Regulation (EC) No 1717/2006 of the European Parliament and of the Council of 15 November 2006 establishing an Instrument for Stability
Date: 2006-11-15
Institutions: Council of the European Union, European Parliament
Subjects: EU aid, EU relations, aid system, cooperation policy, development aid, foreign policy, stability programme

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I

(Acts whose publication is obligatory)

REGULATION (EC) No 1717/2006 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 15 November 2006

establishing an Instrument for Stability

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(1) and 181a thereof,

Having regard to the proposal from the Commission,

(4)

Acting in accordance with the procedure referred to in
Article 251 of the Treaty (1),

Whereas:

(1)

The Community is a major provider of economic, financial,
technical, humanitarian and macroeconomic assistance to
third countries. The promotion of stable conditions for
human and economic development and the promotion of
human rights, democracy and fundamental
freedoms
remains one of the prime objectives of European Union
(hereinafter referred to as ‘the EU’) external action to which
Community instruments for external assistance contribute.
The Council and the Representatives of the Governments of
the Member States meeting within the Council,
in their
November 2004 Conclusions on the effectiveness of EU
External Action, concluded that ‘peace, security and stability
as well as human rights, democracy and good governance,
are essential elements for sustainable economic growth and
poverty eradication’.

(2)

The EU Programme for the Prevention of Violent Conflicts,
endorsed by the European Council, underlines the EU's
‘political commitment to pursue conflict prevention as one
of the main objectives of the EU's external relations’ and
states that Community development cooperation instru-
ments can contribute to this goal and to the development
of the EU as a global player.

(3) Measures taken under this Regulation in pursuit of the
objectives of Articles 177 and 181a of
the Treaty
establishing the European Community (hereinafter referred
to as ‘the EC Treaty’) may be complementary to and should
be consistent with measures adopted by the EU in pursuit of
Common Foreign and Security Policy objectives within the
framework of Title V and measures adopted within the

framework of Title VI of the Treaty on European Union
(hereinafter referred to as ‘the EU Treaty’). The Council and
the Commission should cooperate to ensure such consis-
tency, each in accordance with their respective powers.

The European Consensus on Development, adopted by the
Council and the Representatives of the Governments of the
Member States meeting within the Council, the European
Parliament and the Commission on 22 November 2005
and welcomed by the European Council on 15 and
16 December 2005, states that the Community, within
the respective competences of its institutions, will develop a
comprehensive prevention approach to State fragility,
conflict, natural disasters and other types of crises, to
which goal this Regulation should contribute.

(5)

The European Council approved the European Security
Strategy on 12 December 2003.

(6)

(7)

(8)

The European Council Declaration on Combating Terror-
ism of 25 March 2004 called for counter-terrorist
objectives to be integrated into external assistance pro-
grammes. Moreover, the EU Millennium Strategy on the
prevention and control of organised crime, adopted by the
Council on 27 March 2000, calls for closer cooperation
with third countries.

Post-crisis stabilisation requires a sustained and flexible
engagement from the international community, in particu-
lar in the first years after a crisis, on the basis of integrated
transition strategies.

Implementation of programmes of assistance in times of
crisis and political instability requires specific measures to
ensure flexibility in decision-making and budget allocation,
as well as enhanced measures to ensure coherence with
bilateral aid and mechanisms for the pooling of donor
funds, including the delegation of public authority tasks
through indirect centralised management.

(1) Opinion of the European Parliament delivered on 6 July 2006 (not
Journal) and Council Decision of

yet published in the Official
7 November 2006.

(9)

The Resolutions of
the European Parliament and the
following the Commission
Conclusions of
Communications on the Linking of Relief, Rehabilitation

the Council

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and Development emphasise the need to ensure effective
bridging between operations
financed from different
Community financing instruments in the context of crisis.

(10)

(11)

In order to address the above issues in an effective and
timely manner specific financial resources and financing
instruments are required that can work in a manner
complementary to humanitarian aid and long-term cooper-
ation instruments. Humanitarian aid should continue to be
delivered under Council Regulation (EC) No 1257/96 of
20 June 1996 concerning humanitarian aid (1).

In addition to the measures agreed with partner countries
in the context of the policy framework for cooperation
established under the related Community instruments for
external assistance, the Community must be able to provide
assistance which addresses major global and transnational
issues having a potentially destabilising effect.

(12) The 2001 ‘Guidelines for strengthening operational coordi-
nation between the Community,
represented by the
Commission, and the Member States in the field of external
assistance’ emphasise the need for enhanced coordination
of EU external assistance.

(13) 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
of
the Interinstitutional Agreement of 17 May 2006
between the European Parliament, the Council and the
Commission on budgetary discipline and sound financial
management (2).

(14) 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

(15) This Regulation aims at covering the scope of and replacing
a number of existing Regulations concerning Community
external assistance; those Regulations should therefore be
repealed.

(16) Since

the objectives of

this Regulation cannot be
sufficiently achieved by the Member States, because of the
need for concerted multilateral
response in the areas
defined in this Regulation, and can therefore be better
achieved at Community level, taking account of the scale
and global effects of the measures provided for herein, 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 proportion-
ality, as set out in that Article, this Regulation does not go
beyond what
to achieve these
objectives,

is necessary in order

HAVE ADOPTED THIS REGULATION:

TITLE I

OBJECTIVES AND SCOPE

Article 1

Objectives

1. The Community shall undertake development cooperation
measures,
and technical
financial,
cooperation measures with third countries under the conditions
set out in this Regulation.

economic

as well

as

2.
In accordance with the objectives of such cooperation and
within its limits as laid down in the EC Treaty, the specific aims
of this Regulation shall be:

(a)

(b)

in a situation of crisis or emerging crisis, to contribute to
stability by providing an effective response to help preserve,
establish or re-establish the conditions essential to the
proper implementation of the Community's development
and cooperation policies;

in the context of stable conditions for the implementation
of Community cooperation policies in third countries, to
help build capacity both to address specific global and
transregional threats having a destabilising effect and to
ensure preparedness
to address pre- and post-crisis
situations.

3. Measures taken under this Regulation may be complemen-
tary to, and shall be consistent with, and without prejudice to,
measures adopted under Title V and Title VI of the EU Treaty.

Article 2

Complementarity of Community assistance

this Regulation shall be
1. Community assistance under
complementary to that provided for under related Community
instruments for external assistance. It shall be provided only to
the extent that an adequate and effective response cannot be
provided under those instruments.

2. The Commission shall ensure that measures adopted under
this Regulation are consistent with the Community's overall
strategic policy framework for the partner country, and in
particular with the objectives of the instruments referred to in
paragraph 1, as well as with other
relevant Community
measures.

(1) OJ L 163, 2.7.1996, p. 1. Regulation as amended by Regulation (EC)
No 1882/2003 of the European Parliament and of the Council (OJ
L 284, 31.10.2003, p. 1).
(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).

3.
In order to enhance the effectiveness and consistency of
Community and national assistance measures, the Commission
shall promote close coordination between its own activities and
those of the Member States, both at decision-making level and
the Member States and the
on the ground. To that end,
Commission shall operate a system for exchange of information.

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Article 3

Assistance in response to situations of crisis or emerging
crisis

1. Community technical and financial assistance in pursuit of
the specific aims set out in point (a) of Article 1(2) may be
undertaken in response to a situation of urgency, crisis or
emerging crisis, a situation posing a threat to democracy, law and
the protection of human rights and fundamental
order,
freedoms, or the security and safety of individuals, or a situation
threatening to escalate into armed conflict or severely to
destabilise the third country or countries concerned. Such
measures may also address situations where the Community has
invoked the essential elements clauses of international Agree-
ments in order to suspend, partially or totally, cooperation with
third countries.

2. Technical and financial assistance referred to in paragraph 1
shall cover the following areas:

support, through the provision of technical and logistical
assistance, for the efforts undertaken by international and
regional organisations,
in
promoting confidence-building, mediation, dialogue and
reconciliation;

state and non-state actors

support
for the establishment and the functioning of
interim administrations mandated in accordance with
international law;

support for the development of democratic, pluralistic state
institutions,
including measures to enhance the role of
women in such institutions, effective civilian administration
and related legal frameworks at national and local level, an
independent judiciary, good governance and law and order,
including non-military technical cooperation to strengthen
overall civilian control, and oversight over the security
law
system and measures to strengthen the capacity of
enforcement and judicial authorities involved in the fight
against the illicit trafficking of people, drugs, firearms and
explosive materials;

support for international criminal tribunals and ad hoc
national tribunals, truth and reconciliation commissions,
and mechanisms for the legal settlement of human rights
claims and the assertion and adjudication of property
rights, established in accordance with international human
rights and rule of law standards;

(a)

(b)

(c)

(d)

(e)

support for measures necessary to start the rehabilitation
and reconstruction of key infrastructure, housing, public
buildings and economic assets, as well as essential
productive capacity, and for the re-starting of economic
activity and the generation of employment and the
establishment of the minimum conditions necessary for
sustainable social development;

(n)

(o)

(f)

support for civilian measures related to the demobilisation
and reintegration of former combatants into civil society,

repatriation, as well as
and where appropriate their
measures to address the situation of child soldiers and
female combatants;

(g)

support
restructuring of the armed forces;

for measures to mitigate the social effects of

(h)

(i)

(j)

(k)

(l)

support for measures to address, within the framework of
Community cooperation policies and their objectives, the
socio-economic impact on the civilian population of anti-
personnel
landmines, unexploded ordnance or explosive
remnants of war; activities financed under this Regulation
shall cover risk education, victim assistance, mine detection
and clearance and,
in conjunction therewith, stockpile
destruction;

support for measures to address, within the framework of
Community cooperation policies and their objectives, the
impact on the civilian population of the illicit use of and
access to firearms; such support shall be limited to survey
activities, victim assistance, raising public awareness and the
development of legal and administrative expertise and good
practice.

conditions

Assistance shall be provided only to the extent necessary to
re-establish the
social and economic
development of the populations concerned, in a situation
of crisis or emerging crisis as referred to in paragraph 1. It
shall not include support for measures to combat the
proliferation of arms;

for

support for measures to ensure that the specific needs of
women and children in crisis and conflict situations,
including their exposure to gender-based violence, are
adequately met;

for the rehabilitation and reintegration of

the
support
victims of armed conflict, including measures to address
the specific needs of women and children;

support for measures to promote and defend respect for
human rights and fundamental freedoms, democracy and
the rule of law, and the related international instruments;

(m)

support for socio-economic measures to promote equitable
access to and transparent management of natural resources
in a situation of crisis or emerging crisis;

support for socio-economic measures to address the impact
of sudden population movements,
including measures
addressing the needs of host communities in a situation
of crisis or emerging crisis;

support for measures to support the development and
organisation of civil society and its participation in the
political process, including measures to enhance the role of
women in such processes and measures to promote
independent, pluralist and professional media;

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(p)

support for measures in response to natural or man-made
disasters and threats to public health in the absence of, or to
complement, Community humanitarian assistance.

In the exceptional and unforeseen situations referred to in
3.
paragraph 1, the Community may also provide technical and
financial assistance not expressly covered by the specific areas of
assistance set out in paragraph 2. Such assistance shall be limited
to Exceptional Assistance Measures as referred to in Article 6(2),
which:

— fall within the general scope and specific aims set out in

Article 1(a), and

— are limited in duration to the period laid down in Article 6

(2), and

With regard to assistance relating to the problem of
drugs, due attention shall be given to international
cooperation aimed at promoting best practices
relating to the reduction of demand, production and
harm;

(b)

for measures to address threats to inter-
support
national
transport, energy operations and critical
infrastructure, including passenger and freight traffic
and energy distribution.

Measures adopted in this area shall place particular
emphasis on trans-regional cooperation and the
implementation of
international standards in the
fields of risk awareness, vulnerability analysis, emer-
gency preparedness, alert and consequence manage-
ment;

— would normally be eligible under the other Community
instruments for external assistance, but which, in accord-
ance with Article 2, should be addressed through this
Regulation because of the need to respond rapidly to a
situation of crisis or emerging crisis.

(c)

contributing to ensuring an adequate response to
sudden major
such as
epidemics with a potential trans-national impact.

to public health,

threats

Article 4

Assistance in the context of stable conditions for
cooperation

The Community shall provide technical and financial assistance
in pursuit of the specific aims set out in Article 2(b) in the
following areas:

(1)

threats to law and order, to the security and safety of
individuals, to critical infrastructure and to public health;

assistance shall cover:

(a)

strengthening the capacity of law enforcement and
judicial and civil authorities involved in the fight
against terrorism and organised crime, including illicit
trafficking of people, drugs, firearms and explosive
materials and in the effective control of illegal trade
and transit.

Priority shall be given to trans-regional cooperation
involving third countries which have demonstrated a
clear political will to address these problems. Measures
in this area shall place particular emphasis on good
governance and shall be in accordance with inter-
in particular human rights law and
national
international humanitarian law.

law,

With regard to assistance to authorities involved in the
terrorism, priority shall be given to
fight against
supporting measures concerning the development
and strengthening of counter-terrorism legislation, the
implementation and practice of
law, of
financial
immigration law and the
customs
law and of
law
development of
enforcement.

international procedures for

Particular emphasis shall be placed on emergency-
planning, management of vaccine and pharmaceutical
international cooperation, early warning
stockpiles,
and alert systems;

(2)

risk mitigation and preparedness relating to chemical,
biological, radiological and nuclear materials or agents;

assistance shall cover:

(a)

(b)

(c)

(d)

the promotion of civilian research activities as an
alternative to defence-related research, and support for
the retraining and alternative employment of scientists
and engineers formerly employed in weapons-related
areas;

support
for measures to enhance safety practices
related to civilian facilities where sensitive chemical,
biological, radiological and nuclear materials or agents
are stored, or are handled in the context of civilian
research programmes;

framework of Community
support, within the
the
cooperation policies and their objectives,
infrastructure and relevant
establishment of civil
the dismantlement,
civilian studies necessary for
remediation or conversion of weapons-related facil-
ities and sites where these are declared as no longer
belonging to a defence programme;

for

strengthening the capacity of the competent civilian
authorities involved in the development and enforce-
ment of effective control of
trafficking in
chemical, biological, radiological and nuclear mater-
for their
ials or agents (including the equipment
including through the
production or delivery),

illicit

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installation of modern logistical evaluation and
control equipment;

Article 6

(e)

(f)

the development of the legal framework and institu-
tional capacities for the establishment and enforce-
ment of effective export controls on dual-use goods,
including regional cooperation measures;

the development of effective civilian disaster-prepared-
ness, emergency-planning, crisis response, and cap-
abilities for clean-up measures in relation to possible
major environmental incidents in this field;

as regards the measures covered by points (b) and (d),
particular emphasis shall be placed on assistance to those
regions or countries where stockpiles of materials or agents
referred to in points (b) and (d) still exist and where there is
a risk of proliferation of such materials or agents.

(3)

Pre- and post-crisis capacity building

Support for long-term measures aimed at building and
strengthening the capacity of international, regional and
sub-regional organisations, state and non-state actors in
relation to their efforts in:

(a)

promoting early warning, confidence-building, media-
tion and reconciliation, and addressing emerging
inter-community tensions;

(b)

improving post-conflict and post-disaster recovery.

risk/threat

information,

exchange of

Measures under this point shall include know-how transfer,
the
assessment,
research and analysis, early warning systems and training.
Measures may also include, where appropriate, financial
and technical assistance for the implementation of those
Recommendations made by the UN Peacebuilding Com-
mission falling within the objectives of Community
cooperation policy.

TITLE II

IMPLEMENTATION

Article 5

General framework for implementation

Community assistance under this Regulation shall be imple-
mented through the following measures:

(a)

Exceptional Assistance Measures and Interim Response
Programmes;

(b) Multi-country Strategy papers, Thematic Strategy Papers

and Multi-annual Indicative Programmes;

(c) Annual Action Programmes;

(d)

Special Measures.

Exceptional Assistance Measures and Interim Response
Programmes

1. Community assistance under Article 3 shall be carried out
through Exceptional Assistance Measures and through Interim
Response Programmes.

2. The Commission may adopt Exceptional Assistance Mea-
sures in a situation of crisis as referred to in Article 3(1), as well
as in exceptional and unforeseen situations as referred to in
Article 3(3), where the effectiveness of the measures is dependent
on rapid or flexible implementation. Such measures may have a
duration of up to 18 months.
Individual measures may be
extended in duration by a further six months in the case of
objective and unforeseen obstacles to their implementation,
provided that the financial amount of the measure does not
increase.

3. Where an Exceptional Assistance Measure is costing more
than EUR 20 000 000,
that measure shall be adopted in
accordance with the procedure referred to in Article 22(2).

4. The Commission may adopt Interim Response Programmes
with a view to establishing or re-establishing the essential
conditions necessary for the effective implementation of the
Community's external cooperation policies. Interim Response
Programmes shall build on Exceptional Assistance Measures.
They shall be adopted in accordance with the procedure referred
to in Article 22(2).

5. The Commission shall keep the Council regularly informed
about its planning of Community assistance under Article 3.
Before adopting or
renewing any Exceptional Assistance
Measures costing up to EUR 20 000 000, the Commission shall
inform the Council of their nature, objectives and the financial
amounts envisaged. It shall take account of the relevant policy
approach of the Council both in its planning and subsequent
implementation of such measures,
the
coherence of EU external action. The Commission shall likewise
substantive
inform the Council before making significant
changes to Exceptional Assistance Measures already adopted.

in the interests of

the Commission shall report

6. At as early a stage as possible, following the adoption of
Exceptional Assistance Measures, and in any case within seven
months of doing so,
to the
European Parliament and the Council by giving an overview of
the existing and planned Community response, including the
contribution to be made from other Community financing
instruments, the status of existing Country and Multi-Country
Strategy Papers, and the Community's role within the broader
international and multilateral response. This report shall also
for how long the Commission
indicate whether and,
intends to continue the Exceptional Assistance Measures.

if so,

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Article 7

performance and needs,
referred to in paragraph 7.

in accordance with the procedure

Multi-country Strategy Papers, Thematic Strategy Papers
and Multi-annual Indicative Programmes

1. Multi-country and Thematic Strategy Papers shall constitute
the general basis for the implementation of assistance under
Article 4.

2. Multi-country and Thematic Strategy Papers shall set out the
Community's strategy for the countries or themes concerned,
having regard to the needs of the countries concerned, the
the international situation and the
Community's priorities,
activities of the main partners.

3. Multi-country and Thematic Strategy Papers, and any
revisions or extensions thereof, shall be adopted in accordance
with the procedure referred to in Article 22(2). They shall cover
an initial period of no longer than the period of application of
this Regulation and shall be reviewed at the mid-point.

shall be

Strategy Papers

4.
consistent with, and avoid
duplication of, Country, Multi-country or Thematic Strategy
Papers adopted under other Community instruments for external
assistance. Strategy Papers shall, where appropriate, be based on
a dialogue with the partner country, countries or
region
concerned, including with civil society, so as to support national
development strategies and to ensure the participation and
involvement of the partner country, countries or region.
In
joint consultations shall be carried out between the
addition,
Commission, Member States, and other donors where appro-
priate, in order to ensure that the cooperation activities of the
Community are complementary to those of the Member States
and other donors. Other stakeholders may be associated where
appropriate.

Each Multi-country Strategy Paper shall, where appropriate,
5.
be accompanied by a Multi-annual
Indicative Programme
summarising the priority areas selected for Community finan-
cing, the specific objectives, the expected results and timeframe
of Community support and the indicative financial allocation,
overall and for each priority area. The financial allocations may
be given in the form of a range where necessary.

6. The Multi-annual Indicative Programmes shall determine the
financial allocations for each programme using transparent
criteria, based on the needs and performance of the partner
countries or regions concerned and taking into account the
particular difficulties faced by countries or regions in crisis or
conflict.

7. Multi-annual Indicative Programmes, and any revisions or
extensions thereof, shall be adopted in accordance with the
procedure referred to in Article 22(2). They shall be established,
where appropriate, in consultation with the partner countries or
regions concerned.

8. The financial amounts of Multi-annual
Indicative Pro-
grammes may be increased or decreased as a result of reviews,
situation,
taking

into account

country's

changes

in a

Article 8

Annual Action Programmes

1. Annual Action Programmes shall set out measures to be
adopted on the basis of the Multi-country and Thematic Strategy
Papers and Multi-annual Indicative Programmes referred to in
Article 7.

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

3. Annual Action Programmes and any revision or extension
thereof shall be adopted in accordance with the procedure
referred to in Article 22(2).

Article 9

Special Measures

1. Notwithstanding Articles 7 and 8, in the event of unforeseen
needs or circumstances, the Commission may adopt Special
Measures not provided for in the Multi-country and Thematic
Strategy Papers and Multi-annual Indicative Programmes referred
to in Article 7 or the Annual Action Programmes referred to in
Article 8.

the

activity,

Special Measures shall specify the objectives pursued, the
2.
areas of
the management
expected results,
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.

Special Measures costing more than EUR 5 000 000 shall be
3.
adopted in accordance with the procedure referred to in
Article 22(2).

inform the Committee set up
4. The Commission shall
pursuant to Article 22(1) within one month of adopting Special
Measures costing up to EUR 5 000 000.

TITLE III

BENEFICIARIES AND FORMS OF FINANCING

Article 10

Eligibility

1. The following shall be eligible for funding under
this
Regulation for the purposes of implementing the Exceptional
Assistance Measures and Interim Response Programmes referred

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to in Article 6, the Annual Action Programmes referred to in
Article 8 and the Special Measures referred to in Article 9:

Article 11

Types of measures

(a)

partner countries and regions and their institutions;

1. Community financing may take the following forms:

(b)

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

(a)

projects and programmes;

(c)

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

(d)

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

in so far as

international

jurisdiction,

(e)

European agencies;

(f)

the following entities and bodies of the Member States,
partner countries and regions and any other third country
in so far as they contribute to the objectives of
this
Regulation:

(i)

public and para-statal bodies,
administrations and consortia thereof;

local authorities or

(b)

sectoral or general budget support, where the partner
country's arrangements for managing public funds are
sufficiently transparent, reliable and effective, and where
proper sectoral or macro-economic policies have been put
in place by the partner country and approved by its main
donors, including international financial institutions where
applicable. Budgetary support may in general be one of
several
It shall be allocated with precise
objectives
and related benchmarks. Disbursement of
budgetary support shall be conditional on satisfactory
progress towards achieving the objectives in terms of
impact and results;

instruments.

(c)

in exceptional cases, sectoral and general import-support
programmes, which may take the form of:

(i)

sectoral programmes for imports in kind,

(ii)

sectoral
import programmes providing foreign cur-
rency to finance imports for the sector in question, or

(ii)

companies, firms and other private organisations and
businesses;

(iii)

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

(d)

(iv) non-state actors referred to in paragraph 2;

(v)

natural persons.

2. Non-state actors eligible for financial support under this
include: non-governmental organisations,
Regulation shall
local citizens'
organisations representing indigenous peoples,
groups and traders' associations, cooperatives,
trade unions,
organisations representing economic and social interests, local
organisations (including networks)
involved in decentralised
regional cooperation and integration, consumer organisations,
women's and youth organisations, teaching, cultural, research
and scientific organisations, universities, churches and religious
associations and communities, the media and any non-govern-
mental associations and private and public foundations likely to
contribute to development or the external dimension of internal
policies.

3. Other bodies or actors not listed in paragraphs 1 and 2 may
be financed when this is necessary to achieve the objectives of
this Regulation.

(iii) general

import programmes providing foreign cur-
imports, covering a wide

rency to finance general
range of products;

available

to financial

intermediaries

funds made
in
accordance with Article 20, with a view to providing loans
(to support investment and development of the private
form of
sector,
(in the
subordinated or conditional
loans) or other temporary
minority holdings in business capital, to the extent that the
financial risk of the Community is limited to these funds;

risk capital

example),

for

(e)

grants to fund measures;

(f)

grants to cover operating costs;

(g)

funding for twinning programmes between public institu-
tions, national public bodies or private-law entities with a
public-service mission of a Member State and those of a
partner country or region;

(h)

contributions to international funds,
managed by international or regional organisations;

in particular those

(i)

contributions to national funds set up by partner countries
and regions to attract joint financing from a number of
donors, or contributions to funds set up by one or more
donors for the purpose of the joint implementation of
operations;

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(j)

required for effective
resources
human and material
administration and supervision of projects and pro-
grammes by partner countries and regions.

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.

2. Community financing shall
paying taxes, duties or charges in beneficiary countries.

in principle not be used for

3. Activities covered by Regulation (EC) No 1257/96 and
eligible for funding thereunder may not be funded under this
Regulation.

Article 12

Support measures

1. Community financing may cover expenditure associated
follow-up, monitoring, auditing and
with the preparation,
evaluation activities directly necessary for the implementation
of
its objectives.
Community financing shall also cover expenditure on adminis-
trative support staff employed at Commission Delegations to
manage projects funded under this Regulation.

this Regulation and the achievement of

2.
Support may be financed outside the scope of Multi-annual
Indicative Programmes. The Commission shall adopt such
support measures in accordance with Article 9.

Article 13

Cofinancing

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

(a) Member States, and in particular their public and para-statal

agencies;

(b)

other donor countries and in particular their public and
para-statal agencies;

In the case of

joint cofinancing,

the Commission may
3.
receive and manage funds on behalf of the bodies referred to in
points (a),
(b) and (c) of paragraph 1 for the purpose of
implementing joint measures. In this case, the Commission shall
the joint measures centrally, either directly or
implement
indirectly, by delegating the task to Community agencies or
bodies set up by the Community. Such funds shall be dealt with
as assigned revenue in accordance with Article 18 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) .

Article 14

Management procedures

this Regulation shall be
1. The measures financed under
managed, monitored, evaluated and reported on in accordance
with Regulation (EC, Euratom) No 1605/2002.

2. The Commission may decide to entrust tasks of public
authority, and in particular budget implementation tasks, to
bodies referred to 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 public authority.

3.
In the case of decentralised management, the Commission
may decide to use the procurement or grant procedures of the
beneficiary country or region.

Article 15

Budget commitments

(c)

international and regional organisations, and in particular
international and regional financial institutions;

1. Budget commitments shall be made on the basis of decisions
taken by the Commission in accordance with Articles 6, 8, 9 and
12.

(d)

companies, firms, other private organisations and businesses,
and other non-state actors referred to in Article 10(2);

(e)

partner countries and regions in receipt of funding, and
other bodies eligible for funding as referred to in Article 10.

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 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

2. The legal forms for Community financing shall include (inter
alia):

— financing agreements,

— grant agreements,

— procurement contracts,

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

— employment contracts.

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Article 16

Protection of the financial interests of the Community

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

2. The agreements referred to in paragraph 1 shall expressly
entitle 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 Commu-
nity funds. They shall also expressly authorise the Commission to
carry out on-the-spot checks and inspections, as provided for in
Regulation (Euratom, EC) No 2185/96.

contracts

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

Article 17

Participation and rules of origin

1.
Participation in the award of procurement or grant contracts
financed under this Regulation shall be open to all natural or
legal persons from Member States.

2.
Participation in the award of procurement or grant contracts
financed under this Regulation shall be also open to all natural
and legal persons from:

— any country that is a beneficiary of the Instrument for Pre-

Accession Assistance (4),

— any non-EU Member State of the European Economic Area,

and

— any other

territory in cases where
reciprocal access to external assistance has been established.

third country or

3.
In the case of measures taken in any third country
considered a Least Developed Country according to the criteria
laid down by the OECD, participation in the award of
procurement or grant contracts shall be open on a global basis.

4.
In the case of Exceptional Assistance Measures and Interim
Response Programmes referred to in Article 6, participation in

(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) Council Regulation (EC) No 1085/2006 of 17 July 2006 establishing
(OJ L 210,

for Pre-Accession Assistance (IPA)

an Instrument
31.7.2006, p. 82).

the award of procurement or grant contracts shall be open on a
global basis.

5.
In the case of measures adopted in pursuit of the objectives
referred to in Article 4, participation in the award of
procurement or grant contracts shall be open, and rules of
origin shall extend, to any natural or legal person of a developing
country or of a country in transition, as defined by the OECD,
and to natural or legal persons of any other country eligible
under the relevant strategy.

6.
Participation in the award of procurement or grant contracts
financed under this Regulation shall be open to international
organisations.

7.
Experts proposed in the context of procedures for the award
of contracts need not comply with the nationality rules set out in
this Article.

8. All
financed under
Community or a country eligible under paragraphs 2 to 5.

supplies and materials purchased under contracts
this Regulation shall originate from the

Participation by natural and legal persons from third
9.
countries or territories with traditional economic,
trade or
geographical links to the partner country may be authorised on a
case-by-case basis. The Commission may, moreover,
in duly
substantiated cases authorise the participation of natural and
legal persons from other countries, or the use of supplies and
materials of different origin.

Article 18

Prefinancing

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

Article 19

Grants

In accordance with Article 114 of Regulation (EC, Euratom)
No 1605/2002 natural persons may receive grants.

Article 20

Funds made available to the European Investment Bank or
other financial intermediaries

The funds referred to in Article 11(1)(d) shall be managed by
financial intermediaries, the European Investment Bank (herein-
after referred to as ‘the EIB’) or any other bank or organisation
capable of managing them. The Commission shall adopt
implementing provisions for this Article, on a case-by-case basis
the intermediary
to cover risk-sharing, the remuneration of
entrusted with the task of implementation, the use and recovery

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of interest on the fund and the closure of the operation.

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

Article 21

Evaluation

The Commission shall
regularly evaluate the results and
efficiency 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
for discussion significant evaluation reports to the Committee set
up pursuant to Article 22(1). These results shall feed back into
programme design and resource allocation.

TITLE IV

FINAL PROVISIONS

Article 22

Committee procedure

1. The Commission shall be assisted by a Committee.

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

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

3. The Committee shall adopt its Rules of Procedure.

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

Article 23

Report

The Commission shall examine progress achieved in implement-
ing the measures undertaken pursuant to this Regulation and
shall submit to the European Parliament and the Council an
annual report on the implementation of the assistance. The
report shall also be addressed to the European Economic and
Social Committee and the Committee of the Regions. The report
shall contain information relating to the previous year on the
measures financed and information on the results of monitoring
and evaluation exercises and the implementation of budget
commitments and payments, broken down by country, region
and cooperation sector.

In the period 2007 to 2013:

(a)

(b)

no more than 7 percentage points of the financial envelope
shall be allocated to measures falling under Article 4(1);

no more than 15 percentage points of
the financial
envelope shall be allocated to measures falling under
Article 4(2);

(c)

no more than 5 percentage points of the financial envelope
shall be allocated to measures falling under Article 4(3).

Article 25

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 proposal introducing the modifications to the
Regulation.

Article 26

Repeal

1. As of 1 January 2007 the following Regulations are repealed:

— Regulation (EC) No 2130/2001 of the European Parliament
and of the Council of 29 October 2001 on operations to
aid uprooted people
in Asian and Latin American
developing countries (1),

— Council Regulation (EC) No 1725/2001 of 23 July 2001
concerning action against anti-personnel landmines in third
countries other than developing countries (2),

— Regulation (EC) No 1724/2001 of the European Parliament
and of the Council of 23 July 2001 concerning action
against anti-personnel
in developing coun-
landmines
tries (3),

— Council Regulation (EC) No 381/2001 of 26 February 2001

creating a rapid-reaction mechanism (4),

— Council Regulation (EC) No 1080/2000 of 22 May 2000
on support for the United Nations Interim Mission in
Kosovo (UNMIK) and the Office of the High Representative
in Bosnia and Herzegovina (OHR) (5), with the exception of
Article 1a of that Regulation,

— Council Regulation (EC) No 2046/97 of 13 October 1997
on north-south cooperation in the campaign against drugs
and drug addiction (6),

Article 24

Financial envelope

The financial envelope for implementation of this Regulation
over the period 2007 to 2013 is EUR 2 062 000 000. Annual

(1) OJ L 287, 31.10.2001, p. 3.
(2) OJ L 234, 1.9.2001, p. 6.
(3) OJ L 234, 1.9. 2001, p. 1.
(4) OJ L 57, 27.2. 2001, p. 5.
(5) OJ L 122, 24.5.2000, p. 27.
(6) OJ L 287, 21.10. 1997, p. 1.

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— Council Regulation (EC) No 2258/96 of 22 November
1996 on rehabilitation and reconstruction operations in
developing countries (1).

2. The repealed Regulations shall continue to apply for legal
acts and commitments implementing the budget years preceding
2007.

Article 27

Entry into force

This Regulation shall enter into force on the 20th day following
that of 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, 15 November 2006.

For the European Parliament
The President
J. BORRELL FONTELLES

For the Council
The President
P. LEHTOMÄKI

(1) OJ L 306, 28.11. 1996, p. 1.