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Brussels, 29 November 2000

Farm aid : Go-ahead for € 520 million agreements with candidate countries

The European Commission today authorised Commissioner for Agriculture, Rural Development and Fisheries Franz Fischler to sign the Multi-annual and Annual Financing Agreements with the candidate countries. This is an important step in the process of providing the € 520 million worth pre-accession aid for agriculture and rural development (SAPARD(1)). The Multi-annual Financing Agreements lay down the detailed provisions for delegating the management of the rural development programmes to the candidate countries, covering the necessary financial control rules. This is the first time in the history of the EU that external aid will be managed on a fully decentralised basis, requiring an enormous legislative and administrative effort on both sides. Commenting on the decision, Commissioner Fischler said: "The ground that has been covered over the past year is remarkable". Rejecting criticism of delays, Commissioner Fischler insisted that implementing such a radical, innovative and unprecedented initiative inevitably takes more time than might have been expected. "The Commission is going as fast as possible. Setting up a fraud-proof structures may appear cumbersome, but the time invested now will bear fruit over the coming years. SAPARD is an important catalyst for change. Today we have taken a further step towards committing the EU-funds earmarked for the candidate countries.", he concluded.

What is SAPARD?

SAPARD aims to support the efforts being made by the Central and Eastern European applicant countries in the pre-accession period as they prepare for their participation in the common agricultural policy and the single market. It involves two major objectives. Firstly, it aims to contribute to the implementation of the acquis; secondly, it aims to solve priority and specific problems in the area of agriculture and rural development.

The overall budget in each year of the programme's seven-year run (2000-06) amounts to € 520 million, with the following indicative allocations:

SAPARD: annual indicative budget allocations (in million euro, at constant 1999 prices)



What is the role of the Multi-annual Financing Agreement?

The Multi-annual Financing Agreement lays down the Community management and control rules for SAPARD for the whole period of the programme, namely 2000-2006. It is based on the Commission's communication of January 2000(2) and enshrines the three principles outlined there, namely:

  • full decentralisation of programme management to an agency established under the responsibility of each country;

  • financing arrangements based on differentiated appropriations;

  • the application of the EAGGF Guarantee Section Clearance of Accounts procedure.

For details of the Agreement, see Annex I.

Setting up the framework for an unprecedented initiative

To ensure that SAPARD will work correctly in this radically new situation, it is necessary to establish an adequate legal framework, binding each applicant country and the Community. Support under SAPARD must comply with the principles applied to the common agricultural policy and be implemented in accordance with the Financial Regulation applicable to the Community budget. In addition, the Multi-annual Financing Agreement must address all relevant Community provisions due to the fact that prior to accession, no Community legislation is directly applicable in any of the candidate countries. As a result, the Multi-annual Financing Agreement has required immense legislative and administrative effort on both sides. While the process has been complicated, involving detailed procedures to ensure adequate control of public funds, the investment is worth the effort. By decentralising management, SAPARD will give the future members an opportunity to gain valuable experience in applying the mechanisms for management of rural development programmes. On a broader front, the investment made now will build skills that will be readily transferable to other structural fund activities and to other areas of Community policy. In addition, delegating responsibility will ease the management of the large number of small projects envisaged under SAPARD.

How have the EU and candidate countries collaborated in the process?

The SAPARD process has been characterised by open dialogue, frequent bilateral contacts and extensive consultation from the outset. These consultations have occurred in some instances in an unprecedented way. Prior to the Commission deciding on the provisions to be included in its financing regulation, the draft was communicated to the applicant countries. This consultation was repeated in an enhanced form for the Multi-annual Financing Agreement, where numerous drafts were circulated to candidate countries to allow for their observations to be included in the text. While criticism may suggest that this slows down the process, this can only be interpreted as a short-term view. Consultation ensures that no decisions are taken that are later found to be unsuitable or inapplicable. This is beneficial for the parties on both sides.

Has the procedure taken longer than expected?

It is difficult to determine how long a process should take, when that process has never been attempted before. It is true that due to the unorthodox nature of the process, there are quite a number of tasks to be accomplished. However, the intervals between the various stages have been very short, despite the fact that the work involves negotiations with ten third countries and inter-service consultation with many DGs. Given the scale of the task, the lack of precedent, the necessary sequencing - in other words, certain stages had to be completed before others could be started - the achievements to date are remarkable. If we compare one component of the SAPARD process where there is an equivalent within the Community - namely the time taken for Commission approval of Member State Rural Development Programmes - then the result is impressive. Candidate countries managed to have their programmes approved within the same time frame as the Member States. This is all the more noteworthy when we recall that this is unchartered territory for them.

What remains to be done?

Following the signature of the Multi-annual Financing Agreements by the Commission and the candidate countries, the candidate countries must have their SAPARD agency accredited. As such, the speed of the process in the coming months depends very much on the time taken to set up the SAPARD agency.

See Annex II for a detailed calendar of events

Annex I: Content of the Multi-annual Financing Agreement

The Agreement consists of seven sections, as follows:

    Section A: Financial Management: This section lays down the detailed provisions for the execution of SAPARD on a decentralised basis in each applicant country, reflecting to a large extent the financial implementing regulation adopted by the Commission in early June following a unanimous vote in the EAGGF committee(3).

    Section B: Management, Monitoring and Evaluation of the Programme: This section details the monitoring and evaluation requirements necessary to determine the effectiveness and efficiency of the component parts of the rural development programmes. The requirements are at least as strict as for Member States.

    Section C: General Provisions: on issues such as co-ordination with other instruments (for example, Phare and ISPA), taxation and customs, import and export rules.

    Section D: Quarterly and Annual Declarations of expenditure: this section details the forms to be completed and the rules to be respected in the declaration of expenditure on a quarterly and annual basis.

    Section E: Guidelines for Certifying Body: this section sets out the form, scope and contents of the certificate and report of the body performing the certification of the SAPARD Agency.

    Section F: Text of Community legislation referred to in Regulation (EC) No. 2222/2000 on financial rules for SAPARD adapted for this Agreement: This is a technical section that spells out in full the wording of all relevant Community legislation, adapted to fit the circumstances of SAPARD.

    Section G: Dispute settlement: this section details the procedure to be followed for recourse to an arbitration tribunal, in the event of a dispute.

Annex II: Calendar of events

June 1999: Adoption of Council Regulation (EC) No 1268/1999 of 21 June 1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the pre- accession period(4)

July 1999: Adoption of Commission Decision 1999/595/EC of 20 July 1999 on the indicative allocation of the annual Community financial contribution to pre-accession measures for agriculture and rural development(5)

December 1999: Adoption of Commission Regulation (EC) No 2759/1999 of 22 December 1999 laying down rules for the application of Council Regulation (EC) No 1268/1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the pre-accession period(6)

January 2000: Commission communication outlining the three principles for the financial management of SAPARD.

June 2000: Adoption of Commission Regulation (EC) No 2222/2000 of 7 June 2000 laying down financial rules for the application of Council Regulation (EC) No 1268/1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the pre-accession period (the Financial Implementing Regulation)(7).

July 2000: Draft of Multi-annual Financial Agreement circulated to candidate countries for the first time

September 2000: Rural Development Programmes for Poland, Hungary, Czech Republic, Slovenia, Latvia and Bulgaria unanimously endorsed in STAR committee; these Programmes were adopted by Commission Decision on 18/10, 18/10, 26/10, 27/10, 25/10 and 20/10 respectively.

October 2000: Rural Development Programmes for Estonia, Lithuania and Slovakia unanimously approved in STAR committee; the Programmes for Estonia and Slovakia were both adopted by Commission Decision on 17/11.

November 2000: Rural Development Programme for Romania unanimously approved in STAR committee;

November 2000: Commission decision authorising Commissioner Fischler to sign the Multi-annual Financing Agreements laying down the detailed provisions for delegating management of the programme to the SAPARD agencies in the CEECs.

The following stages must still be completed

Signature of Multi-annual Financing Agreements conferring full responsibility for the sound financial management of the Programme to the governments concerned

Ratification of Financing Agreement in national Parliaments of candidate countries

Commission decision accrediting the SAPARD agencies (responsible for paying and implementing the Programmes).

Signature of the annual Financing Agreement.

(1) Special Accession Programme for Agriculture and Rural Development

(2) The Financial implementing regulation - Commission Regulation (EC) No 2222/2000 of 7 June 2000 - implemented this communication. (Official Journal L 253 , 07/10/2000 p. 0005 0014)

(3) OJ L 253 , 07/10/2000 p. 0005 0014

(4) Official Journal L 161 , 26/06/1999 p. 0087 - 0093

(5) Official Journal L 226 , 27/08/1999 p. 0023 - 0025

(6) Official Journal L 331 , 23/12/1999 p. 0051 - 0054

(7) Official Journal L 253 , 07/10/2000 p. 0005 0014

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