Article 1

United Kingdom

Regulation (EC) No 2304/2002 is amended as follows:

1..

Article 1 is replaced by the following:

‘Subject matter

Article 1

This Regulation lays down the procedures for the programming, implementation and control of the Community financial assistance to the overseas countries and territories (OCTs) managed by the Commission under the Tenth European Development Fund (EDF), in accordance with the provisions of the Overseas Association Decision and the Financial Regulation applicable to the 10th EDF.’
2..

Article 3 is replaced by the following:

‘Territorial programming

Article 3

Operations financed by non-repayable aid under the 10th EDF within the framework of the Overseas Association Decision shall be programmed as soon as possible after the entry into force of the Internal Agreement establishing the 10th EDF by means of the adoption of an SPD following the model in the Annex to this Regulation.’
3..

Article 4 is replaced by the following:

‘Preparation of the SPD

Article 4

1.

The competent OCTs authorities shall prepare a proposal for the SPD following consultations with the widest possible range of stakeholders in the development process, and shall draw on lessons learned and best practices.

Each proposal for an SPD shall be adapted to the needs and specific circumstances of each OCTs. It shall identify results-oriented indicators to be monitored and promote local ownership of cooperation programmes.

2.

The proposal for the SPD shall be the subject of an exchange of views between the OCTs and Member State concerned and the Commission, via, if applicable, the relevant Delegation.

The OCTs shall provide all the necessary information, including the results of any feasibility studies, to make the appraisal of the draft SPD by the Commission as effective as possible.

3.

The 10th EDF financial allocation shall in principle be provided as budgetary support, save in exceptional and duly justified circumstances.

Where the conditions for budgetary support are not met, the SPD shall provide for measures to create the conditions for budgetary support.

Any divergences between the OCTs’s own analysis and the Community’s shall be noted.’
4..

Article 5 is replaced by the following:

‘Appraisal of the SPD by the Commission

Article 5

The Commission shall appraise the proposal for the SPD to determine whether it contains all the elements required and is consistent with the aims of the Overseas Association Decision, of this Regulation and of the relevant Community policies.

The Commission shall also appraise the proposal for the SPD to determine whether it contains all the elements required for the Commission to take the financing decision referred to in Article 20(4) of the Overseas Association Decision.

It shall inform the European Investment Bank of the draft received.

Without prejudice to Article 4(3), the Commission shall decide whether 10th EDF financial assistance is to be granted as budgetary support, subject to a preliminary assessment of the transparency, accountability and effectiveness of public expenditure management and of the openness and transparency of public procurement in accordance with the standards set out in the Financial Regulation applicable to the 10th EDF, or is to be granted as support for programmes or projects.’
5..

Article 6 is replaced by the following:

‘Regional programmes

Article 6

1.

Articles 3 to 5 shall apply mutatis mutandis to the financial support for regional cooperation and integration under Article 3(2) of Annex II Aa to the Overseas Association Decision.

In its assessment of the proposals, the Commission shall take particular account of the anticipated impact on the integration of the beneficiary OCTs within the region to which they belong.

As far as possible, coordination shall be ensured with programmes at territorial level and with actions involving ACP countries and/or the outermost regions referred to in Article 299(2) of the Treaty. This may involve the identification of the priorities and specific resources for the purpose of strengthening cooperation with ACP countries and/or outermost regions, and the modalities for identifying and coordinating the selection of common interest actions.

Commitment of expenditure shall be preceded by a Commission financing decision covering support for projects and programmes.

2.

In order to achieve an adequate scale and to increase efficiency, regional and territorial funds may be mixed for financing regional programmes with a distinct territorial component.

3.

Articles 8 and 16 to 30 apply to regional programmes mutatis mutandis.’
6..

Article 7 is replaced by the following:

‘Use of the reserve

Article 7

1.

The Commission shall allocate resources from reserve B for the purposes referred to in Article 3(4)(b) of Annex II Aa to the Overseas Association Decision on the basis of the mid-term review referred to in Article 22 of this Regulation. The Commission shall adjust the indicative amounts already allocated accordingly and inform the OCTs and the Member States of its decision regarding the new allocations.

2.

For the purposes of committing the resources provided for in Article 28 and Annex II D of the Overseas Association Decision, any OCTs which considers itself to be eligible for the support provided for therein shall submit a complete request on the forms made available by the Commission and include all the information needed for it to be assessed.

The request shall be submitted to the Commission at the latest by the end of the year following the year for which the additional support is required.

The Commission shall inform the OCTs within the shortest possible time of its decision.’
7..

Article 8 is replaced by the following:

‘Commitments

Article 8

1.

Expenditure on financial assistance for the OCTs shall be committed by the Commission in accordance with the Financial Regulation applicable to the 10th EDF.

2.

Within the scope of the SPD, commitment of expenditure shall be preceded by a Commission financing decision covering in principle budgetary support, save in exceptional and duly justified circumstances.

3.

Outside the scope of the SPD, expenditure under the non-allocated reserve B set aside in accordance with Article 3(4) of Annex II Aa to the Overseas Association Decision shall be committed by the Commission and implemented in accordance with the Financial Regulation applicable to the 10th EDF.’
8..

Article 9 is replaced by the following:

‘Paying agents

Article 9

The financial institutions in the OCTs with which the Commission opens accounts in accordance with the Financial Regulation applicable to the 10th EDF for the purposes of implementing cooperation with the OCTs shall exercise the functions of “Paying Agents”.

Interest shall be payable on funds deposited with Paying Agents in the Community.

The Paying Agents shall receive no remuneration for their services and no interest shall be payable on deposited funds.’
9..

Article 10 is replaced by the following:

‘General regulations for contracts

Article 10

1.

The procedures governing the award of contracts shall be indicated in the financing agreements.

2.

Where financial assistance is granted by means of budgetary support, the procedures for public procurement of the OCTs in question shall apply.

3.

In all other cases, award of contract shall follow the applicable provisions of the Financial Regulation applicable to the 10th EDF.’
10..

Article 13 is replaced by the following:

‘Delegations

Article 13

1.

Where the Commission is represented by a Delegation under the authority of a Head of Delegation, it shall inform the OCTs concerned accordingly. In such cases, the provisions of the Financial Regulation applicable to the 10th EDF concerning authorising officers and accounting officers by subdelegation shall apply.

2.

The Head of Delegation shall be the main contact for the different actors of cooperation in the OCTs concerned. He shall cooperate and work closely with the Territorial Authorising Officer.

3.

The Head of Delegation shall have the necessary instructions and delegated powers to facilitate and expedite all operation under this Regulation.

4.

On a regular basis, the Head of Delegation shall inform the OCTs authorities of Community activities which may directly concern cooperation between the Community and the OCTs concerned.’
11..

Article 14 is replaced by the following:

‘Territorial Authorising Officer

Article 14

1.

The Government of each OCTs shall appoint a Territorial Authorising Officer to represent it in all operations financed from the resources of the EDF managed by the Commission and the Bank. The Territorial Authorising Officer shall appoint one or more deputy Territorial Authorising Officers to replace him when he is unable to carry out his duties and shall inform the Commission of this appointment. Wherever the conditions regarding institutional capacity and sound financial management are met, the Territorial Authorising Officer may delegate his functions for implementation of the programmes and projects concerned to the body responsible within the OCTs administration. The Territorial Authorising Officer shall inform the Commission of any such delegation.

When the Commission becomes aware of problems in carrying out procedures relating to the management of EDF resources, it shall, in conjunction with the Territorial Authorising Officer, make all contacts necessary to remedy the situation and take any appropriate steps.

The Territorial Authorising Officer shall assume financial responsibility only for the executive tasks entrusted to him.

Where EDF resources are managed in a decentralised way and subject to any additional powers that might be granted by the Commission, the Territorial Authorising Officer shall:

(a)

be responsible for the coordination, programming, regular monitoring and annual, mid-term and end of-term reviews of implementation of cooperation, and, if applicable, for coordination with donors;

(b)

in close cooperation with the Commission, be responsible for the preparation, submission and appraisal of programmes and projects;

(c)

prepare tender dossiers and, where appropriate, the documents for calls for proposals;

(d)

submit tender dossiers and, where appropriate, documents for calls for proposals, to the Commission for approval before launching invitations to tender and, where appropriate, calls for proposals;

(e)

in close cooperation with the Commission, launch invitations to tender and, where appropriate, calls for proposals;

(f)

receive tenders and, if applicable, proposals, and transmit copies of tenders to the Commission; preside over the opening of tenders and decide on the results of their examination within the period of validity of the tenders, taking account of the time required for approval of contracts;

(g)

invite the Commission to the opening of tenders and, if applicable, proposals and notify the Commission of the results of the examination of tenders and proposals for approval of the proposals for the award of contracts and grants;

(h)

submit contracts and programme estimates and any addenda thereto to the Commission for approval;

(i)

sign the contracts and addenda thereto approved by the Commission;

(j)

clear and authorise expenditure within the limits of the funds assigned to him; and

(k)

during the execution operations, make any adaptation arrangements necessary to ensure the proper execution of approved programmes or projects from the economic and technical viewpoint.

2.

The Territorial Authorising Officer shall, during the execution of operations and subject to the requirement to inform the Commission, decide on:

(a)

technical adjustments and alterations to programmes and projects in matters of detail so long as they do not affect the technical solution adopted and remain within the limits of the reserve for adjustments provided for in the financing agreement;

(b)

changes of site for multiple-unit programmes or projects where justified on technical, economic or social grounds;

(c)

imposition or remission of penalties for delay;

(d)

acts discharging guarantors;

(e)

purchase of goods, irrespective of their origin, on the local market;

(f)

use of construction equipment and machinery not originating in the OCTs, Member States or ACP States provided there is no production of comparable equipment and machinery in the OCTs, Member States or ACP States;

(g)

subcontracting;

(h)

final acceptance, provided that the Commission is present at provisional acceptance, endorses the corresponding minutes and, where appropriate, is present at the final acceptance, in particular where the extent of the reservations recorded at the provisional acceptance necessitates major additional work; and

(i)

hiring of consultants and other technical assistance experts.

3.

In addition the Territorial Authorising Officer shall:

(a)

draw up and, after obtaining the approval of the Monitoring Committee, submit to the Commission the annual implementation report;

(b)

carry out the mid-term review referred to in Article 22;

(c)

ensure that those bodies taking part in the management and implementation of EDF programmes maintain either a separate accounting system or an adequate accounting code for all transactions relating to the assistance; and

(d)

take any necessary measures to ensure the implementation of Articles 16, 19, 24 and 30.

4.

When the annual implementation report referred to in Article 21 is submitted, the Commission and the Territorial Authorising Officer shall review the main outcomes of the previous year.

After this review, the Commission may make comments to the Territorial Authorising Officer. The Territorial Authorising Officer shall inform the Commission of any action taken on these comments. Where in duly substantiated cases the Commission considers that the measures taken are inadequate, it may make recommendations to the OCTs and the Territorial Authorising Officer for adjustments aimed at improving the effectiveness of the monitoring or management arrangements, together with the reasons for any such recommendations.

On receiving any such recommendations, the Territorial Authorising Officer shall subsequently demonstrate the steps taken to improve the monitoring or management arrangements or shall explain why no such steps have been taken.’
12..

Article 22 is replaced by the following:

‘Mid-term review

Article 22

1.

The mid-term review shall be organised to examine the initial results of the SPD, their relevance and the extent to which the targets have been attained.

It shall also assess the use made of financial resources and the operation of monitoring and implementation.

2.

The mid-term review shall be carried out under the responsibility of the Commission, in cooperation with the Territorial Authorising Officer and the Member State concerned.

The mid-term review shall be carried out in general between 30 and 42 months after the entry into force of the Internal Agreement establishing the 10th EDF.

A different deadline may be set in the SPD, in particular in respect of the indicators adopted in the case of budgetary support.

The mid-term review shall be carried out by an independent assessor, submitted to the Monitoring Committee and then sent to the Commission.

3.

The Commission shall examine the relevance and quality of the review on the basis of criteria defined in the SPD, including in respect of the EDF financial allocation.’
13..

Article 27 is replaced by the following:

‘Adaptation of EDF allocations

Article 27

Using the results of monitoring, audit and evaluations as a basis and taking account of the comments of the Monitoring Committee, the Commission may adjust the amounts and conditions of the initial SPD on its own initiative or on a proposal from the OCTs concerned in the light of the current needs and performance of that OCTs and taking due account of the latest available statistical data for that OCTs.

This adaptation shall normally take place on the occasion of the mid-term review referred to in Article 22 or, in the case of irregularities, in the shortest possible time, in accordance with the procedure laid down in Article 24 of the Overseas Association Decision.’
14..

Article 29 is replaced by the following:

‘Recovery and repayments

Article 29

1.

Any repayment due to be made to the Commission shall be made by the due date indicated in the order for recovery drawn up in accordance with the Financial Regulation applicable to the 10th EDF. This due date shall be the last day of the second month following the issuing of the order.

2.

Any delay in effecting repayment shall give rise to interest on account of late payment, starting on the due date referred to in paragraph 1 and ending on the date of actual payment. The rate of such interest shall be one and a half percentage points above the rate applied by the European Central Bank in its main refinancing operations on the first working day of the month in which the due date falls.

3.

The Territorial Authorising Officer shall keep an account of amounts recoverable from payments of Community assistance already made, and ensure that the amounts are recovered without unjustified delay.

The beneficiary shall repay any amount to be recovered, together with interest received on account of late payment, by deducting the amounts concerned from its next statement of expenditure and request for payment to the Commission, or, where this is insufficient, by making a refund to the Community.

The Territorial Authorising Officer shall send the Commission a statement once a year of the amounts awaiting recovery at that date, classified by the year of initiation of the recovery proceedings.’
15..

The Annex is replaced by a new Annex, the text of which is set out in the Annex to this Regulation.