Regulation (EC) No 1568/2003 of the European Parliament and of the Council of 15 July 2003 on aid to fight poverty diseases (HIV/AIDS, tuberculosis and malaria) in developing countries
Date: 2003-07-15
Institutions: Council of the European Union, European Parliament
Subjects: AIDS, EU aid, developing countries, disease prevention, health policy, infectious disease

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REGULATION (EC) No 1568/2003 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on aid to fight poverty diseases (HIV/AIDS, tuberculosis and malaria) in developing countries

of 15 July 2003

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

(6)

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

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

Acting in accordance with the procedure laid down in Article
251 of the Treaty (2),

Whereas:

(1)

(2)

(3)

(4)

(5)

The right to enjoy the highest attainable standard of
physical and mental health is a fundamental human right
which is in line with the provisions of Article 25 of the
Universal Declaration of Human Rights. This right is
being denied to over a fifth of the world's population.

Article 35 of the Charter of Fundamental Rights of the
European Union calls for a high level of human health
protection in the definition and implementation of all
Union policies and activities.

HIV/AIDS, tuberculosis and malaria cause the deaths of
more than five and a half million people each year, their
greatest impact being on morbidity and life expectancy
in developing countries. Moreover, these diseases wipe
out years of development efforts and achievements and
constitute a serious concern in the long run because of
their destabilising effects on society.

It is now widely accepted that prevention, care and treat-
ment are mutually dependent and synergistic.

The failure to reduce the burden of these diseases and
the evidence of their increasing impact have brought
them to the centre of the development debate — as
evidenced by the Declaration of Commitment of the
Special Session of the UN General Assembly of June
2001, which recognises that HIV/AIDS has evolved to
become a developmental emergency, and by the WHO
World Health Assembly's declaration of tuberculosis and
malaria as global emergencies — and have led to calls
for urgent action and a series of national, regional and
international initiatives, all meant to achieve the Millen-
nium Development Goals which include clear targets to
fight HIV/AIDS, tuberculosis and malaria, and to which
the European Community and its Member States
committed themselves.

(1) OJ C 151 E, 25.6.2002, p. 202.
(2) Opinion of the European Parliament of 30 January 2003 (not yet
published in the Official Journal) and Decision of the Council of 16
June 2003.

The abovementioned UN Declaration of Commitment
agreed, for HIV/AIDS alone, to reach by 2005 through a
series of incremental steps an overall target of annual
expenditure on the epidemic of between USD 7 and 10
thousand million in low and middle-income countries
and countries experiencing or at risk of experiencing a
rapid spread of the disease, for prevention, care, treat-
ment, support and mitigation of the impact of HIV/
AIDS, and to take measures to ensure that the resources
needed are made available, particularly from donor
countries and also from national budgets, bearing in
mind that resources of the most affected countries are
seriously limited.

(7)

(8)

(9)

HIV/AIDS, tuberculosis and malaria require an appro-
priate structural response, which is both comprehensive
and coherent and which is beyond the financial and
human resources of most developing countries. Because
of
the
their magnitude and cross-boundary nature,
poverty diseases are among the problems that require a
systematic, coordinated response by the international
community. Interventions in this area are in everyone's
interest and therefore should not be viewed as a question
of development aid alone.

The Doha Declaration on the Agreement on trade-
related aspects of intellectual property rights (TRIPs) and
Public Health affirmed that ‘the TRIPs Agreement does
not and should not prevent members from taking
measures to protect public health’ and that it ‘can and
should be interpreted and implemented in a manner
supportive of WTO members' right to protect public
health and, in particular, to promote access to medicines
for all’ and reaffirmed ‘the right of WTO members to
use, to the full, the provisions in the TRIPs Agreement
which provide flexibility for this purpose’.

The effectiveness of programmes to support national
strategies to combat HIV/AIDS, tuberculosis and malaria
partly depends on the improved coordination of aid at
both the European and the international level, notably
with UN agencies,
including
partnerships between the private, public and voluntary
sectors, and on the use of procedures tailored to the
specific nature of the strategies and partners concerned.

funds and programmes,

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(10)

research and development

Public health is a public responsibility. Inadequate public
policy has compounded the failure of the market to
generate
for neglected
diseases. In 2000, only 10 % of all research and develop-
ment concerned diseases that are responsible for 90 % of
disease in the world. The dynamics of neglect are
different for different diseases, and distinct strategies to
correct this imbalance are needed. Comprehensive action
needs to be taken to compensate for the market failure
in drug development, through increased public funding,
including supporting the research and development of
specific global public goods and effective methods of
prevention and treatment to confront these diseases in
developing countries and the introduction of appropriate
incentives for the private sector to invest accordingly.

(11) Actions specifically targeted at the poverty diseases must
be appropriately situated within the larger context of
generally improved, more effective systems of health
care and health services in developing countries. Consid-
if HIV/
erable improvement of these systems is vital
AIDS, tuberculosis and malaria are to be combated effec-
tively. Special efforts must be made to integrate interven-
tions
the poverty diseases with actions
targeting sexual and reproductive health and rights.

targeting

(12)

The improvement of health is a precondition for and a
key element of sustainable development. For the partner
countries and populations in question, the type of assis-
tance provided for by this Regulation therefore plays a
direct and tangible part in development and thus contri-
butes significantly to the Community's development
cooperation policy.

(13)

In the interests of coherence, all Community policies
should take account of the objective of improving health
and reducing poverty.

(14)

In its Communications to the Council and the European
Parliament of 20 September 2000 and 21 February
2001 on action related to communicable diseases in the
context of poverty reduction, the Commission outlined
the policy principles and strategic priorities needed to
enhance the effectiveness of action by the Community
and the Member States in this field.

(15)

In its Resolutions of 10 November 2000 and 14 May
2001, the Council emphasised the gravity of the HIV/
AIDS, tuberculosis and malaria epidemics and the need
to step up efforts to give more support at national,
regional and global levels.

(16)

(17)

(18)

The Council, in its resolution of 14 May 2001, and the
European Parliament,
in its resolution of 4 October
2001 (1), endorsed the Community Programme for
Action: accelerated action on HIV/AIDS,
tuberculosis
and malaria in the context of poverty reduction, and
stressed the need to ensure that adequate and appro-
priate human and financial resources were in place to
enable effective implementation.

The Joint Declaration of 31 May 2001 by the Council
and the Commission,
the abovementioned European
Parliament resolution of 4 October 2001 and the ACP-
EU Joint Parliamentary Assembly resolution of 1
November 2001 welcomed the proposal of
the UN
Secretary-General
to establish a Global Fund to fight
HIV/AIDS, tuberculosis and malaria, which came into
operation on 29 January 2002, and stressed that contri-
butions to this Fund should be additional to existing
resources.

The abovementioned UN Declaration of Commitment,
and in particular the Monterrey Conference, stipulates
that increased Official Development Assistance (ODA)
and debt relief schemes should be used for the benefit of
better health and education outcomes. The Community
and its Member States have an important role to play in
exploring how increased ODA,
including debt relief
mechanisms, could be used more effectively as tools for
combating HIV/AIDS, tuberculosis and malaria.

(19)

In its Resolutions of September 1998, October 2000
and March 2002,
the ACP-EU Joint Parliamentary
Assembly underlined the threat posed by HIV/AIDS to
all development efforts and the need for rapid action.

(20)

This Regulation renders obsolete Council Regulation
(EC) No 550/97 of 24 March 1997 on HIV/AIDS-related
operations in developing countries (2), which should
therefore be repealed.

(21)

This Regulation lays down, for the entire duration of the
programme, a financial
framework constituting the
prime reference, within the meaning of point 33 of the
Interinstitutional Agreement of 6 May 1999 between the
European Parliament, the Council and the Commission
the
on budgetary discipline
budgetary procedure (3),
the budgetary authority
during the annual budgetary procedure.

and improvement of

for

(1) OJ C 87 E, 11.4.2002, p. 244.
(2) OJ L 85, 27.3.1997, p. 1.
(3) OJ C 172, 18.6.1999, p. 1.

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(22)

(23)

The measures necessary for the implementation of this
Regulation should be adopted in accordance with
Council Decision 1999/468/EC of 28 June 1999 laying
down the procedures for the exercise of implementing
powers conferred on the Commission (1).

The objective of the proposed action, namely to combat
the three major communicable diseases within the
context of poverty reduction, with particular reference
to developing countries, cannot be sufficiently achieved
by the Member States and can therefore, by reason of
the scale and effects of the proposed action, be better
achieved at a Community level, in accordance with the
principles of subsidiarity set out in Article 5 of the
Treaty. In accordance with the principle of proportion-
ality also set out in that Article, this Regulation does not
go beyond what is necessary, in order to achieve that
objective,

HAVE ADOPTED THIS REGULATION:

Chapte r I

Purpose and scope

Article 1

1.
The Community shall implement the European Commu-
nity Programme for Action targeting the three major commu-
nicable diseases, namely HIV/AIDS, tuberculosis and malaria, in
developing countries.

Under that Programme the Community shall provide
2.
financial assistance and appropriate expertise to actors in devel-
opment in order to improve access to health for all and to
promote equitable economic growth, within the overall objec-
tive of reducing poverty with a view to its eventual eradication.

In the allocation of such funding and expertise, priority

3.
shall be given to:

(a) the poorest and least developed countries and the most
disadvantaged sections of the population within developing
countries;

(b) action that complements and reinforces both the policies
and capacities of developing countries and the assistance
provided through other instruments of development coop-
eration.

(1) OJ L 184, 17.7.1999, p. 23.

Article 2

The purpose of the activities carried out under this Regulation
shall be to:

(a) optimise the impact of existing interventions, services and
commodities aimed at preventing and fighting the major
communicable diseases affecting the poorest populations;

(b) increase the affordability of key pharmaceuticals and diag-

nostics for the three diseases;

(c) increase research and development,

including vaccines,

microbicides and innovative treatments.

Article 3

Community financial support shall be given to specific projects
designed to achieve the purposes described in Article 2 and, in
particular, to those which aim to:

(a) provide the necessary technical, scientific and normative
input in order to prioritise health interventions within the
total development cooperation budget and improve health
outcomes
relating to the three major communicable
diseases, keeping a balanced approach between prevention,
treatment and care, with prevention as a key priority,
its effectiveness is increased when
acknowledging that
linked with treatment and care; recognition has to be given
to the fact that important measures have to be looked for
through a multi-sectoral approach,
including targeting
behavioural patterns as well as factors such as clean water
and sanitation,
land-use planning, nutrition and gender
mainstreaming;

(b) improve the performance of health interventions targeted
the three major communicable diseases within the
at
context of a strengthened comprehensive health system,
including public services;

(c) improve understanding of effects of the poverty diseases on
social and economic development, as well as the impact of
strategies aimed at mitigating the negative socioeconomic
effects connected with the diseases;

(d) improve pharmaceutical policies and practice, and help
developing countries, at
to
develop high-quality local production of key preventive and
therapeutic pharmaceuticals consistent with the Doha
Declaration on the Agreement on trade-related aspects of
intellectual property (TRIPs) and Public Health;

regional or national

level,

(e) promote a tiered pricing mechanism for key pharmaceuti-
cals for developing countries that will guarantee the lowest
possible prices;

(f) analyse the effects of factors such as the level of net import
price, tariffs, taxes, and importation, distribution and local
registration fees on consumer prices of medical goods in
developing countries;

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(g) provide, where appropriate, technical assistance to devel-
oping countries to help them address public health issues
in accordance with the provisions of the TRIPs Agreement
as clarified in the Doha Declaration on the TRIPs Agree-
ment and Public Health, so as to enable the developing
countries to protect public health and promote access to
medicines for all;

(h) encourage public investment and develop an incentive
package to encourage more private investment in Research
and Development for new treatments, particularly vaccines
and microbicides, diagnostics, and fixed-dose combinations
designed to fight
the major communicable diseases in
developing countries;

(i) support

team-based clinical, epidemiological, operational
and social studies, so as to enable health-related research to
be conducted on a sounder basis; where appropriate, teams
shall be encouraged also to include personnel from the
developing countries as a way of contributing to the
training of such personnel;

(j) encourage capacity building in developing countries,

to
enable them to coordinate, host and conduct large-scale
population trials and to complete all stages of the research
and development process;

(k) support global initiatives targeting the major communicable
diseases in the context of poverty reduction, including the
Global Fund to fight HIV/AIDS, tuberculosis and malaria
which came into operation on 29 January 2002;

(l) support initiatives which enable the quality of pharmaceuti-

cals to be supervised and monitored.

Article 4

In the context of the operations referred to in Article 3,

1.
Community support may take the form of:

(a) financial assistance;

(b) technical assistance, training, including of doctors and para-

medics, or other services;

(c) supplies,
works;

such as medical

supplies, commodities, and

(d) audits, evaluation and monitoring missions;

(e) transfer of technology and know-how, where possible, for

the purpose of local pharmaceuticals production.

Priority shall be given to enhancing national capacity with a
view to long-term viability.

2.
Community financing may cover both investment expen-
diture, excluding the purchase of real estate, and, in exceptional
and duly substantiated cases, taking into account the fact that
the operation must, as far as possible, aim at medium-term
viability, recurring expenditure as well (including administrative
expenditure, maintenance and running costs), which tempora-
rily represents a burden for the partner, so that maximum use
is made of the support referred to in paragraph 1.

Chapte r II

Procedures for the implementation of aid

Article 5

Community financing under this Regulation shall take the

1.
form of grants.

2.
A financial contribution from the partners defined in
Article 6 shall be sought for each cooperation operation. In
specifying the amount of the contribution requested, account
shall be taken of the capacity of the partners concerned and the
nature of the operation in question. In certain circumstances,
the contribution may be made in kind if the partner is either a
non-governmental organisation (NGO) or a community-based
organisation.

3.
The provision of financial assistance under this Regula-
tion may entail co-financing with other donors, in particular
with Member States, the United Nations, and international or
regional development banks or financial institutions.

In the context of the operations referred to in Article
4.
3(h), (i) and (j), financial assistance shall be granted in coordina-
tion with the new instruments for product research and devel-
opment on poverty-related communicable diseases
imple-
mented under
the Community Framework Programme of
Research and Development 2002-2006.

5.
The contribution to the Global Fund to fight HIV/AIDS,
tuberculosis and malaria shall be made by means of a financing
agreement to be concluded between the Commission and the
Trustee of the Global Fund. The contribution shall be adminis-
tered following the rules and procedures established for the
Global Fund, agreed with the Commission and to be annexed
to the financing agreement.

6.
In the context of the operations referred to in Article
3(h), (i) and (j), efforts shall be made to exploit the synergies
with policies and programming in the area of sexual and repro-
ductive health, in particular for HIV/AIDS interventions.

Article 6

The partners eligible for financial assistance under this

1.
Regulation include:

(a) administrative authorities and agencies at national, regional

and local government level;

(b) local authorities and other decentralised bodies;

(c) local communities, NGOs, community-based organisations
and other not-for-profit natural and legal persons from the
private sector;

(d) regional organisations;

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(e) international organisations, such as the United Nations and
its agencies, funds and programmes, as well as development
banks, financial institutions, global initiatives, international
public-private partnerships;

(b) on-the-spot coordination of the implementation of opera-
tions through regular meetings and exchanges of informa-
tion between the representatives of the Commission and
the Member States in the recipient country.

(f) research institutes and universities.

2. Without prejudice to paragraph 1(e), Community finan-
cial assistance shall be available to partners whose head office
is located in a Member State or in a third country that is a
beneficiary or potential beneficiary of Community assistance
under this Regulation, provided that this office is the actual
centre directing business operations. In exceptional cases, this
office may be located in another third country.

Article 7

1. Where operations are the subject of financing agreements
between the Community and countries which benefit
from
operations financed under this Regulation, the agreements shall
stipulate that the payment of taxes, duties and charges shall not
be financed by the Community.

2.
Any financing agreement or contract concluded under
this Regulation shall stipulate that it is subject to the supervi-
sion and financial control of the Commission which may carry
out spot-checks and inspections, and to audits by the Court of
Auditors, in accordance with the usual arrangements laid down
by the Commission under the provisions in force, particularly
those in the Financial Regulation applicable to the general
budget of the European Communities (1), hereinafter ‘the Finan-
cial Regulation’.

The necessary measures shall be taken to emphasise the

3.
Community character of aid provided under this Regulation.

2.
The Commission, in liaison with the Member States, may
take any initiative necessary for ensuring proper coordination
with the other donors concerned, in particular those forming
part of the United Nations system. Such coordination shall aim
at systematic exchange and analysis of information on opera-
tions planned and implemented in order to ensure coherence
and complementarity.

Chap ter III

Financial and decision-making procedures

Article 10

1.
The financial framework for the implementation of this
Regulation for the period from 2003 to 2006 is hereby set at
EUR 351 million. The annual allocation shall be subject to the
agreement of the budgetary authority on the appropriate means
of financing under the Financial Perspective or through the use
of the instruments provided for by the Interinstitutional Agree-
ment of 6 May 1999.

2.
The annual appropriations shall be authorised by the
budgetary authority within the limits of the Financial Perspec-
tive.

Article 8

Article 11

Participation in invitations to tender for the award of
1.
contracts shall be open on equal terms to all natural and legal
persons in the Member States and in all developing countries. It
may be extended, in exceptional cases, to other third countries.

Supplies shall originate in the beneficiary country, other
In exceptional

2.
developing countries or the Member States.
cases, supplies may originate from other third countries.

Article 9

1.
In order to secure the objectives of consistency and
complementarity referred to in the Treaty and to ensure
maximum effectiveness of these operations as a whole, the
Commission may take all necessary coordination measures,
including:

(a) the establishment of a system for the systematic exchange
and analysis of information on the operations financed and
those which the Community and the Member States
propose to finance;

(1) OJ L 248, 16.9.2002, p. 1.

1.
The Commission shall be responsible for drafting strategic
programming guidelines, defining the Community's coopera-
tion in terms of measurable objectives, priorities, deadlines for
specific areas of action, assumptions and expected outcomes.
Programming shall be annual and indicative.

2.
An annual exchange of views with the Member States
shall take place within the Committee referred to in Article
13(1), on the basis of a presentation by the representative of
the Commission of the strategic programming guidelines for
the operations to be carried out. The Committee shall give an
opinion on these matters in accordance with the procedure
referred to in Article 13(2).

Article 12

1.
The Commission shall be responsible for appraising,
deciding upon and administering the operations covered by this
Regulation in accordance with the budgetary and other proce-
dures in force, in particular those laid down in the Financial
Regulation.

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Decisions concerning operations

for which financing
2.
under this Regulation exceeds EUR 5 million and any changes
to these operations that entail a cost overrun of more than
20 % of the amount initially fixed for the operation concerned
shall be adopted in accordance with the procedure referred to
in Article 13(2).

For decisions and changes to these operations amounting
inform the

3.
to EUR 5 million or less, the Commission shall
Member States.

Article 13

The Commission shall be assisted by the geographically

1.
competent committee for development.

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

The period laid down in Article 4(3) of Decision 1999/468/EC
shall be set at 45 days.

3.

The Committee shall adopt its Rules of Procedure.

Chap ter IV

Reporting and final provisions

Article 14

operations of the Global Fund to fight HIV/AIDS, tuberculosis
and malaria, as well as the Commission's conclusions on the
implementation of this Regulation over the previous budget
year. The summary shall
in particular provide information
about the strengths and weaknesses of operations in terms of
the three communicable
their impact on the fight against
diseases and poverty reduction,
including concrete, qualified
results achieved in relation to the objectives set. Moreover,
information shall be provided on those with whom contracts
have been concluded and the sums of those contracts, and the
disbursements made as well as the results of any independent
evaluations of specific operations.

2.
At the latest one year before the expiry of this Regulation,
the Commission shall submit an independent appraisal report
on its implementation to the European Parliament and the
Council with a view to establishing whether its objectives have
been achieved and providing guidelines for improving the
effectiveness of future operations. On the basis of this appraisal
report the Commission may make proposals for the future of
this Regulation and, if necessary, proposals for its amendment.

Article 15

Regulation (EC) No 550/97 shall be repealed. However, opera-
tions that have been decided upon under that Regulation shall
continue to be implemented under it.

Article 16

After each budget year, the Commission shall submit, in
1.
its annual report to the European Parliament and to the Council
on Community development policy, information on the guide-
lines for its annual indicative strategic programme and on the
operations financed in the course of that year, including the

1.
This Regulation shall enter into force on the third day
following that of its publication in the Official Journal of the
European Union.

2.

It shall apply until 31 December 2006.

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

Done at Brussels, 15 July 2003.

For the European Parliament

The President

P. COX

For the Council

The President

G. TREMONTI