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MEMO/01/29

Brussels, 6 February 2001

Commissioner Fischler signs Multi-Annual and Annual Financing Agreement in Prague.

Commissioner for Agriculture, Rural Development and Fisheries Franz Fischler signed on 5 February the Multi-annual Financing Agreement and the Annual Financing Agreement with the Czech Republic. For the first time, as budgetary procedures have now been completed in respect of the financial commitment for the year 2000, both agreements were signed on the same day. This brought the Czech Republic another step closer to making the pre-accession agriculture programmes fully operational. After today's signature, the implementation of the Sapard Programme will require conclusion of the Agreements and the adoption of the Commission Decision on the accreditation of the Sapard Agency. Mr Fischler expressed his content with the progress being made by the Czech Republic and stated: "The process of preparing for the implementation of the Sapard instrument has been a challenge both for the Commission and for the Czech Republic. Days such as today, however, convince me that we can achieve the Sapard objectives. " On the Annual Agreement, the deadline for spending EU-funds earmarked for Sapard in the 2000 budget is 31 December 2002. Commissioner Fischler said he intends to explore the possible justification and need for extending this deadline.

What remains to be done for the Czech Republic?

The Multi-annual Financing Agreement, setting out the rules for implementing Sapard, must be submitted to the Czech Parliament for ratification. It is only after this ratification that the Agreement will be concluded from the Czech side. The Annual Financing Agreement sets out the Community financial commitment for the year 2001 to the Czech Republic. The starting point for implementation of the programme depends very much on how long it takes to set up the Sapard Agency in the applicant country. As far as setting up the Sapard Agency is concerned, work is progressing in the Czech Republic. The subsequent accreditation is first of all a task to be carried out by the national authorities before the Commission can examine and decide on the conferral of management of aid. In the end these authorities have to construct the administrative machinery to operate Sapard on a decentralised basis. It depends therefore on the efforts made by these national authorities. When the formal act of accreditation and the supporting documentation is received by the Commission in English, the Commission will commence its formal examination of the structures and procedures at the National Fund and the Sapard Agency.

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 (2000-2006). It enshrines the three principles outlined in the Commission's communication of January 2000 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.

What is SAPARD?

Sapard aims to support the efforts 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, to contribute to the implementation of the acquis; secondly, 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 Euro, with the following indicative allocations:

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

Bulgaria

CzechEstoniaHungaryLithuaniaLatviaPolandRomaniaSloveniaSlovakiaTotal
52,12422,06312,13738,05429,82921,848168,683150,6366,33718,289520,000

Setting up the framework for an unprecedented initiative

To help to ensure that Sapard will work correctly in this radically new situation, an adequate legal framework, binding each applicant country and the Community is necessary. Support must comply with the principles applied to the common agricultural policy. The approved agricultural and rural development Programmes have taken account of this obligation. The support must be implemented in accordance with the Financial Regulation applicable to the Community budget and the principles of Council Regulation No. 1258/1999 which have been incorporated into the Multi-annual Financing Agreement. 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 applicant 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 help to ensure adequate control of public funds, this is worth the effort. By decentralising management, Sapard will give 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.

How have the EU and applicant 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 regulation setting out financial rules for implementing Sapard (Regulation 2222/2000), the draft was communicated to the applicant countries.

This consultation was repeated more intensively for the Multi-annual Financing Agreement, where several drafts were circulated to applicant countries to allow for their observations to be included in the text. While criticism may suggest that this slows down the process, such criticism takes a short-term view of the process and does not reflect awareness of the complexity of the process. Consultation and negotiation on the various issues helps to ensure that no decisions are taken that are later found to be unsuitable or inapplicable. This is beneficial for both parties. As this is an innovative process both for the Commission and the applicant countries, it is clear that there may be issues arising in the execution of the Programme that may require changes to the Multi-annual Financing Agreement. A mechanism is in place which allows the Annual Financing Agreement to make such changes which will of course be negotiated in advance with the applicant countries.

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. Applicant 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 uncharted territory for them.

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(1).

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.

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 accounts of the Sapard Agency and National Fund.

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(2)

    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(3)

    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(4)

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

    May 2000:    Circulation to applicant countries of draft regulation laying down financial rules for the implementation 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)(5).

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

    September 2000:Rural Development Programmes for Bulgaria, Poland, Hungary, Czech Republic, Slovenia and Latvia unanimously endorsed in STAR committee; these Programmes were adopted by Commission Decision on 20/10, 18/10, 18/10, 26/10, 27/10 and 25/10 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; the Programme was adopted by Commission decision on 12/12.

    November 2000:Commission decision adopting the text of the Multi-annual Financing Agreement laying down the detailed provisions for delegating management of the programme to the Sapard agencies in the CEECs and Annual Financing Agreement for 2000 and authorising Commissioner Fischler to sign the both agreements.

    December 2000: Global commitment of the year 2000 allocation in the Community Budget.

    December 2000: Signature of MFA with Bulgaria

    January 2001:  Signature of MAFA with Estonia, Latvia and Poland

Steps necessary to make Sapard operational now that the Multi-annual Financing Agreements have been signed

Conclusion of the Multi-annual Financing and Annual Financing Agreements. Commission decision conferring management of aid on Sapard agencies (responsible for paying and implementing the Programmes).

(1) Official Journal L 253 , 07/10/2000 p. 0005 0014  (2) Official Journal L 161 , 26/06/1999 p. 0087 - 0093  (3) Official Journal L 226 , 27/08/1999 p. 0023 - 0025  (4) Official Journal L 331 , 23/12/1999 p. 0051 - 0054  (5) Official Journal L 253 , 07/10/2000 p. 0005 -0014  


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