PROTOCOL

relating to financial cooperation between the European Economic Community and the State of Israel

THE COUNCIL OF THE EUROPEAN COMMUNITIES,

of the one part, and

THE STATE OF ISRAEL,

of the other part,

REAFFIRMING their resolve to implement, under the Mediterranean policy of the enlarged Community, cooperation which will contribute to the economic development of Israel and promote the strengthening of relations between the Community and Israel,

ANXIOUS to pursue to this end the financial cooperation provided for in the Agreement between the European Economic Community and the State of Israel, signed on 11 May 1975,

THE COUNCIL OF THE EUROPEAN COMMUNITIES:

Jakob Esper LARSEN,

Ambassador Extraordinary and Plenipotentiary,

Permanent Representative of Denmark,

Chairman of the Permanent Representatives Committee,

Jean DURIEUX

Special Adviser in the Directorate-General for External Relations of the Commission of the European Communities;

THE STATE OF ISRAEL:

Avraham PRIMOR,

Ambassador Extraordinary and Plenipotentiary;

HAVE AGREED AS FOLLOWS:

Article 1

The Community shall participate, within the framework of financial cooperation, in the financing of projects designed to contribute to the economic development of Israel.

Article 2

1.   For the purposes specified in Article 1, the Community will ask the European Investment Bank (hereinafter referred to as ‘the Bank’) to make available to Israel funds of up to ECU 63 million. This amount may be committed, for a period expiring on 31 October 1991, in the form of loans granted in accordance with the conditions, detailed rules and procedures laid down by the Bank's statute.

2.   Capital projects helping to increase productivity and to achieve complementarity between the Contracting Parties' economies and promoting, in particular, the industrialization of Israel, which have been submitted to the Bank by the State of Israel or, with the latter's agreement, by public or private undertakings having their seat or a place of business in Israel, shall be eligible for financing.

Article 3

Any funds not committed at the end of the period referred to in Article 2 (1) shall be used until exhausted. In that case, the funds shall be used in accordance with the same arrangements as those laid down in this Protocol.

Article 4

Aid contributed by the Bank for the execution of projects may, with the agreement of Israel, take the form of co-financing.

Article 5

The execution, management and maintenance of schemes which are the subject of financing under this Protocol shall be the responsibility of Israel or the other beneficiaries referred to in Article 2.

The Bank shall ensure that its financial aid is expended in accordance with the agreed allocations and to the best economic advantage.

Article 6

1.   Israel shall apply to contracts awarded for the execution of projects financed by the Bank fiscal and customs arrangements no less favourable than those applied vis-à-vis the most favoured nation or the most favoured international development organization.

2.   Israel shall take the necessary measures to ensure that interest and all other payments due to the Bank in respect of loans granted under this Protocol are exempted from any national or local taxes or levies.

Article 7

Where a loan is granted to a beneficiary other than the State of Israel, the provision of a guarantee by the latter or other sufficient guarantees shall be required by the Bank as a condition of the grant of the loan.

Article 8

All natural and legal persons coming within the scope of the Treaty establishing the European Economic Community and all natural and legal persons of Israel may participate on equal terms in tendering procedures and other procedures for the award of contracts which may be financed by the Bank.

Such legal persons formed in accordance with the law of a Member State of the European Economic Community or with that of Israel must have their registered offices, their administrative head offices or their principal establishments in the territories in which the Treaty establishing the European Economic Community is applied or in Israel; however, where only their registered offices are in those territories or in Israel, the activities of such legal persons must be effectively and continuously linked with the economy of those territories or of Israel.

Article 9

Throughout the duration of the loans granted pursuant to this Protocol, Israel shall undertake to make available to debtors enjoying such loans and guarantors of the loans the foreign currency necessary for the payment of interest and commission and the repayment of capital.

Article 10

The results of financial cooperation may be examined within the Cooperation Council.

Article 11

One year before this Protocol expires, the Contracting Parties will consider measures which might be taken during a new period of financial cooperation.

Article 12

This Protocol shall form an integral part of the Agreement between the European Economic Community and the State of Israel signed on 11 May 1975.

Article 13

1.   This Protocol shall be subject to approval in accordance with the Contracting Parties' own procedures; the Contracting Parties shall notify each other when the procedures necessary to this end have been completed.

2.   This Protocol shall enter into force on the first day of the second month following the date on which the notifications provided for in paragraph 1 have been given.

Article 14

This Protocol shall be drawn up in two original copies in the Danish, Dutch, English, French, German, Greek, Italian, Portuguese, Spanish and Hebrew languages, each of these texts being equally authentic.