Explanatory Memorandum to COM(2023)379 - Conclusion of a Protocol on a Framework Agreement with Egypt on the participation of Egypt in Union programmes

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1. CONTEXT OF THE PROPOSAL

The Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, of the one part, and the Arab Republic of Egypt, of the other part1, was signed in Luxembourg on 25 June 2001 and entered into force on 1 June 2004.

The European Council of 17 and 18 June 2004 welcomed the European Commission’s proposals for a European Neighbourhood Policy (ENP) and endorsed the Council conclusions of 14 June 20042.

As part of the European Neighbourhood Policy (ENP), the gradual opening up of certain European Union programmes and agencies to ENP partner countries is one of many measures to promote reform, modernisation and transition in the European Union’s neighbourhood. The European Commission has expanded on this in its December 2006 Communication on the general approach to enable European Neighbourhood Policy partner countries to participate in Community agencies and Community programmes3.

The Council endorsed this approach in its conclusions of 5 March 20074.

Further to this Commission Communication and the 5 March 2007 Council conclusions, the Council, on 18 June 2007, issued directives to the Commission to negotiate Framework Agreements with Algeria, Armenia, Azerbaijan, Egypt, Georgia, Israel, Jordan, Lebanon, Moldova, Morocco, the Palestinian Authority, Tunisia and Ukraine, on the general principles for their participation in Community programmes5.

The June 2007 European Council6 reaffirmed the paramount importance of the ENP and endorsed a Presidency Progress Report7 that had been submitted to the Council meeting of 18 and 19 June 2007 as well as the related Council conclusions8. This report recalled the Council directives to negotiate relevant additional protocols.

The Joint Communication by the Commission and the High Representative of the Union for Foreign Affairs and Security Policy on a new response to a changing Neighbourhood9, endorsed by the Council conclusions of 20 June 2011, further emphasised the EU’s intention to facilitate partner countries’ participation in EU programmes.

The revised European Neighbourhood Policy spelt out in the new EU Agenda for the Mediterranean10 and the Council Conclusions on a renewed Partnership with the Southern Neighbourhood of 16 April 202111, reiterated the intention to open up and facilitate access to EU programmes for the EU’s Southern Partners and to enhance cooperation in Research and Innovation, including through association with the Horizon Europe Programme.

To date, similar protocols have been signed with Algeria12, Armenia13, Azerbaijan14, Georgia15, Israel16, Jordan17, Lebanon18, Moldova19 Morocco20, the Palestinian Authority21, Tunisia22, and Ukraine23. In October 2021, during the EU-Egypt Association Committee, Egypt expressed its interest in signing a Protocol to a Framework Agreement for their association to Horizon Europe and potential full participation in further selected EU programmes.

The objective of the Protocol is to lay down the financial and technical rules enabling the Arab Republic of Egypt to participate in EU programmes. This framework applies only to these programmes for which the relevant constitutive legal acts provide the possibility of the participation of the Arab Republic of Egypt. The horizontal framework established by the Protocol sets out principles for economic, financial and technical cooperation, the modalities for establishing participation in (association to) any given Union programme and the involvement of Egypt in the governance of the Union Programmes or activities. It also allows the Arab Republic of Egypt to receive assistance, in particular financial assistance, from the European Union to participate in the programmes.

The specific terms and conditions regarding the participation of Egypt in each particular Union programme, in particular, the financial contribution to be paid by Egypt as well as reporting and evaluation procedures, should be determined by agreement between the European Commission and the competent authorities of Egypt.

2. LEGAL BASIS

The substantive legal basis for the conclusion of the Protocol is Article 212 of the Treaty on the Functioning of the European Union (TFEU). The procedural legal basis is Article 218(6a) and (7) of the TFEU.

3. BUDGETARY IMPLICATIONS

Egypt shall contribute financially to the programmes in which it participates and to the related management, execution and operation costs under the general budget of the Union.

The specific terms and conditions regarding the participation of Egypt in each particular programme, in particular the financial contribution payable and reporting and evaluation procedures, shall be determined by agreement between the European Commission and the competent authorities of Egypt on the basis of the criteria established by the programmes concerned.

In the event that Egypt applies for external assistance of the Union to participate in a given Union programme on the basis of Article 7 of Regulation (EU) 2021/947 of the European Parliament and of the Council24 or pursuant to any similar Regulation providing for external assistance of the Union to Egypt that may be adopted in the future, the conditions governing the use by Egypt of external assistance of the Union shall be determined in a financing agreement.

Each agreement concluded pursuant to Article 5 shall stipulate, in accordance with Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council25, that financial control or audits or other verifications, including administrative investigations shall be carried out by, or under the authority of, the European Commission, the European Anti-Fraud Office and the Court of Auditors.

Detailed provisions shall be made on financial control and auditing, administrative measures, investigation and prosecution, penalties and recovery granting the European Commission, the European Anti-Fraud Office, the European Public Prosecutor’s Office, and the Court of Auditors powers equivalent to their powers with regard to beneficiaries or contractors established in the Union.

4. OTHER ELEMENTS

No later than three years after the date of entry into force of this Protocol, and every three years thereafter, both Parties may review the implementation of this Protocol on the basis of the actual participation of Egypt in Union programmes.