1.   The primary and overarching objective of cooperation under this Regulation shall be the eradication of poverty in partner countries and regions in the context of sustainable development, including pursuit of the Millennium Development Goals.

2.   Geographic cooperation with the ACP countries and regions in the context of the 10th EDF shall be founded on the basic principles and values reflected in the general provisions of the ACP-EC Partnership Agreement and taking into account the development objectives and cooperation strategies set out in Title XX of the Treaty.

The Joint Development Policy Statement of 22 December 2005: ‘The European Consensus’ shall provide the general framework to guide the programming and implementation of the 10th EDF, including the principles set out in the 2005 Paris Declaration on Aid Effectiveness.

3.   The Paris Declaration on Aid Effectiveness includes the principles of ownership, alignment, harmonisation, results oriented aid management and mutual accountability, valid for partner countries and regions as well as for donors.

Those principles shall create the conditions for the partner countries and regions to exercise effective leadership over their development policies and strategies and lead to a country or region-based and country or region-led approach, involving broad stakeholder consultation and increasingly aligning with national or regional development objectives and strategies, particularly those for reducing poverty. This requires effective donor coordination, based on a search for complementarity, a non-exclusive approach and the promotion of donor-wide initiatives, aligned with and based on existing analyses, processes and strategies and country or region specific procedures and institutions.

4.   Without prejudice to the need to ensure continuity of cooperation from crisis to stable conditions for development, measures covered by, and eligible for funding under Regulation (EC) No 1257/96 shall, in principle, not be funded under this Regulation.

1.   The process of programming for assistance to the ACP countries and regions managed by the Commission under the ACP-EC Partnership Agreement shall be undertaken in accordance with Articles 1 to 14 of Annex IV to that Agreement and in accordance with the general principles referred to in Article 1 of this Regulation.

2.   Programming for the purpose of this Regulation shall mean, inter alia:

3.   The programming at national and regional level shall be conducted in a coordinated way. Coordination for the purpose of this Regulation shall mean, inter alia:

4.   In addition to country strategy papers and regional strategy papers, an intra-ACP strategy paper and related multiannual indicative programme shall be prepared and developed with the ACP-EC Committee of Ambassadors, based on criteria set out for an intra-ACP policy framework compliant with the principles of complementarity and geographic scope inherent in Article 12 of Annex IV to the ACP-EC Partnership Agreement.

5.   In the exceptional circumstances referred to in Article 3(4) and Article 4(5) of Annex IV to the ACP-EC Partnership Agreement, when countries cannot access normal programmable funds and/or the national authorising officer is prevented from carrying out his/her duty, the Community shall make specific provisions as referred to in Article 4(7) of this Regulation.

6.   Programming shall be designed so as to fulfil to the greatest extent possible the criteria for official development assistance (hereinafter referred to in as ‘ODA’) established by the OECD/DAC.

7.   Programming shall, where appropriate, ensure European visibility in partner countries and regions.

1.   At the beginning of the programming processes the Commission shall, on the basis of the needs and performance criteria identified in Articles 3, 9 and 12 of Annex IV to the ACP-EC Partnership Agreement, determine the multiannual indicative fund allocation for each ACP country and region and for the intra-ACP envelope on which the programming process is based, within the limits set out in Article 2 of the Internal Agreement. These criteria shall be standard, objective and transparent.

2.   Regarding the national indicative grant allocation, the resources shall comprise a programmable amount, including an incentive tranche allocated on the basis of governance related criteria in line with the principles on governance adopted by the Council on 16 October 2006, and an allocation for unforeseen needs as referred to in Article 3(2)(b) of Annex IV to the ACP-EC Partnership Agreement.

3.   The EDF Committee referred to in Article 11 shall give its opinion in accordance with the management procedure set out in Article 11(3) on the method used in the application of the general criteria for resource allocation as presented by the Commission.

The consolidated country and regional aid allocations shall be consistent with the amounts set out in Article 2 of the Internal Agreement. They shall be integrated into the country and regional strategy papers and multiannual indicative programmes, and adopted by the Commission in accordance with the management procedure set out in Article 11(3). Funds earmarked for special support programmes and actions as referred to in Article 4(7) shall also be adopted by the Commission in accordance with the management procedure set out in Article 11(3).

1.   The country and regional strategy papers shall be prepared on the basis of the general principles of coordination, ownership and aid effectiveness referred to in Articles 1 and 2, following the common framework for country strategy papers and the principles towards joint multiannual programming adopted by the Council on 11 April 2006.

2.   The strategy papers shall aim to provide a coherent framework for cooperation between the Community and the partner country or region concerned, consistent with the overall purpose and scope, objectives and principles of the ACP-EC Partnership Agreement. The strategy paper shall not only cover the development cooperation funded out of the EDF, but also reflect all other Community instruments having an impact on the partner country or region aiming to ensure policy coherence with other areas of the Community's external action including, where relevant, the EIB.

3.   Except in the circumstances referred to in Article 2(5), multiannual indicative programmes shall be drawn up on the basis of the respective strategy papers and shall be the subject of an agreement with the country or region concerned. Emphasis shall be placed on shared assessments of needs and performance and sector analysis, as well as priorities. In the context of Article 11(3) and in cases where the Commission participates in a joint programming process, the multiannual indicative programme shall where appropriate be integrated in a document drafted jointly with the other participating donors. The multiannual indicative programmes shall include:

Resources may be channelled through different modalities that may be complementary according to what will work best in each country. The use of budget support shall be done in accordance with the eligibility criteria set out in Article 61.2 of the ACP-EC Partnership Agreement.

4.   The strategy papers and multiannual indicative programmes shall take account of, and avoid duplication with, measures and programmes eligible for funding under other EDF or Community instruments. Particular care shall be paid to the interaction between national, regional and intra-ACP support strategies and to consistency with Community instruments, in particular Regulation (EC) No 1905/2006, Regulation (EC) No 1889/2006, and Regulation (EC) No 1257/96, taking into account the actions undertaken under Regulation (EC) No 1717/2006 of the European Parliament and the Council of 15 November 2006 establishing an Instrument for Stability (13). The multiannual adaptation strategies for Sugar Protocol countries provided for in the instrument for development cooperation shall be integrated in the country strategy papers.

5.   The strategy paper referred to in paragraph 4, including its multiannual indicative programme, shall be adopted by the Commission in accordance with the management procedure set out in Article 11(3). At the same time as the strategy papers referred to in paragraph 1 are transmitted to Member States in the EDF Committee, the Commission shall also transmit them to the Joint Parliamentary Assembly for information, while fully respecting the decision-making procedure according to Title IV of this Regulation.

6.   The strategy papers, including the multiannual indicative programmes, shall subsequently be adopted by common agreement between the Commission and the ACP State or region concerned and shall, when adopted, be binding on both the Community and that State or region. Countries without a signed strategy paper remain eligible to funding from the allocation for unforeseen needs referred to in Article 3(2)(b) of Annex IV to the ACP-EC Partnership Agreement.

7.   The provisions referred to in Article 2(5) of this Regulation may take the form of special support programmes replacing the national strategy paper in cases as set out in Article 4(5) of Annex IV to the ACP-EC Partnership Agreement where the national authorising officer in the partner country is prevented from carrying out his duty, or they may take the form of actions funded from the allocation for unforeseen needs referred to in Article 3(2)b of Annex IV to the ACP-EC Partnership Agreement in situations set out in Article 3(4) of that Annex when the partner country can not access the normal programmable funds referred to in Article 3(2)a of that Annex. These special support programmes and actions funded from the allocation for unforeseen needs shall comply with the previous paragraphs and take into account the special considerations referred to in Article 5(4)(c) of this Regulation. They shall be adopted by the Commission in accordance with the management procedure set out in Article 11(3) of this Regulation.

1.   Strategy papers and multiannual indicative programmes as well as the special support programmes and actions referred to in Article 4(7) of this Regulation shall be submitted to annual operational reviews, to reviews at mid-term and at the end of term and, when necessary, to ad hoc reviews. These reviews shall be carried out locally by the Commission and the partner country or region concerned in line with Article 5 of Annex IV of the ACP-EC Partnership Agreement, and shall be prepared on the basis of the general principles of coordination, ownership and aid effectiveness referred to in Articles 1 and 2. The strategy papers and multiannual indicative programmes may also be submitted to ad hoc reviews in between annual, mid-term and end-of-term reviews in line with Article 3(5) of Annex IV of the ACP-EC Partnership Agreement.

2.   The mid-term and end-of-term reviews shall constitute an integral part of the programming process. They shall assess the strategy paper, including the multiannual adaptation strategies for the Sugar Protocol countries and any other programmes funded from Community instruments referred to in Article 4(4), and the multiannual indicative programme in the light of current needs and performance. The review shall include, to the extent possible, an impact assessment of the Community's development cooperation in relation to the general objective of poverty reduction referred to in Article 1(1), to the objectives, allocated resources and indicators set out in the strategy papers and an assessment of the adherence to, and the possibilities for furthering, the aid effectiveness principles referred to in Articles 1 and 2. Following the completion of the mid-term or end-of-term review exercise:

3.   The annual operational reviews shall be conducted in accordance with Article 5(4) of Annex IV to the ACP-EC Partnership Agreement. In cases of new or special needs, set out in Articles 3(5) and 9(2) of Annex IV to the ACP-EC Partnership Agreement, such as those resulting from a post-crisis situation, or exceptional performance when a multiannual indicative allocation is totally committed and additional funding can be absorbed against a background of effective poverty-reduction policies and sound financial management, a multiannual indicative allocation may be increased following the completion of the annual operational review exercise.

The general results of the annual operational reviews shall be presented to the EDF Committee for an exchange of views in accordance with Article 11(4) of this Regulation.

4.   Ad hoc reviews can be carried out at the request of either the ACP State concerned or the Commission in cases of new or special needs or exceptional performance as described in paragraph 3 of this Article or in the case of exceptional circumstances referred to in Article 72 and Article 73 of the ACP-EC Partnership Agreement regarding humanitarian and emergency aid. The Commission shall take into account requests for ad hoc reviews by Member States. The occurrence of sudden and unforeseeable serious humanitarian, economic and social difficulties of an exceptional nature resulting from natural disasters, man-made crises such as wars and other conflicts, post-conflict situations, threats to democracy, the rule of law, human rights or fundamental freedoms or extraordinary circumstances within a country or within a region that have comparable effects, may be considered as cases justifying the conducting of an ad hoc review.

5.   In cases of new needs as defined in the Joint Declaration VI referring to Article 12(2) of Annex IV to the ACP-EC Partnership Agreement regarding intra-ACP cooperation, an increase in the intra-ACP programmable allocation may be financed from the intra-ACP reserves within the global limits set out in Article 2(b) of the Internal Agreement.

6.   Any change in strategy papers and/or resource allocation resulting from a review referred to in paragraphs 1 to 4 shall be adopted by the Commission in accordance with the management procedure set out in Article 11(3). The addenda to the strategy papers, including the multiannual indicative programmes and to the special support programmes shall subsequently be adopted by common agreement between the Commission and the ACP State or region concerned and shall, when adopted, be binding on both the Community and that State or region.

1.   The Commission shall adopt annual action programmes based on the strategy papers and multiannual indicative programmes referred to in Article 4.

Exceptionally, for instance where an annual action programme has not yet been adopted, the Commission may, on the basis of the strategy papers and multiannual indicative programmes, adopt measures not provided for in the annual action programme under the same rules and procedures.

2.   The annual action programmes shall be prepared by the Commission with the partner country or region, involving the Member States locally represented and coordinating where appropriate with other donors, notably in cases of joint programming, and the EIB. The annual action programmes shall describe the general context and assess Community assistance and lessons learnt, including regarding budget support, based especially on the annual operational reviews referred to in Article 5(3). They shall specify the objectives pursued, the fields of intervention, the total amount of financing planned and an indication of the amounts allocated for each operation. They shall include detailed individual fiches for each foreseen operation which shall contain an analysis of the specific sector context, a description of the actions to be financed, the main stakeholders, the expected results based on quantitative and qualitative indicators, the management procedure, an indicative implementation timetable, and, in case of budget support, the criteria for disbursement, inclusive of possible variable tranches. Objectives shall be specific, measurable, realistic and have time-bound benchmarks, aligning with the partner country or region's own objectives and benchmarks to the maximum extent possible. They shall state how they take current or planned EIB activities into account.

3.   The annual action programmes shall be adopted by the Commission in accordance with the management procedure set out in Article 11(3) of this Regulation. Each Member State may request the withdrawal of a project or programme from the annual action programme. If this request is supported by a blocking minority of Member States as laid down in Article 8(3) in connection with 8(2) of the Internal Agreement, the annual action programme shall be adopted by the Commission without the project or programme concerned in accordance with the management procedure set out in Article 11(3) of this Regulation. Unless the Commission, in line with the views of the Member States in the EDF Committee, wishes not to pursue the withdrawn project or programme it shall, at a later stage, be re-submitted to the EDF Committee outside the annual action programme as provided for in paragraph 1, second subparagraph of this Article in the form of a financing proposal which shall then be adopted by the Commission in accordance with the management procedure set out in Article 11(3) of this Regulation.

4.   Amendments to annual action programmes or to measures not provided for in the annual action programmes shall be adopted in accordance with the management procedure set out in Article 11(3). In cases where amendments to Annual Action Programmes or measures not provided for in the annual action programmes do not exceed 20 % of the initial projects, programmes or consolidated allocation thereof, but do not represent more than EUR 10 million, such amendments shall be adopted by the Commission provided they do not affect the initial objectives set out in the Commission decision. The Commission shall inform the EDF Committee of any such amendments within one month.

5.   The Commission shall adopt specific action programmes in accordance with the management procedure set out in Article 11(3) of this Regulation for support expenditures referred to in Article 6(2) of the Internal Agreement and not covered by the multiannual indicative programmes. Any changes in the action programmes for support expenditures shall be adopted in accordance with paragraph 4 of this Article.

6.   Member States represented in the country or region, other interested Member States and where appropriate the EIB shall be kept regularly informed by the Commission on the implementation of Community projects and programmes. In turn, each Member State and the EIB shall also regularly inform the Commission, at country or region level, of the cooperation activities that they are implementing or programming, in each particular country or region.

7.   In accordance with Article 11(4) of this Regulation, each Member State may at any moment request to include on the agenda of the EDF Committee an exchange of views on implementation issues relating to a particular project or programme managed by the Commission. This exchange of views may include the way the Commission applies the criteria for disbursement of budget support referred to under paragraph 2 of this Article.

1.   In the cases referred to in Article 5(4), the Commission may adopt special measures not provided for in the strategy papers and multiannual indicative programmes in accordance with Article 2(5).

2.   Special measures shall specify the objectives pursued, the areas of intervention, the targeted beneficiaries, the expected results, the management procedure and the total amount of financing. They shall contain a description of the operations to be financed, an indication of the amounts allocated for each operation and the indicative timetable for their implementation. They shall include a definition of the type of performance indicators that will have to be monitored when implementing the special measures. These indicators shall take into account the partner country or region's monitoring systems where relevant.

3.   Where the cost of such special measures exceeds EUR 10 million, the Commission shall adopt them under the management procedure set out in Article 11(3). For special measures below EUR 10 million, the Commission shall inform the EDF Committee within one month of their adoption. In accordance with Article 11(4), each Member State may at any moment request to include on the agenda of the EDF Committee an exchange of views on these operations. This exchange of views may lead to the formulation of recommendations which the Commission shall take into account.

4.   Amendments to special measures, such as those making technical adjustments, extending the implementation period, reassigning funds within the forecast budget, or increasing or reducing the size of the budget by less than 20 % of the initial budget, but not more than EUR 10 million, do not require adoption under the management procedure set out in Article 11(3), provided that such amendments do not affect the initial objectives set out in the Commission decision. Any such technical adjustments shall be communicated within one month to the Member States.

5.   The special measures shall be subject to an annual exchange of views within the EDF Committee on the basis of a report prepared by the Commission.

1.   Co-financing shall occur when a project or programme is funded from different sources:

2.   When the Commission is involved in joint co-financing arrangements, the implementing arrangements governing such funds, including, when appropriate, the necessity for joint evaluations and the coverage of the possible administrative costs incurred by the body in charge of the management of the pooled funds shall be laid down in the financing agreement according to the rules and procedures which shall be detailed in the Financial Regulation referred to in Article 10(2) of the Internal Agreement.

Where the Commission receives and manages funds on behalf of:

for the purpose of implementing joint measures, such funds shall be treated as assigned revenue, in accordance with the Financial Regulation referred to in Article 10(2) of the Internal Agreement and shall be integrated as such in the annual action programmes. The visibility of the Member States' contributions shall be assured.

Where the Commission entrusts the bodies referred to in precedent subparagraph with funds for the financing of tasks of public authority, and in particular EDF implementation tasks, such co-financing shall be reflected and duly justified in the annual action programmes and visibility of the EDF contribution shall be ensured.

3.   When the EIB is designated as the manager for a joint co-financing arrangement, the implementing arrangements governing such funds, including, when appropriate the coverage of the administrative costs incurred by the EIB, shall be drawn up in compliance with the statutes and internal regulations of the EIB.

4.   At their own initiative, Member States may also provide to the Commission or the EIB voluntary contributions in accordance with Article 1(9) of the Internal Agreement to help achieve the objectives of the ACP-EC Partnership Agreement outside joint co-financing arrangements. Such contributions shall not affect the overall allocation of funds under the 10th EDF and earmarking shall only be made in duly justified circumstances, for example in response to the exceptional circumstances as referred to in Article 5(4). The additional funds shall be integrated in the programming and review process and in the annual action programmes referred to in this Regulation and reflect partner country or region ownership. Voluntary contributions entrusted to the Commission shall be treated as assigned revenue in accordance with the Financial Regulation referred to in Article 10(2) of the Internal Agreement. They shall be treated in the same way as Member States' regular contributions referred to in Article 1(2) of the Internal Agreement except for the provisions in Articles 6 and 7 of the Internal Agreement for which specific arrangements may be laid down in a bilateral contribution agreement.

5.   Member States entrusting the Commission or the EIB with additional voluntary contributions to help achieve the objectives of the ACP-EC Partnership Agreement shall inform the Council and the EDF Committee of these contributions in advance. Any earmarking shall be duly justified and any resulting change in the annual action programmes or in the strategy papers shall be adopted by the Commission in accordance with the management procedure set out in Article 11(3).

1.   The EDF Committee set up according to Article 8 of the Internal Agreement shall give its opinion, in accordance with the management procedure set out in paragraph 3, on the substantive issues of development cooperation at country, regional and intra-ACP level funded from the 10th EDF and other Community resources referred to in Article 4(3).

2.   The EDF Committee's tasks shall cover the responsibilities spelled out in Titles II and III of this Regulation:

3.   When the EDF Committee is called upon to give its opinion, the representative of the Commission shall submit to the EDF committee within the time-limits set out in the Council Decision on the rules and procedures of the EDF Committee referred to in Article 8(5) of the Internal Agreement, a draft of the measures to be taken. The EDF Committee shall deliver its opinion within a time-limit which the chairman may lay down according to the urgency of the matter but which shall not exceed 30 days. The EIB shall take part in the exchange of views. The opinion shall be delivered by the qualified majority laid down in Article 8(3) of the Internal Agreement on the basis of the votes of the Member States weighted in the manner set out in Article 8(2) of the Internal Agreement.

When the EDF Committee has delivered its opinion, the Commission shall adopt measures which shall apply immediately. However, if these measures are not in accordance with the opinion of the EDF Committee, they shall be communicated by the Commission to the Council forthwith. In that event, the Commission shall defer application of the measures for a period which shall in principle not exceed 30 days from the date of such communication but which may be prolonged for a period of up to 30 days in exceptional circumstances. The Council, acting by the same qualified majority as the EDF Committee, may take a different decision within this period.

4.   The EDF Committee shall have an exchange of views on the general conclusions of the annual operational reviews and of the annual report referred to in Article 14(3). Each Member State may also call for an exchange of views on the evaluations referred to in Article 15(3).

Each Member State can invite the Commission at any moment to provide the EDF Committee with information and to have an exchange of views on issues related to the tasks described under paragraph 2.

Such exchanges of view may lead to the formulation of recommendations by the Member States, which the Commission shall take into account.

5.   On the basis of conclusions of the reviews prepared by the Commission, the EDF Committee shall also examine the consistency and complementarity between Community aid and aid from the Member States and where appropriate other donors, in line with Articles 1 and 2.

1.   The IF Committee set up under the auspices of the EIB according to Article 9 of the Internal Agreement shall consist of the representatives of the Member States and a representative of the Commission. Each Government shall nominate one representative and one designated alternate. The Commission shall act in the same way for its representative. With a view to maintaining continuity, the Chairman of the IF Committee shall be elected by and from among the members of the IF Committee for a period of two years. The EIB shall provide the Committee's secretariat and support services. Only the members of the IF Committee designated by the Member States, or their alternates, shall vote.

The Council, acting unanimously, shall adopt the rules of procedure of the IF Committee on the basis of a proposal drawn up by the EIB after consulting the Commission.

The IF Committee shall act by qualified majority. The weighting of the votes shall be as laid down in Article 8 of the Internal Agreement.

The IF Committee shall meet at least four times a year. Additional meetings may be convened at the request of the EIB or of the members of the Committee as set out in the rules of procedure. In addition, the IF Committee may deliver an opinion by written procedure, in the terms established by its Rules of Procedure.

2.   The IF Committee shall approve:

3.   Furthermore, the IF Committee shall deliver an opinion on:

In addition, the governing bodies of the EIB may, from time to time, request that the IF Committee provides an opinion on all financing proposals, or on certain categories of financing proposals.

4.   It shall be the EIB's responsibility to submit to the IF Committee in a timely manner any matters that require the approval or opinion of the IF Committee, as provided for in paragraphs 1, 2 and 3. Any proposal submitted to the Committee for an opinion shall be made in accordance with the relevant criteria and principles set out in the operational guidelines.

5.   The EIB shall cooperate closely with the Commission and, where applicable, shall coordinate its operations with other donors. In particular:

The Commission shall be deemed to have rendered a favourable opinion on or to have agreed to a proposal unless it notifies a negative opinion on such a proposal within two weeks following the submission of the proposal. As regards opinions for financial or public sector projects, as well as agreement to interest rate subsidies, the Commission may request that the final project proposal be submitted for its opinion or approval two weeks before being sent to the IF Committee.

6.   The EIB shall not proceed with any action mentioned in paragraph 2 unless the IF Committee has given a favourable opinion.

Following a favourable opinion of the IF Committee, the EIB shall decide on the proposal in accordance with its own procedures. In particular it may decide not to proceed with the proposal. The EIB shall periodically inform the IF Committee and the Commission of cases where it decides not to proceed.

For loans from its own resources and for IF investments for which no opinion of the IF Committee is required, the EIB shall decide on the proposal in accordance with its own procedures and, in the case of the Investment Facility, in accordance with the guidelines and the investment strategies approved by the IF Committee.

Notwithstanding a negative opinion of the IF Committee on a proposal to grant an interest subsidy, the EIB may proceed with the loan in question without the benefit of the interest subsidy. The EIB shall periodically inform the IF Committee and the Commission of each occasion on which it so decides to proceed.

The EIB may, subject to conditions laid down in the operational guidelines, and the condition that the essential objective of the loan or Investment Facility investment in question be unchanged, decide to modify the terms of an Investment Facility loan or investment on which the IF Committee has given a favourable opinion under paragraph 2 or of any loan on which the IF Committee has given a favourable opinion regarding interest subsidies. In particular, the EIB may decide to increase the amount of the loan or Investment Facility investment by up to 20 %.

Such an increase may, for projects with interest subsidies referred to in Article 2(7) of Annex II to the ACP-EC Partnership Agreement, result in a proportionate increase in the value of the interest subsidy. The EIB shall periodically inform the IF Committee and the Commission of each occasion on which it so decides to proceed. For projects falling under Article 2(7) of Annex II to the ACP-EC Partnership Agreement, if an increase in the value of the subsidy is requested, the IF Committee shall be required to deliver an opinion before the EIB proceeds.

7.   The EIB shall manage Investment Facility investments and all funds held on account of the said Investment Facility in accordance with the objectives of the Agreement. It may, in particular, take part in the management and supervisory bodies of legal persons in which the Investment Facility is invested, and may compromise, discharge and modify the rights held on account of the Investment Facility in accordance with the operational guidelines.

1.   The Commission and the EIB shall monitor, each to the extent to which it is concerned, the use of EDF assistance by the recipients.

2.   The EIB shall periodically inform the Commission regarding the implementation of projects and programmes financed from the 10th EDF resources it administers, following the procedures set out in the operational guidelines of the Investment Facility.

3.   The Commission shall examine the progress made in implementing the 10th EDF and shall submit to the Council an annual report on the implementation and results and, as far as possible, the main outcomes, results and impacts of the assistance. This report shall also be sent to the EDF Committee for an exchange of views, to the European Parliament, the European Economic and Social Committee and the Committee of the Regions.

It shall contain information relating to the previous year on the measures financed, the results of monitoring and evaluation exercises, the involvement of and harmonisation with partners, including implementation through delegated cooperation as defined in the Financial Regulation referred to in Article 10(2) of the Internal Agreement, and the implementation of commitments and payments, broken down by country, region and cooperation sector.

It shall assess the results of the assistance on the eradication of poverty, using as far as possible specific and measurable indicators of its role in meeting the objectives of the ACP-EC Partnership Agreement. Such indicators shall be aligned with partner country or region's monitoring systems and indicators shared between the donor community and the partner country or region for monitoring their development strategy.

Particular attention shall be given to progress made towards achieving the Millennium Development Goals.

The reports shall also address progress made towards implementing the principles of coordination, ownership and aid effectiveness referred to in Article 1 of this Regulation and cover the accompanying measures of the Economic Partnership Agreements.

4.   The EIB shall provide the IF Committee with information as regards progress towards the objectives of the Investment Facility. Following Article 6b of Annex II to the ACP-EC Partnership Agreement, the overall performance of the Investment Facility shall be subject to a joint review at the mid- and end-term of the 10th EDF. The mid-term review shall be carried out by an independent external expert, in cooperation with the EIB, and shall be made available to the IF Committee.

5.   The Commission shall provide the Council in 2010 with a proposal for the overall performance review to be undertaken with the ACP States on the basis of paragraph 7 of Annex Ib of the ACP-EC Partnership Agreement. This review shall assess the financial performance, and in particular the degree of realisation of commitments and disbursements as well as the quantitative and qualitative performance, and in particular the results and the impact, measured in terms of progress towards achieving the Millennium Development Goals. The review shall also explore the possibilities for and recommend how to enhance alignment of future Community support to the ACP with partner country or region's existing strategies, programming and budget cycles, and further harmonisation among donors.

1.   The Commission and the EIB shall regularly evaluate the results of the implementation of geographical and thematic policies and programmes and of sectoral policies and the effectiveness of programming on the eradication of poverty, where appropriate by means of independent external evaluations, in order to ascertain whether the objectives have been met and to enable it to formulate recommendations with a view to improving future operations. Particular attention shall be given to ensuring coherence of Community development policy and progress made towards achieving the Millennium Development Goals.

2.   These evaluations shall be conducted in association with the partner country or region and in coordination with the Member States locally represented. Other interested Member States and, where relevant, also other donors will be involved. The Commission shall strive to implement the aid effectiveness recommendations on joint evaluations.

3.   The Commission shall send its country and regional evaluation reports to the Council, the EDF Committee and the EIB for information. In accordance with Article 11(4), Member States may at any moment request a discussion of specific evaluations in the EDF Committee. The results shall feed back into programme design and resource allocation, donor coordination and aid effectiveness.

4.   The Commission shall associate relevant stakeholders, including non-State actors, in the evaluation phase of the Community assistance provided.

1.   A mechanism to administer the financing of the common costs of operations is hereby established.

2.   The mechanism shall be called Athena.

3.   Athena shall act on behalf of the participating Member States or, regarding the specific operations, the contributing States as defined in Article 1.

1.   Athena shall be managed, under the authority of the Special Committee, by:

2.   Athena shall use existing administrative structures of the European Union to the greatest possible extent. Athena shall resort to staff made available as necessary by the EU institutions or seconded by Member States.

3.   The Secretary-General of the Council may provide the administrator or the accounting officer with the staff needed for them to carry out their functions, which may be on the basis of a proposal by a participating Member State.

4.   Athena's bodies and staff shall be activated on the basis of operational needs.

1.   A Special Committee composed of one representative of each participating Member State is established (Special Committee). The Commission shall attend the meetings of the Special Committee without taking part in its votes.

2.   Athena shall be managed under the authority of the Special Committee.

3.   When the Special Committee is discussing the financing of the common costs of a given operation:

4.   The Presidency of the Council of the European Union shall convene and chair the meetings of the Special Committee. The administrator shall provide the secretariat for the Special Committee. He/she shall draw up the minutes of the result of the Committee's discussions. He/she shall not take part in its votes.

5.   The accounting officer shall participate as necessary in the proceedings of the Special Committee, without taking part in its votes.

6.   If a participating Member State, the administrator or the operation commander so requests, the Presidency shall convene the Special Committee within at most 15 days.

7.   The administrator shall suitably inform the Special Committee of any claim or dispute addressed to Athena.

8.   The Special Committee shall decide unanimously amongst its members, taking into account its composition as defined in paragraphs 1 and 3. Its decisions shall be binding.

9.   The Special Committee approves all budgets, taking into account the relevant reference amounts, and generally exercises the competences foreseen by Articles 20, 21, 22, 23, 26, 27, 29, 31, 33, 34, 38, 39, 40 and 41.

10.   The Special Committee shall be informed by the administrator, the operation commander and the accounting officer as provided for in the present Decision.

11.   The text of the acts approved by the Special Committee pursuant to articles 20, 21, 22, 23, 24, 26, 29, 31, 33, 34, 39, 40 and 41 shall be signed by the chairman of the Special Committee at the time of their approval and by the administrator.

1.   The Secretary-General of the Council, after informing the Special Committee, shall appoint the administrator and at least one deputy administrator for a period of three years.

2.   The administrator shall discharge his/her duties on behalf of Athena.

3.   The administrator:

4.   The administrator shall ensure that the rules established by the present Decision are complied with, and that the decisions of the Special Committee are applied.

5.   The administrator shall be authorised to adopt any measures which he/she deems necessary to implement the expenditure financed through Athena. He/she shall inform the Special Committee thereof.

6.   The administrator shall coordinate work on financial questions relating to the Union's military operations. He/she shall be the contact point with national administrations and, as appropriate, international organisations on these matters.

7.   The administrator shall be accountable before the Special Committee.

1.   The operation commander shall discharge his/her duties on behalf of Athena in relation to the financing of the common costs of the operation which he/she commands.

2.   For the operation which he/she commands, the operation commander shall:

3.   The operation commander shall be authorised to adopt any measures which he/she deems necessary to implement the expenditure financed through Athena, for the operation which he/she commands. He/she shall inform the administrator and the Special Committee thereof.

1.   The Secretary-General of the Council shall appoint the accounting officer and at least one deputy accounting officer for a period of two years.

2.   The accounting officer shall discharge his/her duties on behalf of Athena.

3.   The accounting officer shall be responsible for:

4.   The administrator and the operation commander shall provide the accounting officer with all the information necessary for the production of accounts which accurately represent Athena's financial assets and budget implementation administered by Athena. They shall guarantee its reliability.

5.   The accounting officer shall be accountable before the Special Committee.

1.   The functions of administrator or deputy administrator, on the one hand, and accounting officer or deputy accounting officer, on the other, shall be mutually incompatible.

2.   Any deputy administrator shall act under the authority of the administrator. Any deputy accounting officer shall act under the authority of the accounting officer.

3.   A deputy administrator shall stand in for the administrator when he/she is absent or prevented from attending. A deputy accounting officer shall stand in for the accounting officer when he/she is absent or prevented from attending.

4.   Officials and other servants of the European Communities, when carrying out functions on behalf of Athena, shall remain subject to the rules and regulations applicable to them.

5.   The staff made available to Athena by the Member States shall be subject to the same rules as those set out in the Council decision concerning the rules applicable to national experts on secondment, and to the provisions agreed on by their national administration and the Community institution or Athena.

6.   Before their appointment, the staff of Athena must have received clearance for access to classified information up to at least ‘Secret UE’level held by the Council, or equivalent clearance by a Member State.

7.   The administrator may negotiate and enter into arrangements with the Member States or Community institutions with a view to designating in advance those staff who could, if need be, be made immediately available to Athena.

1.   Administrative arrangements may be negotiated with Member States or EU institutions in order to facilitate procurement in operations at the most economical conditions. These arrangements shall take the form of an Exchange of Letters between Athena represented by the operation commander or, where there is no operation commander, the administrator, and the competent administrative authorities of the Member States or EU institutions concerned.

2.   The Special Committee shall be consulted before any such arrangement is signed.

1.   An administrative arrangement may be negotiated with a third State or an international organisation in order notably to facilitate procurement in theatre at the most economical conditions taking into account operational constraints. These arrangements shall take the form of an Exchange of Letters between Athena, represented by the operation commander or, where there is no operation commander, the administrator, and the competent administrative authorities of the third State or the international organisation concerned.

2.   Any such arrangement shall be submitted to the Special Committee for approval before it is signed.

1.   In the framework of the agreements concluded between the EU and third States indicated by the Council as potential contributors to EU operations or as contributors to a specific EU operation, the administrator shall negotiate with these third States standing or ad hoc administrative arrangements, respectively. These arrangements shall take the form of an exchange of Letters between Athena and the competent administrative services of the third States concerned establishing the modalities necessary to facilitate swift payment of contributions to any future EU military operation.

2.   Pending the conclusion of the agreements referred to in paragraph 1, the administrator may take the necessary measures to facilitate payments by the contributing third States.

3.   The administrator shall inform the Special Committee in advance of the envisaged arrangements, before signing them on behalf of Athena.

4.   When a military operation is launched by the Union, the administrator shall, for the amounts of contributions decided by the Council, implement the arrangements with the third States contributing to that operation.

1.   The administrator shall open one or more bank accounts on behalf of Athena.

2.   Any bank account shall be opened at a first-rate financial institution with its head office in a Member State.

3.   The contributions from contributing States shall be paid into these accounts. They shall be used to pay for the costs administered by Athena and to make the necessary advances to the operation commander for the implementation of expenditure relating to the common costs of a military operation. No bank account may be overdrawn.

1.   Any payment from Athena's account shall require the joint signature of the administrator or a deputy administrator on the one hand and the accounting officer or a deputy accounting officer on the other.

2.   Funds administered by Athena, including those entrusted to an operation commander, may not be deposited other than with a first-rate financial institution in euro in a current or short-term account.

1.   The common costs listed in Annex I shall be at the expense of Athena whenever they are incurred. When entered in an article of the budget showing the operation to which they are most related, they shall be regarded as operational costs of this operation. Otherwise, they shall be regarded as common costs incurred in preparation for, or following, operations.

2.   Furthermore, Athena shall bear the operational common costs listed in Annex II during the period from the approval of the Crisis Management Concept for the operation until the appointment of the operation commander. In particular circumstances, after the Political and Security Committee has been consulted, the Special Committee may modify the period during which these costs shall be borne by Athena.

3.   During the active phase of an operation, which runs from the date on which the operation commander is appointed to the day on which the operation headquarters ceases its activity, Athena shall bear as operational common costs:

4.   During the active phase of a military supporting action, as determined by the Council, Athena shall bear as operational common costs the common costs defined by the Council on a case-by-case basis by reference to Annex III.

5.   The operational common costs of an operation also include the expenditure necessary to wind it up, as listed in Annex IV.

The operation is wound up when the equipment and infrastructure commonly funded for the operation have found their final destination and the accounts for the operation have been drawn up.

6.   No expenditure incurred with a view to covering costs which would in any case have been borne by one or more contributing States, a Community institution or an international organisation, independently of the organisation of an operation, may be eligible as a common cost.

7.   The Special Committee may decide on a case-by-case basis that, in view of particular circumstances, certain incremental costs other than those listed in Annex IIIB shall be regarded as common costs for one given operation during its active phase.

8.   The Council and the Special Committee shall be informed by the Member States, through the administrator, of cost-sharing arrangements in which they take part in the context of an EU operation.

1.   The common costs of the European Union's exercises shall be financed through Athena following rules and procedures similar to those for operations to which all participating Member States contribute.

2.   These exercise common costs shall be composed of, firstly, incremental costs for deployable or fixed headquarters and, secondly, incremental costs incurred by EU recourse to NATO common assets and capabilities when made available for an exercise.

3.   Exercise common costs shall not include costs related to:

1.   The budget, drawn up in euro, is the act which for each financial year lays down and authorises all the revenue and expenditure administered by Athena.

2.   All expenditure shall be linked to a specific operation, except where appropriate for the costs listed in Annex I.

3.   The appropriations entered in the budget are authorised for the duration of a financial year which begins on 1 January and ends on 31 December of the same year.

4.   Budget revenue and expenditure must balance.

5.   No revenue nor expenditure may be implemented other than by allocation to a heading in the budget and within the limit of the appropriations entered there.

1.   Each year the administrator shall draw up a draft budget for the following financial year, with the assistance of each operation commander for the ‘operational common costs’ section. The administrator shall propose the draft budget to the Special Committee by 31 October at the latest.

2.   The draft shall include:

3.   The commitment and payment appropriations shall be classified in titles and chapters grouping expenditure together by type or purpose, subdivided as necessary into articles. Detailed comments by chapter or article shall be included in the draft budget. One specific title shall be dedicated to each operation. One specific title shall be the general part of the budget and shall include the common costs incurred in preparation for, or further to, operations.

4.   Each title may include a chapter entitled ‘provisional appropriations’. These appropriations shall be entered where there is uncertainty, based on serious grounds, about the amount of appropriations needed or the scope for implementing the appropriations entered.

5.   Revenue shall consist of:

6.   The Special Committee shall approve the draft budget by 31 December. The administrator shall adopt the approved budget and notify the participating and contributing States.

1.   In the case of unavoidable, exceptional or unforeseen circumstances, in particular when an operation arises during the course of the financial year, the administrator shall propose a draft amending budget. the draft amending budget substantially exceeds the reference amount for the operation concerned, the Special Committee may request the Council to approve it.

2.   The draft amending budget shall be drawn up, proposed, approved and adopted and notification given in accordance with the same procedure as the annual budget. However, when the amending budget is linked to the launch of a Union military operation, it shall be accompanied by a detailed financial statement on the common costs anticipated for the whole of the operation. The Special Committee shall discuss it taking account of its urgency.

1.   The administrator, where appropriate on the basis of a proposal by the operation commander, may make transfers of appropriations. The administrator shall inform the Special Committee of his/her intention, in so far as the urgency of the situation permits, at least one week in advance. However, the prior approval of the Special Committee shall be required when:

2.   When he/she deems this to be necessary for the proper conduct of an operation, in the three months following the date of launching of the operation, the operation commander may make transfers of appropriations allocated for the operation, between articles and between chapters in the ‘operational common costs’ section of the budget. He/she shall inform the administrator and the Special Committee thereof.

1.   In principle, the appropriations intended to cover the common costs incurred in preparation for, or further to, operations, which have not been committed are cancelled at the end of the financial year.

2.   Appropriations intended to cover the cost of storing material and equipment administered by Athena may be carried over once to the following financial year, when a commitment to that effect was made before 31 December of the current financial year. Appropriations intended to cover operational common costs may be carried over if they are necessary for an operation which has not been fully wound up.

3.   The administrator shall submit proposals for the carrying over of appropriations from the preceding financial year to the Special Committee by 15 February. These proposals shall be deemed approved unless the Special Committee decides otherwise by 15 March.

1.   Payment appropriations to cover the common costs incurred in preparation for, or further to, operations which are not covered by miscellaneous revenue shall be financed by contributions from the participating Member States.

2.   Payment appropriations to cover the operational common costs of an operation shall be covered by contributions from the Member States and third States contributing to the operation.

3.   The contributions payable by the contributing Member States for an operation shall be equal to the amount of the payment appropriations entered in the budget and intended to cover the operational common costs of that operation, minus the amounts of the contributions payable for the same operation by contributing third States pursuant to Article 13.

4.   The breakdown of contributions between the Member States from whom a contribution is required shall be determined in accordance with the gross national product scale as specified in Article 28(3) of the Treaty on European Union and in accordance with the Council Decision 2000/597/EC, Euratom of 29 September 2000 on the system of the European Communities' own resources (3), or any other Council Decision which may replace it.

5.   The data for the calculation of contributions shall be those set out in the ‘GNI own resources’ column in the ‘Summary of financing of the general budget by type of own resource and by Member State’ table appended to the latest budget adopted by the European Communities. The contribution of each Member State from whom a contribution is due shall be proportional to the share of Gross National Income (GNI) of that Member State in the total GNI aggregate of the Member States from whom a contribution is due.

1.   When the Council has adopted a reference amount for a Union military operation, the contributing Member States, shall pay their contributions at the level of 30 % of the reference amount, unless the Council decides on a higher percentage.

2.   The Special Committee, on the basis of a proposal by the administrator, may decide that additional contributions will be called before the adoption of an amending budget for the operation. The Special Committee may decide to refer the matter to the competent preparatory bodies at the Council.

3.   When the appropriations intended to cover the operational common costs of the operation have been entered in the budget, the Member States shall pay the balance of the contributions which they owe for that operation in application of Article 25 after deduction of the contributions already called from them for the same operation in the same financial year. However, when the operation is planned to last more than six months, the balance of contributions shall be paid in half-yearly instalments. In such a case, the first instalment shall be paid within two months of the launching of the operation; the second instalment shall be paid by a deadline to be set by the Special Committee acting on a proposal from the administrator, taking into account operational needs. The Special Committee may depart from these provisions.

4.   When a reference amount or a budget has been adopted, the administrator shall send the corresponding calls for contributions by letter to the national administrations whose details have been communicated to him/her.

5.   Without prejudice to the other provisions in this Decision, the contributions shall be paid within 30 days following despatch of the relevant call for contributions.

6.   Each contributing State shall pay the bank charges relating to the payment of its own contribution.

7.   The administrator shall acknowledge receipt of contributions.

1.   In the case of an EU Military Rapid Response operation, contributions shall be due by contributing Member States at the level of the reference amount. Without prejudice to Article 26(3), payments shall be made as defined below.

2.   For the purpose of the early financing of EU Military Rapid Response operations, the participating Member States shall:

3.   For the purpose referred to above, the Special Committee, composed of one representative of each of the Member States which have chosen to pay contributions in anticipation (hereafter anticipating Member States), shall establish provisional appropriations in a specific title in the budget. These provisional appropriations shall be covered by contributions payable by the anticipating Member States within 90 days following despatch of the call for these contributions.

4.   Without prejudice to Article 26(3), the contributions due by an anticipating Member State for a Rapid Response operation, up to the level of the contribution it has paid to the provisional appropriations referred to in paragraph 3 of this Article, shall be payable within 90 days following despatch of the call. A similar amount may be made available to the operation commander from the contributions paid in anticipation.

5.   Notwithstanding Article 22, any provisional appropriations referred to under paragraph 3 of this Article which are used for an operation shall be replenished within 90 days following despatch of the call.

6.   Without prejudice to paragraph 1, any anticipating Member State may in specific circumstances authorise the administrator to use its contribution paid in anticipation to cover its contribution to an operation in which it participates, other than a Rapid Response operation. The contribution paid in anticipation shall be replenished by the Member State concerned within 90 days following despatch of the call.

7.   Where funds are required for an operation, other than a Rapid Response operation, before sufficient contributions to that operation have been received, contributions paid in anticipation by Member States which contribute to financing that operation, after approval by the anticipating Member States, may be used up to 50 % of their amount to cover contributions due to that operation. The contributions paid in anticipation shall be replenished by the anticipating Member States within 90 days following despatch of the call.

8.   Notwithstanding Article 33(3), the operation commander may commit and pay the amounts made available to him.

9.   Any Member State may reverse its option by notifying the administrator at least three months in advance.

1.   A Member State, a third State or, as appropriate, an international organisation which has been authorised by the Council to prefinance a part of the common costs of an operation may obtain reimbursement from Athena by making a request accompanied by the necessary supporting documents and addressed to the administrator at the latest two months after the date of completion of the operation concerned.

2.   No request for reimbursement may be honoured if it has not been approved by the operation commander and by the administrator.

3.   If a request for reimbursement presented by a contributing State is approved, it may be deducted from the next call for contributions addressed to that State by the administrator.

4.   If no call for contributions is anticipated when the request is approved, or if the approved request for reimbursement would exceed the anticipated contribution, the administrator shall make payment of the amount to be reimbursed within 30 days, taking account of Athena's cash flow and of what is needed to finance the common costs of the operation concerned.

5.   Reimbursement shall be due in accordance with this Decision even if the operation is cancelled.

1.   The Special Committee, on the basis of a proposal by the administrator or a Member State, may decide that the administrative management of certain expenditure in relation to an operation, particularly in the area of manpower support/messing and laundry, while remaining the responsibility of the Member State which it concerns, should be entrusted to Athena.

2.   The Special Committee, in its decision, may authorise the operation commander to enter into contracts on behalf of the Member States participating in an operation, for the acquisition of the supplies described. It may authorise Athena's budget to prefinance expenditure by the Member States or decide that Athena will collect the necessary funds from the Member States in advance to honour the contracts entered into.

3.   Athena shall keep accounts of the expenditure borne by each Member State the management of which has been entrusted to it. Each month it shall send each Member State a statement of the expenditure borne by it and incurred by it or by its staff during the preceding month, and shall call for the necessary funds to pay for this expenditure. The Member States shall pay Athena the funds required within 30 days following despatch of the call for funds.

1.   If a State does not fulfil its financial obligations, the Community rules on interest on late payment determined by Article 71 of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (4) in relation to the payment of contributions to the Community budget shall be applicable by analogy.

2.   When payment is late by no more than ten days, no interest shall be charged. When payment is late by more than ten days, interests shall be charged for the entire delay.

1.   Athena's appropriations shall be used in accordance with the principles of sound financial management, that is in accordance with the principles of economy, effectiveness and efficiency.

2.   Authorising officers shall be responsible for implementing Athena's revenue or expenditure in accordance with the principles of sound financial management to ensure that the requirements of legality and regularity are complied with. The authorising officers shall make budgetary and legal commitments, clear and authorise expenditure and carry out actions prior to this implementation of appropriations. An authorising officer may delegate his/her duties by a decision determining:

3.   The implementation of appropriations according to the principle of the segregation of the authorising officer and the accounting officer shall be ensured. The duties of authorising officer and accounting officer shall be mutually incompatible. Any payment made on funds administered by Athena shall require the joint signature of an authorising officer and an accounting officer.

4.   Without prejudice to this Decision, when the implementation of common expenditure is entrusted to a Member State, a Community institution or, as appropriate, an international organisation, that State, institution or organisation shall apply the rules applicable to the implementation of its own expenditure. When the administrator implements expenditure directly, it shall comply with the rules applicable to the implementation of the ‘Council’ section of the general budget of the European Communities.

5.   However the administrator may provide the Presidency with elements for proposal to the Council or the Special Committee on rules for the implementation of common expenditure.

6.   The Special Committee may approve rules for the implementation of common expenditure which depart from paragraph 4.

1.   The operation commander shall carry out the duties of authorising officer for expenditure covering the operational common costs of the operation he/she commands. However, the administrator shall carry out the duties of authorising officer for expenditure covering the operational common costs incurred during the preparatory phase of a specific operation, which are implemented directly by Athena, or related to the operation after the end of its active phase.

2.   The sums required for the implementation of expenditure on an operation shall be transferred by the administrator from Athena's bank account to the operation commander, upon his/her request, into the bank account opened on behalf of Athena, of which the operation commander has provided the details.

3.   By way of derogation from Article 19(5), the adoption of a reference amount shall activate the right of the administrator and the operation commander, each in his/her area of competence, to commit and pay expenses for the operation concerned up to 30 % of the reference amount, unless the Council should set a higher percentage. The Special Committee, on the basis of a proposal from the administrator, may decide that additional expenditure may be committed and paid. The Special Committee may decide to refer the question to the competent preparatory bodies at the Council through the Presidency. This derogation shall no longer apply from the date of adoption of a budget for the operation concerned.

4.   During the period prior to the adoption of a budget for an operation, the administrator and the operation commander or his/her representative shall report to the Special Committee every month, each reporting on the matters concerning him/her, as regards the expenses which are eligible as common costs for that operation. The Special Committee, on the basis of a proposal by the administrator, the operation commander or a Member State, may issue directives on the implementation of expenditure during this period.

5.   By way of derogation from Article 19(5), in the case of imminent danger to the lives of personnel involved in a Union military operation, the operation commander for that operation may implement the necessary expenditure to save the lives of those personnel, in excess of the appropriations entered in the budget. He/she shall inform the administrator and the Special Committee as soon as possible. In such a case, the administrator shall, liaising with the operation commander, propose the transfers needed to finance this unexpected expenditure. If it is not possible to ensure sufficient funding for such expenditure by means of a transfer, the administrator shall propose an amending budget.

1.   With a view to winding up the operation which he/she has commanded, the operation commander shall act as necessary to find a final destination for the equipment and infrastructure acquired in common for that operation. He/she shall propose to the Special Committee the relevant rate of depreciation as necessary.

2.   The administrator shall manage the equipment and infrastructure remaining after the end of the active phase of the operation, with a view if necessary to finding its final destination. He/she shall propose to the Special Committee the relevant rate of depreciation as necessary.

3.   The depreciation rate for equipment, infrastructure and other assets shall be approved by the Special Committee at the earliest time possible.

4.   The final destination of equipment and infrastructure financed in common shall be approved by the Special Committee, taking into account operational needs and financial criteria. The final destination may be as follows:

5.   Equipment and infrastructure shall be sold to a contributing State, the host country or a third party for their market value, or, where no market value can be determined, taking account of the relevant rate of depreciation.

6.   Sale or transfer to the host country or a third party shall be in accordance with the security rules in force, particularly within the Council, the contributing States or NATO, as appropriate.

7.   When it is decided that Athena shall retain equipment acquired for an operation, the contributing Member States may ask for financial compensation from the other participating Member States. The Special Committee, composed of the representatives of all the participating Member States, shall take the appropriate decisions on the basis of a proposal from the administrator.

1.   The accounting officer shall keep the accounts of contributions called for and transfers made. He/she shall also draw up the accounts for the common costs incurred in preparation for, or further to, operations, and for operational expenditure implemented under the direct responsibility of the administrator.

2.   The accounting officer shall draw up the consolidated accounts for Athena's revenue and expenditure. Each operation commander shall send him/her the accounts for the expenditure he/she has committed and the payments he/she has made, as well as for the prefinancing he/she has approved to cover the operational common costs of the operation which he/she commands.

1.   When the implementation of Athena's expenditure has been entrusted to a Member State, a Community institution or an international organisation, that State, institution or organisation shall apply the rules which apply to the auditing of its own expenditure.

2.   However, the administrator or persons appointed by him/her may at any time carry out an audit of the common costs of Athena incurred in preparation for, or further to, operations, or the operational common costs of an operation. Furthermore, the Special Committee, on the basis of a proposal by the administrator or a Member State, may at any time appoint external auditors, whose tasks and conditions of employment it shall determine.

3.   With a view to external audits, a six-member college of auditors shall be established. Each year, the Special Committee shall appoint as of 1 January of the following year two members for a three-year period, renewable once, from candidates proposed by the Member States. The Special Committee may extend a member's mandate by up to six months. The candidates must be members of a national audit body in a Member State and offer adequate guarantees of security and independence. They must be available to carry out tasks on behalf of Athena as needed. In carrying out these tasks:

Each year, the College of auditors shall elect to change or extend its chairman from amongst its members. It shall adopt the rules applicable to audits carried out by its members in accordance with the highest international standards. The College of Auditors shall approve the audit reports drawn up by its members before their transmission to the administrator and to the Special Committee.

4.   The Special Committee may decide on a case-by-case basis and upon specific motivations to use other external bodies.

5.   The persons responsible for auditing Athena's expenditure must, before carrying out their task, have received clearance for access to classified information up to at least ‘Secret UE’ level held by the Council, or equivalent clearance from a Member State or NATO, as appropriate. Those persons shall ensure that they respect the confidentiality of the information and protect the data of which they acquire knowledge during their audit task, in accordance with the rules applicable to that information and data.

6.   The administrator and the persons responsible for auditing Athena's expenditure shall have access without delay and without giving prior notice to the documents and to the contents of all data supports relating to that expenditure, and to the premises where those documents and supports are kept. They may make copies. The persons involved in implementing Athena's expenditure shall give the administrator and the persons responsible for the audit of that expenditure the necessary assistance in performing their task.

7.   The cost of the audits carried out by auditors acting on behalf of Athena shall be considered as a common cost to be borne by Athena.

1.   Each operation commander shall provide Athena's accounting officer by 31 March following the end of the financial year, or within four months following the end of the operation which he/she commands, whichever is the earlier, with the necessary information to establish the annual accounts for common costs, the annual accounts for expenditure pre-financed and reimbursed pursuant to Article 29 and the annual activity report.

2.   The administrator, with the assistance of the accounting officer and each operation commander, shall establish and provide to the Special Committee and the College of auditors, by 30 April following the end of the financial year, the provisional annual accounts and the annual activity report.

3.   The Special Committee shall be provided by 31 July following the end of the financial year, by the College of Auditors with an annual audit report and by the administrator, assisted by the accounting officer and each operation commander, with Athena's final annual accounts. The Special Committee shall examine by 30 September following the end of the financial year the annual accounts in the light of the College's audit report, with a view to granting a discharge to the administrator, the accounting officer and each operation commander.

4.   All accounts and inventories shall be retained, each at his/her level, by the accounting officer and each operation commander for a period of five years from the date on which the corresponding discharge was granted.

5.   The Special Committee shall decide to enter the balance of the budget outturn for a financial year for which the accounts have been approved in the budget for the following financial year, as revenue or expenditure depending on the circumstances, by means of an amending budget.

6.   That part of the balance of the budget outturn for a financial year which comes from the implementation of appropriations intended to cover common costs incurred in preparation for, or further to, operations, shall be entered against the next contributions from participating Member States.

7.   That part of the balance of the budget outturn which comes from the implementation of appropriations intended to cover the operational common costs of a given operation shall be entered against the next contributions from the Member States which have contributed to that operation.

8.   If reimbursement cannot be done by deduction from the contributions due to Athena, the balance of the budget outturn shall be repaid to the Member States concerned.

9.   Each Member State participating in an operation shall provide on a voluntary basis information by 31 March each year to the administrator where appropriate through the Operation Commander, on the incremental costs it has incurred for the operation during the previous financial year. This information shall be broken down to show the main items of expenditure. The administrator shall compile this information in order to provide the Special Committee with an overview of the incremental costs of the operation.

1.   When an operation is complete, the Special Committee may decide, on the basis of a proposal by the administrator or by a Member State, that the administrator, with the assistance of the accounting officer and of the operation commander, shall submit to the Special Committee the management accounts and the balance sheet for that operation, at least up to the date on which it was completed, and, if possible, up to the date on which it was wound up. The deadline imposed on the administrator may not be less than four months from the date on which the operation was completed.

2.   If the management accounts and balance sheet cannot, within the given deadline, include the revenue and expenditure connected with the winding up of that operation, then that revenue and expenditure shall appear in the annual management account and balance sheet for Athena and shall be examined by the Special Committee in connection with the annual presentation of accounts.

3.   The Special Committee shall approve the management account and balance sheet for the operation which have been submitted to it. It shall grant a discharge to the administrator, the accounting officer and each operation commander for the operation in question.

4.   If reimbursement cannot be done by deduction from the contributions due to Athena, the balance of the budget outturn shall be repaid to the Member States concerned.

1.   The conditions governing the disciplinary or criminal liability of the operation commander, the administrator and other staff made available in particular by the Community institutions or Member States in the event of misconduct or negligence in the implementation of the budget shall be governed by the Staff Regulations or the arrangements applicable to them. In addition, Athena may at its own initiative or at the request of a contributing State bring a civil action against the abovementioned staff.

2.   In no case may the European Communities or the Secretary-General of the Council be held liable by a contributing State as a result of the performance of their duties by the administrator, the accounting officer or the staff assigned to them.

3.   The contractual liability which may arise from contracts concluded in the context of implementation of the budget shall be covered through Athena by the contributing States. It shall be governed by the law applicable to the contracts in question.

4.   In the case of non-contractual liability, any damage caused by the operation headquarters, force headquarters and component headquarters of the crisis structure, the composition of which shall be approved by the operation commander, or by their staff in the course of their duties shall be covered through Athena by the contributing States, in accordance with the general principles common to the laws of the Member States and the Staff Regulations of the forces, applicable in the theatre of operations.

5.   In no case may the European Communities or the Member States be held liable by a contributing State for contracts concluded in the framework of budget implementation or for damage caused by the units and departments of the crisis structure, the composition of which shall be approved by the operation commander, or by their staff in the course of their duties.