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Guarantee Fund for external actions

Guarantee Fund for external actions

Outline of the Community (European Union) legislation about Guarantee Fund for external actions

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Budget

Guarantee Fund for external actions

Document or Iniciative

Council Regulation (EC, Euratom) No 480/2009 of 25 May 2009 establishing a Guarantee Fund for external actions (Codified version).

Summary

As a result of its loans to third countries and guarantees covering loans to finance investment operations in these countries, the European Union (EU) is exposed to considerable financial risks. It was with the aim of protecting against such risks that the EU adopted this Regulation establishing a Guarantee Fund for external actions.

This Regulation describes how the Fund operates and lays down the procedure for endowing the Fund and the rules for its management. The main aim of the Fund is to protect European budget appropriations and to contribute to compliance with budgetary discipline.

Mission

The mission of the Guarantee Fund for external actions is to pay the EU’s creditors in the event of default by the beneficiary in respect of:

  • a loan granted or guaranteed by the EU;
  • a guaranteed loan granted by the European Investment Bank (EIB) for which the EU acts as guarantor.

Moreover, the Guarantee Fund can cover only loans and guarantees carried out for the benefit of a third country or for the purpose of financing projects in a third country.

Management and financial endowment

The Commission entrusts the financial management of the Fund to the EIB under a mandate from the EU. The Guarantee Fund is endowed by:

  • direct payments from the general budget of the EU;
  • interest on Fund resources invested;
  • amounts recovered from defaulting debtors.

Pursuant to the interinstitutional agreement of May 2006, which contains the Community financial framework for 2007-2013, financing of the Fund is guaranteed as compulsory expenditure from the general budget of the EU.

Target amount and annual transfer

The target amount refers to the amount of resources required by the Fund in order to fulfil its mission. The Fund’s target amount is set at 9 % of the EU’s total outstanding capital liabilities arising from each loan or guarantee operation, increased by unpaid interest due. The annual transfer from the EU budget to the Fund is calculated by applying the target amount to the outstanding amount of loans granted and guaranteed. The difference between the target amount and the actual value of the Fund’s assets is paid from the general budget of the EU into the Fund, or to the budget in the event of a resulting surplus in the Fund.

The provisioning amount is calculated during financial year “n” on the basis of loans granted and guaranteed during the previous financial year (“n-1”). There is therefore a delay of approximately one year between the time when the amounts become outstanding and the actual provisioning of the Fund.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC, Euratom) No 480/2009

30.6.2009

OJ L 145 of 10.6.2009

Related Acts

Report from the Commission of 2 July 2010 – Annual Report from the Commission on the Guarantee Fund and the management thereof in 2009 [COM(2010) 805 final – Not published in the Official Journal].

Council Regulation (EC) No 1934/2006 of 21 December 2006 establishing a financing instrument for cooperation with industrialised and other high-income countries and territories [Official Journal L 405 of 30.12.2006].

Regulation (EC) No 1717/2006 of the European Parliament and of the Council of 15 November 2006 establishing an Instrument for Stability [Official Journal L 327 of 24.11.2006].
This Regulation establishes an instrument for stability which includes development cooperation measures and measures for financial, economic and technical cooperation with third countries.

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

Community Tobacco Fund: information programmes

Community Tobacco Fund: information programmes

Outline of the Community (European Union) legislation about Community Tobacco Fund: information programmes

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Public health > Health determinants: lifestyle

Community Tobacco Fund: information programmes

Document or Iniciative

Commission Regulation (EC) No 2182/2002 of 6 December 2002 laying down detailed rules for the application of Council Regulation (EEC) No 2075/92 with regard to the Community Tobacco Fund [See amending acts].

Summary

The Community Tobacco Fund was established in 1992 by the Regulation on the common organisation of the market in raw tobacco. It finances measures with a view to:

  • improving knowledge of the harmful effects of tobacco and appropriate preventive and curative measures;
  • directing Community production towards other crops or other job-creating economic activities.

Information programmes

The Fund finances information programmes designed to improve the public’s understanding of the harmful effects of tobacco consumption, including projects to raise public awareness of the harmful effects of tobacco consumption, to prevent and stop people from smoking, and to disseminate the results achieved by such projects. Natural and legal persons submitting projects accept the conditions laid down in this Regulation, including the commitment to contribute at least 25 % of the total financing needed for the project out of their own resources.

As regards information programmes, the Commission manages the Fund, assisted by a scientific and technical committee.

The independent experts responsible for evaluating the submitted projects check that they comply with certain conditions. For example, projects must make provision for a partnership linking natural or legal persons established in several Member States, adapting cultural and linguistic variables accordingly.

Once a project is selected for financing, a contract governs the relationship between the Commission and the natural or legal person who submitted it. The Regulation includes a detailed description of what must be included in the contract.

Conversion measures

The Fund has financed:

  • individual measures to encourage diversification in the activities of tobacco-growing holdings, through producer training and the creation of marketing structures for quality products other than tobacco;
  • general interest measures including studies on the opportunities to switch production to other crops or activities, guidance for producers who give up tobacco production, and innovative experiments for demonstration purposes.

The last conversion measures funded were submitted in 2006.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 2182/2002

10.12.2002

OJ L 331 of 7.12.2002

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 480/2004

19.3.2004

OJ L 78 of 16.3.2004

Regulation (EC) No 1881/2005

25.11.2005

OJ L 301 of 18.11.2005

The successive amendments and corrigenda to Regulation No 2182/2002 have been incorporated into the basic text. This consolidated versionis for reference purposes only.

Related Acts

Directive 2001/37/EC of the European Parliament and of the Council of 5 June 2001 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products [Official Journal L 194 of 18.7.2001].
With a view to ensuring a high level of health protection, this Directive contains provisions on the tar yield of cigarettes, tobacco for oral use, and the labelling of tobacco products.

Commission Decision 2003/641/EC of 5 September 2003 on the use of colour photographs or other illustrations as health warnings on tobacco packages [Official Journal L 226 of 10.9.2003].
The objective of this Decision is to lay down rules for the use, on cigarette packets, of colour photographs or other illustrations showing the effects of smoking on health. It constitutes a follow-up to Directive 2001/37/EC on tobacco products, which already requires the size of health warnings on packaging to be increased. However, the use of shock images in addition to messages is not compulsory.

Cooperation with ACP States involved in armed conflicts

Cooperation with ACP States involved in armed conflicts

Outline of the Community (European Union) legislation about Cooperation with ACP States involved in armed conflicts

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > African Caribbean and Pacific states (ACP)

Cooperation with ACP States involved in armed conflicts

Document or Iniciative

Communication from the Commission to the Council and to the European Parliament of 19 May 1999 on cooperation with ACP States involved in armed conflict [COM(1999)240 final – Not published in the Official Journal].

Summary

Background
The escalation of conflicts in ACP countries, particularly in Africa, requires a review of the Community’s cooperation with ACP States. In light of the close links established by the Lomé Convention, replaced in 2000 by the Cotonou Agreement, the European Community has a special responsibility to help ACP States to find peaceful solutions to their conflicts. In particular, it must ensure that the Community funds provided to ACP States are not diverted to military uses.

The communication sets out the various measures and policies available to enable the EU to react to different conflict scenarios in ACP States. The main aim of this review is to prevent the diversion of Community funds to military purposes.

Measures within the framework of the Cotonou Agreement and within the Community framework

Disbursement of funds in instalments

In all financing agreements concerning direct budgetary assistance, the Commission is now introducing provisions that enable funds to be disbursed in stages on the basis of individual assessments. This requires complete budget transparency and enables the Commission to monitor closely the use of Community funds.

Freezing, reducing or suspending aid
This involves freezing the implementation of projects or any further budgetary assistance, reducing aid or suspending it. It may occur in the following circumstances:

  • freezing implementation pending an investigation or stopping certain programmes if the funds are likely to be diverted to military uses;
  • suspending aid in cases of serious violations (as a result of an armed conflict) of human rights and other key elements, such as democratic principles (Articles 96 and 97 and Articles 9 and 10 of the Cotonou Agreement). The Community holds consultations with the country concerned in order to determine whether suspension of aid is necessary;
  • suspending aid in cases where economic sanctions are imposed by the United Nations Security Council.

Freezing aid may concern the disbursement of funds or result in programmes being stopped. Suspending aid consists of a temporary interruption in financing and programmes in certain areas, for example food security or provisions relating to funds for development cooperation in the Cotonou Agreement.

Conditions for freezing or stopping Community aid under the Cotonou Agreement or within the Community framework
It should be noted that suspending aid is an extreme measure. Where aid is frozen or suspended with a view to motivating peaceful solutions, the following aspects must be taken into consideration:

  • the degree of fungibility of funding, in other words the speed and ease with which funds may be diverted to support the war effort;
  • the political and social repercussions of the measures implemented, particularly in relation to the fight against poverty;
  • the administrative flexibility permitting the freezing and re-launching of aid programmes.

The decisions must be based on the individual assessments of the countries and the instruments involved. The measures should be applied in an impartial and proportional manner.

Humanitarian aid

Humanitarian aid must be provided wherever needed on condition that the necessary security conditions exist. It should not be subject to political objectives. However, its potential impact on the course of the conflict should be assessed.

Options for the common foreign and security policy(CFSP)
The review of development cooperation with the countries involved in armed conflicts must form part of an integrated strategy for conflict management and resolution within the framework of the CFSP. The strategy must be flexible and appropriate to the situation on the ground in each region in crisis. It must also take account of the historical, social, economic and political factors at the root of the hostilities, plus the motivations of the parties concerned.

The communication proposes general guidelines for a global EU approach in the following three main situations:

Outbreak, escalation or spread of an armed conflict:

  • complete or partial interruption of development cooperation followed by the implementation of Community measures to resolve the problem;
  • use of other tools such as restrictions on arms exports, trade relations, etc.;
  • use of CFSP instruments (statements issued by the presidency, joint actions, special envoys) to seek solutions to the conflict;
  • involvement of the European Union in the planning of operations to restore peace undertaken in the international arena;
  • establishment of emergency plans for regions susceptible to humanitarian disasters linked to war, such as genocide, “ethnic cleansing”, etc. In the case of such disasters, the provisions of Chapter VII of the United Nations Charter could come into play;
  • use of existing measures to improve the control of arms flows to countries involved in armed conflicts;
  • a coherent response from the Union. All decisions to suspend Community aid must be accompanied by similar action on the part of the Member States of the Union in terms of their bilateral aid in order to guarantee a coherent approach and to maximise the impact of the Union’s policy.

Cessation of hostilities and negotiations:

  • the CFSP must offer support for dialogue and negotiations by sending special envoys, and, where necessary, participating in the efforts to maintain peace;
  • the Commission and the Member States may offer technical and financial assistance for the operations to be carried out after the war, particularly in the socio-economic field, for example the reintegration of refugees.

Breakdown of State authority:

The erosion of State authority and of the management capacity of many African countries has resulted in a particular risk of lasting breakdown of State authority. In order to protect the most vulnerable countries, the European Union may:

  • provide humanitarian aid;
  • provide basic assistance to the social sector through United Nations agencies, international organisations and non-governmental organisations (NGOs);
  • provide aid on a political and economic level to neighbouring countries where there is a breakdown that threatens regional security. This is only envisaged for specific cases. Naturally, such aid would depend on the will of the beneficiary government and respect for fundamental values such as human rights, democratic principles and complete transparency in relation to military expenditure.

Conflict prevention
All political responses to an armed conflict must be considered as emergency responses resulting from a failure in conflict prevention measures. The European Union must be prepared to manage and resolve these violent crises. However, first and foremost, the Union must concentrate on conflict prevention.