Council Regulation (EC) No 1084/2006 of  11 July 2006  establishing a Cohesion Fund and repealing Regulation (EC) No 1164/94
Date: 2006-07-11
Institutions: Council of the European Union
Subjects: Cohesion Fund, environmental protection, operation of the Institutions, powers of the institutions (EU), trans-European network, transport network

31.7.2006

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Official Journal of the European Union

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COUNCIL REGULATION (EC) No 1084/2006

of 11 July 2006

establishing a Cohesion Fund and repealing Regulation (EC) No 1164/94

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 161(2) thereof,

Having regard to the proposal from the Commission,

Having regard to the assent of the European Parliament (1),

Having regard to the opinion of the European Economic and
Social Committee (2),

Having regard to the opinion of
Regions (3),

the Committee of

the

Whereas:

(1)

(2)

(3)

Council Regulation (EC) No 1083/2006 of 11 July 2006
laying down general provisions on the European
Regional Development Fund, the European Social Fund
and the Cohesion Fund (4) establishes a new framework
for the action of the Structural Funds and the Cohesion
Fund. It sets out, in particular, the objectives, the princi-
ples and the rules concerning partnership, programming,
evaluation and management. It is therefore necessary to
specify the mission of the Cohesion Fund in relati on to
the new framework for its action and in relation to the
purpose assigned to it in the Treaty and to repeal, in the
interests of clarity, Council Regulation (EC) No 1164/94
of 16 May 1994 establishing the Cohesion Fund (5).

Trans-European transport network projects financed by
the Cohesion Fund are to comply with the guidelines for
trans-European transport networks adopted by the
Council and the European Parliament.
to
concentrate efforts, priority should be given to projects
of common interest as defined in Decision No 1692/96/
EC of the European Parliament and of the Council of
23 July 1996 on Community guidelines for the develop-
ment of the trans-European transport network (6).

In order

through the Cohesion Fund,
The Community may,
contribute to action in pursuit of
the Community's
environmental objectives specified in Articles 6 and 174
of the Treaty.

(4)

(5)

Regulation (EC) No 1083/2006 provides that rules on
eligibility of expenditure are to be established at national
level, with certain exceptions for which it is necessary to
lay down specific provisions. Specific provisions should
therefore be laid down for the exceptions related to the
Cohesion Fund.

Conditionality provisions in the granting of
financial
assistance should continue to apply in conjunction with
the fulfilment of the conditions of economic conver-
gence as set out in Article 99 of the Treaty and the need
for sound government finances. In this respect, Member
States having adopted the euro are to implement stabi-
lity programmes and Member States not having adopted
the euro convergence programmes, as defined in Council
Regulation (EC) No 1466/97 of 7 July 1997 on the
strengthening of the surveillance of budgetary positions
and the surveillance and coordination of economic poli-
cies (7), leading to the avoidance of excessive government
deficits referred to in Article 104 of the Treaty. Condi-
tionality provisions
should not, however, apply to
commitments already made at the time of suspension,

HAS ADOPTED THIS REGULATION:

Article 1

Establishment and purpose of the Cohesion Fund

1.
A Cohesion Fund (hereinafter referred to as ‘the Fund’) is
strengthening the
hereby established for
the purpose of
economic and social cohesion of the Community in the inter-
ests of promoting sustainable development.

The Fund shall be governed by Regulation (EC) No 1083/

2.
2006 and by this Regulation.

Article 2

Scope of assistance

(1) Assent of 4 July 2006 (not yet published in the Official Journal).
(2) OJ C 255, 14.10.2005, p. 88.
(3) OJ C 231, 20.9.2005, p. 35.
(4) See p. 25 of this Official Journal.
(5) OJ L 130, 25.5.1994, p. 1. Regulation as last amended by the 2003

Accession Act.

1.
Assistance from the Fund shall be given to actions in the
following areas, ensuring an appropriate balance, and according
to the investment and infrastructure needs specific to each
Member State receiving assistance:

(6) OJ L 228, 9.9.1996, p. 1. Decision as last amended by Decision

(7) OJ L 209, 2.8.1997, p. 1. Regulation as last amended by Regulation

No 884/2004/EC (OJ L 167, 30.4.2004, p. 1).

(EC) No 1055/2005 (OJ L 174, 7.7.2005, p. 1).

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(a) trans-European transport networks,

in particular priority
projects of common interest as identified by Decision
No 1692/96/EC;

(b) the environment within the priorities assigned to the Com-
munity environmental protection policy under the policy
and action programme on the environment. In this context,
the Fund may also intervene in areas related to sustainable
development which clearly present environmental benefits,
namely energy efficiency and renewable energy and, in the
transport sector outside the trans-European networks, rail,
river and sea transport, intermodal transport systems and
their interoperability, management of road, sea and air
traffic, clean urban transport and public transport.

The appropriate balance of assistance shall be agreed in

2.
partnership between Member States and the Commission.

Article 3

Eligibility of expenditure

The following expenditure shall not be eligible for a contribu-
tion from the Fund:

(a) interest on debt;

(b) the purchase of land for an amount exceeding 10 % of the
total eligible expenditure for the operation concerned;

(c) housing;

(d) decommissioning of nuclear power stations; and

(e) recoverable value added tax.

Article 4

Conditions applying to access to Fund assistance

Assistance from the Fund shall be conditional on the

1.
following rules:

(a) if the Council has decided in accordance with Article 104(6)
of the Treaty that excessive government deficit exists in a
beneficiary Member State, and

(b) has established in accordance with Article 104(8) of the
Treaty that the Member State concerned has not taken
effective action in response to a Council recommendation
made under Article 104(7) of the Treaty,

it may decide to suspend either the totality or part of the
commitments from the Fund for the Member State concerned
with effect from 1 January of the year following the decision to
suspend.

If

establishes

the Council

the Member State
2.
concerned has taken the necessary corrective action,
it shall
decide, without delay, to lift the suspension of the commit-
ments concerned. At the same time, the Council shall decide,

that

on a proposal
the
from the Commission,
suspended commitment in accordance with the procedure set
out
in the Interinstitutional Agreement of 17 May 2006
the Council and the
between the European Parliament,
Commission on budgetary discipline and sound financial
management (1).

to re-budget

The Council shall take the decisions referred to in para-
3.
graphs 1 and 2 by qualified majority on a proposal from the
Commission.

Article 5

Transitional provisions

1.
This Regulation shall not affect either the continuation or
the modification, including the total or partial cancellation, of
project or other forms of assistance approved by the Commis-
sion on the basis of Regulation (EC) No 1164/94, which shall
consequently apply thereafter to that assistance or the projects
concerned until their closure.

2.
Applications for major projects within the meaning of
Articles 39, 40 and 41 of Regulation (EC) No 1083/2006 made
to the Commission under Regulation (EC) No 1164/94 shall
remain valid provided that such applications are supplemented,
where necessary, so as to comply with the requirements of this
Regulation and the abovementioned Articles of Regulation (EC)
No 1083/2006 within not more than two months as of
1 January 2007.

Article 6

Repeal

1. Without prejudice to the provisions of Article 105(1) of
Regulation (EC) No 1083/2006 and Article 5 of this Regu-
lation, Regulation (EC) No 1164/94 is hereby repealed with
effect from 1 January 2007.

References to the repealed Regulation shall be construed

2.
as references to this Regulation.

Article 7

Review

The Council shall review this Regulation by 31 December
2013 at the latest in accordance with Article 161 of the Treaty.

Article 8

Entry into force

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

(1) OJ C 139, 14.6.2006, p. 1.

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

Done at Brussels, 11 July 2006.

For the Council

The President

E. HEINÄLUOMA