Proposal for a Council Decision on the position to be adopted by the Community within the ACP-EC Council of Ministers regarding a decision to reassign part of the reserve of the 9th European Development Fund (EDF) envelope for long-term development to the allocation for intra-ACP cooperation in the 9th EDF envelope for regional cooperation and integration
Date: 2007-04-25
Institutions: European Commission
Subjects: ACP countries, European Development Fund, development aid, regional cooperation, regional integration

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 25.4.2007 
COM(2007) 222 final 

Proposal for a 

COUNCIL DECISION 

on the position to be adopted by the Community within the ACP-EC Council of 
Ministers regarding a decision to reassign part of the reserve of the 9th European 
Development Fund (EDF) envelope for long-term development to the allocation for 
intra-ACP cooperation in the 9th EDF envelope for regional cooperation and integration 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

Annex  I  to  the  ACP-EC  Partnership  Agreement  signed  in  Cotonou  on  23  June  2000  and 
revised in Luxembourg on 25 June 2005 (hereinafter referred to as the ‘ACP-EC Agreement’) 
specifies that in the event of the funds provided for in any of the instruments of the ACP-EC 
Agreement  being  exhausted  before  the  expiry  of  the  Financial  Protocol,  the  joint  ACP-EC 
Council of Ministers must take appropriate measures. The date beyond which the funds of the 
Financial Protocol covered by the 9th European Development Fund (EDF) can no longer be 
committed  is  set  at  31  December  2007.  The  last  meeting  of  the  joint  ACP-EC  Council  of 
Ministers before this deadline will be held on 25 May 2007. 

Articles  5  and  11  of  Annex  IV  to  the  ACP-EC  Agreement  provide  for  the  Commission  to 
carry out an end-of term review (ETR) of cooperation with the ACP States and regions, which 
may lead to a revision of resource allocation. The conclusions of the ETR conducted in 2006 
under the 9th EDF were submitted to the EDF management committee on 23 January 2007 in 
accordance  with  Article  16  of  the  Internal  Agreement  between  Representatives  of  the 
Governments  of  the  Member  States,  meeting  within  the  Council,  on  the  financing  and 
administration  of  Community  Aid  under  the  Financial  Protocol  to  the  ACP-EC  Agreement 
funded  from  the  9th  EDF,  signed  on  18  September  2000.  The  meeting  endorsed  the  ETR 
conclusions.  

Given  the  resource  reallocations  resulting  from  the  ETR  and  the  new  needs  identified  for 
funding from the 9th EDF intra-ACP allocation in the envelope for regional cooperation and 
integration, the instrument for long-term development used to finance the national indicative 
programmes  will  have  excess  balances  while  the  instrument  used  to  finance  intra-ACP 
projects and programmes is in need of replenishment.  

It is therefore proposed that the Community adopt the position within the ACP-EC Council of 
Ministers  of  May  2007  that  all  remaining  balances  in  the  long-term  development  reserve 
should be systematically transferred to the intra-ACP allocation to be used as follows: 

–  €176.7 million withdrawn from the individual country envelopes for unforeseen needs to 
establish regional envelopes to cover humanitarian and emergency assistance where such 
assistance cannot be financed from the Community budget; 

–  €50 million to establish an intra-ACP fund to finance the FLEX mechanism, which aims at 
mitigating the adverse effects of instability in export earnings for the application year 2005 
in  2006.  In  the  past,  the  FLEX  mechanism  was  funded  from  the  individual  country 
envelopes for unforeseen needs (the "B" envelope); since these funds have been exhausted 
in several countries eligible for FLEX funding, it is proposed to consolidate the funding of 
FLEX at intra-ACP level; 

–  €10 million to establish a reserve to cover a regional project in the SADC region which has 
a high risk of not being appraised in time for the funds to be committed before the end of 
2007; if this project has not received a favourable opinion from the EDF Committee by the 
end  of  July  2007,  the  funds  will  be  transferred  to  the  intra-ACP  reserve  for  alternative 
purposes; 

–  an estimated €185 million as an intra-ACP envelope to be mobilised as follows: 

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•  €80  million  as  a  bridging  fund  for  the  African  Peace  Facility,  of  which  €45 
million  on  the  basis  of  the  available  intra-ACP  funds  before  its  replenishment 
referred to in Article 1 and €35 million after this replenishment; 

•  €5.5 million to contribute to the running costs of the ACP Secretariat for 2008 to 

cover transitional needs pending the entry into force of the 10th EDF; 

•  €2.5  million  to  reinforce  the  intra-ACP  technical  cooperation  facility  primarily 
used to cover technical assistance needs, especially for project preparation for the 
10th EDF; 

•  €35 million for FLEX financial support for the application year 2006; 

•  €4 million as an urgent carry-over of a rinderpest eradication programme in Africa 

(PACE); 

•  €38  million  as  an  additional  EDF  contribution  to  the  Global  Fund  against 

HIV/Aids, Tuberculosis and Malaria (GFATM) 

•  €20 million for a small prudential reserve to finance new and unexpected needs, 
including possible specific action on health, the environment or on migration and 
development in Africa. 

The amount of the intra-ACP envelope of € 185 million is based on existing balances at the 
end  of  2006  (€46  million)  and  an  estimate  of  decommitments  during  2007  on  projects  and 
programmes funded from the 9th EDF and from previous EDFs. This amount may be over- or 
underestimated. 

If  overestimated,  this  will  impact  on  the  FLEX  programme  for  the  application  year  2006 
and/or  the  €20  million  earmarked  for  new  and  unexpected  needs,  which  will  have  to  be 
reduced in order to compensate for the shortfall. 

If decommitments appear to have been underestimated or funds earmarked in the intra-ACP 
envelope  above  are  under-used,  any  additional  funds  will  be  used  as  follows,  in  decreasing 
order of priority: 

•  up to €20 million to further top up the African Peace Facility; 

•  up to €15 million to top up FLEX financial support for the application year 2006 
to  a  total  of  €50  million,  comparable  to  that  earmarked  for  the  application  year 
2005; 

•  any  further  additional  funds  will  be 

transferred 

to 

the  Partnership  for 

Infrastructure in Africa as an advance payment on 10th EDF commitments. 

The Commission therefore suggests that the Council adopts the attached decision. 

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Proposal for a 

COUNCIL DECISION 

on the position to be adopted by the Community within the ACP-EC Council of 
Ministers regarding a decision to reassign part of the reserve of the 9th European 
Development Fund (EDF) envelope for long-term development to the allocation for 
intra-ACP cooperation in the 9th EDF envelope for regional cooperation and integration 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having  regard  to  the  ACP-EC  Partnership  Agreement  signed  in  Cotonou  on  23  June  20001 
and  the  revised  ACP-EC  Partnership  Agreement  signed  in  Luxembourg  on  25  June  20052 
(hereinafter referred to as the 'ACP-EC Agreement'), 

Having regard to the Internal Agreement between the Representatives of the Governments of 
the  Member  States,  meeting  within  the  Council,  on  the  financing  and  administration  of 
Community  Aid  under  the  Financial  Protocol  to  the  ACP-EC  Agreement  funded  from  the 
ninth EDF signed on 18 September 2000 (hereinafter referred to as the 'Internal Agreement')3,  

Having regard to the proposal from the Commission, 

Whereas:  

(1) 

(2) 

(3) 

Article  15  of  the  ACP-EC  Agreement  establishes  an  ACP-EC  Council  of  Ministers 
with powers to take decisions in accordance with the Agreement, and paragraph 8 of 
Annex  I  to  the  ACP-EC  Agreement  authorises  it  to  take  appropriate  measures  if  the 
funds provided for in any of the instruments of the Agreement are exhausted. 

Articles 5 and 11 of Annex IV to the ACP-EC Agreement provide for the Commission 
to carry out an  end-of term  review  of  its  national  and  regional  programmes  with  the 
ACP  States  and  regions.  Following  the  completion  of  the  end-of-term  review,  the 
Commission  may,  on  behalf  of  the  Community,  revise  the  resource  allocation  in  the 
light of the current needs and performance of the ACP States or regions concerned. 

Article 12(2) of Annex IV to the ACP-EC Agreement provides that, in order to take 
account  of  new  needs  for  increasing  the  impact  of  intra-ACP  activities,  the 
Commission may increase the allocation for intra-ACP cooperation. 

1 
2 
3 

OJ L 317, 15.12.2000, p.3. 
OJ L 287, 28.10.2002, p.4. 
OJ L 317, 15.12.2000, p.355. 

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(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

Decision No 2005/446/EC of 30 May 2005 of the Representatives of the Governments 
of the Member States, meeting within the Council, sets 31 December 2007 as the date 
beyond which the funds of the ninth European Development Fund (hereinafter referred 
to as the 'EDF') can no longer be committed4. 

In the context of the 9th EDF end-of-term review, forecasts have been made about the 
decommitments  to  be  made  before  the  end  of  2007  from  previous  EDFs  and  about 
their reallocation.  

Based on the conclusions of the end-of-term review, the forecast decommitments and 
their  proposed  reallocation,  an  estimate  has  been  made  of  the  funds  uncommitted  or 
becoming available before the end of 2007 in the long-term development reserve and 
the  intra-ACP  reserve.  An  estimate  has  also  been  made  of  the  new  needs  for  which 
projects and programmes can be prepared and committed before the end of 2007 and 
for which provision must be made in the long-term development reserve and the intra-
ACP reserve. The EDF Committee has been consulted and has expressed a favourable 
opinion on the conclusions of the end-of-term review. 

The B-envelopes  for unforeseen  needs,  for many countries, are exhausted or may be 
insufficient to be able to respond to possible humanitarian and emergency needs under 
Articles  72  and  73  of  the  ACP-EC  Partnership  Agreement  or  to  mitigate  adverse 
effects  of  instability  in  export  earnings  under  Article  68  of  the  ACP-EC  Partnership 
Agreement (FLEX); for other countries, the B-envelopes remain unused. 

It is therefore proposed to transfer all the remaining uncommitted balances of the B-
envelopes to the intra-ACP reserve, to establish on the basis of those transferred funds 
five new, regionalised B-envelopes consolidating, pro rata, the funds transferred from 
the B-envelopes of the countries of each respective region, and an intra-ACP reserve 
for  emergency  assistance  under  Article  72(3)(a)  and  (b)  of  the  ACP-EC  Partnership 
Agreement  and  to  establish  all-ACP  envelopes  for  FLEX  2006  and  FLEX  2007 
(application years 2005 and 2006). 

The funds of the 9th EDF envelope available for regional cooperation and integration 
are currently insufficient for the planned intra-ACP-funded activities and for setting up 
the  intra-ACP  FLEX  funds,  while  the  estimated  balances  in  the  long-term 
development reserve exceed expected commitments. 

(10)  The Community's position within the ACP-EC Council of Ministers should therefore 
be established with a view to adopting a decision to reassign part of the reserve of the 
9th  EDF  envelope  for  long-term  development  to  the  allocation  for  intra-ACP 
cooperation in the envelope for regional cooperation and integration, 

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OJ L 156, 18.6.2005, p.19. 

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HAS DECIDED AS FOLLOWS: 

Article 1 

The Community position within the ACP-EC Council of Ministers on the use of the reserve of 
the long-term development envelope of the 9th European Development Fund shall be based 
on the draft decision of the ACP-EC Council of Ministers set out in the Annex. 

Minor  changes  may  be  made  to  this  draft  decision  without  a  new  Council Decision  being 
necessary. 

Done at Brussels,  

For the Council 
The President 

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ANNEX 

Draft 

DECISION OF THE ACP-EC COUNCIL OF MINISTERS 

on reassigning part of the reserve of the long-term development envelope of the 9th 
European Development Fund to the allocation for intra-ACP cooperation in the 9th 
EDF envelope for regional cooperation and integration 

THE ACP-EC COUNCIL OF MINISTERS, 

Having regard to the Partnership Agreement between the members of the African, Caribbean 
and Pacific Group of States (hereinafter referred to as the "ACP States") of the one part, and 
the  European  Community  and  its  Member  States,  of  the  other  part,  signed  in  Cotonou  on 
23 June 20005 and  revised  in  Luxembourg on 25  June 20056 (hereinafter referred to as "the 
ACP-EC Partnership Agreement"), and in particular paragraph 8 of Annex I thereto, 

Whereas:  

(1) 

(2) 

(3) 

(4) 

Following  the  completion  of  the  9th  EDF  end-of-term  reviews  in  accordance  with 
Articles  5  and  11  of  Annex  IV  of  the  ACP-EC  Partnership  Agreement,  the  resource 
allocations should be revised in the light of current needs and performance. 

The  funds  reserved  for  the  financing  of  support  for  regional  cooperation  and 
integration and the expected decommitments transferred to this reserve before the end 
of  2007  are  insufficient  to  meet  new  needs  for  increasing  the  impact  of  intra-ACP 
activities. 

Additional  funds  should  be  allocated  to  set  up  an  intra-ACP  funding  mechanism  for 
FLEX  for  each  of  the  years  2006  and  2007  (application  years  2005  and  2006 
respectively),  thereby  ensuring  minimal  support  to  those  countries  subject  to  the 
adverse  effects  of  instability  in  export  earnings  regardless  of  the  level  of  the 
uncommitted balances under their national B-envelopes. 

The uncommitted balances of the national B-envelopes may not cover expected needs 
and  shall  be  transferred  to  the  intra-ACP  reserve  at  the  date  of  adoption  of  this 
decision,  to  create  five  regionalised  B-envelopes  to  finance  future  humanitarian  and 
emergency  assistance  in  each  of  these  regions,  based  on  regional  solidarity,  and  an 
intra-ACP reserve for emergency assistance under Article 72(3)(a) and (b) of the ACP-
EC Partnership Agreement in exceptional circumstances where such assistance cannot 
be financed from the Community budget. 

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6 

OJ L 317, 15.12.2000, p.3. 
OJ L 287, 28.10.2005, p.4. 

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(5) 

(6) 

(7) 

(8) 

(9) 

The regionalised B-envelope for Eastern and Southern Africa and the Indian Ocean is 
a net amount after the deduction of €20 million to compensate for the ad hoc increase 
in  the  B-envelope  of  Sudan  funded  out  of  the  long-term  development  reserve;  no 
regionalised  B-envelope  is  being  set  up  for  the  Pacific  as  the  balances  of  the  B-
envelopes  have  already  been  used  to  a  large  extent  for  a  regional  natural  disaster 
mitigation programme. 

Additional  resources  should  be  allocated  to  replenish  the  Africa  Peace  Facility  over 
the year 2007, including support for the AMIS intervention in Sudan. 

Additional  resources  should  be  allocated  to  finance  part  of  the  running  costs  of  the 
ACP Secretariat for the year 2008 to bridge the period until the entry into force of the 
10th EDF. 

Additional  resources  should  be  allocated  to  reinforce  the  intra-ACP  technical 
cooperation  facility,  which  is  primarily  used  to  cover  technical  assistance  needs, 
especially for project preparation. 

An  additional  contribution  to  the  Global  Fund  against  HIV/Aids,  Tuberculosis  and 
Malaria (GFATM) is requested. 

(10)  A small prudential reserve must be established to be able to meet new and unexpected 

intra-ACP needs in the period to 31 December 2007. 

(11)  Funds  under  the  9th  EDF,  including  expected  decommitments,  can  no  longer  be 
committed  beyond  31  December  2007  and  a  mechanism  has  to  be  found  to  commit 
available balances before that date in an efficient and effective way in support of the 
overall objectives of the ACP-EC Partnership Agreement, 

HAS DECIDED AS FOLLOWS: 

Article 1 – Replenishment of the intra-ACP reserve in the envelope for regional cooperation 
and integration 

1. 

2. 

All  funds  available  in  the  long-term  development  reserve  on  31  March  2007  and 
adjusted for the results of the end of term decisions which had not yet been processed 
in the accounts at that date, with the exception of the funds to support the Centre for 
the Development of Enterprise (CDE) and the Technical Centre for Agricultural and 
Rural  Cooperation  (CTA)  budgets  for  2008  (€32m),  the  funds  for  “high  risk 
programmes”  in  countries  with  a  signed  country  strategy  paper  (€72.4m  as  of 
1.3.2007),  the  funds  for  political  priorities  in  countries  without  a  signed  country 
strategy  paper  (€30.2m  as  of  1.3.2007)  and  the  funds  for  the  Somalia  special 
assistance programme (€36.1m), shall be transferred to the intra-ACP reserve in the 
envelope for regional cooperation and integration. 

All funds set aside under the reserve to support the CDE and CTA budgets for 2008 
to fund “high risk programmes” in countries with a signed country strategy paper and 
to  fund  political  priorities  in  countries  without  a  signed  country  strategy  paper  as 
referred to in paragraph (1) that have not been committed by 31 October 2007 shall 
be transferred to the intra-ACP reserve in the envelope for regional cooperation and 
integration. 

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3. 

4. 

All decommitments from the 9th EDF and previous EDFs initiated in the accounting 
system of the Commission as from 1 April until 31 December 2007 which accrue to 
the  long-term  development  reserve  shall  be  transferred  to  the  intra-ACP  reserve  in 
the envelope for regional cooperation and integration. 

All remaining funds under the national indicative programmes that become available 
under the long-term development reserve between 1 August and 31 December 2007 
shall be transferred to the intra-ACP reserve in the envelope for regional cooperation 
and integration. 

Article 2 – Allocation of the intra-ACP funds 

1. 

The  funds  available  in  the  intra-ACP  reserve  shall  be  used  for  the  following 
purposes: 

(a) 

setting up: 

(i) 

(ii) 

the  ACP-EC  Partnership  Agreement 

one  intra-ACP  reserve  for  emergency  assistance  under  Article  72(3)(a) 
and  (b)  of 
in  exceptional 
circumstances  where  such  assistance  cannot  be  financed  from  the 
Community  budget;  this  envelope  amounts  to  €26 741 326  and  is 
constituted  by  taking  15%  of  the  amounts  of  uncommitted  balances 
remaining  in  the  B-envelopes  of  the  constituent  countries  of  those 
regions  at  the  date  the  end-of-term  reallocation  decisions  entered  into 
force; 

five regionalised B-envelopes amounting to €17 511 615 for the Southern 
African  region,  €48 920 391  for  the  region  of  Eastern  and  Southern 
Africa  and  the  Indian  Ocean,  €31 945 340  for  the  West  African  region, 
€16 139 355  for  the  Central  African  region  and  €35 422 478  for  the 
Caribbean region, based on 85% of the amounts of uncommitted balances 
remaining  in  the  B-envelopes  of  the  constituent  countries  of  those 
regions  at  the  date  the  end-of-term  reallocation  decisions  entered  into 
force; 

the  regionalised  B-envelopes  shall  be  mobilised  for  contributions 
to 
internationally agreed debt relief initiatives as provided for in Article 3(2)(b) of 
Annex  IV  to  the  ACP-EC  Partnership  Agreement  and  for  humanitarian  and 
emergency  assistance  in  accordance  to  Articles  72  and  73  of  the  ACP-EC 
Partnership  Agreement  on  the  basis  of  regional  solidarity  in  exceptional 
circumstances where such assistance cannot be financed from the Community 
budget; 

(b) 

setting up an intra-ACP FLEX programme of €50 million for 2006 (application 
year 2005) in order to ensure minimal support to those countries subject to the 
adverse  effects  of  instability  in  export  earnings  regardless  of  the  level  of  the 
uncommitted balances under their national B-envelopes before the end-of-term 
review reallocation decisions entered into force; 

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(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

replenishing the African Peace Facility for an amount of up to €80 million as a 
further EDF contribution to bridge the financial gap until the entry into force of 
the  10th  EDF,  for  various  peace  support,  training  and  capacity-building 
activities, including support for AMIS in Sudan, of which €45 million on the 
basis  of  the  available  intra-ACP  funds  before  its  replenishment  referred  to  in 
Article 1 and €35 million after this replenishment; 

complementing the institutional support given to the ACP Secretariat in order 
to bridge the period until the entry into force of the 10th EDF with an amount 
of €5.5 million to contribute to the running costs of the ACP Secretariat for the 
year 2008; 

adding €2.5 million to the intra-ACP technical cooperation facility; 

mobilising  €4  million  as  an  urgent  carry-over  of  a  rinderpest  eradication 
programme in Africa (PACE); 

setting  up  a  regional  prudential  reserve  of  €10  million  to  supplement  the 
regional  indicative  programme  for  the  Southern  African  region  in  case  the 
Milange - Mocuba road upgrading programme (Mozambique) can be appraised 
and  pass  the  management  procedure  of  the  EDF  Committee  before  1  August 
2007;  if  this  programme  cannot  be  appraised  in  time,  this  prudential  reserve 
shall be transferred to the intra-ACP reserve; 

setting  up  an  intra-ACP  prudential  reserve  of  €20  million  for  new  and 
unexpected needs which cannot be funded from the regionalised B-envelopes; 

setting up an intra-ACP FLEX programme, provisionally fixed at €35 million 
for  2007  (application  year  2006)  in  order  to  ensure  minimal  support  to  those 
countries subject to the adverse effects of instability in export earnings after the 
regionalisation of the B-envelopes for humanitarian and emergency assistance 
referred to in paragraph 1(a); this programme could be supplemented up to €15 
million by uncommitted funds from the prudential reserves referred to in points 
(g)  and  (h)  or  by  decommitments  transferred  to  the  intra-ACP  reserve  under 
Article 1(3) and (4) in excess of initial estimates; 

(j) 

complementing  the  support  given  to  the  Global  Fund  against  HIV/Aids, 
Tuberculosis and Malaria (GFATM) with an amount of €38 million. 

2. 

3. 

Should  the  amounts  accrued  to  the  intra-ACP  reserve  be  insufficient  to  cover  all 
needs identified, the programme referred to in paragraph 1, point (i) shall be reduced 
accordingly.  Should  the  shortfall  of  funds  be  larger  than  the  amount  referred  to  in 
point (i), the prudential reserve referred to in paragraph 1, point (h) shall be reduced 
accordingly.  A  further  shortfall  of  funds  shall  lead  to  a  reduction  of  the  amount 
referred to in paragraph 1, point (c). 

Should the amounts accrued to the intra-ACP reserve exceed the initial estimates or 
should funds earmarked in paragraph 1, points (c), (d), (e) and (h) be under-used, the 
additional funds becoming available above the ceiling set for the programme referred 
to in paragraph 1, point (i) will be mobilised as follows: 

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(a) 

(b) 

an  amount  of  up  to  €20  million  could  be  used  for  additional  support  to  the 
African Peace Facility should the funds earmarked in paragraph 1, point (c) be 
fully utilised. 

any remaining funds after meeting the needs referred to in point (a) could be 
used  to  top  up  the  EU-ACP  Infrastructure  Trust  Fund  as  an  advance  on  the 
allocations foreseen under the 10th EDF.  

Article 3 – Request for support  

In accordance with Article 13(2) of the Annex IV of the ACP-EC Partnership Agreement, the 
ACP-EC  Council  of  Ministers  calls  on  the  Commission  to  finance  the  actions  laid  down  in 
Article 2. 

This Decision shall enter into force on the day it is adopted. 

Article 4 – Entry into force 

Done in 

For the ACP-EC Council of Ministers 
The President 

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