Financing instrument for development cooperation - DCI (2007-2013)

The financing instrument for development cooperation improves the Community's previous development cooperation framework by merging the different geographic and thematic instruments into a single instrument.

ACT

Regulation (EC) No 1905/2006 of the European Parliament and of the Council of 18 December 2006 establishing a financing instrument for development cooperation [See amending act(s)].

SUMMARY

The Regulation sets up a financing instrument for development cooperation (DCI) which replaces the range of geographic and thematic instruments created over time and as needs arose. Its aim is to improve development cooperation.

Under this instrument, the European Communities finance measures aimed at supporting geographic cooperation with the developing countries included in the list of aid recipients of the Development Assistance Committee of the Organisation for Economic Cooperation and Development (OECD/DAC). These countries are listed in Annex 1 to the Regulation.

The Regulation emphasises that the Community's development cooperation policy is guided by the Millennium Development Goals (MDGs) and that the “European Consensus” provides the general framework for action by the Community on development matters. It also reaffirms that the objectives of this policy are poverty reduction, sustainable economic and social development and the smooth and gradual integration of developing countries into the world economy.

Nature of the instrument

The Regulation provides that Community aid is implemented through geographic and thematic programmes and through the programme of accompanying measures for the African, Caribbean and Pacific (ACP) Sugar Protocol countries.

Geographic programmes encompass cooperation with partner countries and regions determined on a geographical basis. They cover five regions, namely Latin America, Asia, Central Asia, the Middle East and South Africa. Community assistance to these countries is aimed at supporting actions within the following areas of cooperation:

• supporting the implementation of policies aimed at poverty eradication and at the achievement of the MDGs;
• addressing the essential needs of the population, in particular primary education and health;
• promoting social cohesion and employment;
• promoting governance, democracy, human rights and support for institutional reforms;
• assisting partner countries and regions in the areas of trade and regional integration;
• promoting sustainable development through environmental protection and sustainable management of natural resources;
• supporting sustainable integrated water resource management and fostering greater use of sustainable energy technologies;
• assistance in post-crisis situations and fragile States.

The measures taken vary according to the specific needs of each country, taking into account the specific situation in Latin America, Asia, the Middle East or South Africa.

Thematic programmes complement geographic programmes. They cover a specific area of activity of interest to a group of partner countries not determined by geography, or cooperation activities focusing on various regions or groups of partner countries, or an international operation that is not geographically specific. In other words, their scope of application is wider than that of geographic cooperation programmes because they encompass not only the countries eligible for geographic cooperation under the DCI but also the countries and regions eligible under the European Development Fund (EDF) and under Regulation (EC) No 1638/2006.

The Regulation provides for five thematic programmes concerning:

• investing in people;
• the environment and the sustainable management of natural resources;
• non-state actors and Local Authorities;
• the improvement of food security;
• cooperation in the area or migration and asylum.

The Regulation also sets up a programme of accompanying measures in favour of the 18 ACP Sugar Protocol countries (listed in Annex III to the Regulation). The aim of these measures is to support their adjustment process as they are faced with new market conditions due to the reform of the Community sugar regime.

Management and implementation

For the geographic programmes, the Commission draws up a strategy paper and a multiannual indicative programme and adopts an annual action programme for each partner country or region. In the case of thematic programmes, it draws up thematic strategy papers and adopts annual action programmes.

The Commission determines the multiannual indicative allocations within each geographic programme, bearing in mind the specificity of the different programmes and the particular difficulties faced by the countries or regions that are in crisis, in conflict or disaster-prone.

It may also include a specific financial allocation for the purposes of strengthening cooperation between the EU's outermost regions and neighbouring partner countries and regions. In the case of natural disasters or crises which cannot be funded under Regulations (EC) No 1717/2006 and 1257/1996, the Commission may adopt special measures not provided for in the strategy papers or multiannual indicative programmes.

The entities which are eligible for funding are, inter alia, the following:

• partner countries and regions, and their institutions;
• decentralised bodies in the partner countries (municipalities, provinces, departments and regions);
• joint bodies set up by the partner countries and regions with the Community;
• international organisations;
• EU agencies;
• certain entities and bodies of the Member States, partner countries and regions and any other third country in so far as they help to achieve the objectives of this Regulation.

Under this Regulation, the Community may finance among other things, projects and programmes, contribute to national funds set up by partner countries and regions to attract joint financing from several donors, contribute to funds set up by one or more donors for the purpose of the joint implementation of measures, twinning programmes, interest-rate subsidies, especially for environment-related loans, and debt relief under internationally agreed debt relief programmes.

The measures are eligible for co-financing from Member States and their regional and local authorities, other donor countries, international organisations, companies, firms and other private organisations and businesses, other non-state actors and partner countries in receipt of funding.

The financial framework for the implementation of this Regulation over the period 2007-2013 is EUR 16.897 billion: EUR 10.057 billion for the geographic programmes, EUR 5.596 billion for the thematic programmes and EUR 1.244 billion for the ACP Sugar Protocol countries.

The Commission monitors and reviews the implementation of its programmes. It submits an annual report on the results of this Regulation to the European Parliament and the Council.

The Commission is assisted in its work by a committee.

Not later than 31 December 2010, the Commission must submit a report evaluating the implementation of this Regulation in the first three years with, if appropriate, a legislative proposal introducing the necessary modifications.

Article 39 of the Regulation repeals the regulations relating to:

• access to Community external assistance;
• promoting gender equality in development cooperation;
• the AENEAS programme;
• the fight against poverty diseases in developing countries;
• reproductive and sexual health and rights in developing countries;
• aid to uprooted people in Asian and Latin American developing countries;
• the conservation and sustainable management of tropical forests and other forests in developing countries;
• full integration of the environmental dimension in the development process;
• development cooperation with South Africa;
• decentralised cooperation;
• co-financing operations with European non-governmental organisations;
• food-aid policy and food-aid management;
• financial and technical assistance to, and economic cooperation with, the developing countries in Asia and Latin America.

RELATED ACTS

Proposal for a Regulation (EU) of the European Parliament and of the Council of 17 March 2010 amending Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation [COM(2010) 102 final – Not published in the Official Journal]. The European Union (EU) plans to help traditional banana producers in the African, Caribbean and Pacific (ACP) States to adapt to the liberalisation of their system of exports to Europe. Accompanying measures are therefore required for the period covering the end of the preferential trade regime which the producers in these countries benefited from previously.

The accompanying measures provided for by the EU shall enable:

• the promotion of economic diversification through the development of new sectors of activity;
• all the effects of liberalisation, particularly relating to macroeconomic stability, employment, social services and land use to be addressed.
• all the effects of liberalisation, particularly relating to macroeconomic stability, employment, social services and land use to be addressed.

These accompanying measures shall be implemented under the framework of the financing instrument for development cooperation. Codecision procedure: (COD 2010/0059)

Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation and Regulation (EC) No 1889/2006 on establishing a financing instrument for the promotion of democracy and human rights worldwide [COM(2009) 194 final – Not published in the Official Journal].

Certain costs are currently excluded from the financing instrument for development cooperation. However, it may be necessary to take into account taxes, duties and other charges incurred by programme and project participants. In beneficiary countries exemption mechanisms are often absent and their fiscal laws are still evolving. Therefore, this Regulation must be sufficiently flexible to adapt to this reality.

Codecision procedure: (COD/2009/0060)

Last updated: 20.10.2010