Source: EURLEX
Language: en
Format: md

**Council of the**
**European Union**

**Interinstitutional File:**

**2023/0059(NLE)**

**PROPOSAL**

**Brussels, 9 March 2023**
**(OR. en)**

**7265/23**

**RECH 83**
**COASI 60**

From: Secretary-General of the European Commission, signed by Ms Martine
DEPREZ, Director

date of receipt: 7 March 2023

To: Ms Thérèse BLANCHET, Secretary-General of the Council of the
European Union

No. Cion doc.: COM(2023) 113 final

Subject: Proposal for a COUNCIL DECISION on the conclusion of the
Agreement between the European Union, of the one part, and New
Zealand, of the other part, on the participation of New Zealand in Union

programmes

Delegations will find attached document COM(2023) 113 final.

Encl.: COM(2023) 113 final

7265/23 FB/lv

## COMPET.2. EN

EUROPEAN

COMMISSION

Brussels, 7.3.2023
COM(2023) 113 final

2023/0059 (NLE)

Proposal for a

**COUNCIL DECISION**

**on the conclusion of the Agreement between the European Union, of the one part, and**

**New Zealand, of the other part, on the participation of New Zealand in Union**

**programmes**

# **EN EN**

**EXPLANATORY MEMORANDUM**

**1.** **CONTEXT** **OF** **THE** **PROPOSAL**

On 6 December 2021, by a Letter of Intent, New Zealand expressed its formal interest to
associate to Horizon Europe.

New Zealand and the European Union have a history of fruitful cooperation in research and
innovation. A Scientific and Technological Cooperation Agreement has been in force between
New Zealand and the EU since 2009 providing a general legal framework for strengthening
the cooperation between both Parties in this field and the forum for regular discussions of
their research priorities and areas of common interest.

New Zealand has had a strong record of participations in the previous two Framework
Programmes for Research and Innovation- the FP7 and Horizon 2020. Dozens of researchers
have come to Europe with Marie Skłodowska-Curie Actions (MSCA) funding and New
Zealand shows excellent figures in terms of overall New Zealand participation under Horizon
2020, with 77 participations.

The exploratory phase has clarified New Zealand’s interest in associating to Horizon Europe’s
Pillar II ( _‘Global Challenges and European Industrial_ _Competitiveness’_ ). This pillar is
characterised by existing inter-linkages between its clusters, as well as by the multi- or
interdisciplinary nature of many projects. Its collaborative research orientation, and the
priorities outlined in its clusters are rich in potential synergies with the New Zealand R&I
system, and corresponds to both Parties’ strong political will to address together global issues
such as climate change, health, energy and mobility, food, bioeconomy and natural resources,
environment.

Article 16(1), point (d) of the Horizon Europe Regulation concerning the association of third
countries to the programme provides for the possibility of association of third countries and
territories that jointly fulfil all of the criteria spelled out therein. Such third countries or
territories are to participate in the Horizon Europe programme on the basis of an agreement
covering the participation of the third country or territory to any Union programme.
New Zealand fulfils those cumulative criteria, notably, it has a good capacity in science,
technology and innovation; it is committed to a rules-based open market economy, including
fair and equitable dealing with intellectual property rights, respect of human rights, backed by
democratic institutions; and it actively promote policies to improve the economic and social
well-being of its citizens.
On 9 September 2022, the Council authorised the Commission to open negotiations, on behalf
of the Union, with New Zealand on an Agreement between the European Union and New
Zealand on the general principles for the participation of New Zealand in Union programmes
and New Zealand’s association to Horizon Europe – the Framework Programme for Research
and Innovation (2021-2027) [1] . The Research Working Party and the COASI Working Party
were appointed by the Council to act in the capacity of the special committees to assist the
Commission during negotiations.
Negotiations began on 28 October 2022 and concluded on 20 December 2022. The text of the
draft Agreement was initialled by representatives from each of the future Parties on 22
December 2022. The Research Working Party and COASI Working Party were regularly
consulted during negotiations and the European Parliament was kept regularly informed.

1 Council Decision (EU) 2022/1527 of 9 September 2022 authorising the opening of negotiations with
New Zealand for an Agreement on the general principles for the participation of New Zealand in Union

–
programmes and on the association of New Zealand to Horizon Europe the Framework Programme
for Research and Innovation (2021-2027) (OJ L 237, 14.9.2022, p.18).

# EN 1 EN

In line with the negotiating directives, which the Commission obtained from the Council, the
Agreement annexed to this proposal is composed of two parts, notably the general principles
for the participation of New Zealand in Union Programmes and the Protocol on the terms and
conditions for the association of New Zealand to Horizon Europe – the Framework
Programme for Research and Innovation (2021-2027). The latter part is embedded into the
Protocol, forming an integral part of the Agreement.

The Agreement comprehensively regulates the conditions of association of New Zealand
applicable across all Union programmes. It governs the terms and conditions for participation
in EU programmes, modalities for establishing participation in (association to) any given
Union programme and the involvement of New Zealand in the governance of the Union
Programmes or activities (reflecting the principle of no decision making powers). It contains
detailed rules for the establishment of the financial contribution of New Zealand to the Union
Programmes, including, where applicable, an automatic correction mechanism. The
Agreement contains comprehensive rules for the protection of EU financial interests across all
EU programmes, including powers which the Commission, European Court of Auditors,
OLAF and EPPO exercise to that end, as well as rules allowing for swift recovery of financial
amounts due by New Zealand beneficiaries, pursuant to adoption of Commission decisions on
recovery or judgments of the Court of Justice of the European Union addressed to New
Zealand beneficiaries in any Union Programmes to which New Zealand may become
associated. The Agreement also establishes institutional structures, i.e. a Joint Committee
tasked with inter alia monitoring of the implementation of the Agreement and examining how
to improve and develop the cooperation under the Agreement.
The Agreement is meant to create a lasting legal framework for cooperation between the
Union and New Zealand in relation to Union programmes. It is expected to remain in force for
several Multi-annual Financial Frameworks of the EU, similarly to the Agreement on the
European Economic Area, the EU-UK Trade and Cooperation Agreement or the framework
agreements with Enlargement and European Neighbourhood Partnership countries on the
general principles for participation of these countries in EU programmes. Protocols on
association of New Zealand to each specific Union programme could be added to this
Agreement in the future, if such Programmes are open to New Zealand participation under EU
basic acts establishing each relevant Programme, and if this is the political wish of both
Parties, and following the completion of required internal procedures. The duration of the
Protocols is expected to be limited in time to the implementation of any particular Union

programme.
It is proposed that the Protocols will be adopted via consensual decisions of the Joint
Committee, which this Agreement will establish.
All essential elements pertaining to cooperation between the EU and New Zealand in Union
programmes are comprehensively regulated in the Agreement. Article 3(4) of the Agreement
specifically pre-defines and restricts the content of the future Protocols to: identifying the
relevant Programme, activity or part thereof; setting the duration of the association; regulating
matters which are programme-specific and not otherwise regulated in the Agreement and – in
specific cases where the Union programme is implemented through a financial instrument or a
budgetary guarantee - laying down the amount of New Zealand’s contribution to such a Union

programme.
The first such Protocol on Horizon Europe association was negotiated in parallel to the
provisions of the Agreement on general principles of New Zealand’s participation in Union
programmes and forms an integral part of the Agreement, which is now being proposed for
conclusion by the EU. This way of proceeding was authorised by the Council in the
negotiating directives of 9 September 2022. In order to be able to grant privileged access to

# EN 2 EN

the Calls of Horizon Europe Pillar II under the Work Programme 2023-24 the Agreement also
provides for provisional application.
Regarding the programme-specific terms and conditions providing for the association of New
Zealand to the Horizon Europe Framework Programme, they provide – in line with the
recommendation of the Council – for association to the Pillar II of the Programme.

Following an internal analysis of the benefits for the Union, an assessment was made to limit
the scope of the associations of Horizon Europe category (d) countries to Pillar II of Horizon
Europe programme. Pillar I of the programme primarily aims to strengthen the EU’s own
science and technology bases, build-up European research and innovation capabilities and
attract knowledge and talents to Europe. Pillar III focuses on the competitiveness and the
innovative capabilities of the EU. Thus Pillar II was considered the most appropriate for
opening to association of highly-industrialised countries located not in the Union’s geographic
vicinity (without prejudice to any decisions concerning a different scope of possible future
association should it be regarded in EU interest).

The policies of the New Zealand government in areas such as climate change and carbonneutrality point to the long-term potential for developing synergies in Pillar II between
researchers from the Union and New Zealand, particularly given Horizon Europe’s key
objective of tackling climate change.

An association of New Zealand to Pillar II is expected not only to strengthen an already
strong cooperation in areas of mutual interest, but also to contribute to unlocking preidentified potential for cooperation in other areas of significance, such as administrative big
data and precision agriculture, sustainable energy, earthquake research or industrial
innovation. The identified 'niches of excellence' in the New Zealand research system include
bioengineering in medicine, optimisation in industry and services, and Antarctic Research. In
the Pacific region, the EU cooperates with New Zealand on a number of issues including
climate change, regional integration, ocean governance, fisheries (including Illegal
Unreported and Unregulated Fishing) and security (including maritime security). New
Zealand is additionally leading in terms of inclusive research by encouraging the
incorporation of indigenous knowledge (Mātauranga Māori) across all disciplines.

Cooperation through association between the EU and New Zealand would enhance the EU’s
innovativeness and competitiveness. Given the high success rate and high quality of
applications and proposals by entities from New Zealand, association would also contribute to
improving the overall quality of projects funded under Horizon Europe, as well as help create
synergies and competitive advantages at a global level. It is foreseen that association could
lead to a significant increase in terms of cooperation as the EU is New Zealand’s most
significant regional science and innovation partner, with more than half of New Zealand’s
researchers regularly engaged in active collaborations with EU partners. Around 4,000
businesses in New Zealand report performing R&D, with many more engaging in innovation.
New Zealand has 8 Universities, 7 Crown Research Institutes, and a number of independent
research organisations dedicated to research activity. It is important to underline that New
Zealand is de facto dependent on international research collaboration with other countries in
order to conduct frontier research in a number of areas, which explains New Zealand’s high
level of interest in cooperation with the EU and other major Science, Technology and
Innovation players across the globe such as the USA, China, Japan or South Korea.

The already close cooperation between the Union and New Zealand research entities is
expected to be further strengthened through the provisions of the Protocol requiring opening
of programmes and activities equivalent to Pillar II of Horizon Europe to the participation of

# EN 3 EN

EU-based research entities (with an indicative list of relevant New Zealand programmes
contained in the Annex to the Protocol).
The proposed new agreement sets out fair and balanced conditions concerning the financial
contribution of New Zealand to the Horizon Europe Programme, particularly through the
application of the automatic correction system, implementation details thereof being laid
down in the Protocol.
The draft Agreement annexed to this proposal for a Council decision is in line with the
negotiating directives issued by the Council.

**2.** **LEGAL** **ELEMENTS OF THE PROPOSAL**

The proposal for a Council decision is based on Articles 186 and 212 in conjunction with
Article 218(6), point (a) of the Treaty on the Functioning of the European Union.

The consent of the European Parliament will be required under Article 218(6), point (a) TFEU
for the conclusion of the Agreement annexed to this proposal.

In the light of the above, the Commission proposes that the Council conclude the Agreement
on behalf of the European Union.

**3.** **BUDGETARY** **IMPLICATIONS**

The Legislative Financial Statement presented with this Decision sets out the indicative
budgetary implications.

# EN 4 EN

2023/0059 (NLE)

Proposal for a

**COUNCIL DECISION**

**on the conclusion of the Agreement between the European Union, of the one part, and**

**New Zealand, of the other part, on the participation of New Zealand in Union**

**programmes**

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular
Articles 186 and 212 in conjunction with Article 218(6), point (a) thereof,

Having regard to the proposal from the European Commission,

Having regard to the consent of the European Parliament [2],

Whereas:

(1) In accordance with Council Decision (EU) …/… [3], the Agreement between the
European Union, of the one part, and New Zealand, of the other part, on the
participation of New in Union programmes (‘the Agreement’) was signed on behalf of
the Union on … [ _date of signature_ ] subject to its conclusion at a later date.

(2) The objectives of the Agreement are to establish a lasting framework for cooperation
between the Union and New Zealand and to set out the terms and conditions for the
participation of New Zealand in the Union programmes which are opened for its
participation in accordance with the basic acts establishing Union programmes as
referred to in the Agreement. Under the Agreement, the Union will carry out
cooperation measures with New Zealand pursuant to Article 212 of the Treaty on the
Functioning of the European Union. Pursuant to Article 3 of the Agreement, the
specific terms and conditions for the participation of New Zealand in any Union
programme or activity are subject to the adoption of Protocols.

(3) The Union Programme Horizon Europe, the Framework Programme for Research and

–
Innovation for the period 2021 2027, was established by Regulation (EU) 2021/695 of
the European Parliament and of the Council [4] . In line with the Council authorisation the
Protocol on the association of New Zealand to Horizon Europe – the Framework

–
Programme for Research and Innovation (2021 2027) was negotiated in parallel to the
Agreement and, pursuant to Article 15(9) of the Agreement, forms an integral part
thereof.

(4) The European Parliament has given its consent to the Agreement on […/…/…].

2

[…].
3

[…].
4 Regulation (EU) 2021/695 of the European Parliament and of the Council of 28 April 2021 establishing

–
Horizon Europe the Framework Programme for Research and Innovation, laying down its rules for
participation and dissemination, and repealing Regulations (EU) No 1290/2013 and (EU) No 1291/2013
(OJ L 170, 12.5.2021, p.1).

# EN 5 EN

(5) The Agreement should be approved on behalf of the Union,

HAS ADOPTED THIS DECISION:

_Article 1_

The Agreement between the European Union and New Zealand on the participation of New
Zealand in Union programmes (‘the Agreement’) is hereby approved on behalf of the Union.

The text of the Agreement is annexed to this Decision.

_Article 2_

The President of the Council shall designate the person empowered to proceed, on behalf of
the Union, to the exchange of notifications provided for in Article 15(1) of the Agreement, in
order to express the consent of the European Union to be bound by the Agreement.

_Article 3_

This Decision shall enter into force on [the date of its adoption].

Done at Brussels,

_For the Council_

_The President_

# EN 6 EN

**LEGISLATIVE FINANCIAL STATEMENT**

**1.** **NAME** **OF** **THE** **PROPOSAL:**

Proposal for a Council Decision on the conclusion of the Agreement between the
European Union, of the one part, and New Zealand, of the other part, on the
participation of New Zealand in Union programmes

**2.** **BUDGET** **LINES:**

— —
Revenue line (Chapter/Article/Item): 6 0 1 0 Horizon Europe Assigned

revenue

Amount budgeted for the year concerned:

_(only in case of assigned revenues):_

The revenues will be assigned to the following expenditure line
(Chapter/Article/Item):

Whole article 01.0101 (01.010101, 01.010102, 01.010103, 01.010111, 01.010112,
01.010113, 01.010171, 01.010172, 01.010173, 01.010174, 01.010176)

Whole article 01.0202 (01.020210, 01.020211, 01.020212, 01.020220, 01.020230,
01.020231, 01.020240, 01.020241, 01.020242, 01.020243, 01.020250, 01.020251,
01.020252, 01.020253, 01.020254, 01.020260, 01.020261, 01.020270)

Article 01.0205

Budget line 20.XX Administrative expenditure of the European Commission

**3.** **FINANCIAL** **IMPACT**

◻ Proposal has no financial implications

◻ Proposal has no financial impact on expenditure but has a financial impact on

revenue

🗹 Proposal has a financial impact on assigned revenue

# EN 7 EN

The effect is as follows:

_(EUR million to one decimal place)_

|Revenue<br>line|Impact on<br>revenue56|XX months<br>period starting<br>dd/mm/yyyy (if<br>applicable)|Year<br>N|
|---|---|---|---|
|6 0 1 0|18.972|60 months starting<br>01/01/2023|2.142|

|Situation following action|Col2|Col3|Col4|Col5|Col6|
|---|---|---|---|---|---|
|Revenue<br>line|2023|2024|2025|2026|2027|
|6 0 1 0|2.142|2.958|4.305|4.326|5.242|

|(Only in case of assigned revenues, under the condition that the budget line is already known):|Col2|Col3|Col4|Col5|Col6|
|---|---|---|---|---|---|
|Situation following action|Situation following action|Situation following action|Situation following action|Situation following action|Situation following action|
|Expenditur<br>e line7|2023|2024|2025|2026|2027|
|Articles<br>01.0101,<br>01.0202<br>and<br>01.0205|2.11<br>0|2.90<br>0|4.20<br>0|4.20<br>0|5.04<br>0|
|20.XX|0.03<br>2|0.05<br>8|0.10<br>5|0.12<br>6|0.20<br>2|

**4.** **ANTI-FRAUD** **MEASURES**

Article 325 of the Treaty on the functioning of the European Union (TFEU) requires
the Commission to counter fraud and any illegal activities affecting the financial
interests of the Union. Preventing and detecting fraud is therefore a general
obligation for all Commission Services in the framework of their daily activities
involving the use of resources. Fraud involving EU funds has a particularly negative
impact on the reputation of the Commission and the implementation of EU policies

5 The amounts per year need to be an estimation based on the formula or method defined under section 5.
For the starting year, the yearly amount is normally paid without a reduction or pro rata.
6 In the case of traditional own resources (customs duties, sugar levies), the amounts indicated must be
net amounts, i.e. gross amounts after deduction of 20 % for collection costs.
7 To be used only if necessary.

# EN 8 EN

The current Commission Anti-Fraud Strategy (COM(2019)196) was adopted on 29
April 2019, to replace the 2011 Strategy. It is a policy document setting out the
Commission’s priorities in the fight against fraud in view of the 2021-2027
multiannual financial framework. The 2019 CAFS’ main objectives are to 1) “further
improve the understanding of fraud patterns, fraudsters’ profiles and systemic
vulnerabilities relating to fraud affecting the EU budget” (data collection and
analysis), and 2) “optimise coordination, cooperation and workflows for the fight
against fraud, in particular among Commission services and executive agencies”
(coordination, cooperation and processes). The strategy is accompanied by a 63-point
action plan, the full implementation of which is, in principle, due for end 2021.

The guiding principles and target standards of the 2019 CAFS are:

          - zero tolerance for fraud;

          - fight against fraud as an integral part of internal control;

          - cost-effectiveness of controls;

          - professional integrity and competence of EU staff;

          - transparency on how EU funds are used;

          - fraud prevention, notably fraud-proofing of spending programmes;

          - effective investigation capacity and timely exchange of information;

          - swift correction (including recovery of defrauded funds and
judicial/administrative sanctions);

          - good cooperation between internal and external players, in particular between
the EU and national authorities responsible, and among the departments of all EU
institutions and bodies concerned;

          - effective internal and external communication on the fight against fraud.

The Articles 9 – 12 of the Agreement contain detailed provisions concerning antifraud measures. These meausures are to be applicable horizontally to ensure
protection of EU financial interests across EU Programmes or activities covered in
the future Protocols potentially to be adopted by the Joint Committee under the
Agreement to associate New Zealand to a number of EU programmes or activities.
They are applicable also to the association of New Zealand to the Horizon Europe
Programme covered by the Protocol on the association of New Zealand to Horizon

–
Europe the Framework Programme for Research and Innovation (2021-2027)
which was negotiated in parallel to the Agreement and forms and integral part
thereof.

–
Notably the above-mentioned provisions (Articles 9 12 of the Agreement) provide
for the necessary details, processes and allows for unhampered execution of tasks by
the bodies safeguearding the financial interests of the EU (the Commission,
including OLAF, the European Court of Auditors and the EPPO). Througout the
implementation of the Programmes or activities covered by the Protocols to the
Agreement, the principle remains the same: the financial interests of the EU are to be
protected by means of proportionate measures, including measures relating to the
prevention, detection, correction and investigation of irreguralities, including fraud,
to the recovery of funds lost, wrongly paid or incorrectly used and, where
appropriate, to the imposition of the administrative penalties.

# EN 9 EN

In accordance with the Financial Regulation, any person or entity receiving Union
funds is to fully cooperate in the protection of the financial interests of the Union,
grant the necessary rights and access to the Commission, OLAF, the Court of
Auditors and ensure that any third parties involved in the implementation of Union
funds grant equivalent rights. As expressly provided in Article 9(4) of the
Agreement, reviews and audits may be carried out also after the suspension of
application of a Protocol, cessation of application or termination of the Agreement.

The Agreement ensures the possibility for the European Anti-Fraud Office (OLAF)
to carry out administrative investigations, including on-the-spot checks and
inspections on the territory of New Zealand, with a view to establishing whether
there has been fraud, corruption or any other illegal activity affecting the financial
interests of the Union.

As regards the reviews and audits, as wel as fight against irregularities, fraud and
other criminal offences affecting the financial interests of the Union (Cooperation
with OLAF), agents of the institutions and bodies of the Union and the other persons
mandated by the European Commission shall act in a manner consistent with New
Zealand law.

The Agreement obliges the authorities of New Zealand to cooperate with the
European Public Prosecutor’s Office to allow it to fulfil its duty to investigate,
prosecute and bring to justice the perpetrators of, and accomplices to, criminal
offences affecting the financial interests of the European Union as provided for in
Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July
2017 on the fight against fraud to the Union's financial interests by means of criminal
law.

Furthermore the Agreement provides for effective mechanism to ensure swift
recovery of financial amounts due from the New Zealand beneficiaires of the
relevant Union programmes (i.e. those to which New Zealand is associated) pursuant
to adoption of Commission decisions or judgments and orders of Court of Justice in
relation to claims stemming from the Programme.

**5.** **OTHER** **REMARKS**

The method for calculation of New Zealand financial contribution across EU
programmes is defined in Article 6, 7 and 8 of the Agreement. In relation to the
financial contribution of New Zealand to the Horizon Europe Programme, further
technical details for application of the automatic correction mechanism are laid down

–
in Article 5 of the Protocol on the association of New Zealand to Horizon Europe
the Framework Programme for Research and Innovation (2021-2027), and Annex I
thereto. The financial contribution model applicable under the Horizon Europe
Programme is specific amongst all other EU Programmes, providing for application
of an automatic correction mechanism (in line with Article 16 of the Horizon Europe
Regulation).

# EN 10 EN