(a)

paragraph 2 shall be replaced by the following:

(b)

paragraph 6 shall be replaced by the following:

(c)

the following paragraph shall be inserted:

(a)

the following paragraph shall be inserted:

(b)

the following paragraph shall be added:

—

information on terrorist groups and their support networks; and

—

views on means and methods to counter terrorist acts, including in technical fields and training, and experiences in relation to the prevention of terrorism.

—

taking steps to sign, ratify or accede to, as appropriate, and fully implement all other relevant international instruments,

—

the establishment of an effective system of national export controls, controlling the export as well as transit of weapons of mass destruction related goods, including a weapons of mass destruction end-use control on dual-use technologies and containing effective sanctions for breaches of export controls.

‘l)

the promotion of traditional knowledge.’.

‘(d)

promoting the fight against:

(a)

points (c) and (d) shall be replaced by the following:

(b)

the following point shall be added:

‘(i)

regional integration institutions and organisations set up by the ACP States and those with ACP State participation that promote regional cooperation and integration, and’.

‘2.

Cooperation shall also support inter and intra-ACP cooperation schemes and initiatives, including those involving non-ACP developing countries.’.

‘

the development and encouragement of the use of local content for Information and Communication Technologies.’.

(a)

ACP States;

(b)

regional or inter-State bodies to which one or more ACP States belong, including bodies with non-ACP State members, which are authorised by those ACP States; and

(c)

joint bodies set up by the ACP States and the Community to pursue certain specific objectives.

(a)

national and/or regional public or semi-public agencies and departments of ACP States, including Parliaments, and, in particular, their financial institutions and development banks;

(b)

companies, firms and other private organisations and private operators of ACP States;

(c)

enterprises of a Community Member State to enable them, in addition to their own contribution, to undertake productive projects in the territory of an ACP State;

(d)

ACP or Community financial intermediaries providing, promoting and financing private investments in ACP States;

(e)

local decentralised authorities from ACP States and the Community; and

(f)

developing countries that are not part of the ACP Group where they participate in a joint initiative or regional organisation with ACP States.

‘2.

The purpose of support in cases of short-term fluctuations in export earnings is to safeguard socioeconomic reforms and policies that could be affected negatively as a result of a drop in revenue and to remedy the adverse effects of instability of export earnings, in particular from agricultural and mining products.

3.

The extreme dependence of the ACP States' economies on exports, in particular from the agricultural and mining sectors, shall be taken into account in the allocation of resources in the year of application. In this context, the least developed, landlocked and island, post-conflict and post natural disaster ACP States shall receive more favourable treatment.’.

‘1.

Specific actions shall be pursued to support island ACP States in their efforts to halt and reverse their increasing vulnerability caused by new and severe economic, social and ecological challenges. These actions shall seek to advance the implementation of the small island developing States' priorities for sustainable development, while promoting a harmonised approach to their economic growth and human development.’.

(a)

The following paragraph shall be inserted:

(b)

In paragraph 2, point (a) shall be replaced by the following:

‘2.

In such cases either Party may invite the other to enter into consultations. Such consultations shall begin no later than 30 days after the invitation and dialogue under the consultations procedure shall last no longer than 120 days.’.

‘9.

By derogation from Article 58 of this Agreement, an amount of EUR 90 million shall be transferred to the intra ACP envelope under the 9th EDF. This amount may be allocated to finance devolution for the period 2006 to 2007, and shall be managed directly by the Commission.’.

1.

For the purposes set out in this Agreement and for a period beginning on 1 March 2005, a multiannual financial framework of cooperation shall cover commitments beginning on 1 January 2008 for a period of five or six years.

2.

For this new period, the European Union shall maintain its aid effort to ACP States at least at the same level as that of the 9th EDF, not including balances; to this shall be added, based on Community estimates, the effects of inflation, growth within the European Union and enlargement to 10 new Member States in 2004.

3.

Any required amendments to the multiannual financial framework or relative parts of the Agreement shall be decided by the Council of Ministers by derogation from Article 95 of this Agreement.’.

(a)

Article 2 shall be amended as follows:

(b)

Article 3 shall be amended as follows:

(c)

In Article 5, point (b) shall be replaced by the following:

(d)

The following Articles shall be inserted:

‘Article 6a

Annual reporting on the Investment Facility

Representatives of the EU Member States responsible for the Investment Facility, Representatives of the ACP States, as well as the European Investment Bank, the European Commission, the EU Council Secretariat and the ACP Secretariat shall meet annually to discuss the operations, performance and policy questions concerning the Investment Facility.

Article 6b

Review of performance of the Investment Facility

The overall performance of the Investment Facility shall be subject to a joint review at the mid-term and end-term of a financial protocol. Such an exercise may include a recommendation on how to improve the implementation of the Facility.’.

(a)

Article 3 shall be amended as follows:

(b)

Article 4 shall be amended as follows:

(c)

Article 5 shall be amended as follows:

(d)

In Article 6, paragraph 1 shall be replaced by the following:

(e)

Article 9 shall be replaced by the following:

‘Article 9

Resource allocation

1.   At the beginning of the period covered by the Financial Protocol, each region shall receive from the Community an indication of the volume of resources from which it may benefit during a five-year period. The indicative resource allocation shall be based on an estimate of needs and the progress and prospects in the process of regional cooperation and integration. In order to achieve an adequate scale and to increase efficiency, regional and national funds may be mixed for financing regional operations with a distinct national component.

2.   Without prejudice to Article 11 concerning reviews, the Community may, in order to take account of new needs or exceptional performance, increase a region's allocation.’;

(f)

In Article 10(1), point (c) shall be replaced by the following:

(g)

Article 12 shall be replaced by the following:

‘Article 12

Intra-ACP cooperation

1.   At the beginning of the period covered by the Financial Protocol, the Community shall indicate to the ACP Council of Ministers the part of the funds earmarked for regional operations that shall be set aside for operations that benefit many or all ACP States. Such operations may transcend the concept of geographic location.

2.   The Community may, in order to take account of new needs for increasing the impact of intra-ACP activities, increase the allocation for intra-ACP cooperation.’.;

(h)

Article 13 shall be replaced by the following:

‘Article 13

Requests for financing

1.   Requests for financing of regional programmes shall be submitted by:

2.   Requests for financing of intra-ACP programmes shall be submitted by:

(i)

Article 14 shall be replaced by the following:

‘Article 14

Procedures for implementation

1.   (deleted)

2.   (deleted)

3.   Account being taken of the objectives and inherent characteristics of regional cooperation, including intra-ACP cooperation, operations undertaken in this sphere shall be governed by the procedures established for development finance cooperation where applicable.

4.   In particular and subject to paragraphs 5 and 6, any regional programme or project financed from the Fund shall give rise to:

5.   Programmes and projects financed from the Fund and for which requests for financing have been presented by international organisations in accordance with Article 13(2)(c) shall give rise to the drawing up of a grant contract.

6.   Programmes and projects financed from the Fund for which requests for financing have been presented by the ACP Council of Ministers or Committee of Ambassadors shall be implemented either by the ACP Secretariat, in which case a financing agreement shall be drawn up between the Commission and the Secretariat in accordance with Article 17, or by the Commission, depending on the nature of the action.’;

(j)

In Chapter 3, the title shall be replaced by the following:

‘APPRAISAL AND FINANCING’;

(k)

Article 15 shall be replaced by the following:

‘Article 15

Identification, preparation and appraisal of programmes and projects

1.   Programmes and projects that have been presented by the ACP State concerned shall be subject to joint appraisal. The ACP-EC Development Finance Cooperation Committee shall develop the general guidelines and criteria for appraisal of programmes and projects. These programmes and projects are generally multiannual and may incorporate a whole range of actions of a limited size in a particular area.

2.   Programme and project dossiers prepared and submitted for financing must contain all information necessary for the appraisal of the programmes and projects or, where programmes and projects have not been completely defined, provide the broad outlines necessary for their appraisal.

3.   Programme and project appraisal shall take due account of national human resource constraints and ensure a strategy favourable to the promotion of such resources. It shall also take into account the specific characteristics and constraints of each ACP State.

4.   Programmes and projects to be implemented by non-State actors which are eligible in accordance with this Agreement may be appraised by the Commission alone and give rise to the establishment, between the Commission and non-State actors, of grant contracts as defined in Article 19a. This appraisal shall comply with Article 4(1)(d) regarding the types of actors, their eligibility and the type of activity to be supported. The Commission, through the Head of Delegation, shall inform the National Authorising Officer of such allocated grants.’;

(l)

Article 16 shall be replaced by the following:

‘Article 16

Financing proposal and decision

1.   The conclusions of the appraisal shall be summarised in a financing proposal, the final version of which shall be drawn up by the Commission in close collaboration with the ACP State concerned.

2.   (deleted)

3.   (deleted)

4.   The Commission, acting on behalf of the Community, shall communicate its financing decision to the ACP State concerned within 90 days from the date on which the final version of the financial proposal is drawn up.

5.   Where the financing proposal is not adopted by the Commission on behalf of the Community, the ACP State concerned shall be informed immediately of the reasons for that decision. In such a case, the representatives of the ACP State concerned may, within 60 days thereafter, request either:

6.   Following such a hearing, a definitive decision to adopt or reject the financing proposal shall be taken by the Commission on behalf of the Community. Before any decision is taken, the ACP State concerned may forward to the Commission any facts which may appear necessary to supplement the information available to it.’;

(m)

Article 17 shall be replaced by the following:

‘Article 17

Financing Agreement

1.   Save as otherwise provided for in this Agreement, for any programme or project financed from the Fund, a financing agreement shall be drawn up between the Commission and the ACP State concerned.

2.   The financing agreement shall be drawn up between the Commission and the ACP State concerned within 60 days of the decision taken by the Commission on behalf of the Community. The financing agreement shall:

3.   Any unexpended balance left upon closure of the accounts of programmes and projects shall accrue to the ACP State or States concerned.’;

(n)

Article 18 shall be replaced by the following:

‘Article 18

Overrun

1.   Once it appears that there is a risk of cost over-runs over and above the financing available under the financing agreement, the National Authorising Officer shall notify the Commission and request its prior approval on the measures which the National Authorising Officer intends to take in order to cover such cost over-runs, either by reducing the scale of the programme or project or by calling on national or other non-Community resources.

2.   If it is not possible to reduce the scale of the programme or project or to cover the over-runs with other resources, the Commission, acting on behalf of the Community, may, on the basis of a reasoned request from the National Authorising Officer, take an additional financing decision on resources from the indicative programme.’;

(o)

Article 19 shall be replaced by the following:

‘Article 19

Retroactive financing

1.   In order to ensure early project start-up, avoid gaps between sequential projects and prevent delays, the ACP States may, on completion of project appraisal and before the financing decision is taken, pre-finance activities linked to the start-up of programmes, preliminary and seasonal work, orders for equipment with long delivery lead times as well as some on-going operations. Such expenditure shall satisfy the procedures provided for in this Agreement.

2.   Any expenditure referred to in paragraph 1 shall be mentioned in the financing proposal and shall be without prejudice to the financing decision taken by the Commission on behalf of the Community.

3.   Expenditure made by the ACP State under this Article shall be retroactively financed under the programme or project, once the financing agreement is signed.’;

(p)

In Chapter 4, the title shall be replaced by the following:

‘IMPLEMENTATION’;

(q)

The following Articles shall be inserted:

‘Article 19a

Implementation measures

1.   Where financial execution is the Commission's responsibility, implementation of programmes and projects financed from the Fund shall consist chiefly of the following:

2.   In the context of this Annex, procurement contracts are contracts for pecuniary interest concluded in writing in order to obtain, against payment of a price, the supply of movable assets, the execution of works or the provision of services.

3.   In the context of this Annex, grants are direct financial contributions awarded by way of a donation in order to finance:

Grants shall be covered by a written contract.

Article 19b

Tender procedure with suspension clause

In order to ensure early project start-up, the ACP States may, in all duly substantiated cases and in agreement with the Commission, issue invitations to tender for all types of contracts with a suspension clause, once project appraisal is completed but before the financing decision is taken. Such a provision must be mentioned in the financing proposal.’;

(r)

Article 20 shall be replaced by the following:

‘Article 20

Eligibility

Save where a derogation is granted in accordance with Article 22, and without prejudice to Article 26:

(s)

Article 22 shall be replaced by the following:

‘Article 22

Derogations

1.   In exceptional duly substantiated circumstances, natural or legal persons from third countries not eligible under Article 20 may be authorised to participate in procedures for the awarding of procurement contracts or grants financed by the Community at the justified request of the ACP States concerned. The ACP States concerned shall, on each occasion, provide the Commission with the information needed to decide on such derogation, with particular attention being given to:

2.   In the case of projects financed from the Investment Facility, the procurement rules of the Bank shall apply.’;

(t)

Article 24 shall be replaced by the following:

‘Article 24

Implementation by direct labour

1.   In the case of direct labour operations, programmes and projects shall be implemented through public or semi-public agencies or departments of the ACP State or States concerned or by the legal person responsible for executing the operation.

2.   The Community shall contribute to the costs of the department involved by providing the equipment and/or materials that it lacks and/or resources to allow it to acquire additional staff required in the form of experts from within the ACP States concerned or other ACP States. The Community's participation shall cover only costs incurred by supplementary measures and temporary expenditure relating to execution that are strictly confined to the requirements of the programmes and projects in question.

3.   Programme estimates implementing direct-labour operations must comply with the Community rules, procedures and standard documents laid down by the Commission, as applicable at the time of approval of the programme estimates.’;

(u)

Article 26 shall be replaced by the following:

‘Article 26

Preferences

1.   Measures shall be taken to encourage the widest participation of the natural and legal persons of ACP States in the performance of contracts financed by the Fund in order to permit the optimization of the physical and human resources of those States. To this end:

2.   Where two tenders are acknowledged to be equivalent on the basis of the criteria stated above, preference shall be given:

(v)

In Chapter 6, the title shall be replaced by the following:

‘FUND-RESOURCE MANAGEMENT AND EXECUTING AGENTS’;

(w)

Article 34 shall be replaced by the following:

‘Article 34

The Commission

1.   The Commission shall undertake the financial execution of operations carried out with Fund resources, with the exception of the Investment Facility and interest-rate subsidies, using the following main methods of management:

2.   As a general rule, the financial execution of the Fund resources by the Commission shall be decentralised.

In this instance, the execution duties shall be carried out by the ACP States in accordance with Article 35.

3.   In order to carry out the financial execution of the Fund resources, the Commission shall delegate its executive powers within its own departments. The Commission shall inform the ACP States and the ACP-EC Development Finance Cooperation Committee of this delegation of tasks.’;

(x)

Article 35 shall be replaced by the following:

‘Article 35

National Authorising Officer

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

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

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

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

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

(y)

Article 36 shall be replaced by the following:

‘Article 36

Head of Delegation

1.   The Commission shall be represented in each ACP State or in each regional grouping which expressly so requests, by a delegation under the authority of a Head of Delegation, with the approval of the ACP State or States concerned. Appropriate measures shall be taken in any case in which a Head of Delegation is appointed to a group of ACP States. The Head of Delegation shall represent the Commission in all spheres of its competence and in all its activities.

2.   The Head of Delegation shall be the main contact for ACP States and bodies or organisations eligible for financial support under the Agreement. He shall cooperate and work in close cooperation with the National Authorising Officer.

3.   The Head of Delegation shall have the necessary instructions and delegated powers to facilitate and expedite all operations under the Agreement.

4.   On a regular basis, the Head of Delegation shall inform the national authorities of Community activities which may directly concern cooperation between the Community and the ACP States.’;

(z)

Article 37 shall be replaced by the following:

‘Article 37

Payments

1.   For the purpose of effecting payments in the national currencies of the ACP States, accounts denominated in the currencies of the Members States or in euro may be opened in the ACP States by and in the name of the Commission with a national public or semi-public financial institution chosen by agreement between the ACP State and the Commission. This institution shall exercise the functions of National Paying Agent.

2.   The National Paying Agent shall receive no remuneration for its services and no interest shall be payable by it on deposited funds. The local accounts shall be replenished by the Commission in the currency of one of the Member States or in euro, based on estimates of future cash requirements, which shall be made sufficiently in advance to avoid the need for pre-financing by ACP States and to prevent delayed disbursements.

3.   (deleted)

4.   Payments shall be made by the Commission in accordance with the rules laid down by the Community and the Commission, where appropriate after the expenditure has been cleared and authorised by the National Authorising Officer.

5.   (deleted)

6.   The procedures for clearance, authorisation and payment of expenditure must be completed within a period of 90 days from the date on which the payment becomes due. The National Authorising Officer shall process and deliver the payment authorisation to the Head of Delegation not later than 45 days before the due date.

7.   Claims for delayed payments shall be borne by the ACP State or States concerned, and by the Commission from its own resources, for that part of the delay for which each Party is responsible in accordance with the above procedures.’.