1.   The Community shall undertake development cooperation measures, as well as financial, economic and technical cooperation measures with third countries under the conditions set out in this Regulation.

2.   In accordance with the objectives of such cooperation and within its limits as laid down in the EC Treaty, the specific aims of this Regulation shall be:

(a)	in a situation of crisis or emerging crisis, to contribute to stability by providing an effective response to help preserve, establish or re-establish the conditions essential to the proper implementation of the Community's development and cooperation policies;

(b)	in the context of stable conditions for the implementation of Community cooperation policies in third countries, to help build capacity both to address specific global and transregional threats having a destabilising effect and to ensure preparedness to address pre- and post-crisis situations.

3.   Measures taken under this Regulation may be complementary to, and shall be consistent with, and without prejudice to, measures adopted under Title V and Title VI of the EU Treaty.

1.   Community assistance under this Regulation shall be complementary to that provided for under related Community instruments for external assistance. It shall be provided only to the extent that an adequate and effective response cannot be provided under those instruments.

2.   The Commission shall ensure that measures adopted under this Regulation are consistent with the Community's overall strategic policy framework for the partner country, and in particular with the objectives of the instruments referred to in paragraph 1, as well as with other relevant Community measures.

3.   In order to enhance the effectiveness and consistency of Community and national assistance measures, the Commission shall promote close coordination between its own activities and those of the Member States, both at decision-making level and on the ground. To that end, the Member States and the Commission shall operate a system for exchange of information.

1.   Community technical and financial assistance in pursuit of the specific aims set out in point (a) of Article 1(2) may be undertaken in response to a situation of urgency, crisis or emerging crisis, a situation posing a threat to democracy, law and order, the protection of human rights and fundamental freedoms, or the security and safety of individuals, or a situation threatening to escalate into armed conflict or severely to destabilise the third country or countries concerned. Such measures may also address situations where the Community has invoked the essential elements clauses of international Agreements in order to suspend, partially or totally, cooperation with third countries.

2.   Technical and financial assistance referred to in paragraph 1 shall cover the following areas:

(a)	support, through the provision of technical and logistical assistance, for the efforts undertaken by international and regional organisations, state and non-state actors in promoting confidence-building, mediation, dialogue and reconciliation;

(b)	support for the establishment and the functioning of interim administrations mandated in accordance with international law;

(c)

support for the development of democratic, pluralistic state institutions, including measures to enhance the role of women in such institutions, effective civilian administration and related legal frameworks at national and local level, an independent judiciary, good governance and law and order, including non-military technical cooperation to strengthen overall civilian control, and oversight over the security system and measures to strengthen the capacity of law enforcement and judicial authorities involved in the fight against the illicit trafficking of people, drugs, firearms and explosive materials;

(d)

support for international criminal tribunals and ad hoc national tribunals, truth and reconciliation commissions, and mechanisms for the legal settlement of human rights claims and the assertion and adjudication of property rights, established in accordance with international human rights and rule of law standards;

(e)

support for measures necessary to start the rehabilitation and reconstruction of key infrastructure, housing, public buildings and economic assets, as well as essential productive capacity, and for the re-starting of economic activity and the generation of employment and the establishment of the minimum conditions necessary for sustainable social development;

(f)	support for civilian measures related to the demobilisation and reintegration of former combatants into civil society, and where appropriate their repatriation, as well as measures to address the situation of child soldiers and female combatants;

(g)	support for measures to mitigate the social effects of restructuring of the armed forces;

(h)

support for measures to address, within the framework of Community cooperation policies and their objectives, the socio-economic impact on the civilian population of anti-personnel landmines, unexploded ordnance or explosive remnants of war; activities financed under this Regulation shall cover risk education, victim assistance, mine detection and clearance and, in conjunction therewith, stockpile destruction;

(i)

support for measures to address, within the framework of Community cooperation policies and their objectives, the impact on the civilian population of the illicit use of and access to firearms; such support shall be limited to survey activities, victim assistance, raising public awareness and the development of legal and administrative expertise and good practice. Assistance shall be provided only to the extent necessary to re-establish the conditions for social and economic development of the populations concerned, in a situation of crisis or emerging crisis as referred to in paragraph 1. It shall not include support for measures to combat the proliferation of arms;

(j)	support for measures to ensure that the specific needs of women and children in crisis and conflict situations, including their exposure to gender-based violence, are adequately met;

(k)	support for the rehabilitation and reintegration of the victims of armed conflict, including measures to address the specific needs of women and children;

(l)	support for measures to promote and defend respect for human rights and fundamental freedoms, democracy and the rule of law, and the related international instruments;

(m)	support for socio-economic measures to promote equitable access to and transparent management of natural resources in a situation of crisis or emerging crisis;

(n)	support for socio-economic measures to address the impact of sudden population movements, including measures addressing the needs of host communities in a situation of crisis or emerging crisis;

(o)	support for measures to support the development and organisation of civil society and its participation in the political process, including measures to enhance the role of women in such processes and measures to promote independent, pluralist and professional media;

(p)	support for measures in response to natural or man-made disasters and threats to public health in the absence of, or to complement, Community humanitarian assistance.

3.   In the exceptional and unforeseen situations referred to in paragraph 1, the Community may also provide technical and financial assistance not expressly covered by the specific areas of assistance set out in paragraph 2. Such assistance shall be limited to Exceptional Assistance Measures as referred to in Article 6(2), which:

—	fall within the general scope and specific aims set out in Article 1(a), and

—	are limited in duration to the period laid down in Article 6(2), and

—	would normally be eligible under the other Community instruments for external assistance, but which, in accordance with Article 2, should be addressed through this Regulation because of the need to respond rapidly to a situation of crisis or emerging crisis.

1.   Community assistance under Article 3 shall be carried out through Exceptional Assistance Measures and through Interim Response Programmes.

2.   The Commission may adopt Exceptional Assistance Measures in a situation of crisis as referred to in Article 3(1), as well as in exceptional and unforeseen situations as referred to in Article 3(3), where the effectiveness of the measures is dependent on rapid or flexible implementation. Such measures may have a duration of up to 18 months. Individual measures may be extended in duration by a further six months in the case of objective and unforeseen obstacles to their implementation, provided that the financial amount of the measure does not increase.

3.   Where an Exceptional Assistance Measure is costing more than EUR 20 000 000, that measure shall be adopted in accordance with the procedure referred to in Article 22(2).

4.   The Commission may adopt Interim Response Programmes with a view to establishing or re-establishing the essential conditions necessary for the effective implementation of the Community's external cooperation policies. Interim Response Programmes shall build on Exceptional Assistance Measures. They shall be adopted in accordance with the procedure referred to in Article 22(2).

5.   The Commission shall keep the Council regularly informed about its planning of Community assistance under Article 3. Before adopting or renewing any Exceptional Assistance Measures costing up to EUR 20 000 000, the Commission shall inform the Council of their nature, objectives and the financial amounts envisaged. It shall take account of the relevant policy approach of the Council both in its planning and subsequent implementation of such measures, in the interests of the coherence of EU external action. The Commission shall likewise inform the Council before making significant substantive changes to Exceptional Assistance Measures already adopted.

6.   At as early a stage as possible, following the adoption of Exceptional Assistance Measures, and in any case within seven months of doing so, the Commission shall report to the European Parliament and the Council by giving an overview of the existing and planned Community response, including the contribution to be made from other Community financing instruments, the status of existing Country and Multi-Country Strategy Papers, and the Community's role within the broader international and multilateral response. This report shall also indicate whether and, if so, for how long the Commission intends to continue the Exceptional Assistance Measures.

1.   Multi-country and Thematic Strategy Papers shall constitute the general basis for the implementation of assistance under Article 4.

2.   Multi-country and Thematic Strategy Papers shall set out the Community's strategy for the countries or themes concerned, having regard to the needs of the countries concerned, the Community's priorities, the international situation and the activities of the main partners.

3.   Multi-country and Thematic Strategy Papers, and any revisions or extensions thereof, shall be adopted in accordance with the procedure referred to in Article 22(2). They shall cover an initial period of no longer than the period of application of this Regulation and shall be reviewed at the mid-point.

4.   Strategy Papers shall be consistent with, and avoid duplication of, Country, Multi-country or Thematic Strategy Papers adopted under other Community instruments for external assistance. Strategy Papers shall, where appropriate, be based on a dialogue with the partner country, countries or region concerned, including with civil society, so as to support national development strategies and to ensure the participation and involvement of the partner country, countries or region. In addition, joint consultations shall be carried out between the Commission, Member States, and other donors where appropriate, in order to ensure that the cooperation activities of the Community are complementary to those of the Member States and other donors. Other stakeholders may be associated where appropriate.

5.   Each Multi-country Strategy Paper shall, where appropriate, be accompanied by a Multi-annual Indicative Programme summarising the priority areas selected for Community financing, the specific objectives, the expected results and timeframe of Community support and the indicative financial allocation, overall and for each priority area. The financial allocations may be given in the form of a range where necessary.

6.   The Multi-annual Indicative Programmes shall determine the financial allocations for each programme using transparent criteria, based on the needs and performance of the partner countries or regions concerned and taking into account the particular difficulties faced by countries or regions in crisis or conflict.

7.   Multi-annual Indicative Programmes, and any revisions or extensions thereof, shall be adopted in accordance with the procedure referred to in Article 22(2). They shall be established, where appropriate, in consultation with the partner countries or regions concerned.

8.   The financial amounts of Multi-annual Indicative Programmes may be increased or decreased as a result of reviews, taking into account changes in a country's situation, performance and needs, in accordance with the procedure referred to in paragraph 7.

1.   Annual Action Programmes shall set out measures to be adopted on the basis of the Multi-country and Thematic Strategy Papers and Multi-annual Indicative Programmes referred to in Article 7.

2.   Annual Action Programmes shall specify the objectives pursued, the fields of intervention, the expected results, the management procedures and total amount of financing planned. They shall contain a summary description of the operations to be financed, an indication of the amounts allocated for each operation and an indicative implementation timetable. Where relevant, they should include the results of any lessons learned from previous assistance. Objectives shall be measurable.

3.   Annual Action Programmes and any revision or extension thereof shall be adopted in accordance with the procedure referred to in Article 22(2).

1.   Notwithstanding Articles 7 and 8, in the event of unforeseen needs or circumstances, the Commission may adopt Special Measures not provided for in the Multi-country and Thematic Strategy Papers and Multi-annual Indicative Programmes referred to in Article 7 or the Annual Action Programmes referred to in Article 8.

2.   Special Measures shall specify the objectives pursued, the areas of activity, the expected results, the management procedures used and the total amount of financing planned. They shall contain a description of the operations to be financed, an indication of the amounts allocated for each operation and an indicative implementation timetable.

3.   Special Measures costing more than EUR 5 000 000 shall be adopted in accordance with the procedure referred to in Article 22(2).

4.   The Commission shall inform the Committee set up pursuant to Article 22(1) within one month of adopting Special Measures costing up to EUR 5 000 000.

1.   The following shall be eligible for funding under this Regulation for the purposes of implementing the Exceptional Assistance Measures and Interim Response Programmes referred to in Article 6, the Annual Action Programmes referred to in Article 8 and the Special Measures referred to in Article 9:

(a)	partner countries and regions and their institutions;

(b)	decentralised bodies in the partner countries, such as regions, departments, provinces and municipalities;

(c)	joint bodies set up by the partner countries and regions and the Community;

(d)	international organisations, including regional organisations, UN bodies, departments and missions, international financial institutions and development banks, and institutions of international jurisdiction, in so far as they contribute to the objectives of this Regulation;

(e)	European agencies;

(f)

the following entities and bodies of the Member States, partner countries and regions and any other third country in so far as they contribute to the objectives of this Regulation: (i) public and para-statal bodies, local authorities or administrations and consortia thereof; (ii) companies, firms and other private organisations and businesses; (iii) financial institutions that grant, promote and finance private investment in partner countries and regions; (iv) non-state actors referred to in paragraph 2; (v) natural persons.

2.   Non-state actors eligible for financial support under this Regulation shall include: non-governmental organisations, organisations representing indigenous peoples, local citizens' groups and traders' associations, cooperatives, trade unions, organisations representing economic and social interests, local organisations (including networks) involved in decentralised regional cooperation and integration, consumer organisations, women's and youth organisations, teaching, cultural, research and scientific organisations, universities, churches and religious associations and communities, the media and any non-governmental associations and private and public foundations likely to contribute to development or the external dimension of internal policies.

3.   Other bodies or actors not listed in paragraphs 1 and 2 may be financed when this is necessary to achieve the objectives of this Regulation.

1.   Community financing may take the following forms:

(a)	projects and programmes;

(b)

sectoral or general budget support, where the partner country's arrangements for managing public funds are sufficiently transparent, reliable and effective, and where proper sectoral or macro-economic policies have been put in place by the partner country and approved by its main donors, including international financial institutions where applicable. Budgetary support may in general be one of several instruments. It shall be allocated with precise objectives and related benchmarks. Disbursement of budgetary support shall be conditional on satisfactory progress towards achieving the objectives in terms of impact and results;

(c)

in exceptional cases, sectoral and general import-support programmes, which may take the form of: (i) sectoral programmes for imports in kind, (ii) sectoral import programmes providing foreign currency to finance imports for the sector in question, or (iii) general import programmes providing foreign currency to finance general imports, covering a wide range of products;

(d)

funds made available to financial intermediaries in accordance with Article 20, with a view to providing loans (to support investment and development of the private sector, for example), risk capital (in the form of subordinated or conditional loans) or other temporary minority holdings in business capital, to the extent that the financial risk of the Community is limited to these funds;

(e)	grants to fund measures;

(f)	grants to cover operating costs;

(g)	funding for twinning programmes between public institutions, national public bodies or private-law entities with a public-service mission of a Member State and those of a partner country or region;

(h)	contributions to international funds, in particular those managed by international or regional organisations;

(i)	contributions to national funds set up by partner countries and regions to attract joint financing from a number of donors, or contributions to funds set up by one or more donors for the purpose of the joint implementation of operations;

(j)	human and material resources required for effective administration and supervision of projects and programmes by partner countries and regions.

2.   Community financing shall in principle not be used for paying taxes, duties or charges in beneficiary countries.

3.   Activities covered by Regulation (EC) No 1257/96 and eligible for funding thereunder may not be funded under this Regulation.

1.   Community financing may cover expenditure associated with the preparation, follow-up, monitoring, auditing and evaluation activities directly necessary for the implementation of this Regulation and the achievement of its objectives. Community financing shall also cover expenditure on administrative support staff employed at Commission Delegations to manage projects funded under this Regulation.

2.   Support may be financed outside the scope of Multi-annual Indicative Programmes. The Commission shall adopt such support measures in accordance with Article 9.

1.   Measures financed under this Regulation are eligible for cofinancing from the following, :

inter alia

(a)	Member States, and in particular their public and para-statal agencies;

(b)	other donor countries and in particular their public and para-statal agencies;

(c)	international and regional organisations, and in particular international and regional financial institutions;

(d)	companies, firms, other private organisations and businesses, and other non-state actors referred to in Article 10(2);

(e)	partner countries and regions in receipt of funding, and other bodies eligible for funding as referred to in Article 10.

2.   In the case of parallel cofinancing, the project or programme is split into a number of clearly identifiable sub-projects, which are each financed by different partners providing cofinancing in such a way that the end-use of the financing can always be identified. In the case of joint cofinancing, the total cost of the project or programme is shared between the partners providing the cofinancing and resources are pooled in such a way that it is not possible to identify the source of funding for any given activity undertaken as part of the project or programme.

3.   In the case of joint cofinancing, the Commission may receive and manage funds on behalf of the bodies referred to in points (a), (b) and (c) of paragraph 1 for the purpose of implementing joint measures. In this case, the Commission shall implement the joint measures centrally, either directly or indirectly, by delegating the task to Community agencies or bodies set up by the Community. Such funds shall be dealt with as assigned revenue in accordance with Article 18 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 (5) .

1.   The measures financed under this Regulation shall be managed, monitored, evaluated and reported on in accordance with Regulation (EC, Euratom) No 1605/2002.

2.   The Commission may decide to entrust tasks of public authority, and in particular budget implementation tasks, to bodies referred to in Article 54(2)(c) of Regulation (EC, Euratom) No 1605/2002 if they are of recognised international standing, comply with internationally recognised systems of management and control, and are supervised by public authority.

3.   In the case of decentralised management, the Commission may decide to use the procurement or grant procedures of the beneficiary country or region.

1.   Budget commitments shall be made on the basis of decisions taken by the Commission in accordance with Articles 6, 8, 9 and 12.

2.   The legal forms for Community financing shall include ():

inter alia

—	financing agreements,

—	grant agreements,

—	procurement contracts,

—	employment contracts.

1.   Any agreements resulting from this Regulation shall contain provisions ensuring the protection of the Community's financial interests, in particular with respect to fraud, corruption and any other irregularities in accordance with Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities' financial interests (6), Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities' financial interests against fraud and other irregularities (7) and Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) (8).

2.   The agreements referred to in paragraph 1 shall expressly entitle the Commission and the Court of Auditors to have the power of audit, on the basis of documents and on the spot, over all contractors and subcontractors who have received Community funds. They shall also expressly authorise the Commission to carry out on-the-spot checks and inspections, as provided for in Regulation (Euratom, EC) No 2185/96.

3.   All contracts resulting from the implementation of assistance shall ensure the rights of the Commission and the Court of Auditors, as provided for in paragraph 2, during and after the implementation of contracts.

1.   Participation in the award of procurement or grant contracts financed under this Regulation shall be open to all natural or legal persons from Member States.

2.   Participation in the award of procurement or grant contracts financed under this Regulation shall be also open to all natural and legal persons from:

—	any country that is a beneficiary of the Instrument for Pre-Accession Assistance (9),

—	any non-EU Member State of the European Economic Area, and

—	any other third country or territory in cases where reciprocal access to external assistance has been established.

3.   In the case of measures taken in any third country considered a Least Developed Country according to the criteria laid down by the OECD, participation in the award of procurement or grant contracts shall be open on a global basis.

4.   In the case of Exceptional Assistance Measures and Interim Response Programmes referred to in Article 6, participation in the award of procurement or grant contracts shall be open on a global basis.

5.   In the case of measures adopted in pursuit of the objectives referred to in Article 4, participation in the award of procurement or grant contracts shall be open, and rules of origin shall extend, to any natural or legal person of a developing country or of a country in transition, as defined by the OECD, and to natural or legal persons of any other country eligible under the relevant strategy.

6.   Participation in the award of procurement or grant contracts financed under this Regulation shall be open to international organisations.

7.   Experts proposed in the context of procedures for the award of contracts need not comply with the nationality rules set out in this Article.

8.   All supplies and materials purchased under contracts financed under this Regulation shall originate from the Community or a country eligible under paragraphs 2 to 5.

9.   Participation by natural and legal persons from third countries or territories with traditional economic, trade or geographical links to the partner country may be authorised on a case-by-case basis. The Commission may, moreover, in duly substantiated cases authorise the participation of natural and legal persons from other countries, or the use of supplies and materials of different origin.

1.   The Commission shall be assisted by a Committee.

2.   Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply.

The period provided for in Article 4(3) of Decision 1999/468/EC shall be set at 30 days.

3.   The Committee shall adopt its Rules of Procedure.

4.   An observer from the EIB shall take part in the Committee's proceedings with regard to questions concerning the EIB.

1.   As of the following Regulations are repealed:1 January 2007

—	Regulation (EC) No 2130/2001 of the European Parliament and of the Council of 29 October 2001 on operations to aid uprooted people in Asian and Latin American developing countries (10),

—	Council Regulation (EC) No 1725/2001 of 23 July 2001 concerning action against anti-personnel landmines in third countries other than developing countries (11),

—	Regulation (EC) No 1724/2001 of the European Parliament and of the Council of 23 July 2001 concerning action against anti-personnel landmines in developing countries (12),

—	Council Regulation (EC) No 381/2001 of 26 February 2001 creating a rapid-reaction mechanism (13),

—	Council Regulation (EC) No 1080/2000 of 22 May 2000 on support for the United Nations Interim Mission in Kosovo (UNMIK) and the Office of the High Representative in Bosnia and Herzegovina (OHR) (14), with the exception of Article 1a of that Regulation,

—	Council Regulation (EC) No 2046/97 of 13 October 1997 on north-south cooperation in the campaign against drugs and drug addiction (15),

—	Council Regulation (EC) No 2258/96 of 22 November 1996 on rehabilitation and reconstruction operations in developing countries (16).

2.   The repealed Regulations shall continue to apply for legal acts and commitments implementing the budget years preceding 2007.