CELEX: 51978PC0093
Language: en
Date: 1978-03-09
Title: Proposal for a COUNCIL REGULATION (EEC) relating to the Creation of a European Agency for Cooperation (EAC) (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (78) 93
Vol. 1978/0033
 ---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---                                       '
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 ---pagebreak---                  Creation of a European Agency for Cooperation < EAC >.
 For the purposes tf implementing the Lom* Convention and similar agreements
 ( Maghreb , Mashrek , Israel ) the Commission assumes administrative responsibility
particularly 1n the sphere of financial and technical cooperation.        A large
part of these responsibilities Involves the Commission applying a staff policy ,
 since its task 1s :
    1.   to set up, fhaintain and run delegations in the developing countries linked
         to the Community by comprehensive preferential cooperation agreements ;
 %H. to recruit and manage technical cooperation staff placed at the disposal *
         of these countries ;
 111 .   finally , to administer a scholarship programme for students attending the
         training establishments of Member States and associated states .
A specialized instrument was obviously needed to undertake these tasks .       The
 Commission provided this instrument in 1964 in the form of a structure governed
by private law which has proved effective and useftil but which time has shown to
be not completely satisfactory .
The purpose of this communication is therefore !
    to outline the features of the structure which was set up and th« conditions
    under which it Operates ;
 . to explain why this structure must develop and 1ft what direction ;
    finally , to present the draft text required for the creation of the proposed
   new structures .
X.     THE EXISTING INSTRUMENT :   THE EUROPEAN ASSOCIATION FOR COOPERATION
<1>     Origin :  the Implement Inq Convention on the Association annexed to the
                                                                        «
        Treaty of Rome
In the initial phase , from 1958 to 1964, the tents 1n force did not cover
technical cooperation .       Training programmes were likewise non-existent ,   In
the case of capital aid,, the .only concern was to provide technical supervision
 ---pagebreak---  of the execution of projects financed by the EOF . , This task was entrusted
 exclusively to. firms of consulting engineers chosen from within the Community,
 which were bound by contract to the Commission and set up teams of technicians
 locally .                   v
                                                          ••                            •
 In this phasfc , the very idea of Commission representation was not even considered.
 However , events fapldly demonstrated the need to 90 beyond this simple technical
 role : circumstances required the firms of engineering consultants to answer
questions raised by the Governments of the associated states which went far
beyond the technical field and involved relations between the Commission and
non-member countries .     Consultancy firms, which were engaged 1n profit making      i
                                                                                   • m
activities , were not suited to assuming such a role of representation .
                                      >                            «
< 2)   Evolution :  first and second Yaounde Conventions
Zt is for this reason that 1964 saw the beginning of a second phase *       Technical
cooperation , whidh had been formalized, gave rise to extensive training programmes
and the provision of experts 1n the most varied fields .      Gradually , the Commission
set up a network of 21 ," EDF resident supervisors" which still existed at the end ,
of 1975 .
These resident supervisors were assisted by teams of technicians and
administrative andf inanclal staff , made up one-third of the staff of the
consultancy firms retained from the fpreceding phase and two-thirds of staff
recruited directly , like the resident supervisors themselves , under Individual
contracts of employment .
During this phase emphasis was placed mainly on the financial and technical
supervision of the execution of projects and programmes financed by the EDF :
At the end of 1975 , these . local teams were supervising annually the execution
of 100 international invitations        tender and 2 000 contracts of various kinds ,
involving total disbursements of 200 million units of account .      The value of
these teams was generally acknowledged .
 ---pagebreak---                                    - 3 -
   At that tine , thd staff of the teams totalled 1-20 expatriates , 78 of whost
   were university graduates or equivalent ( like A staff officials at the Commissi ,
   and 42 were non-ejraduates (B category ).    The staff was mainly technical :
   11 administrators!, as against 67 civil engineers or architects , 30 agricultural
   and 12 financial experts . ; In addition to this expatriate staff there was a
   total of 320 staff recruited locally - secretaries , chauffeurs , caretakers and
   messengers ( equivalent to categories C and D in the Commission ).    The smallest
   delegation employed two expatriates , the largest eight , while the average was
   about six .
* ^However, as Circumstances would have it , the next phase began with the appearance
   of new forms of aid ( food aid, the Cheysson Fund, exceptional aid from budget
   appropriations ) dnd the associated Governments' desire to deal with all aspects
   of cooperation with the Community and the Commission .
   (3)  The administrative structure created 1n 1964 ?    the EAC
   To carry out the already considerable administrative tasks described above , the
   Commission in 1964 chose a structure governed by private law since 1t did not
   think it advisable to enter the necessary posts 1n the Commission budget .
   Under Belgian law this structure is constituted as the European Association for
   Cooperation ( EAC ), a non-profit making association governed by international law .
                      «
   The Administrative Council of the EAC 1s composed of Commission officials , under
   the chairmanship of the Director-General for Development .     The EAC is
   responsible , under agreements concluded with the Commission , for recruiting and
   managing not only the resident supervisors and their staff but also the technical
   cooperation staff made available to the governments of the associated countries
   at their request /'and finally , for administering scholarship-holders and .
   trainees placed in Belgian training establishments .
                                               )
   The EAC budget and accounts are approved and checked by the Commission and
   audited by the Audit Board . The head office in Brussels has a staff of 40,
                                /                      /
 ---pagebreak--- of categories A , 8 and C , whose terms of employswsnt , though obviously different ,
can be compared tfith those of temporary staff .      The administrative cost of
this head office , financed by a grant from the Commission budget , amounts to
no more than 5% of the EAC 's total operating expenditure , which is financed
by the EDF .
 II .  REASONS FOR CHANGING THE EXISTING STRUCTURE
 1.   Fvotution after the Lom6 Convention
while the administrative requirements relating to the extent of the technical
 cooperation and training programmes still had to be met , the Lom6 Convention
was signed on 28 February 1975 and came into force on 1 April 1976 .        It
considerably widened the geographical scope of cooperation , trebled the volume
of aid - which amounts . to more than 3 000 million units of account for four
years - and enlarged , diversified and improved the various forms of cooperation *
Very logically therefore and at the express request of the ACP States a new
phase is emerging , the outline of which was already visible at tb* end of the
preceding phasfe :  1n accordance with a specific provision of the -om§ Convention
the posts of EOF resident supervisor were abolished and the Commission set up
delegations in each ACP State concerned .       The Delegates were officially
responsible for the whole range of relations between the Community and the
corresponding..ACP 'State , in particular the various forms of cooperation defined
by the Convention ( trade , industrial cooperation , sales promot " on , stabilization
of exoort earnings , training , financial and technical cooperation      and also
those provided for outside the Convention ( food aid, specific measures outside
the terms of Convention :    meat , cereals , NGOs ).  However , their role  n
relation to projects and programmes financed by the EOF remains v<tal jnd
is even growing in importance :     in their desire to decentralize from Brussels ,
the Delegates are becoming involved in the appraisal and evaluation of projects .
Economists will therefore now be needed for the task of supervising amuatly
the execution of 200 international invitations to tender and 5 000 contracts
of various kinds , involving a total annual disbursement of 600 million units
of account .
 ---pagebreak--- In 1976 , 1n accordance with the Convention and at the request of the ACP States ,-
the Commission increased the number of delegetlonft from 21 to 41 .      It recruits
the new Delegates , establishes their teams , transfers staff to provide 3 mixture
of nationalities and uses the experience of senior- staff to help new employees
settle in . Little now remains to be done to complete a network of repre sentatic
which , when fully operational , will comprise 250 expatriate staff of categories A
and B and 700 local staff of categories C and D.
The Lom6 policy 1s , however , extending to the limits which were S'.t .
 In Africa and the Pacific other countries are gaining Independence and acceding
to the Convention1; in these countries new delegations have to be set up .
At the same time , three Maghreb countries , Israel and four Mashrek countries
 have concluded development cooperation agreements with the Community .       These
eight countries expressly asked that delegations be set up and this was
accepted in the 1977 Budget in the case of the three Maghreb countries .
 In the 1978 Budget the Commission has proposed opening four delegations in the
 Mashrek countries and a delegation in Israel ; credits have been opened to this
 effect in Chapter 100 of the budget . Finally , the Commission sends technical
 cooperation experts and develops training schemes outside the associated countries ,
 the practical problems involved must obviously be dealt 'iiith by the same offices .
 2.   Role of the Commission Delegates
 The Commission Delegates* are' concerned w1th :all aspects of cooperation both
 within and outside the terms of the association agreements ;    their role therefore
 differs greatly from that of the resident supervisors of the Yaounde Conventions
 and their task 1s singularly more delicate# For obvious political reasons the
 spirit of "partnership" characteristic of the Lqm£ policy is tending to replace
 the supervisory role by an advisory one , although this does not mean that the
 monitoring o* the1 execution of projects or supervision of . the proper use of
  Community funds are to be relaxed . And yet it is not always easy to reconcile
 these two ideas .
  The extent o* relations with the Member States® diplomatic missions 1s in * -. easing .
  The deliberately norvdiplomat-ic style of the delegates ^ th6 technical nature of
  their activities / the practical and operational nature of the programmes which
                                                                          t
                              t          •           /
 ---pagebreak--- fchs»y men it or j), hev© helped greatly to create sod maintain a climate of cooperation
which is developing smoothly : systematic exchanges of information on bilateral
and Community aid , joint visits to projects financed by European aid ,, inauguration ,
consultation .         Since Lom£ this aspect has increased because the Member States
have stated that they wish to approve Community schemes only after there has
been careful coordination with bilateral aid .
 Events have also necessitated a network for the coordination of efforts with
those of non-member countries® aid organizations ( 1n particular those of the
 Arab countries ,, but also those of the United States, Canada , etc .) and
 international organizations ; here the Commission plays a leading role , in .
Brussels via its departments and on a local level via its Delegates , The              *
organization of numerous cof inancing operations with the IBRD, US, Can dian,
 Arab and Member States * aid has even enabled the Commission on a number of
 occasion to take the lead by using EDF procedures and the Delegates' services
 to monitor , on behalf of all providers of funds , the execution of cofinanced
projects . This trend is even being accentuated, for the number of large-scale
projects is increasing , while, on the other hand, the Arab funds are now making
 their appearance and they show confidence in the Commission, whose "triangular" .
policy is known and appreciated .
 3 . Rer.sons for changing the structure and principles to be applied
 At the final stage 'of this evolution , 1t has to be noted that the exercise of
 such responsibilities by the Commission and its Delegates is somewhat surprising ,
 if not abnormal when 1t has to be done through and under the administrative
 control of a private company . It is also shocking that because the Association
 is a private company , the Community must , under common law, pay taxes to a
 Member State on sums which come from the contributions of the other Member State",
 and will in future come from the Community budget ( for the wages and salaries
 of the EAC staff , the Delegates , services , etc .).      Clearly , in view of the facts
 of the matter and the way in which the Association has evolved the structure
  must undergo a radical transformation. Budgeti^ation of Community development aid
  begun in the 1976 Budget with provision for aid to non-associated developing
  countries, followed up in the 1978 Budget with aid to the countries of the Maghreb
  and Mashrek , will be completed- by the budgetization of the EDF which is proposed by
  the Commission in its memorandum on the renewal of the Lome Convention. This can
  only underline the need to seft up a new" structure in accordance with three
   fundamental principles .
 ---pagebreak---                                   - 7 -
<a> Whatever thtf responsibilities assumed and .th* factions performed, these
       respor>sibi Uties and functions are concerned essentially with the
       representation of public authority. What is more, these responsibilities
       and functions derive from an international treaty . A direct hierarchical
       link of the kind provided for under the Staff Regulations must therefore nc
       be created between the Commission Delegates and the Commission itself .
       Only a public structure, replacing a private association, can enable such
       an objective1 to be attained .
 (b) This public     structure must, however, preserve the advantages which have
       constituted   the strength and contributed towards the effectiveness of the ^.
       twelve-year   old private organization, namely flexibility and autonomy of
       management .    Experience has shown that this is essential . It is a matter
       of administering, from afar - between 5 000 and 20 000 kilometres from
        headquarters - a relatively small but high-quality staff in respect of
        which the avalanche of minor day-to-day practical problems can be properly
        dealt with cnly by a flexible and understanding organisation capable of
        reacting immediately .
  <C) finally* this structure must allow a proper staff mobility policy to be
        organized, for the benefit of the employees as well as of the Commission
        itself, which will permit osmosis between headquarters staff and the staff
        of the overseas branches .    Here too, only a public structure, dependent
        on the Commission and organized by it , can permit the necessary
         interpenetration .
  III . THE NEW INSTRUMENT PROPOSED :     THE EUROPEAN AGENCY FOR COOPERATION
  The way in which the Association has evolved - the main features of which have
  been outlined - the reasons for transforming the existing structures and the
  principles to be observed in directing this transformation all combine to justif.
   the new structure which it is proposed to the Parliament and the Council be
   created : a public Commission agency, set up by the Council on the basis of
   Article 235 of the Treaty, which would have to administer the following five
   categories of staff :
   - The Commission Delegates; " the first steps towards bringing them under the
     Staff Regulations applying to Commission staff was taken with the creation
     in the 1977 Budget of ten temporary posts and the allocation of three posts
     under the 1978 Budget / This category of staff will be administered directly
     by the Commission, and the Agency will merely see to the practical administrate
 ---pagebreak---                                   » 8 «
   – The advisers and members of the delegations ^ for whom It would be
        inadvisable to create a direct link with the Commission under the staff
       Regulations by requesting that the corresponding 210 posts be created in
       the list of posts .    These are experts whose work requires them to travel
        a lot and whose job involves carrying out technical tasks of limited
       duration ; depending on the nature of the programme to be carried out in
       each country or the stage reached in the implementation of those programmes
       they may be transferred to another country or given other duties
        ( technical cooperation made available to States ) or replaced by other
        experts with a different technical training .
    - Technical cooperation experts placed at the disposal of States receiving
        Community aid , who take their instructions from those States and who could
        not therefore be linked directly to the Commission .
    - Staff recruited in accordance with the laws and regulations of the St ate 9
        in which they are required to perform their function and subject to local
        conditions pf employment .
         The ^ aTf of the Agency he«dqudFfef^"ltave^ceOire~subJecl" of submissions
         to the Court of Justice suggesting that they be recognized as civil servants
         The Commission will make proposals at the appropriate time taking account
         of the verdict of the Court .
In addition, the Agency will participate in the execution of the programme of
scholarships and traineeships in Belgium, and posfeibly in other European
countries, for nationals of the developing countries, in particular w^h regard
to the aspect of following up training and that of welfare : assignment to
educational establishments and enrolment of candidates, organization of
trai ". toships, travel arrangements , reception of scholarship-holders and
assistance in finding accommodation , etc .
The Commission therefore has the honour to propose in the Annex a draft
 Council Regulation. establishing a European Agency for Cooperation.
 ---pagebreak--- This         t-®ys 'iom the conditions governing £hf establishment of the Agency ^
•its objectives - which are no different from those of the present Assocetion ■*
the composition of Its Administrative Board , its powers and those of its
director , its resources , the conditions governing the establishment of lis
budget , the rendering of its accounts to the Parliament and the Council , the*
auditing of its operations by th .» Count of Auditors and the law applicable to
contracts concluded by the Agency under the supervision of the Court of Justice .
Since the proposed body will be a Commission agency , set up to enable the
 Commission to assume the administrative responsibilities Incumbent upon 1t unde ^
 the cooperation agreements concluded by the Community, the draft Council
*•                                            ...              .....
 Regulation refers to a Commission regulation for the practical details .
 Wain features of the proposed new instrument
  (a) Under the present conditions , the Agency budget will amount to approximately
      30 ail I ion units of account per year , shared between headquarters e *pe«dHv?
       ( financed by the Commission budget ) and overseas operating expenditure fins:
      by the EOF until the budget ization of the latter in 1980 ,    Headquarters
      expenditure will not exceed 5% of t^e total operating expenditure .
  (b>  The Agency staff will include the staff of the
       Delegations end the technical cooperation staff placed at the disposal of
       Governments at their request .     The arrangements applied to all these
       categories of staff wilt be determined by contracts , the clauses of which
       will be established by the Agency and will be subject to approval by the
       Commission .
 ---pagebreak---      They will be based mainly on the provision* *n fore© but wil * of course
     observe the principle of maintaining the advantages acquired .
<c>  In short , the Agency will be not so much a new creation as the legal
     transformation of an existing instrument .    The staff exists and the
     budgetary resources have been earmarked .    The proposed reform does not
     therefore entail any immediate financial consequences , except in the sense of
     reduction in expenditure , since as a result of the transformation of the
     EAC into a public Commission agency , taxes paid in Belgium and other
     Member States in' the form of tax on the income of the staff of a private
     company will no longer be payable *
                                                                                Φ
The reform is , however , a far-reaching one . It will provide the Commission
with a public structure for implementing a policy which is public and not private .
It will put an emd to a paradox brought about by circumstances but whi h has
been totally called into question by the course of events, by the change in the
form in which the Commission is represented in the developing countries, and by
the progressive budgetization of Community development aid .
 ---pagebreak---                          COUNCIL REGULATION
establishing a European Agency for Cooperation
THE COUNCIL CP THE EUROPEAN COMMUNITIES *
Having regard to the Treaty establishing the European Economic Community,
and in particular Article 235 thereof ,
having regard to the proposal from the Commission /
 Having regard to the Opinion of the European Parliament ,
 Whereas the ACP-EEC Convention of Lom6 , and 1n particular Protocol No 2 thereto,
 had led to the opening 1n the ACP States of forty-one Commission Delegations ,
 the staff of which must be administered under the best possible conditions ;
 Whereas similar Delegations will be opened in other countries linked to the
 Community by comprehensive preferential cooperation agreements ;
 whereas, under or 'independent ly of the Lorn* Conversion , the ACP States and
 other developing .countries enjoy a range of technical assistance and cooperation
 schemes financed by the Community, and whereas it is necessary to recruit and
 administer the extoerts responsible for executing those schemes and to undertake
 the pitactical organization of training schemes ;
 Whereas , in order to facilitate the Commissions task end ensure the necessary
  flexibility, effectiveness and mobility in the administration of the experts
  serving overseas, a European Agency for Cooperation should be set up in the form
 of a Community body with public status under the aegis of the Commission , from
  which it will receive Its directives ;
  Whereas the powers, required for the creat'on of such an Agency are not provided
  for in the Treaty ;
  Whereas the Agency will be set up within the framework of the European Community
  and will function 1n accordance with Community law and 1n compliance with the
 ---pagebreak--- directives which it receive# from the Commission ;    whereas the conditions
under which certain general provisions will apply should be defined ,
HAS ADOPTED THIS REGULATION :
                                                                »
                               Article 1
A European Agency for Cooperation , hereinafter referred to as "the Agency",
is hereby established .
                               Article 2
                                                                                ψ
The task of the Agency shall be to assist the Commission In :
(a)  recruiting , installing and administering experts :
     ~ placed at the disposal of Commission Delegations established in developing
        countries Which are linked to the Community by comprehensive preferential
        cooperation agreements ;
     - who are to undertake technical assistance or cooperation tasks financed
        by the Community in favour of the developing countries ; '
(b)  administering the locally-recruited Delegation staff ;
<c>  participating in executing the programme of scholarships and traineeships
      in Belgium and possibly other European countries fbr nationals from the
     developing countries , with regard to the aspect of following up training
     schemes and that of welfare .
                               Article 3
1.  The Agency shall be non-profit making .   It shall enjoy in the Member States
    the most extensive legal capacity accorded to legal persons .
2.  The seat of the Agency shall be in Brussels .
                               Article 4
The Agency shall Comprise :
- an Administrative Board ,'  t          •
                                                    .
                                                   •'
- a Director .
 ---pagebreak---                                 Article 5
1.  The Administrative Board shall consist of not less than five and not
    more than thirteen members designated by the Commission and chosen from
    within its staff .
2.  The term of office of members of the Administrative Board shall be five
    years .   It shall be renewable .     Upon the expiry of their term of office
    or 1n the event of their resignation , members shall remain in office until
    their appointments are renewed or until they are replaced .
3.  The Administrative Board shall elect its chairman , a deputy chairman , an
    Administrator-Delegate and a secretary from among Its members .
                                Article 6
The Administrative Board shall meet as often as the Interests of the Agency requlrv
and at least once a year .    Its members shall be convened by the Chairman or
Deputy Chairman .
The members shall be entitled to be represented by one of their colleagues with
special authorization to attend the meeting in question .      A member nay represent
only one of his colleagues .
                    «
                              Λ
                                Article 7
If the Chairman lil unable to attend, the Board shall be chaired by the Deputy
Chairman or . If tlto latter 1s unable to attend, by the Administrator-Delegate .
                               Article 8
For decisions to be adopted, not less than five of the members     must be or e sent .
Decisions shall bO taken by a simple majority of those voting ,      In the event
of a tie , the Chairman shall have the casting vote *
 ---pagebreak---                             Article 9
The Administrative Board shall adsnir^stisp the Agency „ whose guidelines
 it shall lay down .
 It shall decide whether to accept any legacy , donation or subsidy from
 sources other than the Community
                            Article 10
 The director of the Agency shall be appointed by the Commission from «
                                                                              0
 11st of candidates submitted by the Administrative Board .
 The director shall be appointed for a max 1 mum period of five years ..  His
 term of office shall be renewable .
                            Article 11
                            ΜΜβΜΜΜΜαΜ
 The director shall Implement the decisions of the Administrative Board and
 shall be responsible for the day-to-day running of the Agency .     He shall
 be the legal representative of the Agency .
                                               4
 The director shall prepare and organize the work of the Administrative Board .
  He shall participate in an advisory capacity 4n the work of t^e Board .
  The director shall be accountable to the Administrative Beard for the
  running of the Agency .
                             Article 12
                          t
  By 31 March erf each year at the latest / the director shall prepare a general
  report ori the activities/ financial situation and future guidelines of the
  Agency and shall submit it to the Administrative Board .
• After 1t « adoption by the Administrative Boards the report shall b< forwarded
   to the Commission .       *
 ---pagebreak---                                       Article 13
The Administrative . Board shall draw up 0 balanced statement of all revenue
and expenditure for earch financial year , which shall be the same as the
calendar year .
                                      Article 14
The Agency 's revenue shall comprise :
- the subsidy included under a specific entry in the budget of the European
    Communities ,
- the subsidy authorized by the Commission from the resources of the Europear.
  • Development Fund ,
- any other resources .
                                       Article 15
1.    The Administrative Board shall , by 31 March each year , at the latest ,
      send the Commission an estimate of revenue and expenditure .      This estimat .
      shall be adopted by the Commission who will forward it to the budgetary
      authority with the preliminary draft budget of the European Communities .
2.    The Commission . wi II also forward this estimate , for their opinion , to the
      European Development Fund Committee set up by the Internal Agreement on the
     financing and administration of Community aid, signed on 11 July 1975 ,
     accompanied by the financing proposal covering the Delegations' expenditure ,.
3.   The Commission shall adopt the estimate of revenue and expenditure before t !/
     beginning of the financial year , adjusting it to the subsidies granted by
     the budget authorities .
 ---pagebreak---                                  Article lo
Without prejudice to the provisions of the j^eneral
Financial Regulation and of the EDF Financial Regulation ,
the provisions concerning the Agency 's relations with the Commission and the internal
administrative and financial arrangements applicable to the Agency shall be
the subject of a regulation adopted by the Commission , the text of which shall
be published in the Official Journal of the European Communities ..  This
Regulation shall lay down the principles governing the financial administration
and the execution of the estimate , the auditing of revenue and expenditure , the
conclusion of contracts , the keeping of accounts and the inventory of movable
and immovable assets .
                                 Article 17
1.  The general terms of employment , the general system of remuneration ,
    allowances and additional payments for staff shall be determined , by analogy
    with the provisions applicable to the temporary staff of the Communities ,
    by the Commission .
                                 Article 18
1.  The Administrative Board shall by 31 March at the latest send the accounts
    of all the revenue and expenditure of the Agency for the preceding financial
    year to the Commission and to the Court of Auditors .
 ---pagebreak---     \
                                  - 7 -
    The latter shall examine them in accordance wilth the second paragraph
    of Article 206(b ) of the EEC Treaty .
2 . The Commtssion shall submit the accounts and the report pf the Court      Audi-
    together with its own comments , to the Council and to the European Parliament
    by 31 October at the latest .    A discharge shall be given to the Administrati
    Board in respect of the financial administratfon of the Agency under the
    procedure laid down in Article 206 ( c ) of the EEC Treaty .
3#  The Financial Controller of the Commission shall be responsible for checking
    the commitment and payment of all expenditure and the recording and recovery
    of   all revenue of the Agency .
                              Article 19
Members of the Administrative Board , the director / the staff and all other
persons participating in the activities of the Agdncy shall be required , even
after their duties have ceased , not to disclose information of the kind covered
by the obligation of professional secrecy .
               *              Article 20
The Protocol on the privileges and Immunities of the European Communlt es shall
apply to the Agency .
                              Article 21
1.  The contractual liability of the Agency shall be governed by the law
    applicable to the contract in question .
                           »
                                                                 )
 ---pagebreak---                                   » 8 -
    . The Court of Justice of the European Communities shall have jurisdiction
      in all disputes between the Agency and its staff within the limits and
      on the conditions laid down in 'the Staff Regulations applicable to the latter .
                                                             • •
2.     In the case of non-contractual liability/ the Agency shall / 1n accordance
      with the general principles trsm*on to the laws of the Member States, ijiake
      good any damage caused by the Agency or its staff in the performance of
      their duties .
      The Court of Justice of the European Communitfes shall have jurisdiction
      in disputes relating to compensation for any Ouch damage .                   0  •
                                                                                    «
                                                                                   0
                                Article 22
The Agency shall be placed under the supervision of the Commission/ which will
give it its directives-
Member Stated/ members of the Administrative Board and third parties directly
and personally involved may refer to the Commission any act of the Agency,
whether express or implied / for the Commission to examine the legality of that
act ,                •
Referral shall be wade to the Commission within 15 days of the day on which the
party concerned first became aware of the act in question .
The Commission shall take a decision within one month ..    If no decision has been
taken within this period/ the case shall be deemed to have been dismissed .
                             /
 ---pagebreak---        «
  !' S
F
                                      - 9 -
                                    Article 23
       This Regulation dhall enter Into force on the thU»d day following its
       publication In the Official Journal of the European Communities .
       This Regulation shall be binding 1n its entirety and directly applicable
        in all Member States .
        Done at
                               Φ ·
                                                    For the Council
                                                    The President
 ---pagebreak---                               FINANCIAL STATEMENT
1 . Until the ED? is budgetized ( i.e. until financial 1980 ), the creation
of a European Agency for Cooperation will not involve additional expenditure
for the Budget .    The administrative expenditure incurrec". "by the headquarters
of the existing AEC is covered by a Commission subsidy ( Article 9340 of the
Budget ).   The headquarters of the Agency will he financed in the same way,
whioh under present conditions will mean approximately 2.6 million EUA for
the 1978 Budget .    Similarly , the operating expenditure concerning the
delegations in the Maghreb and Mashrek countries and in Israel has already
been entered , and will continue to be , in Article 9431 of the Budget
( 820,000 EUA for financial 1978 , plus 379,100 EUA in Chapter 100 ).     The
operating expenditure of the delegations in the ACP countries is covered by
EDF appropriations .
2.   Turning the AEC into an official Community Agency will mean a saving for
the Budget since it will put an end to the payment to Belgium of taxes payable
on the salaries of Brussels–based staff , to whom Belgian law applies .       Gping
by the figures in the 1978 Budget , some 760,000 EUA will be saved in this way.
3.   Once the EDF is budgetized ( on 1 March 1980 ), as the Commission proposes
in its memorandum on the future negotiations for the renewal of the Lome
Convention , the appropriations needed to finance the delegations in the ACP
countries will have to be entered in the Commission's Budget , in addition to
the volume of aid .    How many ACP States will sign the future Convention , and
therefore how many delegations will have to be maintained or opened , is not
yet known , and so it is not possible to say exactly what the budgetary
implications will be , but sis a rough idea, the cost for*' the EDF of running
41 delegations in 1978 is 26.2 million EUA.