CELEX: 51977PC0307
Language: en
Date: 1977-07-04 00:00:00
Title: COMMISSION COMMUNICATION TO THE COUNCIL on the negotiation of the third Financial Protocol under the EEC - Turkey Association Agreement#RECOMMENDATION FOR A COUNCIL DECISION concerning the conclusion of a Financial Protocol between the European Economic Community and Turkey

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (77) 307
Vol. 1977/0103
 ---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
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit
règlement.
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
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this
file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5
der genannten Verordnung freigegeben.
 ---pagebreak---        COMMISSION OF THE EUROPEAN COMMUNITIES
                         I
                                                              COM(77)307 final.
                                                              Brussels , 4 July 1977 *
                    :                            '              1    1
                                                                \
                             t                   •                .
                           COMMISSION COMMUNICATION TO TEE COUNCIL
                  on the negotiation of the third Financial Protocol under
                           the EEC - Turkey Association Agreement
                           RECOMMENDATION FOR A COLTO IL DECISION
                concerning the conclusion of a Financial Protocol between
                       the European Economic Community and Turkey
COX ( 77 ) 307 final .
 ---pagebreak---                      E&planator.T Memorandum
 J.o     The negotiations for a thi^l financial nrot^nol in th^ oo-;,t «:ct
 of the Association Agroetren'': h~twp«~! the F330 and Te rkey w^r.-e compl oted o
 3 February 1977 „ As the Gornmu.nit -r'f-i d«1 « nation has indicate'] its
 agreement ad               the Commission crj/bsnitted the result 3 of the
negotiations to tho Oopno? X which arirsroved then at its meeting on
8 March 1977o The protocol has been signed on. 12 Way .1 077 »
2C      With a view to the conclusion of this protocol on behalf of the
Comnunitj the Commission is requested, to approve the draft cominuni cation
to the Couno.il on the negotiations and the recommendation for a Council
decision to conclude the protocol®
 ---pagebreak---                  COMMISSION COMMUNICATION TO THE COUNCIL
        on the negotiation of the third Finanoial Protocol under
        the EEC-Turkey Association Agreement
 1,   By a Deoision of 29 November 1976 f the Council authorized the
 Commission to open negotiations with the Republic of Turkey for the
 conclusion of the third Financial Protocol under the EEC-Turkey
 Association Agreement and issued the directives for those negotiations ..
 The negotiations with the Turkish Delegation took place within the
 Council of Association .   They were completed on 3 February 1977c
 The Turkish delegation indicated its approval of the content of the
 texts of the draft Protocol and the Community declaration concerning
 the European unit of aocount .   The Community delegation indicated
 its approval ad referendum .   These texts are attached to this
 Communication .
2.    In order to enable the Protocol to be signed at -an early date ,
the Commission submitted the draft texts to the Council on 8 Jiarch 1977
proposing that it take the necessary steps to enable the signature
to take place as soon as possible .    The Drotoool has been signed on 1 ?
May 1977 .
In order that this Protocol may be concluded on behalf of the Community
the Commission is transmitting to the Council herewith a recommendation
for a decision concluding the Protocol , to which is annexed the
Community declaration .
The Commission also recommends that the representatives of the
governments of the Member States , meeting in the Council , take the
steps required .for the implementation of the ratification , accept one e
or approval procedures laid down in Article 16 ( l ) of the Protocol .
 ---pagebreak---                             RECQ MMDATION
                                 for a
                           GOQNCIL DECISION
 concerning the conclusion of a Financial Protocol between the European
 Eoonomio Community and Turkey
 THE COUNCIL OP THE EUROPEAN COMMUNITIES ,
 Having regard to the Treaty establishing the European Economic
 Community, and in partioular Article 238 thereof .
 Having regard to the recommendation from the Commission ,
 Having regard to the Opinion of the European Parliament ,
Whereas the Financial Protocol between the European Economio
 Community and Turkey ,
 signed at    Brussels              on     12 Kay 1977
 should be conoluded ,
HAS DECIDED AS FOLLOWS :
                               Artide 1
The Financial Protocol between the European Economic Community and Turicey,
is hereby approved on behalf of the Community.
The text referred to in the first subparagraph is annexed to this Decision .
                              Article 2
The President of the Council shall oanry out , on behalf of the Ccnunui-.it .v ,
the notification procedure provided for in Article 16 ( l ) of the Protocol .
Done at                                     19
                                                           ?or the Council
                                                          The Prraiaent
 ---pagebreak---           FINANCIAL PROTOCOL
BETWEEN THE EUROPEAN ECONOMIC COMMUNITY
              AND TURKEY
 ---pagebreak---  HIS MAJESTY THE KING OP THE BELGIANS ,
 HER MAJESTY THE QUEEN OF DENMARK ,
 THE PRESIDENT OP THE FEDERAL REPUBLIC OF GERMANY ,
 THE PRESIDENT OP THE FRENCH REPUBLIC ,
 THE PRESIDENT OP IRELAND .
 THE PRESIDENT OP THE ITALIAN REPUBLIC ,
 HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG ,
 HER MAJESTY THE QUEEN OP THE NETHERLANDS ,
 HER MAJESTY THE QUEEN OP THE UNITED KINGDOM OF GREAT BRITAIN
 AND NORTHERN IRELAND ,
 and ,
THE COUNCIL OP THE EUROPEAN COMMUNITIES ,
                         of the one part ,
THE PRESIDENT OP THE REPUBLIC OP TURKEY ,
                        of the other part ,
CONSCIOUS of the need to promote the accelerated development
of the Turkish economy with a view to facilitating the
pursuit of the objectives of the Agreement establishing an
Association between the European Economic Community and
Turkey ,
HAVE DESIGNATED as their Plenipotentiaries :
CEE /TR / e 2
 ---pagebreak--- HIS MAJESTY THE KING OP THE BELGIANS :
HER MAJESTY THE QUEEN OP DENMARK :
THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY
THE PRESIDENT OP THE FRENCH REPUBLIC :
THE PRESIDENT OF IRELAND :
THE PRESIDENT OF THE ITALIAN REPUBLIC :
 ---pagebreak---   HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG ;
  HER MAJESTY THE QUEEN OF THE NETHERLANDS t
  HER MAJESTY THE QUEEN OF THE UNITED KINGDOM OF GREAT BRITAIN
  AND NORTHERN IRELAND ; '
 THE COUNCIL OF THE EUROPEAN COMMUNITIES ;
 THE PRESIDENT OF THE REPUBLIC OF TURKEY ;
 WHO , having exchanged their Full Powers s found in good and
 due form ,
HAVE AGREED AS FOLLOWS :
CEE /TR / e
 ---pagebreak---                               ARTICLE 1
        Within the framework of the Association between the
European Economic Community and Turkey , the Community shall
participate on the terms set out in this Protocol in
measures designed to promote , by efforts additional to
those made by Turkey itself , the development of Turkey .
                              ARTICLE 2
1.          For the purposes specified in Article 1 , and for a
   period expiring on 31 October 1981 , an aggregate amount
   of 310 million European units of account ( EUA ) may be
   committed as follows :
   ( a ) 90 million EUA in the form of loans from the
         European Investment Bank , hereinafter called the
         " Bank", granted from its own resources ;
   ( b ) 220 million EUA in the form of loans on special
         terms granted by the Bank acting on instructions
         from the Community .
2.          Capital projects shall be eligible for financing
   which have been submitted to the Bank by the Turkish
   State or , with the latter' s agreement , by an authority
   or by public or private undertakings having their seat or
   a place of business in Turkey which :
                                                        CEE /TR / e
 ---pagebreak---      M           to increase the productivity of the Turkish
           economy and , in particular , aim to pro-ride Turkey
           with & better economic infrastructure , higher
           agricultural output , and modern 8 efficiently-run
           undertakings in the industrial and service sectors
           whether they are publicly or privately managed ;
     ( b ) further the realization of the objectives of the
           Association Agreement ;
                         ft
     ( c ) are part of the Turkish Development Plan in
           force .
 3.         With respect to the choice of capital projects
    within the framework of the above provisions :
     ( a ) only individual projects may be financed ;
    ( b ) as a general rule , capital projects which are to be
           carried out on Turkish territory may * in principle , be
           financed in all the sectors of the economy ;
    ( c ) special consideration shall be given to projects
           which could serve to improve Turkey 's balance of
           payments .
 I*         Examination of the eligibility of projects and the
    granting of loans shall be undertaken in accordance with
    the detailed rules , conditions and procedures laid
    down by the Bank 's Statute .
CEE/ TR /® 6
 ---pagebreak---                            ARTICLE 3
1.       The amounts to be committed each year shall be
   distributed as evenly as possible throughout the period of
   application of this Protocol . During the initial period
   of application , however , a proportionately higher amount
   may , within reasonable limits ., be committed .
2.       Any funds not committed may ., by the end of the period
   referred to in Article 2(1 ), be used , until exhausted . In
   that case , the funds shall be used in accordance with the
   same arrangements as provided for in this Protocol .
                           ARTICLE 4
1.       The loans may be granted through the intermediary of
   the State or appropriate Turkish bodies , on condition
   that they onlend the amounts to the recipients on terms
   decided , by agreement with the Bank , on the basis of the
   economic and financial characteristics of the projects
   for which they are intended .
2.       Loans granted by the Bank from its own resources
   shall be subject to terms as to duration established on
   the basis of the economic and financial characteristics
   of the projects . The interest rate shall be that applied
   by the Bank at the time of signature of each loan contract .
3f       Loan3 on special terms shall be granted to the
   Turkish State for forty yeafs with postponement of
   amortization of ten years and at an interest rate of
   2„5£ per annum .
                                                     CEE / TR / e 7
 ---pagebreak---      !f&) help to increase the productivity of the Turkish
            economy anclf, in particulars aim to provide Turkey
           with a better economic infrastructure , higher
           agricultural output , and modern 0 efficiently-run
           undertakings in the industrial and service sectors
           whether they are publicly or privately managed ;
     ( b ) further the realisation of the objectives of the
           Association Agreement ;
                            a
     ( e ) are part of the Turkish Development Plan in
           force .
 3.          With respect to the choice of capital projects
    within the framework of the above provisions :
     ( a ) only individual projects may be financed ;
     ( b ) as a general rule , capital projects which are to be
           carried out on Turkish territory may * in principle , be
           financed in all the sectors of the economy ;
    ( c ) special consideration shall be given to. projects
           which could serve to improve Turkey 's balance of
           payments .
 t.         Examination of the eligibility of projects and the
    granting of loans shall be undertaken in accordance with
    the detailed rules , conditions and procedures laid
    down by the Bank 's Statute .
CEE/ TR / ® 6
 ---pagebreak---             Tfcs Turkish Stat® shalA ensure thsv: rep            'oy
      beneficiaries rshioh ar« not iBBP.^dia^sl:? r?.seded by fch-s Sta^«
      foy the amortisation of loans from the Bank are used to
      finance capital projects wifr-hin th® meaning of
      Article 2(2 ). It shall notify the Bank each year of the
      use of these amounts . This provision shall also apply
      to projects carried out under the earlier Financial
      Protocols .
 *5 „       Loaas accorded by the Bank from its own resources
      shall be used primarily to finance projects showing a
      normal return ; loans on special terms shall be used
      primarily to finance indirect or long-term return
      projects .
                               ARTICLE 5
        The loans may be used to cover expenditure on imports
 or the domestic expenditure required for - carrying out
 approved capital project s „ including expenditure on planning B
 on the services of consulting engineers and on technical
 assistance .
                               ARTICLE 6
        Aid from the Bank for the execution of projects may ,
with the agreement of Turkey , take the form of co-financing .
                               ARTICLE 7
       Undertakings whose risk capital comes wholly or partly
from countries of the Community shall have access to the
finance provided for in this Protocol on the same conditions
as undertakings frith national capital .
CEE /TR / e 8
 ---pagebreak---                                   ARTICLE 8
           The execution , management and maintenance of schemes
which are the subject of financing under this Protocol shall
be the responsibility of Turkey or of the other beneficiaries
referred to in Article 2(2 ).
           The Bank shall ensure that its financial aid is expended
 in accordance with the agreed allocations and to the best
economic advantage .
                                  ARTICLE 9
1.              All natural and legal persons of the Republic of
     Turkey or of Member States of the Community may
     participate on equal terms in tendering procedures and
     other procedures for the award of contracts financed by
     loans .
2.              Turkey shall apply to contracts awarded for the
     execution of projects financed under this Protocol fiscal
    and customs arrangements at least as favourable as that
    applied in respect of other international organizations .
                                 ARTICLE 10
          Turkey shall ? take all necessary measures to ensure that
interest and all other payments due to the Bank in respect of
loans granted under this Protocol are exampted from any
national or local tax or levy .
                                    > • 'i    /i ' -  '         ■
v r '! . ><; "J o V .. :!
                                         .? i .t vi:/'-     nr'­
                                               r . îJi M ;
                                                                  ! -
                                            I •;?: - x'-< r
                                                                      CEE/TR / e 9
 ---pagebreak---                               ARTICLE 11
         Ifher® a loan is accorded to a beneficiary other than the
- Turkish State , the provision of a guarantee by the latter
   KtAy be required by the Bank as a condition of the grant of
   the loan .
                            . ARTICLE 12
         Throughout the duration of the loans granted pursuant
   to this Protocol , Turkey shall undertake to make available
   to debtors enjoying such loans and to the guarantors of the
   loans the foreign currency necessary for the payment of
   interest , commission and other charges and for the repayment
   of capital .
                              ARTICLE 13
         The results of financial co-operation may be examined
  within the Association Council set up by Article 6 of the
  Agreement establishing an Association between the European
  Economic Community and Turkey .
                              ARTICLE 11
         The Contracting Parties will 9 one year before the expiry
  of this Protocols consider      what       provisions relating
  to financial assistance might be adopted for a later period .
                              ARTICLE 15
        This Protocol shall be annexed to the Agreement
  establishing an Association between the European Economic
  Community and Turkey .
 CETS/TR/g 10
 ---pagebreak---                             ARTICLE 16
1.       This Protocol shall be subject to ratification ,
   acceptance or approval in accordance with the Contracting
   Parties * own procedures ; the Contracting Parties shall
   notify each other that the procedures necessary to this
   end have been completed .
2.       This Protocol shall enter into force on the first
   day of the second month folloxiring the date on which the
   notifications provided for in paragraph 1 have been given .
                            ARTICLE 17
     This Protocol is drawn up in two copies in the Danish ,
Dutch , English , French , German , Italian and Turkish languages
each of these texts being equally authentic .
                                                       CEE / TR / e 1
 ---pagebreak---                                                 ANNEX
    Declaration of the European Economic Community
        on Article 2 of the Financial Protocol
     The European unit of account used to express the
amounts specified in Article 2 of the Financial Protocol
is defined as t>he sum of the following amounts in the
currencies of the Member States of the Community :
     German mark            0.828
     Pound sterling         0.0885
     Prench franc           1.15
     Italian lira         109
     Dutch guilder          0.286
     Belgian franc          3.66
     Luxembourg franc       0.14
     Danish krone           0.217
     Irish pound            0.00759
     The value of the European unit of account in any
given currency is equal to the sum of the equivalent in
that currency of the amounts of currency referred to in
paragraph 1 . It is calculated by the Commission using
daily market exchange rates .
     The daily rates of exchange in the various national
currencies are published in the Official Journal of the
European Communities .
                                                CEE / TR /e 13
 ---pagebreak---                           FINANCIAL RECORD
                         for the 1977 Budget
PART 1 s    INTERVENTION APPROPRIATIONS
            ( for existing and new projeots )
lo   RELEVANT BUDGET HEADING CODE
     Article 962
2.   TITLE OP BUDGET HEADING
     " Financial cooperation with oertain non-member oountries"
3.  LEGAL BASIS
    Ajrticle 238 of the EEC Treaty
4.  DESCRIPTION , OBJECTIVE(S ) AND JUSTIFICATION OF THE PROJECT
    Third financial protocol between EEC and Turkey , concluded
    3 February 1977 , annexed to the Association Agreement between
    EEC and Turkey .
5.  APPROPRIATION ( in u.a.)
    No commitment will be made in the 1977 Budget under the head of
    the financial ja.id provided for in the financial protocol ( the
    budget heading concerned is a token entry ) o The budget appropriations
    may be used only from the 1978 financial year onwards , after the
    protocol has been ratifiedo      This protocol provides for a sum of
    220 million EXJA to be committed up to 31 Ootober 1981 from budget
    appropriations ( with an additional 90 million HXJA in loans from the
    ECB)o The breakdown of this sum will be decided annually in the
    course of the budget nrocodurso
6,  TYPE OF CONTROL TO BE APPLIED
  . As li id down in the Financial Regulation of <! }' April 1973 aoclicable
    to t : e General Budget of the PJarooean Communities ,,
 ---pagebreak---                    .'•ÄAiVÄtW.X' - » -.».– «■«/ - '4-.IMIW1IIH L-j|»«fcr ~ . A.M* «•-» W «-».
                                                            - 2 -
Bo PART 2 s ADDITIONAL DATA TO B3B PROVIDED FOR A MEM PROJECT
   7.   COST OP THE PROJECT ( FOR TOE WHOLE OP ITS EXPECTED DURATION)
        220 million SUA charged against the Community Budget for the
        whole duration of application of the protocol , i 0 e . up to
        31 October 1981 .
   80   INFORMATION REGARDING STAFFING AND THE APPROPRIATIONS FOR
        ADMINISTRATIVE EKPfNDITURE NBCESSARY FOR THE IMPLEMENTATION
        OF THE PROJECT
        The project will be implemented within the framework of the
        Commission 's establishment plan »
   9,   PROJECT FINANCED FROM;
        Th9 financial aid for the total duration of the financial
        protocol will be financed from Community Budget appropriations
        (220 million ELIA) and EIB own resouroes (-90 million EUA).
        The budget appropriations will be made in the form of special
        loans *