Explanatory Memorandum to COM(2018)460 - Neighbourhood, Development and International Cooperation Instrument

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Reasons and objectives

This proposal is made in the context of the Multiannual Financial Framework (MFF) 2021-2027 as outlined in the communication ‘A modern Budget for a Union that Protects, Empowers and Defends – The Multiannual Financial Framework 2021-2027’1 from the Commission to the European Parliament, the European Council and the Council, the European Economic and Social Committee and the Committee of the Regions. The communication sets the main priorities and overall budgetary framework for EU external action programmes under the heading ‘Neighbourhood and the World’, including the establishment of the Neighbourhood, Development and International Cooperation Instrument.

The objective of the Neighbourhood, Development and International Cooperation Instrument is to uphold and promote the Union’s values and interests worldwide in order to pursue the objectives and principles of its external action, as laid down in Article 3(5), Articles 8 and 21 of the Treaty on European Union (TEU).

The challenges that need to be tackled by external action have increased in recent years. The world has become characterised by rising fragility, brought about by several crises in the EU’s neighbourhood and beyond. Regional conflicts, terrorism, economic inequalities and growing migratory pressures, are all part of this new reality compounded by population growth, climate change and environmental degradation. At the same time, while poverty levels have declined globally, the number of people living in poverty continues to be a major problem, including in emerging economies. While significant progress has been achieved by some partners, others remain locked in fragile situations.

In the Multiannual Financial Framework 2014-2020, a number of financing instruments coexist under the Global Europe heading, most of which will expire on 31 December 2020. Their purpose varies within the broad objectives of the EU’s external action, including:

– poverty reduction and sustainable development (Regulation (EU) 233/2014

establishing the Development Cooperation Instrument),

– promoting the Union’s strategic interests (Regulation 234/2014 establishing the

Partnership Instrument),

– assistance for the Union’s neighbourhood (Regulation (EU) 232/2014 establishing

the European Neighbourhood Instrument),

– the protection of human rights (Regulation (EU) 235/2014 establishing the European

Instrument for Democracy and Human Rights worldwide),

– crisis response, conflict prevention and peace-building activities in partner countries

(Regulation 230/2014 establishing the Instrument contributing to Stability and Peace),

– the promotion of a high level of nuclear safety (Regulation (EURATOM) 237/2014

establishing the Instrument for Nuclear Safety Cooperation),


COM (2018) 321 final

– support for restoring a sustainable financial situation while encouraging economic

adjustment reforms (macro-financial assistance)2,

– support of small and medium-sized enterprises in targeted third countries and the

development of social and economic infrastructure and support of projects related to climate change (Decision (EU) 2018/412 amending Decision No 466/2014/EU on the external lending mandate),

– a guarantee fund for external action (Regulation (EC/EURATOM) 480/2009), and

– a European Fund for Sustainable Development, its Guarantee and its Guarantee Fund

(Regulation (EU) 2017/1601).

The Common Implementing Regulation (Regulation (EU) 236/2014) laying down common rules and procedures for the implementation of the EU instruments for financing external action is also due to expire.

The 11th European Development Fund3, although currently funded outside the EU budget, is one of the major external financing instruments, expiring at the end of 2020. It aims to ensure cooperation with African, Caribbean and Pacific States, contracting parties to the Cotonou Partnership Agreement, and with the Overseas Countries and Territories.

In line with the Communication ‘A new, modern Multiannual Financial Framework for a European Union that delivers efficiently on its priorities post-2020’4 and as concluded in the impact assessment5 that accompanies this Regulation, all the above-mentioned instruments should be streamlined into one broad instrument, except for the macro-financial assistance grants and part of the Instrument for Nuclear Safety Cooperation6.

Recent reviews and evaluations7 of the external instruments have shown their added value and relevance. However, they have also highlighted opportunities for improvements, in particular the need to simplify ways of working and to enable the EU to respond to unforeseen circumstances with greater flexibility. The lessons learned taken together with the growing challenges have prompted the Commission to modify the architecture of the external financing instruments, and incorporate the activities currently financed by the European Development Fund in the budget. Through this proposal the EU will continue to be able to play an active role in promoting human rights, stabilisation, development, security, fighting root causes of irregular migration, trade, the fight against climate change and the protection of the environment among other issues. However, it will be able to do so in a more comprehensive way while providing more flexibility to move resources to where they are needed as the international context changes.

This proposal provides for a date of application as of 1 January 2021 and is presented for a Union of 27 Member States, in line with the notification by the United Kingdom of its intention to withdraw from the European Union and Euratom based on Article 50 of the Treaty on European Union received by the European Council on 29 March 2017.


Macro-financial assistance is a financial instrument used on a case-by-case basis to help countries that

are mainly geographically close to the EU dealing with serious balance-of-payments difficulties.

Internal Agreement on the 11th European Development Fund - OJ L 210, 6 August 2013, p. 1; Council

Regulation (EU) 2015/322 on the implementation of the 11th European Development Fund; and Council

Decision (EU) 2015/334 amending the internal Agreement.


COM/2018/092 final

SWD (2018) 337.


Nuclear-related activities require a specific legal basis and their adoption follows a specific procedure

under the Euratom Treaty.




Consistency with existing policy provisions

This proposal provides an enabling framework through which external action policies and international obligations can be implemented. The international obligations include the 2030 Agenda for Sustainable Development8, the Paris Agreement on Climate Change9, the Addis Ababa Action Agenda10, the Sendai Framework for Disaster Risk Reduction (2015-2030)11 and UN Security Council Resolution 2282 (2016) on sustaining peace12. Within the EU, the policy framework includes the Treaty provisions on external action, which are further detailed through the EU Global Strategy on Foreign and Security Policy13, the new European Consensus on Development14, the renewed EU-Africa Partnership15 and the reviewed European Neighbourhood Policy16, amongst other policy documents17. The Regulation will also constitute the framework for implementing the successor partnership to the current Cotonou Agreement18, which establishes an association and partnership between the members of the African, Caribbean and Pacific Group of States, and the European Union and its Member States.

Consistency with other Union policies

When implementing this Regulation, consistency with other areas of external action and with other relevant EU policies will be ensured, together with policy coherence for development19. As reflected in the 2030 Agenda, this means taking into account the impact of all policies on sustainable development at all levels — nationally, within the EU, in other countries and at global level.

Moreover, synergies with actions under other EU programmes should be sought, in order to maximise the impact of combined interventions. Interactions and complementarity with such programmes should allow for an enhanced Union impact. Actions funded under this proposal should be consistent with those carried out under the Instrument for Pre-Accession III20, the Decision on Overseas Countries and Territories21, the European Instrument for Nuclear Safety







13 14


15 16


18 19 20





Adopted by the Security Council at its 7680th meeting, on 27 April 2016.

www.securitycouncilreport.org/un-documents">www.securitycouncilreport.org/un-documents. https://europa.eu/globalstrategy/en/global-strategy-foreign-and-security-policy-european-union https://ec.europa.eu/europeaid/sites/devco/files/european-consensus-on-development-final-20170626_en.pdf



Inter alia the Arctic policy (JOIN(2016) 21 final, Joint Communication to the European Parliament and the Council, 'An integrated European Union policy for the Arctic' of 27 April 2016) and the Black Sea Synergy (COM(2007) 160 final, Communication from the Commission to the Council and the European Parliament, "Black Sea Synergy – A New Regional Cooperation Initiative", 11 April 2007). https://ec.europa.eu/europeaid/regions/african-caribbean-and-pacific-acp-region/cotonou-agreement_en https://ec.europa.eu/europeaid/policies/policy-coherence-development_en


COM (2018) 465 final Proposal for a Regulation of the European Parliament and of the Council establishing the Instrument for Pre-accession Assistance (IPA III)

COM(2018) 461 final Proposal for a Council Decision on the Association of the Overseas Countries and Territories with the European Union including relations between the European Union on the one hand, and Greenland and the Kingdom of Denmark on the other ('Overseas Association Decision').



to complement the Neighbourhood, Development and International Cooperation Instrument on the basis of the Euratom Treaty22, the common foreign and security policy and the newly proposed European Peace Facility23 which is financed outside the EU budget. Humanitarian aid as set out in Article 214 of the Treaty on the Functioning of the European Union will not be funded under this proposal; humanitarian aid activities will continue to be funded on the basis of the Humanitarian Aid Regulation24.

The External Action Guarantee, financed by this Regulation and IPA III, will also cover the provisioning for macro-financial assistance to address balance of payments crises in relevant countries. The provision of the External Action Guarantee for macro-financial assistance should be commensurate to address the political challenges and economic instability of these countries, taking as a point of reference the annual lending volume agreed in the Mid-term Review of the Multiannual Financial Framework 2014-2020. This non-programmable support should be complementary to other assistance modalities laid down in this Regulation.

Funding from this Regulation should also be used to finance actions related to learning mobility to, from or between third countries under the Erasmus programme, as well as cooperation and policy dialogue with those countries, in education and in culture in a way that is consistent with the Erasmus Regulation and the Creative Europe Regulation.


Legal basis

This proposal is based on Articles 209, 212 and 322 of the Treaty on the Functioning of the European Union. It is presented by the Commission in accordance with the procedure laid down in Article 294 of the Treaty on the Functioning of the European Union.

Part Five, Title III, Chapters 1 and 2 of the Treaty on the Functioning of the European Union, provides the legal framework for cooperation with partner countries and regions.


The EU is in a unique position to deliver external assistance for a number of reasons. Its status as a supranational entity brings with it political influence and consequent leverage. The EU has a global presence through its delegations, which ensures a vast network of information on developments affecting countries worldwide. The EU is also a party to most multilateral processes aiming at addressing global challenges. This allows the EU to be constantly aware of new needs and problems and, therefore, to reallocate resources accordingly. Complementarities between EU action and the actions carried out by the Member States are increasing. This enhances dialogue and cooperation with partner countries, which is increasingly channelled through joint programming with Member States.


The EU is also able to complement Member States activities in dealing with potentially dangerous situations or in the event of particularly costly interventions. In some areas where





COM(2018) 462 final Proposal for a Council Regulation establishing a European Instrument for

Nuclear Safety complementing the Neighbourhood, Development and International Cooperation

Instrument on the basis of the Euratom Treaty.


C(2018) 3800 final Proposal of the High Representative of the Union for Foreign Affairs and Security

Policy to the Council for a Council Decision establishing a European Peace Facility.

Council Regulation (EC) No 1257/96 of 20 June 1996 concerning humanitarian aid (OJ L 163,

2.7.1996, p.


Member States are not active, the EU remains the main, and sometimes the only, actor to intervene. This is the case, for instance, in sensitive contexts such as the defence of human rights and electoral observation missions.

The EU has the opportunity to establish dialogue and cooperation with international and regional organisations, for example with the group of ACP countries and the African Union.


The EU can provide added value based on the volume of resources channelled through its instruments, its relatively flexible modes of management and the predictability of resources

over the

period of the Multi-annual Financial Framework.

The EU has significant expertise in certain fields originating from the history of Europe itself (for instance, regional integration and democratic transition) and from successful policies (such as expertise in food security gained through the common agricultural policy and the common fisheries policy, and in the technical standards of the Single Market). It has a recognised international reputation as a peace and conflict prevention actor and as an active supporter of free elections and human rights.


In line with the principle of proportionality, the proposed Regulation does not go beyond what is necessary to achieve its objectives.


of the instrument

In accordance with Articles 209 and 212 of the Treaty on the Functioning of the European Union, which set out the ordinary legislative procedure to be used to adopt measures for implementing cooperation with third countries, the proposal takes the form of a Regulation, ensuring its uniform application, binding nature in its entirety and direct applicability.






Retrospective evaluations/fitness checks of existing legislation

The mid-term review report25 adopted by the Commission on 10 of the external financing instruments26, the ex post evaluation reports on macro-financial assistance and the mid-term review on the European Investment Bank external lending mandate27 all concluded that the external financing instruments were, overall, fit for purpose and that positive trends were emerging in relation to the achievement of objectives. The reports show that more resources are needed for external financing instruments because they have been stretched to their financial limit.


The mid-term review report COM(2017) 720 final, was based on ten staff working documents, one per instrument (see list below), which in turn were based on ten independent evaluations. The mid-term report, the staff working documents and the independent evaluations can be found at here: https://ec.europa.eu/europeaid/public-consultation-external-financing-instruments-european-union_en The 10 instruments were the: Development Cooperation Instrument (DCI); European Development Fund (EDF); European Neighbourhood Instrument (ENI); Instrument for Pre-Accession (IPA II); Instrument contributing to Stability and Peace (IcSP); European Instrument for Democracy and Human Rights (EIDHR); Partnership Instrument (PI); Instrument for Nuclear Safety Cooperation (INSC); Greenland Decision (GD); and Common Implementing Regulation (CIR). eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016DC0584



The instruments set the scope, objectives and procedures for implementing the policies. The mid-term review report has shown that their enabling nature allows them to cover most needs and goals of EU external action. They would benefit from better reflecting a number of developments such as: the new policy framework including the universal coverage of the 2030 Agenda, the migration/refugee crisis, and the external projection of internal policies. In addition, more consideration needs to be given to the links between development and security and the overall level of ambition for peace and security in external action.

Introducing the principle of graduation28 in certain instruments (i.e. the Development Cooperation Instrument) left a gap in the EU’s ability to cooperate with upper middle income countries through bilateral cooperation. As some situations in those countries may call for such support (e.g. post-crisis situations), it was found that the EU should find innovative ways of cooperation , as set out in the new European Consensus on Development29 with more advanced developing countries and strategic partners, in line with the universal coverage of the 2030 Agenda.

Promoting fundamental values and human rights is at the core of the instruments. However, there were difficulties in promoting and taking this agenda forward in some countries, and the space for civil society organisations was found to be shrinking in many countries. This makes it challenging to work on these issues and highlights the tension between promoting the human rights agenda versus partners’ own priority interests.

In the current context of multiple crises and conflicts, the EU needs to be able to react swiftly to changing events. However, for certain instruments, responsiveness was hindered by a lack of financial flexibility. When new priorities emerged such as the migration/refugee crisis, problems were encountered trying to reallocate funds within the instruments under the budget as large quantities had been tied up in long-term programmes not allowing enough margin. As stated in the mid-term review report, flexibility needs to be enhanced

Consistency is needed between an instrument's component parts, between different instruments and with donors. Overall, the mid-term review report notes mixed findings on coherence. In terms of coherence within the instruments, the findings were satisfactory. There was a certain level of consistency between the instruments but the multiplicity of programmes sometimes led to overlapping actions, in particular complex cooperation with more advanced developing countries. In addition, the interplay between geographic and thematic approaches sometimes resulted in inconsistent responses at country level. Feedback from EU delegations showed that they found it difficult to manage and take advantage of complementarities and to create synergies between the instruments. Overall, it was considered that the EU was missing opportunities for coordinated strategies for a given country/region.

In terms of consistency with Member States, the review found that there was potential for joint programming to be further strengthened. However, this would require more commitment in certain cases both from partner country governments and from Member States.

The mid-term review report points to positive trends emerging in relation to achieving results. However, difficulties in measuring achievements were noted. There was often limited information on monitoring systems referred to in the instruments. There was a lack of data (including baselines) to measure if the instruments were on track to meet some of their

28 In current EU cooperation, ‘graduation’ means that upper middle income countries are no longer eligible for EU bilateral cooperation.

29 Points 91-93.

objectives (particularly the high-level ones), and an understanding that many external factors (e.g. partner country policies and other donors) influence achievement of the objectives.


terms of mainstreaming EU priorities, significant progress was noted across existing



In terms of mainstreaming EU

instruments in the areas of climate change , while more needs to be done to address the scale of other environmental challenges such as biodiversity loss and depletion of natural resources. Mainstreaming human rights, including gender equality and women’s empowerment, was considered in most cases to be ‘work in progress’, with partner governments sometimes showing a lack of interest in, or resistance to, these areas.

While overall organisational performance was found to be efficient, some actors considered that the implementation of some instruments was administratively burdensome.

In terms of leverage, the External Investment Plan has been able to attract substantial private investment for viable business proposals designed to respond to sustainable development needs, with limited public funds. The European Fund for Sustainable Development guarantee contributes to increasing the investment needed in partner countries including in high-risk areas and sectors and has experienced a promising start. The European Fund for Sustainable Development Plus (EFSD+) and the External Action Guarantee should continue building on this positive experience.





drafting the evaluation documents that fed into the mid-term review report, three types of consultations with stakeholders were held. Evaluators carried out some one thousand structured or semi-structured interviews with EU officials and representatives from EU institutions, Member States and partner countries. Several technical workshops were held to present and discuss the draft evaluations with participants from the European Parliament, Council working groups, Member States committees, and civil society organisations and local authorities. An open public consultation was held in 201731. It aimed at gathering feedback from stakeholders on the findings emerging from the evaluations of the instruments and on the future external financing instruments after 202032.

The main messages emerging from the stakeholders consulted are summarised below.

Flexibility: Stakeholders agreed that the new financing instruments should be more flexible in responding to unforeseeable challenges and crises. In particular, they underlined the need to make it easier to shift funds across regions and between aid modalities. However, it was also underlined that increasing flexibility should not come at the cost of less predictability, weaker country ownership and less focus on achieving long-term development objectives. To ensure flexibility and predictability, some respondents argued in favour of having sufficient reserves.

Coherence: Stakeholders considered it necessary to ensure greater consistency between the internal and external policies of the EU, and between the external instruments themselves. Some emphasised the need to strengthen complementarity and synergy between geographical and thematic instruments. Others argued that the Sustainable Development Goals provide the



31 32

For example, 11th EDF climate contributions increased from 3.3% in 2014 to 23.3% in 2016 and DCI climate change contributions increased from 17.7% in 2014 to 24.9% in 2016. Source: Indicator 12b, EU international cooperation and development results framework with input from the OECD DAC Creditor Reporting System.

https://ec.europa.eu/europeaid/public-consultation-external-financing-instruments-european-union_en For more information on the public consultation see https://ec.europa.eu/europeaid/public-consultation-external-financing-instruments-european-union_en

most appropriate basis for increasing consistency between internal and external policies. Most recommended that the EU take a leading role in improving complementarity between various stakeholders, both inside and outside the EU.

Some respondents highlighted the risk of overlap whereby the same policy objectives are funded by multiple instruments. Respondents also called for clear delineation of instruments, while underlining the need to ensure that geographic and thematic programmes take advantage of cross-sectoral synergies and linkages between them.

Complementarity: On the structure of future instruments, stakeholders agreed that combining geographic and thematic programmes brings positive results. They emphasised that the value of geographically structured instruments lies in their capacity to address the specific needs of partner countries in a tailored manner. This is crucial given the diversity of the challenges and needs across these countries. Global, targeted interventions offered by instruments such as the Partnership Instrument and the Instrument contributing to Stability and Peace was also appreciated by stakeholders.

Simplification: The EU was strongly encouraged to further simplify the overall architecture of the instruments. The EU should also continue its efforts to simplify cumbersome administrative and financial procedures. Civil society and local authorities emphasised that procedures and rules currently in place have important implications for their ability to become more involved in development cooperation.

Leverage: Stakeholders agreed that innovative financial instruments can play an important role in leveraging public and private financing for EU external assistance. The positive findings on the leverage effects and financial additionality of such instruments in the recent evaluation on blending33 are considered encouraging. However, civil society respondents raised concerns about private sector priorities overriding poverty reduction objectives in partner countries.


This proposal

responds to most of the concerns expressed by stakeholders.

External expertise

The mid-term review report and associated staff working documents were largely based on a set of independent evaluation reports conducted between 2016 and 2017 (one evaluation per instrument). At the same time, an independent report was also produced on the set of external action instruments covered by the mid-term review report, drawing key lessons and messages from them 34.

Beyond these recent reports, the OECD Development Assistance Committee peer review of the EU’s development cooperation in 201235 came up with a set of recommendations with regard to the architecture, rules and procedures of the EU's external financing instruments. For example, the OECD called on the EU to further simplify and modernise cooperation, by reducing the number of budget items, aligning the rules of the Development Cooperation Instrument and European Development Fund, streamlining approval procedures and increasing consistency between regional and thematic programmes. The EU was asked to


33 34


See https://ec.europa.eu/europeaid/evaluation-blending_en

See https://ec.europa.eu/europeaid/public-consultation-external-financing-instruments-european-



become more effective, timely and flexible both at programme level and across the set of instruments. The latter was particularly sought after in situations of fragility and crisis, in which the OECD saw significant room for improvement.

Impact assessment

In 2018 the Commission carried out an impact assessment36 covering the external action heading ‘Global Europe’ under the 2014-2020 Multi-annual Financial Framework focusing on the major changes proposed for external action, including streamlining several instruments into one broad instrument and the integration of the activities currently financed by the European Development Fund into the EU budget.

The analysis concluded that the advantages of not continuing to finance development activities through the European Development Fund outside the EU budget would outweigh the disadvantages as long as certain pre-conditions could be met. These included:

– the amount allocated to external action should not be less than the sum of the EDF

and the other external financing instruments combined;

– the flexibilities of the EDF should be transferred to the extent possible to the EU


budget; and

– the military operations financed under the European Development Fund’s African

Peace Facility should continue through another off-budget mechanism – the European Peace Facility, which is the object of a separate proposal.

The impact assessment also concluded that most instruments aside from those with a very specific nature such as humanitarian aid with its principle of neutrality could be merged in one instrument, namely: the Common Implementing Regulation, Development Cooperation Instrument, European Development Fund, European Fund for Sustainable Development, External Lending Mandate, European Neighbourhood Instrument, European Instrument for Democracy and Human Rights, Guarantee Fund, Instrument contributing to Stability and Peace, and Partnership Instrument. Those instruments that should remain separate are: the instrument for pre-accession assistance; humanitarian aid; the common foreign and security policy budget; overseas countries and territories including Greenland; the EU’s Union Civil Protection Mechanism; the EU aid volunteers scheme; support for the Turkish Cypriot community; the Emergency Aid Reserve; and the new European Peace Facility.

As noted by the Commission37

noted by the Commission and supported by feedback from partners during the open public consultation, the current architecture of the external financing instruments is too complex. Streamlining a number of instruments into one broad instrument would provide an opportunity to rationalise their management and oversight systems and so reduce the administrative burden for all stakeholders. Having a simplified oversight system would allow the relevant institutions to have a better, more comprehensive view of the EU’s external expenditure.


A broad instrument would provide a more geographically and thematically comprehensive approach, facilitating the implementation of different policies in a trans-regional, multi-


36 37

SWD (2018) 337.

In particular, in the ‘Reflection paper on the future of EU finances’ (June 2017), and the

Communication from the Commission to the European Parliament and to the Council (February 2018).

sectoral and global way. The EU would facilitate coherent responses and synergies, breaking down thematic and geographic silos.

Overlaps would be eliminated, in particular those between the current Partnership Instrument and Development Cooperation Instrument, in relation to innovative cooperation with more advanced development countries, and between the geographic and thematic programmes (i.e. the European Development Fund geographic programmes and the Development Cooperation Instrument thematic programmes).

On 25 April 2018, the impact assessment was examined by the Regulatory Scrutiny Board and received a positive opinion with reservations38 on the understanding that the assessment should be adjusted in order to integrate the Board’s recommendations on certain aspects. As a result, the assessment was revised to:

– provide more information on the governance structure of the new instrument,

including information on decision-making procedures;

– further explain several funding issues, including the funding baseline, the ring-


fencing for regions and thematic areas and the contribution key of Member States to the European Development Fund; and

– elaborate how the future monitoring and evaluation systems would work.

The Board’s opinion and the associated modifications made to the impact assessment are further described in annex 1 of the impact assessment.


A priority for the Commission across the Multiannual Financial Framework is to simplify its regulatory environment.

Streamlining a number of instruments within one broad instrument will provide an opportunity to rationalise management and oversight systems, and so reduce the administrative burden for EU institutions and Member States. Instead of focusing on multiple programming processes, debates would be more focused on political objectives and engagement with external partners. In addition, actions that receive cumulative funding from different Union programmes shall be audited only once, covering all involved programmes and their respective applicable rules.

Simplification does not mean there would be less scrutiny or accountability. The inter-institutional balance would be fully preserved. Rather, the budgetary and scrutiny powers of the European Parliament would be extended by the incorporation of the activities currently financed by the European Development Fund into the EU budget.

In terms of aligning rules, incorporating provisions from the Common Implementing Regulation will give the new instrument a coherent set of principles across all its component parts and will make it easier to understand for partners and implementing agents.

Fundamental rights

The EU is founded on a strong engagement to promote and protect fundamental rights, human rights, democracy and the rule of law. It actively supports these rights and principles within its borders, but also when engaging in relations with third countries.

38 Placeholder

This Regulation replaces the existing European Instrument for Democracy and Human Rights and supports interventions in the area of human rights, fundamental freedoms and democracy in third countries. The proposal is also designed to support civil society as an effective force for political reform and defence of human rights.


In its Communication of 2 May 201839, the European Commission proposed to allocate EUR 89 200 000 000 (in current prices) to the Neighbourhood, Development and International Cooperation Instrument for 2021-2027.


Contribution of the proposed Regulation to the Union commitment to fight

climate change

In the framework of the commitments taken in the Paris Agreement, and the United Nations Sustainable Development Goals, this Regulation should contribute to mainstream climate action in the Union policies. Fighting climate change is among the greatest challenges the world is facing and where the need for national and international intervention action is urgent. In this context, the objective of the Union is to address at least 25% of its budget to fighting climate change. In order to contribute to this objective, actions under this Regulation are expected to contribute 25% of its overall financial envelope to climate objectives.

Implementation plans and monitoring, evaluation and reporting arrangements

The Commission will regularly monitor its actions and review progress made towards delivering results. In line with paragraphs 22 and 23 of the Inter-institutional Agreement of 13 April 201640, where the three institutions confirmed that evaluations of existing legislation and policy should provide the basis for impact assessments of options for further action, the Commission will carry out an interim and a final evaluation. The evaluations will assess the Instrument’s effects on the ground based on the relevant indicators and an analysis of the degree to which the Instrument can be deemed relevant, effective, efficient, provides enough EU added value and is coherent with other EU policies. The evaluations will include lessons learned to identify any problems or potential to further improve the actions or their results and to help maximise their impact.

The conclusions of the evaluations accompanied by observations will be communicated to the European Parliament and to the Council.

Progress will be monitored on the basis of indicators aligned with the objectives of the proposal. From 2022 onwards, the Commission will send the European Parliament and the Council an annual report on the achievement of the objectives of this Regulation.

Evaluations will be carried out in a timely manner to feed into the decision-making process. The Neighbourhood, Development and International Cooperation Instrument should be evaluated once there is sufficient information available on its performance.

39 COM (2018) 321, 2.5.2018.

40 Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making of 13 April 2016; OJ L 123, 12.5.2016, p. 1–14.

Geographic scope and participation of third countries

The proposed Regulation has a worldwide geographic scope. For this reason, a variety of actors from Member States and from outside the Union may have access to its funds and/or become partners to implement them.

As regards recipients of funds outside the Union, entities from developing countries and territories, which are the main beneficiaries of this Regulation, are eligible for Union funding. Other third countries may also be eligible, subject to the conditions laid down in Article 24 of this proposal, which are in line with the international commitments of the Union on aid effectiveness, notably the OECD Untying Recommendation41 and the Nairobi High Level Forum in 2016. Article 24 establishes that, as a general rule, entities from third developed countries may only be recipient of funds under this Regulation on the basis of reciprocity of access to their own development assistance, recognised by a Commission decision. The Stability and Peace and Human Right and Democracy programmes, as well as the rapid response actions, are open to entities from all countries due to the Union interest to have the widest possible offer in light of the worldwide scope of the actions, the difficult circumstances in which assistance is provided and the need to act rapidly. International organisations are also eligible.

As regards the choice of partners outside the Union, the Commission may also decide to work with international organisations, partner countries or entities from other third countries under indirect management for the implementation of a specific action, when this is in the interest of the Union and of the objectives of such action, and subject to the rules and conditions laid down in the Financial Regulation. This choice would require a Commission decision. Furthermore, Members States and third countries may contribute to the External Action Guarantee and therefore their entities could become potentially eligible counterparts for its implementation. For third countries other than contracting parties to the Agreement on the European Economic Area, these contributions require the prior approval by the Commission. The conditions for such contribution should be reflected in an agreement between the Commission and the third country.


explanation of the specific provisions of the proposal



Subject matter — Article 1 defines the instrument created by the Regulation, which is one of the EU programmes for external action.

Definitions — Article 2 contains definitions of the basic terminology used in the Regulation.

Objectives — Article 3 sets out the general objective, applicable to all pillars of the instrument, as well as the specific objectives.

Scope and structure — Article 4 describes the various components of the instrument: geographic, thematic and rapid response. It establishes the geographic and material scope of each component and explains the relationship between the components.

Revised Development Assistance Committee´s Recommendation on untying ODA to the Least Developed Countries and Heavily Indebted Poor countries of 12 August 2014



The geographic component consists of geographic programmes for the European Neighbourhood, Sub-Saharan Africa, Asia and the Pacific and the Americas and the Caribbean. The countries in the Neighbourhood area are listed in Annex I; the list serves as a basis for defining countries in the adjacent areas. Other countries fall within the standard geographic areas. The material scope of geographic programmes, with the areas of cooperation, is set out in Annex II.

The thematic component focuses on global challenges, notably through dedicated thematic programmes on Human Rights and Democracy, Civil Society Organisations, Stability and Peace, and Global Challenges, covering matters such as health, education and training, women and children, decent work and social protection, culture, migration, environment and climate change, sustainable energy, sustainable and inclusive growth, private sector and local authorities. These programmes are complementary to geographic programmes, with worldwide coverage. The material scope of thematic programmes, notably the areas of intervention, is set out in Annex III.

The rapid response component is dedicated to quick response capacity for crisis management, conflict prevention and peace building; strengthening resilience and linking humanitarian and development actions; and foreign policy actions needs and priorities. This component also has worldwide coverage. Areas of intervention are defined in Annex IV. Under this component, no programming is needed; implementation takes the form of direct adoption of exceptional assistance measures, action plans and individual measures.

Coherence, consistency and complementarity — Article 5 explains the relationship between this instrument and other instruments under external action, together with its links to and consistency with internal EU programmes.

Budget — Article 6 refers to the overall envelope for the instrument, and gives a detailed breakdown by geographic area, thematic programmes and rapid response action. It also refers to the ‘emerging challenges and priorities cushion’, which may increase the amounts referred to in the Article.

Policy framework — Article 7 refers to the overall policy framework for the implementation of the instrument. Existing agreements, strategies, conclusions, resolutions and other similar documents determine the policy on which implementation of the instrument would be based.

General principles — Article 8 lists the various principles applicable to the whole instrument, such as democracy, the rule of law and respect for human rights and fundamental freedoms, a rights-based approach, cooperation, dialogue, partnership, development effectiveness, mainstreaming of climate change, environmental protection and gender equality. The Article also underlines the need for cooperation with Member States. An obligation is included to inform and have regular exchanges with the European Parliament, which would allow the Commission and the European Parliament to have regular discussions on policy and the implementation of the instrument.

Capacity building for military actors in support of development and security for development – Article 9 aims at delimiting the security-related activities which may be supported through this Instrument from activities that cannot be financed under the EU budget.


Title II groups chapters related to the implementation of the instrument, which includes multiannual programming.

Chapter I — Programming (Articles 10-15) covers the various provisions on multiannual programming, notably the general approach, specific principles for geographic programmes, the content of programming documents for both geographic and thematic programmes, and the procedure for adopting them. Article 15 sets out how the emerging challenges and priorities cushion works.

Chapter II — Specific provisions for the Neighbourhood (Articles 16-18) contains specific rules for the Neighbourhood area, notably regarding allocation criteria, the performance-based approach and cross-border cooperation.

Chapter III — Action plans, measures and implementing methods (Articles 19-25) contains provisions that supplement the Financial Regulation, due to the specific nature of external action. Article 25 contains provisions needed to import the flexibilities of the EDF.

Chapter IV – EFSD+ budgetary guarantees and financial assistance to third countries (Articles 26-30) merges and replaces the existing provisions on the European Fund for Sustainable Development, the External Lending Mandate and the Guarantee Fund for external actions.

Chapter V — Monitoring, reporting and evaluation (Articles 31-32) contains provisions on indicators and results frameworks used in the monitoring and evaluation of external action, and on the annual report, interim and final evaluation reports.



Title III (Articles 33-41) largely follows the provisions of internal policy programmes regarding institutional issues, information, communication and publicity, repeal and entry into force. A derogation with regard to visibility, a clause on the European External Action Service, and provisions on participation by a country or territory not covered by the Regulation are included.

Article 34 of this Title covers the exercise of the delegation of powers with respect to the provisioning rate (delegation of power contained in Article 26 (3), the areas of cooperation and intervention in Annex II, Annex III and Annex IV (delegation of power contained in Article 4 (6), the priority areas of the European Fund for Sustainable Development + operations and its governance in Annexes V and VI (delegation of power contained in Article 27 (9); the indicators in Annex VII and the establishment of a monitoring and evaluation framework (delegation of power contained in Article 31 (9).

Another issue of substance relates to the committee procedure: Article 35 sets up the ‘Neighbourhood, Development and International Cooperation’ committee, pursuant to Regulation (EU) No 182/2011. That committee is in charge of delivering an opinion on multiannual programming documents and annual work programmes (action plans and measures).

The proposal has seven annexes, as follows:

- Annex I — List of countries and territories in the neighbourhood area

- Annex II — Areas of cooperation for geographic programmes

- Annex III — Areas of intervention for thematic programmes

- Annex IV — Areas of intervention for rapid response actions

- Annex V — Priority areas of the European Fund for Sustainable Development + operations

Annex VI — Governance of the European Fund for Sustainable Development + Annex VII — List of key performance indicators