Council Regulation (EC) No 1085/2006 of  17 July 2006  establishing an Instrument for Pre-Accession Assistance (IPA)
Date: 2006-07-17
Institutions: Council of the European Union
Subjects: EU aid, EU financing, candidate, foreign aid, pre-accession aid

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Official Journal of the European Union

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COUNCIL REGULATION (EC) No 1085/2006

of 17 July 2006

establishing an Instrument for Pre-Accession Assistance (IPA)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 181a thereof,

Having regard to the proposal from the Commission,

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

Having regard to the opinion of
Regions (2),

the Committee of

the

Whereas:

(1)

(2)

(3)

(4)

(5)

(6)

In order to improve the efficiency of the Community's
External Aid, a new framework for programming and
delivery of assistance has been envisaged. The present
instruments
instrument constitutes one of the general
directly supporting European External Aid policies.

Article 49 of the Treaty on European Union states that
any European State which respects the principles of
liberty, democracy, respect for human rights and funda-
mental freedoms, and the rule of law may apply to
become a member of the Union.

The Republic of Turkey's application for membership to
the European Union was accepted by the European
Council in Helsinki in 1999. Pre-accession assistance has
been made available to the Republic of Turkey since
2002. The Brussels European Council on 16 and
17 December 2004 recommended that accession nego-
tiations should be opened with Turkey.

At its meeting at Santa Maria da Feira on 20 June 2000,
the European Council stressed that the countries of the
Western Balkans were potential candidates for member-
ship of the European Union.

At its meeting in Thessaloniki, on 19 and 20 June 2003,
the European Council recalled the conclusions of
its
meetings in Copenhagen in December 2002 and Brussels
in March 2003 and reiterated its determination to fully
and effectively support the European perspective of the
indicating that they would
Western Balkan countries,
become an integral part of the European Union, once
they met the established criteria.

The Thessaloniki European Council 2003 also indicated
the Stabilisation and Association Process would
that
constitute the overall
the European
course of the Western Balkan countries all the way to
their future accession.

framework for

(7)

(8)

(9)

In its resolution on the Thessaloniki European Council
Conclusions, the European Parliament recognised that
each of
the Western Balkan countries was moving
towards accession, but at the same time insisted that
each country should be judged on its own merits.

All
the Western Balkan countries can therefore be
considered as potential candidate countries; however, a
clear distinction should be made between candidate
countries and potential candidate countries.

On 17 and 18 June 2004 the Brussels European Council
recommended that accession negotiations should be
opened with Croatia.

(10) On 15 and 16 December 2005 the Brussels European
Council decided to grant candidate country status to the
former Yugoslav Republic of Macedonia.

(11)

(12)

Further, on 16 and 17 December 2004, the Brussels
European Council recommended that parallel to acces-
sion negotiations, the European Union should engage an
intensive political and cultural dialogue with every candi-
date country.

In the interests of coherence and consistency of Com-
munity assistance, assistance for candidate countries as
well as for potential candidate countries should be
granted in the context of a coherent framework, taking
advantage of the lessons learned from earlier pre-acces-
sion instruments as well as Council Regulation (EC)
No 2666/2000 of 5 December 2000 on assistance for
the
Albania,
Federal Republic of Yugoslavia and the Former Yugoslav
Republic of Macedonia (3). The assistance should also be
consistent with the development policy of the Com-
munity in accordance with Article 181a of
the EC
Treaty.

and Herzegovina,

Croatia,

Bosnia

(13) Assistance for candidate countries as well as for potential
candidate countries should continue to support them in
their efforts to strengthen democratic institutions and
the rule of law, reform public administration, carry out
economic reforms, respect human as well as minority
rights, promote gender equality, support the develop-
ment of civil society and advance regional cooperation
as well as reconciliation and reconstruction, and contri-
bute to sustainable development and poverty reduction
in these countries, and it should therefore be targeted at
supporting
institution-building
range
measures.

a wide

of

(1) Opinion delivered on 6 July 2006 (not yet published in the Official

Journal).

(2) OJ C 231, 20.9.2005, p. 67.

(3) OJ L 306, 7.12.2000, p. 1. Regulation as last amended by Regu-

lation (EC) No 2112/2005 (OJ L 344, 27.12.2005, p. 23).

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(14) Assistance for candidate countries should additionally
focus on the adoption and implementation of the full
acquis communautaire, and in particular prepare candidate
countries for the implementation of the Community's
agricultural and cohesion policy.

(15) Assistance for potential candidate countries may include
some alignment with the acquis communautaire, as well as
support for investment projects, aiming in particular at
building management capacity in the areas of regional,
human resources and rural development.

(16) Assistance should be provided on the basis of a compre-
hensive multi-annual strategy that reflects the priorities
of the Stabilisation and Association Process, as well as
the strategic priorities of the pre-accession process.

to the prerogatives of

In order to assist with the financial part of this strategy,
the
and without prejudice
Budgetary Authority, the Commission should present its
intentions for the financial allocations to be proposed
for
forthcoming years by means of a
multi-annual indicative financial framework, as an inte-
gral part of its annual enlargement package.

three

the

The Transition Assistance and Institution Building, and
Cross-Border Cooperation Components should be acces-
sible to all beneficiary countries, in order to assist them
in the process of transition and approximation to the
EU, as well as
to encourage regional cooperation
between them.

The Regional Development Component,
the Human
Resources Development Component, and the Rural
Development Component should be accessible only to
candidate countries accredited to manage funds in a
decentralised manner, in order to help them prepare for
the time after accession, in particular for the implemen-
tation of the Community's cohesion and rural develop-
ment policies.

(17)

(18)

(19)

(20)

the

such as

should also allow for

and TAIEX (Technical Assistance Information Exchange
Instrument), but
innovative
approaches
implementation through
Member States via shared management in case of cross-
border programmes on the external borders of the Euro-
pean Union. The transfer of knowledge and expertise
regarding the implementation of the acquis communau-
taire, from Member States with relevant experience to
the beneficiaries of this Regulation, should be particu-
larly beneficial in this context.

(22)

(23)

(24)

of

programmes with

implications. They
in

The actions necessary for the implementation of this
Regulation are management measures relating to the
implementation
substantial
should therefore be
budgetary
Council Decision
adopted
1999/468/EC of 28 June 1999 laying down the proce-
dures for the exercise of implementing powers conferred
on the Commission (2), by submitting the multi-annual
indicative planning documents
to a Management
Committee.

accordance with

The annual or multi-annual programmes on a horizontal
and per country basis for the implementation of assis-
tance under the Transition Assistance and Institution
Building Component and the Cross-Border Cooperation
Component should also be submitted to a Management
Committee in accordance with Decision 1999/468/EC.

The multi-annual programmes for the implementation
of the Regional Development Component, the Human
Resources Development Component, and the Rural
Development Component should also be submitted to a
Management Committee,
in accordance with Deci-
sion 1999/468/EC. Since these actions will be closely
aligned to Structural Fund and Rural Development prac-
tices, they should make use as far as possible of the
existing Committees which are in place for Structural
Funds and Rural Development.

Potential candidate countries and candidate countries
that have not been accredited to manage funds in a
decentralised manner should however be eligible, under
the Transition Assistance
and Institution Building
Component, for measures and actions of a similar nature
to those which will be available under the Regional
Development Component, the Human Resources Devel-
and the Rural Development
opment Component
Component.

(25) Where the Commission implements

this Regulation
through centralised management,
it should take the
utmost care to protect the financial interests of the Com-
munity, in particular by applying the rules and standards
of the acquis communautaire in that respect, and where
the Commission implements this Regulation through
other forms of management, the financial
interests of
the Community should be safeguarded through the
conclusion of appropriate agreements containing suffi-
cient guarantees in that respect.

(21) Assistance should be managed in accordance with the
rules for External Aid contained in Council Regulation
(EC, Euratom) No 1605/2002 of 25 June 2002 on the
Financial Regulation applicable to the general budget of
the European Communities (1), making use of the struc-
tures that have proved their worth in the pre-accession
twinning
process, such as decentralised management,

(26)

Rules determining the eligibility of participation in
tenders and grant contracts, as well as rules concerning
the origin of supplies should be laid down in accordance
with recent developments within the European Union
concerning the untying of aid, but should leave the flex-
ibility to react to new developments in this field.

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

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

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(27) Where a beneficiary country violates the principles on
which the European Union is founded, or makes insuffi-
cient progress with respect to the Copenhagen criteria
and the priorities laid down in the European or Acces-
sion Partnership, the Council must, on the basis of a
proposal from the Commission, be in a position to take
the necessary measures. Full and immediate information
to the European Parliament should be ensured.

(33)

The institution of the new system of Community pre-
accession assistance makes it necessary to repeal Council
Regulation (EEC) No 3906/89 of 18 December 1989 on
economic aid to the Republic of Hungary and the Polish
People's Republic (2), Commission Regulation (EC)
No 2760/98 of 18 December 1998 concerning the
implementation of a programme for cross-border coop-
eration in the framework of the PHARE programme (3),
Council Regulation (EC) No 1266/1999 of 21 June
1999 on coordinating aid to the applicant countries in
the framework of the pre-accession strategy (4), Council
Regulation (EC) No 1267/1999 of 21 June 1999 estab-
for Structural Policies for Pre-
lishing an Instrument
accession (5), Council Regulation (EC) No 1268/1999 of
21 June 1999 on Community support for pre-accession
measures for agriculture and rural development in the
applicant countries of central and eastern Europe in the
pre-accession period (6), Council Regulation (EC) No 555/
2000 of 13 March 2000 on the implementation of
operations
the pre-accession
framework of
strategy for the Republic of Cyprus and the Republic of
Malta (7), Council Regulation (EC) No 2500/2001 of
17 December 2001 concerning pre-accession financial
assistance for Turkey (8) and Council Regulation (EC)
No 2112/2005 of 21 November 2005 on access to
Community external assistance. Equally, this Regulation
should replace Regulation (EC) No 2666/2000, which
expires on 31 December 2006,

in the

HAS ADOPTED THIS REGULATION:

TITLE I

GENERAL PROVISIONS

Article 1

Beneficiaries and overall objective

The Community shall assist the countries listed in Annexes I
and II in their progressive alignment with the standards and
policies of the European Union, including where appropriate
the acquis communautaire, with a view to membership.

(2) OJ L 375, 23.12.1989, p. 11. Regulation as last amended by Regu-

lation (EC) No 2257/2004 (OJ L 389, 31.12.2004, p. 1).

(3) OJ L 345, 19.12.1998, p. 49. Regulation as last amended by Regu-

lation (EC) No 1045/2005 (OJ L 172, 5.7.2005, p. 78).

(4) OJ L 161, 26.6.1999, p. 68.
(5) OJ L 161, 26.6.1999, p. 73.
(6) OJ L 161, 26.6.1999, p. 87. Regulation as last amended by Regu-

lation (EC) No 2112/2005.

(7) OJ L 68, 16.3.2000, p. 3. Regulation as last amended by Regulation

(EC) No 769/2004 (OJ L 123, 27.4.2004, p. 1).

(8) OJ L 342, 27.12.2001, p. 1. Regulation as last amended by Regu-

lation (EC) No 2112/2005.

(28)

(29)

(30)

Provision should be made to enable the Council
to
amend this Regulation by way of a simplified procedure
with respect to the status of a beneficiary country as
defined in this Regulation.

Countries which are beneficiaries under
the other
regional External Assistance Instruments should, on the
basis of reciprocity, be able to participate in actions
under this Regulation, where this offers an added value
on account of the regional, cross-border, transnational
or global nature of the action in question.

Since the objective of
this Regulation, namely the
progressive alignment of the beneficiary countries with
the standards and policies of
the European Union,
including where appropriate the acquis communautaire,
with a view to membership, cannot sufficiently be
achieved by the Member States and can therefore be
better achieved at Community level,
the Community
may adopt measures in accordance with the principle of
subsidiarity as set out in Article 5 of the EC Treaty. In
accordance with the principle of proportionality as set
out in that Article, this Regulation does not go beyond
what is necessary in order to achieve this objective.

(31) Given that Article 181a of the EC Treaty stipulates that
measures in the area of economic, financial and tech-
nical cooperation with third countries are to be comple-
mentary to those carried out by the Member States, the
Commission and the Member States are committed to
ensure coordination, coherence and complementarity of
their assistance,
in line with the established EU 2001
guidelines for strengthening operational coordination
between the Community and the Member States in the
field of external assistance, in particular through regular
consultations and frequent exchanges of relevant infor-
mation during the different phases of
the assistance
cycle.

(32) A financial reference amount, within the meaning of
point 38 of the Interinstitutional Agreement of 17 May
2006 between the European Parliament, the Council and
the Commission on budgetary discipline and sound
financial management (1), is included in this Regulation
for
the instrument, without
thereby affecting the powers of the budgetary authority
as they are defined by the EC Treaty.

the entire duration of

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

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Article 2

Scope

Assistance shall, where appropriate, be used in the benefi-
the

1.
ciary countries listed in Annexes I and II
following areas:

to support

(a) strengthening of democratic institutions, as well as the rule

of law, including its enforcement;

(b) the promotion and the protection of human rights and
fundamental freedoms and enhanced respect for minority
rights, the promotion of gender equality and non-discrimi-
nation;

(c) public administration reform, including the establishment
of a system enabling decentralisation of assistance manage-
ment to the beneficiary country in accordance with the
rules laid down in Regulation (EC, Euratom) No 1605/
2002;

(d) economic reform;

(e)

the development of civil society;

(f)

social inclusion;

(g) reconciliation, confidence-building measures and recon-

struction;

(h) regional and cross-border cooperation.

In the case of countries listed in Annex I, assistance shall

2.
also be used to support the following areas:

(a)

the adoption and implementation of the acquis communau-
taire;

(b) support for the policy development as well as preparation
for the implementation and management of the Communi-
ty's common agricultural and cohesion policies.

In the case of countries listed in Annex II, assistance shall

3.
also be used to support the following areas:

(a) progressive alignment with the acquis communautaire;

(b) social, economic and territorial development including, inter
alia, infrastructure and investment related activities, in par-
ticular in the areas of regional, human resources and rural
development.

3.
The Commission shall adopt rules for the implementation
of this Regulation in accordance with the procedure laid down
in Articles 4 and 7 of Decision 1999/468/EC. To that effect,
the Commission shall be assisted by the IPA Committee
referred to in Article 14(1).

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

Article 4

Political framework for assistance

Assistance under this Regulation shall be provided in accord-
ance with the general policy framework for pre-accession,
defined by the European and Accession Partnerships, and
taking due account of the Reports and the Strategy Paper
comprised in the annual Enlargement package of the Commis-
sion.

Article 5

Information on proposed indicative financial allocations

in Article 6,

1. With a view to supporting the strategic planning as
the Commission shall present
provided for
annually to the European Parliament and the Council its inten-
tions for the financial allocations to be proposed for the three
forthcoming years,
indicative
financial
taking into consideration the financial
framework, as well as the European Partnerships, Accession
Partnerships, Reports and Strategy Paper.

in the form of a multi-annual

framework,

This multi-annual

indicative financial

2.
framework shall
present the Commission's intentions for the allocation of funds,
broken down by component, country and multi-country action.
It shall be elaborated on the basis of a set of objective and
transparent criteria,
including needs assessment, absorption
capacity, respect of conditionalities and capacity of manage-
ment. Due account shall also be taken of any exceptional assis-
tance measures or
interim response programmes adopted
under a Regulation establishing the Stability Instrument.

Article 3

Components

The multi-annual indicative financial framework shall be
3.
included in the Commission's annual Enlargement package,
while maintaining a three-year planning horizon.

Assistance

1.
according to the following components:

shall be programmed and implemented

(a) Transition Assistance and Institution Building;

(b) Cross-Border Cooperation;

(c) Regional Development;

(d) Human Resources Development;

(e) Rural Development.

The Commission shall ensure coordination and coherence

2.
between assistance granted under the different components.

Article 6

Planning of assistance

1.
Assistance under this Regulation shall be provided on the
basis of multi-annual indicative planning documents established
by country in close consultation with the national authorities,
so as to support national strategies and ensure the engagement
and involvement of the country concerned. Civil society and
other stakeholders shall be associated where appropriate. Other
programmes of assistance will also be taken into account.

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2.
For countries listed in Annex I, assistance shall be based
in particular on the Accession Partnerships. Assistance shall
cover the priorities and overall strategy resulting from a regular
analysis of the situation in each country and on which prepara-
tions
for accession must concentrate. Assistance shall be
planned in view of the criteria defined by the Copenhagen
European Council of June 1993 and the progress made in the
adoption and implementation of the acquis communautaire, as
well as regional cooperation.

3.
For countries listed in Annex II, assistance shall be based
in particular on the European Partnerships. Assistance shall
cover the priorities and overall strategy resulting from a regular
analysis of the situation in each country and on which prepara-
tion for further integration into the European Union must
concentrate. Assistance shall be planned in view of the criteria
defined by the Copenhagen European Council of June 1993
and the progress made in implementing the stabilisation and
association agreements, including regional cooperation.

for

4. Multi-annual indicative planning documents shall present
indicative allocations
the main priorities within each
component, taking into account the indicative breakdown per
country and per component proposed in the multi-annual indi-
cative financial framework. They shall also set out, as appro-
priate, any funding provided for multi-country programmes
and horizontal initiatives.

5. Multi-annual
shall be
established following a three-year perspective. They shall be
reviewed annually.

indicative planning documents

6.
The Commission shall adopt the multi-annual indicative
planning documents and annual reviews thereof in accordance
with the procedure referred to in Article 14(2)(a).

Article 7

Programming

Assistance under

1.
this Regulation shall be provided
through multi-annual or annual programmes, established by
country and by component, or, as appropriate, by group of
countries or by theme in accordance with the priorities defined
in the multi-annual indicative planning documents.

the
Programmes shall specify the objectives pursued,
2.
fields of intervention, the expected results, the management
procedures and total amount of financing planned. They shall
contain a summary description of the type of operations to be
financed, an indication of the amounts allocated for each type
of operation and an indicative implementation timetable.
Where relevant, they shall include the results of any lessons
learned from previous assistance. Objectives shall be specific,
relevant and measurable and have time-bound benchmarks.

3.
The Commission shall adopt the multi-annual and annual
programmes, and any reviews thereof, in accordance with the
procedures provided for in Article 14(2).

TITLE II

RULES CONCERNING SPECIFIC COMPONENTS

Article 8

Transition Assistance and Institution Building Component

The Transition Assistance

and Institution Building
1.
Component shall assist the countries listed in Annexes I and II
in the attainment of the objectives set out in Article 2.

It may, inter alia, be used to finance capacity and institu-
2.
tion building as well as investment in as far as the latter is not
covered by Articles 9 to 12.

Assistance under this component may also support the
3.
participation of countries listed in Annexes I and II in Com-
munity programmes and agencies. In addition, assistance may
be provided for regional and horizontal programmes.

Article 9

Cross-Border Cooperation Component

1.
The Cross-Border Cooperation Component may support
the countries listed in Annexes I and II in cross-border, and,
where appropriate, transnational and interregional cooperation
among themselves and between them and the Member States.

Such cooperation shall have the objective of promoting
2.
fostering stability, security and
good neighbourly relations,
prosperity in the mutual
interest of all countries concerned,
and of encouraging their harmonious, balanced and sustainable
development.

3.
In the event of cross-border cooperation with Member
States, the rules governing the financial contributions of the
European Regional Development Fund and this Regulation
shall be the relevant provisions of Article 21 of Council Regu-
lation (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 (1).

4.
Cooperation will be coordinated with other Community
instruments for cross-border, trans-national and interregional
cooperation. In case of cross-border cooperation with Member
States, this component shall cover the regions on both sides of
the respective border or borders, either terrestrial or maritime.

(1) See page 25 of this Official Journal.

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5. Within the objectives of this article, this component may
inter alia be used to finance capacity and institution building as
well as investment.

TITLE III

Article 10

Regional Development Component

1.
The Regional Development Component shall support
countries listed in Annex I in policy development as well as
preparation for the implementation and management of the
Community's cohesion policy, in particular in their preparation
for the European Regional Development Fund and the Cohe-
sion Fund.

2.
It may in particular contribute towards the financing of
the type of actions provided for under Regulation (EC)
No 1080/2006 of the European Parliament and of the Council
of 5 July 2006 on the European Regional Development
Fund (1) and Council Regulation (EC) No 1084/2006 of 11 July
2006 establishing a Cohesion Fund (2).

Article 11

Human Resources Development Component

The Human Resources Development Component shall
1.
support countries listed in Annex I in policy development as
well as preparation for the implementation and management of
the Community's cohesion policy,
in their
preparation for the European Social Fund.

in particular

MANAGEMENT AND IMPLEMENTATION

Article 13

Management of assistance, reporting

1.
The Commission shall be responsible for the implementa-
tion of this Regulation, acting in accordance with the proce-
dures referred to in Article 14 and the implementing rules
referred to in Article 3(3).

the

2.
Actions under this Regulation shall be managed, moni-
tored, evaluated and reported on in accordance with Regulation
(EC, Euratom) No 1605/2002. Community financing can take
in particular the form of financing agreements between the
Commission and
country, procurement
beneficiary
contracts or grant agreements with national or international
public sector bodies or natural or legal persons responsible for
carrying out the action, or employment contracts. For cross-
border programmes with Member States according to Article 9
of this Regulation, implementation tasks may be delegated to
Member States,
in which case they shall be implemented
through shared management in accordance with the relevant
provisions of Regulation (EC, Euratom) No 1605/2002. In case
of shared management, the managing authority shall operate in
accordance with the principles and rules laid down in Regu-
lation (EC) No 1083/2006.

2.
It may in particular contribute towards the financing of
the type of actions provided for under Regulation (EC)
No 1081/2006 of the European Parliament and of the Council
of 5 July 2006 on the European Social Fund (3).

3.
The Commission may also receive and manage funds
from other donors, as assigned revenue in accordance with
Article 18 of Regulation (EC, Euratom) No 1605/2002,
in
order to implement actions with these donors.

Article 12

Rural Development Component

1.
The Rural Development Component shall support coun-
tries listed in Annex I in policy development as well as prepara-
tion for the implementation and management of the Communi-
ty's common agricultural policy. It shall in particular contribute
to the sustainable adaptation of the agricultural sector and rural
areas and to the candidate countries' preparation for the imple-
the
mentation of
acquis
Common Agricultural Policy and related policies.

communautaire

concerning

the

2.
It may in particular contribute towards the financing of
the type of actions provided for under Regulation (EC)
No 1698/2005 of 20 September 2005 on support for rural
development by the European Agricultural Fund for Rural
Development (EAFRD) (4).

(1) See page 1 of this Official Journal.
(2) See page 79 of this Official Journal.
(3) See page 12 of this Official Journal.
(4) OJ L 277, 21.10.2005, p. 1.

4.
In duly justified cases, the Commission may, in accord-
ance with Article 54 of Regulation (EC, Euratom) No 1605/
2002, decide to entrust tasks of public authority, and in par-
ticular budget implementation tasks, to the bodies listed in
Article 54(2) of
that Regulation. The bodies defined in
Article 54(2)(c) of that Regulation may be entrusted with tasks
they are of recognised international
of public authority if
standing, comply with internationally recognised systems of
management and control, and are supervised by a public
authority.

5.
Budgetary commitments for actions extending over more
than one financial year may be broken down over several years
into annual instalments.

6.
Each year the Commission shall send to the European
Parliament and the Council a report on the implementation of
Community assistance under this Regulation. The report shall
contain information on the actions financed during the year
and on the findings of monitoring work, and shall give an
assessment of the results achieved in the implementation of the
assistance.

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Article 14

Committees

Financing decisions not covered by a multi-annual or
3.
annual programme shall be adopted by the Commission,
in
accordance with the procedure provided for in paragraph 2(a)
of this Article.

1.
An IPA Committee shall be established, composed of the
representatives of the Member States and chaired by a represen-
tative of the Commission. It shall assist the Commission in par-
ticular in its task to ensure the coordination and coherence
between assistance granted under the different components as
required by Article 3(2).

The IPA Committee shall adopt its rules of procedure.

2. (a) The Commission shall adopt the multi-annual indicative
planning documents and annual reviews thereof referred
to in Article 6 of this Regulation, and the programmes
concerning assistance to be provided under Articles 8
and 9 of this Regulation, in accordance with the proce-
dure laid down in Articles 4 and 7 of Decision 1999/
468/EC. To that effect, the Commission shall be assisted
by the IPA Committee.

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

(b) The

the

shall

adopt

Commission

programmes
concerning assistance to be provided under Article 10
of this Regulation,
in accordance with the procedure
laid down in Articles 4 and 7 of Decision 1999/468/EC.
To that effect, the Commission shall be assisted by the
Coordination Committee of the Funds referred to in
Article 103 of Regulation (EC) No 1083/2006.

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

(c) The Commission shall, after having consulted the
Committee provided for in Article 147 of the EC Treaty,
the programmes concerning assistance to be
adopt
provided under Article 11 of this Regulation, in accord-
ance with the procedure laid down in Articles 4 and 7
of Decision 1999/468/EC. To that effect, the Commis-
sion shall be assisted by the Coordination Committee of
the Funds referred to in Article 103 of Regulation (EC)
No 1083/2006.

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

(d) The

the

shall

adopt

Commission

programmes
concerning assistance to be provided under Article 12
in accordance with the procedure
of this Regulation,
laid down in Articles 4 and 7 of Decision 1999/468/EC.
To that effect, the Commission shall be assisted by the
Rural Development Committee established by Article 90
of Regulation (EC) No 1698/2005.

The Commission shall adopt

4.
the amendments to the
multi-annual and annual programmes and the decisions
referred to in paragraph 3 where they do not comprise substan-
tial changes to the nature of the original programmes and
actions and, as regards the financial element, where they do
not exceed 20 % of
the
to a limit of
programme or action in question,
EUR 4 million. The Committee which gave an opinion on the
original programme or action shall be informed of all
amending decisions.

the total amount allocated for

subject

5.
An observer from the European Investment Bank shall
take part in the Committees' proceedings with regard to ques-
tions concerning the Bank.

Article 15

Types of assistance

1.
Assistance under this Regulation may, inter alia, finance
investments, procurement contracts, grants including interest
rate subsidies, special loans, loan guarantees and financial assis-
tance, budgetary support, and other specific forms of budgetary
aid, and the contribution to the capital of international financial
institutions or the regional development banks to the extent
that the financial risk of the Community is limited to the
amount of these funds. Budgetary support shall be exceptional,
with precise objectives and related benchmarks, and be contin-
gent on the administration of public finances of the beneficiary
country being sufficiently transparent, reliable and efficient, and
on well-defined sectoral or macroeconomic policies approved
in principle by international financing institutions having been
put in place. Disbursement of budgetary support shall be condi-
tional on satisfactory progress towards achieving the objectives
in terms of impact and results.

Assistance may be implemented through administrative
2.
cooperation measures
experts
involving
dispatched from Member States. Such projects shall be imple-
mented according to implementing rules laid down by the
Commission.

public-sector

3.
Assistance may also be used to cover the costs of the
Community's participation in international missions, initiatives
or organisations active in the interest of
the beneficiary
country, including administrative costs.

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

4.
Community financing shall in principle not be used for
paying taxes, duties or charges in beneficiary countries listed in
Annexes I and II.

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Article 16

Support measures

3.
All contracts resulting from the implementation of assis-
tance shall ensure the rights of the Commission and the Court
of Auditors as provided for in paragraph 2, both during and
after the implementation of contracts.

its objectives,

Assistance may also be used to cover the costs of actions linked
to preparation, follow-up, control, audit and evaluation directly
necessary for the administration of the programme and the
in particular studies, meetings,
attainment of
information and publicity, expenses
linked to informatics
networks aiming at information exchange, as well as any other
expenses for administrative and technical assistance of which
the Commission can avail itself for the administration of the
programme.
the administrative
support for the purposes of devolved programme management
in the Commission delegations in third countries.

It also covers the cost of

Article 17

Implementation of assistance

1.
shall
The Commission and the beneficiary countries
conclude framework agreements on the implementation of the
assistance.

2.
Subsidiary agreements concerning implementation of
assistance shall be concluded between the Commission and the
beneficiary country or its implementing authorities as required.

Article 18

Protection of the Community's financial interests

Any agreements

1.
resulting from this Regulation shall
contain provisions ensuring the protection of the Community's
financial interest, in particular with respect to fraud, corruption
and any other irregularities in accordance with Council Regu-
lation (EC, Euratom) No 2988/95 of 18 December 1995 on the
protection of the European Communities financial interests (1),
Council Regulation (EC, Euratom) No 2185/96 of 11 November
1996 concerning on-the-spot checks and inspections carried
out by the Commission in order to protect
the European
Communities' financial interests against fraud and other irregu-
larities (2) and Regulation (EC) No 1073/1999 of the European
Parliament and of the Council of 25 May 1999 concerning
investigations
European Anti-Fraud
by
Office (OLAF) (3).

conducted

the

2.
Agreements shall expressly provide for the Commission
and the Court of Auditors to have the power of audit, on the
basis of documents and on the spot, over all contractors and
subcontractors who have received Community funds. They
shall also expressly authorise the Commission to carry out on-
the-spot checks and inspections as laid down in Regulation (EC,
Euratom) No 2185/96.

(1) OJ L 312, 23.12.1995, p. 1.
(2) OJ L 292, 15.11.1996, p. 2.
(3) OJ L 136, 31.5.1999, p. 1.

Article 19

Rules of participation and origin, eligibility for grants

1.
Participation in the award of procurement or grant
contracts financed under this Regulation shall be open to all
natural persons who are nationals of and legal persons who are
established in a Member State, a country that is a beneficiary of
this Regulation, a country that is a beneficiary of the European
Neighbourhood and Partnership Instrument, or a Member State
of the European Economic Area.

2.
Participation in the award of procurement or grant
contracts financed under this Regulation shall also be open to
all natural persons who are nationals of and legal persons who
are established in any country other than those referred to in
paragraph 1, where reciprocal access to their external assistance
has been established.

Reciprocal access to the Community's external assistance shall
be established by means of a specific decision concerning a
given country or a given regional group of countries. Such a
decision shall be adopted by the Commission in accordance
with the procedure laid down in Article 14(2)(a) and shall be in
force for a minimum period of one year.

The granting of reciprocal access to the Community's external
assistance shall be based on a comparison between the Com-
munity and other donors and shall proceed at sectoral level or
entire country level, whether it be a donor or a recipient
country. The decision of granting this reciprocity to a donor
country shall be based on the transparency, consistency and
proportionality of the aid provided by that donor, including its
qualitative and quantitative nature. The beneficiary countries
shall be consulted in the process described in this paragraph.

3.
Participation in the award of procurement or grant
contracts financed under this Regulation shall be open to inter-
national organisations.

4.
Experts proposed in the context of procedures for the
award of contracts are not required to comply with the nation-
ality condition of paragraphs 1 and 2.

5.
All supplies and materials purchased under a contract
financed under this Regulation must originate from the Com-
munity or a country eligible according to paragraphs 1 or 2.
The term ‘origin’ for the purpose of this Regulation is defined
in the relevant Community legislation on rules of origin for
customs purposes.

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6.
The Commission may, in duly substantiated exceptional
cases, authorise the participation of natural persons who are
nationals of and legal persons who are established in other
countries than those referred to in paragraphs 1 and 2, or the
purchase of supplies and materials of different origin from that
set out in paragraph 5. Derogations may be justified on the
basis of
the unavailability of products and services in the
markets of the countries concerned, for reasons of extreme
urgency, or if the eligibility rules would make the realisation of
a project, a programme or an action impossible or exceedingly
difficult.

In conformity with Article 114 of Regulation (EC,

7.
Euratom) No 1605/2002 natural persons may receive grants.

8. Whenever Community funding covers an operation
implemented through an international organisation, participa-
tion in the appropriate contractual procedures shall be open to
all natural or legal persons who are eligible pursuant to para-
graphs 1 and 2 as well as to all natural or legal persons who
are eligible pursuant to the rules of that organisation, care
being taken to ensure that equal treatment is afforded to all
donors. The same rules shall apply in respect of supplies, mate-
rials and experts.

Whenever Community funding covers an operation co-financed
with a Member State, with a third country, subject to recipro-
city as defined in paragraph 2, or with a regional organisation,
participation in the appropriate contractual procedures shall be
open to all natural or legal persons who are eligible pursuant
to paragraphs 1, 2 and 3 as well as to all natural or legal
persons who are eligible under the rules of such Member State,
third country or regional organisation. The same rules shall
apply in respect of supplies, materials and experts.

Article 20

Coherence, compatibility and coordination

Programmes and projects financed under this Regulation
1.
shall be consistent with EU policies. They shall comply with
the agreements concluded by the Community and its Member
States with the beneficiary countries and respect commitments
under multilateral agreements to which they are parties.

2.
The Commission and the Member States shall ensure
coherence between Community assistance provided under this
Regulation and financial assistance provided by the Community
and the Member States through other internal and external
financial instruments and by the European Investment Bank.

3.
The Commission and the Member States shall ensure
coordination of their respective assistance programmes with
the aim of increasing effectiveness and efficiency in the delivery

of assistance in line with the established guidelines for strength-
ening operational coordination in the field of external assis-
tance, and for the harmonisation of policies and procedures.
Coordination shall involve regular consultations and frequent
exchanges of relevant information during the different phases
of the assistance cycle,
in particular at field level and shall
constitute a key step in the programming processes of the
Member States and the Community.

4.
The Commission will, in liaison with the Member States,
take the necessary steps to ensure proper coordination and
harmonisation and cooperation with multilateral and regional
organisations and entities, such as international financial insti-
tutions, United Nations agencies, funds and programmes, and
non-EU donors.

Article 21

Suspension of assistance

1.
Respect for the principles of democracy, the rule of law
and for human rights and minority rights and fundamental
freedoms is an essential element for the application of this
Regulation and the granting of assistance under it. Community
assistance for Albania, Bosnia and Herzegovina, Croatia, the
former Yugoslav Republic of Macedonia, Montenegro and
Serbia, including Kosovo, shall also be subject to the conditions
defined by the Council in its Conclusions of 29 April 1997, in
particular as regards the recipients' undertaking to carry out
democratic, economic and institutional reforms.

2. Where a beneficiary country fails to respect these princi-
ples or the commitments contained in the relevant Partnership
with the EU, or where progress toward fulfilment of the acces-
sion criteria is insufficient, the Council, acting by qualified
majority on a proposal from the Commission, may take appro-
priate steps with regard to any assistance granted under this
Regulation. The European Parliament shall be fully and immedi-
ately informed of any decisions taken in this context.

Article 22

Evaluation

The Commission shall regularly evaluate the results and effi-
ciency of policies and programmes and the effectiveness of
programming in order to ascertain whether the objectives have
been met and enable it to formulate recommendations with a
view to improving future operations. The Commission shall
send relevant evaluation reports to the Committees referred to
in Article 14 for discussion. These results shall feed back into
programme design and resource allocation.

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TITLE IV

TRANSITIONAL AND FINAL PROVISIONS

Article 23

Status of Beneficiary Country

If a beneficiary country listed in Annex II is granted candidate
status for accession to the EU, the Council, acting by qualified
majority on the basis of a proposal from the Commission will
transfer that country from Annex II to Annex I.

of accession of the Republic of Bulgaria and Romania and the
adjustments to the Treaties on which the European Union is
founded (1).

(EC) No 2760/98,

2.
Should specific measures be necessary to facilitate the
transition from the system established by Regulations (EEC)
No 3906/89,
(EC) No 1266/1999,
(EC) No 1267/1999, (EC) No 1268/1999, (EC) No 555/2000,
(EC) No 2666/2000 or (EC) No 2500/2001 to the one estab-
lished by this Regulation, such measures shall be adopted by
the Commission in accordance with the procedures referred to
in Article 14 of this Regulation.

Article 24

Cross-instrument provision

Article 26

Financial reference amount

In order to ensure consistency and efficiency of Community
assistance, the Commission can decide, in accordance with the
procedure referred to in Article 14(2)(a), that other third coun-
tries, territories and regions can benefit from actions under this
Regulation,
if the project or programme in question has a
regional, cross-border, transnational or global character. In so
doing, the Commission shall strive to avoid duplication with
regard to other instruments of external financial assistance.

Article 25

Transitional provisions

Regulations

(EEC) No 3906/89,

1.
(EC) No 2760/98,
(EC) No 1266/1999, (EC) No 1267/1999, (EC) No 1268/1999,
(EC) No 555/2000, (EC) No 2500/2001 and (EC) No 2112/
2005 shall be repealed with effect from 1 January 2007.

The financial reference amount for the implementation of this
Regulation for the period from 2007 to 2013 shall be EUR
11 468 million. The annual appropriations shall be authorised
by the budgetary authority within the limits of the financial
framework.

Article 27

Review

The Commission shall submit to the European Parliament and
the Council, by 31 December 2010, a report evaluating the
implementation of this Regulation in the first three years,
if
appropriate with a legislative proposal introducing the neces-
sary modifications to this Regulation.

Article 28

Entry into force

These Regulations, as well as Regulation (EC) No 2666/2000,
shall continue to apply for legal acts and commitments imple-
menting the budget years preceding 2007, and for the imple-
mentation of Article 31 of the Act concerning the conditions

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

It shall apply from 1 January 2007 to 31 December 2013.

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

Done at Brussels, 17 July 2006.

For the Council

The President

E. TUOMIOJA

(1) OJ L 157, 21.6.2005, p. 203.

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ANNEX I

— Croatia

— Turkey

— The former Yugoslav Republic of Macedonia.

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ANNEX II

— Albania

— Bosnia

— Montenegro

— Serbia, including Kosovo (1)

(1) As defined in UNSCR 1244.