1.   The general objectives of the Instrument are to:

2.   The specific objectives of the Instrument are:

3.   The achievement of the objectives referred to in paragraphs 1 and 2 of this Article shall be measured using relevant indicators as referred to in Article 41.

4.   At least 93 % of the expenditure under the Instrument shall fulfil the criteria for ODA, established by the Development Assistance Committee of the OECD, thus contributing to ODA collective commitments, including towards LDCs. The specificity of the expenditure related to the partner countries and territories listed in Annex I shall be taken into account.

1.   Union funding under the Instrument shall be implemented through:

2.   The geographic programmes shall encompass country and multi-country cooperation in the following areas:

Geographic programmes may cover all third countries, except for candidates and potential candidates as defined in Regulation (EU) 2021/…. (7) and overseas countries and territories.

Geographic programmes of a continental or trans-regional scope may also be established, in particular a pan-African programme covering African countries under points (a) and (b) of the first subparagraph and a programme covering African, Caribbean and Pacific countries under points (b), (c) and (d) of the first subparagraph.

Geographic programmes in the Neighbourhood area may cover any country or territory listed in Annex I.

In order to attain the objectives of the Instrument, geographic programmes shall be based on the areas of cooperation set out in Annex II.

3.   The thematic programmes shall encompass actions linked to the pursuit of the SDGs at global level, in the following areas:

Thematic programmes may cover all third countries as well as overseas countries and territories.

In order to attain the objectives of the Instrument, thematic programmes shall be based on the areas of intervention set out in Annex III.

4.   The rapid response actions shall enable early action to:

Rapid response actions may cover all third countries as well as overseas countries and territories.

In order to attain the objectives of the Instrument, rapid response actions shall be based on the areas of intervention set out in Annex IV.

5.   Actions under the Instrument shall be implemented primarily through geographic programmes.

Actions implemented through thematic programmes shall be complementary to actions funded under geographic programmes and shall support global and trans-regional initiatives aimed towards achieving internationally agreed goals, in particular the SDGs and the Paris Agreement, as well as protecting global public goods or addressing global challenges. Actions implemented through thematic programmes may also be undertaken where:

Rapid response actions shall be complementary to geographic and thematic programmes. Rapid response actions shall be designed and implemented to enable, where relevant, their continuity under geographic or thematic programmes.

6.   The Commission is empowered to adopt delegated acts in accordance with Article 44 to amend Annexes II, III and IV.

7.   The Commission is empowered to adopt a delegated act in accordance with Article 44 by 31 December 2021, to supplement this Regulation with provisions setting out:

The delegated act referred to in the first subparagraph of this paragraph shall be reviewed at the mid-term evaluation referred to in Article 42(2).

1.   In implementing the Instrument, consistency, coherence, synergies and complementarity with all areas of Union external action, including other external financing instruments, and with other relevant Union policies and programmes, as well as policy coherence for development shall be ensured.

For that purpose, the Union shall take into account the impact of all internal and external policies on sustainable development and shall seek to promote increased synergies and complementarities in particular with trade policy, economic cooperation and other sectorial cooperation.

2.   Actions falling within the scope of Regulation (EC) No 1257/96 shall not be funded under the Instrument.

3.   Where appropriate, an action that has received a contribution under the Instrument may also receive a contribution from another Union programme, provided that the contributions do not cover the same costs. The Instrument may also contribute to measures established under other Union programmes, provided that the contributions do not cover the same costs. The rules of the relevant Union programme shall apply to the corresponding contribution to the action. The cumulative financing shall not exceed the total eligible costs of the action. The support from the different Union programmes may be calculated on a pro-rata basis in accordance with the documents setting out the conditions for support.

1.   The financial envelope for the implementation of the Instrument for the period from 1 January 2021 to 31 December 2027 shall be EUR 79 462 000 000 in current prices.

2.   The financial envelope referred to in paragraph 1 shall be composed of:

3.   The emerging challenges and priorities cushion of EUR 9 534 000 000 shall increase the amounts referred to in points (a), (b) and (c) of paragraph 2 of this Article in accordance with Article 17.

4.   The financial envelope referred to in point (a) of paragraph 2 shall correspond to at least 75 % of the financial envelope referred to in paragraph 1.

5.   Actions under Article 9 shall be financed up to the amount of EUR 270 000 000. The Commission is empowered to adopt delegated acts in accordance with Article 44 to amend that amount.

1.   The Union shall seek to promote, develop and consolidate the principles of democracy, good governance, the rule of law, respect for human rights, including their universality and indivisibility, and fundamental freedoms and respect for human dignity, the principles of equality and solidarity on which it is founded, through dialogue and cooperation with partner countries, regions and civil society, including through action in multilateral fora.

2.   The Instrument shall apply a rights-based approach encompassing all human rights, whether civil and political or economic, social and cultural in order to integrate human rights principles, to support the right holders in claiming their rights, with a focus on poorer, marginalised and vulnerable people and groups, including persons with disabilities, and to assist partner countries in implementing their international human rights obligations. That approach shall be guided by the principles of ‘leaving no-one behind’, equality and non-discrimination on any grounds.

3.   The Instrument shall promote gender equality, women’s and girls’ rights and empowerment and non-discrimination on any grounds, through targeted and mainstreamed actions. It shall also give particular attention to the rights of the child and empowerment of youth.

4.   The Instrument shall be implemented in full accordance with the Union commitment to the promotion, protection and fulfilment of all human rights and to the full and effective implementation of the Beijing Platform for Action and the Programme of Action of the ICPD and the outcomes of their review conferences and remains committed to sexual and reproductive health and rights, in this context. Having that in mind, the Instrument shall support the Union commitment to the promotion, protection and fulfilment of the right of every individual to have full control over, and decide freely and responsibly on matters related to their sexuality and sexual and reproductive health, free from discrimination, coercion and violence. It shall also support the need for universal access to quality and affordable comprehensive sexual and reproductive health information, education, including comprehensive sexuality education, and health-care services.

5.   The Union shall support, as appropriate, the implementation of bilateral, regional and multilateral cooperation and dialogue, association and trade agreements, partnership agreements and triangular cooperation.

The Union shall promote a multilateral and rules-based and values-based approach to global goods and challenges and shall cooperate with Member States, partner countries, international organisations and other donors in that respect.

The Union shall promote effective multilateralism in fostering cooperation with international organisations and other donors.

The Union shall take into account and take up in the regular political dialogue with partner countries their track record in implementing obligations and commitments, including the 2030 Agenda, international human rights conventions, and other conventions, including those on nuclear safety standards, international agreements, in particular the Paris Agreement, and contractual relations with the Union, in particular association agreements, partnership and cooperation agreements and trade agreements.

6.   Cooperation between the Union and the Member States, on the one hand, and partner countries, on the other, shall be based on and shall promote the development effectiveness principles, where applicable, across all modalities, namely: ownership of development priorities by partner countries, a focus on results, inclusive development partnerships, transparency and mutual accountability. The Union shall promote effective and efficient resource mobilisation and use.

In line with the principle of inclusive partnership and transparency, where appropriate, the Commission shall ensure that relevant stakeholders of partner countries, including civil society organisations and local authorities, are duly consulted and have timely access to relevant information allowing them to be adequately involved and play a meaningful role in the design, implementation and associated monitoring processes of programmes. Where appropriate, the Commission shall also ensure that an enhanced dialogue is pursued with the private sector.

In line with the principle of ownership, the Commission, where appropriate, shall favour the use of partner countries’ institutions and systems for the implementation of programmes.

7.   In order to promote the complementarity and efficiency of their action and initiatives, the Union and the Member States shall ensure the coordination of their policies and shall regularly consult each other on their assistance programmes, including in international organisations and during international conferences.

The Union and the Member States shall coordinate their respective support programmes with the aim of increasing effectiveness and efficiency.

The Union shall foster inclusiveness in the implementation of the Instrument and collaboration with Member States, seeking to maximise added value and taking into account experience and capacities, thus reinforcing shared interests, values and common goals. The Union shall encourage the exchange of best practices and knowledge sharing among Member States’ bodies and experts.

8.   Programmes and actions under the Instrument shall mainstream the fight against climate change, environmental protection, human rights, democracy, gender equality and, where relevant, disaster risk reduction, and shall address interlinkages between the SDGs, to promote integrated actions that can create co-benefits and meet multiple objectives in a coherent way. Those programmes and actions shall be based on a comprehensive multi-disciplinary analysis of context, capacities, risks and vulnerabilities, integrate a resilience approach and be conflict sensitive, taking into account conflict prevention and peacebuilding. They shall be guided by the principles of ‘do no harm’ and of ‘leaving no-one behind’.

9.   The Instrument shall promote the use of digitalisation as a powerful enabler for sustainable development and inclusive growth.

10.   A more coordinated, holistic and structured approach to migration shall be pursued with partners, taking into account the importance of addressing the root causes of irregular migration and forced displacement. It shall maximise synergies and build comprehensive partnerships, while paying specific attention to countries of origin and transit. That approach shall combine all appropriate tools and the necessary leverage through a flexible incitative approach with, as appropriate within this context, possible changes in allocation of funding related to migration in accordance with the programming principles of the Instrument. It shall take into account effective cooperation and implementation of Union agreements and dialogues on migration. Those actions shall be implemented in full respect of international law, including international human rights and refugee law, Union and national competences. The effectiveness of that approach shall be assessed annually or as necessary. Migration-related actions pursuant to the Instrument shall be implemented in support of Union migration policy objectives through a flexible funding mechanism.

11.   The Commission shall ensure that actions adopted under the Instrument in relation to the fight against terrorism and organised crime, cyber security and the fight against cybercrime, and capacity building of military actors in support of development and security for development are implemented in accordance with international law, including international human rights and humanitarian law. To that end, the Commission shall establish an appropriate risk assessment and monitoring framework. In that framework, the Commission shall develop operational guidance to ensure that human rights are taken into consideration in the design and implementation of those actions.

Such actions shall be based on regular and robust conflict analysis to ensure conflict sensitivity and to implement a security sector reform approach that contributes to democratic governance, accountability and human security, including benefits for the local population. Those measures shall be embedded, where relevant, in the context of longer term assistance aimed at reforming the security sector.

12.   The Commission shall regularly inform the European Parliament and the Council and, at the initiative of any of those three institutions, have exchanges of views with them, including on the incentive-based approach responding to performance in key areas, referred to in Article 20. The European Parliament may hold regular exchanges of views with the Commission regarding its own assistance programmes, on matters such as capacity-building, including related mediation and dialogue, and election observation.

13.   The Commission shall exchange information on a regular basis with civil society.

14.   Where appropriate, the Commission shall develop and follow risk management frameworks, including assessment and mitigation measures.

15.   Union funding under the Instrument shall not be used to finance the procurement of arms or ammunition, or operations having military or defence implications.

1.   In order to contribute to sustainable development, which requires the achievement of stable, peaceful and inclusive societies, Union assistance under the Instrument may be used in the context of a wider security sector reform or to build the capacity of military actors in partner countries, under the exceptional circumstances set out in paragraph 3, to deliver development activities and security for development activities.

2.   Assistance pursuant to this Article may cover in particular the provision of capacity building programmes in support of development and security for development, including training, mentoring and advice, as well as the provision of equipment, infrastructure improvements and services directly related to that assistance.

3.   Assistance pursuant to this Article shall be provided only:

4.   Union assistance pursuant to this Article shall not be used to finance capacity building of military actors for purposes other than the delivery of development activities and security for development activities. In particular, it shall not be used to finance any of the following:

5.   When designing and implementing measures pursuant to this Article, the Commission shall promote ownership by the partner country. It shall also develop the necessary elements and the good practices required to ensure sustainability and accountability in the medium and long term and shall promote the rule of law and established international law principles.

1.   In order to attain the objectives of the Instrument geographic programmes shall be drawn up from the following areas of cooperation:

2.   Further details on each of the areas of cooperation referred to in paragraph 1 are set out in Annex II.

1.   In order to attain the objectives of the Instrument, thematic programmes shall cover the following areas of intervention:

2.   Further details on each of the areas of cooperation referred to in paragraph 1 are set out in Annex III.

1.   Cooperation and interventions under the Instrument shall be programmed, except for rapid response actions referred to in Article 4(4).

2.   On the basis of Article 7, programming under the Instrument shall be based on the following:

The European Parliament and the Council shall be informed about the outcome of the consultations envisaged under points (c) and (d) of the first subparagraph.

3.   Programming documents shall be results-based and include, wherever possible, clear targets and indicators. Indicators shall be based, where appropriate, on internationally agreed targets and indicators, in particular those set out for the SDGs, as well as country-level result frameworks, to assess and communicate the Union contribution to results, at the level of outputs, outcomes and impact.

1.   Programming of geographic programmes shall be based on the following principles:

2.   Programming of geographic programmes shall provide a specific, tailor-made framework for cooperation based on:

3.   The countries most in need, in particular the LDCs, low income countries, countries in a situation of crisis, post-crisis, or fragility and vulnerability, including small islands developing states and landlocked developing countries, shall be given priority in the resource allocation process.

4.   In addition, the Union shall address the specific challenges of middle income countries and in particular countries that graduate from lower income status.

5.   Cooperation with industrialised countries shall focus on the promotion of Union and mutual interests and values, as well as commonly agreed objectives and multilateralism.

6.   The Instrument shall contribute to actions established under Regulation (EU) 2021/… (8). A single programming document shall be drawn up from this Regulation for seven years, including funds from the IPA III Regulation. Regulation (EU) 2021/… (8) shall apply to the use of those funds.

1.   The implementation of the Instrument shall be carried out for geographic programmes through multiannual country and multi-country indicative programmes.

2.   Multiannual indicative programmes shall set out the priority areas selected for Union financing, the specific objectives, the expected results, clear and specific performance indicators, and the indicative financial allocations, both overall and per priority area and, where applicable, the methods of implementation.

3.   The multiannual indicative programmes shall be built on:

4.   To increase the impact of collective cooperation of the Union, where possible and appropriate, a joint programming document shall replace the Union’s and Member States programming documents. However, such a joint programming document shall only replace the Union’s multiannual indicative programme, provided it is approved in the implementing act adopted in accordance with Article 16, complies with Articles 12 and 13, contains the elements set out in paragraph 2 of this Article and sets out the division of labour between the Union and the Member States.

1.   The implementation of the Instrument shall be carried out for thematic programmes through multiannual indicative programmes.

2.   Multiannual indicative programmes for thematic programmes shall set out the Union’s strategy, the priorities selected for Union financing, the specific objectives, the expected results, clear and specific performance indicators, the international situation, and the activities of the main partners for the theme concerned.

Where applicable, resources and intervention priorities shall be laid down for participation in global initiatives.

3.   Multiannual indicative programmes for thematic programmes shall set out the indicative financial allocation, overall, by area of cooperation and by priority. The indicative financial allocation may be given in the form of a range.

1.   The Commission shall adopt, by means of implementing acts, multiannual indicative programmes referred to in Articles 14 and 15. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 45(2). This procedure shall also apply to reviews referred to in paragraphs 3 and 4 of this Article, which have the effect of significantly modifying the content of the multiannual indicative programme.

2.   When adopting joint multiannual programming documents referred to in Article 14, the Commission decision shall apply only to the Union’s contribution to the joint multiannual programming document.

3.   Multiannual indicative programmes for geographic programmes shall be reviewed following the mid-term evaluation referred to in Article 42(2), as well as on an ad hoc basis as necessary for effective implementation, in particular where there are substantive changes in the policy framework referred to in Article 7 or following a situation of crisis or post-crisis.

4.   Multiannual indicative programmes for thematic programmes shall be reviewed following the mid-term evaluation referred to in Article 42(2), as well as on an ad hoc basis as necessary for effective implementation, in particular where there are substantive changes in the policy framework referred to in Article 7.

5.   On duly justified imperative grounds of urgency, such as crises or immediate threats to peace, democracy, the rule of law, human rights or fundamental freedoms, the Commission may amend multiannual indicative programmes referred to in Articles 14 and 15 by means of implementing acts. Those implementing acts shall be adopted in accordance with the urgency procedure referred to in Article 45(4).

1.   The amount referred to in Article 6(3) shall be used where most needed and duly justified, inter alia:

2.   The use of those funds shall be decided in accordance with the procedures established in Articles 16 and 25.

1.   For partner countries and territories listed in Annex I, priority areas for Union financing shall be selected mainly from those included in the association, partnership and cooperation agreements, jointly agreed association agendas and partnership priorities or other relevant, existing and future, jointly agreed documents referred to in point (c) of Article 14(3), between the Union and the partner countries in bilateral and multilateral formats, including, as relevant, within the Eastern Partnership and the southern dimension of the European Neighbourhood Policy, in accordance with the specific objectives laid down in Article 18 and the areas of cooperation for the geographic programmes set out in Annex II.

2.   By way of derogation from Article 13(2) and (3), Union support under geographic programmes in the Neighbourhood area shall be differentiated in form and in amounts, taking into account the partner country’s:

3.   The Union support referred to in paragraph 2 of this Article shall be reflected in the programming documents for the geographic programmes referred to in Article 14.

1.   Indicatively 10 % of the financial envelope set out in the first indent of point (a) of Article 6(2) to supplement the country indicative financial allocations referred to in Article 14 shall be allocated to the partner countries and territories listed in Annex I as an incentive towards reforms. Such allocations shall be decided on the basis of their performance and progress towards democracy, good governance and the rule of law including cooperation with civil society, human rights including gender equality, cooperation on migration, economic governance and reforms, in particular those reforms that have been jointly agreed. The progress of the partner countries shall be regularly assessed, in particular by means of progress reports which include trends as compared to previous years.

2.   Paragraph 1 shall not apply to support to civil society, conflict prevention and peacebuilding, people-to-people contacts, including cooperation between local authorities, support for the improvement of human rights or crisis-related support measures. In the event of serious or persistent degradation of democracy, human rights or the rule of law, or an increased risk of conflict, support to those actions shall be increased, where possible and appropriate.

1.   Cross-border cooperation, as defined in point (5) of the first paragraph of Article 2, shall cover cooperation along external adjacent land and maritime borders, transnational cooperation over larger transnational territories or around sea-basins, as well as interregional cooperation.

2.   The Neighbourhood area shall contribute to cross-border cooperation programmes as referred to in paragraph 1 co-financed by the European Regional Development Fund in the framework of the Interreg Regulation. Up to 5 % of the financial envelope for the Neighbourhood area shall be indicatively allocated to support those programmes.

3.   Contributions to cross-border cooperation programmes shall be determined and used pursuant to Article 10(3) of the Interreg Regulation.

4.   The Union co-financing rate shall not be higher than 90 % of the eligible expenditure of a cross-border cooperation programme.

5.   Pre-financing for cross-border cooperation programmes may exceed the percentage referred to in Article 51 of the Interreg Regulation. At the request of the managing authority, for each financial year, the pre-financing rate may be up to 80 % of annual commitments to the programme.

6.   A multiannual strategy document for cross-border cooperation, setting out the elements referred to in Article 14(2) of this Regulation, shall be adopted in accordance with Article 10(1) of the Interreg Regulation.

7.   Where cross-border cooperation programmes are discontinued in accordance with Article 12 of the Interreg Regulation, support from the financial envelope for the Neighbourhood area to the discontinued programme that remains available may primarily be used to finance other cross-border cooperation programmes or any other activity under that financial envelope as appropriate.

1.   The Commission shall adopt annual or multiannual action plans and measures. The measures may take the form of individual measures, special measures, support measures or exceptional assistance measures. Action plans and measures shall take into account the specific context and shall specify for each action the objectives pursued, the expected results and main activities, the methods of implementation, monitoring and evaluation as well as the budget and any associated support expenditures.

2.   Action plans shall be based on programming documents, except for cases referred to in paragraphs 5 and 6. Action plans shall be prepared in an inclusive, transparent and timely manner. Whenever appropriate, action plans shall be discussed jointly with Member States in the context of ‘working better together’.

3.   Where necessary, an action may be adopted as an individual measure before or after the adoption of action plans. Individual measures shall be based on programming documents, except for cases referred to in paragraph 5 and in other duly justified cases.

4.   In the event of unforeseen needs or circumstances, and where funding is not possible from more appropriate sources, the Commission may adopt special measures not provided for in the programming documents.

5.   Annual or multiannual action plans and individual measures may be used to implement rapid response actions referred to in points (b) and (c) of Article 4(4).

6.   The Commission may adopt exceptional assistance measures for rapid response actions as referred to in point (a) of Article 4(4).

An exceptional assistance measure may have a duration of up to 18 months, which may be extended twice by a further period of up to six months, up to a total maximum duration of 30 months, in the event of objective and unforeseen obstacles to its implementation, provided that there is no increase in the financial amount of the measure.

In cases of protracted crisis and conflict, the Commission may adopt a second exceptional assistance measure of a duration of up to 18 months. In duly justified cases, further measures may be adopted where the continuity of the Union’s action is essential and cannot be ensured by other means.

1.   Union financing may cover support expenditure for the implementation of the Instrument and for the achievement of its objectives, including administrative support associated with the preparation, follow-up, monitoring, control, audit and evaluation activities necessary for such implementation, as well as expenditure at headquarters and Union delegations for the administrative and coordination support needed for the Instrument, and to manage operations financed under the Instrument, including information and communication actions, and corporate information technology systems.

2.   Where support expenditure is not included in the action plans or measures referred to in Article 23, the Commission shall adopt support measures, where applicable. Union financing under support measures may cover:

1.   Action plans and measures shall be adopted by means of implementing acts. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 45(2).

2.   The procedure referred to in paragraph 1 shall not be required for:

In case of multiannual action plans and measures, the thresholds referred to in points (a), (b) and (c) and point (d)(iv) of the first subparagraph of paragraph 2 shall be applicable on a yearly basis.

When adopted in accordance with this paragraph, action plans and measures, except exceptional assistance measures, and technical amendments shall be communicated to the European Parliament and to the Member States through the relevant committee referred to in Article 45 within one month of their adoption.

3.   Before the adoption or extension of exceptional assistance measures not exceeding EUR 20 000 000, the Commission shall inform the European Parliament and the Council of their nature and objectives and of the financial amounts envisaged. The Commission shall inform the European Parliament and the Council before making significant substantive changes to exceptional assistance measures already adopted. The Commission shall take account of the relevant policy approach for the planning and subsequent implementation of such measures, in the interest of consistency of the Union’s external action.

4.   Where duly justified, imperative grounds of urgency, such as crises, including natural or man-made disasters, or immediate threats to democracy, the rule of law, human rights or fundamental freedoms so require, the Commission may adopt action plans and measures or amendments to existing action plans and measures, as immediately applicable implementing acts, in accordance with the procedure referred to in Article 45(4).

5.   Appropriate environmental screening, including for climate change and biodiversity impacts, shall be undertaken at the level of actions, in accordance with the applicable legislative acts of the Union, including Directive 2011/92/EU of the European Parliament and of the Council (42) and Council Directive 85/337/EEC (43), comprising, where applicable, an environmental impact assessment, including the impact on climate change, ecosystems and biodiversity, for environmentally sensitive actions, in particular for major new infrastructure.

Other appropriate ex ante assessments which are proportionate to the objectives and amounts of the envisaged actions and measures shall be carried out, to determine the possible implications and risks of those actions and measures with regard to human rights, access to natural resources such as land, and social standards including in the form of impact assessments for major actions and measures that are expected to have a significant impact on those areas.

Where relevant, strategic environmental assessments, including the impact on climate change, shall be used in the implementation of sectoral programmes. The involvement of interested stakeholders in environmental assessments and public access to the results of such assessments shall be ensured.

1.   As provided for by the Financial Regulation, the Commission shall implement financing under the Instrument – either directly by the Commission, by Union delegations or by executive agencies, or indirectly through any of the entities listed in point (c) of Article 62(1) of that Regulation.

2.   Financing under the Instrument may also be provided through contributions to international, regional or national funds, such as those established or managed by the EIB, by Member States, by partner countries and regions, by international organisations or by other donors.

3.   The entities listed in point (c) of Article 62(1) of the Financial Regulation and eligible counterparts referred to in Article 35(4) of this Regulation shall fulfil their reporting obligations under Article 155 of the Financial Regulation annually. The reporting requirements for any of those entities are laid down in the financial framework partnership agreement, the contribution agreement, the agreement on budgetary guarantees or the financing agreement.

4.   Actions financed under the Instrument may be implemented by means of parallel or joint co-financing.

5.   In the case of parallel co-financing, an action is split into a number of clearly identifiable components which are each financed by the different partners providing co-financing in such a way that the end-use of the financing can always be identified and duplication of financing is avoided.

6.   In the case of joint co-financing, the total cost of an action shall be shared between the partners providing the co-financing and the resources are pooled in such a way that it is no longer possible to identify the source of financing for any given activity undertaken as part of the action.

7.   Cooperation between the Union and its partners may take the form of, for example:

1.   Union funding may be provided through the types of financing envisaged by the Financial Regulation and in particular:

2.   When working with stakeholders of partner countries such as civil society organisations and local authorities, the Commission shall take into account their specificities, including their needs and the relevant context, when defining the financing modalities, the type of contribution, the award modalities and the administrative provisions for the management of grants, with a view to reaching and best responding to the widest possible range of such stakeholders. Specific modalities shall be encouraged in accordance with the Financial Regulation, such as partnership agreements, authorisations of financial support to third parties, direct award or eligibility-restricted calls for proposals, or lump sums, unit costs and flat-rate financing as well as financing not linked to costs as envisaged in Article 125(1) of the Financial Regulation.

3.   In addition to the cases referred to in Article 195 of the Financial Regulation, the direct award procedure may be used for:

Budget support, including through sector reform performance contracts, shall be based on country ownership, mutual accountability and the commitment of partner countries, taking into account their record and progress with regard to universal values, democracy, human rights and the rule of law, and aims to strengthen partnerships between the Union and partner countries. It shall include reinforced policy dialogue, capacity building and improved governance, complementing partners’ efforts to collect more and to spend better in order to support sustainable, inclusive growth and decent job creation, including for young people, poverty eradication, inequality reduction, and to build and consolidate democracies and peaceful societies. Budget support shall also contribute to gender equality.

Any decision to provide budget support shall be based on budget support policies agreed by the Union, a clear set of eligibility criteria and a careful assessment of the risks and benefits.

4.   Budget support shall be differentiated in such a way as to respond better to the political, economic, social and environmental context of the partner country, taking into account situations of fragility.

When providing budget support in accordance with Article 236 of the Financial Regulation, the Commission shall clearly define and monitor criteria for budget support conditionality, including progress in reforms and transparency, and shall support the development of parliamentary control, national audit capacities and increased transparency and public access to information.

5.   Disbursement of the budget support shall be based on indicators demonstrating satisfactory progress being made towards achieving the objectives agreed with the partner country.

6.   In accordance with point (a) of the second subparagraph of Article 193(2) of the Financial Regulation, in duly justified cases specified in the financing decision, activities supported under the Instrument and the underlying costs incurred in 2021 may be considered eligible as of 1 January 2021, even if those activities were implemented and those costs were incurred before the grant application was submitted.

7.   Financial instruments, budgetary guarantees and blending operations under the Instrument shall be implemented in accordance with the principles laid down in Article 209(1) of the Financial Regulation and whenever possible under the lead of the EIB, a multilateral European finance institution, such as the European Bank for Reconstruction and Development, or a bilateral European finance institution, such as development banks, possibly pooled with additional other forms of financial support, both from Member States and third parties.

Contributions to financial instruments under the Instrument may be made by Member States as well as any entity referred to in point (c) of Article 62(1) of the Financial Regulation.

8.   Financial instruments referred to in paragraph 7 may be grouped into facilities for implementation and reporting purposes.

9.   The Union funding shall not generate or activate the collection of specific taxes, duties or charges.

10.   Taxes, duties and charges imposed by partner countries may be eligible for financing under the Instrument.

1.   Participation in procurement, grant and prize award procedures for actions financed under geographic programmes and under the Civil Society Organisations thematic programme and the Global Challenges thematic programme shall be open to international organisations and to all other legal entities, including civil society organisations, who are nationals of and, in the case of legal persons, who are also effectively established in, the following countries:

2.   Without prejudice to the limitations inherent to the nature and objectives of the action, participation in procurement, grant and prize award procedures for actions financed under the Human Rights and Democracy thematic programme and the Peace, Stability and Conflict Prevention thematic programme as well as rapid response actions, shall be open without limitations.

3.   All supplies and materials financed under the Instrument may originate from any country.

4.   The eligibility rules laid down in this Article shall not apply to, and shall not create nationality restrictions for, natural persons employed or otherwise legally contracted by an eligible contractor or, where applicable, subcontractor.

5.   For actions jointly co-financed by an entity, or implemented in direct or indirect management with entities as referred to in points (c)(ii) to (viii) of Article 62(1) of the Financial Regulation, the eligibility rules of those entities shall also apply.

6.   Where donors provide financing to a trust fund established by the Commission or through external assigned revenues, the eligibility rules in the constitutive act of the trust fund or, in the case of external assigned revenues, in the agreement with the donor, shall apply.

7.   In the case of actions financed under the Instrument and under another Union programme, eligible entities under any of those Union programmes shall be considered eligible.

8.   In the case of multi-country actions, legal entities who are nationals of and, in the case of legal persons, who are also effectively established in, the countries and territories covered by the action may be considered eligible.

9.   The eligibility rules laid down in this Article may be restricted with regard to the nationality, geographical location or nature of applicants, where such restrictions are required on account of the specific nature and the objectives of the action and where they are necessary for its effective implementation.

10.   Tenderers, applicants and candidates from non-eligible countries may be accepted as eligible in the case of urgency or the unavailability of services in the markets of the countries or territories concerned, or in other duly substantiated cases where application of the eligibility rules would make the realisation of an action impossible or exceedingly difficult.

11.   In order to promote local capacities, markets and purchases, where the Financial Regulation provides for an award on the basis of a single tender, priority shall be given to local and regional contractors. In all other cases, participation of local and regional contractors shall be promoted in accordance with the relevant provisions of that Regulation. Sustainability and due diligence criteria shall be promoted.

12.   Under the Democracy and Human Rights thematic programme, any entity not covered under the definition of legal entity in point 6 of the first paragraph of Article 2 shall be eligible when this is necessary to pursue the areas of intervention of this programme.

1.   In addition to Article 12(4) of the Financial Regulation, unused commitment and payment appropriations under the Instrument shall be automatically carried-over and may be committed and used, respectively, up to 31 December of the following financial year. The amount carried over shall be used first in the following financial year.

The Commission shall inform the European Parliament and the Council of commitment appropriations carried-over in accordance with Article 12(6) of the Financial Regulation.

2.   In addition to the rules laid down in Article 15 of the Financial Regulation on making appropriations available again, commitment appropriations corresponding to the amount of decommitments made as a result of total or partial non-implementation of an action under the Instrument shall be made available again to the benefit of the budget line of origin.

3.   Budgetary commitments for actions extending over more than one financial year may be broken down over several years into annual instalments, in accordance with Article 112(2) of the Financial Regulation.

The third subparagraph of Article 114(2) of the Financial Regulation shall not apply to the multiannual actions referred to in the first subparagraph of this paragraph. The Commission shall automatically decommit any portion of a budgetary commitment for an action which, by 31 December of the fifth year following that of the budgetary commitment, has not been used for the purpose of pre-financing or making interim payments, or for which no certified statement of expenditure or any payment request has been submitted.

Paragraph 2 of this Article shall also apply to annual instalments.

4.   By way of derogation from Article 209(3) of the Financial Regulation, repayments and revenues generated by a financial instrument and budgetary guarantees shall be assigned to the budget line of origin as internal assigned revenue after deduction of management costs and fees. Every five years, the Commission shall examine the contribution made to the achievement of Union objectives by, and the effectiveness of, existing financial instruments.

1.   The financial envelope referred to in point (a) of Article (6)(2) shall cover the European Fund for Sustainable Development Plus (EFSD+) and the External Action Guarantee.

2.   The purpose of the EFSD+ as an integrated financial package supplying financial capacity in the form of grants, technical assistance, financial instruments, budgetary guarantees and blending operations referred to in Article 27(1) of this Regulation shall be to support investments and increase access to financing, as a means of contributing to the achievement of the objectives and general principles laid down in Articles 3 and 8 of this Regulation, and, where relevant, the objectives of the IPA III Regulation while maximising additionality and development impact and delivering innovative products, including to SMEs.

The EFSD+ shall in particular foster sustainable and inclusive economic, environmental and social development, transition into sustainable value-added economy and a stable investment environment. It shall also promote socio-economic and environmental resilience in partner countries with a particular focus on the eradication of poverty. The EFSD+ shall thus contribute to the reduction of socio-economic inequalities, sustainable and inclusive growth, climate change adaptation and mitigation, environmental protection and management, the creation of decent jobs on the basis of the core ILO labour standards, economic opportunities, skills and entrepreneurship, socio-economic sectors, including social enterprises and cooperatives, SMEs, sustainable connectivity, the support to vulnerable groups, the promotion of human rights, gender equality and the empowerment of women and young people, as well as addressing specific socio-economic root causes of irregular migration and root causes of forced displacement, in accordance with the priority areas outlined in Annex V and relevant indicative programming documents.

Special attention shall be given to countries identified as experiencing fragility or conflict, LDCs and heavily indebted poor countries, including by providing support for institutional capacity building, economic governance and technical assistance.

3.   The External Action Guarantee shall support the EFSD+ operations covered by budgetary guarantees in accordance with Articles 32 to 39 of this Regulation. The External Action Guarantee shall also support macro-financial assistance and loans to third countries referred to in Article 10(2) of Regulation (Euratom) 2021/… (9).

4.   Under the External Action Guarantee, the Union may guarantee operations, under Guarantee agreements signed between 1 January 2021 and 31 December 2027, up to EUR 53 449 000 000.

The Commission is empowered to adopt a delegated act in accordance with Article 44 to amend the maximum amount of the External Action Guarantee by up to 20 %.

5.   The provisioning rate shall range between 9 % and 50 % depending on the type of operations.

A maximum amount of EUR 10 000 000 000 from the Union budget may be used to provision the External Action Guarantee. The Commission is empowered to adopt delegated acts in accordance with Article 44 to amend this maximum amount to ensure that the provisioning amount reflects the amount and the provisioning rates of the External Action Guarantee, taking into account the type of guaranteed operations.

The provisioning rate for the External Action Guarantee shall be 9 % for the Union’s macro-financial assistance and for budgetary guarantees covering sovereign risks associated with lending operations.

The provisioning rates shall be reviewed at least every three years from the date of application of this Regulation laid down in Article 51. The Commission is empowered to adopt delegated acts in accordance with Article 44 to amend the provisioning rates.

6.   The External Action Guarantee shall be considered as a single guarantee in the common provisioning fund established by Article 212 of the Financial Regulation.

7.   The EFSD+ and the External Action Guarantee may support financing and investment operations in partner countries in the geographical areas referred to in Article 4(2). The provisioning of the External Action Guarantee shall be financed from the budget of the relevant geographic programmes established by point (a) of Article 6(2) and shall be transferred into the common provisioning fund. The EFSD+ and the External Action Guarantee may also support operations in beneficiaries listed in the relevant Annex to the IPA III Regulation. The funding for those operations under the EFSD+ and for the provisioning of the External Action Guarantee shall be financed from the IPA III Regulation. The provisioning of the External Action Guarantee for loans to third countries referred to in Article 10(2) of Regulation (Euratom) 2021/… (9) shall be financed from that Regulation.

8.   The provisioning referred to in Article 211(2) of the Financial Regulation shall be constituted on the basis of the Union’s total liabilities authorised under this Regulation. The annual amount of provisioning required may be constituted during a period not exceeding seven years. The provisioning of guarantees authorised under Regulation (EU) 2017/1601 and of guarantees, financial assistance and Euratom loans to third countries authorised under basic acts whose provisioning is governed by Regulation (EC, Euratom) No 480/2009 shall continue to follow the provisions of those Regulations.

9.   The net assets on … [date of the last day of the month following the month of entry into force of this Regulation] of the EFSD Guarantee Fund and of the Guarantee fund for external actions established by Regulation (EU) 2017/1601 and Regulation (EC, Euratom) No 480/2009,respectively, shall be transferred into the common provisioning fund for the purpose of provisioning the budgetary guarantees authorised under Regulation (EU) 2017/1601 and the guarantees, financial assistance and Euratom loans to third countries authorised under basic acts whose provisioning is governed by Regulation (EC, Euratom) No 480/2009.

1.   The EFSD+ shall be composed of regional investment platforms within the regional areas laid down in Article 4(2) of this Regulation and in the IPA III Regulation and established on the basis of the working methods, procedures and structures of the existing external blending facilities of the Union, which may combine their blending operations and External Action Guarantee operations under the EFSD+.

2.   The Commission shall ensure the management of the EFSD+.

1.   In ensuring the management of the EFSD+, the Commission shall be advised by a strategic board (the ‘EFSD+ strategic board’), except in the case of the operations covering the Western Balkans’ beneficiaries listed in the relevant Annex to the IPA III Regulation, which shall have its specific strategic board.

2.   The EFSD+ strategic board shall advise the Commission on the strategic orientation and priorities of External Action Guarantee investments under the EFSD+, including for the investment windows referred to in Article 36, and contribute to their alignment with the guiding principles and objectives of the Union’s external action, development policy, European Neighbourhood Policy, as well as with the objectives set out in Article 3 and the purpose of the EFSD+ as set out in Article 31. The EFSD+ strategic board shall also support the Commission in setting overall investment goals as regards the use of the External Action Guarantee to support EFSD+ operations and monitor an appropriate and diversified geographical and thematic coverage for investment windows.

3.   The EFSD+ strategic board shall also support overall coordination, complementarity, and coherence between the regional investment platforms, between the three pillars of the External Investment Plan, between the External Investment Plan and the Union’s other efforts on migration and on the implementation of the 2030 Agenda, including the fight against climate change, as well as with Union external programmes and financing instruments.

4.   The EFSD+ strategic board shall be composed of representatives of the Commission and of the High Representative, of all Member States and of the EIB. The European Parliament shall have observer status. Contributors, eligible counterparts, partner countries, relevant regional organisations and other stakeholders may be given observer status, where appropriate. The EFSD+ strategic board shall be consulted prior to the inclusion of any new observer. The EFSD+ strategic board shall be co-chaired by the Commission and the High Representative.

5.   The EFSD+ strategic board shall meet at least twice a year and, when possible, adopt opinions by consensus. Additional meetings may be organised at any time by the chair or at the request of one third of its members. Where consensus cannot be reached, the voting rights as agreed during the first meeting of the EFSD+ strategic board and laid down in its rules of procedure shall apply. The rules of procedure shall set out the framework regarding the role of observers. The minutes and agendas of the meetings of the EFSD+ strategic board shall, following their adoption, be made public.

6.   The Commission shall report annually to the EFSD+ strategic board about the progress made in respect of the implementation of the EFSD+. The strategic board covering the Western Balkans shall inform on progress made on the implementation of the guarantee instrument for that region to complement the above mentioned reporting. The strategic boards shall examine the evaluation reports referred to in Article 42(5) and shall take them into account.

The EFSD+ strategic board shall regularly organise a consultation of relevant stakeholders on the strategic orientation and implementation of the EFSD+.

7.   The existence of the EFSD+ strategic board and the strategic board covering the Western Balkans shall not influence the need to have a single, unified EFSD+ risk management framework.

8.   The risk management function for guarantees under the EFSD+ shall take into account the objectives and principles of the Instrument. Risk assessment and remuneration methodologies under EFSD+ shall be consistently applied to all investment windows, including those referred to in Article 36. A technical risk assessment group shall be established by the Commission. The Commission shall ensure an independent, impartial and inclusive high-quality function of the technical risk assessment group. The Commission shall also ensure that information and analysis are shared in a timely, transparent and inclusive manner with all Member States, with due regard to confidentiality. The composition, rules of procedure and working methods of the technical risk assessment group shall be inclusive, open to experts from the EIB, other eligible counterparts and interested Member States, and shall be presented to the EFSD+ strategic board. The Commission shall disclose to the European Parliament and the Council the composition, terms of reference and rules of procedure of the technical risk assessment group and ensure the impartiality and absence of conflict of interest of its members.

9.   During the application period of the EFSD+, the EFSD+ strategic board shall, as soon as possible, adopt and publish guidelines setting out how conformity of EFSD+ operations with the purpose, objectives and eligibility criteria set out in Articles 31 and 35 is to be ensured.

1.   The financing and investment operations eligible for support through the External Action Guarantee shall be consistent and aligned with Union policies, the relevant programming documents, as well as with the partner countries’ strategies and policies. They shall in particular support the objectives, general principles and policy framework of the Instrument and, where relevant, the IPA III Regulation, with due regard to the priority areas laid down in Annex V to this Regulation.

2.   The External Action Guarantee shall support financing and investment operations which comply with the conditions set out in points (a) to (e) of Article 209(2) of the Financial Regulation concerning in particular the need to achieve additionality, including by addressing market failures or sub-optimal investment situations, alignment of interest of the eligible counterparts, avoiding the distortion of competition, and, where appropriate, maximising private investment, and which:

3.   The External Action Guarantee shall be used to cover the risks for the following instruments:

4.   The eligible counterparts for the purposes of the External Action Guarantee shall be those identified in Article 208(4) of the Financial Regulation, including those from partner countries and third countries contributing to the External Action Guarantee, subject to approval by the Commission in accordance with Article 37 of this Regulation. In addition, and by derogation from point (c) of Article 62(1) of the Financial Regulation, bodies governed by private law of a Member State, a partner country or a third country which has contributed to the External Action Guarantee in accordance with Article 37 of this Regulation, and which provide adequate assurance of their financial capacity shall be eligible for the purpose of the External Action Guarantee.

5.   Eligible counterparts shall comply with the rules and conditions provided for in point (c) of Article 62(1) of the Financial Regulation. In the case of bodies governed by private law of a Member State, a partner country or a third country which have contributed to the External Action Guarantee in accordance with Article 37 of this Regulation, preference shall be given to those bodies that disclose information related to environment, social, tax and corporate governance criteria.

The Commission shall ensure the effective, efficient and fair use of available resources among eligible counterparts, including small and medium-sized counterparts, while promoting cooperation between them and taking due account of their capacities, added value and experience.

The Commission shall ensure fair treatment for all eligible counterparts, in accordance with Article 27(7), and shall ensure that conflicts of interest are avoided throughout the implementation period of the EFSD+. In order to ensure complementarity, the Commission may request any relevant information from eligible counterparts about their non-EFSD+ operations.

6.   The condition set out in Article 219(4) of the Financial Regulation on contributions with own resources shall apply to each eligible counterpart allocated with a budgetary guarantee under the Instrument on a portfolio basis.

7.   The Commission shall select the eligible counterparts in accordance with Article 154 of the Financial Regulation, taking due account of:

8.   On the basis of the multiannual indicative programmes and of the advice provided by the EFSD+ strategic board and the strategic board covering the Western Balkans, the Commission shall, after consulting the regional operational boards and informing the European Parliament and the Council, set up investment windows for regions or specific partner countries, or both, for specific sectors, or for specific projects or specific categories of final beneficiaries, or both, which are to be funded under the Instrument, to be covered by the External Action Guarantee up to a fixed amount. The Commission shall inform the European Parliament and the Council on how the investment windows comply with this Article and on their detailed funding priorities. All requests for financial support within investment windows shall be made to the Commission.

The choice of investment windows shall be duly justified by an analysis of the market failure or sub-optimal investment situations and an assessment of its alignment with the priorities of this Regulation and, where relevant, the IPA III Regulation. The Commission shall carry out that analysis in cooperation with potentially eligible counterparts and stakeholders.

Eligible counterparts may provide the instruments referred to in paragraph 3 under an investment window or individual project administered by an eligible counterpart. Those instruments may be provided for the benefit of partner countries, including countries experiencing fragility or conflict, or countries facing challenges in reconstruction and post-conflict recovery, for the benefit of those partner countries’ institutions, including their public national and private local banks and finance institutions, as well as for the benefit of private sector entities, including SMEs, of those partner countries. Those instruments shall not benefit companies controlled by the military or state security sector, except for duly justified cases.

9.   The Commission shall assess the operations supported by the External Action Guarantee against the eligibility criteria set out in paragraphs 1, 2 and 3, where possible drawing on the existing result measurement systems of the Union and of eligible counterparts. The Commission shall establish a checklist of the eligibility criteria as set out in Article 31, Article 35(1) and (2) and shall assess and select all proposals to be supported by the External Action Guarantee against this checklist, on the basis of the information provided by the eligible counterparts. If necessary, the Commission shall ask the eligible counterparts to clarify or to amend the information provided. The Commission shall publish on an annual basis the checklists and the results of its assessment for each investment window broken down by country and sector.

10.   The Commission is empowered to adopt delegated acts in accordance with Article 44 to amend the priority areas in Annex V.

1.   The EIB shall implement an exclusive dedicated investment window covering a comprehensive risk cover for operations with sovereign counterparts and non-commercial sub-sovereign counterparts with an indicative minimum amount of EUR 11 000 000 000 which shall be programmed in accordance with the procedures laid down in Chapters I and III of this Title.

The EIB shall have the exclusivity for operations with sovereign counterparts and non-commercial sub-sovereign counterparts under the exclusive dedicated investment window. Under the exclusive dedicated investment window, the own resources contribution shall be understood as the assumption of residual risk and the EU guarantee shall cover 65 % of the aggregate amount disbursed and guaranteed under EIB financing operations, less amounts reimbursed, plus all related amounts.

By way of derogation from the second subparagraph, if the EIB cannot carry out or decides not to carry out operations under the exclusive dedicated investment window, the implementation of these operations shall be open to other eligible counterparts, in accordance with conditions which shall be laid down in the relevant External Action Guarantee agreements, which shall take into account the conditions offered to the EIB for the same type of operations and the specific needs, circumstances and nature of the eligible counterpart implementing these operations.

2.   The EIB shall be eligible for implementing operations with sub-sovereign counterparts not covered under the exclusive dedicated investment window referred to in paragraph 1 and operations with the private sector. The procedure referred to in Article 35 shall be used to entrust the EIB, if appropriate, with two additional dedicated investment windows covering:

3.   The indicative amount for the dedicated investment windows referred to in paragraphs 1 and 2 shall be of EUR 26 725 000 000.

In implementing the dedicated investment windows referred to in paragraphs 1 and 2, the EIB shall comply with this Regulation, including its overall objectives and those of the EFSD+ and, where relevant, of the IPA III Regulation, as well as with the relevant programming documents and the reporting obligations.

4.   In accordance with point (f) of Article 209(2) of the Financial Regulation, due to the nature and policy objective of the exclusive dedicated investment window referred to in paragraph 1, the relevant External Action Guarantee agreement may provide that the Union shall not be remunerated for operations under that investment window.

5.   For the purpose of this Article, sub-sovereign operations shall be considered commercial unless otherwise duly justified by the EIB and confirmed by the Commission.

The operations under the dedicated investment window referred to in point (b) of paragraph 2 shall be coherent with those of the export credit agencies of Member States.

6.   The EIB shall be subject to the opinion of the boards laid down in Articles 33 and 34 respectively.

For EIB operations falling under the investment windows referred to in this Article, the eligibility assessment laid down in Article 35(9) shall be satisfied within the framework of the procedure provided for in Article 19 of Protocol No 5 on the Statute of the European Investment Bank, annexed to the TFEU. The EIB shall, in a timely manner, provide all information required by the Commission for that purpose. The EIB financing operations falling under those investment windows shall not be covered by the EU guarantee where the Commission delivers an unfavourable opinion under the procedure provided for in Article 19 of Protocol No 5 on the Statute of the European Investment Bank, annexed to the TFEU. All further modalities applicable to the EIB shall be established in the relevant External Action Guarantee agreements.

7.   The EIB shall be eligible for implementing activities under other investment windows established under Article 35(8).

8.   In compliance with this Regulation, including its objectives and principles and the relevant programming documents, as well as, where relevant, the IPA III Regulation, the Commission and the EIB shall conclude dedicated External Action Guarantee agreements for the dedicated investment windows referred to in paragraphs 1 and 2.

1.   Member States, third countries and other third parties may contribute to the External Action Guarantee.

By derogation from the second subparagraph of Article 218(2) of the Financial Regulation, the contracting parties to the Agreement on the European Economic Area may provide contributions either in the form of guarantees or cash.

Third countries other than the contracting parties to the Agreement on the European Economic Area and other third parties shall provide contributions in the form of cash and subject to the opinion of the EFSD+ strategic board and approval by the Commission.

Member States may request that their contributions be earmarked for the initiation of actions in specific regions, countries, sectors or existing investment windows. The Commission shall inform the European Parliament and the Council without delay of the contributions approved

2.   Contributions in the form of a guarantee shall not exceed 50 % of the amount referred to in Article 31(4).

The contributions made by Member States and the contracting parties to the Agreement on the European Economic Area in the form of a guarantee may only be called for payments of guarantee calls after the funding from the general budget of the Union, increased by any other cash contributions, has been used on payments of guarantee calls.

Any contribution may be used to cover guarantee calls regardless of earmarking.

A contribution agreement shall be concluded between the Commission, on behalf of the Union, and the contributor, and shall contain, in particular, provisions concerning the payment conditions.

1.   On behalf of the Union, the Commission shall conclude External Action Guarantee agreements with the eligible counterparts selected pursuant to Article 35. Those agreements may be concluded with a consortium of two or more eligible counterparts. In compliance with Article 219(1) of the Financial Regulation, budgetary guarantees shall be irrevocable, unconditional and on demand for the types of operations covered under the External Action Guarantee. When concluding External Action Guarantee agreements, the Commission shall take due account of the advice and guidance of the boards and of the technical risk assessment group.

2.   One or more External Action Guarantee agreements shall be concluded for each investment window between the Commission and the eligible counterpart or eligible counterparts selected. In addition, in order to address specific needs, the External Action Guarantee may be granted for individual financing or investment operations.

The European Parliament and the Council shall be notified of the signature of all External Action Guarantee agreements. Upon their request, those agreements shall be made available to the European Parliament and the Council, taking into account the protection of confidential and commercially sensitive information.

3.   External Action Guarantee agreements shall contain, in particular:

4.   The eligible counterpart shall approve financing and investment operations in accordance with its own rules and procedures and in compliance with the External Action Guarantee agreement.

5.   The External Action Guarantee may cover:

6.   For the purposes of the Commission’s accounting and its reporting of the risks covered by the External Action Guarantee, and in accordance with Article 209(4) of the Financial Regulation, eligible counterparts with which an External Action Guarantee agreement has been concluded shall provide the Commission and the Court of Auditors annually with the financial reports on financing and investment operations covered by this Regulation, audited by an independent external auditor, containing, inter alia, information on:

7.   The eligible counterparts shall, upon request, provide the Commission with any additional information necessary to fulfil the Commission’s obligations pursuant to this Regulation, in particular with regard to the selection criteria set out in Article 35, including compliance with human rights, and social, labour and environment standards.

8.   The Commission shall submit an annual report to the EFSD+ strategic board, to regional operational boards, to the European Parliament and to the Council on financial instruments, budgetary guarantees, including those implemented by the EIB, financial assistance in accordance with Article 41(4) and (5) and Articles 241 and 250 of the Financial Regulation. For that purpose, the eligible counterparts shall provide annually the information necessary to allow the Commission to comply with those reporting obligations.

1.   In view of possible grievances of third parties in partner countries, including communities and individuals affected by projects supported by the EFSD+ and the External Action Guarantee, the Commission and Union delegations shall publish on their websites direct references to the complaints mechanisms of the relevant counterparts that have concluded agreements with the Commission. The Commission shall also provide the possibility of directly receiving complaints related to the treatment of grievances by eligible counterparts. The Commission shall take that information into account in view of future cooperation with those counterparts.

2.   Persons and entities implementing financial instruments and budgetary guarantees shall comply with applicable Union law and principles and agreed international and Union standards as laid down in Article 155(2) and (3) of the Financial Regulation. The Commission shall assess whether the systems, rules and procedures of those persons and entities ensure protection of the financial interests of the Union equivalent to that provided for where the Commission implements the Union budget, with due regard to the principle of proportionality, taking into account the nature of the action and the conditions under which this action is implemented.

1.   Indicators to report on progress of the Instrument towards the achievement of the specific objectives laid down in Article 3(2) are set out in Annex VI. Those indicators, in line with the SDGs indicators, shall be used together with data from evaluations and other existing results reporting, as a basis for assessing the extent to which those specific objectives have been achieved.

2.   The Commission shall continuously monitor its actions and, at least on an annual basis, review progress made towards delivering the targets established by this Regulation, as well as expected results, covering outputs and outcomes.

Progress regarding expected results shall be monitored in a transparent and timely manner, on the basis of relevant, measurable, qualitative and quantitative data including, but not limited to those set out in Annex VI. Whenever possible, indicators shall be disagregated by sex, age and other relevant factors.

3.   Joint results frameworks included and agreed within joint programming documents that fulfil the criteria set out in Article 14(4) shall provide, where feasible, the basis for the joint monitoring by the Union and its Member States of their collective support to a partner country.

The performance reporting system shall ensure that data for monitoring programme implementation and results of the Instrument are collected efficiently, effectively, and in a timely manner. To that end, proportionate reporting requirements shall be imposed on recipients of Union funds.

4.   The Commission shall examine the progress made in implementing the Instrument. Starting from 2022 onwards, the Commission shall, in a timely manner by 30 November each year, submit to the European Parliament and to the Council an annual report on progress towards the achievement of the objectives of the Instrument by means of indicators, including, but not limited to, those set in Annex VI, reporting on the ongoing activities, results delivered and the effectiveness of the Regulation. That report shall also be submitted to the European Economic and Social Committee and to the Committee of the Regions.

5.   The annual report shall contain:

The annual report shall assess the results of the Union funding using, as far as possible, specific and measurable indicators to show progress towards the targets and objectives of the Instrument as well as the progress made towards mainstreaming issues referred to in Article 8(8). It shall also present a breakdown on the forms of Union funding as set out in Article 27. In the case of development cooperation, the report shall also assess, where possible and relevant, the adherence to development effectiveness principles, including for innovative financial instruments.

6.   The annual report prepared in 2021 shall contain consolidated information from annual reports concerning the period from 2014 to 2020 on all funding from the Regulations referred to in Article 50(2) of this Regulation, including external assigned revenues and contributions to trust funds, guarantees and a breakdown of spending by country, forms of Union funding, as set out in Article 27 of this Regulation, type of entity as referred to in Article 62 of the Financial Regulation for both direct and indirect management, commitments and payments. That annual report shall reflect the main lessons learnt and the follow-up to the recommendations of the external evaluative exercises carried out in previous years.

7.   The Commission shall submit as part of the annual report detailed reporting on the financing and investment operations covered by the External Action Guarantee, and the functioning of the EFSD+, its management and its effective contribution to its objectives. It shall include the following elements:

8.   An annual estimate of the overall spending related to climate action, desertification and biodiversity shall be made on the basis of the indicative programming documents adopted. The funding allocated under the Instrument shall be subject to an annual tracking system based on the methodology of the OECD, namely the ‘environmental markers’ and ‘Rio markers’, without excluding the use of more precise methodologies where these are available, integrated into the existing methodology for performance management of Union programmes, to quantify the expenditure related to environmental management and protection, climate action, desertification and biodiversity at the level of the action plans and measures referred to in Article 23 and recorded within evaluations and the annual report.

The Commission shall make available information on development cooperation in accordance with recognised international standards such as those from the ILO and the OECD and by using the framework for a common standard developed by the International Aid Transparency Initiative.

9.   To ensure effective assessment of progress of the Instrument towards the achievement of its objectives, the Commission is empowered to adopt delegated acts in accordance with Article 44 to amend Annex VI to review or complement the indicators where considered necessary and to supplement this Regulation with provisions on the establishment of a monitoring and evaluation framework.

1.   The Commission shall evaluate the impact and effectiveness of its actions per area of intervention, and the effectiveness of programming, where appropriate by means of independent external evaluations. The Commission shall take due account of proposals by the European Parliament or the Council for independent external evaluations. Where applicable, evaluations shall make use of the good practice principles of the OECD Development Assistance Committee, seeking to ascertain whether the specific objectives have been met and to formulate recommendations with a view to improving future actions.

The Commission shall communicate the findings and conclusions of the evaluations accompanied by its observations and follow-up, to the European Parliament, to the Council and to the Member States. Evaluations may be discussed at the request of Member States pursuant to Article 45(7). The results shall feed into the preparation of programmes and actions and resource allocation. Those evaluations and follow-up shall be made publicly available.

The Commission shall, to an appropriate extent, associate all relevant stakeholders, including beneficiaries, civil society actors and local authorities in the evaluation process of the Union’s funding provided under the Instrument, and may, where appropriate, seek to undertake joint evaluations with the Member States and other partners with close involvement of the partner countries.

2.   By 31 December 2024, the Commission shall submit a mid-term evaluation of the Instrument. It shall cover the period from 1 January 2021 until the launch of that evaluation. The mid-term evaluation shall be accompanied, if appropriate, by legislative proposals setting out necessary amendments to this Regulation.

3.   The Commission shall carry out a final evaluation of the Instrument within the mid-term review of the following financial period. That evaluation shall analyse and assess the Union contribution to the achievement of the objectives of the Instrument, taking into account indicators measuring the results delivered and any findings and conclusions concerning the impact of the Instrument.

4.   The mid-term and the final evaluations shall address efficiency, effectiveness, impact, sustainability, the added value, the scope for simplification, internal and external coherence, including complementarity and synergies, and the continued relevance of the objectives of the Instrument. Evaluations shall identify lessons learned. The evaluations shall assess the maximum amount of the External Action Guarantee laid down in Article 31(4) and include information on the added value of integrating previously separate instruments into one streamlined instrument.

The mid-term and final evaluations shall also contain consolidated information from annual reports on all funding governed by this Regulation, including external assigned revenues and contributions to trust funds, offering a breakdown of spending by beneficiary country, forms of Union funding, and involvement of Member States and relevant partners, commitments and payments, as well as a breakdown per geographic programmes, thematic programmes and rapid response actions, including the use of funds mobilised from the emerging challenges and priorities cushion, as referred to in Article 6.

The mid-term and final evaluations shall be undertaken for the specific purpose of improving Union funding. They shall inform decisions on the renewal, modification or suspension of the types of actions implemented under the Instrument.

5.   In accordance with the specific reporting provisions in the Financial Regulation, by 31 December 2024 and every three years thereafter, the Commission shall evaluate, on the basis of an external evaluation, the use and the functioning of the External Action Guarantee, in particular its contribution to the overall objectives, the achieved results and additionality. The Commission shall submit that evaluation report to the European Parliament and to the Council. That evaluation report shall be accompanied by an opinion of the Court of Auditors. The evaluation report and the opinion of the Court of Auditors shall be made publicly available.

1.   In duly justified cases and where the action to be implemented is of a global, trans-regional or regional nature, the Commission may decide, within the relevant multiannual indicative programmes or within the relevant action plans or measures to extend the scope of actions to countries and territories not covered by this Regulation pursuant to Article 4 in order to ensure the coherence and effectiveness of Union financing or to foster regional or trans-regional cooperation.

2.   The Commission may include a specific financial allocation to assist partner countries and regions to strengthen their cooperation with neighbouring Union outermost regions and with overseas countries and territories. To that end, the Instrument, may contribute, where appropriate and on the basis of reciprocity and proportionality as regards the level of funding from the Decision on the Overseas Association, including Greenland or the Interreg Regulation, or both, to actions implemented by a partner country or region or any other entity under this Regulation, by a country, territory or any other entity under the Decision on the Overseas Association, including Greenland or by a Union outermost region in the frame of joint operational programmes or to interregional cooperation programmes or measures established and implemented under the Interreg Regulation.

1.   The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.

2.   The power to adopt delegated acts referred to in Article 4(6) and (7), Article 6(5), Article 31(4) and (5), Article 35(10) and Article 41(9) shall be conferred on the Commission for the period of validity of this Regulation.

3.   The delegation of power referred to in Article 4(6) and (7), Article 6(5), Article 31(4) and (5), Article 35(10) and Article 41(9) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.

4.   Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making.

5.   As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

6.   A delegated act adopted pursuant to Article 4(6) and (7), Article 6(5), Article 31(4) and (5), Article 35(10) and Article 41(9) shall enter into force only if no objection has been expressed either by the European Parliament or to the Council within a period of two months of notification of that act to the European Parliament and to the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.

1.   The Commission shall be assisted by the Neighbourhood, Development and International Cooperation Instrument committee. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011. The committee may convene in different formats in charge of specific areas of cooperation and intervention, such as geographic, thematic and rapid response actions.

2.   Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

3.   Where the opinion of the committee is to be obtained by a written procedure, that procedure shall be terminated without result when, within the time-limit for delivery of the opinion, the chair of the committee so decides or a simple majority of committee members so requests.

4.   Where reference is made to this paragraph, Article 8 of Regulation (EU) No 182/2011, in conjunction with Article 5 thereof, shall apply.

5.   The adopted decision shall remain in force for the duration of the adopted or modified document, action programme or measure.

6.   An observer from the EIB shall take part in the committee’s proceedings with regard to questions concerning the EIB.

7.   Member States may request the examination of any other matter concerning the implementation of the Instrument, in particular with regard to multi-annual programming documents including mid-term or ad hoc reviews and evaluations.

1.   The recipients of Union funding shall acknowledge the origin of those funds and ensure the visibility of the Union funding, in particular when promoting and reporting on the actions, and their results by highlighting the support received from the Union in a visible manner on communication material related to the actions supported under the Instrument, and by providing coherent, effective and proportionate targeted information to multiple audiences, including the media and the public.

Agreements concluded with the recipients of Union funding shall contain obligations in that respect.

2.   The Commission shall implement information and communication actions relating to the Instrument, to actions taken pursuant to the Instrument and to the results obtained. Financial resources allocated to the Instrument shall also contribute to the corporate communication of and reporting on the political priorities of the Union, insofar as those priorities are related to the objectives of the Instrument.

3.   The Instrument shall support strategic communication and public diplomacy, including the fight against disinformation, with a view to communicating the values of the Union as well as the added value of, and results achieved by, the Union’s actions.

4.   The Commission shall make publicly available information on actions financed under the Instrument as referred to in Article 38 of the Financial Regulation, including as appropriate through a comprehensive single website.

5.   The website referred to in paragraph 4 shall also include information on financing and investment operations and the essential elements of all External Action Guarantee agreements, including information on the legal identity of eligible counterparts, expected development benefits and complaints procedures, in accordance with point (h) of Article 38(3), taking into account the protection of confidential and commercially sensitive information.

6.   Eligible EFSD + counterparts, in accordance with their transparency policies and Union rules on data protection and on access to documents and information, shall proactively and systematically make publicly available on their websites information relating to all financing and investment operations covered by the External Action Guarantee, relating in particular to the manner in which those operations contribute to the achievement of the objectives and requirements set out in this Regulation. Where possible, such information shall be broken down at project level. Such information shall always take into account the protection of confidential and commercially sensitive information. Eligible EFSD+ counterparts shall also publicise Union support in all information which they publish on financing and investment operations covered by the External Action Guarantee in accordance with this Regulation.

1.   Without prejudice to Article 31(8) of this Regulation, Regulations (EC, Euratom) No 480/2009 and (EU) 2017/1601 are repealed with effect from …. [the first day of the second month following the entry into force of this Regulation] and Decision No 466/2014/EU is repealed with effect from 1 January 2022. The financial envelope for the Instrument shall finance the provisioning of the budgetary guarantees authorised under Regulation (EU) 2017/1601 and of guarantees and financial assistance authorised under basic acts whose provisioning is governed by Regulation (EC, Euratom) No 480/2009. Provisioning for such guarantees in and financial assistance to beneficiaries listed in the relevant Annex to the IPA III Regulation shall be financed from that Regulation.

2.   The financial envelope for the Instrument may also cover technical and administrative assistance expenditures necessary to ensure the transition between this Regulation and the measures adopted under Regulations (EC, Euratom) No 480/2009, (EU) No 230/2014, (EU) No 232/2014, (EU) No 233/2014, (EU) No 234/2014, (EU) No 235/2014, (EU) No 236/2014, (Euratom) No 237/2014 and (EU) 2017/1601 and Decision No 466/2014/EU.

3.   The financial envelope for the Instrument may cover expenditures related to the preparation of any future related Regulation.

4.   If necessary, appropriations may be entered in the budget beyond 2027 to cover the expenditures provided for in Article 24(1), to enable the management of actions not completed by 31 December 2027.