2004/551/CFSPCouncil Joint Action 2004/551/CFSP of 12 July 2004 on the establishment of the European Defence Agency
Date: 2004-07-12
Institutions: Council of the European Union
Subjects: European Defence Agency, European defence policy, operation of the Institutions

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(Acts adopted under Title V of the Treaty on European Union)

COUNCIL JOINT ACTION 2004/551/CFSP

of 12 July 2004

on the establishment of the European Defence Agency

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on European Union, and in
particular Article 14 thereof,

Whereas:

On 19 and 20 June 2003 the European Council at Thes-
saloniki tasked ‘the appropriate bodies of the Council to
undertake the necessary actions towards creating, in the
course of 2004, an intergovernmental agency in the field
of defence capabilities development, research, acquisition
and armaments’.

Strategy

the
endorsed by
The European Security
the establishment of a
European Council
Defence Agency as an important element towards the
development of more flexible and efficient European
military resources.

identifies

(6)

(7)

(8)

(9)

Such an Agency is also envisaged in the draft Treaty
establishing a Constitution for Europe.

The Agency structure should enable it to respond to the
requirements of the European Union and its Member
States and, where necessary to fulfil
to
cooperate with third countries, organisations and entities.

its functions,

Intent

The Agency should develop close working relations with
existing arrangements, groupings and organisations such
(LoI), Organisation de coopération
as Letter of
conjointe
and
Western European Armaments Group (WEAG)/Western
European Armaments Organisation (WEAO), with a view
to assimilation or incorporation of relevant principles
and practices as appropriate.

en matière

d'armement

(OCCAR)

The Secretary-General/High Representative (SG/HR),
in
accordance with Article 26 of the Treaty on European
Union (TEU), should have a leading role in the Agency’s
structure and provide the essential
link between the
Agency and the Council.

promoting
cooperation,

The European Defence Agency (the Agency), which
should be subject to the Council's authority and open
to participation by all Member States, will aim at
in the field of crisis
developing defence capabilities
management,
European
enhancing
and
armaments
strengthening the European
defence industrial and technological base (DTIB) and
creating a competitive European defence equipment
in liaison with the
market, as well as promoting,
Community’s
appropriate,
leadership in strategic technologies
research aimed at
thereby
for
strengthening
in this
domain.

future defence and security capabilities,
industrial potential

research activities where

Europe's

(10)

In the exercise of its role of political supervision and
policy-making,
the Council should issue guidelines to
the Agency.

(11) When adopting guidelines and decisions in relation to
the work of the Agency, the Council should meet in
Defence Ministers’ composition.

(12) Any guidelines or decisions adopted by the Council in
relation with the Agency's work shall be prepared in
accordance with Article 207 of the Treaty establishing
the European Community.

should be brought
Relevant policies and strategies
in consultation with the Commission and
forward,
industry as appropriate, to develop the European DTIB
in a balanced fashion, taking into account the strengths
of the industrial capacities of the Member States.

(13)

the Council’s preparatory and
The competences of
the Committee of
advisory bodies, notably those of
the
Permanent Representatives under Article 207 of
Treaty
the
the European Community,
Political and Security Committee (PSC) and the EU
Military Committee (EUMC) shall remain unaffected.

establishing

The establishment of the Agency should contribute to
the Common Foreign and
the
implementation of
Security Policy (CFSP),
the European
in particular
Security and Defence Policy (ESDP).

(14)

The National Armaments Directors (NAD) should, in a
way to be defined, receive reports and contribute on
issues of
their competence in preparation of Council
decisions relating to the Agency.

(1)

(2)

(3)

(4)

(5)

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(15)

(16)

(17)

(18)

The Agency should have the legal personality necessary
to perform its functions and attain its objectives, while
maintaining close links with the Council and fully
respecting the responsibilities of
the European Union
and its institutions.

tional framework of the European Union, and without prejudice
to the responsibilities of the EU institutions and the Council
bodies. The Agency’s mission shall be without prejudice to the
competences of the European Community,
in full respect of
Article 47 TEU.

It should be provided that the budgets administered by
the Agency may, on a case-by-case basis, receive contri-
butions towards the non-administrative costs, from the
general budget of the European Union, in full respect of
the rules, procedures and decision-making processes
applicable to it, including Article 28(3) TEU.

3.
The Agency shall be open to participation by all EU
Member States bound by this Joint Action. Member States
who wish to participate immediately in the Agency shall
notify their intention to do so to the Council and inform the
SG/HR at the time of the adoption of this Joint Action.

The Agency, while being open to participation by all
Member States, should also provide for the possibility
of specific groups of Member States establishing ad hoc
projects or programmes.

The Agency should have decision-making procedures
allowing it to fulfil its tasks efficiently, while respecting
the national security and defence policies of participating
Member States.

4.
Any Member State wishing to participate in the Agency
after the adoption of this Joint Action or wishing to withdraw
from the Agency shall notify its intention to the Council and
inform the SG/HR. Any necessary technical and financial
arrangements for such participation or withdrawal shall be
determined by the Steering Board.

5.

The Agency shall have its headquarters in Brussels.

(19)

The Agency should fulfil its mission in accordance with
Article 3 TEU and in full respect of Article 47 TEU.

(20)

The Agency should act in full conformity with the EU
security standards and rules.

(21)

In conformity with Article 6 of the Protocol on the
position of Denmark annexed to the Treaty on
European Union and to the Treaty establishing the
European Community, Denmark does not participate in
the elaboration and implementation of decisions and
actions of the European Union which have defence impli-
cations. Denmark has therefore not participated in the
elaboration and adoption of this Joint Action and shall
not be bound by it,

HAS ADOPTED THIS JOINT ACTION:

CHAPTER I

ESTABLISHMENT, MISSION AND TASKS OF THE AGENCY

Article 1

Establishment

Article 2

Mission

1.
The mission of the Agency is to support the Council and
the Member States in their effort to improve the EU’s defence
capabilities in the field of crisis management and to sustain the
ESDP as it stands now and develops in the future.

The Agency’s mission shall be without prejudice to the

2.
competences of Member States in defence matters.

Article 3

Definitions

For the purpose of this Joint Action:

— ‘participating Member States’, shall mean the Member States
of the European Union who participate in the Agency,

— ‘contributing Member States’, shall mean the participating
Member States of the European Union contributing to a
particular project or programme.

1.
An Agency in the field of defence capabilities devel-
opment, research, acquisition and armaments (the European
Defence Agency), hereinafter referred to as ‘the Agency’,
is
hereby established.

Article 4

Political supervision and reporting arrangements

The Agency shall act under the Council’s authority,
2.
in
support of the CFSP and the ESDP, within the single institu-

1.
The Agency shall operate under the authority and the
political supervision of the Council, to which it shall provide
regular
regular
guidelines.

reports and from which it

receive

shall

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The Agency shall report regularly to the Council on its

2.
activities, and shall notably:

terms

tative
equipment);

(encompassing

both forces

and

(a) submit to the Council

in May each year a report on the
Agency’s activities during the previous and the current year;

3.1.2. coordinating the implementation of the European
Capabilities Action Plan (ECAP) and any successor
plan;

(b) submit to the Council in November each year a report on
the Agency’s activities during the current year and provide
information on the draft elements for the Agency’s work
programme and budgets for the following year.

3.1.3. scrutinising, assessing and evaluating against criteria
to be agreed by the Member States the capability
commitments given by the Member States through
the ECAP process, and utilising the CDM;

The Agency shall provide the Council in good time with infor-
mation on important matters to be submitted to the Steering
Board for decision.

3.1.4. promoting

and coordinating harmonisation of

military requirements;

3.
The Council, acting by unanimity, and with advice from
the PSC or other competent Council bodies as appropriate, shall
issue guidelines annually in relation to the work of the Agency,
notably with regard to its work programme. The Agency’s work
programme shall be established within the framework of these
guidelines.

3.1.5.

identifying and proposing collaborative activities in
the operational domain;

3.1.6. providing appraisals on financial priorities
capabilities development and acquisition.

for

Every three years, the Council, acting by unanimity, shall
4.
approve a financial framework for the Agency for the following
three years. This financial framework shall set out agreed prio-
rities and shall constitute a legally binding ceiling. The first
financial framework shall cover the period 2006 to 2008.

5.
The Agency may make recommendations to the Council
and to the Commission as necessary for the implementation of
its mission.

Article 5

Functions and tasks

In fulfilling its functions and tasks,

1.
respect
the competences of
those of the EU institutions.

the Agency shall
the European Community and

3.2. Promotion and enhancement of European armaments

cooperation, in particular by:

3.2.1. promoting and proposing new multilateral coop-
capabilities
to meet
erative
requirements as they stand now and develop in
the future;

projects

ESDP

3.2.2. working for coordination of existing programmes

implemented by Member States;

3.2.3. assuming, at the request of Member States, respon-
sibility for managing specific programmes (through
OCCAR
programme management
arrangements as appropriate);

other

or

The Agency’s fulfilment of its functions and tasks shall be
2.
without prejudice to the competences of Member States in
defence matters.

3.

The Agency shall work in the following principal fields:

3.1. Development of defence capabilities in the field of crisis

management, in particular by:

3.2.4. promoting cost-effective and efficient procurement

by identifying and disseminating best practices.

3.3. Working to strengthen the DTIB and for the creation of an
internationally competitive European Defence Equipment
Market in particular by:

3.3.1. developing relevant policies

in
consultation with the Commission and industry as
appropriate;

and strategies,

3.1.1.

identifying,
competent
in association with the
Council bodies, and utilising the Capability Devel-
opment Mechanism (CDM), the EU’s future defence
capability requirements in quantitative and quali-

3.3.2. pursuing EU-wide development and harmonisation
of relevant rules and regulations (particularly by an
EU-wide application of relevant rules of
the LoI
Framework Agreement).

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3.4. Enhancement of

the effectiveness of European Defence

Research and Technology (R & T), in particular by:

The Head of the Agency shall present the Agency’s reports

3.
to the Council as referred to in Article 4(2).

3.4.1. promoting,

in liaison with the Community’s
research
research activities where
aimed at
fulfilling future defence and security
capability requirements and thereby strengthening
Europe’s industrial and technological potential
in
this domain;

appropriate,

of

The Head of

administrative

the Agency shall be responsible for the
4.
negotiation
third
countries and other organisations, groupings or entities in
accordance with directives given by the Steering Board.
Within such arrangements, as approved by the Steering Board,
the Head of the Agency shall be responsible for establishing
appropriate working relations with them.

arrangements with

3.4.2. promoting more effectively targeted joint defence R
& T, drawing on the experience of relevant elements
of the WEAG and the WEAO;

Article 8

Steering Board

3.4.3. coordinating and planning joint research activities;

3.4.4. catalysing defence R & T through studies and

projects;

3.4.5. managing defence R & T contracts;

3.4.6. working

in liaison with the Commission to
maximise complementarity and synergy between
security related research
defence
programmes.

and civil or

Article 6

Legal personality

The Agency shall have the legal personality necessary to
perform its functions and attain its objectives. Member States
shall ensure that the Agency enjoys the most extensive legal
capacity accorded to legal persons under
laws. The
Agency may, in particular, acquire or dispose of movable and
immovable property and be a party to legal proceedings. The
Agency shall have the capacity to conclude contracts with
private or public entities or organisations.

their

CHAPTER II

ORGANS AND STAFF OF THE AGENCY

Article 7

Head of the Agency

A Steering Board composed of one representative of each
1.
its
participating Member
government, and a representative of the Commission, shall be
the decision-making body of the Agency. The Steering Board
shall act within the framework of the guidelines issued by the
Council.

authorised

commit

State,

to

2.
The Steering Board shall meet at the level of the Ministers
of Defence of the participating Member States or their repre-
in principle hold at least
sentatives. The Steering Board shall
two meetings each year at the level of Ministers of Defence.

3.
The Head of the Agency shall convene and chair the
Steering Board’s meetings. If a participating Member State so
requests,
the Agency shall convene a meeting
within one month.

the Head of

4.
The Head of the Agency may delegate the power to chair
the Steering Board’s meetings at the level of the representatives
of the Ministers of Defence.

5.
The Steering Board may meet in specific compositions
(such as National Defence Research Directors, National
Armaments Directors, National Defence Planners or Policy
Directors).

6.

The Steering Board meetings are attended by:

— the Chief Executive of the Agency or his/her representative,

— the Chairman of EUMC and the NAD of the EU Presidency,

1.

The Head of the Agency shall be the SG/HR for the CFSP.

or their representative.

The Head of

2.
the Agency shall be responsible for the
Agency’s overall organisation and functioning and shall ensure
that the guidelines issued by the Council and the decisions of
the Steering Board are implemented by the Chief Executive, who
shall report to him/her.

The Steering Board may decide to invite, on matters of

7.
common interest:

— the NATO Secretary-General,

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— the Heads/Chairs of other arrangements, organisations or
groupings whose work is relevant to that of the Agency
(such as LoI, WEAG/WEAO, OCCAR),

1.13. approves the ad hoc arrangements referred to in Article

23(1);

— as appropriate, representatives of other third parties.

1.14. concludes the administrative arrangements between the

Agency and third parties referred to in Article 25(1);

Article 9

1.15. approves the annual accounts and balance sheet;

Tasks and powers of the Steering Board

1. Within the framework of the guidelines of the Council
referred to in Article 4(1), the Steering Board:

1.1.

approves the reports to be submitted to the Council;

1.2.

approves, on the basis of a draft submitted by the Head
of the Agency, and no later than 31 December of each
the Agency’s annual work programme for
year,
the
following year;

1.3.

adopts the Agency’s general budget no later than 31
December of each year within the limits set
in the
Agency’s financial framework as decided by the Council;

1.4.

approves the establishment within the Agency of ad hoc
projects or programmes in accordance with Article 20;

1.5.

appoints the Chief Executive and his/her deputy;

1.6.

decides that the Agency may be entrusted by one or
more Member States with the
and
financial management of certain activities within its
remit in accordance with Article 17;

administrative

1.7.

approves any recommendation to the Council or the
Commission;

1.8.

adopts the Agency’s rules of procedure;

1.9. may amend the financial provisions for the implemen-

tation of the Agency’s general budget;

1.10. may amend the rules and regulations applicable to the

contractual staff and national seconded experts;

1.11. determines

the technical and financial arrangements
regarding Member States’ participation or withdrawal
referred to in Article 1(4);

1.12. adopts directives regarding the negotiation of adminis-
trative arrangements by the Head of the Agency;

1.16. adopts

all other

relevant decisions

relating to the

fulfilment of the Agency’s mission.

The Steering Board shall

2.
take decisions by qualified
majority. The votes of the participating Member States shall
be weighted in accordance with Article 23(2) TEU. Decisions
to be adopted by the Steering Board by qualified majority shall
require at least two thirds of the votes of the participating
Member States. Only the representatives of the participating
Member States shall take part in the vote.

3.
If a representative of a participating Member State in the
Steering Board declares that, for important and stated reasons of
national policy, it intends to oppose the adoption of a decision
to be taken by qualified majority, a vote shall not be taken. That
representative may refer the matter, through the Head of the
Agency, to the Council with a view to issuing guidelines to the
Steering Board, as appropriate. Alternatively, the Steering Board,
acting by qualified majority, may decide to refer the matter to
the Council for decision. The Council shall act by unanimity.

The Steering Board, on a proposal

4.
from the Chief
Executive or from a participating Member State, may decide
to set up:

(a) committees

for

the preparation of administrative and
budgetary decisions of the Steering Board, composed of
delegates of the participating Member States and a represen-
tative of the Commission;

(b) committees specialised in specific issues within the Agency’s
remit. These committees shall be composed of delegates of
the participating Member States and, unless the Steering
Board
the
Commission.

representative

otherwise,

decides

of

a

The decision to establish such committees shall specify their
mandate and duration.

Article 10

The Chief Executive

The Chief Executive, and his/her Deputy, are appointed by
1.
the Steering Board on a proposal from the Head of the Agency
for three years. The Steering Board may grant a two-year
extension. The Chief Executive, and his/her Deputy, shall act
under
the Agency and in
accordance with the decisions of the Steering Board.

the authority of

the Head of

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The Chief Executive, assisted by his/her deputy, shall take
2.
all necessary measures to ensure the efficiency and effectiveness
of the Agency’s work. He/she is responsible for the oversight
and coordination of the functional units, in order to ensure the
overall coherence of their work. He/she shall be the head of the
Agency’s staff.

Executive shall publish in advance details of all available
positions and the criteria relevant to the selection process. In
all cases, recruitment shall be directed to securing for the
Agency the services of staff of the highest standard of ability
and efficiency.

3.

The Chief Executive is responsible for:

3.1. ensuring the implementation of the Agency’s annual work

programme;

2.
The Head of the Agency, upon a proposal from the Chief
Executive and following consultation with the Steering Board,
shall appoint the staff of the Agency at senior management
level.

3.2. preparing the work of the Steering Board, in particular the

draft annual work programme of the Agency;

3.

The Agency’s staff shall consist of:

3.3. ensuring close cooperation with and providing information
to the Council preparatory bodies, notably the PSC and the
EUMC;

3.4. preparing the draft annual general budget to be submitted

to the Steering Board;

3.5. preparing the reports referred to in Article 4(2);

3.6. preparing the statement of revenue and expenditure and
implementing the Agency’s general budget and the budgets
of ad hoc projects or programmes entrusted to the Agency;

3.7. the day-to-day administration of the Agency;

3.1. personnel recruited directly by the Agency under fixed-
term contracts, selected among nationals of participating
Member States. The Council, acting by unanimity, shall
approve the regulations applicable to such staff. The
Steering Board shall, within one year of the adoption of
this Joint Action, review and amend, as necessary, these
regulations;

3.2. national experts seconded by participating Member States
either to posts within the Agency organisational structure
or for specific tasks and projects. The Council, acting by
unanimity, shall approve the rules applicable to such
experts. The Steering Board shall, within one year of the
adoption of
review and amend, as
necessary, these rules;

this Joint Action,

3.8. all security aspects;

3.9. all staff matters.

4. Within the work programme and the general budget of
the Agency, the Chief Executive shall be empowered to enter
into contracts and to recruit staff. The Chief Executive shall be
the authorising officer responsible for the implementation of the
budgets administered by the Agency.

5.

The Chief Executive shall be accountable to the Board.

The Chief Executive shall be the legal representative of the

6.
Agency.

Article 11

Staff

The staff of the Agency,

1.
including the Chief Executive,
shall consist of contract and statutory staff members recruited
from among candidates from all participating Member States on
the broadest possible geographical basis, and from the EU insti-
tutions. The staff of the Agency shall be selected by the Chief
Executive on the basis of relevant competence and expertise and
through fair and transparent competition procedures. The Chief

3.3. Community officials seconded to the Agency for a fixed
period and/or for specific tasks or projects as required.

CHAPTER III

BUDGET AND FINANCIAL RULES

Article 12

Budgetary principles

Budgets, drawn up in euro, are the acts which for each
the revenue and

1.
financial year lay down and authorise all
expenditure administered by the Agency.

2.
The appropriations entered in a budget are authorised for
the duration of a financial year which begins on 1 January and
ends on 31 December of the same year.

For each budget,

3.
revenue and expenditure must be
balanced. All revenue and expenditure shall be entered in full
in the relevant budget without any adjustment against each
other.

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The budget shall contain differentiated appropriations,
4.
which shall
and
commitment
payment appropriations and non-differentiated appropriations.

appropriations

consist of

common benefit of

all participating Member
the
States, notably technical case-studies and pre-feasibility
studies;

5.
Commitment appropriations shall cover the total cost of
the legal commitments entered into during the current financial
year. However, commitments may be made globally or in
instalments. Commitments shall be entered into the
annual
accounts on the basis of the legal commitments entered into
up to 31 December.

6.
Payment appropriations shall cover payments made to
honour the legal commitments entered into in the current
financial year and/or earlier financial years. Payments shall be
entered in the
the budget
commitments up to 31 December.

accounts on the basis of

(b) a forecast of the revenue needed to cover expenditure.

The Steering Board shall aim to ensure that the appro-
3.
priations referred to in paragraph 2(a)(ii) shall represent a
significant share of
the total appropriations referred to in
paragraph 2. These appropriations shall reflect actual needs
and shall allow for an operational role for the Agency.

The draft general budget shall be accompanied by a

4.
detailed staff establishment plan and detailed justifications.

7.
The revenue of a financial year shall be entered in the
accounts for the financial year on the basis of the amounts
collected during the financial year.

5.
The Steering Board, acting by unanimity, may decide that
the draft general budget shall furthermore cover a particular
project or programme where this is clearly for the common
benefit of all participating Member States.

Neither revenue nor expenditure may be implemented
8.
other than by allocation to a heading in the budget and
within the limit of the appropriations entered there.

The appropriations shall be classified in titles and chapters
6.
grouping expenditure together by type or purpose, subdivided
as necessary into articles.

9.
Appropriations shall be used in accordance with the prin-
ciples of sound financial management, namely in accordance
with the principles of economy, efficiency and effectiveness.

Each title may include a chapter entitled ‘provisional
7.
appropriations’. These appropriations shall be entered where
there is uncertainty, based on serious grounds, about
the
amount of appropriations needed or the scope for imple-
menting the appropriations entered.

Article 13

The general budget

1.
The Head of the Agency shall provide the Steering Board
by 30 June each year with an overall estimate of the draft
general budget
fully respecting the
limits set down in the financial framework.

for the following year,

2.
The Head of the Agency shall propose the draft general
budget to the Steering Board by 30 September each year. The
draft shall include:

(a)

the appropriations deemed necessary:

(i)

to cover the Agency’s running, staffing and meeting
costs;

(ii) for procuring external

advice, notably operational
analysis, essential for the Agency to discharge its tasks,
and for specific research and technology activities for

8.

Revenue shall consist of:

(a) miscellaneous revenue;

(b) contributions payable by the Member States participating in
the Agency based on the gross national income (GNI) scale.

The draft general budget shall carry lines to accommodate
earmarked revenue and, wherever possible, shall
indicate the
amount foreseen.

The Steering Board shall adopt the draft general budget by
9.
31 December of each year within the Agency’s
financial
framework. When doing so,
the Steering Board shall be
chaired by the Head of the Agency, or by a representative
appointed by him/her from within the General Secretariat of
the Council, or by a member of the Steering Board invited to
do so by him/her. The Chief Executive shall declare that the
budget has been adopted and notify the participating Member
States.

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If, at the beginning of a financial year, the draft general
10.
budget has not been adopted, a sum equivalent to not more
than one twelfth of the budget appropriations for the preceding
financial year may be spent each month in respect of any
chapter or other subdivision of the budget. This arrangement
shall not, however, have the effect of placing at the disposal of
the Agency appropriations in excess of one twelfth of those
provided for
in course of
in the draft general budget
preparation. The Steering Board, acting by a qualified majority
on a proposal from the Chief Executive, may authorise expen-
diture in excess of one twelfth. The Chief Executive may call for
the
appropriations
authorised under this provision, which shall be payable within
30 days from dispatch of the call for contributions.

contributions necessary

to cover

the

Article 14

Amending budgets

In the case of unavoidable, exceptional or unforeseen
1.
circumstances,
the Chief Executive may propose a draft
amending budget within the limits set down in the financial
framework.

2.
The draft amending budget shall be drawn up, proposed,
and adopted and notification given in accordance with the same
procedure as the general budget, within the limits set down in
the financial framework. The Steering Board shall act with due
account to the urgency.

3.
In the situation where the limits set down in the financial
framework would be considered insufficient due to exceptional
and unforeseen circumstances, taking also in full account rules
set out in Article 13(2) and (3), the Steering Board will submit
the amending budget for adoption by the Council, acting by
unanimity.

Article 15

Earmarked revenue

The Agency may receive

in its general budget as
1.
earmarked revenue for a specific purpose financial contributions
to cover costs other
than those referred to under Article
13(2)(a)(i):

(a)

from the general budget of the European Union on a case-
by-case basis,
in full respect of the rules, procedures and
decision-making processes applicable to it;

(b) from Member States, third countries or other third parties.

Earmarked revenue may only be used for the specific

2.
purpose to which it is assigned.

(1) OJ L 253, 7.10.2000, p. 42.

Article 16

Contributions and reimbursements

Determination of contributions where the GNI scale is

1.
applicable

1.1. Where the GNI scale is applicable,

the breakdown of
contributions between the Member States from whom a
contribution is required shall be determined in accordance
with the gross national product scale as specified in Article
28(3) TEU and in accordance with Council Decision
2000/597/EC, Euratom of 29 September 2000 on the
system of the European Communities’ own resources (1),
or any other Council Decision which may replace it.

1.2. The data for the calculation of each contribution shall be
those set out in the ‘GNI own resources’ column in the
‘Summary of financing of the general budget by type of
own resource and by Member State’ table appended to the
latest budget adopted by the European Communities. The
contribution of each Member State from whom a contri-
bution is due shall be proportional to the share of that
Member State’s GNI
in the total GNI aggregate of the
Member States from whom a contribution is due.

2.

Schedule for payment of contributions

2.1. The contributions intended to finance the general budget
shall be paid by the participating Member States in three
equal
instalments, by 15 February, 15 June and 15
October of the financial year concerned.

2.2. When an amending budget

the necessary
is adopted,
contributions
shall be paid by the Member States
concerned within 60 days from dispatch of the call for
contributions.

2.3. Each Member State shall pay the bank charges relating to

the payment of its own contributions.

Article 17

Management by the Agency of expenditure on behalf of
Member States

from the Chief
1.
The Steering Board, on a proposal
Executive or a Member State, may decide that
the Agency
may be entrusted by Member States, on a contractual basis,
with the administrative and financial management of certain
activities within its remit.

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The Steering Board,

in its decision, may authorise the
2.
Agency to enter into contracts on behalf of certain Member
States.
It may authorise the Agency to collect the necessary
funds from these Member States in advance to honour the
contracts entered into.

Article 18

Implementation of the budget

The financial provisions applicable to the Agency’s general
1.
budget shall be adopted by the Council, acting by unanimity.
The Steering Board shall, within one year of the adoption of
this
review and amend these provisions, as
necessary.

Joint Action,

CHAPTER IV

AD HOC PROJECTS OR PROGRAMMES AND ASSOCIATED
BUDGETS

Article 20

Approval of ad hoc projects or programmes and ad hoc
budgets associated with them (Category A)

One or more participating Member States or the Chief
1.
Executive may submit
to the Steering Board an ad hoc
project or programme within the Agency’s remit, which shall
presume general participation by the participating Member
States. The Steering Board shall be informed of the ad hoc
budget, if any, to be associated with the proposed project or
programme, as well as of potential contributions by third
parties.

The Steering Board, acting on a proposal from the Chief
2.
the implementing rules
Executive, shall as necessary adopt
the general
regarding the implementation and control of
budget, notably as
regards public procurement, without
prejudice to relevant Community rules. The Steering Board
shall ensure, in particular, that security of supply and protection
rights
both of defence
requirements are taken into account in a proper manner.

and intellectual property

secret

3.
The financial provisions and rules referred to in this
Article are not applicable to ad hoc projects and programmes
as referred to in Articles 20 and 21.

All participating Member

2.
contribute. They shall
intentions in this regard.

inform the Chief Executive of

States

shall

in principle
their

The Steering Board shall approve the establishment of the

3.
ad hoc project or programme.

The Steering Board, on a proposal

4.
from the Chief
Executive or from a participating Member State, may decide
to set up a committee to supervise the management and imple-
mentation of the ad hoc project or programme. The committee
shall be composed of delegates from each of the contributing
Member States and, when the Community contributes to the
project or programme, a representative of the Commission. The
decision of the Steering Board shall specify the committee’s
mandate and duration.

Article 19

Initial budget 2004 and budget for 2005

1.
The initial general budget for the financial year 2004,
focused on start-up arrangements, shall be as shown in the
financial statement to be submitted with the Joint Action. The
first financial year shall begin one day after the entry into force
of this Joint Action.

For the ad hoc project or programme, the contributing
shall

5.
Member States, meeting within the Steering Board,
approve:

(a)

the rules governing the management of
programme;

the project or

2.
The initial general budget shall be financed by contri-
butions from the participating Member States payable as soon
as possible and in any case no later than within 45 days from
the calls for contributions by the Head of the
despatch of
Agency, Secretary-General of
the European
Union.

the Council of

(b) where appropriate, the ad hoc budget associated with the
project or programme, the key for contributions and the
necessary implementing rules;

(c) participation of third parties in the committee referred to in
paragraph 4. Their participation shall be without prejudice
to the decision-making autonomy of the EU.

3.
The general budget for the financial year 2005 shall be
adopted by the Steering Board with the approval of the Council,
acting by unanimity.

6. Where the Community contributes to an ad hoc project
in the
or programme,
decisions referred to in paragraph 5,
the
decision-making procedures applicable to the general budget
of the EU.

the Commission shall participate

in full respect of

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Article 21

Approval of ad hoc projects, or programmes and ad hoc
budgets associated with them (Category B)

One or more participating Member States may inform the
1.
Steering Board that they intend to establish an ad hoc project or
programme within the Agency’s remit, and where appropriate
the ad hoc budget associated with it. The Steering Board shall
be informed of the ad hoc budget, if any, to be associated with
the proposed project or programme, and details, if relevant, on
human resources for such project or programme, as well as of
potential contributions by third parties.

2.
In the interest of maximising opportunities for coop-
eration, all participating Member States shall be informed of
the ad hoc project or programme,
including the basis upon
in a timely manner
which participation might be expanded,
so that any participating Member State who wishes to do so
may express an interest in joining. Moreover, the initiator(s) of
the project or programme will endeavour
to make their
membership as wide as possible. Participation will be estab-
lished on a case-by-case basis by the initiators.

The ad hoc project or programme shall then be regarded
3.
an as Agency project or programme, unless the Steering Board
decides otherwise within one month of receiving the infor-
mation foreseen in paragraph 1.

4.
Any participating Member State which, at a later stage,
wishes to participate in the ad hoc project or programme shall
notify the contributing Member States of its intentions. The
contributing Member States, within two months of receiving
this notification, shall decide among themselves, having due
regard to the basis set out when participating Member States
are informed of the project or programme, on the participation
of the Member State concerned.

5.
The contributing Member States shall take amongst them
the decisions necessary for the establishment and implemen-
tation of the ad hoc project or programme and, where appro-
priate, the budget associated with it. Where the Community
contributes to such a project or programme, the Commission
shall participate in the decisions referred to in this paragraph in
full respect of the decision-making procedures applicable to the
general budget of the EU. The contributing Member States shall
keep the Steering Board informed, as appropriate, of devel-
opments relating to such project or programme.

Article 22

Article 23

Participation of third parties

1.
Third parties may contribute to a particular ad hoc project
or programme, established in accordance with Articles 20 or
21, and to the budget associated with it. The Steering Board
shall, acting by qualified majority, approve as necessary ad hoc
arrangements between the Agency and third parties for each
particular project or programme.

2.
For projects established under Article 20, the contributing
Member States meeting within the Steering Board shall approve
any necessary modalities with the relevant third parties relating
to their contribution.

3.
For projects established under Article 21, the contributing
Member States shall decide any necessary modalities with the
relevant third parties relating to their contribution.

4. Where the Community contributes to an ad hoc project
or programme,
in the
decisions referred to in paragraphs 2 and 3.

the Commission shall participate

CHAPTER V

RELATIONS WITH THE COMMISSION

Article 24

Association with the Agency’s work

The Commission is a member of

1.
the Steering Board
without voting rights and shall be fully associated with the
work of the Agency.

The Commission, on behalf of the Community, may also

2.
participate in projects and programmes of the Agency.

The Agency shall establish the necessary administrative
3.
arrangements and working relations with the Commission,
in
particular with a view to exchanging expertise and advice in
those areas where the activities of
the Community have a
bearing on the Agency’s missions and where the activities of
the Agency are relevant to those of the Community.

Contributions from the general budget of the European
Union to ad hoc budgets

Contributions from the general budget of the EU may be made
to the ad hoc budgets established for ad hoc projects or
programmes referred to in Articles 20 and 21.

Necessary arrangements to cover a contribution, on a
4.
case-by-case basis, from the general budget of the EU under
Articles 15 and 22, shall be established between the Agency
and the Commission by mutual agreement, or between the
contributing Member States and the Commission by mutual
agreement.

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CHAPTER VI

RELATIONS WITH THIRD COUNTRIES, ORGANISATIONS AND
ENTITIES

Article 25

Relations with third countries, organisations and entities

1.
For the purpose of fulfilling its mission, the Agency may
enter into administrative arrangements with third States, orga-
nisations and entities. Such arrangements shall notably cover:

The non-EU WEAG members shall be provided with the
6.
fullest possible transparency regarding the Agency’s specific
projects and programmes with a view to their participation
therein as appropriate. A consultative committee shall be set
up for this purpose, to provide a forum for exchanging views
and information on matters of common interest falling within
the scope of the Agency's mission. It shall be chaired by the
Chief Executive or his/her representative. It shall include a repre-
sentative of each participating Member State and a represen-
tative of the Commission, and representatives of the non-EU
WEAG members in accordance with modalities to be agreed
with them.

(a)

the principle of a relationship between the Agency and the
third party;

(b) provisions for consultation on subjects related to Agency’s

work;

(c) security matters.

In so doing, it shall respect the single institutional framework
and the decision-making autonomy of
the EU. Each such
arrangement shall be concluded by the Steering Board upon
approval by the Council, acting by unanimity.

2.
The Agency shall develop close working relations with the
relevant elements of OCCAR, the LoI Framework Agreement,
and WEAG/WEAO with a view to incorporate those elements
or assimilate their principles and practices in due course, as
appropriate and by mutual agreement.

3.
Reciprocal transparency and coherent development in the
field of capabilities shall be ensured by the application of CDM
procedures. Other working relations between the Agency and
relevant NATO bodies shall be defined through an adminis-
trative arrangement referred to in paragraph 1, in full respect
of the established framework of cooperation and consultation
between the EU and NATO.

7.
Upon request, other non-EU European NATO members
may also participate in the Consultative Committee referred to
in paragraph 6, in accordance with modalities to be agreed with
them.

8.
The Consultative Committee referred to in paragraph 6
may also serve as a forum for dialogue with other third
interest within the
parties on specific matters of mutual
Agency's remit, and may serve to ensure that they are kept
fully informed of developments
common
in matters of
interest and of opportunities for future cooperation

CHAPTER VII

MISCELLANEOUS PROVISIONS

Article 26

Privileges and immunities

Privileges and immunities necessary for the performance of the
duties of the Agency, the Chief Executive and its staff shall be
provided for in an agreement between participating Member
States.

Article 27

Review clause

The Head of the Agency shall present no later than three years
from the entry into force of this Joint Action or upon the entry
into force of the Treaty establishing a Constitution for Europe,
whichever is the earlier, a report to the Steering Board on the
implementation of this Joint Action, with a view to its possible
review by the Council.

4. With a view to facilitating their possible participation in
projects and programmes
framework of
arrangements referred to in paragraph 1, the Agency shall be
entitled to establish working relations with organisations and
entities other than those mentioned in paragraphs 2 and 3.

and within the

Article 28

Legal liability

5. With a view to facilitating their possible participation in
specific projects and programmes and within the framework of
arrangements referred to in paragraph 1, the Agency shall be
entitled to establish working relations with third countries.

The personal liability of staff towards the Agency shall be

2.
governed by the relevant rules applying to the Agency.

The contractual liability of the Agency shall be governed

1.
by the law applicable to the contract concerned.

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Article 29

Access to documents

Article 32

Transitional measures

taking into account

Upon a proposal by the Chief Executive, the Steering Board
shall adopt rules on public access to the documents of the
the principles and limits laid
Agency,
down in Regulation (EC) No 1049/2001 of
the European
Parliament and of
the Council of 30 May 2001 regarding
public access to European Parliament, Council and Commission
documents (1).

Article 30

Security

The SG/HR shall take the necessary measures for the operational
setting-up of the Agency. For this purpose, he/she may also
exercise the powers granted to the Chief Executive under this
Joint Action until his/her appointment.

Article 33

This Joint Action shall enter into force on the day of
adoption.

its

Article 34

The Agency shall apply the Council’s security regulations

1.
set out in Decision 2001/264/EC (2).

This Joint Action shall be published in the Official Journal of the
European Union.

The Agency shall ensure appropriate security and speed in

2.
its external communications.

Article 31

Language regime

The language regime of the Agency shall be established by the
Council, acting by unanimity.

Done at Brussels, 12 July 2004.

For the Council
The President

B. BOT

(1) OJ L 145, 31.5.2001, p. 43.
(2) OJ L 101, 11.4.2001, p. 1.