Proposal for a Council Decision concerning the signing, on behalf of the European Community, of the Agreement amending the Partnership Agreement signed in Cotonou on 23 June 2000 between the African, Caribbean and Pacific States, of the one part, and the European Community and its Member States, of the other part
Date: 2005-05-03
Institutions: European Commission
Subjects: ACP countries, cooperation agreement, development policy, signature of an agreement, transitional period (EU)

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 3.5.2005 
COM(2005) 185 final 

2005/0071(AVC) 

Proposal for a 

COUNCIL DECISION 

concerning the signing, on behalf of the European Community, of the Agreement 
amending the Partnership Agreement signed in Cotonou on 23 June 2000 
between the African, Caribbean and Pacific States, of the one part, and the 
European Community and its Member States, of the other part 

Proposal for a  

COUNCIL DECISION 

concerning the conclusion of the Agreement amending the Partnership 
Agreement signed in Cotonou on 23 June 2000 between the African, Caribbean 
and Pacific States, of the one part, and the European Community and its 
Member States, of the other part 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

General 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

10. 

11. 

By  virtue  of  a  decision  of  27  April  2004,  the  Council  authorised  the 
Commission  to  open  negotiations  with  the  ACP  States  with  a  view  to 
undertaking a revision of the Partnership Agreement between the ACP States 
and the European Community and its Member States. 

The negotiations took place between 6 May 2004 and 23 February 2005.  

The Commission considers that the revised Partnership Agreement conforms 
to the negotiating directives adopted by the Council on 27 April 2004.  

The  revised  Agreement  marks  an  improvement  in  the  relationship  between 
the  ACP  States  and  the  Community  and  its  Member  States,  while 
maintaining the acquis of the Cotonou Agreement. 

The amendments relate to parts of the main body of the Agreement, Annexes 
I, II and IV and the new Annexes Ibis and VII.  

Some  components,  such  as  the  rules  on  the  award  of  contracts  and  the 
modalities for implementation of the FLEX mechanism will be reviewed and 
adapted, if necessary, by the ACP-EC Council of Ministers. 

The  amendments  cover  a  wide  range  of  issues  relating  to  the  political 
dimension,  development 
and 
the 
implementation and management procedures.  

Investment  Facility 

strategies, 

Provisions  have  been  inserted  concerning  the  international  fight  against 
terrorism,  prevention  of  mercenary  activities,  cooperation  in  countering  the 
proliferation  of  Weapons  of  Mass  Destruction  (WMD),  commitment  to  the 
International Criminal Court and modalities for a more structured and formal 
political dialogue. 

With  regard  to  development  strategies,  the  Agreement  has  been  revised  to 
include a number of new elements relating to the Millennium Development 
Goals (MDGs), the social sector, ICTs, youth, traditional knowledge, island 
ACP states, Non State Actors (NSAs) and regional cooperation.  

A number of amendments were made to Annex II on the Investment Facility 
(IF).  These  include  conditions  relating  to  loans,  interest  rate  subsidies, 
foreign exchange rate risks and Bank remuneration. The IF will be subject to 
a joint review of its performance at mid-term and at the end of the term of the 
Financial Protocol.  

In  order  to  improve  efficiency  and  to  promote  harmonisation,  a  series  of 
into  Annex  IV  regarding  management 
proposals  were 
procedures  and  implementation.  The  proposals  aim,  inter  alia,  to  introduce 
greater flexibility in the allocation of resources and in financial management 

incorporated 

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in crisis or conflict situations, promote further untying of aid, reformulate the 
role of management and execution agents and, more generally, simplify the 
procedures in place. 

12. 

Two changes were made to the Financial Protocol. First, a provision on the 
financing of devolution was introduced into the existing Annex I. Second, a 
new  Annex  Ibis  was  added  relating  to  the  multiannual  financial  framework 
for cooperation under the revised Cotonou Agreement.  

The proposal 

13. 

14. 

15. 

For  the  reasons  given  above,  the  Commission  considers  that  the  revised 
Agreement should be concluded on behalf of the Community. Therefore the 
Commission  proposes that  the Council approve the text of the amendments 
and  adopt  the  attached  proposals.  Since  the  Partnership  Agreement  is  a 
mixed  Agreement  it  will  also  have  to  be  ratified  by  the  Member  States 
according to their constitutional provisions. 

The proposal on signing authorises the President of the Council to designate 
the  person  empowered  to  sign  the  Agreement  amending  the  Partnership 
Agreement on behalf of the Community. 

The  proposal  on  conclusion  authorises  the  President  of  the  Council  to 
designate  the  person  empowered  to  deposit  the  instrument  of  approval  on 
behalf of the Community.  

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Proposal for a 

COUNCIL DECISION 

concerning the signing, on behalf of the European Community, of the Agreement 
amending the Partnership Agreement signed in Cotonou on 23 June 2000 
between the African, Caribbean and Pacific States, of the one part, and the 
European Community and its Member States, of the other part 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community and in particular 
Article 310 thereof, in conjunction with the second sentence of the first subparagraph 
of Article 300(2) thereof, 

Having regard to the proposal from the Commission, 

Whereas the revised Agreement negotiated by the Commission between the African, 
Caribbean  and  Pacific  States,  of  the  one  part,  and  the  European  Community  and  its 
Member  States,  of  the  other  part,  should  be  signed  on  behalf  of  the  European 
Community, 

HAS DECIDED AS FOLLOWS: 

Sole Article 

The President of the Council is hereby authorised to designate the person empowered 
to  sign,  on  behalf  of  the  European  Community,  the  revised  Partnership  Agreement 
between the African, Caribbean and Pacific States, of the one part, and the European 
Community and its Member States, of the other part. 

Done at Brussels, 

The Council 
The President  

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2005/0071(AVC) 

Proposal for a  

COUNCIL DECISION 

concerning the conclusion of the Agreement amending the Partnership 
Agreement signed in Cotonou on 23 June 2000 between the African, Caribbean 
and Pacific States, of the one part, and the European Community and its 
Member States, of the other part 

THE COUNCIL OF THE EUROPEAN UNION,  

Having regard to the Treaty establishing the European Community, and in particular 
Article 310 thereof in conjunction with the second sentence of Article 300(2) and the 
second subparagraph of Article 300(3), 

Having regard to the proposal from the Commission, 

Having regard to the assent of the European Parliament, 

Whereas  

(1) 

(2) 

(3) 

pursuant  to  Article  96  of  the  Partnership  Agreement  the  party  which  after 
having  conducted  a  strengthened  political  dialogue  considers  that  another 
party  fails  to  fulfil  an  obligation  in  respect  of  one  of  the  essential  elements 
referred to in Article 9 may invite the other party to hold consultations and, in 
certain  circumstances,  take  appropriate  measures,  including  where  necessary, 
the  partial  or  full  suspension  of  application  of  the  Partnership  Agreement  to 
the party concerned;  

pursuant to Article 97 of the Partnership agreement the party which considers 
that  a  serious  case  of  corruption  has  occurred  may  invite  the  other  party  to 
hold  consultations  and,  in  certain  circumstances,  take  appropriate  measures, 
including where necessary, the partial or full suspension of application of the 
Partnership agreement to the party concerned;  

pursuant  to  Article  11ter  of  the  Partnership  agreement  the  party  which,  after 
having conducted a strengthened political dialogue, informed in particular by 
reports  by  the  IAEA,  the  OPCW  and  other  relevant  multilateral  institutions, 
considers that the other Party has failed to fulfil an obligation stemming from 
paragraph  1  of  this  article  on  non-proliferation  of  weapons  of  mass 
destruction,  may  invite  the  other  party  to  hold  consultations  and,  in  certain 
circumstances,  take  appropriate  measures,  including  where  necessary,  the 
partial  or  full  suspension  of  application  of  the  Partnership  agreement  to  the 
party concerned; 

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(4) 

(5) 

an  effective  procedure  should  be  adopted  when  it  is  intended  to  take 
appropriate  measures  under  Article  96,  Article  97  or  paragraphs  4,  5,  6  of 
Article 11ter of the Partnership Agreement, 

the  Agreement  amending  the  Partnership  Agreement  between  the  African 
Caribbean  and  Pacific  States  on  the  one  part,  and  the  European  Community 
and its Member States, on the other part, signed in Cotonou on 23 June 2000 
should be approved. 

HAS DECIDED AS FOLLOWS: 

Article 1 

The  revised  Partnership  Agreement  between  the  African,  Caribbean  and  Pacific 
States, of the one part, and the European  Community and  its Member States,  of the 
other  part,  together  with  the  revised  and  the  new  Annexes  attached  thereto  and  the 
declarations made by the Community unilaterally or jointly with other parties that are 
attached to the Final Act, are hereby approved on behalf of the European Community. 

The texts of the amendments to the Agreement, Annexes, and Final Act are attached 
to this Decision. 

Article 2 

The President of the Council is hereby authorised to designate the person empowered 
to deposit the instrument of approval as required by Article 93 of the Agreement on 
behalf of the European Community. 

Article 3 

1. 

Where, at the initiative of the Commission or a Member State, after having 
exhausted  all  possible  options  for  dialogue  under  Article  8,  the  Council 
considers that an ACP State fails to fulfil an obligation concerning one of the 
essential elements referred to in Article 9 of the Partnership Agreement, or in 
serious cases of corruption, the ACP State concerned shall be invited, unless 
there is special urgency, to hold consultations in accordance with Articles 96 
and 97 of the Partnership Agreement.  

Where, at the initiative of the Commission or of a Member State, informed in 
particular by reports by the IAEA, the OPCW and other relevant multilateral 
institutions,  the  Council  considers  that  an  ACP  State  has  failed  to  fulfil  an 
obligation  stemming  from  Article  11ter(1)  on  non-proliferation  of  weapons 
of mass destruction, the ACP State concerned shall be invited, unless there is 
special urgency, to hold consultations in accordance with Article 11ter(4), (5) 
and (6) of the Partnership Agreement. 

The Council shall act by a qualified majority. 

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In the consultations, the Community shall be represented by the Presidency 
of the Council and the Commission. 

2. 

If, on expiry of the deadlines set in Articles 96 and 97 or Article 11ter for the 
consultations  and  despite  all  efforts,  no  solution  has  been  found,  or 
immediately in a case of urgency or refusal to hold consultations, the Council 
may, pursuant to those Articles, decide, on a proposal from the Commission, 
to  take  appropriate  measures  including  partial  suspension  acting  by  a 
qualified majority.  

The  Council  shall  act  unanimously  in  the  case  of  a  full  suspension  of 
application  of  the  Partnership  Agreement  in  relation  to  the  ACP  State 
concerned. 

These measures shall remain in force until such time as the Council has used 
the applicable procedure as set out in the first subparagraph to take a decision 
amending or revoking the measures adopted previously, or where applicable, 
for the period indicated in the Decision.  

For  that  purpose  the  Council  shall  proceed  to  review  the  above  measures 
regularly and at least every six months. 

The  President  of  the  Council  shall  notify  the  measures  thus  adopted  to  the 
ACP State concerned and to the Council of Ministers before they enter into 
force.  

The  Council's  Decision  shall  be  published  in  the  Official  Journal  of  the 
European Union. Where the measures are adopted immediately, notification 
thereof shall be addressed to the ACP State and to the Council of Ministers at 
the same time as an invitation to hold consultations.  

3. 

4. 

The  European  Parliament  shall  be  immediately  and  fully  informed  of  any 
decision taken under paragraphs 1 and 2.  

Should the Council of Ministers develop further modalities for consultation 
as referred to in Article 3(5) of the new Annex VII, the position to be taken 
by the Council within the joint ACP-EU Council will be based on a proposal 
by the Commission.  

Article 4 

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

Done at Brussels,  

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For the Council 
The President 

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REVISION OF THE COTONOU AGREEMENT 

Consolidated changes to the text of the Cotonou Agreement 

Note: 

- Agreement on new texts: underlined  

- Agreement on text to be deleted: strikethrough 

-  Only  revised  text  is  included:  table  of  contents  facilitates  reader  to  place  the 
amendments in the wider text of the Agreement (chapters with amendments: in 
bold and italics) 

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THE COTONOU AGREEMENT 

TABLE OF CONTENTS 

PREAMBLE  

PART 1: 

GENERAL PROVISIONS 

Title I – 

Objectives, principles and actors 

Chapter 1: 

Objectives and principles 

Chapter 2:  The actors of the partnership 

Title II – 

The political dimension 

PART 2: 

INSTITUTIONAL PROVISIONS 

PART 3: 

COOPERATION STRATEGIES 

Title I – 

Development strategies 

Chapter 1: 

General framework 

Chapter 2: 

Areas of support 

Section 1: 

Economic development 

Section 2: 

Social and human development 

Section 3: 

Regional Cooperation and Integration 

Section 4: 

Thematic and cross-cutting issues 

Title II – 

Economic and trade Cooperation 

Chapter 1: 

Objectives and principles 

Chapter 2: 

New trading arrangements 

Chapter 3: 

Cooperation in the international fora 

Chapter 4: 

Trade in services 

Chapter 5: 

Trade-related areas 

Chapter 6: 

Cooperation in other areas 

PART 4: 

DEVELOPMENT FINANCE COOPERATION 

Title I – 

General provisions 

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Chapter 1:  Objectives, principles, guidelines and eligibility 

Chapter 2: 

Scope and nature of financing 

Title II – 

Financial cooperation 

Chapter 1: 

Financial resources 

Chapter 2: 

Debt and structural adjustment support 

Chapter 3: 

Support in case of short-term fluctuations in export earnings 

Chapter 4: 

Support for sectoral policies 

Chapter 5:  Microprojects and decentralised cooperation 

Chapter 6: 

Humanitarian and emergency assistance 

Chapter 7: 

Investment and private sector development support 

Title III – 

Technical cooperation 

Title IV – 

Procedures and management systems 

PART 5: 

GENERAL PROVISIONS FOR THE LEAST-DEVELOPED, 

LANDLOCKED AND ISLAND ACP STATES (LDLICs) 

Chapter 1: 

General provisions 

Chapter 2: 

Least-developed ACP States 

Chapter 3: 

Landlocked ACP States 

Chapter 4: 

Island ACP States 

PART 6: 

FINAL PROVISIONS 

Article 96:  Essential  elements:  consultation  procedure  and  appropriate 
measures 

Article 97:  Consultation procedure and appropriate measures 

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PREAMBLE 

HAVING REGARD TO the Treaty establishing the European Community, on the one 
hand,  and  the  Georgetown  Agreement  establishing  the  Group  of  African,  Caribbean 
and Pacific States (ACP), on the other; 

AFFIRMING  their  commitment  to  work  together  towards  the  achievement  of  the 
objectives of poverty eradication, sustainable development and the gradual integration 
of the ACP countries into the world economy; 

ASSERTING  their  resolve  to  make,  through  their  cooperation,  a  significant 
contribution to the economic, social and cultural development of the ACP States and 
to  the  greater  well-being  of  their  population,  helping  them  facing  the  challenges  of 
globalisation  and  strengthening  the  ACP-EU  Partnership  in  the  effort  to  give  the 
process of globalisation a stronger social dimension; 

REAFFIRMING  their  willingness  to  revitalise  their  special  relationship  and  to 
implement  a  comprehensive  and  integrated  approach  for  a  strengthened  partnership 
based  on  political  dialogue,  development  cooperation  and  economic  and  trade 
relations; 

ACKNOWLEDGING  that  a  political  environment  guaranteeing  peace,  security  and 
stability, respect for human rights, democratic principles and the rule of law, and good 
governance  is  part  and  parcel  of  long  term  development;  acknowledging  that 
responsibility for establishing such an environment rests primarily with the countries 
concerned; 

ACKNOWLEDGING that sound and sustainable economic policies are prerequisites 
for development; 

REFERRING to the principles of the Charter of the United Nations, and recalling the 
Universal  Declaration  of  Human  Rights,  the  conclusions  of  the  1993 Vienna 
Conference  on  Human  Rights,  the  Covenants  on  Civil  and  Political  Rights  and  on 
Economic, Social and Cultural Rights, the Convention on the Rights of the Child, the 
Convention  on  the  Elimination  of  all  forms  of  Discrimination  against  Women,  the 
International  Convention  on  the  Elimination  of  all  forms  of  Racial  Discrimination, 
the 1949 Geneva Conventions and the other instruments of international humanitarian 
law, the 1954 Convention relating to the status of stateless persons, the 1951 Geneva 
Convention  relating  to  the  Status  of  Refugees  and  the  1967 New York  Protocol 
relating to the Status of Refugees; 

the  Convention  for 

CONSIDERING 
the  Protection  of  Human  Rights  and 
Fundamental Freedoms of the Council of Europe, the African Charter on Human and 
Peoples' Rights and the American Convention on Human Rights as positive regional 
contributions  to  the  respect  of  human  rights  in  the  European  Union  and  in  the  ACP 
States; 

REAFFIRMING  that  the  most  serious  crimes  of  concern  to  the  international 
community  must  not  go  unpunished  and  that  their  effective  prosecution  must  be 
ensured  by  taking  measures  at  the  national  level  and  by  enhancing  global 

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collaboration; CONSIDERING that the establishment and effective functioning of the 
International  Criminal  Court  constitute  an  important  development  for  peace  and 
international justice; 

RECALLING  the  Libreville  and  Santo  Domingo  declarations  of  the  Heads  of  State 
and Government of the ACP countries at their Summits in 1997 and 1999; 

CONSIDERING that the development targets and principles agreed in United Nations 
Conferences and the target, set by the OECD Development Assistance Committee, to 
reduce  by  one  half  the  proportion  of  people  living  in  extreme  poverty  by  the 
year 2015 provide a clear vision and must underpin ACP-EU cooperation within this 
Agreement; 

CONSIDERING  that  the  Millennium  Development  Goals  emanating  from  the 
Millennium Declaration adopted by the United Nations General Assembly in 2000, in 
particular the eradication of extreme poverty and hunger, as well as the development 
targets  and  principles  agreed  in  the  United  Nations  Conferences,  provide  a  clear 
vision and must underpin ACP-EU cooperation within this Agreement;  

PAYING  particular  attention  to  the  pledges  made  at  the  Rio,  Vienna,  Cairo, 
Copenhagen,  Beijing,  Istanbul  and  Rome  UN  conferences  and  acknowledging  the 
need  for  further  action  to  be  taken  in  order  to  achieve  the  goals  and  implement  the 
action programmes which have been drawn up in those fora; 

ANXIOUS to respect basic labour rights, taking account of the principles laid down in 
the relevant conventions of the International Labour Organisation; 

RECALLING  the  commitments  within  the  framework  of  the  World  Trade 
Organisation, 

HAVE DECIDED TO CONCLUDE THIS AGREEMENT: 

PART 1 

GENERAL PROVISIONS 

TITLE I 

OBJECTIVES, PRINCIPLES AND ACTORS 

CHAPTER 2 

THE ACTORS OF THE PARTNERSHIP 

ARTICLE 4 

General approach 

The ACP States shall determine the development principles, strategies and models of 
their  economies  and  societies  in  all  sovereignty.  They  shall  establish,  with  the 

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Community,  the  cooperation  programmes  provided  for  under  this  Agreement. 
However,  the  parties  recognise  the  complementary  role  of  and  potential  for 
contributions  by  non-State  actors  and  local  decentralised  authorities  1  to  the 
development process. To this end, under the conditions laid down in this Agreement, 
non-State actors and local decentralised authorities shall, where appropriate: 

–  be informed and involved in consultation on cooperation policies and strategies, on 
priorities  for  cooperation  especially  in  areas  that  concern  or  directly  affect  them, 
and on the political dialogue; 

–  be  provided  with  financial  resources,  under  the  conditions  laid  down  in  this 

Agreement in order to support local development processes; 

–  be involved in the implementation of cooperation project and programmes in areas 

that concern them or where these actors have a comparative advantage; 

–  be provided with capacity-building support in critical areas in order to reinforce the 
capabilities of these actors, particularly as regards organisation and representation, 
and 
including  channels  of 
the  establishment  of  consultation  mechanisms 
communication and dialogue, and to promote strategic alliances. 

TITLE II 

THE POLITICAL DIMENSION 

ARTICLE 8 

Political dialogue 

1. The Parties shall regularly engage in a comprehensive, balanced and deep political 
dialogue leading to commitments on both sides. 

2.  The  objective  of  this  dialogue  shall  be  to  exchange  information,  to  foster  mutual 
understanding,  and  to  facilitate  the  establishment  of  agreed  priorities  and  shared 
agendas,  in  particular  by  recognising  existing  links  between  the  different  aspects  of 
the relations between the Parties and the various areas of cooperation as laid down in 
this Agreement. The dialogue shall facilitate consultations between the Parties within 
international  fora.  The  objectives  of  the  dialogue  shall  also  include  preventing 
situations arising in which one Party might deem it necessary to have recourse to the 
non execution clause consultation procedures foreseen in Articles 96 and 97. 

3. The dialogue shall cover all the aims and objectives laid down in this Agreement as 
well as all questions of common, general, regional or sub-regional interest. Through 
dialogue,  the  Parties  shall  contribute  to  peace,  security  and  stability  and  promote  a 
stable and democratic political environment. It shall encompass cooperation strategies 

1 

Council – Commission Declaration: For the purpose of this article, it is understood that the 
term  ‘local  decentralised  authorities’  covers  all  levels  of  decentralisation  including 
‘collectivités locales’ 

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as well as global and sectoral policies, including environment, gender, migration and 
questions related to the cultural heritage.  

4. The dialogue shall focus, inter alia, on specific political issues of mutual concern or 
of general significance for the attainment of the objectives of this Agreement, such as 
the arms trade, excessive military expenditure, drugs and organised crime, or ethnic, 
religious  or  racial  discrimination.  The  dialogue  shall  also  encompass  a  regular 
assessment of the developments concerning the respect for human rights, democratic 
principles, the rule of law and good governance. 

5.  Broadly  based  policies  to  promote  peace  and  to  prevent,  manage  and  resolve 
violent conflicts shall play a prominent role in this dialogue, as shall the need to take 
full  account  of  the  objective  of  peace  and  democratic  stability  in  the  definition  of 
priority areas of cooperation. 

6. The dialogue shall be conducted in a flexible manner. Dialogue shall be formal or 
informal  according  to  the  need,  and  conducted  within  and  outside  the  institutional 
framework  including  the  ACP  Group,  the  ACP-EU  Joint  Parliamentary  Assembly 
(JPA)2, in the appropriate format, and at the appropriate level including regional, sub-
regional or national level.  

6bis.  Where  appropriate,  and  in  order  to  prevent  situations  arising  in  which  one 
Party  might  deem  it  necessary  to  have  recourse  to  the  consultation  procedure 
foreseen  in  Article  96,  dialogue  covering  the  essential  elements  shall  be  systematic 
and formalised in accordance with the modalities set out in Annex VII. 

7. Regional and sub-regional organisations as well as representatives of civil society 
organisations shall be associated with this dialogue. 

ARTICLE 9 

Essential elements regarding human rights, democratic principles and the rule of law, 
and fundamental element regarding good governance 

1.  Cooperation  shall  be  directed  towards  sustainable  development  centred  on  the 
human  person,  who  is  the  main  protagonist  and  beneficiary  of  development;  this 
entails respect for and promotion of all human rights. 

Respect  for  all  human  rights  and  fundamental  freedoms,  including  respect  for 
fundamental  social  rights,  democracy  based  on  the  rule  of  law  and  transparent  and 
accountable governance are an integral part of sustainable development. 

2.  The  Parties  refer  to  their  international  obligations  and  commitments  concerning 
respect for human rights. They reiterate their deep attachment to human dignity and 

2 

Joint Declaration: In relation to dialogue at national and regional levels, for the purpose of 
this  Article,  the  ‘ACP  Group’  shall  be  taken  to  mean  the  Troika  of  the  ACP  Committee  of 
Ambassadors  (CoA)  and  the  Chairperson  of  the  ACP  Sub-committee  on  Political,  Social, 
Humanitarian  and  Cultural  Affairs  (PSHCA);  the  ACP-EU  Joint  Parliamentary  Assembly 
(JPA)  shall  be  interpreted  as  the  Co-Presidents  of  the  ACP-EU  JPA,  or  their  designated 
nominees. 

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human  rights,  which  are  legitimate  aspirations  of  individuals  and  peoples.  Human 
rights  are  universal,  indivisible  and  inter-related.  The  Parties  undertake  to  promote 
and protect all fundamental freedoms and human rights, be they civil and political, or 
economic, social and cultural. In this context, the Parties reaffirm the equality of men 
and women. 

The  Parties  reaffirm  that  democratisation,  development  and  the  protection  of 
fundamental  freedoms  and  human  rights  are  interrelated  and  mutually  reinforcing. 
Democratic  principles  are  universally  recognised  principles  underpinning  the 
organisation  of  the  State  to  ensure  the  legitimacy  of  its  authority,  the  legality  of  its 
actions  reflected  in  its  constitutional,  legislative  and  regulatory  system,  and  the 
existence  of  participatory  mechanisms.  On  the  basis  of  universally  recognised 
principles, each country develops its democratic culture. 

The  structure  of  government  and  the  prerogatives  of  the  different  powers  shall  be 
founded on rule of law, which shall entail in particular effective and accessible means 
of legal redress, an independent legal system guaranteeing equality before the law and 
an executive that is fully subject to the law. 

Respect for human rights, democratic principles and the rule of law, which underpin 
the ACP-EU Partnership, shall underpin the domestic and international policies of the 
Parties and constitute the essential elements of this Agreement. 

3.  In  the  context  of  a  political  and  institutional  environment  that  upholds  human 
rights, democratic principles and the rule of law, good governance is the transparent 
and accountable management of human, natural, economic and financial resources for 
the  purposes  of  equitable  and  sustainable  development.  It  entails  clear  decision-
making  procedures  at  the  level  of  public  authorities,  transparent  and  accountable 
institutions, the primacy of law in the management and distribution of resources and 
capacity building for elaborating and implementing measures aiming in particular at 
preventing and combating corruption. 

Good  governance,  which  underpins  the  ACP-EU  Partnership,  shall  underpin  the 
domestic  and  international  policies  of  the  Parties  and  constitute  a  fundamental 
element  of  this  Agreement.  The  Parties  agree  that  only  serious  cases  of  corruption, 
including acts of bribery leading to such corruption, as defined in Article 97 constitute 
a violation of that element. 

4. The Partnership shall actively support the promotion of human rights, processes of 
democratisation, consolidation of the rule of law, and good governance. 

These areas will be an important subject for the political dialogue. In the context of 
this dialogue, the Parties shall attach particular importance to the changes underway 
and to the continuity of the progress achieved. This regular assessment shall take into 
account each country's economic, social, cultural and historical context. 

These  areas  will  also  be  a  focus  of  support  for  development  strategies.  The 
Community shall provide support for political, institutional and legal reforms and for 
building the capacity of public and private actors and civil society in the framework of 
strategies agreed jointly between the State concerned and the Community. 

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ARTICLE 11 

Peace-building policies, conflict prevention and resolution 

The  Parties  shall  pursue  an  active,  comprehensive  and  integrated  policy  of 
peace-building and conflict prevention and resolution within the framework 
of the Partnership. This policy shall be based on the principle of ownership. 
It  shall  in  particular  focus  on  building  regional,  sub-regional  and  national 
capacities, and on preventing violent conflicts at an early stage by addressing 
their root-causes in a targeted manner, and with an adequate combination of 
all available instruments. 

The  activities  in  the  field  of  peace-building,  conflict  prevention  and 
resolution  shall  in  particular  include  support  for  balancing  political, 
economic,  social  and  cultural  opportunities  among  all  segments  of  society, 
for strengthening the democratic legitimacy and effectiveness of governance, 
for establishing effective mechanisms for the peaceful conciliation of group 
interests, for bridging dividing lines among different segments of society as 
well as support for an active and organised civil society.  

Relevant  activities  shall  also  include,  inter  alia,  support  for  mediation, 
negotiation  and  reconciliation  efforts,  for  effective  regional  management  of 
shared,  scarce  natural  resources,  for  demobilisation  and  reintegration  of 
former  combatants  into  the  society,  for  addressing  the  problem  of  child 
soldiers,  as  well  as  for  suitable  action  to  set  responsible  limits  to  military 
expenditure and the arms trade, including through support for the promotion 
and  application  of  agreed  standards  and  codes  of  conduct.  In  this  context, 
particular  emphasis  shall  be  given  to  the  fight  against  anti-personnel 
landmines  as  well  as  to  addressing  an  excessive  and  uncontrolled  spread, 
illegal trafficking and accumulation of small arms and light weapons.  

The  parties  also  undertake  to  cooperate  in  the  prevention  of  mercenary 
international 
activities 
legislations  and 
conventions  and 
regulations  

their  obligations  under 
their  respective 

in  accordance  with 

instruments,  and 

In  situations  of  violent  conflict  the  Parties  shall  take  all  suitable  action  to 
prevent  an  intensification  of  violence,  to  limit  its  territorial  spread,  and  to 
facilitate  a  peaceful  settlement  of  the  existing  disputes.  Particular  attention 
shall be paid to ensuring that financial resources for cooperation are used in 
accordance  with  the  principles  and  objectives  of  the  Partnership,  and  to 
preventing a diversion of funds for belligerent purposes.  

In post-conflict situations, the Parties shall take all suitable action to facilitate 
the return to a non-violent, stable and self-sustainable situation. The Parties 
shall ensure the creation of the necessary links between emergency measures, 
rehabilitation and development cooperation. 

In promoting the strengthening of peace and international justice, the parties 
reaffirm their determination to: 

1. 

2. 

3. 

3bis. 

4. 

5. 

6. 

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- share experience on the adoption of legal adjustments required to allow for 
the ratification and implementation of the Rome Statute of the International 
Criminal Court and; 

-  fight  against  international  crime  in  accordance  with  international  law, 
giving due regard to the Rome Statute 

The parties shall seek to take steps towards ratifying and implementing  the 
Rome Statute and related instruments. 

ARTICLE 11 (bis) Fight against terrorism 

“The Parties reiterate their firm condemnation of all acts of terrorism, and undertake 
to  combat  terrorism  through  international  cooperation,  in  accordance  with  the  UN 
Charter  and  International  Law,  relevant  conventions  and  instruments  and  in 
particular  full  implementation  of  UN  Security  Council  Resolutions  1373  and  1456 
and other relevant UN resolutions. To this end, the Parties agree to exchange: 

–  information on terrorist groups and their support networks; and 

–  views on means and methods to counter terrorist acts, including in technical fields 

and training, and of experiences in relation to the prevention of terrorism.3  

ARTICLE 11 (ter) 

Co-operation in countering the proliferation of weapons of mass destruction 

1. 

The  Parties  consider  that  the  proliferation  of  weapons  of  mass  destruction 
and  their  means  of  delivery,  both  to  state  and  non-state  actors,  represents 
one of the most serious threats to international stability and security.  

The Parties therefore agree to co-operate and to contribute to countering the 
proliferation  of  weapons  of  mass  destruction  and  their  means  of  delivery 
through  full  compliance  with  and  national  implementation  of  their  existing 
obligations  under  international  disarmament  and  non-proliferation  treaties 
and agreements and other relevant international obligations.  

The parties agree that this provision constitutes an essential element of this 
agreement.  

2. 

The parties furthermore agree to cooperate and to contribute to the objective 
of non proliferation by:  

–  taking  steps  to  sign,  ratify,  or  accede  to,  as  appropriate,  and  fully 

implement all other relevant international instruments;  

3 

Council  –  Commission  Declaration:  Financial  and  technical  assistance  in  the  area  of 
cooperation  in  the  fight  against  terrorism  will  be  financed  by  resources  other  than  those 
intended for the financing of ACP-EC development cooperation.  

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3. 

4. 

–  the  establishment  of  an  effective  system  of  national  export  controls, 
controlling the export as well as transit WMD related of goods, including 
a WMD end-use control on dual use technologies and containing effective 
sanctions for breaches of export controls4. 

Financial and technical assistance in the area of cooperation to counter the 
proliferation  of  weapons  of  mass  destruction  will  be  financed  by  specific 
instruments  other  than  those  intended  for  the  financing  of  ACP-EC 
Cooperation. 

The  Parties  agree  to  establish  a  regular  political  dialogue  that  will 
accompany and consolidate their cooperation in this area. 

If,  after  having  conducted  a  strengthened  political  dialogue,  a  Party, 
informed in particular by reports by the IAEA, the OPCW and other relevant 
multilateral institutions, considers that the other Party has failed to fulfil an 
obligation stemming from paragraph 1 of this article on non-proliferation of 
weapons  of  mass  destruction,  it  shall,  except  in  cases  of  special  urgency, 
supply the other Party and both the ACP and the EU Councils of Ministers 
with  the  relevant  information  required  for  a  thorough  examination  of  the 
situation with a view to seeking a solution acceptable to the Parties. To this 
end,  it  shall  invite  the  other  Party  to  hold  consultations  that  focus  on  the 
measures taken or to be taken by the party concerned to remedy the situation 

5. 

The consultations shall be conducted at the level and in the form considered 
most appropriate for finding a solution. 

The consultations shall begin no later than 30 days after the invitation and 
shall  continue  for  a  period  established  by  mutual  agreement,  depending  on 
the nature and gravity of the violation. In any case, the dialogue under the 
consultation procedure shall last no longer than 120 days.  

6. 

If  the  consultations  do  not  lead  to  a  solution  acceptable  to  both  Parties,  if 
consultation is refused, or in cases of special urgency, appropriate measures 
may  be  taken.  These  measures  shall  be  revoked  as  soon  as  the  reasons  for 
taking them have disappeared. 

PART 3 

COOPERATION STRATEGIES 

TITLE I 

DEVELOPMENT STRATEGIES 

4 

Council – Commission Declaration: It is understood that the measures set out in article 11ter 
(2)  will  be  undertaken  within  an  adapted  timeframe  that  takes  into  account  each  country 
specific constraints. 

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CHAPTER 2 

AREAS OF SUPPORT 

SECTION 1 

ECONOMIC DEVELOPMENT 

ARTICLE 23 

Economic sector development 

Cooperation  shall  support  sustainable  policy  and  institutional  reforms  and  the 
investments  necessary  for  equitable  access  to  economic  activities  and  productive 
resources, particularly: 

the development of training systems that help increase productivity in both the 

(a) 
formal and the informal sectors; 

(b) 

capital, credit, land, especially as regards property rights and use;  

development  of  rural  strategies  aimed  at  establishing  a  framework  for 

(c) 
participatory decentralised planning, resource allocation and management; 

(d) 
agricultural production strategies, national and regional food security policies, 
sustainable development of water resources and fisheries as well as marine resources 
within the economic exclusive zones of the ACP States. Any fishery agreement that 
may  be  negotiated  between  the  Community  and  the  ACP  States  shall  pay  due 
consideration to consistency with the development strategies in this area; 

economic  and  technological  infrastructure  and  services,  including  transport, 
(e) 
telecommunication  systems,  communication  services  and  the  development  of 
information society; 

development  of  competitive  industrial,  mining  and  energy  sectors,  while 

(f) 
encouraging private sector involvement and development; 

(g) 

trade development, including the promotion of fair trade; 

(h) 

development of business, finance and banking; and other service sectors; 

(i) 

tourism development; 

development  of  scientific,  technological  and  research  infrastructure  and 

(j) 
services; including the enhancement, transfer and absorption of new technologies; 

the  strengthening  of  capacities  in  productive  areas,  especially  in  public  and 

(k) 
private sectors; and. 

(l) 

the promotion of traditional knowledge. 

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SECTION 2 

SOCIAL AND HUMAN DEVELOPMENT 

ARTICLE 25 

Social sector development 

1. 

Cooperation  shall  support  ACP  States'  efforts  at  developing  general  and 
sectoral  policies  and  reforms  which  improve  the  coverage,  quality  of  and 
access  to  basic  social  infrastructure  and  services  and  take  account  of  local 
needs and specific demands of the most vulnerable and disadvantaged, thus 
reducing the inequalities of access to these services. Special attention shall be 
paid to ensuring adequate levels of public spending in the social sectors. In 
this context, cooperation shall aim at: 

(a) 

improving education and training, and building technical capacity and skills; 

improving health systems and nutrition, eliminating hunger and malnutrition, 

(b) 
ensuring adequate food supply and security;  

integrating population issues into development strategies in order to improve 
(c) 
reproductive  health,  primary  health  care,  family  planning;  and  prevention  of  female 
genital mutilation; 

(d) 

Promoting the fight against: 

- HIV/AIDS, ensuring the protection of sexual and reproductive health and 
rights of women; 

- other poverty-related diseases, particularly Malaria and Tuberculosis; 

increasing the security of household water and improving access to safe water 

(e) 
and adequate sanitation; 

(f) 
improving  the  availability  of  affordable  and  adequate  shelter  for  all  through 
supporting  low-cost  and  low-income  housing  programs  and  improving  urban 
development; and 

encouraging the promotion of participatory methods of social dialogue as well 

(g) 
as respect for basic social rights. 

2. 
Cooperation  shall  also  support  capacity-building  in  social  areas  such  as 
programmes  for  training  in  the  design  of  social  policies  and  modern  methods  for 
managing  social  projects  and  programmes;  policies  conducive  to  technological 
innovation  and  research;  building  local  expertise  and  promoting  partnerships;  and 
round-table discussions at national and/or regional level. 

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Cooperation  shall  promote  and  support  the  development  and  implementation 
3. 
of policies and of systems of social protection and security in order to enhance social 
cohesion and to promote self-help and community solidarity. The focus of the support 
shall,  inter-alia,  be  on  developing  initiatives  based  on  economic  solidarity, 
particularly by setting-up social development funds adapted to local needs and actors. 

ARTICLE 26 

Youth issues 

Cooperation  shall  also  support  the  establishment  of  a  coherent  and  comprehensive 
policy for realising the potential of youth so that they are better integrated into society 
to  achieve  their  full  potential.  In  this  context,  cooperation  shall  support  policies, 
measures and operations aimed at: 

(a) 

protecting the rights of children and youth, especially those of girl children; 

(b) 
promoting  the  skills,  energy,  innovation  and  potential  of  youth  in  order  to 
enhance  their  economic,  social  and  cultural  opportunities  and  enlarge  their 
employment opportunities in the productive sector; 

helping  community-based  institutions  to  give  children  the  opportunity  to 

(c) 
develop their physical, psychological, social and economic potential;  

reintegrating 

(d) 
rehabilitation programmes; and 

into  society  children 

in  post-conflict  situations 

through 

promoting the active participation of young citizens in public life and fostering 

(e) 
student exchanges and interaction of ACP and EU Youth organisations. 

SECTION 3 

REGIONAL COOPERATION AND INTEGRATION 

ARTICLE 28 

General approach 

Cooperation shall provide effective assistance to achieve the objectives and priorities 
which the ACP States have set themselves in the context of regional and sub-regional 
cooperation  and  integration,  including  inter-regional  and  intra-ACP  cooperation. 
Regional Cooperation can may also involve non-ACP developing countries as well as5 
Overseas  Countries  and  Territories  (OCTs)  and  outermost  regions.  In  this  context, 
cooperation support shall aim to: 

5 

Council  –  Commission  Declaration:  The  implementation  of  these  provisions  (regarding 
regional cooperation where non-ACP countries are involved) depends on the implementation 
of equivalent provisions in the framework of the EC financial instruments on cooperation with 
other  countries  and  regions  of  the  world.  The  Union  will  inform  the  ACP  Group  upon  the 
entry into force of these equivalent provisions. 

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(a) 

foster the gradual integration of the ACP States into the world economy; 

accelerate  economic  cooperation  and  development  both  within  and  between 

(b) 
the regions of the ACP States; 

promote  the  free  movement  of  persons,  goods,  services,  capital,  labour  and 

(c) 
technology among ACP countries;  

accelerate  diversification  of 

the  ACP  States;  and 
(d) 
coordination and harmonisation of regional and sub-regional cooperation policies; and 

the  economies  of 

(e) 

promote and expand inter and intra-ACP trade and with third countries. 

ARTICLE 29 

Regional economic integration 

Cooperation shall, in the area of regional economic integration, support: 

(a) 

developing and strengthening the capacities of: 

(i) 
regional  integration  institutions  and  organisations  set  up  by  the  ACP 
States  and  those  with  ACP  State  participation  that6  to  promote  regional 
cooperation and integration, and 

(ii)  national  governments  and  parliaments 
integration;  

in  matters  of  regional 

fostering participation of Least Developed Countries (LDC) ACP States in the 

(b) 
establishment of regional markets and sharing the benefits therefrom; 

(c) 

implementation of sectoral reform policies at regional level; 

(d) 

liberalisation of trade and payments;  

promoting  cross-border  investments  both  foreign  and  domestic,  and  other 

(e) 
regional or sub-regional economic integration initiatives; and 

taking account of the effects of net transitional costs of regional integration on 

(f) 
budget revenue and balance of payments. 

ARTICLE 30 

Regional Cooperation 

1. 
Cooperation shall, in the area of regional cooperation, support a wide variety 
of  functional  and  thematic  fields  which  specifically  address  common  problems  and 
take advantage of scale of economies, including: 

6 

See declaration (footnote 5) 

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infrastructure  particularly  transport  and  communications  and  safety  thereof 
(a) 
and  services,  including  the  development  of  regional  opportunities  in  the  area  of 
Information and Communication Technologies (ICT); 

(b) 

the environment; water resource management and energy; 

(c) 

health, education and training;  

(d) 

research and technological development; 

(e) 

regional initiatives for disaster preparedness and mitigation; and  

other  areas,  including  arms  control,  action  against  drugs,  organised  crimes, 

(f) 
money laundering, bribery and corruption. 

Cooperation  shall  also  support  inter  and  intra-ACP  cooperation  schemes  and 

2. 
initiatives, including those involving non-ACP developing countries7. 

3. 
Cooperation  shall  help  promote  and  develop  a  regional  political  dialogue  in 
areas  of  conflict  prevention  and  resolution;  human  rights  and  democratisation; 
exchange,  networking,  and  promotion  of  mobility  between  the  different  actors  of 
development, in particular in civil society. 

TITLE II 

ECONOMIC AND TRADE COOPERATION 

CHAPTER 4 

TRADE IN SERVICES 

ARTICLE 43 

Information and Communication Technologies, and Information Society 

1. 
The  Parties  recognise  the  important  role  of  information  and  communication 
technologies, as well as the active participation in the Information Society, as a pre-
requisite for the successful integration of the ACP countries into the world economy. 

2. 
They  therefore  reconfirm  their  respective  commitments  under  existing 
multilateral  agreements,  in  particular  the  protocol  on  Basic  Telecommunications 
attached to the GATS, and invite those ACP countries, which are not yet members of 
these agreements, to accede to them. 

They  furthermore  agree  to  participate  fully  and  actively  in  any  future 

3. 
international negotiation, which might be conducted in this area. 

7 

See declaration (footnote 5) 

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The  Parties  will  therefore  take  measures  that  will  enable  inhabitants  of  ACP 
4. 
countries  easy  access  to  information  and  communication  technologies,  through, 
amongst other, the following measures: 

the development and encouragement of the use of affordable renewable energy 

– 
resources; 

the  development  and  deployment  of  more  extensive  low-cost  wireless 

– 
networks; and 

the  development  and  encouragement  of  the  use  of  local  content  for 

- 
Information and Communication Technologies. 

5. 
The  Parties  also  agree  to  step  up  cooperation  between  them  in  the  area  of 
information  and  communication  technologies,  and  the  Information  Society.  This 
cooperation  shall,  in  particular,  be  directed  towards  greater  complementarity  and 
harmonisation of communication systems, at national, regional and international level 
and their adaptation to new technologies. 

PART 4 

DEVELOPMENT FINANCE COOPERATION 

TITLE I 

GENERAL PROVISIONS 

CHAPTER 1 

OBJECTIVES, PRINCIPLES, GUIDELINES AND ELIGIBILITY 

ARTICLE 58 

Eligibility for financing 

The following entities or bodies shall be eligible for financial support provided 

1. 
under the Agreement: 

(a) 

ACP States; 

regional  or  inter-State  bodies  to  which  one  or  more  ACP  States  belong, 
(b) 
including bodies with non-ACP State members8, which are authorised by those ACP 
States; and 

joint  bodies  set  up  by  the  ACP  States  and  the  Community  to  pursue  certain 

(c) 
specific objectives. 

8 

See declaration (footnote 5) 

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Subject  to  the  agreement  of  the  ACP  State  or  ACP  States  concerned,  the 

2. 
following shall also be eligible for financial support: 

(a) 
national and/or regional public or semi-public agencies and departments of or 
local  authorities  of  ACP  States  including  Parliaments  and,  in  particular,  their 
financial institutions and development banks; 

companies, firms and other private organisations and private operators of ACP 

(b) 
States; 

enterprises of a Community Member State to enable them, in addition to their 

(c) 
own contribution, to undertake productive projects in the territory of an ACP State; 

ACP  or  Community  financial  intermediaries  providing,  promoting  and 

(d) 
financing private investments in ACP States;  

(ce) 
agents of decentralised cooperation and other non-State actors from the ACP 
States and from the Community local decentralised authorities from ACP States and 
the Community 9; and 

developing  countries  that  are  not  part  of  the  ACP  Group  where  they 

(f) 
participate in a joint initiative or regional organisation with ACP States.10 

Non-state  actors  from  ACP  States  and  the  Community,  which  have  a  local 
3. 
character,  shall  be  eligible  for  financial  support  provided  under  the  Agreement, 
according  to  the  modalities  agreed  in  the  national  and  regional  indicative 
programmes. 

TITLE II 

FINANCIAL COOPERATION 

CHAPTER 3 

SUPPORT IN CASES OF SHORT-TERM FLUCTUATIONS IN EXPORT 
EARNINGS 

ARTICLE 68 

1.  The  Parties  recognise  that  instability  of  export  earnings,  particularly  in  the 
agricultural  and  mining  sectors,  may  adversely  affect  the  development  of  the  ACP 
States and jeopardise the attainment of their development requirements. A system of 
additional support in order to mitigate the adverse effects of any instability in export 
earnings,  including  in  the  agricultural  and  mining  sectors,  is  therefore  set  up  within 
the financial envelope for support to long-term development. 

2. The purpose of support in cases of short-term fluctuations in export earnings is to 
safeguard  socio-economic  macroeconomic  and  sectoral  reforms  and  policies  that 

9 
10 

See Declaration (footnote 1) 
See declaration (footnote 5) 

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could be affected negatively are at risk as a result of a drop in revenue and to remedy 
the adverse effects of instability of export earnings, in particular from agricultural and 
mining products.  

3.  The  extreme  dependence  of  the  ACP  States'  economies  on  exports,  in  particular 
from the agricultural and mining sectors, shall be taken into account in the allocation 
of resources in the year of application. In this context, the least developed, landlocked 
and  island,  post-conflict  and  post  natural  disaster  ACP  States  shall  receive  more 
favourable treatment.  

4.  The  additional  resources  shall  be  provided  in  accordance  with  the  specific 
modalities of the support mechanism as set out in Annex II on Terms and Conditions 
of Financing. 

5.  The  Community  shall  also  provide  support  for  market  based  insurance  schemes 
designed for ACP States seeking to protect themselves against the risk of fluctuations 
in export earnings. 

PART 5 

GENERAL PROVISIONS FOR THE LEAST-DEVELOPED, 

LANDLOCKED AND ISLAND ACP STATES (LDLICs) 

CHAPTER 4 

ISLAND ACP STATES 

ARTICLE 89 

1. Specific provisions and measures shall be established to support island ACP States 
in  their  efforts  to  overcome  the  natural  and  geographical  difficulties  and  other 
obstacles hampering their development so as to enable them to step up their respective 
rates of development. 

Specific actions shall be pursued to support island ACP states in their efforts to halt 
and reverse their increasing vulnerability caused by new and severe economic, social 
and ecological challenges. These actions shall seek to advance the implementation of 
the  small  island  developing  states  priorities  for  sustainable  development,  while 
promoting a harmonised approach to their economic growth and human development. 

2. The list of island ACP States is given in Annex VI. It may be amended by decision 
of the Council of Ministers when a third State in a comparable situation accedes to the 
Agreement. 

PART 6 

FINAL PROVISIONS 

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ARTICLE 96 

Essential elements: consultation procedure and appropriate measures 

as regards human rights, democratic principles and the rule of law 

1. 
Within the meaning of this Article, the term "Party" refers to the Community 
and the Member States of the European Union, of the one part, and each ACP State, 
of the other part. 

2. 
Both parties agree to exhaust all possible options for dialogue under Article 8, 
except  in  cases  of  special  urgency,  prior  to  commencement  of  the  consultations 
referred to in paragraph 3 (a) of the present Article. 

2.3 

If,  despite  the  political  dialogue  conducted  regularly  between  the  Parties  on 
(a) 
the  essential  elements  as  provided  for  under  Articles  8  and  paragraph  (2)  of  the 
present  Article,  a  Party  considers  that  the  other  Party  has  failed  fails  to  fulfil  an 
obligation stemming from respect for human rights, democratic principles and the rule 
of  law  referred  to  in  paragraph  2  of  Article  9,  it  shall,  except  in  cases  of  special 
urgency,  supply  the  other  Party  and  the  Council  of  Ministers  with  the  relevant 
information  required  for  a  thorough  examination  of  the  situation  with  a  view  to 
seeking a solution acceptable to the Parties. To this end, it shall invite the other Party 
to  hold  consultations  that  focus  on  the  measures  taken  or  to  be  taken  by  the  party 
concerned to remedy the situation in accordance with Annex VII. 

The  consultations  shall  be  conducted  at  the  level  and  in  the  form  considered  most 
appropriate for finding a solution. 

The  consultations  shall  begin  no  later  than  15  30  days  after  the  invitation  and  shall 
continue for a period established by mutual agreement, depending on the nature and 
gravity of the violation. In any case, the dialogue under the consultations procedure 
shall last no longer than 60 120 days.  

If the consultations do not lead to a solution acceptable to both Parties, if consultation 
is refused, or in cases of special urgency, appropriate measures may be taken. These 
measures shall be revoked as soon as the reasons for taking them have disappeared. 

(b) 
The  term  "cases  of  special  urgency"  shall  refer  to  exceptional  cases  of 
particularly serious and flagrant violation of one of the essential elements referred to 
in paragraph 2 of Article 9, that require an immediate reaction. 

The Party resorting to the special urgency procedure shall inform the other Party and 
the Council of Ministers separately of the fact unless it does not have time to do so. 

(c) 
The  "appropriate  measures"  referred  to  in  this  Article  are  measures  taken  in 
accordance with international law, and proportional to the violation. In the selection 
of these measures, priority must be given to those which least disrupt the application 
of this agreement. It is understood that suspension would be a measure of last resort. 

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If measures are taken in cases of special urgency, they shall be immediately notified 
to the other Party and the Council of Ministers. At the request of the Party concerned, 
consultations may then be called in order to examine the situation thoroughly and, if 
possible,  find  solutions.  These  consultations  shall  be  conducted  according  to  the 
arrangements set out in the second and third subparagraphs of paragraph (a). 

ARTICLE 97 

Consultation procedure and appropriate measures  

as regards corruption 

The Parties consider that when the Community is a significant partner in terms 
1. 
of financial support to economic and sectoral policies and programmes, serious cases 
of corruption should give rise to consultations between the Parties. 

In such cases either Party may invite the other to enter into consultations. Such 
2. 
consultations  shall  begin  no  later  than  21  30  days  after  the  invitation  and  dialogue 
under the consultations procedure shall last no longer than 60 120 days.  

3. 
If  the  consultations  do  not  lead  to  a  solution  acceptable  to  both  Parties  or  if 
consultation is refused, the Parties shall take the appropriate measures. In all cases, it 
is  above  all  incumbent  on  the  Party  where  the  serious  cases  of  corruption  have 
occurred  to  take  the  measures  necessary  to  remedy  the  situation  immediately.  The 
measures  taken  by  either  Party  must  be  proportional  to  the  seriousness  of  the 
situation.  In  the  selection  of  these  measures,  priority  must  be  given  to  those  which 
least disrupt the application of this agreement. It is understood that suspension would 
be a measure of last resort.  

4. 
Within the meaning of this Article, the term "Party" refers to the Community 
and the Member States of the European Union, of the one part, and each ACP State, 
of the other part.  

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REVISION OF THE COTONOU AGREEMENT 

Consolidated changes to Annex I of the Agreement 

Note: 

- Agreement on new texts: underlined 

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ANNEX I 

FINANCIAL PROTOCOL 

1.  For  the  purposes  set  out  in  this  Agreement  and  for  a  period  of  five  years 
commencing  1 March 2000,  the  overall  amount  of  the  Community's  financial 
assistance to the ACP States shall be EUR 15 200 million. 

2. The Community's financial assistance shall comprise an amount up to EUR 13 500 
million from the 9th European Development Fund (EDF). 

3. The 9th EDF shall be allocated between the instruments of cooperation as follows: 

(a) 
EUR 10 000 million in the form of grants shall be reserved for an envelope for 
support  for  long-term  development.  This  envelope  shall  be  used  to  finance  national 
to  5  of  Annex  IV 
in  accordance  with  Articles  1 
indicative  programmes 
"Implementation and management procedures" to this Agreement. From the envelope 
for support for long-term development :  

(i)  EUR 90 million shall be reserved for the financing of the budget of the 

Centre for the Development of Enterprise (CDE); 

(ii)  EUR 70 million shall be reserved for the financing of the budget of the 

Centre for the Development of Agriculture (CTA); and  

(iii)  an  amount  not  exceeding  EUR  4  million  shall  be  reserved  for  the 
this  Agreement  (Joint 

in  Article  17  of 

purposes  referred 
Parliamentary Assembly). 

to 

(b) 
EUR 1 300 million in the form of grants shall be reserved for the financing of 
support for regional cooperation and integration of the ACP States in accordance with 
Articles 6  to  14  of  Annex  IV  "Implementation  and  management  procedures"  to  this 
Agreement. 

(c) 
EUR  2  200  million  shall  be  allocated  to  finance  the  Investment  Facility 
according  to  the  terms  and  conditions  set  out  in  Annex  II  "Terms  and  conditions  of 
financing"  to  this  Agreement  without  prejudice  to  the  financing  of  the  interest  rate 
subsidies provided for in Articles 2 and 4 of Annex II to this Agreement funded from 
the resources mentioned in paragraph 3(a) of this Annex. 

4.  An  amount  of  up  to  EUR  1  700  million  shall  be  provided  from  the  European 
Investment Bank in the form of loans made from its own resources. These resources 
shall  be  granted  for  the  purposes  set  out  in  Annex  II  "Terms  and  conditions  of 
financing"  to  this  Agreement  in  accordance  with  the  conditions  provided  for  by  its 
statutes  and  the  relevant  provisions  of  the  terms  and  conditions  for  investment 
financing  as  laid  down  in  the  aforementioned  Annex.  The  Bank  may,  from  the 
resources  it  manages,  contribute  to  the  financing  of  regional  projects  and 
programmes. 

5. Any balances remaining from previous EDFs on the date of entry into force of this 
Financial Protocol, as well as any amounts that shall  be decommitted at  a later date 

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from ongoing projects under these Funds, shall be transferred to the 9th EDF and shall 
be used in accordance with the conditions laid down in this Agreement. Any resources 
thus  transferred  to  the  9th  EDF  that  previously  had  been  allocated  to  the  indicative 
programme of an ACP State or region shall remain allocated to that State or region. 
The  overall  amount  of  this  Financial  Protocol,  supplemented  by  the  transferred 
balances from previous EDFs, will cover the period of 2000 – 2007. 

6.  The  Bank  shall  administer  the  loans  made  from  its  own  resources,  as  well  as  the 
operations financed under the Investment Facility. All other financial resources of this 
Agreement shall be administered by the Commission. 

7. Before the expiry of this Financial Protocol, the Parties shall assess the degree of 
realisation  of  commitments  and  disbursements.  This  assessment  shall  constitute  the 
basis for re-evaluating the overall amount of resources as well for evaluating the need 
for new resources to support financial cooperation under this Agreement. 

8. In the event of the funds provided for in any of the instruments of the Agreement 
being  exhausted  before  the  expiry  of  this  Financial  Protocol,  the  joint  ACP-EC 
Council of Ministers shall take the appropriate measures. 

9.  By  derogation  to  Article  58  of  this  Agreement,  an  amount  of  90  million  euro  is 
transferred  to  the  intra  ACP  envelope  under  the  9th  EDF.  This  amount  can  be 
allocated to finance devolution for the period 2006-2007, and is managed directly by 
the Commission. 

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REVISION OF THE COTONOU AGREEMENT 

New Annex I bis to be added to the Cotonou Agreement 

Note: 

- Agreement on new texts: underlined  

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ANNEXE I BIS 11 

Multi-annual financial framework of cooperation in the framework of the revised 
Cotonou Agreement 

1 
For the purposes set out in this agreement and for a period commencing from 
1st  March  2005,  the  new  multi-annual  financial  framework  of  cooperation  would 
cover commitments starting from 01 January 2008 for a period of five or six years. 

2. 
For this new period, the European Union will maintain its aid effort to ACP 
Countries at least at the same level as that of the 9th EDF, not including balances; to 
this should be added, based on Community estimates, the effects of inflation, growth 
within the European Union, and enlargement to 10 new Member States in 2004. 

3. 
Any required amendments to the multi-annual financial framework or relative 
parts  of  the  Agreement  will  be  decided  by  the  ACP-EC  Council  of  Ministers  by 
derogation to article 95 of the present Agreement 

11 
1. 

2. 

3. 

Declarations by the Union:  
The  European  Union  undertakes  to  propose  at  the  earliest  opportunity,  if  at  all  possible  by 
September 2005,  an  exact  amount  for  the  multiannual  financial  framework  for  cooperation 
under the revised Cotonou Agreement and its period of application. 
The  minimum  aid  effort  referred  to  in  paragraph  2  of  Annex  I  bis  is  guaranteed,  without 
prejudice to the eligibility of the ACP countries for additional resources under other financial 
instruments which already exist or, potentially, may be created in support of actions in areas 
such as emergency humanitarian aid, food security, poverty-related diseases, support for the 
implementation of the Economic Partnership Agreements, support for the measures envisaged 
following the reform of the sugar market, and relating to peace and stability. 
The deadline for the commitment of funds of the 9th EDF, fixed at 31 December 2007, could 
be reviewed if necessary. 

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REVISION OF THE COTONOU AGREEMENT 

Consolidated changes to Annex II of the Cotonou Agreement 

Note: 

- Agreement on new texts: underlined  

- Agreement on text to be deleted: strikethrough 

- Only revised text is included. 

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ANNEXE II 

TERMS AND CONDITIONS OF FINANCING 

CHAPTER 1 

INVESTMENT FINANCING 

ARTICLE 2 

Resources of the investment facility 

1. 

The resources of the Facility may be used, inter alia, to: 

(a) 

provide risk capital in the form of: 

(i) equity participation in ACP enterprises, including financial institutions; 

(ii)  quasi-capital  assistance 
institutions; and 

to  ACP  enterprises, 

including  financial 

(iii)  guarantees  and  other  credit  enhancements  which  may  be  used  to  cover 
political  and  other  investment-related  risks,  both  for  foreign  and  local 
investors or lenders. 

(b) 

provide ordinary loans. 

2. 

3. 

(a) 

(b) 

(c) 

4. 

Equity participation shall normally be for non-controlling minority holdings 
and  shall  be  remunerated  on  the  basis  of  the  performance  of  the  project 
concerned. 

Quasi-capital  assistance  may  consist  of  shareholders’  advances,  convertible 
bonds, conditional, subordinated and participating loans or any other similar 
form of assistance. Such assistance may consist in particular of: 

conditional loans, the servicing and/or the duration of which shall be linked 
to the fulfilment of certain conditions with regard to the performance of the 
project; in the specific case of conditional loans for pre-investment studies or 
other  project-related  technical  assistance,  servicing  may  be  waived  if  the 
investment is not carried out; 

participating loans, the servicing and/or the duration of which shall be linked 
to the financial return of the project; and 

subordinated loans, which shall be repaid only after other claims have been 
settled. 

The remuneration of each operation shall be specified when the loan is made. 
However: 

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(a) 

(b) 

5. 

6. 

7. 

(a) 

(b) 

in  the  case  of  conditional  or  participating  loans,  the  remuneration  shall 
normally comprise a fixed interest rate of not more than 3% and a variable 
component related to the performance of the project; and 

in the case of subordinated loans, the interest rate shall be market related. 

Guarantees shall be priced so as to reflect the risks insured and the particular 
characteristics of the operation. 

The interest rate of ordinary loans shall comprise a reference rate applied by 
the  Bank  for  comparable  loans  with  the  same  terms  and  conditions  as  to 
grace and repayment periods and a mark up determined by the Bank. 

Ordinary loans may be extended on concessional terms and conditions in the 
following cases: 

for infrastructure projects in the Least Developed Countries, in post-conflict 
countries and post-natural  disaster countries – other than those referred to 
under  (b)  -  that  are  prerequisites  for  private  sector  development.  In  such 
cases, the interest rate of the loan will be reduced by 3 %;  

for infrastructure projects by commercially-run public entities, that are pre-
requisites  for  private  sector  development  in  countries  subject  to  restrictive 
borrowing  conditions  under  the  HIPC  initiative  or  another  internationally 
agreed  debt  sustainability  framework.  In  such  cases,  the  Bank  will  seek  to 
reduce the average cost of funds through appropriate co-financing with other 
donors. Should this not be deemed possible, the interest rate of the loan can 
be reduced by such amount as required to comply with the level arising from 
the  HIPC  initiative  or  a  new  internationally  agreed  debt  sustainability 
framework.  

(b)(c) 

for  projects  which  involve  restructuring  operations  in  the  framework  of 
privatisation or for projects with substantial and clearly demonstrable social 
or  environmental  benefits.  In  such  cases,  loans  may  be  extended  with  an 
interest  rate  subsidy  the  amount  and  form  of  which  will  be  decided  with 
respect to  the particular characteristics of the  project. However,  the interest 
rate subsidy shall not be higher than 3 %. 

The final rate of loans falling under § (a) or § (c) shall, in any case, never be less than 
50% of the reference rate; 

8. 

9. 

The  funds  to  be  provided  for  these  concessional  purposes  will  be  made 
available  from  the  Investment  Facility.  and  shall  not  exceed  5%  of  the 
overall amount allocated for investment financing by the Investment Facility 
and by the Bank from its own resources.  

Interest subsidies may be capitalised or may be used in the form of grants. to 
support  project-related 
technical  assistance,  particularly  for  financial 
institutions in the ACP countries. ; Up to 10% of the budget for interest rate 
subsidies can be used to support project related technical assistance in ACP 
countries.  

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ARTICLE 3 

Operations of the investment facility 

1. 

The  Investment  Facility  shall  operate  in  all  economic  sectors  and  support 
investments of private and commercially run public sector entities, including 
revenue generating economic and technological infrastructure critical for the 
private sector. The Facility shall: 

(a) 

(b) 

(c) 

(d) 

be  managed  as  a  revolving  fund  and  aim  at  being  financially 
sustainable.  Its  operations  shall  be  on  market-related  terms  and 
conditions  and  shall  avoid  creating  distortions  on  local  markets  and 
displacing private sources of finances; and  

support the ACP financial sector and endeavour have a catalytic effect 
by  encouraging  the  mobilisation  of  long-term  local  resources  and 
attracting foreign private investors and lenders to projects in the ACP 
States; 

bear part of the risk of the projects it funds. Its financial sustainability 
being ensured through the portfolio as a whole and not from individual 
interventions; and 

seek to channel funds through ACP national and regional institutions 
and  programs  that  promote  the  development  of  small-and  medium-
sized enterprises (SMEs).  

2. 

The  Bank  will  be  remunerated  for  the  cost  incurrred  in  managing  the 
Investment Facility. For the first two years after the entering into force of the 
second financial protocol this will be up to an amount of 2% p.a. of the total 
initial endowment of the Investment Facility. Thereafter, the remuneration of 
the  Bank  will  include  a  fixed  component  of  0.5%  p.a.  of  the  initial 
endowment and a variable component of an amount of up to 1.5% p.a. of the 
portfolio  of  the  Investment  Facility  that  is  invested  in  projects  in  ACP 
countries. The remuneration will be financed out of the Investment Facility. 

2.3. 

On expiry of the Financial Protocol, and in the absence of a specific decision 
by  the  Council  of  Ministers,  the  cumulative  net  reflows  to  the  Investment 
Facility shall be carried over to the next Protocol. 

ARTICLE 4 

Bank own resource loans 

1. 

The Bank shall: 

(a) 

contribute,  through  the  resources  it  manages,  to  the  economic  and 
industrial  development  of  the  ACP  States  on  a  national  and  regional 
basis;  and  to  this  end,  finance  as  a  priority  productive  projects  and 
programmes or other investments aimed at promoting the private sector 
in all economic sectors; 

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(b) 

(c) 

regional 
establish  close  cooperation 
development  banks  and  with  banking  and  financial  institutions  of  the 
ACP States and of the EU; and 

links  with  national  and 

in consultation with the ACP State concerned, adapt the arrangements 
and procedures for implementing development finance cooperation, as 
set out in this Agreement, if necessary, to take account of the nature of 
the  projects  and  programmes  and  to  act  in  accordance  with  the 
objectives of this Agreement, within the framework of the procedures 
laid down by its statute. 

2. 

Loans  from  the  Bank’s  own  resources shall  be  granted  under  the  following 
terms and conditions: 

(a) 

the reference rate of interest shall be the rate applied by the Bank for a 
loan with the same conditions as to currency, and repayment period on 
the day of signature of the contract or on the date of disbursement; 

(b)  however : 

(i) 

in principle, public sector projects shall be eligible for an interest 
rate subsidy of 3%; 

(ii) private sector projects falling into the categories specified in Article 
2(7)(c)  shall  be  eligible  for  interest  rates  subsidies  on  the  same 
terms as those specified in Article 2(7)(c). 

. 

The  final  interest  rate  shall,  in  any  case,  never  be  less  than  50%  of  the 
reference rate. 

(c) 

(d) 

the amount of the interest rate subsidy calculated in terms of its value 
at  the  times  of  disbursement  of  the  loan  shall  be  charged  against  the 
interest  subsidy  allocation  of  the  ,Investment  Facility  as  defined  in 
Article 2(8) and 2(9), and paid directly to the Bank; and 

the  repayment  period  of  loans  made  by  the  Bank  from  its  own 
resources  shall  be  determined  on  the  basis  of  the  economic  and 
financial  characteristics  of  the  project,  but  may  not  exceed  25  years. 
These loans shall normally comprise a grace period fixed by reference 
to the construction period of the project. 

3. 

For investments financed by the Bank from its own resources in public sector 
companies,  specific  project-related  guarantees  or  undertakings  may  be 
required from the ACP State concerned. 

ARTICLE 5 

Conditions for foreign exchange rate risk 

In  order  to  minimise  the  effects  of  exchange  rate  fluctuations,  the  problems  of 
exchange rate risk shall be dealt with in the following way: 

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(a) 

(b) 

(c) 

in the case of equity participation designed to strengthen an enterprise’s own 
funds,  the  exchange  rate  risk  shall,  as  a  general  rule,  be  borne  by  the 
Investment Facility; 

in  the  case  of  ordinary  loans  and  risk  capital  financing  for  small-and 
medium-sized enterprises (SMEs), the exchange rate risk shall, as a general 
rule, be shared by the Community, on the one part, and by the other parties 
involved,  on  the  other.  On  average,  the  foreign  exchange  rate  risk  should 
shall be shared equally; and 

where  feasible  and  appropriate,  particularly  in  countries  characterised  by 
macroeconomic and financial stability, the Facility will endeavour to extend 
loans in local ACP currencies, thus de facto taking the foreign exchange risk. 

ARTICLE 6bis 

Annual reporting on the Investment Facility  

Representatives  of  the  EU  Member  States  responsible  for  the  Investment  Facility, 
Representatives  of  ACP  States,  as  well  as  the  European  Investment  Bank,  the 
European  Commission,  the  EU  Council  secretariat  and  the  ACP  secretariat  shall 
meet  annually  to  discuss  the  operations,  performance  and  policy  questions 
concerning the Investment Facility. 

ARTICLE 6ter 

Review of performance of the Investment Facility  

The overall performance of the Investment Facility shall be subject to a joint review 
at  the  mid  and  end-term  of  a  financial  protocol.  Such  an  exercise  may  include 
recommendation

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COTONOU AGREEMENT 

REVISION OF ANNEX IV 

Updated: 1 March 2005 

- New text agreed on is underlined 

- Deleted text is struck through (xxxx) 

This document contains only provisions that have been amended. Use the table of 
contents  to  see  where  the  amendments  come  in  the  Agreement  (amended 
chapters are highlighted with bold and italics). 

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CHAPTER 1 

PROGRAMMING (NATIONAL) 

ARTICLE 3 

Resource allocation 

1.  Resource  allocation  shall  be  based  on  needs  and  performance,  as  defined  in  this 
Agreement. In this context: 

(a)  needs  shall  be  assessed  on  the  basis  of  criteria  pertaining  to  per  capita  income, 
population size, social indicators and level of indebtedness, export earning losses and 
dependence on export earnings, in particular in the sectors of agriculture and mining. 
Special  treatment  shall  be  accorded  to  the  least  developed  ACP  States  and  the 
vulnerability  of  island  and  landlocked  states  shall  duly  be  taken  into  account.  In 
addition, account shall be taken of the particular difficulties of countries dealing with 
the aftermath of conflict or natural disaster; and  

(b) performance shall be assessed in an objective and transparent manner on the basis 
of the following parameters: progress in implementing institutional reforms, country 
performance in the use of resources, effective implementation of  current operations, 
sustainable  development  measures  and 
poverty  alleviation  or 
macroeconomic and sectoral policy performance. 

reduction, 

2. The allocated resources shall comprise two elements: 

(a) an allocation to cover macroeconomic support, sectoral policies, programmes and 
projects in support of the focal or non-focal areas of Community assistance; and 

(b) an allocation to cover unforeseen needs such as emergency assistance where such 
support  cannot  be  financed  from  the  EU  budget,  contributions  to  internationally 
agreed  debt  relief  initiatives  and  support  to  mitigate  adverse  effects  of  instability  in 
export earnings. 

3.  This  indicative  amount  shall  facilitate  the  long-term  programming  of  Community 
aid for the country concerned. Together with the uncommitted balances of resources 
allocated  to  the  country  under  previous  EDFs,  and  wherever  possible  Community 
budget  resources,  these  allocations  shall  be  the  basis  for  the  preparation  of  the 
indicative programme for the country concerned. 

4.  Provision  will  be  made  for 
circumstances, cannot access normal programmable resources. 

those  countries  which,  due 

to  exceptional 

5. Without prejudice to Article 5(7) concerning reviews, the Community may, in order 
to  take  account  of  special  needs  or  exceptional  performance,  increase  a  country’s 
allocation.12  

12 

EU-ACP  declaration:  “special  needs”  are  needs  resulting  from  exceptional  or  unforeseen 
circumstances, such as post-crisis situations. “Exceptional performance” means a situation in 

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ARTICLE 4 

Preparation and adoption of the indicative programme 

1. Upon receipt of the information referred to above, each ACP State shall draw up 
and  submit  to  the  Community  a  draft  indicative  programme  on  the  basis  of  and 
consistent with its development objectives and priorities as expressed in the CSS. The 
draft indicative programme shall contain: 

(a) the focal sector, sectors or areas on which support should be concentrated; 

(b)  the  most  appropriate  measures  and  operations  for  attaining  the  objectives  and 
targets in the focal sector, sectors or areas; 

(c)  the  resources  reserved  for  projects  and  programmesprogrammes  and  projects 
outside  the  focal  sector(s)  and/or  the  broad  outlines  of  such  activities,  as  well  as  an 
indication of the resources to be deployed for each of these elements; 

(d) the types of non-state actors eligible for funding, in accordance with the criteria 
laid down by the Council of Ministers, and the resources allocated for non-state actors 
and the type of activities to be supported, which must be not-for-profit;  

(e) proposals for regional projects and programmesprogrammes and projects; and 

(f)  a  reserve  for  insurance  against  possible  claims  and  to  cover  cost  increases  and 
contingencies. 

2. The draft indicative programme shall, as appropriate, contain the resources reserved 
to  reinforce  human,  material  and  institutional  ACP  capacity  for  preparing  and 
implementing  national  and  regional  indicative  programmes  and  for  improving  the 
management of the ACP States' public investment projects cycle. 

3.  The  draft  indicative  programme  shall  be  the  subject  of  an  exchange  of  views 
between  the  ACP  State  concerned  and  the  Community.  The  indicative  programme 
shall  be  adopted  by  common  agreement  between  the  Commission  on  behalf  of  the 
Community and the ACP State concerned. It shall, when adopted, be binding on both 
the  Community  and  that  State.  This  indicative  programme  shall  be  annexed  to  the 
CSS and shall in addition contain: 

(a) specific and clearly identified operations, especially those that can be committed 
before the next review; 

(b) a timetable for implementation and review of the indicative programme, including 
commitments and disbursements of resources; and 

(c) the parameters and criteria for the reviews. 

which,  outside  the  mid-term  and  end-of-term  reviews,  a  country’s  allocation  is  totally 
committed  and  additional  funding  from  the  national  indicative  programme  can  be  absorbed 
against a background of effective poverty-reduction policies and sound financial management. 

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4. The Community and the ACP State concerned shall take all necessary measures to 
ensure  that  the  programming  process  is  completed  within  the  shortest  possible  time 
and,  save  in  exceptional  circumstances,  within  twelve  months  of  the  signing  of  the 
Financial  Protocol.  In  this  context,  the  preparation  of  the  CSS  and  the  indicative 
programme must be part of a continuous process leading to the adoption of a single 
document. 

5. When an ACP State faces a crisis situation as the result of a war or other conflict, 
or  exceptional  circumstances  with  a  comparable  effect,  preventing  the  National 
Authorising Officer from carrying out his duty, the Commission may itself manage the 
resources allocated to the State in question in accordance with Article 3 and use it for 
special  support.  Special  support  may  concern  peace-building  policies,  conflict 
management  and  resolution,  post-conflict  support,  including  institution-building, 
economic and social-development activities, taking particular account of the needs of 
the  most  vulnerable  sections  of  the  population.  The  Commission  and  the  ACP  State 
concerned must revert to normal implementation and normal management procedures 
as  soon  as  the  authorities  responsible  for  managing  cooperation  are  able  to  do  so 
once more. 

ARTICLE 5 

Review process 

1.  Financial  cooperation  between  the  ACP  State  and  the  Community  shall  be 
sufficiently  flexible  to  ensure  that  operations  are  kept  constantly  in  line  with  the 
objectives  of  this  Agreement  and  to  take  account  of  any  changes  occurring  in  the 
economic  situation,  priorities  and  objectives  of  the  ACP  State  concerned.  In  this 
context,  the  National  Authorizing  Officer  and  the  Head  of  DelegationCommission 
shall: 

(a) annually undertake an operational review of the indicative programme; and 

(b)  undertake  a  mid-term  and  end-of-term  review  of  the  CSS  and  the  indicative 
programme in the light of current needs and performance. 

2.  In  exceptional  circumstances  referred  to  in  the  provisions  on  humanitarian  and 
emergency assistance, the review can be carried out on the demand of either Party. 

3.  The  National  Authorising  Officer  and  the  Head  of  Delegation  the  Commission 
shall: 

(a) take all necessary measures to ensure adherence to the provisions of the indicative 
programme, including ensuring that the timetable of commitments and disbursements 
agreed at the time of programming is adhered to; and 

(b) determine any causes of delay in implementation and propose suitable measures to 
remedy the situation. 

4. The annual operational review of the indicative programme shall consist of a joint 
assessment of the implementation of the programme and take into account the results 
of  relevant  activities  of  monitoring  and  evaluation.  This  review  shall  be  conducted 

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locally and shall be finalised between the National Authorizing Officer and Head of 
Delegationthe Commission within a period of 60 days. It shall in particular cover an 
assessment of: 

(a)  the  results  achieved  in  the  focal  sector(s)  measured  against  the  identified  targets 
and impact indicators and sectoral policy commitments; 

(b)  projects  and  programmes  programmes  and  projects  outside  the  focal  sector(s) 
and/or in the framework of multi-annual programmes; 

(c) the use of resources set aside for non-state actors; 

(d) the effectiveness of implementation of current operations and the extent to which 
the timetable for commitments and payments has been respected; and 

(e) an extension of the programming perspective for the following years. 

5.  The  National  Authorising  Officer  and  Head  of  Delegation  the  Commission  shall 
submit  a  report  on  the  conclusions  of  the  operational  review  to  the  Development 
Finance  Cooperation  Committee  within  30  days.  The  Committee  shall  examine  the 
report in accordance with its responsibilities and powers under the Agreement. 

6.  In  the  light  of  the  annual  operational  reviews,  the  Commission  and  the  National 
Authorising  Officer  Head  of  Delegation  may  at  the  mid-term  and  end-of-term 
reviews, and within the above time frames, review and adapt the CSS: 

(a) where the operational reviews indicate specific problems; and/or 

(b) in the light of changed circumstances of an ACP State. 

These reviews shall be completed within 30 days of the finalisation of the mid-term 
and end-of-term reviews. The final review of the Financial Protocol shall also include 
adjustments  for  the  new  financial  protocol  in  terms  of  both  resource  allocation  and 
preparation for the next programme. 

7.  Following  the  completion  of  the  mid-term  and  end-of-term  reviews,  the 
Commission  may,  on  behalf  of  the  Community,  revise  the  resource  allocation  in  the 
light of current needs and performance of the ACP State concerned. 

CHAPTER 2 

PROGRAMMING AND PREPARATION (REGIONAL) 

ARTICLE 6 

Participation 

1. Regional cooperation shall cover operations benefiting and involving: 

EN 

44 

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(a)  two  or  more  or  all  ACP  States  as  well  as  any  non-ACP  developing  countries 
participating in these operations13 and/or 

(b)  a  regional  body  of  which  at  least  two  ACP  States  are  members,  including  those 
with members which are non-ACP countries.14 

2.  Regional  cooperation  can  also  involve  Overseas  Countries  and  Territories  and 
outermost  regions.  The  funding  to  enable  participation  of  these  territories  shall  be 
additional to funds allocated to the ACP States under the Agreement. 

ARTICLE 9 

Resource allocation 

1. At the beginning of the period covered by the Financial Protocol, each region shall 
receive from the Community an indication of the volume of resources from which it 
may  benefit  during  a  five-year  period.  The  indicative  resource  allocation  shall  be 
based  on  an  estimate  of  needs  and  the  progress  and  prospects  in  the  process  of 
regional  co-operation  and  integration.  In  order  to  achieve  an  adequate  scale  and  to 
increase efficiency, regional and national funds may be mixed for financing regional 
operations with a distinct national component. 

2. Without prejudice to Article 11 concerning reviews, the Community may, in order 
to  take  account  of  new  needs  or  exceptional  performance,  increase  a  region’s 
allocation.15  

ARTICLE 10 

Regional indicative programme 

1. On the basis of the resource allocation indicated above, the duly mandated regional 
organisation(s),  or  in  the  absence  of  such  a  mandate,  the  National  Authorising 
Officers  of  the  countries  in  the  region,  shall  draw  up  a  draft  Regional  Indicative 
Programme. In particular, the draft programme shall specify: 

(a) the focal sectors and themes of Community aid; 

(b)  the  most  appropriate  measures  and  operations  to  achieve  the  objectives  set  for 
those sectors and themes; and 

13 

14 
15 

Council-Commission  Declaration:  Implementation  of  these  provisions  (concerning  regional 
cooperation involving non-ACP countries) will be subject to the implementation of equivalent 
provisions in the rules governing the Community's financial instruments for cooperation with 
other  countries  and  regions.  The  EU  will  inform  the  ACP  Group  when  these  equivalent 
provision are implemented. 
See declaration (footnote 2). 
EU-ACP  declaration:  “new  needs”  are  needs  resulting  from  exceptional  or  unforeseen 
circumstances, such as post-crisis situations. “Exceptional performance” means a situation in 
which,  outside  the  mid-term  and  end-of-term  reviews,  a  region’s  allocation  is  totally 
committed and  additional  funding  from  the regional  indicative  programme  can  be absorbed 
against  a  background  of  effective  regional-integration  policies  and  sound  financial 
management. 

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(c) the projects and programmes programmes and projects enabling those objectives 
to be attained, insofar as they have been clearly identified as well as an indication of 
the  resources  to  be  deployed  for  each  of  these  elements  and  a  timetable  for  their 
implementation. 

2.  The  Regional  Indicative  Programmes  shall  be  adopted  by  common  agreement 
between the Community and the ACP States concerned. 

ARTICLE 12 

Intra-ACP cooperation 

1. At the beginning of the period covered by the Financial Protocol, the Community 
shall  indicate  to  the  ACP  Council  of  Ministers  the  part  of  the  funds  earmarked  for 
regional operations that shall be set aside for operations that benefit many or all ACP 
States. Such operations may transcend the concept of geographic location. 

2.  The  Community  may,  in  order  to  take  account  of  new  needs  for  increasing  the 
impact of intra-ACP activities, increase the allocation for intra-ACP cooperation16

. 

16 

EU-ACP  Declaration:  “New  needs”  are  needs  which  may  arise  from  exceptional  or 
unforeseen  circumstances,  such  as  those  arising  from  new  commitments  to  international 
initiatives or to address challenges which are common to ACP countries.  

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ARTICLE 13 

Requests for financing 

1. 

Requests for financing of regional programmes shall be submitted by: 

(a) 

a duly mandated regional body or organisation; or 

(b) 
a  duly  mandated  sub-regional  body  or  organisation  or  an  ACP  State  in  the 
region  concerned  at  the  programming  stage,  provided  that  the  operation  has  been 
identified in the RIP. 

2. 

Requests for financing of intra-ACP programmes shall be submitted by: 

(a) 
at  least  3  duly  mandated  regional  bodies  or  organisations  belonging  to 
different  geographic  regions,  or  at  least  two  ACP  States  the  National  Authorising 
Officers of from each of the three regions; or 

the ACP Council of Ministers, or, by specific delegation, the ACP Committee 

(b) 
of Ambassadors; or 

(c) 
international  organisations  carrying  out  operations  that  contribute  to  the 
objectives of regional cooperation and integration, such as the African Union, subject 
to prior approval by the ACP Committee of Ambassadors.17 

17 

ACP-EU Declaration: ‘In view of the particular geographic situation of the Caribbean and 
Pacific  regions,  the  ACP  Council  of  Ministers  or  the  ACP  Committee  of  Ambassadors  may, 
notwithstanding subparagraph 2(a) of the present Article, present a specific funding request 
for one or the other of these regions.  

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ARTICLE 14 

Procedures for implementation 

Regional  programmes  shall  be  implemented  by  the  requesting  body  or  any 

1. 
other duly authorised institution or body. 

Intra-ACP programmes shall be implemented by the requesting body or their 
2. 
duly  authorised  agent.  In  the  absence  of  a  duly  authorised  implementing  body,  and 
without  prejudice  to  ad  hoc  projects  and  programmes  managed  by  the  ACP 
Secretariat, the Commission shall be responsible for the implementation of intra-ACP 
operations. 

31 
Account being taken of the objectives and inherent characteristics of regional 
cooperation,  including  intra-ACP  cooperation,  operations  undertaken  in  this  sphere 
shall be governed by the procedures established for development finance cooperation 
where applicable. 

In particular and subject to paragraphs 3 and 4, any regional programme or 

2. 
project financed from the Fund shall give rise to: 

(a) 
either,  in  accordance  with  Article  17,  a  financing  agreement  drawn  up 
between  the  Commission  and  the  bodies  mentioned  in  Article  13;  in  such  cases,  the 
relevant body shall designate a Regional Authorising Officer whose duties correspond 
mutatis mutandis with those of the National Authorising Officer; 

or a grant contract as defined in Article xx drawn up between the Commission 
(b) 
and the bodies mentioned in Article 13, depending on the nature of the measure and 
where the relevant body, other than an ACP State, is responsible for carrying out the 
programme or project. 

3. 
Programmes and projects financed from the Fund and for which requests for 
financing  have  been  presented  by  international  organisations  in  accordance  with 
Article 13(2)(c) shall give rise to the drawing up of a grant contract 

4. 
Programmes  and  projects  financed  from  the  Fund  for  which  requests  for 
financing  have  been  presented  by  the  ACP  Council  of  Ministers  or  Committee  of 
Ambassadors  shall  be  implemented  either  by  the  ACP  Group  Secretariat,  in  which 
case a financing agreement is drawn up between the Commission and the Secretariat 
in accordance with Article 17, or by the Commission, depending on the nature of the 
action. 

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CHAPTER III 

APPRAISAL AND FINANCING Project implementation 

ARTICLE 15 

Project Identification, preparation and appraisal of programmes and projects 

1. 
Projects and programmes Programmes and projects that have been presented 
by  the  ACP  State  concerned  shall  be  subject  to  joint  appraisal.  The  ACP-EC 
Development  Finance  Cooperation  Committee  shall  develop  the  general  guidelines 
and criteria for appraisal of projects and programmes programmes and projects. These 
programmes  and  projects  are  generally  multi-annual  and  can  incorporate  a  whole 
range of actions of a limited size in a particular area. 

Project  or  programme  Programme  and  project  dossiers  prepared  and 
2. 
submitted for financing must contain all information necessary for the appraisal of the 
projects  or  programmes  programmes  and  projects  or,  where  such  projects  and 
programmes programmes and projects have not been completely defined, provide the 
broad  outlines  necessary  for  their  appraisal.  Such  dossiers  shall  be  officially 
transmitted to the Community by the ACP States or the other eligible beneficiaries in 
accordance with this Agreement.  

3. 
Project  and  programmeProgramme  and  project  appraisal  shall  take  due 
account of national human resource constraints and ensure a strategy favourable to the 
promotion of such resources. It shall also take into account the specific characteristics 
and constraints of each ACP State. 

4. 
Programmes  and  projects  to  be  implemented  by  non-state  actors  which  are 
eligible  in  accordance  with  this  Agreement  may  be  appraised  by  the  Commission 
alone and give rise to the establishment of grant contracts between the Commission 
and non-state actors in accordance with Article xx. This appraisal should comply with 
Article 4(1)(d) regarding the types of actors, their eligibility and the type of activity to 
be  supported.  The  Commission,  through  the  Head  of  Delegation,  shall  inform  the 
National Authorising Officer of such allocated grants. 

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ARTICLE 16 

Financing proposal and decision 

1. 
The conclusions of the appraisal shall be summarised in a financing proposal, 
the final version of which shall be drawn up by the Community Commission in close 
collaboration  with  the  ACP  State  concerned.  This  financing  proposal  shall  be 
submitted for approval by the Commission's decision-making body.  

2. 
The  financing  proposal  shall  contain  an  advance  timetable  for  the  technical 
and  financial  implementation  of  the  project  or  programme,  including  multi-annual 
programmes and global allocations for operations of a small financial scale, and shall 
deal  with  the  duration  of  the  different  phases  of  implementation.  The  financing 
proposal shall: 

(a) 

take into account the comments of the ACP State or States concerned; and 

be  forwarded  simultaneously  to  the  ACP  State  or  States  concerned  and  the 

(b) 
Community. 

3. 
The Commission shall finalise the financing proposal and forward it, with or 
without  amendment,  to  the  Community's  decision-making  body.  The  ACP  State  or 
States  concerned  shall  be  given  an  opportunity  to  comment  on  any  amendment  of 
substance which the Commission intends to make to the document. These comments 
shall be reflected in the amended financing proposal. 

The Community’s decision-making bodyThe Commission, acting on behalf of 
4 2. 
the Community, shall communicate its financing decision to the ACP State concerned 
within 120 90 days from the date of communication finalisation of the final version of 
the financial proposal. referred to above. 

5 3.  Where the financing proposal is not adopted by the Commission on behalf of 
the Community, the ACP State or States concerned shall be informed immediately of 
the reasons for that decision. In such a case, the representatives of the ACP State or 
States concerned may, within 60 days thereafter, request either: 

that the matter be referred to the ACP-EC Development Finance Cooperation 

(a) 
Committee set up under this the Agreement; or 

(b) 

that they be given a hearing by the Community's representatives. 

6 4. 
Following such a hearing, a definitive decision to adopt or reject the financing 
proposal shall be taken by the relevant Community body the Commission on behalf of 
the Community. Before any decision is taken, the The ACP State or States concerned 
may  forward,  before  any  decision  is  taken,  to  the  Commission  any  facts  which  may 
appear necessary to supplement the information available to it. 

7. 
Multi-annual  programmes  shall,  inter  alia,  finance  training,  decentralised 
operations, micro-projects, trade promotion and trade development, sets of operations 
of  a  limited  scale  in  a  specific  sector,  project/programme  management  support  and 
technical cooperation. 

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In cases referred to above, the ACP State concerned may submit to the Head 
8. 
of  Delegation  a  multi-annual  programme  setting  out  its  broad  outlines,  the  types  of 
actions envisaged and the financial commitment proposed: 

(a) 
the financing decision on each multi-annual programme shall be taken by the 
Chief  Authorising  Officer.  The  letter  from  the  Chief  Authorizing  Officer  to  the 
National  Authorizing  Officer  notifying  such  decision  shall  constitute  the  financing 
agreement; and 

(b) 
within the framework of multi-annual programmes thus adopted, the National 
Authorising  Officer  or,  when  the  case  arises,  the  agent  of  decentralised  cooperation 
which  has  been  delegated  functions  for  this  purpose  or,  in  appropriate  cases,  other 
eligible  beneficiaries  shall  implement  each  individual  action  in  accordance  with  the 
relevant  provisions  of  this  Agreement  and  the  terms  of  the  financing  agreement 
referred  to  above.  Where  implementation  is  to  be  carried  out  by  agents  of 
decentralised  cooperation  or  other  eligible  beneficiaries,  the  National  Authorising 
Officer and the Head of Delegation shall maintain financial responsibility and monitor 
the  operations  regularly  with  a  view  to  enabling  them,  inter  alia,  to  carry  out  their 
obligations. 

9. 
At the end of each year, the National Authorising Officer in consultation with 
the  Head  of  Delegation,  shall  forward  a  report  to  the  Commission  on  the 
implementation of the multi-annual programmes. 

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ARTICLE 17 

Financing Agreement 

1. 
Save  as  otherwise  provided  for  in  this  Agreement,  for  any  project  or 
programme  programme  or  project  financed  by  a  grant  from  the  Fund,  a  financing 
agreement  shall  be  drawn  up  between  the  Commission  and  the  ACP  State  or  States 
concerned. . Where the direct beneficiary is not an ACP State, the Commission shall 
formalise  the  financing  decision  by  means  of  an  exchange  of  letters  with  the 
beneficiary concerned. 

2. 
The financing agreement shall be drawn up between the Commission and the 
ACP  State  or  States  concerned  within  60  days  of  the  decision  taken  by  the 
Commission  on  behalf  of  the  Community's  decision-making  body.  The  financing 
agreement shall: 

in 

the 

specify, 

particular, 

financial 
(a) 
commitmentCommunity’s  financial  contribution,  the  financing  arrangements  and 
terms  and 
the  project  or 
programmeprogramme  or  project  concerned  and  shall  also  incorporate  the  advance 
timetable for the technical implementation of the project or programme contained in 
the financing proposal; and 

the  general  and  specific  provisions  relating 

Fund’s 

details 

the 

of 

to 

make  adequate  provision  for  appropriations  to  cover  cost  increases  and 

(b) 
contingencies. 

3. 
Once the financing agreement has been signed, disbursements shall be made in 
accordance  with  the  financing  plan  laid  down  therein.  Any  unexpended  balance  left 
upon closure of the programme or project accounts of projects and programmes shall 
accrue to  the ACP  State  or States concerned and  shall be so specified in the Fund's 
books. It may be used in the manner laid down in this Agreement for the financing of 
projects and programmes. 

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ARTICLE 18 

Overrun 

1. 
Once it appears that there is a risk of cost over-runs beyond over and above 
the  financing  available  under  beyond  the  limit  set  in  the  financing  agreement  are 
likely  to  be  incurred  the  National  Authorising  Officer  shall  through  the  Head  of 
Delegation, notify the Chief Authorising Officer accordingly Commission and request 
its  prior  approval  on,  as  well  as  of  the  measures  which  the  National  Authorising 
Officer  intends  to  take  in  order  to  cover  such  cost  over-runs  over  the  allocated 
appropriations,  either  by  reducing  the  scale  of  the  programme  or  projectproject  or 
programme or by calling on national or other non-Community resources. 

2. 
If it is not possible to reduce the scale of the programme or project or to cover 
the  over-runs  with  other  resources,  the  Commission,  acting  on  behalf  of  the 
Community,  may,  on  the  basis  of  a  reasoned  request  from  the  National  Authorising 
Officer,  take  an  additional  financing  decision  on  resources  from  the  national 
indicative programme.If it is decided by agreement with the Community not to scale 
down  the  project  or  programme  or  if  it  is  not  possible  to  cover  them  by  other 
resources,  then  such  over-runs  may  be  financed  up  to  20%  of  the  financial 
commitment for the project or programme concerned from the indicative programme. 

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ARTICLE 19 

Retroactive financing 

1. 
In  order  to  ensure  early  project  start-up,  avoid  gaps  between  sequential 
projects and prevent delays, the ACP States, in agreement with the Commission, may, 
on completion of project appraisal and before the financing decision is taken 

issue invitations to tender for all types of contracts, with a suspension clause; 

(a) 
and 

pre-finance  activities  linked  to  the  start-up  of  programmes,  preliminary  and 
(b) 
seasonal work, orders for equipment with long delivery lead times as well as some on-
going  operations.  Such  expenditure  must  satisfy  the  procedures  provided  for  in  the 
Agreement. 

2. 
This  provision  must  be  mentioned  in  the  financing  proposal  and  shall  be 
without prejudice to the financing decision taken by the Commission on behalf of the 
Community.These decisions do not prejudge the powers of the Community’s decision-
making body. 

3. 
Expenditure  made  by  the  ACP  State  in  pursuance  of  this  provision  shall  be 
retroactively financed under the project or programmeprogramme or project, once the 
financing agreement is signed. 

CHAPTER 4 

COMPETITION AND PREFERENCES 

IMPLEMENTATION 

ARTICLE xx18 

Implementation measures 

1. 
Implementation  of  programmes  and  projects  financed  from  the  Fund  shall, 
where  financial  execution  is  the  Commission’s  responsibility,  consist  chiefly  of  the 
following: 

(a) 

awarding of contracts; 

(b) 

awarding of grants; 

(c) 

performance by direct labour; 

18 

Joint  declaration:  In  accordance  with  Article  100  of  the  Cotonou  Agreement,  the  ACP-EC 
Council will examine the provisions in Annex IV to the Agreement concerning the awarding 
and  performance  of  contracts  with  a  view  to  adopting  them  before  the  revised  Agreement 
enters into force. 

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direct payments as budgetary support, support for sectoral programmes, debt 

(d) 
relief and support to cover short-term fluctuations in export earnings. 

2. 
Procurement  contracts  are  contracts  for  pecuniary  interest  concluded  in 
writing in order to obtain, against payment of a price, the supply of movable assets, 
the execution of works or the provision of services. 

3. 

In  the  context  of  this  Annex,  grants  are  direct  financial  contributions 
awarded by way of a donation in order to finance: 

either a measure designed to help achieve an objective of this Agreement or of 

(a) 
a programme or project adopted in accordance with this Agreement, or 

(b) 

the functioning of a body which pursues such an objective. 

They shall be covered by a written agreement. 

ARTICLE zz 

Tender procedure with suspension clause 

In order to ensure early project start-up, the ACP States may, in all duly substantiated 
cases and in agreement with the Commission, issue invitations to tender for all types 
of contracts with a suspension clause, once project appraisal is completed but before 
the financing decision is taken. Such a provision must be mentioned in the financing 
proposal. 

ARTICLE 20 

Eligibility 

Save  where  a  derogation  is  granted  in  accordance  with  Article  22,  and  without 
prejudice to Article 26: 

1) 

2) 

3) 

Participation  in  procedures  for  the  awarding  of  public  procurement 
contracts or grants financed from the Fund shall be open to all natural and 
legal  persons  from  ACP  States  and  Member  States  of  the  European 
Community. 

Supplies and materials purchased under a contract financed from the Fund 
must  originate  in  a  country  that  is  eligible  under  paragraph  1.  In  this 
context,  the  definition  of  the  concept  of  'originating  products'  shall  be 
assessed by reference to the relevant international agreements, and supplies 
originating  in  the  Community  shall  include  supplies  originating  in  the 
Overseas Countries and Territories. 

Participation  in  procedures  for  the  awarding  of  public  procurement 
contracts  or  grants  financed  from  the  Fund  shall  be  open  to  international 
organisations. 

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4) 

5) 

6) 

Whenever  the  Fund  finances  an  operation  implemented  through  an 
international  organisation,  participation  in  procedures  for  the  awarding  of 
public procurement contracts or grants shall be open to all natural and legal 
persons  who  are  eligible  under  paragraph  1,  and  to  all  natural  and  legal 
persons  who  are  eligible  according  to  the  rules  of  the  organisation,  care 
being taken to ensure equal treatment of all donors. The same rules apply for 
supplies and materials. 

Whenever the Fund finances an operation implemented as part of a regional 
initiative,  participation 
the  awarding  of  public 
procurement  contracts  or  grants  shall  be  open  to  all  natural  and  legal 
persons  who  are  eligible  under  paragraph  1,  and  to  all  natural  and  legal 
persons  from  a  country  participating  in  the  relevant  initiative.  The  same 
rules apply for supplies and materials.19 

in  procedures 

for 

Whenever  the  Fund  finances  an  operation  co-financed  with  a  third  State, 
participation  in  procedures  for  the  awarding  of  public  procurement 
contracts  or  grants  shall  be  open  to  all  natural  and  legal  persons  eligible 
under paragraph 1, and to all persons eligible under the rules of the above 
mentioned third State. The same rules apply for supplies and materials.  

Save  where  a  derogation  is  granted  in  accordance  with  the  General  Regulations  for 
contracts or Article 22: 

participation in invitations to tender and the award of the contracts financed by 

(a) 
the Fund shall be open on equal terms to: 

(i) 

natural persons, companies or firms or public or semi-public agencies 
of the ACP States and the Member States; 

(ii) 

(ii) cooperative societies and other legal persons governed by public or 
private law, of the Member States and/or the ACP States; 

(iii)  and  (iii)  joint  ventures  or  groupings  of  companies  or  firms  of  ACP 

States and/or of a Member State. 

(b) 
supplies  must  originate  in  the  Community  and/or  the  ACP  States.  In  this 
context,  the  definition  of  the  concept  of  'originating  products'  shall  be  assessed  by 
reference  to  the  relevant  international  agreements,  and  supplies  originating  in  the 
Community  shall  include  supplies  originating  in  the  Overseas  Countries  and 
Territories.  

ARTICLE 22 

Derogations 

In  order  to  ensure  the  optimum  cost-effectiveness  of  the  system,  natural  or 
1. 
legal persons from non-ACP developing countries may be authorised to participate in 

19 

See declaration (footnote 2). 

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56 

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contracts financed by the Community at the request of the ACP States concerned. The 
ACP States concerned shall, on each occasion, provide the Head of Delegation with 
the  information  needed  for  the  Community  to  decide  on  such  derogation,  with 
particular  attention  being  given  to:In  exceptional,  duly  substantiated  circumstances, 
natural  or  legal  persons  from  third  countries  not  eligible  under  Article  20  may  be 
authorised  to  participate  in  procedures  for  the  awarding  of  public  procurement 
contracts  or  grants  financed  by  the  Community  at  the  justified  request  of  the  ACP 
States  concerned.  The  ACP  States  concerned  shall,  on  each  occasion,  provide  the 
Commission  with  the  information  needed  to  decide  on  such  derogation,  with 
particular attention being given to: 

(a) 

the geographical location of the ACP State concerned; 

the competitiveness of contractors, suppliers and consultants from the Member 

(b) 
States and the ACP States;  

the  need  to  avoid  excessive  increases  in  the  cost  of  performance  of  the 

(c) 
contract; 

transport difficulties or delays due to delivery times or other similar problems; 

(d) 
and 

(e) 

technology that is the most appropriate and best suited to local conditions; 

(f) 

cases of extreme urgency; 

(g) 

the availability of products and services in the relevant markets. 

2.  In  the  case  of  projects  financed  from  the  Investment  Facility,  EIB  procurement 
rules shall apply.  

Participation by third countries in contracts financed by the Community may 

2. 
also be authorised: 

where  the  Community  participates  in  the  financing  of  regional  or  inter-

(a) 
regional schemes involving such countries; 

(b) 

in the case of co-financing projects and programmes; and 

(c) 

in the case of emergency assistance. 

3. 
In  exceptional  cases  and  in  agreement  with  the  Commission,  consultancy 
firms  with  experts  who  are  nationals  of  third  countries  may  participate  in  service 
contracts. 

ARTICLE 24 

(this Article to be moved to the end of the chapter before the Article on tax and 
customs arrangements) 

Implementation by direct labour 

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In the case of direct-labour operations, projects and programmes programmes 
1. 
and  projects  shall  be  implemented  through  public  or  semi-public  agencies  or 
departments of the ACP State or States concerned or by the legal person responsible 
for executing the operation.  

2. 
The  Community  shall  contribute  to  the  costs  of  the  department  involved  by 
providing the equipment and/or materials that it lacks and/or resources to allow it to 
acquire  additional  staff  required  in  the  form  of  experts  from  within  the  ACP  States 
concerned or other ACP States. The Community's participation shall cover only costs 
incurred by supplementary measures and temporary expenditure relating to execution 
that are strictly confined to the requirements of the project in question. 

3. 
Programme  estimates  implementing  direct-labour  operations  must  comply 
with  the  Community  rules,  procedures  and  standard  documents  laid  down  by  the 
Commission, as applicable at the time of approval of the programme estimates.20 

ARTICLE 26 

Preferences 

1. 
Measures  shall  be  taken  to  encourage  the  widest  participation  of  the  natural 
and legal persons of ACP States in the performance of contracts financed by the Fund 
in  order  to  permit  the  optimization  of  the  physical  and  human  resources  of  those 
States. To this end: 

(a) 

(b) 

for works contracts of a value of less than EUR 5 000 000, tenderers from the 
ACP  States,  provided  that  at  least  one  quarter  of  the  capital  stock  and 
management staff originates from one or more ACP States, shall be accorded 
a  10%  price  preference  where  tenders  of  an  equivalent  economic,  technical 
and administrative quality are compared; 

for supply contracts, irrespective of the value of the supplies, tenderers from 
the ACP States who offer supplies of at least 50% in contract value of ACP 
origin, shall be accorded a 15% price preference where tenders of equivalent 
economic, technical and administrative quality are compared; 

(c) 

in  respect  of  service  contracts,  where  tenders  of  equivalent  economic  and 
technical quality are compared preference shall be given to: 

(i) 

experts,  institutions  or  consultancy  companies  or  firms  from  ACP 
States  with  the  required  competence;where  tenders  of  equivalent 
economic and technical quality are compared 

(ii)  offers  submitted  by  an  ACP  firm  in  a  consortium  with  European 

partners; and 

20 

ACP-EU Declaration: The ACP States will be consulted, a priori, on any amendments to the 
Community rules referred to in Article 24(3).  

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(iii)  offers  presented  by  European  tenderers  with  ACP  sub-contractors  or 

experts.  

(d) 

(e) 

where  subcontracting  is  envisaged,  preference  shall  be  given  by  the 
successful  tenderer  to  natural  persons,  companies  and  firms  of  ACP  States 
capable of performing the contract required on similar terms; and 

the  ACP  State  may,  in  the  invitation  to  tender,  offer  prospective  tenderers 
assistance from other ACP States' companies or firms or national experts or 
consultants  selected  by  mutual  agreement.  This  co-operation  may  take  the 
form either of a joint venture, or of a subcontract or of on-the-job training of 
trainees. 

Where  two  tenders  are  acknowledged  to  be  equivalent  on  the  basis  of  the 

2. 
criteria stated above, preference shall be given: 

(a) 

to the tenderer of an ACP State; or 

(b) 

if no such tender is forthcoming, to the tenderer who: 

(i) 

allows for the best possible use of the physical and human resources of 
the ACP States; 

(ii)  offers  the  greatest  subcontracting  possibilities  for  ACP  companies, 

firms or natural persons; or 

(iii) 

is  a  consortium  of  natural  persons,  companies  and  firms  from  ACP 
States and the Community. 

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CHAPTER 6 

FUND-RESOURCE MANAGEMENT AND EXECUTING AGENTS 

ARTICLE 34 

The Chief Authorising Officer The Commission 

1. 
The Commission shall undertake the financial execution of operations carried 
out  with  Fund  resources,  with  the  exception  of  the  Investment  Facility  and  interest-
rate subsidies, using the following main methods of management: 

(a) 

centralised management; 

(b) 

decentralised management 

As  a  general  rule,  the  financial  execution  of  the  Fund  resources  by  the 

2. 
Commission shall be decentralised. 

In  this  instance,  the  execution  duties  shall  be  carried  out  by  the  ACP  States  in 
accordance with Article 35. 

3. In order to carry out the financial execution of the Fund resources, the Commission 
shall  delegate  executive  powers  to  the  Commission  departments.  The  Commission 
shall inform the ACP States  and  the Development Finance Committee (DFC)  of the 
delegation of tasks within its departments.21  

1. 
The Commission shall appoint the Chief Authorising Officer of the Fund, who 
shall  be  responsible  for  managing  the  resources of  the Fund.  The  Chief Authorising 
Officer shall be responsible for commitment, clearance, authorisation and accounting 
of expenditure under the Fund. 

2. 

(a) 

(b) 

(c) 

The Chief Authorising Officer shall: 

commit, clear and authorise expenditure and keep accounts of commitments 
and authorisations; 

ensure that financing decisions are carried out; 

in  close  cooperation  with 
the  National  Authorising  Officer,  make 
commitment  decisions  and  financial  arrangements  that  prove  necessary  to 
ensure  proper  execution  of  approved  operations  from  the  economic  and 
technical viewpoints; 

(d) 

prepare the tender dossier before the invitations to tender are issued, for: 

21 

Commission  declaration:  the  detailed  respective  responsibilities  of  management  and 
executing agents of Fund resources are included in a manual on procedures upon which ACP 
States will be consulted in accordance with Article 12 of the Cotonou Agreement. The manual 
will be made available to ACP States from the entry into force of the revised Agreement. Any 
amendments to the manual will be subject to the same procedure. 

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(i) 

open international tender, and 

(ii) 

restricted international invitation to tender with prequalification. 

(e) 

approve  the  proposals  for  the  placing  of  contracts  subject  to  the  powers 
exercised by the Head of Delegation under Article 36; 

(f) 

ensure publication in reasonable time of international invitations to tender. 

3. 
The Chief Authorising Officer shall, at the end of each year, make available a 
detailed  balance  sheet  of  the  Fund  showing  balances  of  contributions  paid  into  the 
Fund  by  the  Member  States  and  global  disbursements  in  respect  of  each  financing 
heading. 

ARTICLE 35 

National Authorising Officer 

1. 
The  Government  of  each  ACP  State  shall  appoint  a  National  Authorising 
Officer  to  represent  it  in  all  operations  financed  from  the  resources  of  the  Fund 
managed  by  the  Commission  and  the  Bank.  The  National  Authorising  Officer  shall 
appoint one or more deputy National Authorising Officers to replace him when he is 
unable  to  carry  out  his  duties  and  shall  inform  the  Commission  of  this 
appointment.The National Authorising Officer may delegate some of these functions. 
Wherever  the  conditions  regarding  institutional  capacity  and  proper  financial 
management are met, the National Authorising Officer may delegate his functions for 
implementation  of  the  programmes  and  projects  concerned  to  the  body  responsible 
within his national administration. The National Authorising Officer shall inform the 
Chief Authorising Officerthe Commission of any such delegation. 

If  the  Commission  becomes  aware  of  problems  with  implementation  of 
2. 
procedures for the management of Fund resources, it shall hold discussions with the 
National Authorising Officer in order to rectify the situation and shall adopt, where 
necessary, all appropriate measures. 

The  National  Authorising  Officer  shall  assume  financial  responsibility  only 

3. 
for the executive tasks entrusted to him. 

4. 
Where Fund resources are managed in a decentralised way and subject to any 
additional powers that might be granted by the Commission, the National Authorising 
Officer shall: 

(a) 

a (b) 

be  responsible  for  the  coordination,  programming,  regular  monitoring  and 
annual, mid-term and end-of-term reviews of implementation of cooperation, 
and for coordination with donors; 

in close cooperation with the Head of DelegationCommission, be responsible 
for 
submission  and  appraisal  of  projects  and 
programmesprogrammes and projects;  

the  preparation, 

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(c) 

(d) 

(e) 

(f) 

(g) 

) 

) 

(h) 

(i) 

(j) 

(k) 

prepare  tender  documents  and,  where  appropriate,  the  documents  for  calls 
for proposals; 

submit  tender  documents  and,  where  appropriate,  documents  for  calls  for 
proposals,  to  the  Commission  for  approval  before  launching  invitations  to 
tender and, where appropriate, calls for proposals; 

in  close  cooperation  with  Head  of  delegationthe  Commission,  launch 
invitations to local open tender and, where appropriate, calls for proposals, 

receive  tenders,  both  local  and  international  (open  and  restricted),  and,  if 
applicable,  proposals,  and  transmit  copies  of  tenders  to  the  Commission; 
preside  over  the  opening  of  tenders  and  decide  on  the  results  of  their 
examination within the period of validity of the tenders, taking account of the 
time required for approval of contracts;sign contracts and riders thereto and 
approve expenditure;  

invite the Commission to the opening of tenders and, if applicable, proposals 
and  notify  the  Commission  of  the  results  of  the  examination  of  tenders  and 
proposals  for  approval  of  the  proposals  for  the  award  of  contracts  and 
grants; 

submit,  before  issuing  local  open  invitations  to  tender,  the  invitation  to 
tender dossier to the Head of Delegation who shall give his agreement within 
30 days; 

complete  the  evaluation  of  tenders  within  the  tender  validity  period  taking 
into consideration the period required for the approval of contracts; 

submit  contracts  and  programme  estimates  and  any  addenda  thereto  to  the 
Commission for approval; 

sign the contracts and addenda thereto approved by the Commission; 

clear  and  authorise  expenditure  within  the  limits  of  the  funds  assigned  to 
him; and 

during 
the  execution  operations,  make  any  adaptation  arrangements 
the  proper  execution  of  approved  projects  or 
necessary 
programmesprogrammes  or  projects  from  the  economic  and  technical 
viewpoint. 

to  ensure 

The National Authorising Officer shall, during the execution of operations and 

5 
subject to the requirement to inform the Head of DelegationCommission, decide on: 

(a) 

technical adjustments and alterations to programmes and projects in matters 
of  detail  so  long  as  they  do  not  affect  the  technical  solution  adopted  and 
remain  within  the  limits  of  the  reserve  for  adjustments  provided  for  in  the 
financing agreement; 

(b) 

alterations to estimates during execution; 

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(c) 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

transfers from item to item within estimates; 

changes  of  site  for  multiple-unit  projects  or  programmesprogrammes  or 
projects where justified on technical, economic or social grounds; 

imposition or remission of penalties for delay; 

acts discharging guarantors; 

purchase of goods, irrespective of their origin, on the local market; 

use of construction equipment and machinery not originating in the Member 
States  or  ACP  States  provided  there  is  no  production  of  comparable 
equipment and machinery in the Member States or ACP States; 

subcontracting; 

final  acceptance,  provided  that  a  Head  of  Delegationthe  Commission  is 
present  at  provisional  acceptance,  endorses  the  corresponding  minutes  and, 
where appropriate, is present at the final acceptance, in particular where the 
extent of the reservations recorded at the provisional acceptance necessitates 
major additional work;22 and 

(k) 

hiring of consultants and other technical assistance experts. 

22 

Commission  declaration:  the  detailed  respective  responsibilities  of  management  and 
executing agents of Fund resources are included in a manual on procedures upon which ACP 
States will be consulted in accordance with Article 12 of the Cotonou Agreement. The manual 
will be made available to ACP States from the entry into force of the revised Agreemen. Any 
amendments to the manual will be subject to the same procedure. 

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ARTICLE 36 

Head of Delegation 

1. 

2. 

3. 

4. 

The Commission shall be represented in each ACP State or in each regional 
grouping which expressly so requests, by a delegation under the authority of 
a  Head  of  Delegation,  with  the  approval  of  the  ACP  State  or  States 
concerned. Appropriate measures shall be taken in any case in which a Head 
of Delegation is appointed to a group of ACP States. The Head of Delegation 
shall represent the Commission in all spheres of its competence and in all its 
activities. 

The Head of Delegation shall be the main contact for ACP States and bodies 
or organisations eligible for financial support under the Agreement. He shall 
cooperate  and  work  in  close  cooperation  with  the  National  Authorising 
Officer.23

The Head of Delegation shall have the necessary instructions and delegated 
powers to facilitate and expedite all operations under the Agreement. 

On  a  regular  basis,  the  Head  of  Delegation  shall  inform  the  national 
authorities of Community activities which may directly concern cooperation 
between the Community and the ACP States. 

1. 
The  Commission  shall  be  represented  in  each  ACP  State  or  in  each  regional 
grouping which expressly so requests, by a delegation under the authority of a Head 
of Delegation, with the approval of the ACP State or States concerned. Where a Head 
of Delegation is appointed to a group of ACP States, appropriate steps shall be taken 
to ensure that the Head of Delegation is represented by a deputy resident in each of 
the  States  in  which  the  Head  of  Delegation  is  not  resident.  The  Head  of  Delegation 
shall  represent  the  Commission  in  all  spheres  of  its  competence  and  in  all  its 
activities. 

To  this  end,  and  in  close  cooperation  with  the  National  Authorising  Officer, 

2. 
the Head of Delegation shall: 

(a) 

(b) 

23 

at the request of the ACP State concerned, participate and give assistance in 
the  preparation  of  projects  and  programmes  and  in  negotiating  technical 
assistance contracts; 

participate in appraising projects and programmes, preparing tender dossiers 
and  seeking  ways  to  simplify  project  and  programme  appraisal  and 
implementation procedures; 

Commission  declaration:  the  detailed  respective  responsibilities  of  management  and 
executing agents of Fund resources are included in a manual on procedures upon which ACP 
States will be consulted in accordance with Article 12 of the Cotonou Agreement. The manual 
will be made available to ACP States from the entry into force of the revised Agreement. Any 
amendments to the manual will be subject to the same procedure. 

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(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

(j) 

(k) 

(l) 

prepare financing proposals; 

approve, before the National Authorising Officer issues them, the local open 
invitation to tender and the emergency assistance contract dossiers within 30 
days of their submission to him by the National Authorising Officer; 

be  present  at  the  opening  of  tenders  and  receive  copies  of  them  and  of  the 
results of their examination; 

approve, within 30 days, the National Authorising Officer's proposal for the 
placing  of  local  open  tenders,  direct  agreement  contracts,  emergency 
assistance contracts, service contracts and works contracts with a value less 
than  EUR  5  million  and  supply  contracts  with  a  value  less  than  EUR  1 
million; 

for all other contracts not covered by the above, approve within 30 days the 
National  Authorising  Officer's  proposal  for  the  placing  of  the  contract 
wherever the following conditions are fulfilled: 

(i) 

the  tender  selected  is  the  lowest  of  those  conforming  to  the 
requirements of the tender dossier; 

(ii) 

the  tender  selected  meets  all  the  selection  criteria  stated  in  the  tender 
dossier; and 

(iii) 

the tender selected does not exceed the sum earmarked for the contract.  

where  the  conditions  set  out  in  paragraph  (g)  are  not  fulfilled,  forward  the 
proposal to the Chief Authorising Officer who shall decide thereon within 60 
days of the receipt of the Head of Delegation. Where the price of the selected 
tender  exceeds  the  sum  earmarked  for  the  contract,  the  Chief  Authorising 
Officer  shall,  upon  giving  approval  to  the  award,  make  the  necessary 
financial commitment; 

(i) 

endorse  contracts  and  estimates  in  the  case  of  direct  labour,  riders 
thereto  as  well  as  payment  authorisations  issued  by  the  National 
Authorising Officer; 

ensure that the projects and programmes financed from the resources of the 
Fund managed by the Commission are properly executed from the financial 
and technical viewpoints; 

cooperate with the national authorities of the ACP State where he represents 
the Commission in evaluating operations regularly; 

communicate to the ACP State all information and relevant documents on the 
procedures for implementing development finance cooperation especially as 
regards appraisal criteria and tender evaluation criteria; and 

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(m) 

on  a  regular  basis,  inform  the  national  authorities  of  Community  activities 
which  may  directly  concern  cooperation  between  the  Community  and  the 
ACP States. 

3. 
The  Head  of  Delegation  shall  have  the  necessary  instructions  and  delegated 
powers  to  facilitate  and  expedite  all  operations  under  the  Agreement.  Any  further 
delegation of administrative and/or financial powers to the Head of Delegation other 
than  described  in  this  Article  shall  be  notified  to  the  National  Authorising  Officers 
and the ACP Council of Ministers. 

ARTICLE 37 

Payments and paying agents 

1. 
For  the  purpose  of  effecting  payments  in  the  national  currencies  of  the  ACP 
States,  accounts  denominated  in  the  currencies  of  the  Members  States  or  in  euro 
shallmay  be  opened  in  each  ACP  State  the  ACP  States  by  and  in  the  name  of  the 
Commission  with  a  national  public  or  semi-public  financial  institution  chosen  by 
agreement between the ACP State and the Commission. This institution shall exercise 
the functions of National Paying Agent. 

2. 
The National Paying Agent shall receive no remuneration for its services and 
no  interest  shall  be  payable  by  it  on  deposited  funds.  The  local  accounts  shall  be 
replenished  by  the  Commission  in  the  currency  of  one  of  the  Member  States  or  in 
euro, based on estimates of future cash requirements, which shall be made sufficiently 
in advance to avoid the need for pre-financing by ACP States and to prevent delayed 
disbursements. 

3. 
For the purpose of effecting payments in Euro, accounts denominated in Euro 
shall  be  opened  in  the  name  of  the  Commission  with  financing  institutions  in  the 
Member  States.  These  institutions  shall  exercise  the  functions  of  Paying  Agents  in 
Europe. 

Payments  from  the  European  accounts,  which  will  be  executed  on  the 
4. 
instruction of the Commission or by the Head of Delegation acting on its behalf, may 
be made in respect of expenditure authorised by the National Authorising Officer or 
by  the  Chief  Authorising  Officer  with  the  prior  authorisation  of  the  National 
Authorising Officer. Payments shall be made by the Commission in accordance with 
the rules laid down by the Community and the Commission, where appropriate after 
the expenditure has been cleared and authorised by the National Authorising Officer. 

5. 
Within  the  limits  of  the  funds  available  in  the  accounts,  the  Paying  Agents 
shall  make  disbursements  authorised  by  the  National  Authorising  Officer  or,  as 
appropriate,  the  Chief  Authorising  Officer,  after  verifying  that  the  supporting 
documents  provided  are  substantially  correct  and  in  order,  and  that  the  discharge 
given for payment is valid. 

6. 
The procedures for clearance, authorisation and payment of expenditure must 
be completed within a period of 90 days from the date on which the payment becomes 
due.  The  National  Authorising  Officer  shall  process  and  deliver  the  payment 
authorisation to the Head of Delegation not later than 45 days before the due date. 

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Claims  for  delayed  payments  shall  be  borne  by  the  ACP  State  or  States 
7. 
concerned, and by the Commission from its own resources, for that part of the delay 
for which each party is responsible in accordance with the above procedures. 

8. 
The Paying Agents, the National Authorising Officer, the Head of Delegation 
and the responsible Commission departments shall remain financially liable until the 
Commission gives final clearance for the operations for the execution of which they 
are responsible. 

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REVISION OF THE COTONOU AGREEMENT 

New Annex VII to be added to the Cotonou Agreement 

Note: 

- Agreement on new texts: underlined  

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ANNEX VII 

POLITICAL DIALOGUE AS REGARDS HUMAN RIGHTS, DEMOCRATIC 
PRINCIPLES AND THE RULE OF LAW 

ARTICLE 1 

Objectives 

1. 

2. 

3. 

1. 

2. 

3. 

4. 

24 

The  consultations  foreseen  in  Article  96(3)  (a)  will  take  place,  except  in 
cases  of  special  urgency,  after  exhaustive  political  dialogue  as  foreseen  in 
Articles 8 and 9(4) of the Agreement. 

Both  Parties  should  conduct  such  political  dialogue  in  the  spirit  of  the 
Agreement  and  bearing  in  mind  the  Guidelines  for  ACP-EU  Political 
Dialogue established by the Council of Ministers. 

Political  Dialogue  is  a  process  which  should  foster  the  strengthening  of 
ACP-EU  relations  and  contribute  towards  achieving  the  objectives  of  the 
Partnership. 

ARTICLE 2 

Intensified Political Dialogue preceding Article 96 Consultations 

Political  dialogue  concerning  respect 
for  human  rights,  democratic 
principles  and  the  rule  of  law  shall  be  conducted  pursuant  to  Articles  9(4) 
and  8  of  the  Partnership  Agreement  and  within  the  parameters  of 
internationally  recognised  standards  and  norms24.  In  the  framework  of  this 
dialogue the Parties may agree on joint agendas and priorities. 

The  Parties  may  jointly  develop  and  agree  specific  benchmarks  or  targets 
with  regard  to  human  rights,  democratic  principles  and  the  rule  of  law, 
within the framework of internationally agreed standards and norms, taking 
into  account  special  and  particular  circumstances  of  the  ACP  State 
concerned.  Benchmarks  are  mechanisms  for  reaching  targets  through  the 
setting of intermediate objectives and timeframes for compliance. 

The political dialogue set out in paragraphs 1 and 2 shall be systematic and 
formal  and  shall  exhaust  all  possible  options  prior  to  Article  96 
consultations. 

Except  for  cases  of  special  urgency  as  defined  in  Article  96(3)(b)  of  the 
Agreement,  Article  96  consultations  may  also  go  ahead  without  preceding 
intensified  political  dialogue,  when  there  is  persistent  lack  of  compliance 
with commitments taken by one of the Parties during an earlier dialogue, or 
by a failure to engage in dialogue in good faith. 

Joint  Declaration:  The  internationally  recognised  standards  and  norms  are  those  of  the 
instruments referred to in the Preamble of this Agreement.  

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5. 

1. 

2. 

3. 

4. 

5. 

Political dialogue under Article 8 will also be utilized between the Parties to 
assist  countries  subject  to  appropriate  measures  under  Article  96,  to 
normalise the relationship. 

ARTICLE 3 

Additional rules on consultation under Article 96 of the Agreement 

The  Parties  shall  strive  to  promote  equality  in  the  level  of  representation 
during consultations under Articles 96. 

The  Parties  are  committed  to  transparent  interaction  prior  to,  during  and 
after the formal consultations, bearing in mind the specific benchmarks and 
targets referred to in Article 2(2) of this annex. 

The Parties shall use the 30-day notification period as provided for in Article 
96(3) of the Agreement for effective preparation by the parties, as well as for 
deeper consultations within the ACP Group and among the Community and 
its Member States. During the consultation process, the Parties should agree 
flexible  timeframes,  whilst  acknowledging  that  cases  of  special  urgency,  as 
defined in Article 96 3(b) and Article 2 (4) above, may require an immediate 
reaction. 

The  Parties  acknowledge  the  role  of  the  ACP  Group  in  political  dialogue 
based on modalities to be determined by the ACP Group and communicated 
to the European Community and its Member States. 

The  Parties  acknowledge 
for  structured  and  continuous 
consultations under Article 96. The Council of Ministers may develop further 
modalities to this end.25 

the  need 

25 

Declaration of  the  Commission  and  Council  of  the  European  Union:  As  regards  the 
modalities  foreseen  in article  3  of  Annex  VII,  the position to  be  taken by  the  Council  of  the 
European  Union  within  the  joint  ACP-EU  Council  will  be  based  on  a  proposal  by  the 
Commission.  

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