to discharge its obligations under the ACP-EC
enabling it
Agreement,
in particular under Article 34(1) of Annex IV
thereto, and under the Overseas Association Decision, in parti-
cular under Articles 20 and 32 thereof, for the clearance of
expenditure financed from EDF resources.

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The implementation by ACP States and OCTs of operations
financed from EDF resources shall be subject to Commission
scrutiny, which may be exercised by prior approval, by ex post
checks or by a combined procedure, in accordance with the
provisions of the ACP-EC Agreement, the Overseas Association
Decision and the measures implementing that Decision.

4.
Depending on the degree of decentralisation provided for
in the ACP-EC Agreement and in the Overseas Association
Decision and the measures implementing that Decision, the
Commission shall strive to encourage the beneficiary ACP
States and the OCTs to adhere, when exercising the powers
entrusted to them under the ACP-EC Agreement and under the
Overseas Association Decision, to the principle of sound finan-
cial management set out in Article 4, in particular the progres-
sive application of the following criteria:

(a) effective segregation of the duties of authorising officer and

accounting officer;

(b) existence of an effective system for the internal control of

management operations;

(c) separate procedures

for

the presentation of accounts

showing the use made of EDF resources;

(d) existence of an independent, public or private external audit

system;

(e) transparent, non-discriminatory procurement procedures

which prevent any conflict of interests;

(f) in the case of the direct-labour operations referred to in
Article 80(2), adequate provisions for the management and
scrutiny of imprest accounts and for the definition of the
responsibilities of
imprest administrator and the
accounting officer.

the

the purposes of applying the first subparagraph,

For
Commission shall,
States and OCTs,
financing agreements referred to in Article 51(3).

the
in agreement with the beneficiary ACP
incorporate appropriate provisions in the

Article 14

1. Where the Commission implements EDF resources on a
centralised basis,
implementation tasks shall be performed
either directly in its departments or indirectly, in accordance
with paragraphs 2 to 7 of this Article and with Articles 16 and
17.

The Commission may not entrust

2.
to third parties its
implementation powers under the ACP-EC Agreement or the
Overseas Association Decision where those powers involve a
large measure of discretion implying political choices.

The first subparagraph shall apply in particular to the financing
decisions provided for in Article 51(2).

3. Within the limits laid down in paragraph 2, the Commis-
sion may entrust
involving the exercise of public
authority, in particular financial implementation tasks, to:

tasks

(a) the executive agencies referred to in Article 15;

(b) national public-sector bodies governed by private law with
a public service mission and providing adequate financial
guarantees for the implementation of the tasks assigned to
them within the framework defined in this paragraph.

In the case, referred to in point (b) of the first subparagraph, of
programmes or projects co-financed by the Member States or
their implementing bodies and reflecting the priorities laid
down in the Country Cooperation Strategies provided for in
Chapter III of the Internal Agreement and in Article 20 of the
Overseas Association Decision, the Commission may entrust
responsibility for managing Community aid to Member States
or to their implementing bodies. The Commission may draw
on the EDF resources provided for in Article 1(2)(a)(i) and (ii)
of the Internal Agreement in order to pay financial compensa-
tion for the administration costs incurred.

Implementation tasks may be entrusted to the bodies referred
to in point (b) of the first subparagraph only if the delegation
of financial implementation tasks is a response to the require-
ments of sound financial management, as shown by prior
analysis and, ensures compliance with the principle of non-
discrimination and the visibility of Community action. No
implementing tasks entrusted in this way may give rise to
conflicts of interests. If the analysis shows that delegation best
satisfies the requirements of sound financial management, the
Commission shall request the opinion of the EDF Committee
provided for in Article 21 of the Internal Agreement before
proceeding to implement the delegation. The EDF Committee
may also give its opinion on the planned application of the
selection criteria.

The financial guarantees referred to in point (b) of the first
subparagraph shall apply in particular as regards the full
recovery of any amounts due to the Commission.

4. Where indirect methods of implementation are used, as
provided for in paragraph 3, the bodies responsible for imple-
mentation shall:

(a) conduct regular checks to ensure that the operations to be

financed have been implemented correctly;

(b) take appropriate measures to prevent

irregularities and
fraud and if necessary bring prosecutions to recover funds
lost, wrongly paid or badly used.

5.
The decisions, referred to in paragraph 3, entrusting
implementing tasks shall cover all appropriate arrangements
for ensuring the transparency of operations carried out and
must comprise:

(a) an independent external audit;

Where indirect methods of
implementation are used, as
provided for in paragraph 3, the implementing tasks delegated
must be clearly defined and supervised.

(b) an effective internal control system for management opera-

tions;

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(c) accounting arrangements for those operations and proce-
dures for the presentation of the accounts which will enable
the correct use of EDF resources to be ascertained and the
true extent of that use to be reflected in the accounts;

(d) procurement and grant award procedures which comply

with the provisions of Titles IV and VI.

The Commission may accept that the audit, accounting and
procurement systems of the national bodies referred to in para-
graph 3 are equivalent to its own, with due account for inter-
nationally accepted standards.

The Commission shall

ensure periodic
the implementation of

supervision,
6.
evaluation and control of
the tasks
entrusted to the bodies referred to in paragraph 3. The
European Anti-Fraud Office (OLAF)
shall enjoy the same
powers with regard to such bodies as it does with regard to
Commission departments. The bodies in question shall adopt
the necessary measures to help OLAF carry out internal investi-
gations. Any act undertaken by such bodies for the financial
implementation of EDF resources, and in particular any deci-
sion or any contract concluded by them, must specifically
provide for the same controls as Article 51(4).

7.
The Commission may not entrust measures implementing
funds deriving from EDF resources, such as payment and
recovery, to external private sector entities or bodies other than
those referred to in point (b) of the first subparagraph of para-
graph 3.

The tasks which the Commission may entrust by contract to
external private sector entities or bodies other than those
referred to in point (b) of the first subparagraph of paragraph 3
shall be technical expertise tasks and administrative, prepara-
tory or ancillary tasks involving neither the exercise of public
authority nor the use of discretionary power.

to internationally accepted standards. The
tees equivalent
implementation by international organisations of operations
financed from EDF resources shall be subject to scrutiny by the
Commission. Such scrutiny shall be
exercised by prior
approval, by ex post checks or by a combined procedure.

CHAPTER 3

FINANCIAL ACTORS

Se c ti on 1

Principle of segregation of duties

Article 17

The duties of authorising officer and accounting officer

1.
shall be segregated and mutually incompatible.

2.
Save where otherwise indicated, references in this Regula-
tion to the authorising officer or to the authorising officer
responsible shall be deemed to refer to the Commission's
authorising officers defined in Section 2. References to the
accounting officer shall be deemed to refer to the Commission's
accounting officers defined in Section 3.

Se c ti on 2

Authorising officer

Article 18

Article 15

The executive agencies shall be legal persons under Community
law created by Community decision, to which powers of imple-
mentation may be delegated in all or in part on behalf of the
Commission and on its responsibility,
in accordance with
Council Regulation (EC) No 58/2003 of 19 December 2002
laying down the statute for executive agencies to be entrusted
with certain tasks relating to the management of Community
programmes (1) and defining the conditions and arrangements
for their creation and operation.

Article 16

In the context of joint management with international organisa-
tions, the latter shall, in their accounting, audit, control and
procurement procedures, apply standards which offer guaran-

(1) OJ L 11, 16.1.2003, p. 1.

In the context of the financial

1.
implementation of the
operations referred to in Article 1(2), the Commission shall
perform the duties of authorising officer.

2.
The Commission shall determine the staff of an appro-
priate level to whom it shall delegate the duties of authorising
officer, and shall delimit the powers delegated and the circum-
stances in which delegates may sub-delegate those powers.

In accordance with Article 34 of Annex IV to the ACP-EC
3.
Agreement,
the Commission shall appoint an authorising
officer by delegation as Chief Authorising Officer of the EDF. It
shall also define his duties in respect of the implementation of
the Overseas Association Decision. The Chief Authorising
Officer may delegate his powers to authorising officers by sub-
delegation.

4.
The powers of authorising officer shall be delegated or
sub-delegated only to persons covered by the Staff Regulations
of officials and the conditions of employment of other servants
of the European Communities (hereinafter referred to as ‘the
Staff Regulations’).

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The rules on spheres of competence adopted in this Title
5.
shall apply to authorising officers by delegation or sub-delega-
tion. Authorising officers by delegation or sub-delegation may
act only within the limits set by the instrument of delegation or
sub-delegation. Each delegation or sub-delegation decision shall
indicate the limits and, where appropriate, the duration of the
delegation. The authorising officer by delegation or sub-delega-
tion may be assisted in his task by one of more members of
staff entrusted, under the responsibility of the former, with
certain operations required for the implementation of the EDF
and production of the accounts.

6.
Decisions taken pursuant to paragraphs 2, 3 and 5 shall
be notified to the delegates, the accounting officer, the internal
auditor and the Court of Auditors.

Article 19

The authorising officer entrusted with the management of EDF
resources shall be responsible for implementing revenue and
expenditure in accordance with the principle of sound financial
management and for ensuring that the requirements of legality
and regularity are complied with.

Article 20

1.
To implement expenditure, the Chief Authorising Officer
and authorising officers by sub-delegation shall make commit-
ments, validate expenditure and authorise payments and shall
undertake the preliminaries for the implementation of EDF
resources.

2.
Implementation of revenue shall comprise drawing up
estimates of amounts receivable, establishing entitlements to be
recovered and issuing recovery orders. It shall involve waiving
established entitlements where appropriate.

Article 22

The Chief Authorising Officer shall

1.
take all measures
necessary for the implementation of Annex IV to the ACP-EC
Agreement and Articles 18 and 33 of the Overseas Association
Decision and Annexes II A to II D thereto.

The Chief Authorising Officer shall

2.
take all measures
necessary to ensure that national, regional or local authorising
officers perform the tasks for which they are responsible by
virtue of the ACP-EC Agreement, and in particular Annex IV
thereto, and by virtue of the Overseas Association Decision or
In close cooperation
measures implementing that Decision.
with the National Authorising Officer, he shall
take such
commitment decisions and financial measures as prove neces-
sary, from an economic and technical point of view, to ensure
the proper execution of operations.

Article 23

Where the Chief Authorising Officer becomes aware of
problems in carrying out procedures relating to management
of EDF resources, he shall, in conjunction with the national or
regional authorising officer, make all contacts necessary to
remedy the situation and take any steps that are necessary. For
instance, in cases where the national or regional authorising
officer does not or is unable to perform the duties incumbent
on him under the ACP-EC Agreement, the Chief Authorising
Officer may temporarily take his place,
in which case, the
Commission may receive, from the resources allocated to the
ACP State in question, financial compensation for the extra
administrative workload incurred.

Any measure taken by the Chief Authorising Officer pursuant
to the first subparagraph shall be taken in the name of and on
behalf of the national or regional authorising officer concerned.

Article 21

Article 24

1.
Save in cases where management is centralised, opera-
tions relating to the implementation of programmes or projects
shall be carried out by the national or regional authorising
officer, as defined in Article 35 of Annex IV to the ACP-EC
Agreement and in the measures implementing the Overseas
Association Decision, in close cooperation, in the ACP States,
with the head of delegation in accordance with Articles 35 and
36 of Annex IV to the ACP-EC Agreement.

The head of delegation shall be an authorising officer by
2.
sub-delegation and, in exercising the powers delegated to him,
he shall be subject to this Regulation. He shall receive the
necessary instructions and powers to perform his duties as
defined in Article 36 of Annex IV to the ACP-EC Agreement
and in the measures implementing the Overseas Association
Decision.

1.
In compliance with the minimum standards adopted by
the Commission and having due regard to the risks associated
the
with the management environment and the nature of
operations financed, the Chief Authorising Officer shall put in
place the organisational structure and the internal management
and control systems and procedures suited to the performance
of his duties, including where appropriate ex post checks. Before
an operation is authorised, the operational and financial aspects
shall be verified by staff other than the member of staff who
initiated the operation. Initiation of an operation and the ex
ante and ex post verification of that operation shall be separate
functions.

2.
All staff responsible for controlling the management of
financial operations shall have the necessary professional skills.
They shall respect a specific code of professional standards
established by the Commission.

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Any member of staff involved in the financial manage-
3.
ment and control of operations who considers that a decision
which his superior requires him to apply or to agree to is irre-
gular or contrary to the principles of sound financial manage-
ment or the professional rules by which he is bound shall
inform the Chief Authorising Officer in writing and, if the latter
fails to take action, the panel referred to in Article 35(3). In the
event of fraud, corruption or any other illegal activity which
may harm the interests of the Community, he shall
inform
OLAF and the authorities designated by the Staff Regulations.

Article 25

The Chief Authorising Officer shall report to the Commission
on the performance of his duties in the form of an annual
activity report, which shall include financial and management
information. The report shall cover the results of his operations
by reference to the objectives set, the risks associated with
those operations, the use made of the resources provided and
the functioning of the internal control system. The annual
activity report and other specified information shall be brought
to the attention of the internal auditor of the Commission. By
15 June each year at the latest, the Commission shall send the
European Parliament and the Council a summary of the annual
activity report for the previous year.

S e c ti on 3

Accounting officer

Article 26

1.

The accounting officer shall be responsible for:

(a) proper implementation of payments, collection of revenue
and recovery of amounts established as being receivable;

(b) preparing and presenting the financial

statements and
implementation in accordance with

reports on financial
Articles 100 and 101;

The accounting officer is alone empowered to handle
3.
monies and other assets. He shall be responsible for their safe-
keeping.

Article 27

The accounting officer shall be appointed by the Commission.
The accounting officer may, for the performance of his duties,
delegate certain tasks to subordinates who are subject to the
Staff Regulations. The instrument of delegation shall define the
tasks entrusted to the delegates.

Decisions taken pursuant to the first subparagraph shall be
notified to the delegates, the Chief Authorising Officer, the
internal auditor and the Court of Auditors.

Se c ti on 4

Paying agent

Article 28

In order to make the payments provided for in Article 37(1)
and (4) of Annex IV to the ACP-EC Agreement or in the
measures implementing the Overseas Association Decision, the
institu-
accounting officer shall open accounts with financial
tions in the ACP States and the OCTs, for payments in the
national currencies of the ACP States or in the local currencies
of the OCTs, and with financial
institutions in the Member
States, for payments in euro and other currencies. In accor-
dance with Article 37(2) of Annex IV to the ACP-EC Agree-
ment, deposits in accounts with financial
institutions in the
ACP States and the OCTs shall bear no interest and the latter
shall receive no remuneration for their services. In accordance
the Internal Agreement, deposits in
with Article 1(3) of
accounts with financial institutions in the Member States shall
bear interest and such interest shall be credited to the one of
the accounts provided for in that Article.

Article 29

(c) keeping the accounts for:

(i) the allocations referred to in Article 6, except those for
the Investment Facility, and interest rate subsidies;

(ii) the commitments referred to in Article 51;

(iii) payments, revenue and debts;

The relations between the Commission and the paying agents
provided for in Article 37 of Annex IV to the ACP-EC Agree-
ment or in the measures implementing the Overseas Associa-
tion Decision shall be the subject of contracts. Once signed,
copies of those contracts shall be sent to the Court of Auditors
for information purposes.

(d) laying down, in accordance with Title VII, the accounting

rules and methods and the chart of accounts;

Article 30

(e) defining and validating the accounting systems and, where
appropriate, validating systems defined by the Chief
Authorising Officer
supplying or
explaining accounting information;

the purpose of

for

(f) treasury management.

The accounting officer

2.
shall obtain from the Chief
Authorising Officer and from the EIB, who shall, each for their
own part, guarantee its reliability, all the information necessary
for the production of accounts giving a true image of the finan-
cial implementation of EDF resources.

1.
The Commission shall transfer from the special accounts
the amounts needed to
opened pursuant
replenish the accounts opened in its name in accordance with
Article 28. Such transfers shall be made on the basis of the
cash needs of the projects and programmes.

to Article 40(3)

2.
The Commission shall endeavour to make any withdra-
wals from the special accounts referred to in the first subpara-
graph of Article 40(3) in such a way as to maintain a distribu-
tion of
its assets in those accounts corresponding to the
proportions in which the various Member States contribute to
the EDF.

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Article 31

The signatures of the Commission officials and staff who are
empowered to carry out operations on the EDF's accounts shall
be lodged with the banks concerned when the accounts are
opened or, in the case of officials and staff who are authorised
subsequently, when they are designated. That procedure also
applies to the lodging of signatures of national and regional
authorising officers and their deputies for operations in paying
agent accounts opened in the ACP States or the OCTs and,
in the accounts opened in the Member
where appropriate,
States.

as a result of serious misconduct on his part in the course of or
in connection with the performance of his duties, in particular
in the event of failure to comply with this Financial Regulation
when establishing entitlements to be recovered or issuing
recovery orders, entering into a commitment of expenditure or
signing a payment order. The same shall apply if they omit to
draw up a document establishing a debt or if they neglect to
issue recovery orders or are, without justification, late in issuing
them, or if they neglect to issue payment orders or are, without
justification, late in issuing them, thereby rendering the institu-
tion liable to civil action by third parties.

CHAPTER 4

LIABILITY OF THE FINANCIAL ACTORS

S e c ti on 1

General rules

Article 32

1. Without prejudice to any disciplinary action, the Chief
Authorising Officer and authorising officers by sub-delegation
may at any time have their delegation or sub-delegation with-
drawn temporarily or definitively by the authority which
appointed them.

2. Without prejudice to any disciplinary action, accounting
officers may at any time be suspended temporarily or defini-
tively from their duties by the Commission.

Article 33

1.
The provisions of this Chapter shall obtain without preju-
dice to the criminal law liability which the persons referred to
in Article 32 may incur under the applicable national law and
the legislation in force on the protection of the European
Communities'
interests and on the fight against
corruption involving officials of the European Communities or
officials of Member States.

financial

Each authorising officer or accounting officer shall be
2.
liable to disciplinary action and payment of compensation as
provided for in the Staff Regulations, without prejudice to Arti-
cles 34, 35 or 36 of this Regulation. In the event of fraud,
illegal activity which may harm
corruption or any other
Community interests, OLAF and the authorities designated by
the Staff Regulations shall be informed.

Article 35

1. Where the Chief Authorising Officer or an authorising
officer by sub-delegation considers that a decision which it is
his responsibility to take is irregular or contrary to the princi-
ples of sound financial management, he shall inform the dele-
gating authority in writing.
If the delegating authority then
gives a reasoned instruction in writing to the Chief Authorising
Officer or authorising officer by sub-delegation to take the deci-
sion in question, the latter may not be held liable.

2.
In the event of internal sub-delegation, the Chief Author-
ising Officer shall continue to be responsible for the effective-
ness of the internal management and control systems put in
place and for the choice of the authorising officer by sub-dele-
gation.

3.
The specialised panel set up by the Commission in accor-
dance the General Financial Regulation, shall have competence
to determine, in relation to the EDF, whether a financial irregu-
larity has occurred and, if so, the consequences entailed, if any.
In respect of
the management of EDF resources by the
Commission, cases shall be referred to that panel as provided
for in the detailed rules for implementing the General Financial
Regulation.

On the basis of the panel's opinion, the Commission shall
decide whether to initiate proceedings entailing liability to
disciplinary action or to payment of compensation. If the panel
detects systemic problems, it shall send a report with recom-
mendations to the Chief Authorising Officer and to the internal
auditor.

Se c ti on 3

Rules applicable to accounting officers

S e c ti on 2

Article 36

Rules applicable to authorising officers

Article 34

Authorising officers shall be liable to pay compensation in
accordance with the conditions laid down in the Staff Regula-
tions, under which an official may be required to make good,
in whole or in part, any damage suffered by the Communities

An accounting officer shall be liable to disciplinary action and
payment of compensation, as provided for and in accordance
with the procedures laid down in the Staff Regulations, in parti-
cular where:

(a) he loses or damages monies, assets and documents in his

keeping;

(b) he unduly alters bank accounts or postal giro accounts;

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(c) he recovers or pays amounts which are not in conformity

with the corresponding recovery or payment orders;

(d) he fails to collect revenue due.

(b) the amount of the contributions required to finance the
EDF operations managed by the EIB, including interest rates
subsidies.

CHAPTER 5

REVENUE OPERATIONS

S e c ti on 1

Making available of EDF resources

Article 37

EDF revenue consists of payments made by the Member States
in accordance with the Internal Agreement and this Regulation,
the income generated by deposits in accordance with Article
6(2) of this Regulation and any other sum whose acceptance is
established by the Council.

Article 38

1.
The Member States' annual contributions shall be deter-
mined by the Council, acting by the qualified majority provided
for in Article 21 of the Internal Agreement, on a proposal from
the Commission, and shall consist of three instalments payable
in accordance with the following procedures.

2.
The proposal for the first instalment of the following year
shall be presented by the Commission at the same time as the
communication referred to in Article 8(1). The Council shall
decide on this instalment at the latest by the end of the current
year and Member States shall pay the contributions due at the
latest by 21 January of the following year.

The proposal for the second instalment of the current year shall
be presented by the Commission at the same time as the
communication referred to in Article 8(3). The Council shall
decide on this instalment at the latest by 21 calendar days
following the presentation by the Commission of its proposal.
Member States shall pay the contributions due under this instal-
ment at the latest by 21 calendar days following the date on
which the Council's decision was notified to them.

The proposal for the third instalment of the current year shall
be presented by the Commission by 10 October. The Council
shall decide on this instalment at the latest by 21 calendar days
following the presentation by the Commission of its proposal.
Member States shall pay the contributions due under this instal-
ment at the latest by 21 calendar days following the date on
which the Council's decision was notified to them.

Supplementary contributions for the financial year decided on
by the Council in accordance with Article 10(4) of the Internal
Agreement shall, unless the Council decides otherwise, be due
and be made within as brief a period as possible which shall be
laid down in the decision to call for such contributions and
which may not exceed three months.

Each instalment of

3.
contributions proposed by the
Commission and decided by the Council shall specify, in accor-
dance with Article 1:

(a) the amount of the contributions required to finance the

EDF operations managed by the Commission;

The amounts to be paid by each Member State and
4.
referred to in paragraph 3 shall be set in such a way as to be in
proportion to that State's contributions to the EDF as fixed in
Article 1(2) of the Internal Agreement and indicated in the
Annex to this Regulation, for each of the amounts referred to
in paragraph 3 of this Article.

Article 39

This Part and Part Three shall apply only to revenue collected
by the Commission pursuant to Article 40.

Article 40

The financial contributions of the Member States shall be

1.
expressed in euro.

Each Member State shall pay the amount of its contribu-

2.
tion in euro.

In respect of the amount due to the Commission under
3.
financial contributions shall be credited by
Article 38(2)(a),
each Member State to a special account entitled ‘Commission
of the European Communities — European Development Fund’
opened with the bank of issue of that Member State or the
financial
institution designated by it. The amount of such
contributions shall remain in those special accounts until the
payments provided for in Article 37 of Annex IV to the ACP-
EC Agreement or in the measures implementing the Overseas
Association Decision need to be made.

In respect of the amount due to the EIB under Article 38(2)(b),
financial contributions shall be credited by each Member State,
in accordance with the detailed rules laid down in Article 122,
to an account opened with the EIB in the name of each
Member State.

Where necessary, the Commission shall provide appropriate
technical assistance in the implementation of the Council deci-
sions referred to in Article 38.

4. Where an instalment of contributions payable under this
Article is not paid by the deadline fixed by Article 38(1), the
Member State concerned shall be required to pay interest in
respect of the unpaid amount. This interest shall be charged at
a rate of two percentage points above the interest rate applied
by the European Central Bank to its main refinancing opera-
tions on the first working day of the month in which the
amount falls due, as published in the C series of the Official
Journal of the European Union. That rate shall be increased by a
quarter of a percentage point for each month of delay. The
interest shall be payable for the entire period of delay and shall
be calculated from the first calendar day following the deadline
for payment of the instalment laid down in Article 38.

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In respect of the amount due to the Commission under Article
38(2)(a), such late payment interest shall be credited to one of
the accounts provided for in Article 6(2).

In respect of the amount due to the EIB under Article 38(2)(b),
such late payment interest shall be credited to the EIB.

5.
Upon expiry of the financial protocol set out in Annex I
to the ACP-EC Agreement, that part of the contributions which
the Member States remain obliged to pay in accordance with
Article 38 of this Regulation shall be called up by the Commis-
sion, as required, in accordance with the conditions laid down
in this Regulation.

S e c ti on 2

Estimates of amounts receivable

Article 41

The authorising officer responsible shall first make an estimate
of the amount receivable in respect of any measure or situation
which may give rise to or modify an amount owing to the EDF
and is brought to the Commission's attention by the National
Authorising Officer or is noticed by the Commission itself.
Such estimates shall be sent
to the accounting officer for
recording in the accounts. They shall mention the type of
revenue and the accounting item to which it is to be booked
and also, as far as possible, the estimated amount involved and
the name and description of the debtor. When drawing up esti-
mates of amounts receivable, the accounting officer responsible
shall check that:

(a) the revenue is booked to the correct item;

(b) the estimated amount receivable is in order and conforms
to the relevant provisions relating to the management of
the EDF and all acts adopted pursuant thereto and to the
principle of sound financial management referred to in
Article 4.

The Commission shall lay down the conditions in which

2.
interest on late payment is due to the Communities.

Se c ti on 5

Authorisation of recovery

Article 44

1.
The authorisation of recovery is the act whereby the
authorising officer responsible instructs the accounting officer,
by issuing a recovery order, to recover an amount receivable
which he has established.

2. Without prejudice to the responsibilities of the ACP States
or the OCTs,
the Commission may formally establish an
amount as being receivable from persons other than States by
means of a decision which shall be enforceable under the same
conditions as laid down in Article 256 of the Treaty.

Article 45

Every debt that is identified as being certain, of a fixed amount
and due in the context of the implementation of EDF resources
shall be established by means of a recovery order given to the
accounting officer, followed by a debit note sent to the debtor,
both drawn up by the authorising officer responsible. The
recovery order shall be accompanied by supporting documents
certifying the established entitlements. When drawing up the
recovery order, the authorising officer responsible shall ensure
that:

(a) the revenue is booked to the correct item;

(b) the recovery order is in order and conforms to the relevant

provisions;

(c) the supporting documents are in order;

(d) the particulars of the debtor are correct;

S e c ti on 3

(e) the due date is indicated;

Establishment of amounts receivable

Article 42

Establishment of an amount receivable is the act by which the
authorising officer responsible:

(a) verifies that the debt exists;

(b) determines or verifies the reality and the amount of the

debt;

(c) verifies the conditions in which the debt is due.

S e c ti on 4

Principle of recovery

Article 43

1.

Amounts wrongly paid shall be recovered.

(f) the order conforms to the principle of sound financial

management referred to in Article 4;

(g) the amount and currency of the sum to be recovered are

correct.

Such recovery orders shall be recorded in the accounts by the
accounting officer.

Se c ti on 6

Recovery

Article 46

1.
The accounting officer shall act on recovery orders for
amounts receivable that have been duly established by the
authorising officer responsible. He shall exercise due diligence
to ensure that the EDF receives its revenue by the due dates
indicated in the recovery orders and ensure that the relevant
rights of the Communities are safeguarded.

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If recovery has not actually taken place by the due date
2.
specified in the recovery order, the accounting officer shall
inform the authorising officer responsible and immediately
initiate the procedure for effecting recovery by any means
offered by the law, including, where appropriate, by offsetting.
If this is not possible, the accounting officer shall enforce a
recovery decision secured either in accordance with Article
44(2) or by a legal action.

The accounting officer shall recover amounts by offsetting
3.
them against equivalent claims that the EDF or the Commu-
nities has on any debtor who himself has a claim on the EDF
or the Communities that is certain, of a fixed amount and due.

4.
In connection with the direct labour operations referred
to in Title V, where claims that the EDF has on the National
Authorising Officer via the public or semi-public bodies or
departments of the ACP State or OCT concerned are not recov-
ered within the prescribed time-limits, the authorising officer
the necessary measures to obtain
responsible shall take all
actual repayment of the sums due,
including, where appro-
priate, suspension by the Chief Authorising Officer of the use
of that type of arrangement for that State or OCT.

Article 47

1. Where the authorising officer responsible is planning to
waive recovery of an established amount receivable, he shall
ensure that the waiver is in order and complies with the princi-
ples of sound financial management and proportionality in
accordance with procedures and criteria previously laid down
by the Commission for that purpose. The waiver decision must
be substantiated. The authorising officer may delegate the deci-
sion only as laid down by the Commission in the rules referred
to in paragraph 2.

2.
The detailed rules for implementing the General Financial
Regulation shall apply mutatis mutandis to the implementation
of this Article.

CHAPTER 6

EXPENDITURE OPERATIONS

S e c ti on 1

Se c ti on 2

Commitment of expenditure: principles and definitions

Article 49

The commitment of expenditure shall be preceded by a finan-
cing decision adopted by the Commission or by the authorities
to which powers have been delegated by the Commission.

Article 50

1.
The financial commitment by the Commission is the
operation reserving the funds necessary to cover subsequent
payments to honour a legal commitment.

The legal commitment by the Commission is the act whereby
the authorising officer responsible enters into an obligation
with regard to third parties which may result in expenditure
being charged to the EDF.

The financial commitment and the legal commitment shall be
adopted by the same authorising officer. That rule may be
waived:

(a) in the case of administrative expenditure incurred by the
Commission within the meaning of paragraph 4 in respect
of which the financial commitments have been divided in
accordance with paragraph 3;

(b) where global commitments relate to financing agreements

under Article 51(3).

The Commission's financial commitment

2.
is individual
when the beneficiary and the amount of the expenditure are
known.

The Commission's financial commitment is global when at least
the elements necessary to identify the individual
one of
commitment is still not known.

3.
Financial commitments for Commission administrative
expenditure may be divided over several years into annual
instalments. The corresponding legal commitments shall stipu-
late that division.

4.
The following shall be regarded as administrative expendi-
ture for the purposes of point (a) of the third subparagraph of
paragraph 1:

General provisions

(a) expenditure on human resources other than regular staff;

Article 48

Every item of expenditure shall be committed, validated,

1.
authorised and paid.

(b) training expenditure;

(c) mission expenses;

(d) representation expenses;

(e) meeting expenses;

2.
The decisions and procedures for commitment, validation,
authorisation and payment of expenditure by the Commission
are defined in this Chapter.

(f) expenses relating to freelance interpreters and/or transla-

tors;

(g) expenses relating to exchanges of officials;

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(h) cost of

recurring rentals of movable and immovable

property;

(i) cost of miscellaneous insurance;

(j) cost of cleaning and maintenance;

(k) costs related to the use of telecommunications services;

(b) the expenditure conforms to the relevant provisions,

in
particular of the ACP-EC Agreement, the Overseas Associa-
tion Decision, the Internal Agreement, this Regulation, and
all acts adopted in implementation of those provisions;

(c) there is compliance with the principle of sound financial

management.

(l) cost of water, gas and electricity;

(m) outlay for periodical publications.

Article 51

Commitment

of

The authorising officer responsible shall

1.
first make a
financial commitment before entering into a legal obligation,
binding upon the Commission, with third parties.

2.
Financing decisions taken by the Commission, in accor-
dance with the ACP-EC Agreement or the Overseas Association
Decision, which authorise it to grant financial aid from the
EDF, shall give rise to financial commitments by the Commis-
sion.

The following shall constitute legal commitments by the

3.
Commission:

(a) a financing agreement between the Commission, acting for
the Community, and the beneficiary ACP State or States or
the beneficiary OCTs or the bodies they have designated;

(b) a contract or grant agreement between the Commission
and national or international public-sector bodies or natural
or legal persons responsible for carrying out the operations.

Each financing agreement, contract or grant agreement
4.
shall provide expressly for the Commission, OLAF and the
Court of Auditors, to exercise their powers of control, on docu-
ments and on the spot, over all contractors and subcontractors
who have received financing from EDF resources.

Article 52

When adopting a financial commitment, the authorising officer
responsible shall ensure that:

(a) the expenditure has been charged to the correct accounting

item;

(b) the funds are available;

(c) the expenditure conforms to the relevant provisions,

in
particular of the ACP-EC Agreement, the Overseas Associa-
tion Decision, the Internal Agreement, this Regulation, and
all acts adopted in implementation of those provisions;

(d) the principle of sound financial management is complied

with.

When a legal commitment is adopted, the authorising officer
shall ensure that:

(a) the commitment is covered by the corresponding financial

commitment;

under

centralised

Se c ti on 3

expenditure
management

Article 53

1. Where EDF resources are managed by the Commission
on a centralised basis or jointly, the commitment of expendi-
ture shall be subject to the provisions of this Section.

2.
Individual legal commitments relating to individual finan-
cial commitments shall be concluded by the Commission by 31
December of year N at the latest, year N being the year in
which the Commission's individual financial commitment was
adopted, subject to Article 50(3).

As a general rule, global financial commitments shall cover the
total cost of the corresponding individual legal commitments
concluded by the Commission up to 31 December of year
N + 1, year N being the year in which the Commission's global
financial commitment was adopted, subject to Article 50(3).

However, where the global commitments referred to in Article
51(3) are implemented, the Commission shall conclude the
corresponding individual contracts and agreements by no later
than three years from the date of the financial commitment.
Individual contracts and agreements relating to audit and
evaluation may be concluded later.

At the end of the periods referred to in the first and second
subparagraphs, the unused balance of those financial commit-
ments shall be decommitted by the authorising officer respon-
sible.

3.
The amount of each individual legal commitment adopted
by the Commission following a global commitment shall, prior
to signature, be registered by the authorising officer responsible
in the EDF financial accounts and booked to the global
commitment.

4.
The legal commitments entered into for operations
extending over more than one financial year and the corre-
sponding financial commitments shall have a final date for
implementation set in accordance with the requirements of
sound financial management, save in the case of the adminis-
trative expenditure referred to in Article 50(3).

Any parts of such commitments which have not been imple-
mented six months after that date shall be decommitted and
the corresponding appropriations cancelled.

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Where a legal commitment has not given rise to any payment
during a period of three years, the authorising officer shall
proceed to decommit the financial commitment and cancel the
appropriations.

The termination of a project and the decommitment of
5.
the funds committed in accordance with paragraphs 1 to 4
shall be carried out when the legal commitments entered into
by the Commission in connection with that project with
respect to third parties are concluded and the related payments
and collections have been recorded in the accounts.

6.
The provisions of paragraph 4 shall apply without preju-
dice to the decisions that may be adopted by the Council under
Articles 96 and 97 of the ACP-EC Partnership Agreement.

S e c ti on 4

Commitment

of

expenditure

under

decentralised

management

Article 54

(b) the assigned funds corresponding to individual

legal
commitments entered into for the implementation of a
financing agreement referred to in paragraph 2 which have
not given rise to any payment during a period of three
years are decommitted.

Individual legal commitments as referred to in the first subpara-
graph shall be contracts, grant agreements or programme esti-
mates concluded by the ACP State or OCT or its authorities or
by the Commission acting in their name and on their behalf.

For the purposes of applying the first and second subpara-
graphs, the Commission shall, in agreement with the benefi-
ciary ACP States and OCTs, incorporate relevant provisions in
the financing agreements referred to in paragraph 2.

5.
The termination of a project and the decommitment of
the funds committed in accordance with paragraphs 1 to 4
shall be carried out after conclusion of the legal commitments
entered into by the ACP State or OCT or its authorities, and/or
by the Commission acting in their name and on their behalf in
connection with that project with respect to third parties, and
after the related payments and collections have been recorded
in the accounts.

1. Where EDF resources are managed on a decentralised
basis, the commitment of expenditure by the Commission shall
be subject to the provisions of this Section.

6.
The provisions of paragraph 4 shall apply without preju-
dice to the decisions that may be adopted by the Council under
Articles 96 and 97 of the ACP-EC Partnership Agreement.

2.
Financing agreements with the beneficiary ACP States or
OCTs shall be concluded by 31 December of year N+1 at the
latest, N being the year in which the Commission's financial
commitment was adopted.

Where financing agreements are not concluded by the deadline
laid down in the first subparagraph, the corresponding appro-
priations shall be decommitted.

3.
The Commission shall be under an obligation to effect
payment from EDF resources whenever the head of delegation,
acting as authorising officer by sub-delegation:

(a) endorses contracts and programme estimates, as provided
for in Article 80(4) of this Regulation, in accordance with
Article 36(2)(i) of Annex IV to the ACP-EC Agreement, or
the relevant provisions of the measures implementing the
Overseas Association Decision;

(b) endorses grant agreements.

In respect of each endorsement the authorising officer respon-
sible shall record in the accounts the value of the contract,
programme estimate or grant in question. This recording shall
be called ‘assigned funds’.

The assigned funds recorded shall be set off by the Commission
against the global commitments corresponding to the financing
decisions concerned.

4.
In accordance with the principle of sound financial
management referred to in Article 4 and acting within its
powers, the Commission shall endeavour to see that:

Se c ti on 5

Validation of expenditure

Article 55

Validation of expenditure is the act whereby the authorising
officer responsible:

(a) verifies the existence of the creditor's entitlement;

(b) determines or verifies the reality and the amount of the

claim;

(c) verifies the conditions in which payment is due.

Article 56

1.
Validation of any expenditure shall be based on valid
supporting documents attesting the creditor's entitlement, on
the basis of a statement of services actually rendered, supplies
actually delivered or work actually carried out or on the basis
of other documents justifying payment. The nature of
the
supporting documents to be enclosed with the payment orders
and the particulars to be included shall be such as to make it
possible to carry out the checks provided for in Articles 55, 58
and 60.

(a) the individual legal commitments implementing the finan-
cing agreements referred to in paragraph 2 are concluded
the corre-
no later than three years from the date of
sponding financial commitment by the Commission;

Before taking the decision validating the expenditure, the
2.
authorising officer
responsible shall personally check the
supporting documents or shall, on his own responsibility,
ascertain that this has been done.

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The decision validating the expenditure shall be expressed
3.
by the signing of a ‘passed for payment’ voucher by the author-
ising officer responsible.

(c) the references of the legal commitment giving rise to an

entitlement to payment;

(d) the references of the financial commitment against which it

is to be booked;

Article 57

(e) the sum to be paid, indicating the currency in which it is

The Chief Authorising Officer shall lay down the criteria for
signing the ‘passed for payment’ voucher by analogy with the
relevant provisions of the detailed rules for the implementation
of the General Financial Regulation.

to be paid;

(f) the name and address of the payee;

(g) the bank account into which the payment is to be made;

(h) the object of the expenditure;

Article 58

(i) the means of payment.

In a non-computerised system, ‘passed for payment’ shall take
the form of a stamp incorporating the signature of the author-
ising officer responsible. In a computerised system, ‘passed for
payment’ shall take the form of validation using the personal
password of the authorising officer responsible.

S e c ti on 6

Authorisation of expenditure

Article 59

Authorisation of expenditure is the act whereby the authorising
officer responsible, by issuing a payment order, instructs the
accounting officer to pay an item of expenditure which he has
validated.

The payment order shall be dated and signed by the authorising
officer responsible, then sent to the accounting officer.

Article 62

The supporting documents shall be kept by the authorising
officer responsible.

Se c ti on 7

Payment of expenditure

Article 63

Article 60

1.
Payment shall be made only on production of proof that
the relevant action is in accordance with the provisions of the
basic act or the contract and shall cover one or more of the
following operations:

When drawing up the payment order, the authorising officer
responsible shall ensure that:

(a) payment of the entire amount due;

(a) the payment order has been properly issued, meaning that
corresponding validation decision has been taken

a
previously in the form of ‘passed for payment’;

(b) the payment order corresponds to the financial commit-

ment against which it is booked;

(c) the expenditure is charged to the correct

item in the

accounts;

(d) the appropriations are available;

(e) the particulars of the payee are correct.

Article 61

The payment order must state:

(a) the financial year against which the expenditure is to be

booked;

(b) the instrument and allocation against which it is to be

booked in accordance with Article 3;

(b) payment of the amounts due in any of the following ways:

(i) pre-financing, which may be divided into a number of

payments,

(ii) one or more interim payments,

(iii) payment of the balance of the amounts due.

2.
A distinction shall be made in the accounts between the
different types of payment referred to in paragraph 1 at the
time they are made.

Pre-financing is intended to provide the beneficiary with a

3.
float. It may be split into a number of payments.

4.
An interim payment, which may be repeated, is intended
to reimburse expenditure incurred by the beneficiary on the
basis of a statement of expenditure when the action is in
It may clear pre-financing in whole or in part,
progress.
without prejudice to the provisions of the basic act or contract.

5.
The closure of the expenditure shall take the form of the
payment of the balance, which may not be repeated and clears
all preceding payments, or a recovery order.

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Article 64

Payment of expenditure shall be made by the accounting officer
within the limits of the funds available.

Article 65

Payments shall be effected through the bank accounts referred
to in Article 28. The detailed rules for opening, administering
and using such accounts shall be determined by the Commis-
sion.

Those rules shall in particular require the joint signatures on
transfer orders and all bank payments of two duly authorised
officials.

Article 66

1.
In cases where the head of delegation performs the duties
of authorising officer by sub-delegation in accordance with
Article 21(2), the corresponding payments may be effected by
an accounting officer by sub-delegation, where appropriate on
the spot.

The accounting officer may effect payments in local currency
from the paying agent account in the ACP State or OCT and
payments in foreign currency from one or more paying agent
accounts in the Community.

For payments made by the accounting officer by sub-dele-
2.
gation,
the authorising officer responsible shall ensure that
checks are carried out either before or after their execution and
on their entry in the accounts.

S e c ti on 8

Time limits for expenditure operations

Article 67

The validation, authorisation and payment of expenditure must
be completed within a period of no more than 90 days from
the date on which payment is due. The National Authorising
Officer shall authorise the expenditure and notify the head of
delegation accordingly no later than 45 days before that time
limit expires.

Claims for delayed payments for which the Commission is
responsible in accordance with Article 37 of Annex IV to the
ACP-EC Agreement shall be borne by the Commission from
the account or accounts provided for in Article 6(2) of this
Regulation.

CHAPTER 7

COMPUTER SYSTEMS

Article 68

1. Where revenue and expenditure operations are managed
by means of computer systems, documents may be signed by a
computerised or electronic procedure.

2. Where computer systems and subsystems are used to
process financial implementation operations, a full description
of each system or subsystem shall be required.

Each description shall define the content of all data fields and
describe how the system treats each individual operation. It
shall show in detail how the system guarantees the existence of
a complete audit trail for each operation.

The data in computer systems and subsystems shall be

3.
saved periodically and kept in a safe place.

CHAPTER 8

INTERNAL AUDITOR

Article 69

The internal auditor of the EDF shall be the internal auditor of
the Commission. He shall perform his duties in accordance
with the relevant international standards. He shall be accoun-
table to the Commission for verifying the proper operation of
systems and procedures
implementing EDF resources
managed by the Commission under Article 1. The internal
auditor may be neither authorising officer nor accounting
officer.

for

Article 70

1.
The internal auditor shall advise the Commission on
dealing with risks, by issuing independent opinions on the
quality of management and control systems and by issuing
recommendations for improving the conditions of implementa-
tion of operations and promoting sound financial management.
He may be called on to advise the authorities of ACP countries
or OCTs on the same topics.

He shall be responsible in particular for:

(a) assessing the

suitability and effectiveness of

internal
management systems and the performance of departments
in implementing policies, programmes and actions by refer-
ence to the risks associated with them;

(b) assessing the suitability and quality of the internal control
systems applicable to every operation for the implementa-
tion of EDF resources.

2.
The internal auditor shall enjoy full and unlimited access
to all the information he requires to perform his duties, where
necessary on the spot, including in the Member States and in
third countries.

The internal auditor shall report to the Commission on
3.
his findings and recommendations. The Commission shall
ensure that action is taken on recommendations resulting from
audits. The internal auditor shall also submit to the Commis-
sion an annual internal audit report indicating the number and
type of audits carried out, the recommendations made and the
action taken on those recommendations.

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Each year

the Commission shall send the authority
4.
responsible for discharge a report summarising the number and
type of internal audits carried out, the recommendations made
and the action taken on those recommendations.

CHAPTER 2

PROCEDURES AND PRINCIPLES CONCERNING THE AWARD
OF CONTRACTS

Article 71

Article 74

The special rules applicable to the internal auditor shall be
those laid down in the detailed rules for implementing the
General Financial Regulation, particularly as regards his inde-
pendence in the performance of his duties and the circum-
stances under which he may be held liable.

TITLE IV

PROCUREMENT

CHAPTER 1

SCOPE

Article 72

Public contracts are contracts

for pecuniary interest
1.
concluded in writing by a contracting authority within the
meaning of Article 73 in order to obtain, against payment of a
price paid in whole or in part from EDF resources, the supply
of movable or immovable assets, the execution of works or the
provision of services.

Such contracts comprise:

(a) supply contracts;

(b) works contracts;

(c) service contracts.

2.

This Title does not relate to grants.

1.
The procedures for the award of contracts relating to
operations financed by the EDF to assist ACP States shall be
those defined in Article 28 of Annex IV to the ACP-EC Agree-
ment.

The procedures for the award of contracts relating to opera-
tions financed by the EDF to assist OCTs shall be defined in the
measures implementing the Overseas Association Decision.

2. Where the Commission acts as contracting authority for
the implementation of humanitarian aid or emergency aid
within the framework of the ACP-EC Agreement or the Over-
seas Association Decision, it shall be required to comply with
the relevant Community rules on procurement.

CHAPTER 3

PARTICIPATION IN CONTRACTS

Article 75

Participation in tendering procedures

in respect of
1.
contracts financed by the EDF shall be open on equal terms in
accordance with the conditions laid down in Article 20 of
Annex IV to the ACP-EC Agreement.

2.
Nationals of countries other than ACP States and the
Member States, including the OCTs, may be authorised to take
part in the tendering procedures in accordance with the condi-
tions laid down in Article 22 of Annex IV to the ACP-EC
Agreement.

Article 73

Article 76

The following shall be contracting authorities for the

1.
purposes of this Title:

(a) the beneficiary ACP State or States or bodies duly mandated

by them, or their representatives;

(b) the Commission, in the case of contracts awarded on its

own account;

(c) the Commission, on behalf of and for the account of one

or more beneficiary ACP States;

(d) a national or international public sector body or natural or
legal persons who have signed a financing agreement or
grant agreement with one or more ACP countries or with
the Commission for the implementation of a programme
or project.

The procurement procedures shall be laid down in the

2.
financing agreements referred to in Article 51(3).

Within the limits of the powers conferred on it by the ACP-EC
Agreement and in accordance with the conditions laid down in
Article 21 of Annex IV thereto, the Commission shall ensure
the broadest possible participation, on equal terms, in tendering
procedures for contracts financed by the EDF and shall ensure
compliance with the principles of transparency, proportion-
ality, equal treatment and non-discrimination.

Article 77

Within the limits of the powers conferred on it by the ACP-EC
Agreement the Commission shall take steps to establish, by
analogy with the relevant rules of the general financial regula-
tion, a central database containing details of candidates and
tenderers who are, according to the rules defined in Article 28
of Annex IV to the ACP-EC Agreement,
in a situation that
excludes them from participation in procedures for the award
of contracts relating to operations financed by the EDF.

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CHAPTER 4

PUBLICATION

Article 78

Within the limits of the powers conferred on it by the ACP-EC
Agreement and in accordance with the conditions laid down in
Articles 21 and 34 of Annex IV thereto, the Commission shall
take the necessary steps to have international tendering proce-
dures published in the Official Journal of the European Union and
on the Internet.

Article 79

1. Within the limits of the powers conferred on it by the
ACP-EC Agreement, the Commission shall take all appropriate
measures to ensure the effective dissemination of information
for the economic operators concerned, notably through peri-
odic publication of the programmes and projects to be financed
from EDF resources.

The Commission shall ensure in particular

the
2.
following information is published in the most appropriate
media, with an indication of the subject matter, content and
value of the proposed contracts:

that

(a) fact sheets identifying projects;

(b) a summary of financing proposals adopted by the Commis-

sion after consulting the EDF Committee.

3. Within the limits of the powers conferred on it by the
ACP-EC Agreement,
the
results of tendering procedures are published at the earliest
opportunity.

the Commission shall ensure that

TITLE V

DIRECT LABOUR OPERATIONS

Article 80

This Title shall govern the direct

labour operations
1.
provided for in Article 24 of Annex IV to the ACP-EC Agree-
ment. It shall apply mutatis mutandis to financial cooperation
with the OCT.

In the case of direct

labour operations, projects and
2.
programmes shall be implemented directly through public
departments of the ACP State or States concerned.

The Community shall contribute to the costs of the department
involved by providing the equipment and/or materials that it
lacks and/or the resources to acquire any additional staff
required, such as experts from within the ACP States concerned
or other ACP States. The Community's participation shall cover
only costs incurred by supplementary measures and temporary
expenditure relating to execution that are strictly confined to
the requirements of the project in question.

imprest administrator and an accounting officer, appointed by
the National Authorising Officer with the prior approval of the
head of delegation.

In the case of externalised direct labour operations, the
3.
contracting authorities within the meaning of Article 73(1)(a)
shall entrust tasks relating to the implementation of projects or
programmes to public, semi-public or private bodies that are
legally distinct from the ACP State or States concerned. In such
cases, the body concerned shall assume responsibility for the
management and implementation of the programme or project
in place of the National Authorising Officer. Tasks so delegated
may include the power to conclude contracts and manage
contracts and the supervision of works on behalf of or for the
account of the ACP State or States concerned.

4.
Direct labour operations shall be implemented on the
basis of a programme of measures to be carried out and an esti-
mate of their cost, hereinafter referred to as the ‘programme
estimate’. The programme estimate is a document laying down
the human and material resources required, the budget and the
detailed technical and administrative implementing arrange-
ments for execution of a project over a specified period by
direct labour and, possibly, by means of public procurement
and the award of specific grants. Each programme estimate
shall be prepared by the imprest administrator and the
accounting officer referred to in paragraph 2, in the case of
direct labour operations, or by the third party organisation
referred to in paragraph 3, in the case of externalised direct
labour operations, and shall then be approved by the National
Authorising Officer and the head of delegation before the activ-
ities it provides for commence.

5.
In the context of the implementation of the programme
estimates referred to in paragraph 4, the procurement and
grant award procedures shall comply with those laid down in
Titles IV and VI respectively. In particular, proposals for the
award of contracts must be approved by the head of delegation
in accordance with Article 36 of Annex IV to the ACP-EC
Agreement. The same shall apply to proposals to award grants.

6.
The financing agreements referred to in Article 51(3)
must make provision for the implementation of projects or
programmes by direct-labour operations.

Article 81

the
In the case of externalised direct
contracting authority referred to in Article 73(1)(a)
shall
conclude a service contract with a third party organisation. The
Commission shall ensure that the contract sets out:

labour operations,

for

(a) adequate provisions

scrutiny of

the use of EDF
resources by the Chief Authorising Officer, the head of
delegation, OLAF,
the
Court of Auditors and the national audit bodies of the ACP
State or States concerned;

the National Authorising Officer,

The financial management of a project implemented by direct
labour in accordance with the first and second subparagraphs
shall be carried out by imprest accounts administered by an

(b) a clear definition and precise delimitation of the powers
delegated to the organisation concerned and the powers
retained by the National Authorising Officer;

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(c) the procedures to be followed in exercising the powers so
to be
such as
the award of contracts or the supervision of

the selection of operations

delegated,
financed,
works;

(d) the possibility of ex post review and financial penalties
where the granting of funds or award of contracts by the
third party organisation does not correspond to the proce-
dures laid down at point (c);

(e) effective segregation of the duties of authorising officer and

accounting officer;

(f) the existence of an effective system for the internal control

of management operations;

(g) the existence of an accounting system for management
operations and separate procedures for the presentation of
accounts enabling the correct use of EDF resources to be
ascertained.

TITLE VI

GRANTS

CHAPTER 1

GENERAL PROVISIONS

Article 82

In the context of centralised management, grants are
1.
direct financial contributions, awarded by the Commission by
way of donation from EDF resources in order to finance:

(a) either an action designed to help achieve an objective of
the ACP-EC Agreement or the Overseas Association Deci-
sion, or of a programme or project adopted in accordance
with that Agreement or Decision;

(e) payments made to bodies to whom powers are delegated
by the Commission as provided for in Articles 14 and 15
or within the framework of joint management referred to
in Article 16.

CHAPTER 2

AWARD PRINCIPLES

Article 83

The award of grants shall be subject to the principles of
1.
transparency and equal treatment. Grants may not be cumula-
tive; they may not be awarded retrospectively; and they must
involve co-financing.

The grant may not have the purpose or effect of produ-

2.
cing a profit for the beneficiary.

Article 84

1. Where,
in the context of centralised management, an
action provides for financing in the form of grants, the opera-
tional plan for that action shall contain a programme, except in
the case of crisis management aid or humanitarian aid opera-
tions.

That programme shall be implemented through the publication
of calls for proposals save in duly substantiated cases of
urgency or where the nature of the beneficiary leaves no other
choice for a given action.

The grants awarded shall be published annually with due

2.
observance of the requirements of confidentiality and security.

Article 85

One action may give rise to the award of only one grant

1.
from EDF resources to any one beneficiary.

(b) or the functioning of a body which pursues such an

objective.

A beneficiary may be awarded only one operating grant

2.
from EDF resources per financial year of the beneficiary.

They shall be covered by a written agreement.

The following shall not constitute grants for the purposes

2.
of this Title:

(a) financing agreements as referred to in Article 51(3)(a);

(b) public contracts as referred to in Title IV or direct labour

operations as referred to in Title V;

(c) loans, guarantees, contributions, contracts,

rate
subsidies or any other financial operation managed by the
EIB;

interest

(d) direct or indirect budgetary assistance, or aid to help relieve
debt or support export earnings in the event of short-term
fluctuations;

Article 86

1.
A grant may be awarded for an action which has already
begun only if the applicant can demonstrate the need to start
the action before the agreement was signed.

In such cases, expenditure eligible for financing may not have
been incurred prior to the date of submission of the grant
application, save in duly substantiated exceptional cases or in
the case of expenditure necessary for the proper implementa-
tion of crisis management aid or humanitarian aid operations,
as provided for in the ACP-EC Agreement or the Overseas
Association Decision.

No grant may be awarded retrospectively for actions already
completed.

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The agreement on an operating grant may not be signed
2.
more than four months after the start of the beneficiary's
budget year. Expenditure eligible for financing may not have
been incurred before the date when the grant application was
submitted or the start of the beneficiary's budget year.

Article 87

An action may be financed entirely from EDF resources only if
this proves essential for its completion.

CHAPTER 3

AWARD PROCEDURE

Article 88

1.
Grant applications shall be eligible where they fall under
the ACP-EC Agreement or the Overseas Association Decision
or a programme or project adopted in accordance with that
Agreement or Decision and are submitted in writing by legal
persons. By way of exception, depending on the nature of the
action or the objective pursued by the applicant, natural
persons may receive grants in accordance with the conditions
laid down in the Agreement or Decision.

2.
Grants may not be awarded to applicants whose situation,
at the time of a grant award procedure, is such that they fall to
be classed as ineligible under the Community rules applicable
to public procurement.

Applicants must certify that they are not in one of the situa-
tions referred to in the first subparagraph.

3.
Effective, proportionate and dissuasive administrative and
financial penalties may be imposed by the Chief Authorising
Officer on applicants who are excluded under paragraph 2.

Article 89

The selection criteria shall be such as to make it possible
1.
to assess the applicant's ability to complete the proposed action
or work programme.

The award criteria shall be such as to make it possible to
2.
assess the quality of the proposals submitted in the light of the
objectives and priorities set.

Article 90

Proposals

1.
shall be evaluated, on the basis of pre-
announced selection and award criteria, by an evaluation
committee set up for that purpose, with a view to determining
which proposals may be financed.

2.
On the basis of the evaluation provided for in paragraph
1, the authorising officer responsible shall draw up the list of
beneficiaries and the amounts approved.

The authorising officer responsible shall inform applicants
3.
in writing of the decision on their application. If the grant
requested is not awarded, he shall give the reasons for the rejec-
tion of the application, with reference in particular to the selec-
tion and award criteria previously announced. Applicants shall
the award decision being
be informed within 15 days of
forwarded to the beneficiaries.

CHAPTER 4

PAYMENT

Article 91

The pace of payments shall be determined by the financial risks
involved, the duration and progress of the action, or the costs
incurred by the beneficiary.

Article 92

The authorising officer responsible may require the beneficiary
to lodge a guarantee in advance in order to limit the financial
risks connected with the payment of pre-financing.

Taking account of difficulties of access
to local banking
services, for non-state actors this guarantee shall be demanded
in respect of pre-financing exceeding EUR one million or repre-
senting over 90 % of the total amount of the grant. The author-
ising officer responsible may however exempt from this obliga-
tion beneficiaries who have concluded a framework partnership
agreement.

Article 93

1.
The amount of the grant shall not become final until after
the Commission has accepted the final reports and accounts,
without prejudice to subsequent checks by the Commission.

Should the beneficiary fail to comply with his legal or
2.
contractual obligations,
the grant shall be suspended and
reduced or terminated after the beneficiary has been given the
opportunity to make his observations.

CHAPTER 5

IMPLEMENTATION

Article 94

1. Where implementation of the action requires the award
of procurement contracts by the beneficiary, the grant agree-
ments referred to in Article 82(1) shall make provision for
procedures that comply with the Community rules on procure-
ment applicable to cooperation with non-member countries.

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Each grant agreement shall provide expressly for the
2.
Commission, OLAF and the Court of Auditors to exercise their
powers of control, on documents and on the spot, over all
contractors and subcontractors who have received financial
assistance from EDF resources.

(b) prudence;

(c) consistent accounting methods;

(d) comparability of information;

Article 95

In the context of decentralised management, referred to in
Article 13, the Commission shall strive to encourage manage-
ment by the beneficiary ACP States and OCTs that is aimed at
applying provisions equivalent to those laid down in this Title.

(e) materiality;

(f) no netting;

(g) reality over appearance;

(h) accrual-based accounting.

TITLE VII

ACCOUNTS

CHAPTER 1

PRESENTATION OF THE ACCOUNTS

Article 96

1.
The Commission shall draw up, by 31 July each year at
the latest, the accounts of the EDF describing the financial
situation of the Fund as at 31 December of the preceding year.
The EDF Accounts shall comprise:

(a) the financial statements referred to in Article 100;

(b) the reports on financial

implementation referred to in

Article 101;

(c) the financial statements and the information supplied by

the EIB in accordance with Article 125(2).

The EDF accounts shall be accompanied by a report on
2.
financial management during the preceding year containing an
accurate description of:

(a) the achievement of the objectives for the financial year, in
accordance with the principle of sound financial manage-
ment;

(b) the financial situation and the events that had a significant
influence on the activities carried out during the financial
year.

Article 99

In accordance with the principle of

1.
accrual-based
accounting, the financial statements referred to in Article 100
shall show the charges and income for the financial year,
regardless of the date of payment or collection.

The value of assets and liabilities shall be determined in
2.
accordance with the valuation rules provided for in Article
111.

Article 100

The

financial

1.
shall be prepared by the
accounting officer and presented in millions of euro. They shall
comprise:

statements

(a) the balance sheet, which represents the assets and liabilities
and financial situation and the economic outturn of the
it shall be
EDF at 31 December of
presented in accordance with the structure laid down by
the Directives of the European Parliament and Council on
the annual accounts of certain types of companies, but with
account being taken of the specific nature of the EDF's
activities;

the previous year;

(b) the

cash-flow table

showing amounts

collected and
disbursed during the year, the final treasury position and a
funds covering the
statement of sources and uses of
preceding financial year;

Article 97

(c) a table of items payable to the EDF showing:

The accounts must comply with the rules and be accurate and
comprehensive and present a true and fair view:

(a) as regards the financial statements, of the assets and liabil-
ities, charges and income, entitlements and obligations not
shown as assets or liabilities, and cash flow;

(b) as regards the reports on financial implementation, of the
revenue and expenditure operations from EDF resources.

Article 98

(i) amounts still to be recovered at the beginning of the

financial year;

(ii) entitlements established in the course of the financial

year;

(iii) amounts recovered in the course of the financial year;

(iv) cancellation of established entitlements;

(v) amounts still to be recovered at the end of the financial

year.

The financial statements referred to in Article 100 shall be
drawn up in accordance with generally accepted accounting
principles, namely:

(a) going concern basis;

2.
The annex to the financial statements shall supplement
and comment on the information presented in the statements
referred to in paragraph 1 and shall contain notes indicating
which accounting principles were applied in the preparation
and presentation of the accounts.

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Article 101

CHAPTER 2

1.
The reports on financial implementation shall be prepared
by the accounting officer and presented in millions of euro.
They shall comprise the financial outturn account, which sets
out all financial operations for the year in terms of revenue and
expenditure. The annex to the financial outturn account shall
supplement and comment on the information presented in it.

2.
The reports on financial implementation shall comprise
the following tables, presented in millions of euro and prepared
by the Chief Authorising Officer in conjunction with the
accounting officer:

(a) a table describing changes over the preceding financial year

in the appropriations indicated in the Annex;

(b) a table showing the total by allocation of commitments,
assigned funds and payments effected during the financial
year and aggregate totals since the opening of the EDF;

(c) tables showing by appropriation, country, territory, region
or sub-region, the total commitments, assigned funds and
payments effected during the financial year and aggregate
totals since the opening of the EDF.

Article 102

The Commission shall send the provisional accounts to the
Court of Auditors by 31 March of the following financial year
at the latest. By 30 April it shall send the European Parliament,
the Council and the Court of Auditors the report, referred to in
Article 96, concerning financial management during the year.

INFORMATION ON IMPLEMENTATION OF EDF RESOURCES

Article 104

The Commission and the EIB shall monitor, each to the
1.
extent to which it is concerned, the use of EDF assistance by
the ACP States, the OCTs or any other beneficiary, and the
implementation of projects financed by the EDF, having parti-
cular regard to the objectives referred to in Articles 55 and 56
of the ACP-EC Agreement and in the corresponding provisions
of the Overseas Association Decision.

2.
The EIB shall periodically inform the Commission
regarding the implementation of projects financed from the
EDF resources it administers, following the procedures set out
in the operational guidelines of the Investment Facility.

The Commission and the EIB shall provide the EDF
3.
Committee with information on the operational implementa-
tion of EDF resources through the national and regional alloca-
tions set out in the Annex. Such information shall also cover
projects and programmes
Investment
Facility. The Commission shall send that information to the
Court of Auditors in accordance with Article 32(4) of the
Internal Agreement.

financed from the

CHAPTER 3

ACCOUNTING

Article 105

Article 103

1.
The Court of Auditors shall, by 15 June at the latest,
make its observations on the provisional accounts as regards
the part of the EDF resources for which the Commission is
responsible for financial management under Article 1(2), so
that the Commission can make the corrections deemed neces-
sary for drawing up the final accounts.

2.
The Commission shall approve the final accounts and
send them to the European Parliament, the Council and the
Court of Auditors by 31 July of the following financial year at
the latest.

3.
The final accounts shall be published by 31 October of
the following financial year in the Official Journal of the European
Union together with the statement of assurance given by the
Court of Auditors in respect of the part of the EDF resources
for which the Commission is responsible for financial manage-
ment under Article 1(2).

The accounting system is the system serving to organise
information in such a way that figures can be

1.
the financial
input, filed and registered.

2.
The accounts shall consist of general accounts and finan-
cial accounts. Those accounts shall be kept in euro on the basis
of the financial year.

3.
The figures in the general accounts and the financial
accounts shall be adopted at the close of the financial year so
that the accounts referred to in Chapter 1 can be drawn up.

Notwithstanding paragraphs 2 and 3, the Chief Author-

4.
ising Officer may keep analytical accounts.

Article 106

The accounting officer shall be responsible for the monitoring
and entry in the accounts of payments by the Member States
and other revenue.

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Article 107

(b) provision for the revision of prices and contingencies as

The general accounts shall record, in chronological order using
the double entry method, all events and operations affecting
the economic and financial situation and the assets and liabil-
ities of the EDF, and which make up the EDF balance sheet.

Article 108

1. Movements on the accounts and the balances shall be
entered in the accounting ledgers.

All accounting entries,

to the
2.
accounts, shall be based on supporting documents, to which
they shall refer.

including adjustments

The accounting system shall be such as to leave a trail for

3.
all accounting entries.

Article 109

The accounting officer shall, after the close of the financial year
and up to the date of presentation of the accounts, make any
adjustments which, without involving disbursement or collec-
tion in respect of that year, are necessary for a true and fair
presentation of the accounts which complies with the rules.

defined in EDF-funded contracts;

(c) financial provision for exchange rate fluctuations.

The conversion rates to be used for final accounting of
4.
payments made under the projects or programmes referred to
in Part 4 of the ACP-EC Agreement and Annex IV thereto or in
the Overseas Association Decision shall be the rates applicable
on the date on which the Commission accounts referred to in
Article 28 of this Regulation were debited.

5.
All accounting records referring to the fulfilment of a
commitment shall be kept for a period of five years from the
date of the decision giving discharge in respect of the financial
implementation of EDF resources, referred to in Article 119,
concerning the financial year during which the commitment
was closed for accounting purposes.

Article 111

the

The

shall

adopt

accounting officer

applicable
1.
accounting rules and methods. He shall prepare and, after
consulting the Chief Authorising Officer, adopt the chart of
accounts to be applied to the EDF's operations. In so doing he
shall be guided by the internationally accepted accounting stan-
dards for the public sector but may depart from them where
justified by the specific nature of the EDF's activities.

Article 110

The financial accounts shall allow detailed monitoring of

1.
the financial implementation of EDF resources.

2.
Entries in the accounts shall be made on the basis of the
chart of accounts using a nomenclature which makes a clear
distinction between the general accounts and the financial
accounts. The chart of accounts shall be sent to the Court of
Auditors.

They shall show all:

(a) allocations;

(b) commitments;

(c) assigned funds;

(d) payments, and established debts and collection operations
for the financial year, in full and without any adjustment
against each other.

2. When commitments, payments and debts are expressed
in national currencies, the accounting system shall make it
possible, where necessary, for them to be recorded in national
currencies as well as in euro.

3.
The commitments defined in Article 51 shall be recorded
in euro for the value of the financing decisions taken by the
Commission.

The assigned funds defined in Article 54(3) shall be recorded in
euro at the equivalent of the value of the contracts, grants and
programme estimates concluded by the beneficiary ACP State
or OCT or by the Commission in the performance of the
project. That value shall include where appropriate:

(a) provision for the payment of reimbursable expenses on

presentation of supporting documents;

TITLE VIII

EXTERNAL AUDIT AND DISCHARGE

CHAPTER 1

GENERAL PROVISIONS

Article 112

The operations financed from EDF resources managed by the
EIB in accordance with Article 1(3) shall be subject to the audit
and discharge procedures laid down in the Statutes of the EIB
for all of its operations. Detailed rules for auditing by the Court
of Auditors are set out in the Tripartite Agreement. They shall
be the result of a common agreement between the EIB, the
Commission and the Court of Auditors in the Agreement
currently in force or possibly by a new Agreement or any other
agreement that may replace it.

regards

the operations

As
financed from EDF resources
managed by the Commission in accordance with Article 1(5),
the Court of Auditors shall exercise its powers in accordance
with this Title.

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CHAPTER 2

EXTERNAL AUDIT

Article 113

The Commission shall inform the Court of Auditors, as soon as
possible, of all decisions and rules adopted pursuant to this
Regulation.

The Commission shall afford the Court of Auditors all the
5.
facilities and give it all the information which the latter deems
necessary for the performance of its task. It shall place at the
disposal of the Court of Auditors all documents concerning the
award and performance of contracts and all accounts of cash
or materials, all accounting records or supporting documents,
and also administrative documents relating thereto, all docu-
ments relating to revenue and expenditure, all inventories, all
organisation charts which the Court of Auditors considers
necessary for auditing the financial outturn report on the basis
of documents or on the spot and, for the same purposes, all
documents and data created or stored on a magnetic medium.

Article 114

The officials whose operations are checked by the Court of
Auditors shall:

In the performance of its task, the Court of Auditors shall
notify the Commission and the authorities to which this Regu-
lation applies of the names of the members of its staff who are
empowered to audit them and the tasks entrusted to those
persons.

(a) disclose their records of cash in hand, any other cash, secu-
rities and materials of any kind and the supporting docu-
ments in respect of their stewardship of the funds with
which they are entrusted and any books, registers and other
documents relating thereto;

Article 115

1.
In respect of cooperation with the ACP States, the Court
of Auditors, when examining whether all revenue has been
received and all expenditure incurred in a lawful and proper
manner, shall have regard to the provisions of the ACP-EC
Agreement, this Regulation and all other acts adopted pursuant
to those instruments.

In respect of cooperation with the OCT, the Court of Auditors,
when examining whether all revenue has been received and all
expenditure incurred in a lawful and proper manner, shall have
regard to the provisions of the EC Treaty, the Overseas Associa-
tion Decision, this Regulation and all other applicable acts.

2.
In the performance of its task, the Court of Auditors shall
be entitled to consult, in the manner provided for in paragraph
6, all documents and information relating to the financial
management of departments or bodies with regard to opera-
tions financed or co-financed from EDF resources. It shall have
the power to make enquiries of any official responsible for a
the
revenue or expenditure operation and to use any of
auditing procedures appropriate to those departments or
bodies.

In order to obtain all the necessary information for the perfor-
mance of its task, the Court of Auditors may be present, at its
request, during the audit operations carried out within the
framework of financial implementation by, or on behalf of, the
Commission.

3.
The Court of Auditors shall ensure that all securities and
cash on deposit or in hand are checked against vouchers signed
by the depositories or against official memoranda of cash and
securities held. The Court may carry out such checks itself.

(b) present

the

correspondence or

any other document
required for the full implementation of the audit referred to
in paragraph 1.

The information referred to under (b) of the second subpara-
graph may be requested only by the Court of Auditors.

The Court of Auditors shall be empowered to audit the docu-
ments relating to EDF revenue and expenditure which are held
by the Commission departments responsible.

The task of establishing that

6.
the revenue has been
received and the expenditure incurred in a lawful and proper
manner and that the financial management has been sound
shall extend to the utilisation by bodies outside the Commis-
sion of EDF resources which they have received and managed
in the form of grants in accordance with Title VI. All financing
from EDF resources granted to beneficiaries outside the
Commission shall be subject to the agreement in writing by the
beneficiaries or, failing agreement on their part, by the contrac-
tors or subcontractors, to an audit by the Court of Auditors of
the use made of the financing granted.

Use of integrated computer systems may not have the
to
impairing access by the Court of Auditors

7.
effect of
supporting documents.

8.
The national audit authorities of the beneficiary states
shall be encouraged to participate in the work of the Court of
Auditors.

Article 116

At the request of the Court of Auditors, the Commission
4.
shall authorise financial
institutions holding EDF deposits to
enable the Court of Auditors to ensure that the external data
tally with the accounts.

1.
After the closure of each financial year, the Court of
Auditors shall draw up an annual report in accordance with
paragraphs 2 to 6.

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The Court of Auditors shall transmit to the Commission,
2.
by 15 June at the latest, any observations which, in its opinion,
are such that they should appear in the annual report. Those
observations must remain confidential. The Commission shall
address its replies to the Court of Auditors by 30 September at
the latest.

The annual report shall contain an assessment of the

3.
soundness of financial management.

The Court of Auditors may add any summary report or

4.
any general observations which it sees fit to make.

The Court of Auditors shall take all necessary steps to
5.
ensure that the Commission's replies to its observations are
published immediately after the observations to which they
relate.

The Court of Auditors shall send its annual report,
6.
together with the Commission's replies,
to the authorities
responsible for giving discharge and to the Commission, by 31
October at the latest, and shall ensure the publication thereof
in the Official Journal of the European Union.

Article 117

1.
The Court of Auditors shall notify the Commission of any
observations which, in its opinion, are such that they should
appear in a special report. Those observations must remain
confidential.

The Commission shall have two and a half months within
which to inform the Court of Auditors of any comments it
wishes to make on the observations in question.

The Court of Auditors shall adopt the definitive version of the
special report in question the following month.

2.
The special reports referred to in paragraph 1, together
with the Commission's replies, shall be transmitted without
delay to the European Parliament and the Council, each of
which shall decide, where appropriate in conjunction with the
Commission, what action is to be taken in response.

Should the Court of Auditors decide to have any such special
reports published in the Official Journal of the European Union,
they shall be accompanied by the Commission's replies.

The Court of Auditors may, at the request of one of the
issue opinions on matters relating to the

3.
other institutions,
EDF.

Article 118

At the same time as the annual report referred to in Article
116, the Court of Auditors shall provide the European Parlia-
ment and the Council with a statement of assurance as to the
reliability of the accounts and the legality and regularity of the
underlying transactions.

CHAPTER 3

DISCHARGE

Article 119

1.
Before 30 April of year N + 2, the European Parliament,
upon a recommendation from the Council acting by a qualified
majority, shall give a discharge to the Commission in respect of
the financial implementation for year N of the EDF resources,
which it manages in accordance with Article 1(2). If that date
cannot be met, the European Parliament or the Council shall
inform the Commission of the reasons for the postponement.
Should the European Parliament postpone the decision giving
discharge,
the Commission shall make every effort to take
measures, as soon as possible, to facilitate removal of the obsta-
cles to that decision.

2.
The discharge decision shall cover the accounts referred
to in Article 96, except the part thereof provided by the EIB in
accordance with Article 125(2). The discharge decision shall
include an assessment of the responsibility of the Commission
in the execution of
the financial management during the
preceding period.

the European
3. With a view to granting the discharge,
Parliament shall, after the Council has done so, examine the
EDF accounts referred to in Article 96. It shall also examine the
annual report made by the Court of Auditors together with the
Commission's replies, any special reports by the Court of Audi-
tors relevant to the financial year in question and the Court of
Auditors' statement of assurance as to the reliability of the
accounts and the legality and regularity of the underlying trans-
actions.

4.
The Commission shall take all appropriate steps to act on
the observations accompanying the European Parliament's
discharge decision and the comments accompanying the
discharge recommendation adopted by the Council.

5.
At the request of the European Parliament or the Council,
the Commission shall report on the measures taken in the light
of those observations and comments, and, in particular, on the
its departments which are
instructions given to those of
responsible for the financial implementation of EDF resources.
That report shall also be sent to the Court of Auditors.

The decision giving the discharge shall be published in

6.
the Official Journal of the European Union.

Article 120

The Commission shall submit to the European Parliament, at
the latter's request, any information required for the control of
implementation of the EDF resources managed by the Commis-
sion in accordance with Article 1(2) for the year in question.
Access to confidential
information and the arrangements for
handling it shall comply with fundamental human rights, the
protection of business secrecy, the provisions governing judicial
and disciplinary proceedings and the interests of the Commu-
nity.

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SPECIFIC PROVISIONS CONCERNING EDF RESOURCES MANAGED BY THE EIB

PART TWO

Article 121

Each year, before 1 September, the EIB shall send the Commis-
sion its estimates of commitments and payments, which are
necessary for drawing up the communication referred to in
in respect of the operations of the Investment
Article 8(1),
Facility, including interest rate subsidies, in accordance with the
Internal Agreement.

Each year, before 1 May, the EIB shall send the Commission
the updated estimates of commitments and payments which
are necessary for drawing up the communication referred to in
Article 8(3).

Article 122

1.
The contributions referred to in Article 39 and adopted
by the Council shall be paid by the Member States to the EIB
via a special account opened in the name of each Member
State.

2.
Save where the Council decides otherwise regarding the
remuneration of the EIB in accordance with Article 8 of the
Internal Agreement, proceeds received by the Bank via the
credit balance of the special accounts referred to in paragraph
1 of
in the
this Article shall be recorded in an account
Commission's name, and used for the purposes set out in
Article 9 of the Agreement.

3.
Any rights resulting from operations carried out by the
EIB using EDF resources, and particularly rights as creditor or
owner, shall be vested in the Member States.

4.
The EIB shall undertake the treasury management of the
amounts referred to in paragraph 1 in accordance with the
laid down in the management agreement
detailed rules
provided for in Article 128.

5.
The Investment Facility shall be managed in accordance
with the conditions laid down in the ACP-EC Agreement, the
Overseas Association Decision and the Internal Agreement.

Article 123

The EIB shall be remunerated on a full indemnity basis for the
management of the Investment Facility operations. The Council
shall decide on the resources and mechanisms for remuneration
of the Bank in accordance with Article 8(2) of the Internal
Agreement. The measures implementing that decision shall be
incorporated in the management agreement provided for in
Article 128.

butions paid to the EIB and, in particular, of the total quarterly
amounts of commitments, contracts and payments, in accor-
dance with the detailed rules laid down in the management
agreement provided for in Article 128.

Article 125

The EIB shall keep the accounts of the Investment Facility,
1.
including interest rate subsidies, financed by the EDF to provide
a trail for the full circuit of the funds, from receipt to disburse-
ment and then to the revenue to which they give rise and any
subsequent recoveries. The EIB and the Commission shall draw
up the relevant accounting rules and methods by common
agreement and inform the Member States accordingly.

2.
Each year the EIB shall send the Council and the Commis-
sion a report on the implementation of operations financed
from EDF resources under its management, including the finan-
cial statements drawn up in accordance with the rules and
methods referred to in paragraph 1 and the information
referred to in Article 101(2).

Those documents shall be submitted in draft form no later than
28 February and in their final version no later than 30 June of
the following financial year, so that they can be used by the
Commission in preparing the accounts referred to in Article 96
of this Regulation in accordance with Article 32(1) of the
Internal Agreement. The report on the financial management
of the resources managed by the EIB shall be submitted by the
latter to the Commission no later than 31 March of
the
following financial year.

Article 126

The EIB's own rules shall apply to contracts financed by the
EDF resources which it manages.

Article 127

Where programmes or projects are co-financed by the Member
States or their implementing bodies and correspond to the
priorities laid down in the Country Cooperation Strategies
provided for in Chapter III of the Internal Agreement and in
Article 20 of the Overseas Association Decision, the EIB may
entrust responsibility for managing Community aid to Member
States or their implementing bodies.

Article 124

Article 128

The EIB shall regularly inform the Commission of the opera-
including
tions carried out under
interest rate subsidies, of the use made of each call for contri-

the Investment Facility,

The detailed rules for implementing this Part shall be the
subject of a management agreement between the Commission,
acting on behalf of the Community, and the EIB.

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PART 3

TRANSITIONAL AND FINAL PROVISIONS

TITLE I

TRANSITIONAL PROVISIONS

CHAPTER 1

for in Article 1(3) of the Internal Agreement. The same shall
apply to miscellaneous revenue of previous EDFs comprising,
for example, default
late
payment of contributions to those EDFs by Member States and
the interest generated by the EDF resources managed by the
EIB, that is payable to the Community.

interest received in the event of

TRANSFER OF BALANCES REMAINING FROM PREVIOUS EDFs

Article 129

1.
The provisions of this Title shall govern the transfer to
the 9th EDF of the balances remaining from resources consti-
tuted under the Internal Agreements relating to the 6th (1),
7th (2) and 8th (3) EDFs (hereinafter referred to as ‘previous
EDFs’).

2.
The balances remaining from previous EDFs shall be used
to finance projects, programmes and other forms of action that
contribute to attaining the objectives of the ACP-EC Agreement
and the Overseas Association Decision, in accordance with the
provisions of that Agreement or that Decision, and with the
conditions laid down in this Title.

To that end, any balances remaining from previous EDFs on
the date of the entry into force of the Financial Protocol set out
in Annex I to the ACP-EC Agreement, in the case of the ACP
States, or on the date of the entry into force of the Internal
Agreement,
together with any
amounts to be decommitted at a later date from ongoing
projects under those EDFs, shall be transferred to the 9th EDF.
This paragraph shall apply without prejudice to Decision No 2/
2000 of the ACP-EC Council of Ministers (4).

in the case of

the OCTs,

Article 130

1.
Any resources transferred to the 9th EDF that were
previously allocated to the indicative programme of an ACP
State or an ACP region before the entry into force of the Finan-
cial Protocol set out in Annex I to the ACP-EC Agreement shall
remain allocated to that State or region.

Resources that were allocated to OCTs before the entry
2.
into force of the Overseas Association Decision shall remain
allocated to them. Any resources thus transferred to the 9th
EDF after having been allocated previously to the indicative
programme of an OCT or a region shall remain allocated to
that OCT or to regional cooperation in the context of the
implementation of the Overseas Association Decision.

3.
The balance of revenue accruing from interest on the
resources of previous EDFs shall be transferred to the 9th EDF
and allocated for the same purposes as the revenue provided

(1) OJ L 86, 31.3.1986, p. 221.
(2) OJ L 229, 17.8.1991, p. 288.
(3) OJ L 156, 29.5.1998, p. 108.
(4) OJ L 17, 19.1.2001, p. 20.

Article 131

1.
In respect of the ACP States, any balance that is not allo-
cated to a country or region, taking into account the transi-
tional measures applicable up to the entry into force of the
shall be assigned to the unallocated
ACP-EC Agreement,
amount of
in accordance with the decision
referred to in Article 132 of this Regulation.

the 9th EDF,

The first subparagraph shall apply in particular to:

(a) any balance remaining from the resources of previous EDFs
that were not previously allocated to a specific ACP State
or region, including any balances of resources available for
emergency aid, aid for refugees or structural adjustment;

(b) any balance remaining from resources under the Stabex

and Sysmin instruments.

2.
In respect of the OCTs, any balance that is not allocated
to an indicative programme on the date when the Internal
Agreement enters into force shall be assigned to the non-allo-
cated amount of the EDF.

The first subparagraph shall apply in particular to any balance
remaining from the overall amounts referred to in Articles 118
and 142 of Council Decision 91/482/EC (5), which concern,
respectively,
the Stabex and Sysmin instruments. However,
financing decisions concerning balances under Sysmin may be
adopted up to the entry into force of the Internal Agreement if
a request for financing was introduced before Decision 91/482/
EC expired.

Article 132

The Commission shall adopt
the detailed arrangements for
implementing this Title with regard to the definitive treatment
under the 9th EDF of the remaining balances and amounts to
be decommitted and transferred to the 9th EDF.

Those detailed arrangements shall be adopted after consultation
of the EIB in respect of the resources managed by it and in
accordance with the rules laid down in the ACP-EC Agreement,
the Overseas Association Decision, the Internal Agreement and
this Regulation.

(5) OJ L 263, 19.9.1991, p. 1.

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CHAPTER 2

RULES APPLICABLE

FOR THE

IMPLEMENTATION OF

PREVIOUS EDFs AND BALANCES TRANSFERRED

EDFs, save as regards the duties of financial controller and the
presentation of accounts. The procedure for calling contribu-
tions required to implement those decisions shall be that laid
down in this Regulation in the case of operations managed by
the Commission.

Article 133

Balances remaining from previous EDFs that are trans-
1.
ferred to the 9th EDF shall be administered in accordance with
the conditions laid down in this Title and in the relevant provi-
sions of the ACP-EC Agreement, the Overseas Association Deci-
sion or the Internal Agreement.

the Financial Controller,

2.
As regards the ACP States, commitments relating to
previous EDFs entered into before the entry into force of the
ACP-EC Agreement shall continue to be implemented in accor-
dance with the rules applicable to those EDFs, save as regards
the duties of
the presentation of
accounts and the procedure for calling contributions, for which
the provisions of this Regulation shall apply. With effect from
the date on which the ACP-EC Agreement enters into force, the
balances transferred to the 9th EDF shall be used in accordance
with the conditions laid down in the ACP-EC Agreement, the
Internal Agreement and this Regulation.

Article 134

To ensure that commitments entered into under previous EDFs
are completed in accordance with the principle of sound finan-
cial management, the Commission shall implement procedures
which provide, in particular, that, after this Regulation enters
into force, a financing agreement may be renewed only once
and may not in any event be renewed for a period of more
than three years from the deadline laid down at the time of that
the programme or
entry into force for the completion of
project financed by the agreement in question.

CHAPTER 3

TRANSITIONAL PERIOD

Article 135

However, where transfers are made from previous EDFs for the
benefit of national or
indicative programmes, as
provided for in Article 130:

regional

1.
The procedures concerning Member States' contributions
laid down in Articles 8, 38 and 40 shall apply for the first time
in respect of the first instalment to be proposed after the entry
into force of this Regulation.

(a) if

the amount exceeds EUR 10 million per country or
region, those resources shall be administered in accordance
with the rules of the EDF of origin as regards eligibility for
participation in tenders and the award of contracts;

2.
The deadlines referred to in Articles 102, 103, 116 and
125 shall apply for the first time in respect of financial year
2005.

(b) if

the resources transferred are equal

to or less than
EUR 10 million, the eligibility rules applicable to tenders
under the 9th EDF shall apply.

As

regards

3.
relating to the
the OCTs, commitments
previous EDFs entered into before the entry into force of the
Internal Agreement and this Regulation shall continue to be
implemented in accordance with the rules applicable to those
EDFs, save as regards the duties of the Financial Controller, the
presentation of accounts and the procedure for calling contri-
butions, for which the provisions of this Regulation shall apply.
Resources from previous EDFs shall continue to be employed
in accordance with the relevant provisions of Decision 91/482/
EC, which shall remain applicable for that purpose until the
entry into force of the Internal Agreement.

For earlier years those deadlines shall be:

(a) 30 April and 31 May for Article 102;

(b) 15 July for Article 103(1);

(c) 15 October for Article 103(2);

(d) 30 November for Article 103(3);

(e) 15 July and 31 October for Article 116(2);

(f) 30 November for Article 116(6);

(g) 31 March, 15 September and 30 April

for the second

subparagraph of Article 125(2).

4.
Decisions relating to previous EDFs for which the EIB
undertakes the financial implementation shall continue to be
implemented in accordance with the rules applicable to those

3.
The provisions of Title VII of Part One shall apply gradu-
ally depending on technical possibilities in order to be fully
effective for the financial year 2005.

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TITLE II

FINAL PROVISIONS

Article 136

1.
In accordance with Articles 2 and 34 of the Internal
Agreement, the Member States shall assess the degree to which
commitments and disbursements have been carried out before
the expiry of the EDF. On that occasion they shall also assess
the Commission's needs in respect of the resources reserved for
costs linked to implementation under Articles 4 and 9 of the
Internal Agreement. The need for new resources to support
financial cooperation and costs linked to implementation under
Article 9 of the Internal Agreement shall be established in the
light of that assessment. Due account shall be taken of the
uncommitted and non-disbursed resources under the EDF.

The Commission shall take full account of that performance
assessment when updating the allocation of resources under
Article 16 of the Internal Agreement and shall decide on any
reallocation of resources that is necessary in order to guarantee
optimum use of the available resources.

Before the expiry of the 9th EDF, the Member States shall
2.
set a date beyond which the resources of the EDF may no
longer be committed.

Article 137

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

It shall be applicable for the same period as the Internal
Agreement.

Done at Brussels, 27 March 2003.

For the Council

The President

M. STRATAKIS

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ANNEX

FINANCIAL INFORMATION ON THE EDF

1. In accordance with Article 1 of the Internal Agreement, the EDF shall consist of an amount of up to EUR 13 800

million contributed by the Member States as follows:

Member State

Contribution in EUR million

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom

540,96

295,32

3 223,68

172,50

805,92

3 353,40

85,56

1 730,52

40,02

720,36

365,70

133,86

204,24

376,74

1 751,22

13 800,00

Within that total amount:

(i) EUR 13 500 million shall be allocated to the ACP States;

(ii) EUR 175 million shall be allocated to the OCTs;

(iii) EUR 125 million shall be allocated to the Commission for costs linked to implementation of the EDF.

2.1. Out of the total amount stated in Article 1(2)(a) of the Internal Agreement, an amount of up to EUR 13 500

million shall be reserved for the ACP States and allocated as follows:

(a) up to EUR 10 000 million in the form of non-repayable aid comprising up to:

(i) EUR 9 836 million reserved for support for long-term development to be programmed in accordance with
Articles 1 to 5 of Annex IV to the ACP-EC Agreement. Those resources may be used to finance humani-
tarian aid and short-term emergency aid in accordance with Article 72(3) of the ACP-EC Agreement. Out
of that total allocation, EUR 195 million shall be earmarked to finance the interest rate subsidies provided
for in Article 3(c) of Annex I to the ACP-EC Agreement and Articles 2 and 4 of Annex II thereto;

(ii) EUR 90 million reserved for the financing of the budget of the Centre for Development of Enterprise

(CDE) in accordance with the provisions of Annex III to the ACP-EC Agreement;

(iii) EUR 70 million reserved for the financing of the budget of the Technical Centre for Agriculture and Rural

Cooperation (CTA) in accordance with the provisions of Annex III to the ACP-EC Agreement; and

(iv) EUR 4 million for the expenditure relating to the ACP-EC Joint Assembly, constituted by Article 17 of the

ACP-EC Agreement;

(b) up to EUR 1 300 million reserved for the financing of support for regional cooperation and integration of the

ACP States in accordance with Articles 6 to 14 of Annex IV to the ACP-EC Agreement;

(c) up to EUR 2 200 million shall be allocated to finance the Investment Facility in accordance with the terms and
conditions set out in Annex II (‘Terms and conditions of financing’) to the ACP-EC Agreement, without preju-
dice to the financing of the interest rate subsidies provided for in Articles 2 and 4 of Annex II to the Agreement
funded from the resources mentioned in point (a)(i) of this Section.

1.4.2003

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Official Journal of the European Union

L 83/31

2.2. Out of the EUR 13 500 million referred to in Section 2.1, an amount of EUR 1 000 million may be released only
following a performance review undertaken by the Council in 2004, on the basis of a proposal from the Commis-
sion. Those resources shall, if released, be distributed as appropriate between the envelopes referred to in points (a),
(b) and (c) of Section 2.1.

3. The overall amount of financial assistance to the OCTs allocated by the Community out of the overall amount
stated in Article 1(2)(a) of the Internal Agreement shall be EUR 175 million, of which EUR 155 million in the
form of non-repayable aid, including EUR 1 million set aside to finance the interest rate subsidies provided for in
Article 3(3)(d) of Annex IIA to the Overseas Association Decision, and EUR 20 million under the Investment
Facility. The rules governing the implementation of that assistance shall be laid down in the Council Decision on
the association of the OCTs with the Community, adopted pursuant to Article 187 of the Treaty.

4. An amount of EUR 125 million shall be reserved for the financing of costs linked to implementation incurred by
the Commission in the framework of the ACP-EC Agreement. It shall be utilised in accordance with the principles
set out in Article 9 of the Internal Agreement together with the resources referred to in Article 1(3) of that Agree-
ment.

5.1. To the amount laid down in the second paragraph of Section 1 shall be added up to EUR 1 720 million in the
form of loans granted by the EIB from its own resources. Those resources shall be granted for the purposes set out
in Annex II to the ACP-EC Agreement and in the Overseas Association Decision, in accordance with the conditions
provided for by its statutes and the relevant provisions of the terms and conditions for investment financing as laid
down in that Annex and Decision.

5.2. Those loans shall be allocated as follows:

(a) up to EUR 1 700 million for financing operations to be carried out in the ACP States;

(b) up to EUR 20 million for financing operations to be carried out in the OCTs.