Regulation (EC) No 1638/2006 of the European Parliament and of the Council of 24 October 2006 laying down general provisions establishing a European Neighbourhood and Partnership Instrument
Date: 2006-10-24
Institutions: Council of the European Union, European Parliament
Subjects: Belarus, Caucasus countries, EU aid, European neighbourhood policy, Jordan, Mediterranean third countries, Moldova, Russia, Syria, Ukraine, cross-border cooperation, economic cooperation, environmental cooperation, political cooperation, technical cooperation, trade cooperation

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I

(Acts whose publication is obligatory)

REGULATION (EC) No 1638/2006 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 24 October 2006

laying down general provisions establishing a European Neighbourhood and Partnership Instrument

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European Commu-
nity, and in particular Articles 179 and 181a thereof,

Having regard to the proposal from the Commission,

Acting in accordance with the procedure laid down in Article 251
of the Treaty (1),

(6)

Whereas:

(1) A new framework for planning and delivering assistance is
proposed in order to make the Community’s external
assistance more effective. This Regulation constitutes one of
the general instruments providing direct support for the
European Union’s external policies.

The Copenhagen European Council of 12 and 13 December
2002 confirmed that enlargement of the European Union
presents an important opportunity to take forward
relations with neighbouring countries based on shared
political and economic values, and that the European Union
remains determined to avoid new dividing lines in Europe
and to promote stability and prosperity within and beyond
the new borders of the European Union.

international agreements and international conventions to
which the Community, the Member States and the partner
countries are parties and that it be delivered taking into
account
law
commonly accepted by the parties.

the general principles of

international

In eastern Europe and the southern Caucasus, the Partner-
ship and Cooperation Agreements provide the basis for
contractual
the Euro-
Mediterranean Partnership (the Barcelona Process) provides
a regional framework for cooperation which is comple-
mented by a network of Association Agreements.

In the Mediterranean,

relations.

(7) Under

the European Neighbourhood Policy, a set of
priorities are defined together by the European Union and
the partner countries, to be incorporated in a series of
jointly agreed Action Plans, covering a number of key areas
for specific action, including political dialogue and reform,
trade and economic reform, equitable social and economic
development, justice and home affairs, energy, transport,
information society, environment, research and innovation,
the development of civil society and people-to-people
contacts. Progress towards meeting these priorities will
contribute to realising the full potential of the Partnership
and Cooperation Agreements and the Association Agree-
ments.

The Brussels European Council of 17 and 18 June 2004
reiterated the importance it attached to strengthening
cooperation with those neighbours, on the basis of
partnership and joint ownership and building on shared
values of democracy and respect for human rights.

(8)

The privileged relationship between the European Union
and its neighbours should build on commitments to
common values, including democracy, the rule of law, good
governance and respect
for human rights, and to the
principles of market economy, open, rule-based and fair
trade, sustainable development and poverty reduction.

In order to support the partner countries’ commitment to
common values and principles and their efforts in the
implementation of the action plans, the Community should
be in a position to provide assistance to those countries and
to support various forms of cooperation among them and
between them and the Member States with the aim of
developing a zone of
security and
prosperity involving a significant degree of economic
integration and political cooperation.

shared stability,

(5)

It
Regulation

is important
be

that Community assistance under this
the
provided

compliance with

in

(1) Opinion of

the European Parliament of 6 July 2006 (not yet
published in the Official Journal) and Council Decision of 17 October
2006.

(9)

Promotion of political, economic and social reforms across
the neighbourhood is an important objective of Commu-
nity assistance. In the Mediterranean this objective will be
further pursued within the Mediterranean strand of the

(2)

(3)

(4)

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Strategic Partnership with the Mediterranean and the
Middle East. The relevant elements of the European Union
strategy for Africa will be taken into account
in the
relations with the Mediterranean neighbours from North
Africa.

(10)

It is important that support to be provided to neighbouring
developing countries within the framework established by
the European Neighbourhood Policy should be coherent
with the objectives and principles of
the European
Community Development Policy, as outlined in the Joint
Statement entitled ‘The European Consensus on Develop-
ment’ (1) adopted on 20 December 2005 by the Council
and the Representatives of the Governments of the Member
States meeting within the Council, the European Parliament
and the Commission.

(11) The European Union and Russia have decided to develop
their specific strategic partnership through the creation of
four common spaces, and Community assistance will be
used to support the development of this partnership and to
promote cross-border cooperation at the border between
Russia and its European Union neighbours.

(12) The Northern Dimension provides a framework for
cooperation between the European Union, Russia, Norway
and Iceland and it is important that Community assistance
be also used to support activities contributing to the
implementation of such a framework. The new objectives
of this policy will be set out in a political declaration and a
policy framework document to be prepared on the basis of
the guidelines approved by the Northern Dimension
ministerial meeting of 21 November 2005.

(13) For Mediterranean partners, assistance and cooperation
should take place within the framework of
the Euro-
Mediterranean Partnership established by the Barcelona
Declaration of 28 November 1995 and affirmed at the 10th
anniversary Euro-Mediterranean Summit of 28 November
2005, and should take into account the agreement reached
in that context on establishing a free-trade area for goods by
2010 and beginning a process of asymmetric liberalisation.

(14)

It is important to foster cooperation both at the European
Union external border and among partner countries,
especially those among them that are geographically close
to each other.

(15)

In order to avoid the creation of new dividing lines, it is
particularly important
to remove obstacles to effective
cross-border cooperation along the external borders of the
European Union. Cross-border cooperation should con-
tribute to integrated and sustainable regional development
between neighbouring border regions and harmonious
territorial
integration across the Community and with
neighbouring countries. This aim can best be achieved by

(1) OJ C 46, 24.2.2006, p. 1.

combining external policy objectives with environmentally
sustainable economic and social cohesion.

(16)

to assist neighbouring partner countries

In order
in
achieving their objectives, and to promote cooperation
between them and Member States, it is desirable to establish
a single policy-driven instrument which will replace a
number of existing instruments, ensuring coherence and
simplifying assistance programming and management.

(17) This instrument should also support cross-border cooper-
ation between partner countries and the Member States
bringing substantial efficiency gains operating through a
single management mechanism and with a single set of
procedures. It should build on the experience acquired from
the implementation of the Neighbourhood Programmes in
the period 2004 to 2006 and operate on the basis of
principles such as multi-annual programming, partnership
and cofinancing.

(18)

that border

is important

It
regions which belong to
countries of the European Economic Area (EEA) and which
are currently taking part
in cross-border cooperation
involving Member States and partner countries may
continue to do so on the basis of their own resources.

(19) This Regulation establishes for the period 2007 to 2013 a
financial envelope which constitutes the prime reference
amount for the budgetary authority according to point 37
the Interinstitutional Agreement between the Eur-
of
opean Parliament, the Council and the Commission on
budgetary discipline and sound financial management (2).

(20) The measures necessary for the implementation of this
Regulation should be adopted in accordance with Council
Decision 1999/468/EC of 28 June 1999 laying down the
procedures
implementing powers
the exercise of
conferred on the Commission (3).

for

(21) The use of the management procedure should be applicable
when defining the implementing rules which will govern
the implementation of cross-border cooperation and when
adopting strategy papers, action programmes and special
measures not provided for in strategy papers whose value
exceeds the threshold of EUR 10 000 000.

(22) Since the objectives of this Regulation, namely to promote
enhanced cooperation and progressive economic integra-
tion between the European Union and neighbouring
countries, cannot be sufficiently achieved by the Member
States and can, by reason of the scale of the action, be
better achieved at Community level, the Community may
in accordance with the principle of
adopt measures,
subsidiarity as set out
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 those objectives.

in Article 5 of

the Treaty.

(2) OJ C 139, 14.6.2006, p. 1.
(3) OJ L 184, 17.7.1999, p. 23. Decision as amended by Decision 2006/

512/EC (OJ L 200, 22.7.2006, p. 11).

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(23) This Regulation makes it necessary to repeal Council
Regulations (EEC) No 1762/92 of 29 June 1992 on the
implementation of the Protocols on financial and technical
cooperation concluded by the Community with Mediter-
ranean non-member countries (1),
(EC) No 1734/94 of
11 July 1994 on financial and technical cooperation with
the West Bank and the Gaza Strip (2) and (EC) No 1488/96
of 23 July 1996 on financial and technical measures to
accompany (MEDA) the reform of economic and social
structures in the framework of
the Euro-Mediterranean
partnership (3). Equally, this Regulation will replace Council
Regulation (EC, Euratom) No 99/2000 of 29 December
1999 concerning the provision of assistance to the partner
States in eastern Europe and central Asia (4), which expires
on 31 December 2006,

HAVE ADOPTED THIS REGULATION:

TITLE I

OBJECTIVES AND PRINCIPLES

Article 1

Subject matter and scope

1. This Regulation establishes a Neighbourhood and Partner-
the
ship Instrument
development of an area of prosperity and good neighbourliness
involving the European Union, and the countries and territories
listed in the Annex (hereinafter partner countries).

to provide Community assistance for

2. Community assistance shall be used for the benefit of
partner countries. Community assistance may be used for the
common benefit of Member States and partner countries and
their regions, for the purpose of promoting cross-border and
trans-regional cooperation as defined in Article 6.

3. The European Union is founded on the values of liberty,
democracy, respect for human rights and fundamental freedoms
and the rule of law and seeks to promote commitment to these
values in partner countries through dialogue and cooperation.

Article 2

Scope of Community assistance

2. Community assistance shall be used to support measures
within the following areas of cooperation:

(a)

promoting political dialogue and reform;

(b)

(c)

and

legislative

regulatory

promoting
approximation
towards higher standards in all relevant areas and in
particular to encourage the progressive participation of
partner countries in the internal market and the intensifica-
tion of trade;

strengthening of national institutions and bodies respon-
sible for the elaboration and the effective implementation
of policies in areas covered in association agreements,
partnership and cooperation agreements, and other multi-
lateral agreements to which the Community and/or its
Member States and partner countries are parties, whose
purpose is the achievement of objectives as defined in this
Article;

(d)

promoting the rule of law and good governance, including
strengthening the effectiveness of public administration and
the impartiality and effectiveness of
the judiciary, and
supporting the fight against corruption and fraud;

(e)

promoting sustainable development in all aspects;

(f)

(g)

pursuing regional and local development efforts, in both
rural and urban areas, in order to reduce imbalances and
improve regional and local development capacity;

promoting environmental protection, nature conservation
and sustainable management of natural resources including
fresh water and marine resources;

(h)

supporting policies aimed at poverty reduction, to help
achieve the UN Millennium Development Goals;

1. Community assistance shall promote enhanced cooperation
and progressive economic integration between the European
Union and the partner countries and,
the
implementation of partnership and cooperation agreements,
association agreements or other existing and future agreements.
It shall also encourage partner countries’ efforts aimed at
promoting good governance and equitable social and economic
development.

in particular,

(i)

(j)

(1) OJ L 181, 1.7.1992, p. 1. Regulation as amended by Regulation (EC)

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

(2) OJ L 182, 16.7.1994, p. 4. Regulation as last amended by Regulation
(EC) No 2110/2005 of the European Parliament and of the Council
(OJ L 344, 27.12.2005, p. 1).

(3) OJ L 189, 30.7.1996, p. 1. Regulation as last amended by Regulation

(EC) No 2112/2005.

(4) OJ L 12, 18.1.2000, p. 1. Regulation as amended by Regulation (EC)

No 2112/2005.

supporting policies to promote social development, social
inclusion, gender equality, non-discrimination, employment
and social protection including protection of migrant
workers, social dialogues, and respect for trade union rights
and core labour standards, including on child labour;

supporting policies to promote health, education and
training, including not only measures to combat the major
communicable diseases and non-communicable diseases
and disorders, but also access to services and education for
good health, including reproductive and infant health for
girls and women;

(k)

promoting and protecting human rights and fundamental
freedoms, including women's rights and children’s rights;

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(l)

civil

supporting democratisation, inter alia, by enhancing the role
of
society organisations and promoting media
pluralism, as well as through electoral observation and
assistance;

(m)

fostering the development of civil society and of non-
governmental organisations;

(n)

(o)

promoting the development of a market
economy,
including measures to support the private sector and the
development of small and medium-sized enterprises, to
encourage investment and to promote global trade;

promoting cooperation in the sectors of energy, telecom-
munication and transport, including on interconnections,
networks and their operations, enhancing the security and
safety of international transport and energy operations and
promoting renewable energy sources, energy efficiency and
clean transport;

(y)

(z)

supporting cross-border cooperation through joint local
initiatives to promote sustainable economic, social and
environmental development in border regions and inte-
grated territorial development across the Community’s
external border;

promoting regional and sub-regional cooperation and
integration,
including, where appropriate, with countries
not eligible for Community assistance under this Regula-
tion;

(aa) providing support

including
in post-crisis
support to refugees and displaced persons, and assisting
in disaster preparedness;

situations,

(bb) encouraging communication and promoting exchange
among the partners on the measures and activities financed
under the programmes;

(p)

providing support for actions aimed at increasing food
safety for citizens,
in the sanitary and
in particular
phytosanitary domains;

(cc) addressing common thematic challenges in fields of mutual
concern and any other objectives consistent with the scope
of this Regulation.

(q)

ensuring efficient and secure border management;

(r)

supporting reform and strengthening capacity in the field
of justice and home affairs, including issues such as asylum,
migration and readmission, and the fight against, and
trafficking in human beings as well as
prevention of,
terrorism and organised crime,
including its financing,
money laundering and tax fraud;

(s)

supporting administrative cooperation to improve trans-
parency and the exchange of information in the area of
taxation in order to combat tax avoidance and evasion;

(t)

promoting participation in Community research and
innovation activities;

(u)

(v)

promoting cooperation between the Member States and
partner countries in higher education and mobility of
teachers, researchers and students;

including links with communities of

promoting multicultural dialogue, people-to-people con-
tacts,
immigrants
living in Member States, cooperation between civil societies,
cultural institutions and exchanges of young people;

(w)

supporting cooperation aimed at protecting historical and
cultural heritage and promoting its development potential,
including through tourism;

(x)

supporting participation of partner countries in Commu-
nity programmes and agencies;

Article 3

Policy framework

1. The partnership and cooperation agreements, the associa-
tion agreements and other existing or future agreements which
establish a relationship with partner countries, and the relevant
Commission communications and Council conclusions laying
down guidelines for European Union policy towards these
countries, shall provide an overall policy framework for the
programming of Community assistance under this Regulation.
Jointly agreed action plans or other equivalent documents shall
provide a key point of
setting Community
assistance priorities.

reference for

2. Where no agreements, as mentioned in paragraph 1,
between the European Union and partner countries exist,
Community assistance may be provided when it proves useful
to pursue European Union policy objectives, and shall be
programmed on the basis of such objectives.

Article 4

Complementarity, partnership and co financing

1. Community assistance under this Regulation shall normally
complement or contribute to corresponding national, regional or
local strategies and measures.

2. Community assistance under this Regulation shall normally
be established in partnership between the Commission and the
beneficiaries. The partnership shall
involve, as appropriate,
national, regional and local authorities, economic and social
partners, civil society and other relevant bodies.

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3. The beneficiary countries shall involve, as appropriate, the
relevant partners at the appropriate territorial level, in particular
at regional and local level, in the preparation, implementation
and monitoring of programmes and projects.

TITLE II

PROGRAMMING AND ALLOCATION OF FUNDS

Article 6

Type of programmes

4. Community assistance under this Regulation shall normally
be co-financed by the beneficiary countries through public funds,
contributions from the beneficiaries or other sources. Co-
financing requirements may be waived in duly justified cases and
when this is necessary to support the development of civil
society and non-state actors for measures aimed at promoting
human rights and fundamental
freedoms and supporting
democratisation.

1. Community assistance under
implemented through:

this Regulation shall be

(a)

country, multi-country and cross-border strategy papers
and multi-annual
indicative programmes referred to in
Article 7, covering:

Article 5

Coherence, compatibility and coordination

1.
Programmes and projects financed under this Regulation
shall be consistent with European Union policies. They shall
comply with the agreements concluded by the Community and
its Member States with the partner countries and respect
commitments under multilateral agreements and international
conventions to which they are parties, including commitments
on human rights, democracy and good governance.

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
(EIB).

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

(i)

(ii)

country or multi-country programmes, which deal
with assistance to one partner country or address
regional and sub-regional cooperation between two or
more partner countries, in which Member States may
participate;

cross-border cooperation programmes, which deal
with cooperation between one or more Member
States and one or more partner countries, taking place
in regions adjacent to their shared part of the external
border of the Community;

(b)

joint operational programmes for cross-border cooperation
referred to in Article 9, annual action programmes referred
to in Article 12 and special measures referred to in
Article 13.

trans-regional
2. Multi-country programmes may include
cooperation measures. For the purposes of
this Regulation,
trans-regional cooperation shall mean cooperation between
Member States and partner countries, addressing common
challenges, intended for their common benefit, and taking place
anywhere in the territory of the Member States and of partner
countries.

Article 7

Programming and allocation of funds

1.
For country or multi-country programmes, strategy papers
shall be adopted in accordance with the procedure referred to in
Article 26(2). Strategy papers shall reflect the policy framework
and the action plans referred to in Article 3 and be consistent
with the principles and modalities laid down in Articles 4 and 5.
Strategy papers shall be established for a period compatible with
the priorities set in the policy framework and shall contain multi-
annual indicative programmes including indicative multi-annual
financial allocations and priority objectives for each country or
region consistent with those listed in Article 2(2). They shall be
reviewed at mid-term or whenever necessary and may be revised
in accordance with the procedure referred to in Article 26(2).

4. The Commission shall, in liaison with the Member States,
take the necessary steps to ensure proper coordination and
cooperation with multilateral and regional organisations and
entities, such as international
institutions, United
Nations agencies, funds and programmes, and non-European
Union donors.

financial

2.
In establishing country or multi-country programmes, the
Commission shall determine the allocations for each pro-
gramme, using transparent and objective criteria and taking into
account the specific characteristics and needs of the country or
the region concerned, the level of ambition of the European

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Union's partnership with a given country, progress towards
implementing agreed objectives, including on governance and on
reform, and the capacity of managing and absorbing Community
assistance.

(c)

all coastal territorial units corresponding to NUTS level 2
or equivalent facing a sea basin common to Member States
and partner countries.

3.
For the sole purpose of cross-border cooperation, in order
to establish the list of joint operational programmes referred to
in Article 9(1), the indicative multi-annual allocations and the
territorial units eligible to participate in each programme, one or,
if necessary, more strategy papers shall be adopted in accordance
with the procedure referred to in Article 26(2). Such strategy
papers shall be drawn up taking into account the principles and
modalities laid down in Articles 4 and 5 and shall, in principle,
cover a period of up to seven years from 1 January 2007 to
31 December 2013.

4. The Commission shall determine the allocation of funds to
the cross-border cooperation programmes, taking into account
objective criteria, such as the population of the eligible areas and
other factors affecting the intensity of cooperation, including the
specific characteristics of the border areas and the capacity for
managing and absorbing Community assistance.

5. The European Regional Development Fund (ERDF) shall
contribute to cross-border cooperation programmes established
and implemented under the provisions of this Regulation. The
amount of the contribution from the ERDF for borders with
partner countries is set out in the relevant provisions of 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 (1).

6.
In the event of crises or threats to democracy, the rule of
law, human rights and fundamental freedoms, or of natural or
man-made disasters, an emergency procedure may be used to
conduct an ad hoc review of strategy papers. This review shall
ensure coherence between Community assistance provided
under this Regulation and assistance provided under other
Community financial
including Regulation (EC,
Euratom) (2) of the European Parliament and of … the Council of
establishing an Instrument for Stability.

instruments,

TITLE III

CROSS-BORDER COOPERATION

Article 8

Geographical eligibility

1. The cross-border cooperation programmes referred to in
Article 6(1)(a)(ii) may cover all of the following border regions:

(a)

all
territorial units corresponding to NUTS level 3 or
equivalent along the land borders between Member States
and partner countries;

(b)

territorial units corresponding to NUTS level 3 or

all
equivalent along sea crossings of significant importance;

(1) OJ L 210, 31.7.2006, p. 25.
(2) Not yet published in the Official Journal.

2.
In order to ensure the continuation of existing cooperation
and in other justified cases, territorial units adjoining those
referred to in paragraph 1 may be allowed to participate in cross-
border cooperation programmes under the conditions laid down
in the strategy papers referred to in Article 7(3).

3. When programmes are established pursuant to paragraph
(1)(b), the Commission may, in agreement with the partners,
propose that participation in cooperation be extended to the
whole NUTS level 2 territorial unit in whose area the NUTS level
3 territorial unit is located.

4. The list of sea crossings of significant importance shall be
defined by the Commission in the strategy papers referred to in
Article 7(3) on the basis of distance and other
relevant
geographical and economic criteria.

Article 9

Programming

1. Cross-border cooperation under this Regulation shall be
in the framework of multi-annual programmes
carried out
covering cooperation for a border or a group of borders and
comprising multi-annual measures which pursue a consistent set
of priorities and which may be implemented with the support of
joint operational pro-
(hereinafter
Community assistance
grammes). The joint operational programmes shall be based on
the strategy papers referred to in Article 7(3).

2.
Joint operational programmes for land borders and sea
crossings of significant importance shall be established for each
border at the appropriate territorial level and include eligible
territorial units belonging to one or more Member States and
one or more partner countries.

3.
Joint operational programmes for sea basins shall be
multilateral and include eligible territorial units facing a common
sea basin belonging to several participating countries, including
at least one Member State and one partner country, taking into
account the institutional systems and the principle of partner-
ship. They may include bilateral activities supporting cooperation
between one Member State and one partner country. These
programmes shall be closely coordinated with trans-national
cooperation programmes having a partially overlapping geo-
graphical coverage and having been established in the European
Union pursuant to Regulation (EC) No 1083/2006.

Joint operational programmes shall be established by the
4.
Member States
the
appropriate territorial level, in accordance with their institutional
system and taking into account the principle of partnership

concerned at

and partner

countries

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referred to in Article 4. They shall normally cover a period of
seven years running from 1 January 2007 to 31 December 2013.

(d)

the joint operational programme cannot be implemented
owing to problems arising in relations between participat-
ing countries,

5. Countries, other than the participating countries, which face
a common sea basin where a joint operational programme is
being established may be associated with that joint operational
programme and benefit from Community assistance under the
conditions determined in the implementing rules referred to in
Article 11.

6. Within one year of the approval of the strategy papers
referred to in Article 7(3), the participating countries shall jointly
submit proposals for joint operational programmes to the
Commission. The Commission shall adopt each joint operational
programme after assessing its consistency with this Regulation
and the implementing rules.

7.
Joint operational programmes may be revised at the initiative
of the participating countries, participating border regions or the
Commission to take into account changes in cooperation
priorities, socio-economic developments, the results observed
from implementation of the measures concerned and from the
monitoring and evaluation process, and the need to adjust the
amounts of aid available and reallocate resources.

Following the adoption of

8.
the joint operational pro-
grammes, the Commission shall conclude a financing agreement
with the partner countries in accordance with the relevant
provisions of 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). The financing
agreement shall include the legal provisions necessary for the
implementation of the joint operational programme and should
also be signed by the joint managing authority referred to in
Article 10.

Participating countries

9.
the
shall,
principle of partnership, jointly select those actions consistent
with the priorities and measures of
the joint operational
programme that will receive Community assistance.

taking into account

10.

In specific and duly justified cases, where:

the Commission, following consultations with the Member State
(s) concerned, shall take the necessary steps to allow the Member
State concerned to use the ERDF contribution to the programme
pursuant to Regulation (EC) No 1083/2006.

Article 10

Management of programmes

Joint operational programmes

1.
in principle, be
implemented through shared management by a joint managing
authority located in a Member State. The joint managing
authority may be assisted by a joint technical secretariat.

shall,

2. The participating countries may propose to the Commission
that the joint managing authority should be located in a partner
country, provided that the designated body is in a position to
apply in full the criteria laid down in the relevant provisions of
Regulation (EC, Euratom) No 1605/2002.

For

the purpose of

3.
this Regulation ‘joint managing
authority’ shall mean any public or private authority or body,
level,
including the state itself, at national, regional or local
designated jointly by the Member State or States and the partner
country or countries covered by a joint operational programme,
having the financial and administrative capacity to manage
Community assistance and having the legal capacity to conclude
the agreements necessary for the purpose of this Regulation.

4. The joint managing authority shall be responsible for
managing and implementing the joint operational programme in
accordance with the principle of sound technical and financial
management, and for ensuring the legality and regularity of its
operations. To this end,
in place appropriate
management, control and accounting systems and standards.

it shall put

a joint operational programme cannot be established owing
to problems arising in relations between participating
countries or between the European Union and a partner
country,

5. The management and control system of a joint operational
programme shall provide for proper separation of the manage-
ment, certification and audit functions, either through a proper
segregation of duties within the managing authority or through
the designation of separate bodies for certification and audit.

by 30 June 2010, at the latest, the participating countries
have not yet
submitted to the Commission a joint
operational programme,

the partner country does not sign the financing agreement
by the end of the year following the adoption of the
programme,

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

6.
In order to allow the joint operational programmes to
prepare adequately for implementation, after the adoption of the
joint operational programme and before the signature of the
the Commission may allow the joint
financing agreement,
managing authority to use part of the programme budget to start
financing programme activities
the incurring of
operational costs of the managing authority, technical assistance
and other preparatory actions. The detailed modalities of such a
preparatory phase shall be included in the implementing rules
referred to in Article 11.

such as

(a)

(b)

(c)

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Article 11

Implementing rules

Implementing rules laying down specific provisions for the
1.
implementation of this Title shall be adopted in accordance with
the procedure referred to in Article 26(2).

include
2. Matters covered by the implementing rules shall
issues such as the rate of cofinancing, preparation of
joint
operational programmes, the designation and functions of the
joint authorities, the role and function of the monitoring and
selection committees and of the joint secretariat, eligibility of
expenditure,
the preparatory phase,
technical and financial management of Community assistance,
financial control and audit, monitoring and evaluation, visibility
and information activities for potential beneficiaries.

joint project selection,

TITLE IV

IMPLEMENTATION

Article 12

Adoption of action programmes

1. Action programmes, drawn up on the basis of the strategy
papers referred to in Article 7(1), shall be adopted in accordance
with the procedure referred to in Article 26(2), normally on an
annual basis.

Exceptionally, for instance where an action programme has not
yet been adopted, the Commission may, on the basis of the
strategy papers and multi-annual indicative programmes referred
to in Article 7, adopt measures not provided for in an action
programme under the same rules and procedures as apply to
action programmes.

2. Action programmes shall specify the objectives pursued, the
fields of intervention, the expected results, the management
procedures and the total amount of financing planned. They shall
take into account the lessons learned from past implementation
of Community assistance. They shall contain a description of the
operations to be financed, an indication of the amounts allocated
for each operation and an indicative implementation timetable.
They shall
the type of performance
indicators that shall have to be monitored when implementing
the measures financed under the programmes.

include a definition of

Article 13

Adoption of special measures not provided for in the
strategy papers or multi-annual indicative programmes

1.
In the event of unforeseen and duly justified needs or
circumstances, the Commission shall adopt special measures not
provided for in the strategy papers or multi-annual indicative
programmes (hereinafter special measures).

Special measures may also be used to fund activities to ease the
transition from emergency aid to long-term development
activities, including activities intended to ensure that the public
is better prepared to deal with recurring crises.

2. Where the cost of such measures exceeds EUR 10 000 000,
them in accordance with the
the Commission shall adopt
procedure referred to in Article 26(2).

The procedure referred to in Article 26(2) need not be used for
amendments to special measures such as those making technical
adjustments, extending the implementation period, reallocating
appropriations within the forecast budget, or increasing the size
of the budget by less than 20 % of the initial budget, provided
these amendments do not affect the initial objectives set out in
the Commission decision.

the

activity,

Special measures shall specify the objectives pursued, the
3.
the management
expected results,
areas of
procedures used and the total amount of financing planned.
They shall contain a description of the operations to be financed,
an indication of the amounts allocated for each operation and an
indicative implementation timetable. They shall
include a
definition of the type of performance indicators that will have
to be monitored when implementing the special measures.

4. The Commission shall send special measures the value of
which does not exceed EUR 10 000 000 to the European
Parliament and the Member States for their information within
one month of adopting its decision.

Article 14

Eligibility

1. The following shall be eligible for funding under
Regulation for
grammes,
special measures:

this
implementing action pro-
joint cross-border cooperation programmes and

the purposes of

3.
For cross-border cooperation, the Commission shall adopt
joint programmes in accordance with the procedures referred to
in Article 9.

(a)

partner countries and regions and their institutions;

4. The Commission shall present action programmes and joint
cross-border cooperation programmes to the European Parlia-
ment and the Member States for their information within one
month of their adoption.

(b)

decentralised bodies in the partner countries, such as
regions, departments, provinces and municipalities;

(c)

joint bodies set up by the partner countries and regions and
the Community;

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(d)

including regional organisa-
international organisations,
tions, UN bodies, departments and missions, international
financial institutions and development banks, in so far as
they contribute to the objectives of this Regulation;

2. When essential to achieve the objectives of this Regulation,
Community assistance may be granted to bodies or actors which
are not explicitly referred to in this Article.

(e) Community institutions and bodies, but only for

the
purposes of implementing support measures of the type
referred to in Article 16;

(f)

European Union agencies;

(g)

the following entities and bodies of the Member States,
partner countries and regions and any other third country
complying with the rules on access to the Community's
external assistance referred to in Article 21, in so far as they
contribute to the objectives of this Regulation:

(i)

(ii)

public or parastatal bodies,
administrations and consortia thereof;

local authorities or

companies, firms and other private organisations and
businesses;

(iii)

financial institutions that grant, promote and finance
private investment in partner countries and regions;

(iv) non-state actors as defined in (h);

(v)

natural persons;

(h)

the following non-state actors:

(i)

non-governmental organisations;

(ii)

organisations
minorities;

representing national and/or ethnic

Article 15

Types of measures

1. Community assistance shall be used to finance programmes,
projects and any type of measure contributing to the objectives
of this Regulation.

2. Community assistance may also be used:

(a)

to finance technical assistance and targeted administrative
measures, including those cooperation measures involving
public-sector experts dispatched from the Member States
and their regional and local authorities involved in the
programme;

(b)

to finance investments and investment-related activities;

(c)

for contributions to the EIB or other financial intermedi-
aries, in accordance with Article 23, for loan financing,
equity investments, guarantee funds or investment funds;

(d)

for debt relief programmes in exceptional cases, under an
internationally agreed debt relief programme;

(e)

for sectoral or general budget support
the partner
country’s management of public spending is sufficiently
transparent, reliable and effective, and where it has put in
place properly formulated sectoral or macroeconomic
policies approved by its principal donors, including, where
relevant, the international financial institutions;

if

(iii)

local citizens’ groups and traders’ associations;

(f)

to provide interest-rate subsidies, in particular for environ-
mental loans;

(iv)

cooperatives, trade unions, organisations representing
economic and social interests;

(g)

to provide insurance against non-commercial risks;

(v)

local organisations (including networks) involved in
decentralised regional cooperation and integration;

(vi)

consumer organisations, women’s and youth organi-
sations,
research and scientific
organisations;

teaching, cultural

(vii) universities;

(viii) churches and religious associations and communities;

(h)

to contribute to a fund established by the Community, its
international and regional organisations,
Member States,
other donors or partner countries;

(i)

(j)

to contribute to the capital of
international
institutions or the regional development banks;

financial

to finance the costs necessary for the effective administra-
tion and supervision of projects and programmes by the
countries benefiting from Community assistance;

(ix)

the media;

(k)

to finance microprojects;

(x)

cross-border associations, non-governmental associa-
tions and independent foundations.

(l)

for food security measures.

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In principle, Community assistance shall not be used to

3.
finance taxes, customs duties and other fiscal charges.

Article 16

Support measures

1. Community financing may also cover expenditure associated
with the preparation,
follow-up, monitoring, auditing and
evaluation activities directly necessary for the implementation
of this Regulation and for the achievement of its objectives, e.g.
information, awareness-raising, publication
studies, meetings,
and training activities,
including training and educational
measures for partners enabling them to take part in the various
stages of the programme, expenditure associated with computer
information and any other
networks for
administrative or
the
Commission may incur for the management of the programme.
It shall also cover expenditure at Commission Delegations on the
administrative support needed to manage operations financed
under this Regulation.

technical assistance expenditure that

the exchange of

2. These support measures are not necessarily covered by
multi-annual programming and may therefore be financed
outside the scope of strategy papers and multi-annual indicative
programmes. However, they may also be financed under multi-
indicative programmes. The Commission shall adopt
annual
indicative
support measures not covered by multi-annual
programmes in accordance with Article 13.

Article 17

Co-financing

1. Measures financed under this Regulation shall be eligible for
cofinancing from the following, inter alia:

(a) Member States, their regional and local authorities and their

public and parastatal agencies;

(b)

(c)

EEA countries, Switzerland and other donor countries, and
in particular their public and parastatal agencies;

international organisations,
including regional organisa-
tions, and in particular international and regional financial
institutions;

(d)

companies, firms, other private organisations and busi-
nesses, and other non-state actors;

(e)

partner countries and regions in receipt of funding.

2.
In the case of parallel cofinancing, the project or programme
is split into a number of clearly identifiable sub-projects which
are each financed by the different partners providing cofinancing
in such a way that the end-use of the financing can always be
identified. In the case of joint cofinancing, the total cost of the
project or programme is shared between the partners providing
the cofinancing, and resources are pooled in such a way that it is
not possible to identify the source of funding for any given
activity undertaken as part of the project or programme.

In the case of

joint cofinancing,

the Commission may
3.
receive and manage funds on behalf of the bodies referred to in
paragraph 1(a), (b) and (c) for the purpose of implementing joint
measures. Such funds shall be treated as assigned revenue, in
accordance with Article 18 of Regulation (EC, Euratom)
No 1605/2002.

Article 18

Management procedures

1. The Commission shall
implement operations under this
Regulation in accordance with Regulation (EC, Euratom)
No 1605/2002.

implementation tasks,

2. The Commission may entrust tasks of public authority, and
to the bodies
in particular budget
indicated in Article 54(2)(c) of Regulation (EC, Euratom)
No 1605/2002 if they are of recognised international standing,
comply with internationally recognised systems of management
and control and are supervised by a public authority.

3. The Commission may conclude framework agreements with
partner countries which shall provide for all measures necessary
to ensure the effective implementation of Community assistance
and protection of the Community’s financial interests.

4.
In the case of decentralised management, the Commission
may decide to use the procurement or grant procedures of the
beneficiary partner country or region, provided that:

(a)

(b)

the procedures of the beneficiary partner country or region
satisfy the principles of transparency, proportionality, equal
treatment and non-discrimination and prevent any conflict
of interests;

the operations

the beneficiary partner country or region undertakes to
check regularly that
financed by the
Community budget have been properly implemented, to
take appropriate measures to prevent irregularities and
fraud, and,
if necessary, to take legal action to recover
unduly paid funds.

Article 19

Budget commitments

1. Budget commitments shall be made on the basis of decisions
taken by the Commission in accordance with Articles 9(6), 12(1),
13(1) and 16(2).

2. Budget commitments for measures extending over a number
of financial years may be split into annual instalments, spread
over a number of years.

3. Community financing may take one of the following legal
forms, inter alia: financing agreements, grant contracts, procure-
ment contracts, employment contracts.

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Article 20

Protecting the Community’s financial interests

to irregularities,

in particular with respect

1. Any agreements resulting from this Regulation shall contain
provisions ensuring the protection of the Community’s financial
interests,
fraud,
corruption and any other illegal activity,
in accordance with
Council Regulations (EC, Euratom) No 2988/95 of 18 December
1995 on the protection of the European Communities financial
interests (1), and (Euratom, EC) 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 Commu-
nities’ financial interests against fraud and other irregularities (2)
and Regulation (EC) No 1073/1999 of the European Parliament
and of the Council of 25 May 1999 concerning investigations
conducted by the European Anti-Fraud Office (OLAF) (3).

2. Agreements shall expressly entitle the Commission and the
Court of Auditors to perform audits, including document audits
or an on-the-spot audit of any contractor or subcontractor who
has
received Community funds. They shall also expressly
authorise the Commission to carry out on-the-spot checks and
in Regulation (Euratom, EC)
inspections, as provided for
No 2185/96.

3. All contracts resulting from the implementation of Com-
munity assistance shall ensure the rights of the Commission and
the Court of Auditors under paragraph 2 during and after the
performance of the contracts.

Article 21

Participation in tenders and contracts

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 established in, a
Member State of the Community, a country that is a beneficiary
of
is a beneficiary of an
Instrument
for Pre-Accession Assistance set up by Council
Regulation (EC) No 1085/2006 of 17 July 2006 establishing an
Instrument for Pre-Accession Assistance (IPA) (4) or a Member
State of the EEA.

this Regulation, a country that

2. The Commission may, in duly substantiated cases, authorise
the participation of natural persons who are nationals of, and
legal persons established in, a country having traditional
economic,
links with neighbouring
countries, and the use of supplies and materials of different
origin.

trade or geographical

3.
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, or legal persons established in, any
country other than those referred to in paragraph 1, whenever
reciprocal access to their external assistance has been established.
Reciprocal access shall be granted whenever a country grants
eligibility on equal terms to the Member States and to the
recipient country concerned.

(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.
(4) OJ L 210, 31.7.2006, p. 82.

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 referred to in Article 26(2) 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
Community and other donors and shall proceed at sectoral or
entire country level, whether it be a donor or a recipient country.
The decision to grant this reciprocity to a donor country shall be
based on the transparency, consistency and proportionality of
including its qualitative and
the aid provided by that donor,
quantitative nature. The beneficiary countries shall be consulted
in the process described in this paragraph.

4.
Participation in the award of procurement or grant contracts
financed under this Regulation shall be open to international
organisations.

5.
Experts proposed in the context of procedures for the award
of contracts need not comply with the nationality rules set out
above.

6. All
supplies and materials purchased under contracts
financed under this Regulation shall originate in the Community
or a country eligible under this Article. The term ‘origin’ for the
purpose of this Regulation is defined in the relevant Community
legislation on rules of origin for customs purposes.

7. The Commission may,
in duly substantiated exceptional
cases, authorise the participation of natural persons who are
nationals of, and legal persons established in, countries other
than those referred to in paragraphs 1, 2 and 3, or the purchase
of supplies and materials of different origin from that set out in
paragraph 6. 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 were to make the realisation of a project, a
programme or an action impossible or exceedingly difficult.

8. Whenever Community funding covers an operation imple-
mented through an international organisation, participation in
the appropriate contractual procedures shall be open to all
natural or legal persons who are eligible pursuant to para-
graphs 1, 2 and 3 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, materials and
experts.

Whenever Community funding covers an operation co-financed
with a Member State, with a third country, subject to reciprocity
as defined in paragraph 3, or with a regional organisation,

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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.

9. Where Community assistance under
this Regulation is
managed by a joint managing authority, as referred to in
Article 10, the procurement rules shall be those laid down in the
implementing rules referred to in Article 11.

10. Tenderers who have been awarded contracts under this
Regulation shall respect core labour standards as defined in the
relevant International Labour Organisation conventions.

Paragraphs 1 to 10 shall be without prejudice to the
11.
participation of categories of eligible organisations by nature or
by localisation in regard to the objectives of the action.

Article 22

Prefinancing

TITLE V

FINAL PROVISIONS

Article 25

Annual report

The Commission shall examine the progress made on imple-
menting the measures taken under this Regulation and shall
submit to the European Parliament and the Council an annual
report on the implementation of Community assistance. This
report shall also be submitted to the European Economic and
Social Committee and to the Committee of the Regions. It shall
contain information relating to the previous year on the
measures financed, the results of monitoring and evaluation
exercises, and the implementation of budget commitments and
payments broken down by country, region and cooperation
sector.

Article 26

Committee

1. The Commission shall be assisted by a committee.

Interest generated by prefinancing payments to beneficiaries shall
be deducted from the final payment.

2. Where reference is made to this paragraph, Articles 4 and 7
of Decision 1999/468/EC shall apply.

Article 23

The period laid down in Article 4(3) of Decision 1999/468/EC
shall be set at 30 days.

Funds made available to the EIB or other financial
intermediaries

3. The committee shall adopt its rules of procedure.

1. The funds referred to in Article 15(2)(c) shall be managed by
financial
intermediaries, by the EIB or any other bank or
organisation capable of managing them.

4. An observer from the EIB shall take part in the committee’s
proceedings with regard to questions concerning the EIB.

2. The Commission shall adopt implementing provisions for
paragraph 1 on a case-by-case basis to cover risk-sharing, the
remuneration of the intermediary responsible for implementa-
tion, the use and recovery of profits on funds, and the closure of
the operation.

In order

5.
to facilitate the dialogue with the European
Parliament, the Commission shall regularly inform the European
the committee proceedings and provide the
Parliament of
relevant documents
including agenda, draft measures and
summary records of the meetings in accordance with Article 7
(3) of Decision 1999/468/EC.

Article 24

Evaluation

1. The Commission shall regularly evaluate the results of
geographical and cross-border policies and programmes and of
sectoral policies 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.

2. The Commission shall send significant evaluation reports to
the committee referred to in Article 26 for discussion. These
reports and discussions shall feed back into programme design
and resource allocation.

Article 27

Participation by a third country not listed in the Annex

1. To ensure the coherence and effectiveness of Community
assistance, the Commission may decide, when adopting action
programmes of the type referred to in Article 12 or the special
measures referred to in Article 13, that countries, territories and
regions eligible for assistance under other Community external
assistance instruments and the European Development Fund are
eligible for measures under this Regulation where the project or
programme implemented is of a global, regional or cross-border
nature.

Provision may be made for

2.
possibility in the strategy papers referred to in Article 7.

this method of

financing

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3. The provisions of Article 14 concerning eligibility and the
provisions of Article 21 concerning participation in procurement
procedures shall be adapted to allow the countries, territories or
regions concerned to take part.

In the case of programmes financed under the provisions of
4.
different Community external assistance instruments, participa-
tion in procurement procedures may be open to all natural and
legal persons of
the different
instruments.

the countries eligible under

Article 28

Suspension of Community assistance

1. Without prejudice to the provisions on the suspension of aid
in partnership and cooperation agreements and association
agreements with partner countries and regions, where a partner
country fails to observe the principles referred to in Article 1, the
Council, acting by a qualified majority on a proposal from the
Commission, may take appropriate steps in respect of any
Community assistance granted to the partner country under this
Regulation.

2.
In such cases, Community assistance shall primarily be used
to support non-state actors for measures aimed at promoting
human rights and fundamental freedoms and supporting the
democratisation process in partner countries.

Article 29

Financial envelope

1. The financial envelope for implementation of this Regula-
tion over
EUR
11 181 000 000, broken down as follows:

the period 2007 to 2013 shall be

(a)

a minimum of 95 % of the financial envelope shall be
allocated to the country and multi-country programmes
referred to in Article 6(1)(a)(i);

(b)

up to 5 % of the financial envelope shall be allocated to the
cross-border
referred to in
Article 6(1)(a)(ii).

cooperation programmes

2. Annual appropriations shall be authorised by the budgetary
authority within the limits of the financial framework.

Article 30

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 with, if
introducing the necessary
appropriate, a legislative proposal
modifications to it, including to the financial breakdown referred
to in Article 29(1).

Article 31

Repeal

1. As from 1 January 2007, Regulations (EEC) No 1762/92,
(EC) No 1734/94 and (EC) No 1488/96 shall be repealed.

2. The repealed Regulations shall continue to apply for legal
acts and commitments of pre-2007 budget years.

Article 32

Entry into force

This Regulation shall enter into force 20 days after 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 Strasbourg, 24 October 2006.

For the European Parliament

The President

J. BORRELL FONTELLES

For the Council

The President

P. LEHTOMÄKI

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ANNEX

Partner countries referred to in Article 1

Algeria

Armenia

Azerbaijan

Belarus

Egypt

Georgia

Israel

Jordan

Lebanon

Libya

Moldova

Morocco

Palestinian Authority of the West Bank and Gaza Strip

Russian Federation

Syria

Tunisia

Ukraine