REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Twelfth Annual Report 2017 on the implementation of Community assistance under Council Regulation (EC) No 389/2006 of 27 February 2006 establishing an instrument of financial support for encouraging the economic development of the Turkish Cypriot community
Date: 2018-06-22
Institutions: European Commission, Secretariat-General
Subjects: Cyprus, EU aid, EU programme, activity report, civil society, development aid, economic development, financial aid, national unification, social development

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 22.6.2018 COM(2018) 487 final  REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Twelfth Annual Report 2017 on the implementation of Community assistance under Council Regulation (EC) No 389/2006 of 27 February 2006 establishing an instrument of financial support for encouraging the economic development of the Turkish Cypriot community  
 
 
REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN 
PARLIAMENT 

Twelfth Annual Report 2017 on the implementation of Community assistance under 
Council Regulation (EC) No 389/2006 of 27 February 2006 establishing an instrument of 
financial support for encouraging the economic development of the Turkish Cypriot 
community 

1. 

INTRODUCTION 
Council  Regulation  (EC)  No  389/20061  (the  "Aid  Regulation")  is  the  basis  for  the 
provision of assistance to the Turkish Cypriot community (TCc) and requires annual 
reporting  to  the  Council  and  the  European  Parliament.  This  report  covers  the  year 
2017. 

2. 

PROGRAMMING OF THE ASSISTANCE 

Between  2006  and  the  end  of  2017,  EUR  485  million  was  programmed  for 
operations under the Aid Regulation. The amount committed in December 2017 for 
the  2017  annual  programme  was  EUR  34,836,2402.  The  Multiannual  Financial 
Framework  (MFF)  2014-20  provides  a  multi-annual  perspective  to  the  programme 
with a provision for stable, annual funding. The assistance programme is, however, 
temporary in nature, aiming to facilitate the reunification of Cyprus, and both the Aid 
Regulation and Council Regulation No 1311/2133 laying down the MFF, allow for a 
revision in case of reunification.  

3. 

IMPLEMENTATION MECHANISMS  

The programme is implemented in the areas of the Republic of Cyprus in which the 
Government of the Republic of Cyprus does not exercise effective control and where 
the application of the acquis is temporarily suspended pursuant to Protocol 10 of the 
through  direct 
Treaty  of  Accession.  Assistance 
management by the European Commission, but some projects are indirectly managed 
by  the  United  Nations  Development  Programme  (UNDP),  the  European  Bank  for 
Reconstruction and Development (EBRD) or the British Council.  

implemented  primarily 

is 

The Commission operates in a unique political, legal and diplomatic context. Ad hoc 
arrangements  are  needed  to  implement  the  programme  while  respecting  the 
principles of sound financial management. In EU-funded aid programmes, in normal 
circumstances,  agreements with a beneficiary  government would establish the legal 
framework  for  development  assistance.  No  such  agreements  can  be  made  for  the 
assistance to the TCc. Management and mitigation of the inherent risk is part of the 
Commission's  responsibility  and  measures  adopted  include  intensive  monitoring  of 
contracts and provision of support to beneficiaries, revised payment conditions and a 
careful approach to the use of bank guarantees. The assistance includes a significant 
amount of grant support, requiring resource-intensive management.  

To  ensure  successful  and  sustainable  implementation  in  this  environment,  the  TCc 
must fully engage in the preparation for the acquis roll-out following settlement.  

1 
2 
3  

OJ L65, 7.3.2006, p.5. 
Commission Decision C(2016) 6688.  
OJ L347, 2.12.2013, p.884. 

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The Programme Team operates through the EU Programme Support Office (EUPSO) 
in  the  northern  part  of  Nicosia.  The  Representation  of  the  Commission  in  Cyprus 
also  hosts  meetings,  seminars  and  press  conferences  and  communicates  with  the 
Cypriot public throughout the island, including on the Aid Programme. In addition, 
the  EU  Infopoint,  funded  under  the  Aid  Programme,  carries  out  a  range  of 
communication  and  visibility  actions,  providing  information  about  EU  policies, 
priorities and actions in support of the TCc, and promoting European culture.  

4. 

IMPLEMENTATION DURING THE REPORTING PERIOD 

4.1. 

General overview 

The Commission continues to implement the Aid Regulation with the overall aim of 
supporting reunification. The Commission stands ready to adapt the programme as a 
result of any agreements reached in the settlement talks.  

Operations  in  2017  included  the  continuation  of  a  number  of  established  and 
successful  projects,  such  as  EU  scholarships  and  confidence  building  measures  in 
support  to  the  Committee  on  Missing  Persons  (CMP)  and  to  the  Technical 
Committee on Cultural Heritage (TCCH).  

Assistance  provided  to  key  economic  sectors  preparing  for  a  settlement  was 
reinforced through projects for the development of the private sector and rural areas 
as well as human resources development. Efforts towards tangible improvements in 
the area of animal diseases eradication and food safety continued. 

Considerable  gaps  in  the  capacity  of  the  beneficiaries  to  effectively  implement  the 
acquis still exist and the adoption of many legal texts remains pending. However, the 
TCc has a firmer understanding of the challenges linked with the implementation of 
legal texts aligned with EU standards. 

Grant  support  remains  an  essential  element  of  the  programme.  For  the  scholarship 
programme,  the  Commission  continued  to  make  recourse  to  outsourcing,  to  help 
ensure that grants reach the beneficiaries in a timely and efficient manner. 

In  addition,  since  2008,  a  Project  Management  Unit  (PMU)  set  up  through  a 
technical  assistance  service  contract  has  been  providing  services  to  support  the 
implementation of grant schemes. This PMU continues to offer valuable help to the 
Commission  in  terms  of  increased  efficiency  and  assurance  in  the  operational 
management, implementation, and monitoring of grant schemes.  

One  continuing  issue  has  been  the  construction  of  the  Famagusta  sewage  network, 
the  contract  for  which  was  terminated  in  December  2013  by  the  Commission.  The 
dispute with the former contractor has been brought to arbitration as all options for 
an amical settlement had been exhausted. In parallel, the related repair works will be 
tendered in 2018. 

At the end of the year, 274 contracts were overall running under the Programme.  

4.2. 

Progress by objectives 

The  overall  objective  of  the  Aid  Programme  is  to  facilitate  the  reunification  of 
Cyprus  by  encouraging  the  economic  development  of  the  TCc,  with  particular 
emphasis on the economic integration of the island, on improving contacts between 
the two communities and with the EU, and on preparation for the acquis.  

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The  activities  undertaken  in  2017  with  respect  to  each  of  the  objectives  of  the  Aid 
Regulation were:  

4.2.1.  Objective 1: Developing and restructuring of infrastructure 

In  the water sector,  the design and the tender  dossier for the  construction of a new 
trunk  sewer  to  convey  waste  water  of  Nicosia  to  the  bi-communal  waste  water 
treatment plant (WWTP) in Nicosia have been finalised. Launch of the Works tender 
is  foreseen  in  early  2018.  The  feasibility  study  and  conceptual  design  of  the 
distribution system for the treated sewage effluent of the bi-communal WWTP have 
been  well  advanced  and  are  under  final  approval.  The  final  detailed  design  and 
associated tender dossier for this important bi-communal project are expected within 
2018.  

The  tender  dossier  for  the  necessary  remedial  works  to  the  Famagusta  sewage 
networks was drafted and the Works tender is to be launched in early 2018. 

Preparatory activities were initiated for the first phase of the decommissioning of the 
old  Nicosia WWTP  and  for  setting up  of  a  bicycle-walking path  along  the  Pedieos 
River.  

Assistance  in  the  solid  waste  sector  continued  through  different  actions.  Two 
contracts  –  Extension  to  the  Koutsoventsis/Güngör  landfill  and  Landfill  Degassing 
Plant  –  were  signed  in  December  2017.  The  Works  are  due  to  be  finalised  by 
December 2018. 2017 also saw the completion of the design and implementation of a 
Solid  Waste  Management  Database  having  as  its  basis  the  European  Solid  Waste 
Catalogue. This is currently being trialled by the responsible environmental bodies, it 
however already being hailed as a success. 

After  several  delays,  the  installation  of  a  new  sterilisation  facility  for  treatment  of 
hazardous medical waste has been put back on track and due to be finalised by mid-
2018.  This  project  was  further  bolstered  through  a  technical  capacity  project 
implementation  of  a  sustainable  Medical  Waste 
involving 
Management System.   

the  design  and 

The  tender  for  setting  up  a  collection,  transport  and  central-treatment  system  for 
animal  by-products  that  are  most  dangerous  for  human  and  animal  health  was 
launched  for  the  second  time,  but  no  valid  offers  were  received.  Following  an 
optimisation of the tender dossier, the project will be re-tendered in early 2018.  

Finally,  solid  waste  management  was  also  addressed  in  grant  schemes  supporting 
civil  society  and  local  communities.  These  involve  the  setting  up  of  solid  waste 
transfer stations and green waste management according to a coherent EU developed 
Integrated Solid Waste Management Plan.  

Also, projects to enhance the monitoring systems for air and water quality have been 
approved  in  2017  and  technical  specifications  have  been  drafted.  Tendering  is 
expected in mid-2018.  

A  contract  for  Technical  Assistance  for  the  Implementation  of  a  Traffic  Safety 
Programme  was  finalised.  A  roadmap  for  implementation  of  driving  license  issue, 
vehicle registration and vehicle technical inspection has been prepared and requires 
further  assistance  and  support  from  the  beneficiary  in  order  to  implement  the 
roadmap and improve traffic safety.  

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4.2.2.  Objective 2: Promoting social and economic development 

The  Technical  Assistance  to  the  Private  Sector  (TAPS)  project,  launched  in 
November  2015,  was  extended  to  September  2018.  This  project  aims  at  promoting 
private sector growth and job creation. It provides technical assistance to local bodies 
to prepare for the application of the acquis in areas linked with the development of 
the private sector. The support takes the form of analytical studies and preparation of 
strategies,  including  for  example  the  finalisation  of  the  Small  and  Medium 
Enterprises  Strategy  and  Action  Plan.  It  also  assists  Micro  and  Small-Sized 
Enterprises  (MSMEs)  to  prepare  for  the  acquis  by  supporting  Business  Support 
Organisations that reinforce their organisational and service provision capacity. 

A guidance note on the viability of an innovation strategy in line with Horizon 2020 
and  the  concept  of  SMART  growth  was  developed  by  an  external  expert  under  a 
single contract in early 2017.  

In  addition,  the  Delegation  Agreement  with  the  EBRD  to  grant  Turkish  Cypriot 
companies  access  to  credit  funds  and  to  provide  capacity  building  support  to  local 
business  consultants  was  extended  with  an  additional  EUR  0.8  million.  Businesses 
are also supported directly through grants. All the remaining grants directly awarded 
to businesses under the SME Development: Modernising Products and Services grant 
scheme  were  finalised  in  2017.  Overall,  36  projects  have  been  successfully 
implemented under this scheme.  

In the field of rural development, technical assistance was provided to develop farm 
advisory  services,  including  the  training  of  local  advisors.  Out  of  the  39  projects 
awarded  in  2013  under  the  3rd  Rural  Development  grant  scheme,  a  further  6  were 
successfully completed in 2017. 

In  2017, the technical assistance project to  support preparation  and implementation 
of  animal  diseases  (AD)  eradication  (initiated  in  mid-2015)  continued  to  build  the 
capacities  of  the  veterinary  services  to  plan  and  implement  AD  surveillance  and 
eradication  programmes  and  to  strengthen  the  system  for  animal  identification  and 
registration. The assistance also helped continuous improvement of the performance 
and  the  quality  of  outputs  of  the  veterinary  laboratory.  In  2016/2017,  the  first  ever 
large  scale  testing  of  animals  to  establish  the  status  of  priority  AD  (such  as 
brucellosis  and  tuberculosis)  was  implemented  in  the  northern  part  of  Cyprus.  The 
purpose  and  long  term  benefits  of  the  elimination  of  important  diseases  in  food 
producing  animals  have  been  widely  communicated  to  the  local  farmers.  This 
improved  farmers'  awareness  and  ensured  their  support  to  the  elimination  of 
important AD in the area.  

Under a project to develop metrology capacity in the TCc, training was provided on 
analytical techniques relating to the EU requirements for food safety standards.  

TCc capacities to implement animal health and food safety programmes were further 
strengthened through the award of four supply contracts, totalling EUR 0.5 million, 
to provide equipment and consumables for veterinary and food safety laboratories. 

Five  grant  contracts  totalling  EUR  3  million  were  awarded  under  the  4th  call  for 
proposals  for  Community  Development.  Four  projects  focus  on  improving  the 
efficiency  and  quality  of  local  community  services  such  as  waste  management  and 
environmental protection. One project aims at establishing a centre for assistance to 
victims of domestic violence. 

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In the education sector, the implementation of 15 grants that were awarded in 2016 
under the EUR 1.5 million grant scheme for Innovation and Change in Education VI 
continued in 2017. Out of the 15 projects, 9 are being implemented by schools and 6 
by  lifelong-learning  organisations.  The  projects  mainly  focus  on  enhancing 
teaching/learning capacities in the schools with introducing extra-curricular and soft 
skills programmes as well as establishing science labs and a green-house for organic 
farming.  On  the  other  hand,  the  life-long  learning  projects  focus  on  improving 
professional  capacities  of  architects  and  engineers  and  introduce  entrepreneurship 
and life-long training courses to improve the employability of youth.  

A new EUR 1.5 million grant scheme for  Innovation and Change in Education VII 
launched in the first half of 2016 covers the same objectives as the previous call for 
proposals. The evaluation of project proposals is ongoing.  

The  second  technical  assistance  project  for  Vocational  Education,  Training  and 
Labour  Market  (VETLAM  II),  launched  in  November  2015  continued  its  activities. 
During 2017, the technical assistance mainly focused on a review and update of the 
qualifications framework, development of vocational schools strategy, development 
of active labour market measures for 3 selected disadvantaged groups (youth, women 
and  people  with  disabilities)  and  capacity  building  for  employment  services.  The 
assessment  procedures  for  work-based  learning  and  apprenticeship  programmes  as 
well as a local pool of assessors were also developed. The project is planned to end 
in November 2018. 

Building  on  the  results  of  previous  analytical  work,  the  second  phase  of  the 
economic monitoring programme conducted by the World Bank provided additional 
in-depth  analysis  and  technical  assistance  in  important  areas.  The  programme 
focused  on  fiscal  analysis,  financially  sustainable  public  administration  bodies, 
economic,  trade-related  effects  of  reunification,  private-sector  development  and 
social inclusion, and macroeconomic monitoring. In line with the political priorities 
in the framework of the Aid Programme, an additional envelope of EUR 4.8 million 
was contracted in 2017 for the continuation of the engagement of the World Bank to 
build  on  the  analytical  and  advisory  work  done  so  far  and  to  continue  providing 
advice and targeted support to the TCc until December 2020. 

4.2.3.  Objective 3: Fostering reconciliation, confidence building measures, and support to 

civil society 

The  Committee  on  Missing  Persons  (CMP),  supported  by  the  Aid  Programme 
through  an  indirect  management  arrangement  with  UNDP,  continued  its  field  and 
laboratory work. By the end of 2017, out of the 2002 total missing persons, the CMP 
had exhumed 1194 sets of remains, out of which 831 were genetically identified and 
returned to their families. 

In December 2017, the Delegation Agreement with UNDP was extended to provide 
funding for the operations of the CMP for the year 2018, for an amount of EUR 2.6 
million. Overall, in the period 2006-2018 the EU contributed with a total of EUR 22 
million which amounts to 80% of the overall funding provided to the CMP. 

With the passing of time, it is increasingly difficult to obtain precise information to 
determine the location of the burial sites. This is a key challenge to be addressed now 
by  renewed  efforts  in  researching  civil  and  military  archives,  as  well  as  with  a 
stronger  use  of  IT  tools  in  order  to  facilitate  the  investigation,  excavation  and 
exhumation phases. 

5 

 
 
To this end, a billboard campaign was put up in both communities in December 2017 
in  order  to  encourage  them  to  come  forward  with  any  information  they  may  have. 
The CMP members also directly conducted research on UN archives in New York in 
May 2017.  

Cultural  Heritage  protection  through  the  bi-communal  Technical  Committee  on 
Cultural  Heritage  (TCCH)  remained  a  key  component  of  the  reconciliation  and 
confidence building actions supported under the Aid Programme. Between 2011 and 
2017, the Cultural Heritage programme has received EUR 14.7 million of EU funds 
which are being used to improve the protection of 71 cultural heritage sites across the 
island. These include 5 large scale projects, 30 medium size projects, 26 small scale 
projects and 10 projects in design phase. During 2017, the main achievements were 
the completion of the conservation works for the Monastery of Agios Panteleimonas 
in  May  as  well  as  for  the  Martinengo  Bastion  and  for  a  section  of  the  walls  of 
Famagusta in September. Also in 2017, works were finalised for the conservation of 
Agia  Marina/Gurpinar,  a  Maronite  church  located  within  a  military  site.  Steps  are 
being taken to  ensure  adequate maintenance and caretaking of restored sites  by the 
beneficiary communities. 

In  response  to  an  initiative  of  the  two  Cypriot  leaders  for  new  confidence  building 
measures, the Commission acted swiftly in 2015 to reallocate the necessary resources 
for  the  opening  of  the  new  crossing  points  at  Deryneia  and  Lefka-Apliki.  A 
Delegation Agreement with UNDP was signed in early 2016 for works north of the 
Green Line, which were finalised in 2017. At the request of the Republic of Cyprus, 
in  2017  the  Commission  and  the  UNDP  signed  an  addendum  to  the  Delegation 
Agreement  for  the  works  of  the  sections  within  the  Buffer  Zone.  These  works  are 
expected to be completed in 2018.  

Support  for  civil  society  continued  in  2017.  Technical  assistance  (Civic  Space) 
providing capacity building for Civil Society Organisations (CSOs) and stimulating 
networking  and  joint  actions  with  Greek  Cypriot  and  other  EU  CSOs  continued  in 
2017.  Efforts  concentrated  initially  on  creating  an  enabling  environment  for  the 
development of Civil Society and encouraging active citizenship initiatives through 
the  "Grow  Civic"  mechanism.  In  addition,  18  contracts  awarded  under  the  Civil 
Society  in  Action  IV  and  V  grant  schemes  were  running  in  2017.  They  funded  a 
variety  of  actions  in  the  fields  of  environment,  human  rights,  art  and  sport  that 
encourage  citizens'  engagement  and  cross-community  exchanges.  The  6th  call  for 
proposals of the Civil Society in Action grant scheme has been launched in mid-2017 
providing  new  opportunities  for  CSOs  to  reinforce  their  capacity,  actions  and 
cooperation, and make a change for the benefit of all.  

The  Civil  Society  Forum  (CSF),  a  platform  where  CSOs  can  express  their 
expectations and priorities, was convened every three months. It acted as a catalyst 
for advocacy and promoted active citizenship. A full month of CSO actions under the 
name  of  "Open  Door  Festival"  took  place  for  the  second  time  during  the  whole 
month  of  October,  to  inform  the  public  of  past  and  present  activities  and  promote 
volunteerism  among  people  of  all  ages.  During  the  Festival,  more  than  60 
associations, foundations, platforms, initiatives and activists opened their doors and 
took  the  road  through  the  northern  part  of  Cyprus  to  meet  the  public  and  network 
with other CSOs. 

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4.2.4.  Objective 4: Bringing the TCc closer to the EU 

The management of scholarships to the EU was delegated to the British Council for 
the academic years 2014-16. This arrangement was extended for a further three years 
through a Delegation Agreement signed with the British Council in December 2016, 
covering  the  academic  years  2017-20.  The  EUR  1.92  million  available  under  the 
2017 call allowed funding 152 scholarships for the 2017/2018 academic year. These 
scholarships support students during the first year of undergraduate studies, graduate 
students in their masters or doctoral programmes, and researchers and professionals 
in further developing their language and professional skills across EU Member States 
through  language  courses  or  internship  programmes.  The  Scholarship  Programme 
has ensured access to scholarships to more than 1000 Turkish Cypriot students and 
professionals since 2007. Continuity of this scheme is considered vital and increased 
efforts  will  be  put  on  targeting  the  needs  and  gaps  within  the  TCc.  As  part  of  the 
activities to manage the Scholarship Programme, the British Council organises every 
year  the  "Study  in  Europe"  day  to  provide  information  to  students  about  study 
possibilities in the EU. An online alumni network is being developed in the last years 
in order to enhance the contacts and professional relations between the Scholarship 
alumni.  The  British  Council  is  continuously  monitoring  medium-term  impact,  for 
example the return rate of students to Cyprus and success in finding employment.  

The high demand for information on the EU in the TCc continued in 2017. The EU 
Infopoint,  which  is  managed  together  with  the  Representation  of  the  European 
Commission in Cyprus, started functioning in early 2015 with a total budget of EUR 
1,545,000 for a 30-month period; the project was extended in July 2017 until January 
2020 with a total budget of EUR 3 million. It generated a high level of visibility for 
the  EU,  its  policies  and  the  Aid  Programme.  Until  now,  the  EU  Infopoint  held 
various panels/events on various topics, including environment (water, energy, waste 
management  including  recycling,  biodiversity,  beach  cleaning,  and  Green  Week), 
organic agriculture, health & safety at work, food safety, animal welfare, and animal 
health.  It  has  also  covered  topics  such  as  human  rights,  rights  of  people  with 
disabilities, children’s rights, gender equality, LGBTQ rights, and consumers' rights.  

In  2017,  the  EU  Infopoint  organised  49  events  (of  which  28  in  Nicosia)  including 
Europe Day, European Week against Racism, European Youth Week & International 
Youth  Day,  European  Night  of  Researchers,  EU  Anti-Trafficking  Day,  Mobility 
Week  and  Traffic  Safety,  European  Week  of  Sport,  and  European  SMEs  Week. 
These  events  attracted  over  4,849  participants,  showing  increased  interest  from  the 
community (4,382 participants at 2016 events and 2,383 participants at 2015 events).  

During  2017,  2,255  information  products  and  10  newsletters  were  distributed  (in 
total  since  the  opening  of  the  Infopoint,  13,684  and  30  respectively). 343  news 
articles and  33 TV spots appeared on the local media during 2017 (1,266  and 115, 
respectively, since inception of the project). Traffic on the Facebook page "Abbilgi" 
also confirmed the popularity of the activities (4,052 new 'likes' in 2017, bringing the 
total number of likes since its opening to 12,523). The EU Infopoint supported also 
the  promotion  of  all  Calls  for  Proposals  and  other  Aid  Programme-funded  projects 
and  events  via  Facebook  posts/reminders,  front-shop  poster  displays,  hosting  of 
events  and  project  launches  at  its  public  space.  It  established  strategic  partnerships 
with other EU-funded projects and technical assistance projects such as Civil Society 
development 
(Civic  Space),  Private  Sector  Development,  Animal  Disease 
Eradication,  Waste  Management,  as  well  as  with  relevant  departments  and  Civil 
Society Organisations in the TCc. 

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4.2.5.  Objectives  5-6:  Preparing  the  Turkish  Cypriot  community  to  introduce  and 

implement the acquis  

The  Commission's  Technical  Assistance  and  Information  Exchange  (TAIEX) 
instrument is used to implement objectives  5 and 6 of the Aid Regulation and thus 
helps prepare the TCc for implementation of the acquis in view of the withdrawal of 
its suspension upon the entry into force of a comprehensive settlement of the Cyprus 
problem.  

Assistance  continued  in  2017  and  new  experts  were  selected  in  17  main  areas,  or 
"sectors",  of  the  acquis.  In  total,  the  number  of  events  organised  in  2017  was  118. 
TAIEX actions included inter alia expert missions, workshops and study visits. TCc 
stakeholders  demonstrated  a  significantly  heightened  awareness  of  acquis 
requirements in the active TAIEX sectors.  

Support  for  trade  across  the  Green  Line  (Regulation  866/2004)  continued.  The 
independent experts were involved in 2017 in carrying out the regular phytosanitary 
inspections  of  potatoes  and  citrus  products,  taking  honey  samples  for  analysis  and 
producing  an  updated  list  of  vessels  whose  catch  can  be  traded  across  the  Green 
Line. 

4.3. 

Financial execution (contracts and payments) 

4.3.1.  Contracting 

The Commission signed legal commitments in 2017 amounting to EUR 23.2 million. 
The  total  volume  increased  compared  to  the  previous  year  (EUR  15.5  million  in 
2016).  

4.3.2.  Payments 

Payments in 2017 were EUR 17.2 million (EUR 21.4 million in 2016).  

4.4.  Monitoring 

The Commission has direct responsibility for implementation of most projects (direct 
management).  The  level  of  monitoring  by  Commission  staff  is  very  high,  with 
constant  contacts  with  contractors,  "spot-check"  visits  as  well  as  site  meetings  and 
steering committees meetings. The PMU continued to support the Commission with 
the  monitoring  implementation  of  grant  contracts/projects  awarded  to  local 
communities for their development, to SMEs and rural enterprises, to Civil Society 
Organisations, to schools and vocational education and training organisations, while 
also supporting  grant  beneficiaries  in the application  of EU rules  for grant contract 
implementation, including for secondary procurement.  

In  addition,  the  Commission  implements  a  number  of  contracts  under  indirect 
management mode. The implementing entities such as the UNDP, the EBRD, and the 
British Council are pillar assessed and report to the Commission in accordance with 
the  respective  Framework  Agreements.  The  Commission  is  closely  involved  in  the 
day-to-day monitoring of these actions.  

For TAIEX, a new planning period was launched, which will include regular Project 
Steering  Group  meetings  to  take  stock,  evaluate  progress  and  continue  planning. 
TAIEX logistics are monitored through the on-line TAIEX Management System. 

8 

 
 
 
 
4.5. 

Audit and controls 

In  2017,  the  Internal  Audit  Service  (IAS)  carried  out  an  audit  on  the  financial 
management  of  the  Structural  Reform  Support  Service  (SRSS),  including  the 
financial  management  of  the  Aid  Programme.  The  objective  of  the  audit 
encompassed,  amongst  others,  the  adequacy  of  the  design  and  the  effective 
implementation of the internal control system for financial management (legality and 
regularity  and  efficiency  of  the  financial  workflow).  The  IAS  identified  some 
weaknesses  in  the  internal  control  environment  put  in  place  in  the  procurement 
procedures, which are being addressed through implementation of an action plan in 
response to IAS recommendations. 

4.6. 

Evaluation 

Significant improvement in statistics within the TCc will be necessary to accompany 
the future acquis roll-out.  

An  ex-post  evaluation  of  SME  grant  schemes  was  conducted  by  the  PMU  and 
informed  the design of the new call for proposals  that will be launched in  2018. A 
similar ex-post evaluation of rural development grant schemes was initiated and the 
results are expected in 2018. 

4.7. 

Information, Publicity and Visibility 

Overall,  there  were  120  visibility  and  communication  actions  in  2017,  a  large 
number  of  them  organised  in  cooperation  with  the  Representation  of  the  European 
Commission in Cyprus. Some of the highlights in 2017 were: presentations on "The 
Juncker  Commission:  Two  Years  on  Working  for  a  Better  Europe  that  Protects, 
Empowers and Defends" in various cities, Open Door Festival, sharing information 
on the work of the CSOs in 4 cities (Nicosia, Famagusta, Galateia, Lefka), and the 
European  Science  and  Fun  Day,  in  which  more  than  500  high-school  students 
participated. Europe Day was celebrated with 2 large-scale outdoor events in Nicosia 
and Famagusta with more than 700 participants.  

Many public events on the EU Scholarships for the TCc ensured extensive outreach 
Completion ceremonies of various Cultural Heritage projects, including Martinengo 
Bastion  and  the  Walls  and  Archangelos  Michael  Church,  were  held.  The 
Entrepreneurship  Ecosystem/Marketplace  event  brought  together  many  participants 
to learn more about EU support in the TCc. EU support in the area of Traffic Safety 
was also communicated during various events with school children, families and the 
general public.  

4.8. 

Consultations with the Government of the Republic of Cyprus 

Meetings  were  held  with  representatives  of  the  Government  of  the  Republic  of 
Cyprus,  in  particular  when  senior  Commission  officials  visited  the  island.  The 
Commission  continues  to  rely  on  the  Government's  cooperation  for  verification  of 
property  rights,  and  also  meets  regularly  with  the  Permanent  Representation  in 
Brussels. 

5. 

CONCLUSIONS 

The  Commission  continues  to  deliver  assistance  under  the  Aid  Regulation  to 
facilitate  the  reunification  of  Cyprus  by  encouraging  the  economic  development  of 
the TCc, through work under its six objectives. During 2017, assistance continued to 
focus on areas that present particular problems with future acquis compliance.  

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In view of the capacity constraints, limited human and financial resources and gaps 
in  readiness  for  the  future  acquis  roll-out,  the  sustainability  of  projects  must  be 
carefully considered. The track record of past assistance and the maturity of projects 
will be continuously reflected in future programming exercises. Efforts will focus on 
bringing more impact in priority areas through fewer but larger actions. 

The  Commission  stands  ready  to  deploy  resources,  including  under  the  Aid 
Programme, to support settlement negotiations under UN auspices as needed. 

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