Proposal for a Council Regulation amending Council Regulation (EC) No 1080/2000 of 22 May 2000 on support for the United Nations Interim Mission in Kosovo (UNMIK) and the Office of the High Representative in Bosnia and Herzegovina (OHR)
Date: 2003-07-02
Institutions: European Commission
Subjects: Bosnia and Herzegovina, Community budget, EU financing, Kosovo, accounting entry, aid to refugees, cooperation policy, economic reconstruction, legal basis

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 02.07.2003
COM(2003) 389 final

2003/0143 (CNS)

Proposal for a

COUNCIL REGULATION

amending Council Regulation (EC) No 1080/2000 of 22 May 2000 on support for the
United Nations Interim Mission in Kosovo (UNMIK) and the Office of the High
Representative in Bosnia and Herzegovina (OHR)

(presented by the Commission)

EXPLANATORY MEMORANDUM

The European Union plays a leading role in the Stability Pact for South-Eastern Europe (SP),
which is a regional policy framework established by the international community in Cologne
on 10 June 1999 in an attempt to support the countries in that region in their efforts to foster
peace, democracy, respect for human rights and economic prosperity, and to achieve stability
in  the  region  as  a  whole.  The  Special  Coordinator  of  the  SP  is  appointed  by  the  EU  after
consultation with the OSCE Chairman in Office and other participants, and  endorsement by
the  OSCE  Chairman  in  Office.  Timely  installation  and  regular  operation  of  the  SP  may  be
important factors in achieving the goals of the European Union in the region, in particular in
achieving  stabilisation  in  the  region.  Until  now,  the  Council  has  appointed  an  EU  Special
Representative  (EUSR)  to  act  as  Special  Coordinator  of  the  SP  and  provided  him  with  the
necessary means to fulfil his mandate by adopting renewed Joint actions1 under the CFSP.

In the context of the review by the Council and the Commission of CFSP instruments and in
view of the fact that they will be streamlined by May 2003, it has been agreed to move EU
financial  support  for  the  SP  from  CFSP  to  the  first  pillar  and  to  remove  the  Special
Coordinator of the SP from the list of EUSRs. This will reflect the fact that, since the mandate
of the SP was confirmed with a medium-term objective, it appears inappropriate that the SP
should  continue  to  be  subject  to  the  rules  applied  to  EUSRs,  in  particular  the  six-monthly
mandate  renewal  rule.  The  current  financial  proposal,  is  to  a  large  extent  a  budget-neutral
operation for  Heading IV "External Action". The Commission is proposing a transfer of the
financing  of  the  operation  from  CFSP  line  19  03  03  (former  B8-012)  "Conflict  resolution,
verification, support for the peace process and stabilisation" to line 19 07 04 (former B7-547)
"Interim  Civilian  Administration".  Yet  line  19  07  04  will  also  have  to  cover  those
expenditures  financed  in  2003  by  Council  Administrative  Budget  line  1113  "Special
advisers".

Since the proposal to amend the Regulation was adopted by the Commission after the  2004
Preliminary Draft Budget, the accompanying € 2 million increase in the specific line 19 07 04
(B7-547) for Interim Civilian Administrations will have to be secured in the 2004 budgetary
procedure by means of an amendment by the budgetary authority.

It is therefore necessary to provide a legal framework under the first pillar so as to cover, as
from 1.1.2004, the Community's financial assistance to the SP. This objective is best achieved
by  amending  Council  Regulation  (EC)  No  1080/2000  of  22  May  20002  on  support  for  the
United  Nations  Interim  Mission  in  Kosovo  (UNMIK)  and  the  Office  of  the  High
Representative in Bosnia and Herzegovina (OHR), to extend its scope to include the SP.

This legal framework will ensure the transparency of Community financing of the SP, which
will take the form of a grant, subject to the yearly conclusion of a financing agreement, based
on a detailed budget submitted by the SP. The financing agreement will be concluded by the
Commission, acting on behalf of the Community, with the SP. It will determine the amount of
the grant, the eligible expenditure, the period covered, the implementing procedures  and the
procedures  for  verifying  the  management  and  ultimate  destination  of  the  Community  grant.
With regard to  Article 2 of the Regulation No 1080/2000 on  the  equitable  division  of  costs
with  other  members  of  the  international  community,  co-financing  in  kind  will  be  explicitly

1

2

99/523/CFSP  OJ  L  201  (29.07.1999);  99/822/CFSP  OJ  L  337  (09.12.1999);  00/793/PESC  OJ  L  318
(14.12.2000); 01/915/CFSP OJ L 337 (19.12.2001); 02/964/CFSP OJ L 334 (10.12.2002).
OJ L 122, 24.5.2000, p. 27

2

                                                
allowed. In addition, this legal framework will provide a procedure for appointing the Special
Coordinator  of  the  SP,  in  accordance  with  the  Cologne  document,  which  established  the
Stability Pact on 10 June 1999.

This financial assistance by the Community will allow the Special Co-ordinator of the SP to
continue  to  fulfil  its  mandate  and,  in  particular:  to  promote  achievement  of  the  Pact's
objectives within, and between, the individual countries, where the Pact proves to have added
value; to chair the South-Eastern  Europe  Regional  Table;  to  maintain  close  contact  with  all
participants  and  facilitating  States,  organisations  and  institutions  of  the  Pact,  as  well  as
pertinent regional initiatives and organisations, with a view to fostering regional cooperation
and enhancing regional ownership; to cooperate closely with all institutions of the European
Union and its Member States in order to promote the role of the European Union in the Pact
and  to  ensure  complementarity  between  the  work  of  the  Pact  and  the  Stabilisation  and
Association  Process;  to  meet  periodically  and  collectively  with  the  Chairs  of  the  Working
Tables  to  ensure  strategic  overall  coordination  and  provide  the  secretariat  of  the  Regional
Table and its instruments;  and  to work  on the  basis of  a list,  agreed in  advance  on a  yearly
basis and in consultation with the participants of the Pact, of priority actions for the Pact to
implement, while keeping the working methods and structures of the Pact under review and
ensuring consistency and efficient use of resources.

3

2003/0143 (CNS)

Proposal for a

COUNCIL REGULATION

amending Council Regulation (EC) No 1080/2000 of 22 May 2000 on support for the
United Nations Interim Mission in Kosovo (UNMIK) and the Office of the High
Representative in Bosnia and Herzegovina (OHR)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article
181a (2) 1st sentence thereof,

Having regard to the proposal from the Commission,3

Having regard to the opinion of the European Parliament,4

Whereas:

(1) 

(2) 

(3) 

(4) 

The  European  Union  plays  a  leading  role  in  the  Stability  Pact  for  South-Eastern
Europe (SP), which is a transitional regional policy framework that was established by
the international community in Cologne on 10 June 1999 in an attempt to support the
countries in that region in their efforts to foster peace, democracy, respect for human
rights and economic prosperity, and to achieve stability in the region as a whole.

Paragraph 13 of  the  document  approved  in  Cologne  stipulates  that  the  Stability  Pact
will have a Special Coordinator appointed by the European Union, after consultation
with the OSCE Chairman in Office and other participants, and endorsed by the OSCE
Chairman  in  Office.  The  Special  Coordinator  chairs  the  Regional  Table  for  South-
Eastern  Europe  and  is  assisted  by  three  working  tables.  The  Special  Coordinator
promotes  achievement  of  the  Pact's  objectives  where  the  Pact  proves  to  have  added
value,  with  a  view  to  fostering  regional  cooperation  and  enhancing  regional
ownership,  and  ensuring  complementarity  between  the  work  of  the  Pact  and  the
Stabilisation and Association Process of the European Union.

Timely installation and regular operation of the Stability Pact are important factors in
achieving  the  goals  of  the  European  Union  in  the  region,  in  particular  in  achieving
stabilisation  in  the  region  and  optimising  the  effectiveness  of  Community  aid  under
this policy.

A  legal  framework,  comparable  to  that  established  by  Council  Regulation  (EC)  No
1080/2000  on  support  for  the  United  Nations  Interim  Mission  in  Kosovo  (UNMIK)
and the Office of the High Representative in Bosnia and Herzegovina (OHR), should

3

4

OJ C […], […], p.[…]
OJ C […], […], p.[…]

4

                                                
accordingly be provided to cover the Community's financial assistance to the Stability
Pact.

(5) 

This objective is best achieved by amending Council Regulation No (EC) 1080/2000
to extend its scope to include the Stability Pact,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 1080/2000 is hereby amended as follows :

(1)

The Title is replaced by the following

“Council Regulation (EC) No 1080/2000 of 22 May 2000 on support for the United
Nations Interim Mission in Kosovo (UNMIK), the Office of the High Representative
in Bosnia  and Herzegovina (OHR)  and  the Stability  Pact  for  South-Eastern  Europe
(SP)”.

(2)

Article 1 is replaced by the following :

“Article 1

1.  Within  the  context  of  its  policy  of  reconstruction,  aid  to  assist  the  return  of
refugees and displaced persons and economic and regional cooperation with Kosovo
and Bosnia and Herzegovina, as well as its policy towards the region as a whole, the
Community  shall  contribute  financially  to  the  establishment  and  operation  of  the
UNMIK (fourth pillar), the OHR and the SP.

2. This financing shall be in the form of  a grant to the budgets  of  the UNMIK, the
OHR and the SP.”

(3)

The following Article 1a is inserted:

“Article 1a

The  Commission  shall  appoint  the  Special  Coordinator  of  the  Stability  Pact,  after
consultation  with  the  OSCE  Chairman  in  Office  and  other  participants,  and
endorsement by the OSCE Chairman in Office”.

(4)

In Article 2(2)(2), the following sentence is added:

“Co-financing in kind shall be possible.”

5

Article 2

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

It shall apply as from 1 January 2004.

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

Done at Brussels,

For the Council
The President

6

LEGISLATIVE FINANCIAL STATEMENT

Policy area(s): External relations

Activit(y/ies): Relations with the Western Balkans

TITLE  OF  ACTION:  Proposal  for  a  Council  Regulation  amending  Council  Regulation  (EC)  No
1080/2000  in  order  to  provide  a  legal  basis  for  Community  financial  support  for  the
Stability Pact for South-Eastern Europe

1.

BUDGET LINE(S) + HEADING(S)

Chapter :19 07 "Cooperation with the countries of the Western Balkans"(Former Chapter B7-
5 4, )

Article : 19 07 04 "Interim civilian administrations" (former Article B7-547)

Chapter CFSP 19 03 "Common Foreign and Security Policy" (Former B8-01)

Article  :  19  03  03  "Conflict  resolution,  verification,  support  for  the  peace  process  and
stabilisation" (Former B8-012)

Council Administrative Budget item 1113 "Special advisers"

2.

2.1.

2.2.

OVERALL FIGURES

Total allocation for action (Part B): €6 million for commitment

Period of application

As from 1.1.2004 and for an undetermined duration. Subject to an annual review of
the  mandate  of  the  Stability  Pact,  reflected  in  an  annual  financing  agreement  to  be
concluded between the Commission and the Stability Pact.

7

2.3.

Overall multiannual estimate of expenditure

(a)

Schedule  of  commitment  appropriations/payment  appropriations 
intervention) (see point 6.1.1)

(financial

€ million (to three decimal places)

Year
2004

Year
20055

Year
20065

[n+4]

[n+5
and
subs.
Years]

Total

19 03 03 "Conflict
Resolution, verification,
support for the peace
process and stabilisation

Commitments

Payments

19 07 04 "Interim Civilian
Administrations

Commitments

Payments

-2

-2

+2

+2

-2

-2

+2

+2

-2

-2

+2

+2

p.m.

p.m

p.m.

p.m

-6 + p.m.

-6 +p.m

p.m

p.m.

p.m

p.m.

+6 +p.m

+

+6 
p.m.

(b)

Technical and administrative assistance and support expenditure (see point 6.1.2)

Commitments

Payments

Subtotal a+b

Commitments

Payments

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

p.m.

p.m.

p.m.

p.m.

0 + p.m.

0 + p.m.

(c)

Overall  financial  impact  of  human  resources  and  other  administrative  expenditure
(see points 7.2 and 7.3)

Commitments/
payments

TOTAL a+b+c

Commitments

Payments

0

0

0

0

0

0

0

0

0

0

0

0

p.m.

p.m.

p.m.

p.m.

0 + p.m.

0 + p.m.

5

Subject  to  an  annual  review  of  the  mandate  of  the  Stability  Pact,  reflected  in  an  annual  financing
agreement to be concluded between the Commission and the Stability Pact.

8

                                                
2.4.

Compatibility with financial programming and financial perspective

(cid:1) Proposal is compatible with existing financial programming.

2.5.

Financial impact on revenue

(cid:1) Proposal  has  no  financial  implications  (involves  technical  aspects  regarding

implementation of a measure)

3.

BUDGET CHARACTERISTICS

Type of expenditure

New

EFTA
contribution

Contributions
form applicant
countries

Heading in
financial
perspective

Non-comp

Diff

YES/

NO

NO

No 4

4.

LEGAL BASIS

Proposal for a Council Regulation amending Council Regulation (EC) No 1080/2000 in order
to  provide  a  legal  basis  for  Community  financial  support  for  the  Stability  Pact  for  South-
Eastern Europe

5.

DESCRIPTION AND GROUNDS

5.1.

Need for Community intervention

5.1.1. Objectives pursued

Timely installation and regular operation of the SP may be important factors in achieving the
goals  of  the  European  Union  in  the  region,  in  particular  in  achieving  stabilisation  in  the
region.  The  European  Union  plays  a  leading  role  in  the  Stability  Pact  for  South-Eastern
Europe  (SP),  which  is  a  regional  policy  framework  established  by  the  international
community in Cologne on 10 June 1999 in an attempt to support the countries in that region
in their efforts to foster peace, democracy, respect for human rights and economic prosperity,
and to achieve stability in the region as a whole.

The Special Coordinator of the SP, who is appointed by the EU, will carry out the tasks set by
the Stability Pact for South-Eastern Europe, these being:

to  promote  achievement  of  the  Pact's  objectives  within,  and  between,  the  individual

(a)
countries in SEE, where the Pact proves to have added value;

(b)

to chair the South-Eastern Europe Regional Table;

(c)
to maintain close contact with all participants and facilitating States, organisations and
institutions of the Pact, as well as relevant regional initiatives and organisations, with a view
to fostering regional cooperation and enhancing regional ownership;

9

(d)
to cooperate closely with all institutions of the European Union and its Member States
in order to promote the role of the European Union in the Pact in accordance with paragraphs
18, 19 and 20 of the Stability Pact document and to ensure complementarity between the work
of the Pact and the Stabilisation and Association Process;

(e)
to  meet  periodically  and  collectively  as  appropriate  with  the  Chairs  of  the  Working
Tables  to  ensure  strategic  overall  coordination  and  provide  the  secretariat  of  the  South-
Eastern Europe Regional Table and its instruments;

(f)
to  work  on  the  basis  of  a  list,  agreed  in  advance  and  in  consultation  with  the
participants  of  the  Pact,  of  priority  actions  for  the  Stability  Pact  to  implement  during  the
course of 2003, while keeping the working methods and structures of the Pact under review
and ensuring coherence and efficient use of resources.

5.1.2. Measures taken in connection with ex ante/ex-post evaluation

In  its  Common  Position  of  17  May  1999,  the  Council  of  the  European  Union  outlined    the
reasons and procedures for the establishment of a Stability Pact for South-Eastern Europe:

-  a  political  solution  to  the  Kosovo  crisis  must  be  embedded  in  a  determined  effort  geared
towards stabilising the region as a whole;

- a Stability Pact for South-Eastern Europe should be prepared, founded on the UN Charter,
the principles and commitments of the OSCE, and the relevant treaties and conventions of the
Council of Europe, in particular the European Convention on Human Rights;

- the EU should play the leading role in the Stability Pact, the OSCE has a key role to play in
fostering security and stability, and the Stability Pact should be developed and implemented
in close association with the OSCE;

- the aim of this Stability Pact is to help ensure cooperation among the countries in the region
towards  comprehensive  measures  for  the  long-term  stabilisation,  security,  democratisation,
and  economic  reconstruction  and  development  of  the  region,  and  for  the  establishment  of
lasting  good-neighbourly  relations  among  and  between  them,  and  with  the  international
community.

The  Stability  Pact  for  South-Eastern  Europe  (SP)  was  established  by  the  international
community at the Cologne Summit on 10 June 1999.

The EU renewed its financial support for the Stability Pact, by adopting four joint actions, in
December 1999, December 2000, December 2001 and December 2002, respectively.

The member states and the Commission established a document entitled “EU Priorities within
the Stability Pact”, which was adopted by the General Affairs Council on 11 June 2001. The
General Affairs Council of 19 November 2001 adopted conclusions on the future direction of
the Stability Pact, including (1) concentration and refocusing of activities on priority areas, (2)
emphasis  on  regional  cooperation  and  (3)  complementarity  with  the  Stabilisation  and
Association Process of the EU. These objectives were followed up in the GAC of 11 March
2002 and priorities were set under the stewardship of the new Special Coordinator.

10

The  SCSP  has  conducted  an  internal  review  and  has  presented  its  core  objectives  and
achievables for 2003 in order to further focus its activities and follow up on the results from
2002.

Therefore, the future financing of the Stability Pact can be committed, based on a regular and
extensive examination in the past of its mandate.

5.2.

Action envisaged and budget intervention arrangements

The  main  beneficiaries  are  the  countries  and  people  of  South-Eastern  Europe.  The  working
tables of the Stability Pact coordinate the objectives and action undertaken by its participants
and  promote  regional  cooperation  in  the  fields  of  democracy  and  human  rights,  economic
development and reconstruction, security and justice and home affairs. The Stability Pact will
provide an effective addition to the Stabilisation and Association Processes and move steadily
toward a leadership role  for  South-Eastern  Europe,  by  promoting  regional  ownership  of  the
activities within the Stability Pact.

Community financing will be in the form of a grant to the budget of the SP.

Equitable  division  of  costs  is  also  envisaged  with  other  members  of  the  international
community (see section 6.2 below). In 2002, the EU contribution was estimated at 40% of the
SP budget, EU member states contribution at 21% and non-EU states at 39%. With regard to
EU  member  states  and  non-EU  members  of  the  Stability  Pact,  provision  is  made  for  co-
financing in kind, in accordance with existing arrangements.

5.3.

Methods of implementation

The operation will be managed centrally and directly by the Commission using regular staff.

6.

FINANCIAL IMPACT

6.1.

Total financial impact on Part B - (over the entire programming period)

(The  method  of  calculating  the  total  amounts  set  out  in  the  table  below  is  explained  by  the
breakdown in Table 6.2. )

Project funded by EC grant contribution and contributions in kind by Stability Pact member
states.  In  2000  the  contribution  of  the  EU  amounted  to  €  2  485  000  that  was  integrally
financed from the CSFP budget line B8-012.  In subsequent years, the contribution has been
financed both from the CSFP budget line B8-012 and from Council administrative budget line
1113. It totaled €2 610 824 in 2001 (of which CFSP : €1 862 824; Council : €748 000) and €2
142 290 in 2002 (of which CFSP : €1 420 290; Council : €722 000).

For 2003, the estimates are €1 903 631 (of which CFSP: €1 583 631; Council : €320 000).

The current financial proposal, is to a large extent a budget-neutral operation for Heading IV
"External Action". The Commission is proposing a transfer of the financing of the operation
from CFSP line 19 03 03 (former B8-012)  "Conflict resolution, verification, support for the
peace  process  and  stabilisation"  to  line  19  07  04  (former  B7-547)  "Interim  Civilian
Administration".  Yet  line  19  07  04  will  also  have  to  cover  those  expenditures  financed  in
2003 by Council Administrative Budget line 1113 "Special advisers".

11

Since the proposal to amend the Regulation was adopted by  the  Commission after the  2004
Preliminary Draft Budget, the accompanying € 2 million increase in the specific line 19 07 04
(B7-547) for Interim Civilian Administrations will have to be secured in the 2004 budgetary
procedure by means of an amendment by the budgetary authority.

Breakdown

EU Contribution

Of which :
- 19 07 04 (former B7-547)

N

2003
(p.m.)

1,9

0

- 19 03 03 (former B8-012)

1, 58

-Council  Administrative
budget line 1113

0,32

Commitments in € million

N + 1

2004

 N + 2

2005

N + 3

2006

N + 4

Total

N + 5 and
subs.
Years

p.m.

p.m.

2

2

0

0

2

2

0

0

2

2

0

0

Bilateral 
by Member States

contributions

A, B, D, DK, EL, IRL, I,
NL, S

Non-contributing
Member States

E, F, FIN, L, PT, UK

Other financing
contributions

USA, Switzerland,
Canada, Croatia, FYROM,
Hungary, Turkey, Czech
Republic

p.m.

p.m.

p.m.

p.m.

none

p.m.

none

p.m.

none

none

p.m.

p.m.

6

6

0

p.m.

none

p.m.

TOTAL

1,9

2

2

2

6

12

6.2.

Calculation of costs and division of costs

The  amount  of  the  grant,  the  eligible  expenditure,  the  period  covered,  the  implementing
procedures and the procedures for verifying the management and ultimate destination of the
Community grant will be covered by a financing agreement between the Commission, acting
on behalf of the Community, and the recipient bodies.

The understanding is to maintain the current structure of EU support and the current division
of  costs  with  the  other  members  of  the  international  community.  As  an  illustration,  the
respective figures for the 2003 EU contribution and the list of recorded contributions in kind
from other members of the international community in the year 2002 are listed below:

(cid:1)  EXISTING EU FINANCIAL CONTRIBUTION (Estimates for 2003)

1. EU CFSP Budget line (B8-012)
- Salaries of 4 secretaries, 2 experts, 1 financial official; 1 finance officer and 1 bookkeeper: €589 174
- Mission expenditure related to the EU staff of the Stability Pact secretariat (hotel, travel, subsistence):
€191 488
- Equipment, communications, services and other supplies: €247 500
- Insurance: €4000 - Office rent: €429 010
- Contingencies: €122 459
TOTAL (1st half of 2003) CSFP budget for operational expenditures: €1 583 631
2. Council Administrative Budget line 1113
Administrative expenditure, including secondment of the EUSR acting as Special Coordinator (salaries,
mission expenses, insurance): €320 000
TOTAL (1st half of 2003) Council Secretariat administrative budget: €320 000

TOTAL EU CONTRIBUTION (Estimates for 2003): €1 903 631

CO-FINANCING IN KIND (2002)

1. EU Member States
- 10 A grade staff members of SCSP: 4 Cabinet members (Head of Cabinet, Deputy Head of Cabinet, 2
Cabinet Members), 2 Heads of Unit and 4 experts. In 2002, these secondments were made by A [2], S, D,
NL, B, IRL, I [2]
- 1 personal assistant to the EUSR, seconded by A
- 3 secretaries, seconded by A
- Mission costs of the Cabinet members are borne by the seconding member states.
- 1 meeting of Regional table in Thessaloniki hosted by EL
- 2 Table Chairs (EL, I) and 1 Sub-Table Chair (S)
- Office in Thessaloniki (EL)
- Regional Return Initiative (RRI) and Migration and Asylum Initiative (MAI) Steering Committee
Chairman and Assistant (DK)

2. Non-EU Participants
- 9 A grade staff members of SCSP: 1 Deputy SC with logistical back-up, 1 Cabinet member, 1
Spokesperson, 1 Head of Unit and 5 experts - all with associated mission costs. In 2002, the USA provided
the Deputy Special Coordinator at ambassadorial level, logistical back-up and missions and 1 Cabinet
Member. Switzerland provided 1 Spokesperson, and Canada provided 1 Head of Unit. In 2002,
contributors of experts from South-Eastern Europe were: Croatia, FYROM, Hungary, Turkey and Czech
Republic.
- 3 Table co-chairs (principally missions). Rotating at yearly intervals between SEE states.
- 1 Table chair + assistant (principally missions) (Croatia).
- 1 meeting of the Regional table in Bucharest hosted by Romania.
- 12 related Stability Pact meetings (working tables, task forces, etc.) in various SEE countries.

13

7.

7.1

7.2

7.3

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

Impact on human resources: none

Overall financial impact of human resources: none

Other administrative expenditure deriving from the action:

none

8.

FOLLOW-UP AND EVALUATION

8.1.

Follow-up arrangements

The  Commission  is  responsible  for  implementation  of  the  operations  covered  by  this
Regulation.

The  amount  of  the  grant,  the  eligible  expenditure,  the  period  covered,  the  implementing
procedures and the procedures for verifying the management and ultimate destination of the
Community grant will be covered by a financing agreement between the Commission, acting
on behalf of the Community, and the recipient bodies.

The terms of that financing agreement will ensure an equitable division of the cost between
the  European  Union  and 
international  community.
the  other  members  of 
The Commission  will verify implementation  of this Regulation and  regularly  report  back to
the European Parliament and the Council.

the 

The Stability Pact will be accountable to the Commission for expenditure incurred in respect
of  its  activities.  The  Special  Representative  will  present  a  comprehensive  written  annual
report to the Commission on the implementation of the mandate

To  ensure  the  coherence  of  EU  external  action,  the  activities  of  the  SP  will  be  coordinated
with those of the HR, the Presidency and the Commission. Close liaison will be maintained in
the field with the Presidency, the Commission and the Heads of Mission as well as with other
international stakeholders.

8.2.

Arrangements and schedule for the planned evaluation

The  Commission  may  conduct  an  evaluation  of  this  action  within  the  framework  of  its
budgetary powers.

9.

ANTI-FRAUD MEASURES

The financing agreements and any contract or implementing instruments resulting therefrom
will expressly provide for the Commission or bodies authorised by the Commission, the Court
of Auditors and the European Anti-Fraud Office (OLAF) to carry out inspections on the spot,
if necessary.

An external audit was organised by the Commission in 2001. It covered the SP accounts for
1999 and 2000, with satisfactory results.

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