2. For the least-developed, landlocked and island ACP States, the percentage referred to in paragraph 1 shall be 1%.
3. Where, following a natural disaster, a substantial fall in production of the product in question is recorded during the year preceding the year of application, the percentage referred to in paragraph 1 shall be calculated on the basis of the average export earnings from that product during the three years preceding the year of the disaster.
A substantial fall in production shall be taken to mean at least 50 % of the average production during the three years preceding the year of the disaster.
Article 197.
1. In order to implement the system, a reference level and a transfer basis shall be calculated for each ACP State and for exports of each product referred to in Article 187 (1) to the Community or other destinations as defined in Article 189.
2. The reference level shall be constituted by the average of export earnings during the period of the six calendar years preceding each year of application less the two years with the highest and lowest figures.
3. The transfer basis shall be constituted by the difference between the reference level and actual earnings in the calendar year of application, reduced by an amount corresponding to 4,5 % of the reference level. In the case of the least-developed ACP States, this percentage shall be 1%.
4. The reductions referred to in paragraph 3 shall not apply in the case of the least-developed or landlocked ACP States if the difference between the reference level and actual earnings is less than ECU 2 million, or in the case of island ACP States if this difference is less than ECU 1 million.
In no case shall the reduction of the difference between the reference level and actual earnings be greater than:
- 20% for the least-developed and for landlocked ACP States,
- 30% for other ACP States.
5. The amount of the transfer shall be the transfer basis after application, where relevant, of Articles 202 to 204 and 194,
Article 198.
1. Where an ACP State:
- begins processing a product traditionally exported in the raw state, or
- begins exporting a product which it did not traditionally produce,
the system may be put into operation on the basis of a reference level calculated over the three years preceding the year of application.
2. In the case of the ACP States accorded the derogation:
- referred to in Article 189 (2), the transfer basis shall be calculated by adding to the earnings from exports of the product or products concerned to the Community the earnings from exports of those products to other ACP States;
- referred to in Article 189 (3), the transfer basis shall be calculated according to the earnings from exports of the product or products concerned to all destinations.
Article 199.
1. In order to ensure that the system functions efficiently and rapidly, statistical cooperation shall be instituted between each ACP State and the Commission.
2. The ACP States shall notify the Commission of the annual statistical data specified in the joint declaration in Annex XLII.
3. This information must be sent to the Commission not later than 31 March in the year following that of application. Failure to do so shall result in the ACP State concerned losing all transfer rights in relation to the product or products in question for the relevant year of application.
Article 200.
The system shall be implemented in respect of the products listed In Article 187 where they are:
(a) released for home use in the Community, or
(b) brought into the Community under the inward processing arrangements in order to be processed.
2. The statistics to be used to carry out the calculations referred to in Article 197 shall be those calculated and published by the Statistical Office of the European Communities. :
3. In the case of ACP States accorded the derogation
(a) referred to in Article 189 (2), the statistics relating to exports of the product or products in question to other ACP States shall be the volume exported by the ACP State concerned multiplied by the average unit value of imports by the Community as calculated and published by the Statistical Office of the European Communities or, failing those, the statistics of the ACP State concerned;
(b) referred to in Article 189 (3), the statistics relating to exports of the product or products in question to all destinations shall be the volume exported by the ACP State concerned multiplied by the average unit value of imports by the Community as calculated and published by the Statistical Office of the European Communities or, failing those, the statistics of the ACP State concerned.
4. Should there be significant differences between the statistics of the Statistical Office of the European Communities and those of the ACP State concerned, consultation shall be held between that ACP State and the Commission.
Article 201.
No transfer shall take place if it emerges from the examination of the dossier to be undertaken by the Commission in conjunction with the ACP State concerned that the fall in earnings from exports to the Community is the result of measures or policies involving discrimination detrimental to the Community.
Article 202.
The transfer basis shall be reduced in due proportion to the fall in earnings from exports to the Community of the product in question if, after joint examination by the Commission and the ACP State concerned, it appears that such a drop is the consequence of trade-policy measures taken by the ACP State or through its economic operators with the aim of restricting supply; such reduction may entail the annulment of the transfer basis.
Article 203.
Should examination of the trend of the ACP State's exports, to all destinations, of production of the product in question in the ACP State concerned and of demand in the Community reveal significant changes, consultations shall take place between the Commission and that ACP State to determine whether the transfer basis is to be maintained or reduced, and, if so, to what extent.
Article 204.
In no case shall any transfer basis for a given product be greater than the corresponding amount calculated on the basis of the exports of the ACP State concerned to all destinations.
Article 205.
1. The Commission shall adopt a transfer decision on completion of the examination carried out in conjunction with the ACP State; this examination shall bear on the statistical data and the calculation of the transfer basis which may give rise to a payment.
2. For each transfer a transfer agreement shall be concluded between the Commission and the ACP State concerned.
Article 206.
1. The ACP State concerned and the Commission shall take such steps as are required to ensure that advances and transfers are made rapidly in accordance with the procedures laid down in Article 207.
2. Article 205 shall be applicable by analogy to advances.
Article 207.
1. Provided that the ACP State concerned has sent all the necessary statistical information by 31 March in the year following that of application, in accordance with Article 199 (3), the Commission shall notify each ACP State not later than 30 April following of its situation in respect of each of the products listed in Article 187 (2) exported by that State during that year.
2. The ACP State concerned and the Commission shall take all possible steps to ensure that the procedures referred to in Articles 201 to 203 are concluded not later than 30 June of the year in question. After this period has elapsed, the Commission shall notify the ACP States of the amount of the transfer resulting from appraisal of the dossier.
3. Without prejudice to Article 206 and not later than 31 July of the year in question the Commission shall take decisions concerning all transfers, except for those where consultations have not been concluded.
4. On 30 September of the year in question the Commission shall report to the Committee of Ambassadors on the progress made with the processing of all transfers.
Article 208.
1. In the event of a disagreement between an ACP State and the Commission over the results of the examinations or consultations referred to in Articles 201 to 203 and 199 (3), the ACP State concerned shall have the right to initiate, without prejudice to possible recourse to Article 352, a good offices procedure.
2. The good offices procedure shall be carried out by an expert appointed by agreement between the Commission and the ACP State concerned.
3. Within two months of this appointment, the conclusions of the procedure shall be communicated to the ACP State concerned and to the Commission, which shall take account of them in making the transfer decision.
The ACP State concerned and the Commission shall take all possible steps to ensure that the decision is taken not later than 31 October following receipt of the request,
4. The procedure shall not result in a delay in the processing of any other transfers for the same year of application.
Article 209.
1. Where application of Articles 196 and 197 gives rise to a transfer basis, the ACP State concerned shall, in the month following receipt of the notification referred to in Article 207 (1), send the Commission a substantial analysis of the sector recording the loss of earnings, the causes of the loss, the policies pursued by the authorities and the projects, programmes and operations to which the recipient State undertakes to allocate the resources in accordance with the objectives set out in Article 186 (2).
2. Should the recipient ACP State intend, as provided for in Article 186 (2), to allocate the funds to a sector other than that where the loss has occurred, it shall communicate to the Commission the reasons for this allocation.
3. Projects, programmes or operations to which the recipient ACP State undertakes to allocate the transferred resources shall be examined jointly by the Commission and the ACP State concerned.
4. Where, in the sector for which the transfer is destined, there is already an adjustment operation designed to restructure production and export activities or to achieve diversification, the resources shall be used to second these efforts and; where necessary, support any consistent reform policy in the sectors concerned.
Article 210.
When agreement is reached on the use of resources, the ACP State and the Commission shall sign a protocol setting up a framework of mutual obligations stipulating how the funds are to be used at the various stages of the operations agreed on.
Article 211.
1. The transfer shall be made in ecus upon signature of the transfer agreement referred to in Article 205 (2) into an interest-bearing account, for which presentation of two signatures, of the ACP State and the Commission, shall be required. Any interest shall be credited to this account.
2. The funds in the account referred to in paragraph 1 shall be mobilized as the operations specified in the protocol on the use of the funds are implemented, on condition that the provisions of Article 212 have been complied with.
3. The procedures laid down in paragraph 2 shall be applicable by analogy to any counterpart funds generated.
Article 212.
1. Within twelve months of the mobilization of resources the recipient ACP State shall send the Commission a report on the use which it has made of the funds transferred.
2. Should the report referred to in paragraph 1 not be presented within the time limit set or should it call for comment, the Commission shall send a request for substantiation to the ACP State concerned, which shall be obliged to reply thereto within two months.
3. Once the deadline referred to in paragraph 2 has expired, the Commission may, having referred the matter to the Council of Ministers and having duly informed the ACP State concerned, three months after completion of this procedure, suspend application of decisions on subsequent transfers until that State has provided the required information.
The ACP State concerned shall be notified of this measure immediately.
Chapter 2. Special Undertakings on Sugar
Article 213.
1. In accordance with Article 25 of the ACP-EEC Convention of Lomé signed on 28 February 1975 and with Protocol 3 annexed thereto, the Community has undertaken for an indefinite period, notwithstanding the other provisions of this Convention, to purchase and import, at guaranteed prices, specific quantities of cane sugar, raw or white, which originates in the ACP States producing and exporting cane sugar and which those States have undertaken to deliver to it
2. The conditions for the implementation of the aforementioned Article 25 have been laid down by Protocol 3 referred to in paragraph 1. The text of the Protocol is annexed to this Convention as Protocol 8.
3. Article 177 of this Convention shall not apply within the framework of the said Protocol.
4. For the purpose of Article 8 of the said Protocol the institutions established under this Convention may be used during the period of application of this Convention.
5. Article 8 (2) of the said Protocol shall apply should this Convention cease to be operative.
6. The declarations contained in Annexes XII, XXI and XXII to the Final Act to the ACP-EEC Convention of Lomé signed on 28 February 1975 are reaffirmed and their provisions shall continue to apply. These declarations are annexed as such to this Convention.
7. This Article and the Protocol 3 referred to in paragraph 1 shall not apply to relations between the ACP States and the French overseas departments.
Chapter 3. Mining Products: Special Financing Facility (Sysmin)
Article 214.
1. A special financing facility shall be set up for those ACP States whose mining sectors occupy an important place in their economies and are facing difficulties that are already perceived or foreseeable in the near future.
2. Its aims are to contribute towards establishing a more solid and wider basis for the development of the ACP States while supporting their efforts:
- to safeguard their mining production and export sectors by remedial or preventive action designed to alleviate the serious consequences for their economies of the loss of viability as a result of a decline in their production or export capacity and/or export earnings in the mining products sector following major technological or economic changes or temporary or unforeseeable disruptions beyond the control of the State concerned and of the enterprise managing the sector concerned. Particular attention shall be paid to adjusting the competitive situation of enterprises to changes in market conditions, or
- for States heavily dependent on exports of one mining product, to diversify and broaden the bases of their economic growth, notably by helping them complete development projects and programmes under way where these are seriously jeopardized owing to substantial falls in export earnings from that product.
3. In pursuing these objectives, this support:
- will be adapted to the economic restructuring needs of the ACP State concerned,
- will take into account at the time of its formulation and implementation the mutual interests of the Contracting Parties.
Article 215.
1. The special financing facility provided for in Article 214 shall be aimed at ACP States which export to the Community and which, during at least two of the four years preceding that of the request for aid, have derived either:
(a) 15% or more of their export earnings from one of the following products: copper (including cobalt), phosphates, manganese, bauxite and alumina, tin, iron ore, whether or not in agglomerate form, uranium; or
(b) 20% or more of their export earnings from all mining products (excluding precious minerals other than gold, oil and gas).
However, for least-developed, landlocked or island ACP States, the figure stipulated in (a) shall be 10 % and the figure stipulated in (b) shall be 12 %.
For the calculation of the thresholds referred to in (a) and (b) earnings shall not include those from mining products not covered by the system.
2. Recourse to the special financing facility shall be possible where, in the light of the aims referred to above:
(a) it is perceived or expected that the viability of one or more enterprises in the mining sector has been or is about to be seriously affected following temporary or unforeseeable difficulties - whether technical, economic or political - beyond the control of the State or undertaking concerned, and where such damage to viability leads to or may lead to a significant fall in revenue for the ACP State concerned - assessed in particular on the basis of a drop in production or export capacities of the product in question of around 10% - and/or a deterioration in its external trade balance.
Foreseeable damage to viability shall be characterized by the onset of deterioration of the means of production and its impact on the country's economy; or
(b) in cases under paragraph 1 (1), it is perceived that a substantial fall in export earnings from the mining product concerned, in relation to the average for the two years before the request, is seriously jeopardizing the completion of development projects and programmes under way. To be taken into consideration, such a fall in earnings must:
- be caused by technical, economic or political difficulties and not artificially provoked, directly or indirectly, by policies and measures of the ACP State or the economic operators concerned,
- result in a corresponding fall in total export earnings of approximately 10% at least in the year before that of the request.
The said difficulties shall refer to disruptions such as accidents, serious technical incidents, serious internal of external political events, major technological and economic changes or major changes in trade relations with the Community.
3. An ACP State may request financial aid under the special financing facility where the conditions set out in paragraphs 1 and 2 are met.
Article 216.
1. The aid referred to in Article 215 shall be used in pursuit of the aims of the facility as set out in Article 214 (2).
- Where maintenance or return to viability of the mining enterprise or enterprises affected is deemed possible and appropriate by the two parties, the aid shall be used to finance projects or programmes, including the financial restructuring of the enterprise or enterprises concerned, with a view to maintaining, re-establishing or rationalizing at a viable level the production and export capacity concerned.
- Where it is not thought possible by the two parties to maintain or restore viability, the aid shall be used to broaden the bases of economic growth through the financing of viable horizontal or vertical conversion or diversification projects or programmes.
- By common agreement, the aim of diversification may also be pursued where the economy is dependent on the mining product in question to a significant degree, even where: viability can be re-established.
- Where Article 215 (2) (b) is applicable, the objective of diversification shall be pursued through financial assistance to aid the completion of development projects and programmes under way outside the mining sector which are in jeopardy.
2. Any decision to allocate funds to projects or programmes shall take due account of economic interests and the social implications of such aid in the ACP State concerned and in the Community and will be adapted to the economic restructuring needs of that ACP State.
In the case of requests presented under Article 215 (1) (b), the Community and the ACP State concerned shall jointly and systematically seek to establish the scope and the terms of any aid accorded in such a way that such aid does not injure competing Community mining production.
The consideration and appraisal of these factors shall be part of the analysis referred to in Article 217 (2).
3. Special attention shall be accorded to:
- processing and transport operations, notably at regional level, and the proper integration of the mining sector in the country's overall economic and social development,
- preventive operations to minimize any disruptive effects by adapting technology, improving the technical and managerial skills of local staff and adapting the skills of local staff to enterprise management techniques,
- stepping up the ACP States' scientific and technical capacity for the production of new materials.
Article 217.
1. The request for aid must include information on the nature of the problems encountered, the perceived or expected consequences of the disruption both at national level and at the level of the mining enterprise or enterprises affected and indications in the form of an identification sheet on the measures or actions undertaken or desired to remedy them.
The request shall be made as soon as these consequences are identified and within a period not exceeding 12 months for making up the file.
2. Prior to any Community decision a technical, economic and financial analysis shall be made systematically of the mining sector concerned in order to assess both the eligibility of the request and the project or programme to be undertaken to utilize the aid. That analysis, which shall be very detailed, shall, in order to identify the operation, take particular account of world market prospects and, without prejudice to the first paragraph of Article 216 (2), the situation of the Community market in the products concerned. It shall also include an analysis of the possible implications of such an operation for the competing mining products of Member States and the possible implications of its non-implementation for the ACP State concerned. Its objective shall be to ascertain:
- whether the viability of the means of production concerned has been or is likely to be damaged and whether that viability can be restored, or whether recourse to diversification measures is more appropriate, or
- whether the fall in export earnings referred to in Article 215 (2) (b) seriously jeopardizes the implementation of development projects and programmes under way.
The analysis shall be carried out in accordance with the procedures for financial and technical cooperation. It shall require the close cooperation of the ACP State and economic operators concerned.
3. A single decision shall be taken on eligibility and the financing proposal.
The Community and the ACP State concerned shall take the necessary steps to expedite appraisal of requests so that the appropriate action may be taken swiftly.
Article 218.
1. If necessary, technical assistance for setting up and supervising the project may be financed under the facility.
2. The procedures applicable to such assistance and the detailed rules for its implementation shall be those laid down in this Convention for development finance cooperation.
Article 219.
1. For the purposes specified in Article 214 and for the period of application of the Financial Protocol annexed to this Convention, the Community shall allocate the overall amount provided for in that Protocol to cover all its commitments under this special financing facility. The amount allocated to the facility shall be managed by the Commission.
2. (a) This overall amount shall be divided into a number of equal annual instalments corresponding to the number of years of application. Each year, except the last, the Council of Ministers, on the basis of a report submitted to it by the Commission, may authorize the advance use of up to 50% of the following year's instalment where required.
(b) Any balances remaining at the end of each year of application of the Financial Protocol annexed to this Convention, except the last, shall be carried over automatically to the following year.
(c) Consequently, the resources available for each year of application will be made up of the following elements:
- the annual instalment, less any amounts used under (a);
- the sums carried over under (b);
(d) If the resources available for any year of application are insufficient, the amounts provided for shall be reduced accordingly, without prejudice to subparagraphs (a), (b) and (c).
Before expiry of the period of application of the Financial Protocol, the Council of Ministers shall decide on the allocation of any balances remaining from the overall amount.
3. The amount of the aid provided for in Article 215 shall be determined by the Commission in the light of the funds available under the special financing facility, the nature of the relevant projects and programmes, the possibilities for cofinancing and the relative importance of the mining. industry concerned for the economy of the ACP State.
4. Under no circumstances may a single ACP State be eligible for more than 35 % of the resources available as a result of the application of paragraph 2 (c). The rate shall be 15 % for aid under Article 215 (1) (b).
5. Aid accorded to an ACP State under the special financing facility may be on-lent by that State to the final borrower on different financial terms which shall be established in the financing decision and shall result from an analysis of the aid project conducted on the basis of the usual economic and financial criteria for the type of project planned.
6. The analysis referred to in Article 217 shall be financed from resources of the facility.
7. In exceptional circumstances arising out of an emergency, confirmation and proof of which will have to be provided initially by the analysis, an ACP State which so requests may be granted an advance by way of partial prefinancing of the project or programme which it precedes.
Title III. DEVELOPMENT FINANCE COOPERATION
Chapter 1. General Provisions
Section 1. Objectives
Article 220.
The objectives of development finance cooperation shall be, through the provision of adequate financial resources and appropriate technical assistance, to: