CELEX: 51979PC0524
Language: en
Date: 1979-10-03
Title: DRAFT INTERNAL AGREEMENT OM THE FINANCING AND ADMINISTRATION OF COMMUNITY AID

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (79) 524
Vol. 1979/0180
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
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In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
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Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
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 ---pagebreak--- Λ
    COMMISSION OF THE EUROPEAN COMMUNITIES
                                             COM ( 79 ) 524 final
                                             Brussels - 3rd October 1979
                                     DRAFT
                       INTERNAL AGREEMENT OM THE FINANCING
                       AND ADMINISTRATION OF COMMUNITY AID
  COM ( 79 ) 524 final
 ---pagebreak---                 Commum catiorr of the Commission to the Council
Subject ; draft Internal Financial Agreement
Following the invitation which it issued to the Commission at the
18 September 1979 session , the Council is invited to find herewith
the draft Internal Agreement on the Financing and Administration of
Community aid under the future EEC / ACP Convention .
 ---pagebreak---                Draft
INTERNAL AGREEMENT ON THE FINANCING
AND ADMINISTRATION OF COMMUNITY AID
 ---pagebreak--- THE REPRESENTATIVES OF THE GOVERNMENTS OF THE MEMBER STATES , MEETING
WITHIN THE COUNCIL .
Having regard to the Treaty establishing the European Economic Community
 ( hereinafter called the " Treaty "),
                                              I
Whereas the ACP-EEC Convention of                  , ( hereinafter called
the " Convention ") set the aggregate amount of Community aid to the
ACP States at 5 227 million units of account ;
Whereas the representatives of the Governments of the Member States ,
meeting within the Council , agreed on                         to set at
110 million units of account the amount of aid to be borre by the
European Development Fund for the benefit of the overseas countries arid
territories having special relations with France , the Netherlands and the
United Kingdom ( hereinafter called the " countries and territories ");
whereas provision is also made for loans to the amount of 15 million units
of account to be granted by the European Investment Bank ( hereinafter
 called the " Bank ") from its own resources in the countries and territories ;
Whereas the unit of account used in application of this Agreement is
that laid down in the Council Decision of 21 April 1975 on the
definition and conversion of the European unit of account used for
expressing the amounts of aid mentioned in Article 42 of the ACP-EEC
 Convention of Lome ; whereas steps should be taken to allow for the
possibility , by Council decision , of replacing the said unit of account
by the ECU;
Whereas , in order to implement the Convention and the Decision concerning
the countries and territories ( hereinafter called the " Decision "), a fifth
European Development Fund should be established and the details of the
Fund 's appropriation should be determined together with the Member States
contributions to it ;
 ---pagebreak---                                 - 2 -
Whereas the rules for the management of financial cooperation should be
determined /, the procedure for programming / examining and approving aid
should be decided and the detailed rules for supervising the use of the aid
should be defined ;
Whereas a Committee of Representatives of the Governments of the Member
States should be set up under the auspices of the Commission and a
similar committee should be set up under the auspices of the Bank ;
Whereas the work done by the Commission and the Bank to apply the
Convention and the corresponding provisions of the Decision should be
harmonized ;   whereas it is therefore desirable that , as far as possible /
the composition of the Committees set up under the auspices of the
Commission and of the Bank should be identical ;
Whereas the Council adopted on 16 July 1974 a Resolution on the
harmonization and coordination of Member States' cooperation policies ;
After consulting the Commission of the European Communities /
HAVE AGREED AS FOLLOWS :
 ---pagebreak---                                   CHAPTER 1
                                  Article 1
1.  The Member States hereby set up a European Development Fund ( 1980 )
hereinafter called the " Fund ").
2.  (a)   The Fund shall consist of 4 652 million European units of account ,
          ( hereinafter called " EUA"), to be financed by the Member States
          as follows :
          Belgium                           274.468 mi I lion EUA
          Denmark                           116.30  mi l lion EUA
          Germany                         1 316.516 rm l lion EUA
          France                          1 190.912 mi l lion EUA
          Ireland                            27.912 mi l lion EUA
          Italy                             534.98  mi l lion EUA
          Luxembourg                          9.304 rm l lion EUA
          Netherlands                       344.248 mi l lion EUA
          United Kingdom                    837.36  mi l lion EUA .
    (b)   This schedule may be amended by Council Decision reached unanimously
          in the event of the accession of a new Member State to the Community .
3.  The amount stated in paragraph 2 shall be allocated as follows :
(a)  4 542 million EUA for the ACP States , comprising :
     2 928 million EUA in the form of grants
        504 million EUA in the form of special loans
        280 million EUA in the form of risk capital
        550 million EUA in the form of transfers pursuant to Title II ,
         Chapter I of the Convention ;
        280 million EUA in the form of the special financing facility pursuant
         to Title III - Chapter I of the Convention ;
 ---pagebreak---                                 - 4 -
(b)  98 million EUA for the countries and territories , comprising :
     59 million EUA in the form of grants
     31 million EUA in the form of special loans
      8 million EUA in the form of risk capital ;
(c)  12 million EUA in the form of transfers for the countries and
     territories , pursuant to those provisions of the Decision which
     concern the export earnings stabilization system .
4.  Where a country or territory which has become independent accedes to the
Convention , the amounts indicated in paragraph 3(b ) shall be reduced and
those indicated in paragraph 3(a ) correspondingly increased by a decision
of the Council acting unanimously on a proposal from the Commission .
5.  In this case , the country concerned will continue to be eligible for the
funds provided for in paragraph 3(c ), subject to the management rules laid
down in Title II of the Convention .
                                Article 2
To the amount laid down in Article 1(2 ) shall be added up to 700 million EUA
in the form of loans granted by the Bank from its own resources under the
conditions laid down by it in accordance with its statute .
 ---pagebreak---                                    - 5 -
These Loans shall be allocated as follows :
(a)   up to the amount of 685 million EUA , for financing operations to
      be carried out in the ACP States ;
                                             1
(b )  up to the amount of 15 million EUA , for financing operations to
      be carried out in the countries and territories .
                                   Article 3
The EUA used for applying this Agreement shall be that defined in the
Council Decision of 21 April 1975 on the definition and conversion of the
European unit of account used for expressing the amounts of aid mentioned
in Article 42 of the ACP-EEC Convention of Lome .         This definition may be
amended by Council Decision .
                                   Article 4
An amount of up to 175 million EUA shall be set aside from the grant aid
specified in Article 1(3 ) ( a ) and ( b ) for financing the interest rate
subsidies referred to in Article 104 of the Convention and in the
corresponding provisions of the Decision .         Any part of this amount not
committed by the end of the period during which loans are granted by the
Bank shall again become available as grant aid .
The Council may decide , on a proposal from the Commission drawn up in
agreement with the Bank , to raise this ceiling .
1
  Figure to be confirmed .
 ---pagebreak---                                    - 6 -
                                   Article 5
With the exception of loans granted by the Bank from its own resources ,
all financial operations undertaken for the benefit of the ACP States
or the countries and territories shall be carried out in accordance
with the conditions laid down in this Agreement and shall be charged to
the Fund .
                                   Article 6
1.   Within one month of the entry into force of the Convention , and
subsequently before 1 September of each year , the Commission shall draw
up estimates of the commitments to be entered into during the budget year ,
taking into account the Bank 's forecasts in respect of the operations which
it manages , and shall communicate these estimates to the Council .
2.   In the same manner , the Commission shall establish and communicate to
the Council the total amount of the payments to be made in the budget
year in question .      On the basis of this amount and taking into account
cash requirements , including those arising from expenditure incurred in
implementing Title I , Chapter I of the Convention and the corresponding
provisions of the Decision and expenditure incurred in implementing
Title III , Chapter I of the Convention , the Commission shall draw up a
schedule of calls for contributions determining the dates on which payment
is due ;   the detailed rules for payment of such contributions by the
Member States shall be determined by the Financial Regulation referred to
in Article 28 .      This schedule shall be submitted by the Commission to the
Council , which shall decide thereon by the qualified majority laid down
in Arti ele 17(4 ) .
 ---pagebreak---                                  - 7 -
If the contributions are insufficient to meet the actual requirements of
the Fund in the budget year in question , the Commission shall submit
proposals for supplementary payments to the Council , which shall decide
thereon as soon as possible by the qualified majority laid down in
Arti cle 17(4 ) .
3.   Until used by the Commission for financing projects , programmes or
transfers adopted under the conditions laid down in Articles 10 to 21 , 26
and 27 , the funds obtained from the calls for contributions referred to
in paragraph 2 shall remain deposited in special accounts opened by each
Member State with its Treasury or with such bodies as it may designate ,
in accordance with the detailed rules laid down by the Financial Regulation
referred to in Article 28 .
                                 Article 7
1.   Any remaining balance of the Fund shall be used up in accordance with
the same rules as those laid down in the Convention , the Decision and this
Agreement .
2.   Upon expiry of this Agreement , Member States shall still be obliged to
pay , as provided in Article 6 , that portion <^f their contributions not yet
called for .
                                 Article 8
1.   The Member States undertake to act as guarantor for the Bank , waiving
any right to object and in proportion to their contributions to its capital ,
in respect of all financial commitments arising for its borrowers out of
the loan contracts concluded by the Bank with its own resources in
implementation both of Article 95 of the Convention and the corresponding
provisions of the Decision , and where appropriate . Article 59 of the
 Convention .
 ---pagebreak---                                    - 8 -
  2.   This guarantee shall be restricted to 75% of the total amount of the
  credits opened by the Bank under all the loan contracts .    It shall be
  applied to cover all risks .
(3 .   Notwithstanding the above paragraphs the Community
 may , with regard to financial commitments under Article 59 of the
  Convention , act as guarantor for the Bank , in specific cases and at the
  latter 's request , in respect of the total amount of the credits opened
                                                        1
 by the Bank under the corresponding loan contracts .)
 4.    The undertakings arising from paragraphs 1 and 2 shall be the subject
 of guarantee contracts between each Member State and the Bank .
(5 .   The undertakings of the Community arising from paragraph 3 shall be
 the subject of guarantee contracts between the Community , represented
                                      1
 by the Commission , and the Bank .)
                                   Article 9
 1.    Payments made to the Bank in respect of special loans granted to the
 ACP States and the countries and territories since 1 June 1964 , as well
 as the proceeds and income from risk capital operations undertaken since
 1 February 1971 for the benefit of those States , countries and territories ,
 shall be credited to the Member States in proportion to their contributions
 to the Fund from which the sums are derived , unless the Council decides
 unanimously , on a proposal from the Commission , to place them in reserve
 or allocate them to other operations .
 Any commission due to the Bank for managing the loans and operations referred
 to in the first subparagraph shall be deducted in advance from these sums .
  1
    Proposal of the Bank ;  the Commission considers that these two paragraphs
    should be taken up in a Council declaration .
 ---pagebreak---                       ;
                                 - 9 -
2.  The amount of the grants from the Fund , as fixed in Article 1(3 ) ( a )
and ( b ), shall be supplemented by any other Revenue accruing to the Fund .
                                 CHAPTER II       -
                                 Article 10
1.   Subject to Articles 17 to 21 and without prejudice to the Bank 's
responsibilities for the administration of certain forms of aid , the Fund
shall be adminitered by the Commission in accordance with the rules laid
down by the Financial Regulation referred to in Article 28 .
2.   Subject to Articles 22 to 24 , risk capital and interest rate subsidies
financed from the Fund 's resources shall be administered by the Bank on
behalf of the Community in accordance with its statute and the rules laid
down by the Financial Regulation referred to in Article 28 .
                                 Article 11
The Commission shall be responsible for implementing the aid policy
defined by the Council and the general guidelines for financial and
technical cooperation defined by the ACP-EEC Council of Ministers
pursuant to Article 119 of the Convention .
                                 Article 12
1.   The Commission and the Bank shall periodically provide each other with
appropriate information on the requests made to them for finance and on
preliminary contracts made with them by the relevant bodies of the ACP
States , the countries and territories , or other recipients of aid as
provided for in Article 94 of the Convention and in the corresponding
provisions of the Decision , before their requests were submitted .
 ---pagebreak---                                    - 10 -
  2.   The Commission and the Bank shall keep each other informed of the
   progress made in appraising requests for finance .
                                   Article 13
   1.  The Commission shall appraise projects which , pursuant to Article 101
  of the Convention and the corresponding provisions of the Decision , could
  be financed by grants or special loans from the Fund 's resources .
  The Commission shall also appraise requests for transfers submitted pursuant
  to Title II , Chapter I of the Convention and the corresponding provisions
  of the Decision , together with projects and programmes eligible for the
  special financing facility pursuant to Title III , Chapter I of the Convention .
  To this end , it shall satisfy itself that the conditions for bringing into
. operation the export earnings stabilization system and the special financing
  facility for minerals have been met .
  2.   The Bank shall appraise projects which , pursuant to its statute ,
  Article 101 of the Convention and the corresponding provisions of the Decision ,
  could be financed by loans from its own resources , with or without interest
  rate subsidies , or by risk capital .
  3.   Projects which come under the industrial , agri-industrial , mining or
  tourism sectors , and energy production schemes linked to a project in those
  sectors , shall be submitted to the Bank , which shall examine whether they
  are eligible for one of the forms of aid it administers .
  4.   Where , in the course of appraisal of a project or programme by the
  Commission or by the Bank , it is . found that such project or programme could
  not be financed by one of the forms of aid administered by the institution
  in question , the latter will , having informed the potential recipient ,
  transmit the request to the other institution .
  1
    See declaration annexed .
 ---pagebreak---                                   - 11 -
                                  Article 14
  »
 1.  Without prejudice to special instructions which the Bank receives
 from the Community in respect of the recovery of principal and interest
 relating to special loans , the Commission shall undertake , on behalf of
 the Community , the financial execution of operations carried out with
 the Fund 's resources in the form of grants , special loans , transfers or
 special financing facility ;   it shall make payments in accordance with
 the Financial Regulation referred to in Article 28 .
 2.  The Bank shall undertake , on behalf of the Community , the financial
•execution of operations carried out with the Fund 's resources in the form
 of risk capital .    In such cases , the Bank shall act on behalf and at the
 risk of the Community .    Any resulting rights , particularly rights as
 creditor or owner , shall be vested in the Community .
 3.  The Bank shall undertake the financial execution of operations
 carried out in the form of loans from its own resources combined with
 interest rate subsidies from the Fund 's resources .
                                  Article 15
 1.   By way of application of Article 109 of the Convention , programming
 missions shall be undertaken under the general responsibility of the
  Commission with the participation of the Bank .
 2.   For the purpose of their preparation , and at the same time to achieve ,
 on the occasion of the missions , coherence between the Community aid and
 the aid given by each Member State to the ACP States ,
 (a)   the Commission shall provide the Member States with information obtained from
       the ACP States as regards the content and prospects of their development plans
       the objectives they have set themselves and projects already identified which
       are likely to attain those objectives .    The Commission shall prepare such
       information in liaison with the Bank , as regards the matters which concern
       the latter .
 (b)   The Member States shall inform the Commission concerning the direction to be
       taken for their future and for any granted or intended project or programme
       financing .
 ---pagebreak---                                  - 12 -
 (c)  Each Member State and the Commission shall peridocially bring such
                                                 *
      information up to date .
3.   This article shall also apply as regards the countries and territories .
                                 Article 16
1.   Before programming missions are sent out , and on the basis of information
provided by the Commission and the Member States , an exchange of views
between the representatives of the Member States , the Commission and the
Bank shall take place to ascertain the general framework for the Community 's
financial and technical cooperation with each ACP State !
                                    ■
2.   Following the programming missions undertaken in the ACP States by the
Commission and the Bank , the indicative programme of Community aid for each
ACP State shall be forwarded to the Member States .
Should more than one Member State so request , the programmes shall be
the subject of an exchange of views between the representatives of the
Member States , the Commission and the Bank .
3.   If need be , and at least once during the period covered by the
Cprwention , the representatives of the Member States , the Commission and
the Bank shall jointly examine the rate of implementation of the
indicative programmes and any amendments to be made to the same at the
request of the ACP State in question .
 ---pagebreak---                                  - 13 -
                                  Article 17
1 . A Committee ( hereinafter called the " EDF Committee ") , consisting of
representatives of the Governments of the Member States , shall be set up
under the auspices of the Commission .
The EDF Committee shall be chaired by a Commission representative , and its
secretariat shall be provided by the Commission .
A representative of the Bank shall take part in its work .
2.  The Council , acting unanimously , shall adopt the rules of procedure of
the EDF Committee .
3.  Within the EDF Committee , the votes of the Member States shall be
weighted as follows :
                       Belgium                           6
                       Denmark                           3
                       Germany                         27
                       France                          24
                       Ireland                           2
                       Italy                           12
                       Luxembourg                        1
                       Netherlands                       8
                       United Kingdom                  17
4.  The EDF Committee shall act by a qualified majority of 69 votes .
                                  Article 18
1.  The EDF Committee shall give its opinion on financing proposals for
projects or programmes financed by grants , special loans or special
financing facility resources , submitted to it by the Commission .
 ---pagebreak---                                  - 14 -
2.   The financing proposals for projects shall explain the relevance of
the projects to the development prospects of the country or countries
concerned ;  where appropriate , they shall mention the use to which such
countries have put previous Community aid .
They shall include in particular measures promoting , in accordance with
Title VII , Chapter 7 of the Convention and the corresponding provisions
of the Decision , participation by national firms of the ACP States and of
the countries and territories in carrying out the projects .
3.   If the EDF Committee requests substantial changes in the financing
proposal or in the absence of a favourable opinion on the latter , the
Commission shall consult the representatives of the ACP State or ACP
States concerned .   In the absence of a favourable opinion , the latter
shall , at their request , be heard by the representatives of the Community ,
in accordance with Article 113 of the Convention .
4.   In the cases mentioned in paragraph 3 , the financing proposal , after
review or extension , as the case may be , shall be submitted afresh to
the EDF Committee at one of its subsequent meetings .-- - ~
If the Committee still refuses to deliver a favourable opinion , the
Commission shall consult afresh the representatives of the ACP State or
ACP States concerned , in accordance with Article 113(4 ) of the Convention .
                                 Article 19
1.   The financing proposals , together with the opinion of the EDF Committee ,
shall be submitted to the Commission for its decision .
 ---pagebreak---                                 - 15 -
2.  If the Commission decides to differ from the opinion expressed by
the Committee / or if the Committee has not delivered a favourable opinion ,
it shall either withdraw the financing proposal or , at the earliest
opportunity , refer the proposal to the Council , which shall decide on it
according to the same voting procedure as the EDF Committee .
In the latter case the ACP State concerned may , as provided for in
Article 113(5 ) of the Convention , transmit to the Council any additional
information it considers necessary before the final decision is taken and
may be heard by the President and members of the Council .
                                 Article 20
The Commission shall regularly inform the EDF Committee of all requests for
financing officially submitted to it by one or more ACP States irrespective
of whether these are selected by its departments .
                                 Article 21
The EDF Committee shall be kept informed of the results of work periodically
done by the Commission on the evaluation of projects being carried out or
completed , particularly in relation to the development objectives set .
                                 Article 22
1.   A Committee ( hereinafter called the   Article 22 Committee ), consisting
of representatives of the Governments of the Member States , shall be set
up under the auspices of the Bank .
 ---pagebreak---                                  - 16 -
The Article 22 Committee shall be chaired by the representative of the
Member State currently occupying the Presidency of the Board of
Governors of the Bank ;   its secretariat shall be provided by the Bank .
A representative of the Commission shall take part in its work .
2.   The Council , acting unanimously , shall adopt the rules of procedure
of the Article 22 Committee .
3.   Within the Article 22 Committee , the votes of the Member States shall
be weighted as provided in Article 17(3 ).
4.   The Article 22 Committee shall act by a qualified majority of 69 votes .
                                 Article 23
1.   The Article 22 Committee shall deliver an opinion on requests for loans
with interest rate subsidies and on proposals for financing by risk capital
which are submitted to it by the Bank .
The Commission representative may , at meetings , submit the Commission 's
assessment of these proposals .    This assessment shall state whether the
projects conform with Community development aid policy , with the objectives
of financial and technical cooperation laid down by the Convention and with
the general guidelines adopted by the ACP-EEC Council of Ministers .
In addition , the Bank shall inform this Committee of any loans without
interest rate subsidies that it intends to grant .
2.  The document submitted to the Article 22 Committee by the Bank shall ,
in particular , explain the relevant of the project to the development
prospects of the country or countries concerned and , where appropriate ,
indicate the situation as regards loans granted by the Community and holdings
acquired by it .
 ---pagebreak---                                  - 17 -
3.   Where the Article 22 Committee does not deliver a favourable opinion
on a proposal concerning an ACP State or group of ACP States , the Bank
shall consult the representatives of the said State or States and the
procedure laid down in Article 113(3 ) and ( 4 ) of the Convention shall apply .
4.   Where the Article 22 Committee delivers a favourable opinion in respect
of a request for a loan with an interest rate subsidy , the request ,
together with the reasoned opinion of the Committee and , where appropriate ,
the assessment of the Commission representative , shall be submitted for a
decision to the Board of Directors of the Bank , which shall act in
accordance with the provisions of the Bank 's statute .
 In the absence of a favourable opinion from the Article 22 Committee , the
 Bank shall either withdraw the request or decide to uphold it .    In the latter
 event , this request , together with the reasoned opinion of the Committee and ,
 where appropriate , the assessment given by the Commission representative , shall
 be submitted for a decision to the Board of Directors of the Bank , which shall
 act in accordance with the provisions of the Bank 's Statute .
 5.  Where , in respect of a proposal for financing by risk capital , the
 Article 22 Committee delivers a favourable opinion , the proposal shall be
 submitted for a decision to the Board of Directors of the Bank which shall act
 in accordance with the provisions of the Bank 's statute .
 In the absence of a favourable opinion from the Article 22 Committee , the Bank
 shall either withdraw the proposal or request that the Member State chairing
 the Article 22 Committee bring the matter before the Council as soon as possible ,,
 In the latter case , the proposal shall be submitted to the Council together with
 the reasoned opinion of the Article 22 Committee and the assessment by the
 Commission representative .
 ---pagebreak---                                   - 18 -
The Council shall act in accordance with the same voting procedure as
the Article 22 Committee .
If the Council decides to confirm the Article 22 Committee 's position , the
Bank shall withdraw its proposal .
If , however , the Council is in agreement with the Bank 's proposal , the Bank
shall implement the procedures under its statute .
                                  Article 24
1.    Subject to such adjustments as are necessary to take account of the
nature of the operations financed and of the procedures laid down in the
statute of the Bank , the latter shall regularly inform the Article 22
Committee of all requests for financing officially submitted to it ,
irrespective of whether these are selected by its departments .
2.    The Article 22 Committee shall be kept informed of the results of work
periodically done by the Bank on the assessment of projects being carried
out or completed , particularly in relation to the development objectives
set .
                                  Article 25
1.    The Commission and the Bank shall ascertain how the Community aid
administered by each of them is used by the ACP States , the countries
and territories or any other recipients .
2.    They shall also ascertain , each for their own operations and in close
collaboration with the relevant authorities of the country or countries
concerned , how projects financed with Community aid are used by the
recipients .
 ---pagebreak---                                 - 19 -
3.   When ascertaining how Community aid and projects are used , as provided
for in paragraphs 1 and 2 , the Commission and the Bank shall examine the
extent to which the objectives referred to in Articles 91 and 92 of the
Convention and in the corresponding provisions of the Decision have been
attained .
4.   The Commission and the Bank shall inform the Council as and when required
of its findings pursuant to paragraphs 1 , 2 and 3 .
The Council , acting by a qualified majority as laid down in Article 17(4 ),
shall take the necessary measures .
                                 CHAPTER III
                                                     \
                                  Article 26
The amounts of the transfers referred to in Articles 39 and 40 respectively
of Title II of the Convention and in the corresponding provisions of the
Decision , and the contributions to the replenishment of resources mentioned
in Article 42 of the Convention and in the corresponding provisions of the
Decision , shall be expressed in units of account as laid down in Article 3 .
Payments shall be made in the' currency of one or more Member States chosen by
the Commission after consultation of the ACP State or the relevant
authorities of the countries and territories .
                                 Article 27
Each year the Commission shall draw up a comprehensive report for the Member
States on the operation of the system and the use made by the ACP States of
the funds transferred .
 ---pagebreak---                                 - 20 -
The report shall indicate in particular the effect of the system on the
economic development of the recipient countries and on the development
of external trade .
This article shall also apply in respect of the countries and territories .
                                CHAPTER IV
                                Article 28
The provisions for implementing this Agreement shall be the subject of a
Financial Regulation adopted , upon the entry into force of the Convention ,
by the Council acting by the qualified majority laid down in Article 18(4 )
on the basis of a Commission draft , after an opinion has been delivered by
the Bank on the provisions concerning it and by the Court of Auditors provided
for in Article 206 of the Treaty .
                                Article 29
1.  At the close of each financial year , the Commission shall adopt the
revenue and expenditure account and the balance sheet of the Fund .
2.  Without prejudice to paragraph 4 , the Court of Auditors provided for
in Article 206 of the Treaty shall exercise also its powers in respect of
the Fund 's operations . The conditions under which the Court exercises its
powers shall be laid down in the Financial Regulations referred to in
Article 28 .
3.  The discharge for the financial management of the Fund shall be given
to the Commission according to the procedure provided for in the fourth
paragraph of Article 206 of the Treaty .
 ---pagebreak---                                 - 21 -
4.   The operations financed from the resources of the Fund and managed by
the Bank shall be subject to the control and discharge procedures laid down
by the statute of the Bank for all its operations .   Each year , the Bank
shall send the Commission and the Council a report on the execution of
operations financed from the resources of the Fund and managed by the Bank .
                                Article 30
1.   The remaining balance of the Development Fund for the overseas countries
and territories established by the Implementing Convention annexed to the
Treaty shall continue to be administered as provided in that Implementing
Convention and in accordance with the rules and regulations in force on
31  December 1962 .
The remaining balance of the Fund set up by the Internal Agreement on the
financing and administration of Community aid signed at Yaounde on 20 July 1963
shall continue to be administered as provided in that Internal Agreement
and in accordance with the rules and regulations in force on 31 May 1969 .
The remaining balance of the Fund set up by the Internal Agreement on the
financing and administration of Community aid signed at Yaounde on
29 duly 1969 shall continue to be administered as provided in that Internal
Agreement and in accordance with the rules and regulations in force on
31 January 1975 .
The remaining balance of the Fund set up by the Internal Agreement on the
 financing and administration of Community aid signed in Brussels on
 11 July 1975 shall continue to be administered as provided in that Internal
Agreement and in accordance with the rules and regulations in force on
 1 March 1980 .
 ---pagebreak---                                 - 22 -
2.   In the event of successful completion of projects financed from the
Funds referred to in paragraph 1 being jeopardized by a lack of resources
due to the balance being exhausted , proposals for additional financing may
be submitted by the Commission under the conditions laid down in Article 18 .
                                Article 31
This Agreement shall be approved by each Member State in accordance with its
own constitutional requirements .   The Government of each Member State shall
notify the Secretariat of the Council of the European Communities when the
procedures required for its entry into force have been completed .
This Agreement is concluded for the same duration as the Convention .
However , it shall remain in force for as long as is necessary for all the
operations financed under the Convention to be fully executed .
                                Article 32
This Agreement , drawn up in a single original in the Danish , Dutch , English ,
French , German and Italian languages , each of these texts being equally
authentic , shall be deposited in the archives of the Secretariat of the
Council of the European Communities , which shall transmit a certified copy
to each of the Governments of the Signatory States .
 ---pagebreak---                       Draft Declaration of the Community
Article 13(3 ) of the Internal Financial Agreement
1.   It is understood that the sectors of Bank intervention mentioned in
Article 13(3 ) of the Internal Agreement are not limitative but constitute
a guide-line which does not exclude the possibility of the Bank giving aid
in the form of loans out of its own resources for infrastructure projects
showing a commercial return in the ACP States when this form of financing
seems appropriate , by reason of their level of development and economic
and financial state .
2.   Requests for financing by risk capital for projects in the transport
and telecommunications sectors may , in exceptional circumstances , also be
presented to the Bank in the case of industrial-type firms under autonomous
management which are able to justify the use of this kind of aid ( Article 105
of the Convention ).
3.   As regards aid for small and medium-size firms ( Article 144 of the
 Convention ) responsibility for drawing up such projects rests either with
the Commission or the Bank according to the rules and criteria set out in
the annexed table .
 Annex
 ---pagebreak---                    POSSIBLE ALLOCATION OP RESPONSIBILITIES BETWEEN THE
                        COMMISSION AND THE EIB FOR THE FDTAHCIMJ
                          OP SMALL AMD MEDIUM-SIZED ENTERPRISES
                                                                            1
 Thiti allocation of responsibilities should be placed on a, formal basis ii; terts
 which could possibly be negotiated in part with the ACP States ; it should , in any
 case , appear at least in an internal protocol between the Commission and the 3ank .
           EUROPEAN INVESTMENT BANK                             COMMISSICST
                                         I. Sectors
 Small and mediun-sieed enterpriseB                 Small enterprises in the craft ,
 in industry , agricultural industry                agricultural and commercial sectors .
 and tourism ,
 Onlendin/r bodies                            II .  On lend in-? bodies or direct rccipia rtj
 Banks and development financing                    Any body , either public or in the
 institutions working in the EIB                    nature of a cooperative or mutual
 sectors specified under I. above                   assistance society , aimed at
 and employing banking and com­                     developing the craft , commercial
 mercial administrative method a .                  and agricultural sectors .
                                III . Methods and procedures
 (Token entry) Direct acquisition'           ' '    EDF grant or loan on special terras to
of holdings by the Community in                     the onlending body with the condition
the capital of development banks .                  where appropriate , that the latter
- Global loans , with interest                      pass on the financing in the form of
   rate subsidy , fromlhe Bank 's                   a loan.
   own resources .
– Global aid , in the form of risk
   capital (fco finance loans or COJW
   stitute the own resources of
   small and medium-sized enter­
   prises ).
The Bartk 's usual appraisal ,
decision-taking and monitoring
procedures to be adapted to the
particular cases and to the
nature of the operations .
                           IV . Size of the lending operations
No prior limit on global loans                      No limit for the direct recipient and .
or
or aid
    aid ..                                          where onlent to agricultural , craft ax.
                                                    commeroial sectors , loan may not
Minimum lending of 20 000 SUA ( or                  exceed 20 OO0 EUA for the individual
more , of oourse ) for enterprises                  operation,
in the EIB sectors specified
under I. above .