2016 Annual Activity Report Annexes - European...

2016

Annual Activity Report

Annexes

Directorate General

Neighbourhood and

Enlargement

Negotiations – DG

NEAR

Ref. Ares(2017)1714195 - 30/03/2017

DG NEAR_aar_2016_annexes_final Page 2 of 224

Table of Contents

Contents

ANNEXES 3

ANNEX 1: STATEMENT OF THE RESOURCES DIRECTOR ................................................................................................. 3 ANNEX 2: REPORTING – HUMAN RESOURCES, BETTER REGULATION, INFORMATION MANAGEMENT AND EXTERNAL

COMMUNICATION .............................................................................................................................................. 4 ANNEX 3: DRAFT ANNUAL ACCOUNTS AND FINANCIAL REPORTS .................................................................................. 13 ANNEX 4: MATERIALITY CRITERIA ......................................................................................................................... 32 ANNEX 5: INTERNAL CONTROL TEMPLATE(S) FOR BUDGET IMPLEMENTATION (ICTS) ...................................................... 33 ANNEX 6: IMPLEMENTATION THROUGH NATIONAL OR INTERNATIONAL PUBLIC-SECTOR BODIES AND BODIES GOVERNED BY

PRIVATE LAW WITH A PUBLIC SECTOR MISSION ................................................................................................................ 75 ANNEX 7: LIST OF UNION DELEGATIONS SUBMITTING AN EAMR ................................................................................ 85 ANNEX 8A: ANNUAL AOSD REPORT – THE EU REGIONAL TRUST FUND IN RESPONSE TO THE SYRIAN CRISIS, THE MADAD

FUND ........................................................................................................................................................ 86 ANNEX 8B: ANNUAL AOSD REPORT – THE EUROPEAN UNION TRUST FUND FOR AFRICA NORTH OF AFRICA WINDOW ........... 99 ANNEX 9: EVALUATIONS AND OTHER STUDIES FINALISED OR CANCELLED DURING THE YEAR ............................................ 117 ANNEX 10: EUROPEAN COURT OF AUDITORS – PERFORMANCE AUDITS ....................................................................... 121 ANNEX 11: ANALYSIS OF KEY PERFORMANCE INDICATORS 2016 ................................................................................ 127 ANNEX 12: PERFORMANCE TABLES ...................................................................................................................... 163

ANNEXES

ANNEX 1: Statement of the Resources Director

“I declare that in accordance with the Commission’s communication on clarification of

the responsibilities of the key actors in the domain of internal audit and internal control

in the Commission1, I have reported my advice and recommendations to the Director-

General on the overall state of internal control in the DG

I hereby certify that the information provided in Section 2 of the present AAR and in its

annexes is, to the best of my knowledge, accurate and complete.”

Date: 31/03/2017

"Signed"

Mark Johnston

1 Communication to the Commission: Clarification of the responsibilities of the key actors in the domain of

internal audit and internal control in the Commission; SEC(2003)59 of 21.01.2003.


ANNEX 2: Reporting – Human Resources, Better Regulation, Information Management and External

Communication

This annex is the annex of section 2.2 "Other organisational management dimensions".

1. Human Resources Management

Objective:

The DG deploys effectively its resources in support of the delivery of the Commission's priorities and core business, has a competent and engaged workforce, which is driven by an effective and gender-balanced management and which can deploy its full potential within supportive and healthy working conditions

Indicator 1 : Percentage of female representation in middle management: 40%

by 2019

Source of data:

SEC(2015)336 final : Targets for female representation in management functions in the European Commission for the years 2015-2019 Baseline

2016

(January)

Target

2019

Latest known results

for 2016

38% 40% 32%

Main outputs in 2016:

Description Indicator Target Latest known results

Monitor

gender

balance in

middle

management

positions.

Provide

training and

mentoring

opportunities

for potential

managerial

colleagues.

Appointment

of women to

first middle

management

function

Increase in female

representation in

middle management

positions.

Applicants are better

informed and prepared

to apply for middle

management positions

Increase number of

women appointed to

first time middle

management functions.

39% by end 2016.

Identified colleagues

receive appropriate

training/mentoring in

2016

Appoint 1 woman to

first time

management position

by end 2016

32%

None in 2016

No first time female

Head of Unit

nomination in 2016.

Any change in the

number of occupied

positions seriously

impacts the

percentage of female

HoU representation. 2

HoU positions were

filled in 2016.Female


candidates were

shortlisted to the final

interviews in both

cases, but in

comparison to the

selected candidate did

not possess the

complete skill set

required to lead these

units.

Indicator 2 :

Percentage of staff who feel that the Commission cares about their well-being

Source of data: Commission staff survey

Baseline Target


for 2016

January

2014 : 32%

Target: Commission Average (now 35%) in 2016

Two percentage points above Commission

Average (now 37%) in 2018

In relation to the indicator 2 on staff well-being,

DG NEAR sets the target for this indicator in 2016

at the level of Commission Average (currently

35%) for 2016 and at 2 percentage points above

the Commission average in the 2018 staff survey.

This is based on the recommendations of the DG

NEAR Staff Engagement Working Group, which

was established following the results of the 2014

survey. The target was approved by senior

management

24%



Promote an

appropriate

work life

balance for

staff.

Promote

awareness of

fit@ work

campaign

including

mental and

physical

health &

wellbeing

activities

Staff request

appropriate working

conditions (part-time,

flexitime and

teleworking) to match

their particular work life

balance considerations.

Staff attend and

participate in activities

which increase staff

understanding of the

importance of mental

and physical health to

their overall well being

100% of staff using

flexitime

10% of colleagues

teleworking by end

2016

100% of eligible

requests for part-time

validated

Organise minimum 6

fit@work workshops

on:

Ergonomics

Physical health

Social-psychological

issues

Organise weekly well-

being activities

Yoga

Chair massage

Pilates

100% of staff using

flexitime

9,4% of staff

teleworking

100% of the requests

for part time were

validated

Well-being activities

were organised twice

per week in 2016.

Sessions of yoga,

chair massage and

Pilates were organised

in 2016.

The Medical Service's


updated list of

fit@work workshops

announced for last

quarter of 2016 was

not made available.

Indicator 3 : Staff engagement index

Source of data: Commission staff survey

Baseline

2014

Target

2016/2018


For 2016

2014 :

DG NEAR

Staff

engagement

index =64

Commission Average (now 65%) in 2016

Two percentage points above Commission

Average (now 67%) in 2018

DG NEAR sets the target for this indicator in 2018

at 2 percentage points above the Commission

average in the 2018 staff survey2.

58% (for HQ=64%

and for Delegations=

53%



Improve DG

NEAR score

on Staff

engagement

index in Staff

Survey

Staff have the

necessary tools,

information & training,

receive appropriate

feedback and timely

communication to

enable them to

understand their role

and contribution to the

overall DG NEAR and

EU objectives

Roll out the 2016

Staff Engagement

Action

Plan tackling the staff

engagement issues

raised in the 2014

Staff survey namely:

Shared DG NEAR

vision and purpose

Effective internal

communication

Managing

Performance

Enhancing 'people'

management skills

Action Plan Roll out

March 2016

Our NEAR Core Group

Focus Groups

launched in

September 2016 Directorate Team

Building events

facilitated by Our

NEAR for each

Directorate launched

in December 2016 Timely updates

including videos from

management

published on intranet

2 This is based on the recommendations of a DG NEAR Staff Engagement Working Group established following

the results of the 2014 survey, and approved by senior management of the DG


Working conditions &

work /life balance

Career advice, career

paths,

opportunities &

mobility

Training & training

budget.

Take 'temperature'

mid-year on the 7

areas contributing to

overall staff

engagement.

Career advice

provided to staff in

annual mobility

exercise and in

reorganisations Implementation of

2016 training plan

with provision of over

40 in house courses, 5

teambuilding events

and individual

coaching sessions for

6 managers

2. Better Regulation

DG NEAR does not manage regulatory acquis. Nonetheless, some major evaluations such

as the two Mid-term Reviews of the financial instruments (ENI and IPA II) and two

evaluations addressing some of the "fundamental" strategic axis of its partnerships

(Economic Governance and Public Administration Reform) have been launched in full

compliance with the Better Regulation principles. The Open Public Consultations having

been launched in February 2017 for three of them.

In 2016 DG NEAR launched three evaluations according to the Principle of Better

Regulation in line with the Annual Management Plan 2016 i.e.

-Thematic Evaluation on the support to SME competitiveness

-Thematic Evaluation on support to Economic Governance in Enlargement

-Thematic Evaluation on social protection (2007 to 2013)

The result of these evaluations is intended to provide advice and evidence for the design

of future policies and financial instruments. In particular, they will help to identify lessons

learned to feed into the Mid-term review of 2014-2020 instruments and the impact

assessments of possible successor instruments after 2030.

No Impact Assessments were submitted by DG NEAR in 2016 to the Regulatory Scrutiny

Board in 2016.

3. Information management aspects

Objective:

Information and knowledge in your DG is shared and reusable by other DGs. Important documents are registered, filed and retrievable Indicator 1 : Percentage of registered documents that are not filed (ratio)

Source of data: Hermes-Ares-Nomcom (HAN)6 statistics


Baseline

2015

Target 2020


for 2016

4,73%

0% 1,40%



Electronic filing

of registered

documents in

Ares

Number of registered

and filed documents in

ARES

100% 98.6%

E-Signatory

(ARES) for all

invoices as

from 18 April

2016

Number of e-

signatories for invoices

in Ares (from 18 April

2016)

100% of invoices

arrived to HQ and

Delegations with e-

signatory in ARES

documenting internal

approval process

(operational and

financial visas and

AOSD)

100% as from 18

April 2016

Indicator 2 : Number of HAN files readable/accessible by all units in the DG


Baseline

2015

Target 2020


for 2016

93.39% Target: 93%

93.58%

Indicator 3 : Number of HAN files shared with other DGs


Baseline

2015

Target 2020


for 2016

4.15% Target: 20%

5,22%

4. External communication activities

Objective: Citizens perceive that the EU is working to improve their lives and engage with

the EU. They feel that their concerns are taken into consideration in European decision making

and they know about their rights in the EU

Definition: Eurobarometer measures the state of public opinion in the EU Member States. This global indicator is influenced by many factors, including the work of other EU institutions and national governments, as well as political and economic factors, not just the communication actions of the Commission. It is relevant as a proxy for the overall perception of the EU citizens. Positive visibility for the EU is the desirable corporate outcome of Commission communication, even if individual DGs’ actions may only make a small contribution Source of data: Standard Eurobarometer (DG COMM budget) [monitored by DG COMM

Baseline

November

Target 2020


for 2016


2014

Total "Positive": 39% Neutral: 37 % Total "Negative": 22%

Positive image of the EU ≥ 50%

Total "Positive": 35%

Neutral: 38%

"Negative":25%

Objective: To increase knowledge and understanding of the European neighbourhood policy, including the use and objectives of EU funds for the neighbourhood Main outputs in 2016:


Press trips for

EU journalists

to

neighbourhood

regions

Number of participants

Cost per contact

Indirect audience

reach:

audience of the media

covering the event who

might have seen the

articles – Opportunities

to see (OTS)


who declare the event

met their expectations

Useful contacts made

Likelihood to share the

info

Better understanding of

the policy/related

funding

55

n/a

n/a

>60% of participants




52

n/a

n/a

100%

75%

96%

80%

Training

seminars on

EU visibility

and

communication

for

beneficiaries in

the

neighbourhood


Cost per contact



met their expectations


info

40

n/a



40%

n/a

90%

100%

OPEN

Neighbourhood

Regional

Programme:

Opportunities,

Participation,

Engagement

and

Networking

with people

from the

Neighbourhood

area; covers:

1)Thematic

1)-focus groups,

-surveys

-web analytics

-number of subscribers

to news alert system

2) number of pick-ups

of audio visuals

produced, publication

/distribution of outputs

1) To be defined in

inception report as

depending on theme

of campaigns –

potentially decision

makers, journalists,

young people in

partner countries

2) General public in

neighbourhood

11 videos, 4

factsheets;19 feature

stories/op-eds used

via social media and

in local press,

Media outputs

generated by

journalist trainings

(Media Hub) on EU

related issues and

made available on


integrated

communication

campaigns

targeting

audiences in

one or several

partner

countries

2) Journalist

trainings will

generate

media outputs

on EU related

issues

online media sharing

platform: 205;

Number of pick-ups of

audio visuals: 157

Objective: To increase knowledge and understanding of the enlargement policy, including the use and objectives of EU pre-accession funds Main outputs in 2016:


Youth

Conference

(in line with

Vienna Summit

Conclusions)


Cost per contact

Event met expectations



info


the policy/related

funding

Better opinion of the

EU/its institutions

150

n/a






150

n/a

97%

95%

98%

88%

67%

Series of policy

events in the

EU Member

States


Cost per contact



info


the policy/related

funding

Better opinion of the

EU/its institutions

1500

n/a





2300

n/a

99%

95%

97%

60%

Study visits of

EU

stakeholders

to enlargement

region


Cost per contact




info


the policy/related

funding

Better opinion of the EU/its institutions

55

n/a






52

n/a

85%

85%

84%

85%

61%

Study Visits of

EU

Number of Participants

Cost per Contact

150

137 (DG NEAR

decided not to


stakeholders

to the

enlargement

regions

Indirect audience

reach: audience of the

media covering event

who might have seen

the article –

Opportunities to See

(OTS)



met their expectation



info


the policy related

funding

n/a

n/a

>60%of participants




implement 3 of the

planned press trips)

n/a

n/a

92%

85%

100%

82%

In 2016, DG NEAR conducted an external evaluation of information and communication

activities implemented by the EU delegations/office in the enlargement region, whose

recommendations are under implementation.

Objective: Dissemination of information through DG NEAR website and social media Main outputs in 2016:


DG NEAR

website

Number of visits

Number of unique

visitors

Number of page views

Top pages viewed by

users

Pages per visit

1.500.000

1.000.000

3.000.000

n/a

n/a

1.907.394

1.275.428

3.364.973

n/a

n/a

DG NEAR

social media

(Facebook and

twitter

Number of people

reached

Number of impressions

Fan engagement rate

Facebook: average

reach by post:

60,000

Twitter: 450,000

(overall)

Facebook: 3%

Twitter: 1%

Average number of

engagements by post

Facebook: 1450

Twitter: 36

Facebook: overall:

15,408,500,

average reach by

post: 130,250

Twitter: 5,847,300

Facebook: 6.2%

Twitter: 3.9%

Average number of

engagements by post

Facebook: 1900,

Twitter: 55


Annual communication spending (based on estimated commitments):

Baseline (2015): Target (2016): Total amount

spent

Total of FTEs working on

external communication

EUR 18,258,542.97 EUR 22,655,000 EUR 22,950,0003 15

3 Including pro rata annual commitment of EUR 5 million for the Regional Communication Programme OPEN

Neighbourhood.


ANNEX 3: Draft annual accounts and financial reports

Table 1 : Commitments

Table 2 : Payments

Table 3 : Commitments to be settled

Table 4 : Balance Sheet

Table 5 : Statement of Financial Performance

Table 5 Bis: Off Balance Sheet

Table 6 : Average Payment Times

Table 7 : Income

Table 8 : Recovery of undue Payments

Table 9 : Ageing Balance of Recovery Orders

Table 10 : Waivers of Recovery Orders

Table 11 : Negotiated Procedures (excluding Building Contracts)

Table 12 : Summary of Procedures (excluding Building Contracts)

Table 13 : Building Contracts


TABLE 1: OUTTURN ON COMMITMENT APPROPRIATIONS IN 2016 (in Mio EUR)

Commitment

appropriations authorised

Commitments made %

1 2 3=2/1

Title 19 Foreign policy instruments

19 19 05 Cooperation with third countries under the Partnership Instrument (PI)

0,176855 0 0,00 %

Total Title 19 0,176855 0 0,00%

Title 22 Neighbourhood and enlargement negotiations

22 22 01

Administrative expenditure of the 'Neighbourhood and enlargement negotiations' policy area

56,49685345 44,2951462 78,40 %

22 02 Enlargement process and strategy

2351,895404 2342,02635 99,58 %

22 04 European Neighbourhood Instrument (ENI)

2291,326832 2261,81122 98,71 %

Total Title 22 4699,71909 4648,13272 98,90%

Total DG NEAR 4699,895945 4648,13272 98,90 %

* Commitment appropriations authorised include, in addition to the budget voted by the legislative authority, appropriations carried over from the previous exercise, budget amendments as well as miscellaneous commitment appropriations for the period (e.g. internal and external assigned revenue).

0, %

20, %

40, %

60, %

80, %

100, %

120, %

% Outturn on commitment appropriations


TABLE 2: OUTTURN ON PAYMENT APPROPRIATIONS IN 2016 (in Mio EUR)

Chapter Payment

appropriations authorised *

Payments made %

1 2 3=2/1

Title 19 Foreign policy instruments

19 19 05

Cooperation with third countries under the Partnership Instrument (PI)

0,956222 0,55813705 58,37 %

Total Title 19 0,956222 0,55813705 58,37%

Title 22 Neighbourhood and enlargement negotiations

22 22 01


65,33905532 45,33907032 69,39 %

22 02

Enlargement process and strategy 1051,9106 982,9607291 93,45 %

22 04

European Neighbourhood Instrument (ENI)

2243,860326 1998,691071 89,07 %

Total Title 22 3361,109981 3026,99087 90,06%

Total DG NEAR 3362,066203 3027,549007 90,05 %

* Payment appropriations authorised include, in addition to the budget voted by the legislative authority, appropriations carried over from the previous exercise, budget amendments as well as miscellaneous payment appropriations for the period (e.g. internal and external assigned revenue).

0, %

10, %

20, %

30, %

40, %

50, %

60, %

70, %

80, %

90, %

100, %

="% Outturn on payment appropriations"


TABLE 3 : BREAKDOWN OF COMMITMENTS TO BE SETTLED AT 31/12/2016 (in Mio EUR)

2016 Commitments to

be settled

Commitments to be settled

from

Total of commitments to be settled at end

Total of commitments

to be settled at end

Chapter Commitments 2016

Payments 2016

RAL 2016 % to be settled

financial years previous to

2016

of financial year 2016(incl

corrections)

of financial year 2015 (incl.

corrections)

1 2 3=1-2 4=1-2/1 5 6=3+5 7

Title 19 : Foreign policy instruments

19 19 05

Cooperation with third countries under the Partnership Instrument (PI)

0 0,00 0 0,00 % 1,23 1,23 1,78

Total Title 19 0 0,00 0 0,00% 1,22511501 1,22511501 1,78325206

Title 22 : Neighbourhood and enlargement negotiations

22 22 01


44,19632524 38,70 5,50057013 12,45

% 0,00 5,50 8,84

22 02

Enlargement process and strategy

2342,026354 303,65 2038,373456 87,03

% 3.285,89 5.324,26 4021,86

22 04

European Neighbourhood Instrument (ENI)

2261,811218 316,05 1945,763264 86,03

% 5.326,42 7.272,19 7256,23

Total Title 22 4648,033897 658,40 3989,637291 85,83% 8612,313609 12601,9509 11286,9371

Total DG NEAR 4648,033897 658,40 3989,637291 85,83

% 8613,538724 12603,17601 11288,7204


0,00

1.000,00

2.000,00

3.000,00

4.000,00

5.000,00

6.000,00

7.000,00

8.000,00

="Breakdown of Commitments remaining to be settled (in Mio EUR)"

0,00

1.000,00

2.000,00

3.000,00

4.000,00

5.000,00

6.000,00

7.000,00

8.000,00

="Breakdown of Commitments remaining to be settled (in Mio EUR)"


P.III.2. Accumulated Surplus / Deficit 4.697.450.707,28 1.489.250.222,89

Non-allocated central (surplus)/deficit* -6.152.537.061,96 -

2.240.129.363,34

TOTAL 0,00 0,00

It should be noted that the balance sheet and statement of financial performance presented in Annex 3 to this Annual Activity Report, represent only the assets, liabilities, expenses and revenues that are under the control of this Directorate General.

Significant amounts such as own resource revenues and cash held in Commission bank accounts are not included in this Directorate General's accounts since they are managed centrally by DG Budget, on whose balance sheet and statement of financial performance they appear.

Furthermore, since the accumulated result of the Commission is not split amongst the various Directorates General, it can be seen that the balance sheet presented here is not in equilibrium.

Additionally, the figures included in tables 4 and 5 are provisional since they are, at this date, still subject to audit by the Court of Auditors. It is thus possible that amounts included in these tables may have to be adjusted following this audit.

TABLE 4 : BALANCE SHEET NEAR

BALANCE SHEET 2016 2015

A.I. NON CURRENT ASSETS

732.558.982,24 678.765.417,98

A.I.4. Non-Current Financial Assets 384.221.295,53 412.573.389,53

A.I.5. Non-Current Pre-Financing 347.837.686,71 266.192.028,45

A.I.6. Non-Cur Exch Receiv & Non-Ex Recoverab

500.000,00

A.II. CURRENT ASSETS 1.692.100.411,57 1.364.594.312,18

A.II.1. Current Financial Assets 38.332.281,60 54.350.437,30

A.II.2. Current Pre-Financing 1.410.331.552,89 1.091.884.790,46

A.II.3. Curr Exch Receiv &Non-Ex Recoverables

20.290.117,74 30.897.670,92

A.II.6. Cash and Cash Equivalents 223.146.459,34 187.461.413,50

ASSETS 2.424.659.393,81 2.043.359.730,16

P.I. NON CURRENT LIABILITIES -1.582.010,00 -6.215.823,07

P.I.2. Non-Current Provisions -1.582.010,00 -6.215.823,07

P.I.3. Non-Current Financial Liabilities 0,00

P.III. NET ASSETS/LIABILITIES -56.721.562,83 -63.140.864,83

P.III.1. Reserves -56.721.562,83 -63.140.864,83

P.II. CURRENT LIABILITIES -911.269.466,30 -

1.223.123.901,81

P.II.2. Current Provisions -19.639.163,00 -13.310.076,00

P.II.4. Current Payables -107.097.735,40 -138.295.020,44

P.II.5. Current Accrued Charges &Defrd Income

-784.532.567,90 -1.071.518.805,37

LIABILITIES -969.573.039,13 -

1.292.480.589,71

NET ASSETS (ASSETS less LIABILITIES) 1.455.086.354,68 750.879.140,45


TABLE 5 : STATEMENT OF FINANCIAL PERFORMANCE NEAR

STATEMENT OF FINANCIAL PERFORMANCE 2016 2015

II.1 REVENUES -33.257.092,56 -49.010.081,09

II.1.1. NON-EXCHANGE REVENUES -11.367.784,90 -92.255,42

II.1.1.5. RECOVERY OF EXPENSES -6.665.467,98 -92.255,42

II.1.1.6. OTHER NON-EXCHANGE REVENUES -4.702.316,92

II.1.2. EXCHANGE REVENUES -21.889.307,66 -48.917.825,67

II.1.2.1. FINANCIAL INCOME -19.048.552,80 -25.015.577,52

II.1.2.2. OTHER EXCHANGE REVENUE -2.840.754,86 -23.902.248,15

II.2. EXPENSES 2.291.917.432,14 3.257.210.565,48

II.2. EXPENSES 2.291.917.432,14 3.257.210.565,48

II.2.10.OTHER EXPENSES 24.568.114,58 50.352.112,17

II.2.1. EXP IMPLEM BY MEMBER STATES (SHARED)

139.541.073,14 201.938.647,48

II.2.2. EXP IMPLEM BY COMMISS&EX.AGENC. (DM) 1.305.329.512,27 2.075.253.349,90

II.2.3. EXP IMPL BY OTH EU AGENC&BODIES (IM) 338.348,22 -502.657,33

II.2.4. EXP IMPL BY 3RD CNTR & INT ORG (IM) 653.632.257,35 735.578.621,25

II.2.5. EXP IMPLEM BY OTHER ENTITIES (IM) 148.481.228,19 176.975.647,94

II.2.6. STAFF AND PENSION COSTS 383.690,60

II.2.8. FINANCE COSTS 19.643.207,79 17.614.844,07

STATEMENT OF FINANCIAL PERFORMANCE 2.258.660.339,58 3.208.200.484,39

It should be noted that the balance sheet and statement of financial performance presented in Annex 3 to this Annual Activity Report, represent only the assets, liabilities, expenses and revenues that are under the control of this Directorate General.

Significant amounts such as own resource revenues and cash held in Commission bank accounts are not included in this Directorate General's accounts since they are managed centrally by DG Budget, on whose balance sheet and statement of financial performance they appear.

Furthermore, since the accumulated result of the Commission is not split amongst the various Directorates General, it can be seen that the balance sheet presented here is not in equilibrium.

Additionally, the figures included in tables 4 and 5 are provisional since they are, at this date, still subject to audit by the Court of Auditors. It is thus possible that amounts included in these tables may have to be adjusted following this audit.


TABLE 5bis : OFF BALANCE SHEET NEAR

OFF BALANCE 2016 2015

OB.1. Contingent Assets 203.605.305,46 275.150.322,02

GR for performance 50.312.649,68 67.693.315,10

GR for pre-financing 133.418.792,23 176.747.083,90

OB.1.4. CA Other 19.873.863,55 30.709.923,02

OB.2. Contingent Liabilities -1.900.000,00 -1.900.000,00

OB.2.1. CL Guarantees given -300.000,00 0,00

OB.2.7. CL Amounts relating to legal cases -1.600.000,00 -1.900.000,00

OB.3. Other Significant Disclosures -11.816.667.670,19 -10.185.156.616,18

OB.3.1. Undrawn commitments 0,00 0,00

OB.3.2. Comm against app. not yet consumed -11.816.667.670,19 -10.185.156.616,18

OB.4. Balancing Accounts 11.614.962.364,73 9.911.906.294,16

OB.4. Balancing Accounts 11.614.962.364,73 9.911.906.294,16

OFF BALANCE 0,00 0,00

It should be noted that the balance sheet and statement of financial performance presented in Annex 3 to this Annual Activity Report, represent only the assets, liabilities, expenses and revenues that are under the control of this Directorate General. Significant amounts such as own resource revenues and cash held in Commission bank accounts are not included in this Directorate General's accounts since they are managed centrally by DG Budget, on whose balance sheet and statement of financial performance they appear. Furthermore, since the accumulated result of the Commission is not split amongst the various Directorates General, it can be seen that the balance sheet presented here is not in equilibrium. Additionally, the figures included in tables 4 and 5 are provisional since they are, at this date, still subject to audit by the Court of Auditors. It is thus possible that amounts included in these tables may have to be adjusted following this audit.


TABLE 6: AVERAGE PAYMENT TIMES FOR 2016 - DG NEAR

Legal Times

Maximum Payment Time (Days)

Total Number of Payments

Nbr of Payments within Time Limit

Percentage Average Payment

Times (Days)

Nbr of Late Payments


Times (Days)

21 1 1 100,00 % 13

30 1717 1424 82,94 % 1,302,301,494 293 17,06 % 8,251,459,034

40 1 1 100,00 % 16

45 868 548 63,13 % 2,547,793,439 320 36,87 % 9,751,244,289

50 1 1 100,00 % 67

51 1 1 100,00 % 25

54 1 1 100,00 % 6

56 2 2 100,00 % 16,5

60 1534 1327 86,51 % 3,126,927,633 207 13,49 % 9,261,554,346

73 2 2 100,00 % 39

86 1 1 100,00 % 35

90 824 723 87,74 % 3,933,413,179 101 12,26 % 1,310,826,506

120 1 1 100,00 % 54


4954 4032 81,39 % 922 18,61 %

Average Net Payment Time

3,846,550,468 2,547,112,805 9,529,123,851

Average Gross Payment Time

554,663,221 3,855,320,333 1,294,291,148

Target Times


Target Payment Time (Days)


Nbr of Payments within Target

Time Percentage

Average Payment

Times (Days)

Nbr of Late Payments


Times (Days)

20 376 311 82,71 % 1,005,666,621 65 17,29 % 3,503,114,035

30 940 371 39,47 % 1,715,053,137 569 60,53 % 7,462,059,978

60 1 1 100,00 % 96

75 1 1 100,00 % 105


1318 682 51,75 % 636 48,25 %

Average Net Payment Time

4,129,561,132 1,391,564,564 7,065,588,899

Average Gross Payment Time

653,419,651 264,642,154 1,070,316,275

Suspensions

Average Report Approval

Suspension Days

Average Payment Suspension Days

Number of Suspended Payments

% of Total Number


Amount of Suspended Payments

% of Total Amount

Total Paid Amount

5 55 1522 30,72 % 4954 524.630.430,48 18,02 % 2.910.792.390,75

Late Interest paid in 2016

DG GL Account Description

Amount (Eur)

NEAR 65010000 Interest expense on late payment of charges 63 259,67

NEAR 65010100 Interest on late payment of charges New FR 23 394,38

86 654,05


TABLE 7 : SITUATION ON REVENUE AND INCOME IN 2016

Revenue and income recognized Revenue and income cashed from Outstanding

Chapter Current year RO Carried over RO Total Current Year RO Carried over RO Total balance

1 2 3=1+2 4 5 6=4+5 7=3-6

52 REVENUE FROM INVESTMENTS OR LOANS GRANTED, BANK AND OTHER INTEREST

1.107.955,95 6.225,71 1.114.181,66 845.186,15 4.520,71 849.706,86 264.474,80

57 OTHER CONTRIBUTIONS AND REFUNDS IN CONNECTION WITH THE ADMINISTRATIVE OPERATION OF THE INSTITUTION

1.864,42 0,00 1.864,42 1.864,42 0,00 1.864,42 0,00

59 OTHER REVENUE ARISING FROM ADMINISTRATIVE MANAGEMENT

7.780,97 0,00 7.780,97 7.780,97 0,00 7.780,97 0,00

63 CONTRIBUTIONS UNDER SPECIFIC AGREEMENTS

5.682.160,72 0,00 5.682.160,72 5.682.160,72 0,00 5.682.160,72 0,00

66 OTHER CONTRIBUTIONS AND REFUNDS 41.893.099,18 29.448.642,13 71.341.741,31 34.412.950,65 10.745.108,20 45.158.058,85 26.183.682,46

81 LOANS GRANTED BY THE COMMISSION 34.056.361,15 5.703.518,10 39.759.879,25 29.466.915,14 5.703.518,10 35.170.433,24 4.589.446,01

90 MISCELLANEOUS REVENUE 0,00 276.753,90 276.753,90 0,00 0,00 0,00 276.753,90

Total DG NEAR 82.749.222,39 35.435.139,84 118.184.362,23 70.416.858,05 16.453.147,01 86.870.005,06 31.314.357,17


TABLE 8 : RECOVERY OF PAYMENTS (Number of Recovery Contexts and corresponding Transaction Amount)

INCOME BUDGET RECOVERY ORDERS

ISSUED IN 2016

Error Irregularity Total undue

payments recovered

Total transactions in recovery context(incl. non-

qualified) % Qualified/Total RC

Year of Origin (commitment) Nbr RO Amount Nbr RO Amount Nbr RO Amount Nbr RO Amount Nbr RO Amount

2003 1 228.624,47 1 228.624,47 1 228.624,47 100,00% 100,00%

2004 1 2.702.274,59 1 2.702.274,59 2 2.770.109,81 50,00% 97,55%

2005 4 2.445.251,24

2006 3 963.629,22 3 963.629,22 6 966.102,92 50,00% 99,74%

2007 2 126.692,97 1 377.918,36 3 504.611,33 8 718.651,86 37,50% 70,22%

2008 2 42.123,01 2 42.123,01 15 1.611.240,30 13,33% 2,61%

2009 6 34.047,72 5 209.514,00 11 243.561,72 25 1.287.656,40 44,00% 18,92%

2010 7 59.309,74 15 817.379,67 22 876.689,41 27 1.088.814,61 81,48% 80,52%

2011 2 15.798,18 26 2.076.727,34 28 2.092.525,52 66 7.331.277,57 42,42% 28,54%

2012 20 3.191.645,85 20 3.191.645,85 60 5.127.155,84 33,33% 62,25%

2013 2 260.815,43 24 776.960,72 26 1.037.776,15 67 7.044.277,14 38,81% 14,73%

2014 20 1.918.259,71 20 1.918.259,71 48 3.014.430,54 41,67% 63,64%

2015 1 293,70 1 293,70 5 41.958,34 20,00% 0,70%

No Link 2 1.483.360,79 2 1.483.360,79 26 47.355.024,57 7,69% 3,13%

Sub-Total 20 496.957,74 120 14.788.417,73 140 15.285.375,47 360 81.030.575,61 38,89% 18,86%


EXPENSES BUDGET

Error Irregularity OLAF Notified Total undue

payments recovered

Total transactions in recovery context(incl.

non-qualified)

% Qualified/Total RC

Nbr Amount Nbr Amount Nbr Amount Nbr Amount Nbr Amount Nbr Amount

INCOME LINES IN INVOICES

NON ELIGIBLE IN COST CLAIMS

82 4.408.564,12 163 108.354.609,88 245 112.763.174,00 324 116.710.344,39 75,62% 96,62%

CREDIT NOTES 63 1.283.987,13 174 1.254.733,22 237 2.538.720,35 331 11.249.314,26 71,60% 22,57%

Sub-Total 145 5.692.551,25 337 109.609.343,10 482 115.301.894,35 655 127.959.658,65 73,59% 90,11%

GRAND TOTAL 165 6.329.629,24 457 125.048.170,22 622 131.377.799,46 1015 208.990.234,26 61,28% 54,96%


TABLE 9: AGEING BALANCE OF RECOVERY ORDERS AT 31/12/2016 FOR NEAR

Number at 01/01/2016

Number at 31/12/2016

Evolution Open Amount

(Eur) at 01/01/2016

Open Amount (Eur) at

31/12/2016 Evolution

2002 1 1 0,00 % 129.919,66 129.024,98 -0,69 %

2005 2 2 0,00 % 267.184,00 267.184,00 0,00 %

2006 2 2 0,00 % 771.200,00 771.200,00 0,00 %

2007 5 5 0,00 % 473.469,35 473.469,35 0,00 %

2008 4 3 -25,00 % 405.460,33 244.734,53 -39,64 %

2009 5 5 0,00 % 337.684,48 337.684,48 0,00 %

2010 6 4 -33,33 % 723.850,75 128.929,75 -82,19 %

2011 11 8 -27,27 % 2.307.537,93 1.900.609,29 -17,63 %

2012 16 12 -25,00 % 1.573.495,63 1.320.258,37 -16,09 %

2013 21 18 -14,29 % 3.291.704,87 3.235.687,35 -1,70 %

2014 33 25 -24,24 % 6.083.813,00 2.866.333,66 -52,89 %

2015 71 30 -57,75 % 19.119.144,68 7.356.201,91 -61,52 %

2016 77 12.724.848,79

177 192 8,47 % 35.484.464,68 31.756.166,46 -10,51 %

TABLE 10 : RECOVERY ORDER WAIVERS IN 2016 >= EUR 100.000

Waiver

Central Key Linked RO Central Key

RO Accepted Amount

(Eur) LE Account Group

Commission Decision

Comments

1 3233160066 3241006390 -366.501,00

2 3233160075 3230807546 -160.725,80

3 3233160097 3241207946 -110.268,00

4 3233160144 3241009635 -228.420,00

5 3233160146 3241112343 -270.000,00

Total DG -1.135.914,80

Number of RO waivers 5

Justifications:


TABLE 11 : CENSUS OF NEGOTIATED PROCEDURES - DG NEAR - 2016

External Actions > EUR 20,000

Negotiated Procedure Legal base

Number of Procedures Amount (EUR)

Art. 242 1c) 4 1.865.875,00

Art. 246 1c) 1 29.763,26

Art. 266.1(a) 3 657.760,00

Art. 266.1(b) 6 5.816.560,00

Art. 266.1(c) 14 10.791.986,00

Art. 266.1(f) 2 827.308,00

Art. 268.1(a) 2 562.190,00

Art. 268.1(c) 4 946.369,31

Art. 268.1(d) 3 2.025.139,36

Art. 268.1(h) 2 297.985,52

Art. 270.1(b) 2 3.288.438,44

Art. 270.1(e) 3 2.818.316,70

Total 46 29.927.691,59

Procurement > EUR 60,000

Negotiated Procedure Legal base

Number of Procedures Amount (EUR)

Art. 134.1(c) 2 1.212.519,00

Art. 134.1(e) 1 592.000,00

Total 3 1.804.519,00


TABLE 12 : SUMMARY OF PROCEDURES OF DG NEAR EXCLUDING BUILDING CONTRACTS

External Procedures > EUR 20,000

Procedure Type Count Amount (EUR)

External Procedures > EUR 20,000

(Ext. act) Exceptional Negotiated Procedure with a single offer (Art. 266 RAP)

1 110.000,00

(Ext. act) Service - Competitive Negotiated Procedure with at least three candidates without pub. (Art. 265.1(b) & 3 RAP)

9 1.418.976,60

(Ext. act) Service - Competitive Negot.Proc. with at least three candidates without pub.(Art. 265.1(b) & 3 RAP)

46 6.577.272,31

(Ext. act) Service - Exceptional Negotiated Procedure with a single offer (Art. 266 RAP)

25 18.033.614,00

(Ext. act) Service - International Open Procedure with prior publication (Art. 265(1)(a)(ii) RAP)

2 2.693.990,00

(Ext. act) Service - International Restricted Procedure with prior publication (Art. 265.1(a)(i) & 2 RAP)

83 183.450.356,55

(Ext. act) Service - International Restr.Proc. with four to eight tenderers after prior pub (Art. 241.1(a)&2IR)

1 201.500,00

(Ext. act) Service - Negotiated Procedure with a single offer (Art. 242 IR)

4 1.865.875,00

(Ext. act) Supply - Competitive Negot.Proc. with at least three candidates without pub.(Art.267.1(b)(ii)&2 RAP)

3 146.472,00

(Ext. act) Supply - Exceptional Negotiated Procedure with a single offer (Art. 268 RAP)

11 3.831.684,19

(Ext. act) Supply - International Open Procedure after publication of a contract notice (Art. 267.1(a) RAP)

34 17.992.828,84

(Ext. act) Supply - Local open procedure with prior publication (Art. 267.1(b)(i) RAP)

4 482.610,00

(Ext. act) Works - Exceptional Negotiated Procedure with a single offer (Art. 270 RAP)

5 6.106.755,14

(Ext. act) Works - Local Open Procedure with prior publication (Art.269.1(b) RAP)

10 9.660.463,11

(Ext. act) Works - Local Open Procedure with prior publication (Art.269(1) (b) RAP)

1 685.468,96

(Ext. act) Works - Negotiated Procedure with a single offer (Art. 246 IR)

1 29.763,26

TOTAL 240 253.287.629,96


Internal Procedures > EUR 60,000

Procedure Type Count Amount (EUR)

Internal Procedures > EUR 60,000

Exceptional Negotiated Procedure without publication of a contract notice (Art. 134 RAP)

3 1.804.519,00

Negotiated Procedure with at least five candidates below Directive thresholds (Art. 136a RAP)

1 118.000,00

Open Procedure (Art. 127.2 RAP)

1 1.166.000,00

TOTAL 5 3.088.519,00


TABLE 13 : BUILDING CONTRACTS

Total number of contracts :

1

Total amount :

85.440,00

Legal base Contract Number Contractor Name Description

Amount (EUR)

Art. 134.1(g) 0837408

ENTER COMPUTERS DOO*

Annual renewal of the Lease contract for the EU Info Centre in Podgorica (Year 4)

85.440,00


ANNEX 4: Materiality criteria

The criteria used by DG NEAR to determine the materiality of potential

weaknesses have been established in line with the Standing Instructions for the

2016 AAR. These instructions propose a standard quantitative materiality

threshold of maximum 2% for the authorized payments of the reporting year,

but also allow a multi-annual approach. Because of their multiannual nature, the

effectiveness of DG NEAR's control strategy can only be fully measured and

assessed once all audits, checks and controls have been fully implemented and

systematic errors have been detected and corrected.

The question of being on track towards the control objective of legality and

regularity is to be reassessed annually, taking into account both the frequency

and importance of the errors found as well as a cost/benefit analysis of the effort

needed to detect and correct them. Notwithstanding the multiannual span of DG

NEAR’s control strategy, its Director-General is required to sign a statement of

assurance for each financial reporting year. In order to determine whether to

qualify this statement of assurance with a reservation, the effectiveness of the

control systems in place needs to be assessed not only for the year of reference

but also with a multiannual perspective, to determine whether it is possible to

reasonably conclude that the control objectives will be met in the future as

foreseen.

The identification and potential correction of internal control weaknesses (and -

in particular - errors with financial impact), the criteria for making a decision on

whether there is material error in the expenditure of the DG and the question of

whether to make a reservation in the AAR, will therefore be based on the full

range of internal controls described in the AAR and on the level of error identified

in the RER Studies on a multi-annual basis and in the Annual Reports by the

ECA.

In quantitative terms:

DG NEAR ensures that the RER, i.e. the level of errors which remain undetected

and uncorrected, does not exceed 2% by the end of the management cycle. DG

NEAR considers that a weakness is quantitatively significant and deserves to be

disclosed as a reservation to the Declaration when the value of the transactions

affected by this weakness represents more than 2% of all the transactions of the

same nature (instrument, management mode) closed during the period under

review (01/09/2015 – 31/08/2016).

In qualitative terms:

DG NEAR considers issuing a reservation if (i) significant errors, taking into

account their frequency of occurrence, or (ii) significant weaknesses in the

Internal Control have been identified.

The identification of significant weaknesses in the Internal Control system is

derived from various sources, such as the annual assessment of internal controls

(ICAD), the conclusions from reports issued by the various control bodies (ECA,

IAS) and major issues that have been outlined by the various controlling bodies

or situations where a significant reputational risk may occur (e.g. major fraud

cases or decisions with a significantly negative political impact).


ANNEX 5: Internal Control Template(s) for budget implementation (ICTs)

I – Direct Management - Grants

Stage 1: Prior to Contracting

A – Identification and formulation of action to be co-financed including choice of instrument and implementation modality

Main control objectives: Ensuring that the Commission selects the most appropriate instrument in its cooperation with partner

countries in line with the policy objectives (effectiveness); compliance (legality & regularity) and ensures the proper type of support and

modalities specific to each partner country

Overall control efficiency indicator: Estimated cost of controls of grant operations divided by total amount of expenditure under grant

operations in the year.

Main risks

It may happen (again)

that…

Mitigating controls

How to determine

coverage frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

The instrument and/or

implementation modality

is not well suited to work

towards the identified

objectives and/or lead to a

substantial increase of

implementation risks.

Quality Review

100%

- staff costs of control are

estimated using

approximations based on

analyses of the

organogram, job

descriptions and

programme/project

portfolios

- external costs of control

are based on values of

respective contracts and

related disbursements

Estimated cost of controls

of grant operations up to

the identification and

formulation divided by

total amount of grants

contracted.


B - Preparation, adoption and publication of the Annual Work Programmes and Calls for proposals

Main control objectives: Ensuring that the Commission selects the proposals that contribute the most towards the achievement of the

policy or programme objectives (effectiveness); Compliance (legality & regularity); Prevention of fraud (anti-fraud strategy)

Main risks


that…

Mitigating controls

How to determine

coverage frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

The annual work

programmes and the

subsequent calls for

proposals do not

adequately reflect the

policy objectives,

priorities, are incoherent

and/or the essential

eligibility, selection and

award criteria are not

adequate to ensure the

evaluation of the

proposals.

Hierarchical validation

within the authorising

department

Explicit allocation of

responsibility to

individual officials

(reflected in task

assignment or function

descriptions)

Centralised checklist-

based verification

If risk materialises, all

grants awarded during

the year under this work

programme or call would

be irregular. Possible

impact 100% of budget

involved and significant

reputational

consequences.

Coverage / Frequency:

100%

Depth: Checklist

includes a list of the

requirements of the

regulatory provisions

identified.


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






of grant preparation

adpption and publication

divided by total amount

of grants contracted.


C - Selecting and awarding: Evaluation, ranking and selection of proposals

Main control objectives: Ensuring that the most promising projects for meeting the policy objectives are among (a good balance of) the

proposals selected (effectiveness); Compliance (legality & regularity); Prevention of fraud (anti-fraud strategy)

Main risks


that…

Mitigating controls

How to determine

coverage frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

The evaluation, ranking

and selection of proposals

is not carried out in

accordance with the

established procedures,

the policy objectives,

priorities and/or the

essential eligibility, or

with the selection and

award criteria defined in

the annual work

programme and

subsequent calls for

proposals.

Assignment of staff (e.g.

programme officers)

and/or

Selection and

appointment of expert

evaluators (if foreseen as

deviation from FR)

100% vetting for

technical expertise and

independence (e.g.

conflicts of interests,

nationality bias, ex-

employer bias, collusion)


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






of grant selection divided

by total amount of grants

contracted.

Redress procedure

100% of contested

decisions are analysed by

redress committee


Stage 2 - Contracting: Transformation of selected proposals into legally binding grant agreements

Main control objectives: Ensuring that the actions and funds allocation is optimal (best value for public money; effectiveness, economy,

efficiency); Compliance (legality & regularity); Prevention of fraud (anti-fraud strategy)

Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

The description of the

action in the grant

agreement includes tasks

which do not contribute

to the achievement of the

programme objectives

and/or that the budget

foreseen overestimates

the costs necessary to

carry out the action.

The beneficiary lacks

operational and/or

financial capacity to carry

out the actions.

Procedures do not comply

with regulatory

framework.

Project Officers

implement evaluators’

recommendations in

discussion with selected

applicants. Hierarchical

validation of proposed

adjustments.

Validation of beneficiaries

(operational and financial

viability).

Signature of the grant

agreement by the AO.

In-depth financial

verification and taking

appropriate measures for

high risk beneficiaries.

Reinforce financial and

contractual circuits.

100% of the selected

proposals and

beneficiaries are

scrutinised.

Coverage: 100% of draft

grant agreements.

Depth may be

determined after

considering the type or

nature of the beneficiary

(e.g. SMEs, joint-

ventures) and/or of the

modalities (e.g.

substantial

subcontracting) and/or

the total value of the

grant.


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






related to contracting of

implementation divided

by total amount of grants

contracted.


Stage 3 - Monitoring the execution. This stage covers the monitoring the operational, financial and reporting aspects related to the

project and grant agreement

Main control objectives: ensuring that the operational results (deliverables) from the projects are of good value and meet the

objectives and conditions (effectiveness & efficiency); ensuring that the related financial operations comply with regulatory and

contractual provisions (legality & regularity); prevention of fraud (anti-fraud strategy); ensuring appropriate accounting of the operations

(reliability of reporting, safeguarding of assets and information)

Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

The actions foreseen are

not, totally or partially,

carried out in accordance

with the technical

description and

requirements foreseen in

the grant agreement

and/or the amounts paid

exceed that due in

accordance with the

applicable contractual

and regulatory

provisions.

Operational and financial

checks in accordance

with the financial circuits.

Operation authorisation

by the AO

For riskier operations, ex-

ante in-depth and/or on-

site verification.

100% of the projects are

controlled, including only

value-adding checks.

Riskier operations subject

to in-depth and/or on-

site controls.

The depth depends on

risk criteria. - staff costs of control are

estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






related to monitoring of


by total amount of

payments made under

grant contracts

For high risk operations,

reinforced monitoring

Risk assessment to

identify potential ROM,

evaluations and on-the-

spot (OV and/or FV)

monitoring visit. Earmark

projects for risk-based

system audits (during the

first phase of

implementation of the

project) and financial

audits (after receiving at

least one interim

payment or at the end of

the project) : (see below

annual control plans)

High risk operations

identified by risk criteria.

Red flags: delayed

interim deliverables,

suspicion of plagiarism,

unstable consortium,

requesting many

amendments, Early

Detection and Exclusion

System (EDES), etc.


Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

If needed: application of

Suspension/interruption

of payments, Penalties or

liquidated damages.

Referring grant to OLAF

Depth: depends from

results of controls.

Expenditure verification

accompanying

Any request for

payment of the

balance in the

case of grants of

more than EUR

100,000;

Any request for

pre-financing

payments per

financial year in

case of grants of

EUR 5.000,000 or

more.

Annual Control Plans:

Audits and expenditure

verifications are planned

annually for ongoing and

closed operations of DG

NEAR overall portfolio.

The operations to be

verified or audited are

determined through risk

analyses. These controls

can take place before or

after disbursements

Coverage: > 10% of

ongoing or "recently"

closed operations


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






related to audits and

verifications of


by total amount of grant

contracts


Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

recognizing expenditure.


Stage 4 - Ex-Post controls and Follow-up

A - Reviews, audits and monitoring

Main control objectives: Measuring the effectiveness of ex-ante controls by ex-post controls; detect and correct any error or fraud

remaining undetected after the implementation ex-ante controls (legality & regularity; anti-fraud strategy); addressing systemic

weaknesses in the ex-ante controls, based on the analysis of the findings (sound financial management); Ensuring appropriate accounting

of the recoveries to be made (reliability of reporting, safeguarding of assets and information)

Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

The ex-ante controls (as

such) fail to prevent,

detect and correct

erroneous payments or

attempted fraud.

The ex-post controls

focus on the detection of

external errors (e.g.

made by beneficiaries).

Through a residual error

rate (RER) study a

representative sample of

closed operations is

reviewed in order to

determine the

effectiveness of the

pyramid of controls put in

place by the DG.

Findings are validated

with fund recipients, used

for possible ex-post

corrections (i.e.

recoveries), taken into

consideration for

improvements of ex-ante

controls, and referred to

OLAF where needed.

MUS sample sufficiently

representative to draw

valid management

conclusions.


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios





Estimated cost of RER

controls of grant

operations divided by

total amount of

expenditure under grant


Supervision missions to

Delegations by

independent staff not

involved in the

operational and financial

circuits

Size and composition of

sample are determined in

accordance with the

cooperation portfolios

managed by the visited

Delegations.

Staff costs of controls

including mission costs

Estimated cost of

supervision missions


Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators


B - Implementing results from ex-post audits/controls

Main control objectives: Ensuring that the (audit) results from the ex-post controls lead to effective recoveries (legality & regularity;

anti-fraud strategy); Ensuring appropriate accounting of the recoveries made (reliability of reporting)

Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

The errors, irregularities

and cases of fraud

detected are not

addressed or not

addressed timely

Systematic registration of

audit / control results to

be implemented.

Financial operational

validation of recovery in

accordance with financial

circuits.

Authorisation by AO.

Coverage: 100% of final

audit results with a

financial impact.

Findings of systemic

errors are considered for

corrections of non-

audited projects by the

same beneficiary, taken

into account for future

projects.


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios





Estimated cost of follow

up of financial

recommendations on

grant operations divided

by total amount of

expenditure under grant



II – Direct Management - Procurement

A – Identification and formulation of action to be co-financed including choice of instrument and implementation modality

Stage 1: Prior to Contracting




Overall control efficiency indicator: Estimated cost of controls of procurement operations divided by total amount of expenditure

under procurement contracts in the year.

Main risks


that…

Mitigating controls

How to determine

coverage frequency

and depth

How to estimate the

costs of controls

Possible control

indicators








Quality Review

100%


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






of procurement

operations up to the

identification and


total amount of

procurement contracts

concluded in the year.


B - Planning the procurement

Main control objectives: Effectiveness, efficiency and economy. Compliance (legality and regularity).

Overall cost efficiency indicator: total cost of controls of process / total expenditure executed during the year

Main risks


that…

Mitigating controls How to determine coverage

frequency and depth

How to estimate the

costs of controls

Possible control

indicators

The needs are not well

defined (operationally

and economically) and

that the decision to

procure was

inappropriate to meet the

operational objectives

Discontinuation of the

services provided due to

a late contracting (poor

planning and

organisation of the

procurement process)

Validation by AO(S)D of

justification (economic ,

operation) for launching

a procurement process.

Publication of intended

procurements / Work

programme.

100% of the forecast

procurements

- staff costs of control

are estimated using

approximations based

on analyses of the

organogram, job

descriptions and

programme/project

portfolios

- external costs of

control are based on

values of respective

contracts and related

disbursements

Estimated cost of

controls of the planning

of procurement


total amount of




C - Needs assessment & definition of needs

Main control objectives: Effectiveness, efficiency and economy. Compliance (legality and regularity).

Main risks


that…


frequency and depth

How to estimate the

costs of controls

Possible control

indicators

The best offer/s are not

submitted due to the

poor definition of the

tender specifications

AOSD supervision and

approval of

specifications 100% of the calls for tenders

including the technical

specifications are verified ex-

ante by EC staff except for

some of the CFT launched

inside Programme-estimates in

accordance with applicable

rules.


are estimated using


on analyses of the

organogram, job

descriptions and

programme/project

portfolios

- external costs of




disbursements

Estimated cost of

controls of the

supervision of

specifications divided by

total amount of



Call for tenders which

are technically complex

are elaborated by

external experts

contracted through

service contracts and

then verified by EC

staff.


D – Selection of the offer & evaluation

Main control objectives: Effectiveness, efficiency and economy. Compliance (legality and regularity). Fraud prevention and detection.

Main risks


that…

Mitigating controls

(those in bold are

strongly recommended)

How to determine coverage

frequency and depth

How to estimate the

costs of controls

Possible control

indicators

The most economically

advantageous offer not

being selected, due to a

biased, inaccurate or

‘unfair’ evaluation

process

Formal evaluation

process: Opening

committee and

Evaluation committee

100% of the offers analysed.

and all documents transmitted - staff costs of control

are estimated using


on analyses of the

organogram, job

descriptions and

programme/project

portfolios

Estimated cost of

controls of procurement

selection divided by

total amount of

procurements

contracted.

Opening and Evaluation

Committees'

declaration of absence

of conflict of interests

100% of the members of the

opening committee and the

evaluation committee

Exclusion decisions

documented

100% checked and required

documents provided are

consistent


Stage 2 - Contracting: Transformation of selected offers into legally binding contracts

Main control objectives: Ensuring that the actions and funds allocation is optimal (best value for public money; effectiveness, economy,


Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

The contractor lacks

operational and/or

financial capacity to carry

out the actions.

Procedures do not comply

with regulatory

framework.

Validation of

substantiating documents

provided by contractors

Signature of contracts by

the AO.

Reinforce financial and

contractual circuits.

100% of tenders are

scrutinized.


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios


related to contracting


of procurements

contracted


Stage 3 – Monitoring Implementation / Financial transactions

Main control objectives: Ensuring that the implementation of the contract is in compliance with the signed contract

Main risks


that…


frequency and depth

How to estimate the

costs of controls

Possible control

indicators

The

products/services/works

foreseen are not, totally

or partially, provided in

accordance with the

technical description and


the contract and/or the

amounts paid exceed

that due in accordance

with the applicable

contractual and

regulatory provisions.

Business discontinues

because contractor fails

to deliver

Operational and financial

checks in accordance

with the financial

circuits.

Operation authorisation

by the AO

For riskier operations,

ex-ante in-depth and/or

on-site verification.

100% of the projects are

controlled, including only

value-adding checks.

Riskier operations subject to

in-depth and/or on-site

controls.

The depth depends on risk

criteria.


are estimated using


on analyses of the

organogram, job

descriptions and

programme/project

portfolios

- external costs of




disbursements

Estimated cost of

controls related to

monitoring of


by total amount of

payments made under


For high risk operations,

reinforced monitoring

Risk assessment to

identify potential ROM,

evaluations and on-the-

spot (OV and/or FV)

monitoring visit. Earmark

projects for risk-based

system audits (during

the first phase of


project) and financial

audits (after receiving at

least one interim

payment or at the end of

the project) : (see below

annual control plans)

High risk operations identified

by risk criteria.

Red flags: delayed interim

deliverables, suspicion of

plagiarism, unstable

consortium, requesting many

amendments, Early Detection

and Exclusion System (EDES),

etc.


Main risks


that…


frequency and depth

How to estimate the

costs of controls

Possible control

indicators


Suspension/interruption

of payments, Penalties or

liquidated damages.


Depth: depends from results

of controls.

Expenditure verification

accompanying most

procurement interim and

final invoices (folloiwng

contractual conditions)


Audits and expenditure

verifications are planned





verified or audited are

determined through risk

analyses. These controls

can take place before or

after disbursements


Coverage: > 10% of ongoing

or "recently" closed operations


are estimated using


on analyses of the

organogram, job

descriptions and

programme/project

portfolios

- external costs of




disbursements

Estimated cost of

controls related to

audits and verifications

of implementation


of procurement

contracts


Stage 4 – Ex-Post controls






Main risks


that…

Mitigating controls


frequency and depth

How to estimate the

costs of controls

Possible control

indicators



detect and correct


attempted fraud.




made by beneficiaries).


rate (RER) study a




determine the


pyramid of controls put in

place by the DG.




corrections (i.e.


consideration for



OLAF where needed.



valid management

conclusions.


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios








total amount of

expenditure under

procurement operations

in the year.


Delegations by


involved in the


circuits



accordance with the



Delegations.



Estimated cost of



Main risks


that…

Mitigating controls


frequency and depth

How to estimate the

costs of controls

Possible control

indicators





Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators


and cases of fraud

detected are not

addressed or not

addressed timely


audit / control results to

be implemented.




circuits.




financial impact.



corrections of non-

audited projects by the

same beneficiary, taken

into account for future

projects.


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






up of financial

recommendations on



of expenditure under


in the year.


III – Direct Management - Budgetary support

Stage 1: Identification and formulation




Overall control efficiency indicator: Estimated cost of controls of budget support operations divided by total amount of expenditure

under budget support operations in the year.

Main risks


that…

Mitigating controls

How to determine

coverage frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

1.- The Commission

supports partner countries

which do not meet the

criteria on fundamental

values and/or the 4

eligibility criteria

2.- The programme is

wrongly formulated to

meet the general

objectives for budget

support programmes.

3.- The programme's

Quality Review in HQ to

analyse the identification

fiche of the project.

100% of BS FIP


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






of identification and


total amount of

expenditure under budget

support operations in the

year.

Quality Review in HQs to

analyse the action fiche

of the project and the

draft Financing

agreement.

100 % of BS FAs

DG NEAR step by step

financial circuit for level

one commitments in

budget support

operations.

100 % of BS FAs


Main risks


that…

Mitigating controls

How to determine

coverage frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

specific objectives are not

aligned with partner

countries own

development policies, are

not coordinated with other

aligned donors and are not

consistent with EU

development policy.

RISK assessment

framework for budget

operations: Implemented

by the Delegation and

reviewed in the FAST4 for

substantial or high risk

BS programmes.

Substantial or high risk

BS FAs

4 Financial Assistance Steering Committee.


Stage 2 – Contracting.

Main control objectives: Ensuring that the main parameters of the budget support operation are correctly encoded in the contract

database.

Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

Important parameters

relevant for

disbursements under

budget support

operations are wrongly

encoded.


financial circuit for level

two commitments in

budget support

operations.

100% of parampeters


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios


of staff verifying the main

parameters divided by

total amount of



year.


Stage 3 – Monitoring of the implementation – operational, financial and reporting aspects.

Main control objectives: Ensuring that the operational results meet the conditions, objectives and expected results (effectiveness &

efficiency); Ensuring that the related financial operations comply with regulatory and contractual provisions (legality & regularity);

ensuring appropriate accounting of the operations (reliability of reporting, safeguarding of assets and information).

Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

1. The Commissions fails

to identify a significant

deterioration of

fundamental values

and/or wrong

assessment on the 4

eligibility criteria before

BS payments are

released.

2. The Commission

makes a wrong

calculation of the amount

to be disbursed for the

variable tranches

3.- Risk that transfer of

funds into the Treasury

account has not

respected the terms of

the financing Agreement

on exchange rate and

treasury credit delay

Policy structured dialogue

On eligibility, risk

assessment framework

and policy performance

framework;


financial circuit for

payments in BS

operations;

RISK assessment

framework Implemented

by the Delegation and

reviewed in the FAST for

substantial or high risk

BS programmes

100% of BS payments

100% of BS payments

Substantial or high risks

BS payments


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






of monitoring divided by

total amount of



year.


Stage 4 – Ex post controls

A – Ex-post controls and follow-up

Main control objectives: Measuring the effectiveness of ex-ante controls; detect and correct any error or fraud remaining undetected

after the implementation of ex-ante controls (legality & regularity; anti-fraud strategy); addressing systemic weaknesses in the ex-ante

controls, based on the analysis of the findings (sound financial management); Ensuring appropriate accounting of the recoveries to be

made (reliability of reporting, safeguarding of assets and information)

Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

The ex- ante controls fail

to prevent, detect and

correct erroneous

disbursements or fraud.

Residual error rate study.

BS payments are

included in the scope of

the RER study (MUS

sample).


estimated using


analyses of the

organogram, job

descriptions,

programme/project

portfolios and staff

mission costs.








total amount of

expenditure under

procuremen operations in

the year. t

Estimated cost of


Review of sample

transactions during

supervisopn missions to

Delegations.



accordance with the



Delegations.



Main control objectives: Ensuring that the results from ex-post controls lead to appropriate corrective measures (legality & regularity;

anti-fraud strategy).

Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators

The deficiencies, errors,

and irregularities

detected through ex-post

controls are not

addressed (timely).


ex-post control outcomes

to be implemented.


Coverage: 100% of ex-

post control outcomes

with a financial impact.


errors might be extended

to non-audited projects

by the same country

partner.


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios





Estimated cost of follw up

of findings divided by

total amount of

expenditure under

Budget Support



IV Indirect Management by beneficiary countries (IMBC) under IPA5

Stage 1 – Programming, evaluation and selection of proposals

A - Preparation, adoption and publication of the Programming decision(s) (including choice of management mode),

publication evaluation and selection of proposals/offers

Main control objectives: Ensuring that the Commission selects the implementation mode and subsequently the /proposals/offers that

contribute the most towards the achievement of the policy or programme objectives (effectiveness); compliance (legality & regularity);

prevention of fraud (anti-fraud strategy)

Main risks


that…

Mitigating controls

How to determine

coverage

frequency and

depth

How to estimate the

costs and benefits of

controls

Possible control

indicators

5 Please note that the mode of implementation for IMBC has different modalities under IPA and ENI. The implementation modalities referred to here are the ones of IPA.


Main risks


that…

Mitigating controls

How to determine

coverage

frequency and

depth

How to estimate the


controls

Possible control

indicators

The Decision(s) do not

adequately reflect the

policy objectives,

priorities;

For IPA, the

establishment (or

prolongation) of the

mandate of the partner

country is affected by

issues, which would

undermine the basis for

the management of the

related EU funds (via that

particular entity);

Hierarchical validation within the

authorising department;

Inter-service consultation,

including all relevant DGs;

Adoption by the Commission

Systems audits (de-centralised

management under IPA)

Recommended:

(1) Explicit allocation of

responsibility to individual

officials (reflected in task

assignment or function

descriptions)

(2) Use of standardised

checklist-based verification

If risk materialises

risk that some or all

costs would be

irregular. Possible

impact on budget

involved and

significant

reputational

consequences.

Coverage /

Frequency: 100%

Depth: Checklists

includes a list of the

necessary

requirements


are estimated using


on analyses of the

organogram, job

descriptions and

programme/project

portfolios

- external costs of




disbursements

Effectiveness:

- Systems audit findings

- Corrective measures

- Consumption rate of

commitment credits

Efficiency: Cost of

control for the

programming phase over

the total cost of control

and its evolution.


B - Selecting and awarding: Evaluation and selection of proposals/offers

Main control objectives: Ensuring that the most promising proposals / best value for money offers for meeting the policy objectives are

among (a good balance of) the proposals / are the offers selected (effectiveness); Compliance (legality & regularity); Prevention of fraud

(anti-fraud strategy)

Main risks


that…

Mitigating controls

How to determine

coverage

frequency and

depth

How to estimate the


controls

Possible control

indicators

The evaluation, ranking

and selection of

proposals/offers is not


with the policy

objectives, priorities

and/or the essential

eligibility, or with the

selection and award

criteria defined in the

Decisions and subsequent

calls for

proposals/tenders.

Eligibility, selection and

award criteria are not

adequate to ensure the

evaluation of the

proposals/offers;

Assignment of staff (e.g. Task

Managers)

Use of standardised checklist-

based verification

100%6


are estimated using


on analyses of the

organogram, job

descriptions and

programme/project

portfolios

- external costs of




disbursements

Effectiveness:

-Relevant rejection rates

Efficiency Indicators:

Cost of control for the

evaluation phase over the

total cost of control and

its evolution.

6 With regard to de-centralised management: the Conferral of Management decisions in place for the reporting period stipulate ex ante control of 100% of transactions

prepared by the National Authorities in the beneficiary countries up to the contract signature. In the case of Turkey a progressive drawing down of exante controls has started to be implemented.


Stage 2 - Contracting: Transformation of selected proposals / offers into legally binding grant agreements / contracts

Main control objectives: Ensuring that the actions and fund allocation is optimal (best value for public money; effectiveness, economy,


Main risks


that…

Mitigating controls

How to determine

coverage,

frequency and

depth

How to estimate the


controls

Possible control

indicators

The description of the

action in the grant

agreement /contracts

includes tasks which do

not contribute to the

achievement of the

operational objectives

and/or that the budget

foreseen overestimates

the costs necessary to

carry out the action.

The beneficiary

/contractor does not

meet eligibility criteria or

lack financial capacity to

carry out the actions

Assignment of staff (e.g. Task

Managers)

Use of standardised checklist-

based verification

100% of the

selected proposals /

offers and

beneficiaries /

candidates are

scrutinised.

Coverage: 100% of

draft grant

agreements /

contracts.

NB: the contracting

authority is the

relevant national

authority, so

process does not

included contract

signature by

Commission


are estimated using


on analyses of the

organogram, job

descriptions and

programme/project

portfolios

Effectiveness:

- Rejection Rates7

- Derogations, prior

approvals and other

exceptions authorised

Efficiency indicators:


contracting phase over

the total cost of control

and its evolution.

7 Ratio between the number of rejections of tender, evaluation, and contracts documents submitted by National Implementing Agencies (IAs) for the Commission’s ex

ante control and the absolute number of submissions of documents for approval in the reporting year.


Stage 3 - Monitoring the execution. This stage covers the monitoring the operational, financial and reporting aspects related to the

project and grant agreement

Main control objectives: ensuring that the operational results (deliverables) from the projects are of good value and meet the

objectives and conditions (effectiveness & efficiency); ensuring that the related financial operations comply with regulatory and

contractual provisions (legality & regularity); prevention of fraud (anti-fraud strategy); ensuring appropriate accounting of the operations

(reliability of reporting, safeguarding of assets and information)

Main risks


that…

Mitigating controls

How to determine

coverage,

frequency and

depth

How to estimate the


controls

Possible control

indicators

The actions foreseen are

not, totally or partially,


with the technical

description and


the grant agreement

/contract and/or the

amounts paid exceed that

due in accordance with

the applicable contractual

and regulatory provisions

(ineligible/irregular).

Operational monitoring in

accordance with the

responsibilities of the

Commission

For high/very high projects this

may include on the spot

missions

100% of the

projects are

monitored;

Systems audits (de-

centralised

management)

implemented

according to

systems audit

programme;

Riskier operations

subject to in-depth

and/or on-site

controls;

The depth depends

on risk assessment.


are estimated using


on analyses of the

organogram, job

descriptions and

programme/project

portfolios

Effectiveness:

- Systems audit findings


- Irregularities reported

by the National

authorities;

- Efficiency

Indicators:


monitoring phase over

the total cost of

control and its

evolution.


Suspension/interruption of

payments, Penalties or

liquidated damages.


High risk operations

identified by risk

assessment

Depth: depends on

results of ex ante

controls / risk

assessment.


Stage 4 - Ex-Post controls


Main control objectives: Measuring the effectiveness of ex-ante controls; detect and correct any error or fraud remaining undetected

after the implementation ex-ante controls (legality & regularity; anti-fraud strategy); addressing systemic weaknesses in the ex-ante

controls, based on the analysis of the findings (sound financial management); Ensuring appropriate accounting of the recoveries to be

made (reliability of reporting, safeguarding of assets and information)

Main risks


that…

Mitigating controls

How to determine

coverage,

frequency and

depth

How to estimate the


controls

Possible control

indicators

The ex-ante controls fail

to prevent, detect and

correct erroneous

payments or attempted

fraud.

Specific statistically

representative RER study for

IMBC

Carry out ex post control

audits of a representative

sample of operations to

identify errors, recovery

unduly paid amounts, and

establish the residual error

rates

Validate audit results with

beneficiary

If needed: refer case to OLAF

Methodology

developed by an

external auditor.

2016 coverage is

80% in value.

Representative

sample: sample

sufficiently

representative to

draw valid

management

conclusions

Risk-based sample,

determined in

accordance with the

selected criteria

Costs: estimation of

cost of staff involved in

the coordination and

execution of the audit

strategy. Cost of

contracts with audit

firms for the

outsourced audits.

external costs of




disbursements

Estimated cost of RER,

other audits and staff

controls of IPA IMBC


total amount of

expenditure under IAP

IMBC operations in the

year.

The audit strategy focus

on the detection of


made by beneficiaries)

and do not consider any

internal errors made by

staff or embedded

systematically in the own

Establish an audit strategy,

performed by independent

staff not involved in the


circuits

ideally, the sample

will be representative

to enable drawing

valid management

conclusions about the

entire population

during the

programme’s



Estimated cost of control

missions


Main risks


that…

Mitigating controls

How to determine

coverage,

frequency and

depth

How to estimate the


controls

Possible control

indicators

organisation lifecycle.




Main risks


that…

Mitigating controls

How to determine

coverage,

frequency and

depth

How to estimate the


controls

Possible control

indicators


and cases of fraud

detected are not

addressed or not

addressed timely


audit / control results to be

implemented.

Financial operational validation

of recovery in accordance with

financial circuits.

Authorisation by the relevant

AOSD

Coverage: Final


financial impact.


errors might be

extended to non-

audited projects by

the same beneficiary

Costs: estimation of

cost of staff involved in

the coordination and

execution of the audit

strategy. Cost of

contracts with audit

firms for the

outsourced audits.

external costs of




Effectiveness:

- Total recovery orders

issued


V - Indirect management with International Organisations and Member States Agencies


Stage 1 – Prior to Contracting

A – Ex-ante (re)assessment of the entrusted entity’s financial and control framework (towards “budget autonomy”;

“financial rules”).

Main control objectives: Ensuring that the entrusted entity is fully prepared to start/continue implementing the delegated funds

autonomously with respect of all 5 ICOs.

Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the


controls

Possible control

indicators

The financial and control

framework deployed by

the entrusted entity is

not fully mature to

guarantee achieving all 5

ICOs (legality and

regularity, sound financial

management, true and

fair view reporting,

safeguarding assets and

information, anti-fraud

strategy).

Ex-ante assessment,

conditional to granting

budget autonomy

Hierarchical validation


department

Requiring justification

and prior consent for any

deviating financial rules

Postponing the budget

autonomy

Obligation to notify any

subsequent changes

embedded in Board

proceedings

Coverage/frequency:

100% of entrusted

entities/once

Depth may be

determined after

considering the type or

nature of the entrusted

entity (e.g. other

international organisation

with a specific EC

agreement, EIB/EIF,

PPPs, CFSP persons, etc)

and/or the value of the

budget concerned.

Costs of control:


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios





(1) Overall cost of

controls implemented by

DG NEAR staff divided by

the annual amount

delegated (excluding

remuneration paid).

(2) Remuneration and/or

fees paid to entrusted

entities divided by the

annual amount delegated

(excluding remuneration

paid).


B - Identification and formulation




Main risks


that…

Mitigating controls

How to determine

coverage frequency

and depth

How to estimate the

costs of controls

Possible control

indicators








Quality Review

100%


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






in the identification and

formulation phases


of contracts concluded in

the year.


Stage 2 – Contracting (i.e. Establishment (or prolongation) of the mandate to the entrusted entity (“delegation act”/

“contribution agreement” / etc)).

Main control objectives: Ensuring that the legal framework for the management of the relevant funds is fully compliant and regular

(legality & regularity), delegated to an appropriate entity (best value for public money, economy, efficiency), without any conflicts of

interests (anti-fraud strategy).

Main risks


that…

Mitigating controls

How to determine

coverage frequency

and depth

How to estimate the


controls

Possible control

indicators

The establishment (or

prolongation) of the

mandate of the entrusted

entity is affected by legal

issues, which would

undermine the legal basis

for the management of

the related EU funds (via

that particular entity).

The establishment of the

delegated acts concerned

(Pagoda, Imda,

previously Delegation

Agreements and

Contribution Agreements)

is submitted to

hierarchical validation


department and to Inter-

service consultation,

including all relevant

DGs.

Coverage: 100%

Frequency: once

If risk materialises, all

funds delegated during

the year(s) to the

entrusted entity would be

irregular. Possible impact

100% of budget involved

and significant

reputational

consequences.

Costs of control:


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios


of the mandate divided

by total amount of

contracts concluded in

the year.

The Commission has not

sufficient information

from independent

sources on the entity’s

management

achievements, which

prevents drawing

conclusions on the

assurance for the budget

entrusted to the entity –

which may reflect

negatively on the

Commission’s governance

reputation and quality of

Agreements specify the

control, accounting,

audit, publication, etc

related requirements –

incl. independent audit

function and cooperation

with IAS and ECA

- potential escalation of

any major governance-

related issues with

entrusted entities

- referral to OLAF

Coverage: 100%


Main risks


that…

Mitigating controls

How to determine

coverage frequency

and depth

How to estimate the


controls

Possible control

indicators

reporting.


Stage 3 – Monitoring the implementation

A - Operations: monitoring, supervision, reporting (“representation” / “control with or around the entity”).

Main control objectives: Ensuring that the Commission is fully and timely informed of any relevant management issues encountered by

the entrusted entity, in order to possibly mitigate any potential financial and/or reputational impacts (legality & regularity, sound financial

management, true and fair view reporting, anti-fraud strategy).

Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the


controls

Possible control

indicators

Due to weak "modalities

of cooperation,

supervision & reporting",

the Commission is not

(timely) informed of

relevant management

issues encountered by

the entrusted entity,

and/or does not (timely)

react upon notified issues

by mitigating them or by

making a reservation for

them – which may reflect

negatively on the

Commission’s governance

reputation and quality of

accountability reporting.

Agreement specifying the




incl. the modalities on

reporting back relevant

and reliable control

results

Monitoring or supervision

of the entrusted entity

(e.g. ‘regular’ monitoring

meetings at operational

level; review of reported

control results and any

underlying mngt/audit

reports; representation

and intervention at the

board, scrutiny of annual

report, etc).

Management review of

the supervision results.

If appropriate/needed:

- reinforced monitoring of

operational and/or

financial aspects of the

Coverage: 100% of the

entities are monitored /

supervised.

Frequency: meetings

take place regularly

depending on the

delegated activities and

delegated entities,

reports submitted at least

annually (depending of

contractual provisions).

In case of operational

and/or financial issues,

measures are being

reinforced.


the mandate of the (type

of) entity, inter alia

whether the Commission

has full access to the

entity’s internal control

information.

Costs of control:


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






of monitoring divided by

total amount of

expenditure under IMEE



Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the


controls

Possible control

indicators

entity

- intervention, e.g. via

own audits on-the-spot,

by IAS

- potential escalation of

any major governance-

related issues with

entrusted entities

- referral to OLAF


Verification of

expenditure are planned





verified are determined

through risk analyses.

These controls can take

place before or after

disbursements


Coverage: > 10% of

ongoing or "recently"

closed operations


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






related to verifications of


by total amount of IMEE's

contracts


B – Commission contribution: payment or suspension/interruption.

Main control objectives: Ensuring that the Commission fully assesses the management situation at the entrusted entity, before either

paying out the (next) contribution for the operational and/or operating budget of the entity, or deciding to suspend/interrupt the (next)

contribution (legality & regularity, sound financial management, anti-fraud strategy).

Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the


controls

Possible control

indicators

The Commission pays out

the (next) contribution to

the entrusted entity,

while not being aware of

the management issues

that may lead to financial

and/or reputational

damage.

Agreement specifying the




incl. reporting back

Management review of

the supervision results.

Ex-ante OV and FV, ‘in-

depth’ if need be

Hierarchical validation of

contribution payment and

recovery of non-used

operating budget subsidy

If appropriate/needed:

suspension or

interruption of payments

Coverage: 100% of the

contribution payments.

Frequency: usually

annually but can be more

frequent depending on

the contractual

provisions.


the mandate of the (type

of) entity, inter alia

whether the Commission

has full access to the

entity’s internal control

information.

Costs of control:


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






related to verifications of


by total amount of IMEE's

contracts


Stage 4 - Ex-Post controls and Follow-up

A - Reviews, audits, verifications and monitoring





Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the


controls

Possible control

indicators



detect and correct


attempted fraud.




made by beneficiaries)

and do not consider any

internal errors made by

staff or embedded

systematically in the own

organisation


rate (RER) study a




determine the

effectiveness of ex-ante

controls.




corrections (i.e.


consideration for



OLAF where needed.



valid management

conclusions.


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






controls of IMEE's


total amount of

expenditure in the year.


Delegations by


involved in the


circuits



accordance with the



Delegations.



Estimated cost of



B - Implementing results from ex-post controls

Main control objectives: Ensuring that the results from the ex-post controls lead to effective recoveries (legality & regularity; anti-fraud

strategy); Ensuring appropriate accounting of the recoveries made (reliability of reporting)

Main risks


that…

Mitigating controls

How to determine

coverage, frequency

and depth

How to estimate the

costs of controls

Possible control

indicators


and cases of fraud

detected are not

addressed or not

addressed timely


control results to be

implemented.




circuits.




financial impact.



corrections of other

projects by the same

beneficiary, taken into

account for future

projects

Costs of control:


estimated using


analyses of the

organogram, job

descriptions and

programme/project

portfolios






up of recommendations

on IMEE's operations


of expenditure in the

year.


ANNEX 6: Implementation through national or

international public-sector bodies and bodies governed by private law with a public sector mission

Remarks

This report is generated to comply with DG BUDG's standing instructions for the Annual

Activity Report. Annex 6 of the Annual Activity Report should include information about

implementing tasks entrusted to national or international public sector bodies and bodies

governed by private law with a public sector mission. At least the following information is

required for each entity which implemented programmes in the reporting year:

programmes concerned, annual budgetary amount entrusted, duration of the delegation,

justification of the recourse to indirect centralised management, justification of the

selection of the bodies and a summary description of the implementing tasks entrusted

to these bodies.

The BO report thus extracts the list of delegation agreements of the reporting year. Such

contracts (or contract amendments) are identified based on their Budget Management

Type (indirect management) and through the organizations implementing the

programmes (Implemented By Code), which may be public law bodies (PL), private law

bodies with a public sector mission (PM) or public law bodies implementing public-private

partnerships (PP).

The report combines financial information originating from ABAC and operational

information from CRIS to meet the requirements of the BUDG.


Contract Number

Contract

Title

Financial Management

Area

Programm

es concerned (Instrumen

t)

Entity in

Charge

Del in Charg

e

Benefitting zone

LC Type

LC Type

description

BMT

Implemented

by Code

Implemented by

LEF

Complete

Name

Original contract EC Signature Date

Original Contract Contract

or Signatur

e Date

Authorizing Office

r Signature Date (Latest in the

year)

Start date

End date

Com L2

Accepted

Amount

(Eur)

Justification of the recourse to indirect centralised

management

Justification of the selection of the bodies

Summary description of the implementing tasks entrusted to

these bodies

351612

Convention de délégation

BGUE

ENI NEAR B 03

Tunisia

Tunisia

DAG

Delegation agreement

IM PM Private law bodies with a public service mission

6000509044

AGENCE FRANCAISE D'EXPERTISE TECHNIQUE INTERNATIONALE

1/12/2014

10/12/2014

15/07/2016

19/09/2014

18/12/2018

80.000,00

Indirect centralised management is justified as it allows deeper impact at local level. Participatory approach, inclusion, localised participation will be guaranteed throughout the project by EUNIC/British council. This management mode will favour networking and sharing of experiences.

EUNIC/British Council will promote Tunisian cultural diversity and access to culture at local, national and international level. The implementing body will support freedom of expression among young generations and will encourage capacity building and professionalisation of workers of the cultural sector. EUNIC through its different members will promote transfer of expertise and best practices at European level. EUNIC members are in close contact with civil society organisations and can ensure better interaction. the British council is pillar-assessed and has gone through a ISO 9001: 2008 quality certification exercise

The tasks entrusted to EUNIC/british council are: - call for proposals/ call for candidatures (promoting culture and freedom of expression at local level; support the organisation of festivals and support to heritage protection) - technical assistance - capacity building - setting up of a demand-driven expertise pool - awareness raising and promotion campaigns - mapping, studies, assessments - training programme

355442

Support to solid waste management in Jordanian communities hosting Syrian refugees

BGUE

ENI NEAR B 01

Jordan

Jordan

DAG



6000057485

DEUTSCHE GESELLSCHAFT FUR INTERNATIONALE ZUSAMMENARBEIT (GIZ) GMBH

23/12/2014

28/12/2014

15/06/2016

1/01/2015

31/05/2017

500.000,00

A part of this action with the objective of improving the waste disposal services in the governorates of Irbid and Mafraq through rehabilitating existing landfill facilities may be implemented in indirect management with Gesellschaft für Internationale Zusammenarbeit (GiZ) in

accordance with Article 58(1)(c) of Regulation (EU, Euratom) No 966/2012.

This implementation is justified because GiZ (i) has a substantial proven track-record of project implementation in Jordan, in particular in the area of water and wastewater infrastructure (ii) is currently implementing a pilot operation in solid waste management in the governorates under consideration.

Improve the waste disposal services in Irbid and Mafraq through rehabilitating existing landfill facilities, upgrading transfer capacities and strengthening Joint Services Councils administrative and technical capacities.

355468

Promoting financial inclusion through improved governance and outreach of Microfinance in Jordan

BGUE

ENI NEAR B 01

Jordan

Jordan

DAG



6000057485


18/12/2014

23/12/2014

20/12/2016

1/01/2015

31/12/2018

100.000,00

A part of this action with the objective of reinforcing the institutional and organisation capacities of key public institutions will be implemented in indirect centralised management with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH in accordance with Article 54(2)(c) of Financial Regulation 1605/2002.

This implementation is justified because the expertise of this Member State agency in the area of microfinance is recognised and it is already providing technical assistance to the Central Bank of Jordan in the area of microfinance regulation and supervision.

The agency will support the development of organisational and institutional capacities at the Central Bank of Jordan, the Development and Employment Fund and the Ministry of Planning and International Cooperation (MoPIC) and contract the relevant key studies and assessments identified in the National Policy as well as consumer protection campaigns. Ancillary technical assistance will be provided in the form of policy advice to the Government of Jordan.


372758

Supporting the private sector development in Lebanon

BGUE

ENI NEAR B 01

Lebanon

Lebanon

DAG



6000509044


11/02/2016

25/02/2016

11/02/2016

25/02/2016

24/09/2019

15.000.000,

00

This action may be implemented in indirect management with Expertise France in accordance with Article 58(1) of Regulation (EU, Euratom) N° 966/2012.

Expertise France has been selected for the following reasons i) Due to the complexity and technical nature of the programme, Indirect Management with a Member State agency is the preferred option. Expertise France is the lead implementation agency in the field of private sector development. The agency will be able to fully contribute to the further design of the programme and will be able to adjust it according to the volatile conditions prevailing in the country. ii) Lebanon is highly impacted by the Syrian crisis. The volatile environment as well as the target groups (vulnerable communities) require flexibility and rapid response. iii) The French agency has a good knowledge of the Lebanese background, where it has already implemented projects. iv) A 'peer to peer' approach will be privileged so as to have a better focus on the private sector needs. The agency will be able to mobilise a large network of actors, including Chambers of Commerce and 'field' experts.

The entrusted entity would carry out the following budget-implementation tasks: Establishment and management of a Technical and Financial Coordination Unit (TFCU) and of two main Sector Management and Coordination Units (SMCU); Launching of call for tenders and calls for proposals; Definition of eligibility, selection and award criteria; Evaluation of tenders and proposals; Award of grants, contracts; Concluding, monitoring and managing contracts; Carrying out payments, and recovering amounts due.

373015

Appui au renforcement du secteur culturel tunisien

BGUE

ENI NEAR B 03

Tunisia

Tunisia

DAG



6000069973

THE BRITISH COUNCIL ROYAL CHARTER

18/05/2016

6/06/2016

18/05/2016

6/06/2016

5/06/2019

4.000.000,0

0

Indirect centralised management is justified as it allows deeper impact at local level. Participatory approach, inclusion, localised participation will be guaranteed throughout the project by EUNIC/British council. This management mode will favour networking and sharing of experiences.

EUNIC/British Council will promote Tunisian cultural diversity and access to culture at local, national and international level. The implementing body will support freedom of expression among young generations and will encourage capacity building and professionalisation of workers of the cultural sector. EUNIC through its different members will promote transfer of expertise and best practices at European level. EUNIC members are in close contact with civil society organisations and can ensure better interaction. The British council is pillar-assessed and has gone through a ISO 9001: 2008 quality certification exercise.

The tasks entrusted to EUNIC/British council are: - call for proposals/ call for candidatures (promoting culture and freedom of expression at local level; support the organisation of festivals and support to heritage protection) - technical assistance - capacity building - setting up of a demand-driven expertise pool - awareness raising and promotion campaigns - mapping, studies, assessments - training programme


375788

Gaza Emergency Response Window

BGUE

ENI NEAR B 02

West Bank and Gaza Strip

West Bank and Gaza Strip

DAG


IM PL Public law bodies

6000075251

KREDITANSTALT FUR WIEDERAUFBAU

27/10/2016

11/11/2016

27/10/2016

11/11/2016

10/05/2018

4.500.000,0

0

The action concerns funding for recovery and reconstruction measures for municipalities in Gaza following the severe damages and service interruptions incurred during the Gaza conflict in July-August 2014. The action is implemented through the multi-donor mechanism “Gaza Municipal Emergency Response”, established by the Ministry of Local Government (MoLG), the Municipal Development and Lending Fund (MDLF) and Financing Partners (FPs). The “Gaza Emergency Response Window” has been included as an additional financing window to the Municipal Development Program (MDP) implemented by the MDLF. KfW is the main funding partner of the MDP supporting the programme since its beginning. The Action is implemented in accordance with the Articles 58 (1)(c) and 60 (1) of Regulation (EU, Euratom) No. 966/2012.

KfW is the main funding partner of the Municipal Development Programme (MDP) and has also proved to be a reliable implementing partner for the EU contribution of EUR 7,3 million to the MDPII. The Gaza Emergency Response Window has proved to be a fast channel to provide funds to Gaza. This new window of the MDP, which is operational since December 2014, has already disbursed more than USD 5 million. Furthermore, KfW allocated EUR 5 million to the Gaza Emergency Response Window as parallel funding to the World Bank's multidonor trust fund which allocates USD 3 million from the WB and DKK 60 million from the Government of Denmark to finance this new window for Gaza. Furthermore, KfW will ensure appropriate ex-ante/ex-post controls on the correct applications of procedure and use of funds in line with Article 2.4 of the General Conditions of the Delegation Agreement.

The entrusted entity would carry out the following budget-implementation tasks: general supervision and monitoring of activities, partly contracting, validation and processing of payments, reporting, evaluation and, if necessary, auditing. Procurement and tendering with regard to works and supplies contracts will be sub-delegated to the Municipality Development and Lending Fund (MDLF), which is applying the World Bank procurement rules. Through the MDP II, the PA is allocating grants for capital investment projects and capacity development interventions to municipalities in Gaza in line with the most critical needs identified in the PA post-war municipal damaged assessment. The Gaza Emergency Response window has proved to be a fast channel to provide funds to Gaza.

376096

U-LEAD with Europe: Ukraine Local Empowerment, Accountability and Development Programme – Component 1

BGUE

ENI NEAR C 01

Ukraine

Ukraine

DAG



6000057485


20/07/2016

11/08/2016

20/07/2016

1/01/2016

31/12/2019

58.500.000,

00

To maximize the EU impact and visibility in Ukraine by combining EU and Member States efforts; Reduction of transaction costs.

GIZ good record of experience in Ukraine and on decentralisation: GIZ works for over 20 years on the regional and local level all over Ukraine, has an established network and currently already about 150 employees in the country.

GIZ implements component 1 of the U-LEAD with Europea programme on capacity building, including procurement and grant procedures and management of corresponding contracts and payments.

376097

U-LEAD with Europe: Ukraine Local Empowerment, Accountability and Devel

BGUE

ENI NEAR C 02

Ukraine

Ukraine

DAG



6000074277

SWEDISH INTERNATIONAL DEVELOPMENTCOOPERATION AGENCY SIDA

8/08/2016

18/08/2016

8/08/2016

18/08/2016

17/04/2020

30.000.000,

00

To maximize the EU impact and visibility in Ukraine by combining EU and Member States efforts.

Sweden has more than 150 years of history of decentralised government with most of its public services delivered at local level. A more transparent and efficient public administration, closer to European standards and norms, is one of the main priorities of SIDA in Ukraine.

SIDA implements component 2 of the U-LEAD programme on the set up of administrative centers across Ukraine. SIDA would carry out the following budget-implementation tasks: procurement and grant procedures and management of corresponding contracts and payments.


opment Programme Component 2: Administrative service centres and awareness raising of citizens on local self-governance

376717

Centrale photovoltaïque (PV) à Tozeur

BGUE

ENI NEAR B 03

Tunisia

Tunisia

DAG



6000075251


29/11/2016

29/11/2016

24/11/2016

29/11/2016

28/11/2020

1.605.000,0

0

indirect centralised management is the standard modality for projects adopted in the framework of the Neighbourhood investment facility. In the framework of the NIF a European financial institution presents a project to the NIF board together with a Tunisian promoter.

KfW is the European promoter of this NIF project.KfW has the technical expertise needed for this type of interventions (photovoltaic plant) where technical competencies and expertises are needed.

*- works and supplies- procurement and equipment- project management- technical supervision- technical assistance and accompanying measures- communication and visibility

377482

Local Development Programme for Deprived Urban Areas in North Lebanon

BGUE

ENI NEAR B 01

Lebanon

Lebanon


6000057485


27/12/2016

20.000.000,

00

This action is implemented in indirect management with the GIZ in accordance with Article 58(1)(c) of Regulation (EU, Euratom) No 966/2012.

This implementation is justified because of the complexity and the political sensitivity of the programme and, after careful comparison between fields of activities and expertise of the various EU Member States development agencies, GIZ was considered as the most appropriate to conduct the activities foreseen in this programme given its expertise in each of the following fields:- Security, reconstruction and peace, - Governance and democracy, - Social development, - Rural development, - Vocational training, - Labour market, - Private sector development, - Economic development and employment, - Sustainable infrastructure.

The entrusted entity would carry out the following budget-implementation tasks: - Establishment and management of a Technical Coordination Unit, - Establishment of partnerships with the concerned local and national authorities, - Establishment of a steering committee, - Launching calls for tenders for works and supervision, - Launching calls for proposals, - Definition of eligibility, selection and award criteria, - Evaluation of tenders and proposals, - Conclusion, monitoring and managing of contracts, - Carrying out payments, and recovering amounts due when appropriate. - Carrying out communication and visibility measures.


378826

''200 MW Wind Farm Project Gulf of Suez''

BGUE

ENI NEAR B 01

Egypt Egypt DAG



6000075251


22/12/2016

27/12/2016

22/12/2016

27/12/2016

26/06/2023

30.680.000,

00

The action consists in an investment in infrastructure. As a blending project in the framework of the Neighbourhood Investment Facility (NIF), the lead European Finance Institution (KfW), requested a grant from the NIF in order to realise the investment. Alignment with the lead EFI procedures and implementation is possible through entrusting the management of EU funds to KfW. Such type of management is the most appropriate to realise such complex infrastructure projects which include several stakeholders, while it gives the possibility for the EU to closely monitor the implementation.

KfW identified the project (project promoter), presented it to the NIF for funding and will be in charge of the implementation as the Lead Financial Institute. This institution has a large experience in the field of renewable energy and is largely present in Egypt. Moreover, a similar project (the 200 MW Gulf of El Zayt Widfarm) was successfully implemented recently under indirect management by the same institution with an EU grant contribution

Activities entrusted to the KfW for the implementation of the "200MW Wind Farm Project Gulf of Suez" are described in Annex I of the Delegation Agreement which lays down the rules for implementation, for the payment of the EU contribution, and defines the relations between the Organisation and the Contracting Authority. This implementation entails overall administration of the activities and Project supervision and no-objection during implementation for tendering of goods and services, disbursement and management of funds. The Delegatee Body will be in charge of the administration, monitoring and reporting; and will monitor and report on implementation of the Action including the no objection of the project's interim and final reports (technical and financial).

379972

Programme contribuant à la dépollution de la Méditerranée (DEPOLMED)

BGUE

ENI NEAR B 03

Tunisia

Tunisia

DAG



6000095503

AGENCE FRANCAISE DE DEVELOPPEMENT

20/12/2016

28/12/2016

20/12/2016

1/01/2017

31/12/2021

10.750.000,

00

Indirect centralised management is the standard modality for projects adopted in the framework of the Neighbourhood investment facility. In the framework of the NIF a European financial institution presents a project to the NIF board together with a Tunisian promoter.

AFD is the European promoter of this NIF project. AFD has the technical expertise needed for this type of interventions (depollution of coastal areas and depollution of water and sanitation) where technical competencies and expertises are needed.

The project aims to contribute to: • The preservation of water quality along the Tunisian Mediterranean coast, through the reduction of water-related pollution (in line with H2020 objectives and new 5 year plan of Tunisia government, notably environmental protection, resource management, green economy); • Improve living conditions of coastal communities by improving their sanitary environment and access to sanitation services ; • Improve the performance of the National Sanitation Office (ONAS) in its investment programme management functions, operations and maintenance of infrastructure (pumping and depollution stations), and relations with the public (better communication and public consultation), in a perspective of sustainable development and governance of the sector.


381021

Improved access to water, water distribution performance and related sewerage disposal in Irbid Governorate for host communities and Syrian refugees

BGUE

ENI NEAR B 02

Jordan

Jordan

DAG



6000095503


20/12/2016

22/12/2016

20/12/2016

22/12/2016

21/12/2021

19.480.000,

00

In accordance with NIF procedures for evaluation of projects proposed by eligible European Financing Institutions, that are subsequently submitted to the opinion of the NIF Board and EC Decision. The Commission has adopted the Annual Action Programme 2016 contributing to the Neighbourhood Investment Facility from the general budget of the European Union . Following the selection process foreseen in the 2016 Annual Action Programme, some projects to be implemented have been selected.

AFD and KFW are leading implementing agencies in the water sector in Jordan. Over the past years, they have developed a high level of expertise in the sector and are trusted partners for the local authorities. Their institutional and operational network allows to implement project in the water sector in an efficient way that proved to be over the years much welcome by the beneficiary country. The proposal submitted to the NIF was very relevant for the country and the region especially in light of the Syrian influx in the Northern region. The action proposed was also complementary to other EU funded projects in the region.

The Action would include the following activities: • Component 1: Selected Investment in water and wastewater networks in Irbid Governorate (north of Jordan) Component 1.1: Implementation of an improved water distribution network in Irbid and Ramtha • The remaining distribution areas of Irbid, following the Water Master Plan. A detailed design will be needed before launching the tender of this second package. • The six distribution areas of Ramtha. It will come after the completion of Irbid as all the packages cannot easily be implemented simultaneously, given the load of supplementary works for the implementing unit, even though engineering consultant will support this unit. Also, to ensure continuity in Irbid, the completion of Irbid restructuring is prioritized • Component 2: Support to Yarmouk Water Company to ensure the sustainability of water service and to provide improved services to the population.

381119

Appui à la mise en œuvre des réformes budgétaire et comptable

BGUE

ENI NEAR B 03

Tunisia

Tunisia

DAG



6000509044


29/11/2016

29/11/2016

25/11/2016

31/01/2016

30/10/2019

3.400.000,0

0

The main bulk of this programme is implemented through budget support. However indirect centralised management is used for the supplementary support component. These measures are aimed at accompanying a complex reform of public finance management through objective based budgeting. in order to do so external expertise and highly skilled competences are needed.

Expertise France was selected to promote the transfer of best practices and competences in the field of public finance management and obkjective based budgeting.

The main tasks implemented by Expertise France will be: - accompanying the adoption of the finance bill and support to the drafting of the main complementary/implementing regulations. - technical assistance and capacity building to ensure the smmoth implementation of the public finance management reform - setting up of IT systems and software for public accounting - improve communication and manage change within the Tunisian administration to accompany the reform.


381265

Education for all in times of crisis II

BGUE

IPA2 NEAR A 05

Turkey

Turkey

DAG



6000075251


28/11/2016

5/12/2016

28/11/2016

5/12/2016

4/01/2020

50.000.000,

00

The swift implementation of the project due to the crisis situation in the context of the massive refugee flow from Syria required the intervention of a body with the technical and human capacities to responsibly proceed with the construction of schools as soon as possible. This was only feasible through indirect centralised management and following the 2016 needs assessment jointly elaborated by the European Commission and Turkey.

KFW is a longstanding EU implementing partner in Turkey. They have got the experience and the knowledge of the country's institutions and functioning; a solid structure on the field (which has been even strengthened); and they excel in the field of education infrastructure.

The overall objective of the Action is to cater longer-termdevelopment needs to displaced persons, in particulareducation for children.The specific objectives of the Action are:1) To increase the access to inclusive quality primary andsecondary education opportunities for Turkish and Syrianchildren and youth / Construction of approx. 15 schools,including school furniture and equipment;2) To strengthen the implementation and managementcapacity of MoNE with regard to the construction of schools.

381435

SANAD MENA Fund for Micro-, Small and Medium Enterprises (Phase II)

BGUE

ENI NEAR B 02

Headquarters

Mediterranean Region

DAG



6000075251


22/12/2016

28/12/2016

22/12/2016

28/12/2016

27/06/2031

20.400.000,

00

The programme is implemented by KfW, one of the entities to which the EC entrusts budget implementation tasks under indirect management (art 60 of the FR) via the Neighbourhood Investment Facility (NIF).

The selection of the KfW to which the EC entrusts budget implementation tasks under indirect management (art 60 of the FR) in the context of the NIF is firstly done via the pillar assessment and subsequently via the financing decisions.

The tasks entrusted to tKfW are the subscription and the management of C-shares (acquired with EC funds) for the account of the EC.

381453

National Drainage Program III in the framework of the Joint Integrated Sector Approach in the irrigation sector (NDP III - JISA)

BGUE

ENI NEAR B 01

Egypt Egypt IM PL Public law bodies

6000075251


22/12/2016

23/12/2016

22/12/2016

31/01/2024

40.000.000,

00

This action may be implemented in indirect management with KfW in accordance with Article 58(1)(c) of Regulation (EU, Euratom) No 966/2012.

The Programme consists in investments in infrastructure mainly implemented through civil work contracts. Taking into account the technical expertise in contracting and tendering works contracts, as well as the resources needed for the procurement and operational follow up, the recourse to indirect management is considered to be the most efficient and appropriate implementation modality for the achievement of the foreseen results. Since the 1990’s KfW has contributed to the implementation of the two previous phases, NDP-I and NDP II, of which NDP-III is considered a natural continuation. The beneficiary (MWRI) is aware of the contractual guidelines of KfW due to the previous experience. Delegating the management tasks to KfW, who has the adequate experience in the sector, as well as proven capacity and resources, justified its selection.

This implementation entails overall administration of the activities and Project supervision and no-objection during implementation for tendering of goods and services, disbursement and management of funds. The Delegatee Body will be in charge of the administration, monitoring and reporting; and will monitor and report on implementation of the Action including the no objection of the project's interim and final reports (technical and financial).


381505

Programme National d’Assainissement phase 2 (PNA2) - Amélioration de l'assainissement au Maroc

BGUE

ENI NEAR B 03

Morocco

Mediterranean Region

DAG



6000095503


21/12/2016

26/12/2016

21/12/2016

26/12/2016

25/10/2026

10.300.000,

00

Indirect centralised management is the standard modality for projects adopted in the framework of the Neighbourhood investment facility. In the framework of the NIF a European financial institution presents a project to the NIF board together with a Moroccan promoter.

AFD is the European promoter of this NIF project. AFD has the technical expertise needed for this type of interventions in the field of sanitation where specific technical competenciesare needed, and was the promoter of the previous project in this feld (PNA1) also funded through the NIF.

The entrusted entity would carry out the budget-implementation tasks - including the contract-management steps of the project cycle - for the provision of expertise and accompanying studies enabling the establishment of a legislative, institutional and communication framework for the sanitation sector; as well as for accompanying investments.

382081

Eastern Partnership SME Finance Facility - Phase II KfW

BGUE

ENI NEAR C 01

Headquarters

Eastern Europe Region

DAG



6000075251


22/12/2016

23/12/2016

22/12/2016

1/03/2017

30/06/2030

5.200.000,0

0

The contract was signed in the context of blending operations under the Neighbourhood Investment Facility. Blending operations are implemented in accordance with Article 58(c) of FR 966/2012 as applicable and with respect to Article 40 of Reg 2015/323 (2) i.e. via indirect management.

The entrusted entity was selected during the selection process within the framework of the Neighbourhood Investment Facility.

The Action combines two pre-agreed KfW loans to the German Ukrainian Fund (GUF), for on-lending to its partner financial institutions (GUF-PFIs) and eligible SMEs, including micro-enterprises, with EU grant resources to support SME lending during the crisis period and beyond. Emphasis is given to stimulating local currency lending through Partner Financial Institutions (GUF-PFIs) in Ukraine.

382245

Upgrading Informal Areas Infrastructures

BGUE

ENI NEAR B 01

Egypt Egypt DAG



6000057485


14/12/2016

22/12/2016

14/12/2016

1/04/2017

30/09/2020

25.000.000,

00

This action may be implemented in indirect management with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in accordance with Article 58(1)(c) of Regulation (EU, Euratom) No 966/2012.

The proposed intervention aims at contributing to the local socio-economic development in the informal areas of the Greater Cairo Region (GCR) by enhancing the delivery of services through the upgrading of basic community infrastructures. It will complement the ongoing two phases of the "Upgrading Informal Areas project in the GCR" implemented by the GIZ and mostly financed by the EU. These phases are part of a wider intervention of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) called the Participatory Development Programme in Urban Areas (PDP). The GIZ is successfully implementing the first two phases of the project and has accumulated over 10 years of experience in the development of informal areas in Egypt. During these years, it has established strong working relations with all stakeholders. Finally, the GIZ's know-how in works-related programmes will be another asset for this new phase.

The entrusted entity would carry out the following budget-implementation tasks, following its own procedures, covering several contract-management steps of the project cycle: needs assessment and identification of priorities, launching calls for tender; definition of eligibility, selection and award criteria; evaluation of tenders, award of contracts; acting as contracting authority concluding and managing contracts, carrying out payments and recovering moneys dues.


382642

EU Anti-Corruption Initiative in Ukraine

BGUE

ENI NEAR SGUA

Ukraine

Ukraine

DAG



6000005292

KONGERIGET DANMARK

30/12/2016

16/01/2017

30/12/2016

16/01/2017

15/01/2020

14.500.000,

00

To maximize the EU impact and visibility in Ukraine by combining EU and EU Member States efforts.

Good track record in preventing and fighting corruption of Denmark which scores as 1st in the Transparency International Corruption Perception Index 2015; long-standing experience in the successful implementation of EU-funded projects in third countries; proven expertise in the implementation of technical assistance projects in the area of good governance and anti-corruption projects, proven experience in Ukraine, in particular through its Good Governance program (2015-2018, DKK 60 million), which notably provides support to the establishment of the National Agency for the Prevention of Corruption (with UNDP), criminal justice reform (with the Council of Europe) and the Ombudsperson Office (with UNDP). DANIDA has also supported free media incl. investigative journalism in Ukraine since 2005 and civil society since 2009. Moreover, DANIDA co-finances the upcoming U-LEAD decentralisation programme (approximately DKK 40 million).

Procurement procedures and conclusion of service and supply contracts, allocation of grants and execution of related payments.

382859

Support to the European Humanities University

BGUE

ENI NEAR C 02

Belarus

Belarus

DAG



6000074277

SWEDISH INTERNATIONAL DEVELOPMENTCOOPERATION AGENCY SIDA

21/12/2016

28/12/2016

21/12/2016

28/12/2016

27/10/2019

2.000.000,0

0

The action involves entrustment of budget implementation tasks in accordance with Article 58(1)(c) of Regulation (EU, Euratom) No 966/2012.

This implementation is justified because SIDA has a proven long-term commitment to supporting the EHU by being the biggest EU Member State donor to the university, and is very active in donor co-ordination on the EHU. As one of the most active donors, SIDA has also been very closely following up developments of the EHU in the past two years that led to a management reform of the university.

SIDA manages the EU contribution to the European Humanities University by signing with the EHU an agreement that will specify the range of activities to be funded by the EU contribution and execute the related payments.

383266

Strengthening Public Finance Management in Armenia

BGUE

ENI NEAR C 02

Armenia

Armenia

DAG



6000057485


30/12/2016

29/12/2016

29/12/2016

1/04/2017

31/12/2019

1.000.000,0

0

It was decided to use indirect centralised management because the project would be best implemented through GIZ due to the expertise of this agency in this field (see next column).

The selection of GIZ for this project is justified since it has valuable expertise in Armenia since 2009. In particular, the three areas of specific support to be provided by GIZ are key area of expertise of GIZ in Armenia, also on the basis of the existing division of labor among local cooperating partners. Finally, GIZ has established strong professional and institutional networks from which this intervention would aslo benefit.

This programme aims at Public Finance Policy Reform in Armenia.The implementing tasks entail supporting the action in the fields of programme budgeting, public oversight and strengthening the external audit function.

23

Sum:

366.995.00

0,00


ANNEX 7: List of Union Delegations submitting an EAMR

22 DG NEAR Delegations have submitted an EAMR report in 2016:

NEAR A TR Turkey IPA

NEAR B DZ Algeria ENI

NEAR B EG Egypt ENI

NEAR B PS West Bank and Gaza Strip ENI

NEAR B IL Israel ENI

NEAR B JO Jordan ENI

NEAR B LB Lebanon ENI

NEAR B MA Morocco ENI

NEAR B SY Syria ENI

NEAR B TN Tunisia ENI

NEAR C AM Armenia ENI

NEAR C AZ Azerbaijan ENI

NEAR C BY Belarus ENI

NEAR C GE Georgia ENI

NEAR C MD Moldova ENI

SGUA UA Ukraine ENI

NEAR D AL Albania IPA

NEAR D BA Bosnia and Herzegovina IPA

NEAR D XK Kosovo IPA

NEAR D ME Montenegro IPA

NEAR D MK The former Yugoslav Republic of

Macedonia IPA

NEAR D RS Serbia IPA


ANNEX 8a: Annual AOSD Report – The EU Regional Trust Fund

in response to the Syrian crisis, The MADAD FUND

2016

Annual AOSD Report for EU Trust

Funds8

The European Union Regional Trust Fund in response to

the Syrian crisis, The MADAD FUND

8 The report included in the AAR does not contain the annexes of the AOSD report.


"We are delivering on our commitment to support refugees and host communities across the region.

With this new package we are well on track to meet our ambitious target to mobilise EUR 1 billion for

the EU Syria Trust Fund and - with the latest contributions and pledges from our Member States and

the EU budget - I expect we shall actually exceed EUR 1.2 billion by early 2017. This funding will

secure better healthcare, education and economic opportunities for those affected by the Syrian

conflict, bringing more stability to the region and beyond''

Commissioner for European Neighbourhood Policy and

Enlargement Negotiations, Johannes Hahn

1. Policy and/or operational highlights of the year

1.1. Policy highlights of the year

The Syrian conflict has triggered the world’s largest humanitarian crisis. Refugees from Syria are

the biggest refugee population from a single conflict in a generation, with over 4.8 million Syrian refugees in neighbouring countries and the wider region.

Countries bordering Syria are hosting the majority of refugees: Lebanon hosts almost 1.1 million

Syria refugees and has, along with Jordan, the largest per capita refugee population in the world.

Turkey is currently hosting some 3 million Syrian refugees, the largest number of Syrian refugees

in one country in the world.

The European Union is the leading donor in the international response to the Syrian crisis with

an overall total of EUR 9 billion from the EU budget and Member States collectively allocated in

humanitarian and development assistance since the start of the conflict in 2011. The European

Commission’s support in response to the Syrian crisis has now exceeded EUR 3.4 billion, including

both immediate humanitarian assistance, and non-humanitarian aid.

The European Commission pledge for 2016 amounts to EUR 1.115 billion. The Commission has also

given an indicative amount for 2017 of EUR 1.275 billion, bringing the total pledge for the two

years to EUR 2.39 billion

The Partnership Priorities and the EU-Lebanon Compact have been adopted on 11

November 2016. In light of the revised European Neighbourhood Policy (ENP) and as announced

at the London Conference "Supporting Syria and the Region" of February 2016, the EU is proposing

a comprehensive support package which combines different policy elements within EU

competencies and which is based on mutual commitments. The Compact priority actions will be

funded through the additional EU funds pledged at the London conference (at least EUR 400 million

in grants). The core objectives of the EU-Lebanon Compact are both to provide an appropriate and

safe environment for refugees1 and displaced persons from Syria, during their temporary stay in

Lebanon, and to provide a beneficial environment for Lebanon, host communities and vulnerable

groups.

For Lebanon, the European Commission has allocated close to EUR 880 million in assistance to

refugees and vulnerable communities in Lebanon since the beginning of the crisis. This includes:

EUR 356.1 million from the humanitarian budget, including EUR 87 million for 2016.

close to EUR 250 million from the European Neighbourhood Instrument mainly to support

Lebanese institutions to provide Lebanese vulnerable communities and Syrian refugees with

access to basic services.

more than EUR 42 million from the Instrument contributing to Peace and Stability to address

longer term resilience needs of affected civilians, both refugees and Lebanese host

communities.


EUR 1.2 million from the European Instrument for Democracy and Human Rights.

EUR 224 million through the EU Regional Trust Fund in response to the Syrian

crisis, the "Madad Fund", to address longer-term resilience needs of Syrian refugees and

support Lebanese host communities and the national administration with a focus on

increasing access for refugees to education and training, as well as livelihoods and health.

The EU programmes are aligned with priorities in the Lebanese Government's response plan to the

consequences of the influx of refugees from Syria, and integrated in the various documents such as

1) Regional Response Plans (RRP), 2) the Lebanon Roadmap of Priority Interventions for

Stabilization from the Syrian Conflict and 3) the ‘Reaching All Children with Education in Lebanon’

launched by the Minister of Education to ensure vulnerable school-aged children affected by the

Syria crisis access quality formal and non-formal learning opportunities.

Jordan has been severely affected by the Syrian crisis at the political, economic and social level

since its outbreak in 2011, with over 650,000 Syrian refugees currently living in Jordanian territory.

As a consequence, Jordan has benefited from significant additional EU allocations to help the

country deal with the burden imposed by the Syrian conflict.

For Jordan, the Commission’s total funding in response to the Syrian crisis amounts to EUR 836

million addressing both refugees and host communities’ needs. This support package includes

notably EUR 251 million of humanitarian aid and EUR 170 million of development assistance from

the ENI, as well as EUR 118 million from the EU Regional Trust Fund in response to the

Syrian crisis, the ‘Madad fund’, which targets Syria and its affected neighbouring countries. Most

of the ENI funds will be used to defray the cost of providing education for Syrian refugee children in

Jordanian public schools and studying opportunities for University students. Finally, the European

Commission adopted and fully disbursed a Macro-Financial Assistance (MFA) package of EUR 180

million, whilst a second Macro-Financial Assistance (MFA) operation for Jordan of EUR 200 million

was approved in 2016 and is expected to be contracted and disbursed in 2017.

The EU Regional Trust Fund in Response to the Syrian Crisis, the ‘Madad Fund’ (‘Madad’

broadly means "providing aid and help jointly with others" in Arabic), was established with the

signature of its Constitutive Agreement on 15 December 2014 by the European Union (represented

by the Commission) and one of its Member States (Italy).9 Its aim is to of address longer-term

resilience needs of Syrian refugees and internally displaced persons (IDPs) in neighbouring

countries, as well as supporting host communities and their administrations, principally in Lebanon,

Turkey, Jordan, Iraq and the Western Balkans through the provision of basic education and child

protection, better access to healthcare, improved water and waste-water infrastructure, as well as

support to resilience, economic opportunities and social inclusion. Today the fund is also one of the

key mechanisms through which the new EU “Compacts” with Jordan and Lebanon will be

implemented. The Fund has been established for an initial duration of 60 months in order to

provide a medium-term response.

1.2. Operational highlights of the year

In 2016, 13 Action Documents for a total of EUR 400 million were adopted by the

Trust Fund’s Operational Board. In addition, by way of a revised Commission establishment

decision in December 2015, and subsequent adoption by the Trust Fund Board in March 2016, the

Fund's scope has been expanded to also cover support to IDP's in Iraq fleeing from the interlinked

Syria/Iraq/Da'esh crisis, to provide flexibility to support affected countries also with hosting non-

Syrian refugees, and to provide support in the Western Balkans to non-EU countries affected by the

refugee crisis.

9 Establishment decision C(2014) 9615 of 10.12.2014 as amended by decision C(2015) 9691 of 21.12.2015. The Constitutive

Agreement was revised in March 2016.

http://data.unhcr.org/syrianrefugees/country.php?id=107

https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/neighbourhood/pdf/key-documents/syria_2014_9615_f1_comission_decision793137.pdf

https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/neighbourhood/pdf/key-documents/syria/2015-mod-eu-trust-fund-syrian-crisis-establishment-commission-decision.pdf

https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/neighbourhood/countries/syria/madad/20160526-revised-madad-fund-constitutive-agreement.pdf

https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/neighbourhood/countries/syria/madad/20160526-revised-madad-fund-constitutive-agreement.pdf


The revised Constitutive Agreement is published on the Fund webpage:

http://ec.europa.eu/enlargement/neighbourhood/countries/syria/madad/20160526-revised-madad-

fundconstitutive- agreement.pdf

In the reporting period the following actions were adopted by the Operational Board

between March and December 2016 for a total of EUR 400 million:

On 6 December 2016:

EUR 82 million for Lebanon

EUR 62 million Health Programme for Syrian refugees and vulnerable Lebanese populations

to increase access to quality, equitable and affordable health care services. The project will

furthermore increase capacities of primary and secondary health sectors, and provide equal

access to health services for refugees and host communities.

EUR 20 million Water, Sanitation and Hygiene (WASH) programme for Syrian refugees and

Lebanese host communities. The project will improve access to efficient and sustainable safe

water supply, environmental sanitation and hygiene in Lebanon for vulnerable populations.

Through the adoption of the above programmes, the EU is also implementing commitments it

undertook within the recently agreed EU-Lebanon Compact aimed at supporting Lebanon to address

the impact of the Syrian crisis while ensuring better living conditions for refugees and vulnerable

Lebanese communities.

EUR 50 million for Iraq

A multi-project action will foster socio-economic opportunities towards stabilisation. The

programme will significantly scale up the EU's contribution to stabilising Iraq especially in

areas liberated from ISIL/Da'esh so that displaced populations can return to their homes.

The focus is on demining and creating economic opportunities and livelihoods.

EUR 6.85 million in support of concessional loans and effective monitoring:

EUR 5 million is provided for the EU contribution to the MENA Concessional Financing

Facility for Jordan and Lebanon (CFF) led by the World Bank in order to support alternative

investment resources for Jordan and Lebanon.

EUR 1.85 million will be made available for a multi-tier external monitoring and evaluation

mechanism to continuously check the performance of the EU Trust Fund in real time. The

mechanism will intervene at project level and country level aggregating results into an

overall performance check for the Trust Fund.

On 21 June 2016:

EUR 165 million for actions in Turkey which will support education, including school

construction, as well as conditional cash transfers and higher education for young Syrians,

and extend water and waste-water facilities in southern Turkey. This will be implemented in

partnership with UNICEF, UNHCR, the EIB and KfW, working closely with the Turkish

authorities.

For Jordan, EUR 21 million in urgent grant financing for a EUR140 million programme

financed together with Germany and France to rehabilitate the overstretched water networks

in northern Jordan, where most of the Syrian refugees reside.

EUR 15 million allowing UNRWA to provide urgent education services and cash

assistance to thousands of Palestinian refugees from Syria who have now fled to Lebanon

and Jordan.

http://ec.europa.eu/enlargement/neighbourhood/countries/syria/madad/20160526-revised-madad-fundconstitutive-%20agreement.pdf

http://ec.europa.eu/enlargement/neighbourhood/countries/syria/madad/20160526-revised-madad-fundconstitutive-%20agreement.pdf


In a teleconference meeting on 11 April 2016 (substituting for the planned Board of 22 March

cancelled due to the Brussels terror attacks):

EUR 20 million for refugee child education in Jordan, and

EUR 25million for higher education and training for young Syrians in the region,

By way of a written procedure on 7 March 2016:

EUR 15 million to provide support to manage the influx of migrants and refugees in the

Western Balkans.

2. Programming, implementation and results (including evaluations)

In partnership with the main refugee host governments, all Trust Fund-financed actions are

increasingly aligned and implemented in accordance with the refugee crisis response plans of the

affected countries, in particular the Jordan Response Plan 2016-2018, the Lebanon Crisis Response

Plan, and the national plans in Turkey and Iraq, as part of the regional UN refugee and resilience

response framework in this regard. The Trust Fund also supports relevant areas of the EU-Turkey

Joint Action Plan and has become one of the delivery instruments for the Facility for Refugees in

Turkey.

Including actions already adopted in 2015 for a total of EUR 367 million, the overall focus of the

Trust Fund has developed as follows:

EUR 233 million are being invested in education to provide a massive scale-up of support to

the Ministries of Education in Turkey, Lebanon and Jordan enabling them to enrol more than

200,000 additional refugee children in school, while also providing for accelerated learning

programmes, non-formal and early childhood education and child protection activities. It comprises

3 levels of action: (i) a multi-country programme with UNICEF focusing on Lebanon and Turkey, (ii)

several multi-country actions by European NGO groupings focusing on retention support, non-

formal and early childhood education, and (iii) additional direct support of EUR 20 million to the

Jordanian Ministry of Education. Together, these actions target up to 587,000 school-age children

and adolescents that are currently out of- school. As a result the EU Trust Fund financing will

contribute substantially to closing the remaining gap to achieve the goal of bringing all refugee

children into education.

EUR 203 million have been allocated for resilience & local development projects

responding to the urgent need of improving economic opportunities for refugees and vulnerable

host communities beyond dependency on humanitarian relief. These are being implemented

through a mix of single-country and multi-country activities by European NGOs, EU Member States

development agencies (GiZ, Expertise France, AECID, Italian Cooperation, AfD), and the Red

Cross/Red Crescent movement. The projects target more than 200 communities and 400,000

people across the region and notably also in Iraq and Turkey, addressing basic financial needs of

vulnerable families, engaging unemployed and disillusioned youth through work, skills development


and community engagement in preparation of a future return to Syria, while also mitigating

tensions between host and refugee communities.

Providing a total of EUR 117 million, two action documents in the health sector aim to

widen and enhance access of refugees across the region to primary, secondary and tertiary health

care, psycho-social support, and protection from sexual and gender-based violence. It will reach

and benefit at least 700,000 refugees with a focus on Turkey and Lebanon. In addition, specific

healthcare support is provided in northern Iraq to the Dohuk hospital.

EUR143 million are used for water, sanitation and hygiene programmes in Jordan and

Lebanon and to extend water and wastewater facilities in southern Turkey. These actions

are helping Syrian refugees and host communities, where the needs for supporting municipal water

and wastewater services are biggest, benefitting more than 1.5 million people.

EUR49 million are providing long-needed support for young Syrians to pursue higher

education as well as technical and vocational training in the region around Syria. While

before the war, 20% of 18-25 year old Syrians were enrolled in higher and further education, this

has dropped to less than 5% among the same age group today among the refugees. With partners

such as DAAD, British Council, Campus France, EP-Nuffic, Stichting Spark, UNHCR and the German-

Jordanian University, several thousand course placements and scholarships are made available in

the region, focusing on Turkey, Jordan, Lebanon and northern Iraq.

Overall, 20 action documents with projects in the above mentioned main sectors have already

been approved in 5 meetings of the Trust Fund’s Operational Board, covering a total amount of EUR

767 million.

Until the end of 2016 an amount of EUR 767 millon had been committed for individual projects,

of which signed contracts amount to EUR 339 million (EUR 321 in 2016 alone), while disbursements

from the Fund amounted to EUR 143 million (EUR 129 million in 2016 alone).


All action documents are published on the TF webpage: https://ec.europa.eu/neighbourhood-

enlargement/news_corner/key-documents_en?field_file_theme_tid%5B0%5D=191

3. Financial report10

3.1. Amounts pledged and received

At the end of 2016, the EU and 23 donors contributed to the Madad Trust Fund: the EU

Budget, 22 Member States and 1 non-Member State, with total contributions reaching an amount of

approximately EUR 939 million. The contributions from the EU Budget amounted by the end of

2016 to EUR 822 million while the contributions from Member States amounted to EUR 92 million

and EUR 24 million from Turkey.

10 Draft annual accounts of the EU Trust Fund will be annexed to the AAR of the AOD.

https://ec.europa.eu/neighbourhood-enlargement/news_corner/key-documents_en?field_file_theme_tid%5B0%5D=191

https://ec.europa.eu/neighbourhood-enlargement/news_corner/key-documents_en?field_file_theme_tid%5B0%5D=191



Amounts paid in 2016 were EUR 128,957,460 as shown in the table below:

ALL payments

HQ Delegation Total

Amounts

(EUR) %

Amoun

ts

(EUR)

% Amounts

(EUR) %

Grants in Direct

Management 20.992.424 16% 0 0% 20.992.424 16%

Budget Support 0 0% 0 0% 0 0%

Procurement in Direct

Management 31.538 0% 0 0% 31.538 0%

Indirect Management with

International

Organizations

81.000.000 63% 0 0% 81.000.000 63%


EIB and EIF 0 0% 0 0% 0 0%


Development Agencies 25.474.659 20% 0 0% 25.474.659 20%


Beneficiary countries 0 0% 0 0% 0 0%

Administrative

expenditure 1.458.840 1% 0 0% 1.458.840 1%

Other 0 0% 0 0% 0 0%

Total : 128.957.460 100% 0 0% 128.957.460 100

%

3.2. Beneficiaries and amounts contracted

In 2016 the Trust Fund signed 12 contracts for a total value of EUR 321,070,819. The details with a

list of beneficiaries and amounts contracted are provided below and in full detail under Annex 3.

Ref. Title

Com L2

Budget

Manage

ment

Type

Code

Contractor

Com L2

Accepted

Amount

(EUR)

T04.17

T004 - DELEGATION AGREEMENT

WITH UNICEF - "GENERATION

FOUND": EU SYRIA TRUST FUND -

UNICEF PARTNERSHIP

IM UNITED NATIONS

CHILDREN'S FUND*UNIC 90.000.000

T04.21

T004 - ACTION DOCUMENT:

FURTHER AND HIGHER

EDUCATION PROGRAMME FOR

VULNERABLE SYRIAN YOUTH

DM

DEUTSCHER

AKADEMISCHER

AUSTAUSCHDIE

11.999.879

T04.23

T004 - CREATION OF BUDGETARY

COMMITMENT FOR ACTION:

LEADERS – PROMOTING

INCLUSIVE LOCAL ECONOMIC

EMPOWERMENT AND

DEVELOPMENT TO ENHANCE

RESILIENCE AND SOCIAL

STABILITY

DM

DANSK

FLYGTNINGEHJAELP*DAN

ISH REFUG

7.005.044


T04.25

T004 - DELEGATION AGREEMENT:

GIZ - " QUDRA – RESILIENCE FOR

SYRIAN REFUGEES, IDPS AND

HOST COMMUNITIES IN

RESPONSE THE SYRIAN CRISES" -

ACTION DOCUMENT: REGIONAL

RESILIENCE & LOCAL

DEVELOPMENT PROGRAMME FOR

SYRIAN REFUGEES AND HOST

COMMUNITIES

IM

DEUTSCHE

GESELLSCHAFT FUR

INTERNATI

70.600.000

T04.27

T004 - GRANT CONTRACT TF-

MADAD/2016/T04.12- ACTION

DOCUMENT: REGIONAL

RESILIENCE & LOCAL

DEVELOPMENT PROGRAMME FOR

SYRIAN REFUGEES AND HOST

COMMUNITIES

DM SEARCH FOR COMMON

GROUND VZW*SFCG 4.453.447

T04.38 T004 - GRANT CONTRACT TF-

MADAD/2016/T04.18 DM

ASSOCIAZIONE ITALIANA

PER LA SOLIDA 5.727.304

T04.40

T004 - LEVEL 2 COMMITMENT FOR

CONTRACT TF-

MADAD/2016/T04.20 (GVC)

DM

GRUPPO DI

VOLONTARIATO CIVILE

ASSOC

12.618.649

T04.53

T004 - DELEGATION AGREEMENT

WITH IOM: "EU SUPPORT TO

SERBIA AND THE FORMER

YUGOSLAV REPUBLIC OF

MACEDONIA IN MANAGING THE

MIGRATION/REFUGEES

CRISIS/BALKAN ROUTE"

IM

INTERNATIONAL

ORGANIZATION FOR

MIGR

7.650.211

T04.54

T004 - ACTION DOCUMENT:

SCHOOL CONSTRUCTION TO

INCREASE THE NUMBER OF

PRIMARY ANS SECONDARY

SCHOOLS FRO SYRIAN REFUGEE

CHILDREN (REGIONAL

COMPETITIVENESS) - KFW

IM KREDITANSTALT FUR

WIEDERAUFBAU* 70.172.476

T04.55 T004 - CONTRACT TF-

MADAD/2016/T04.28 DM

REPUBLIKA

SRBIJA*REPUBLIQUE DE

SERB

7.299.999

T04.56

T04.27: DELEGATION AGREEMENT

WITH AFD "IMPROVED ACCESS TO

WATER, WATER DISTRIBUTION

PERFORMANCE AND RELATED

SEWERAGE DISPOSAL IN IRBID

GOVERNORATE FOR HOST

COMMUNITIES AND SYRIAN

REFUGEES"

IM AGENCE FRANCAISE DE

DEVELOPPEMENT* 21.420.000

T04.58 T004 - GRANT CONTRACT - TF-

MADAD/2016/T04.22 - AVSI DM FONDAZIONE AVSI* 12.123.811

Count

: 12 Sum: 321.070.819

4. Management and internal control


4.1. Control results

General

The EU Trust Fund operates in the general system of of internal control defined by the

Commission. In addition the Trust Fund is subject to an external audit.

As per the Constitutive Agreement of the Trust Fund and given its objective to operate in a crisis

and post-crisis situation, flexible procedures appropriate to the local environment are used to

ensure that the Fund is effective and responsive to the needs identified. These procedures are in

accordance with the FR provisions and are set up in NEAR financial guides. Their use needs to be

justified on a case by case basis. A register of exceptions, derogations and prior approvals granted

under the Trust Fund together with non-compliance events detected during the year is kept.

Project implementation is foreseen in direct management where the Trust Fund is the Contracting

Authority and signs procurement and grant contracts, or indirect management by which project

implementation is delegated to a third party, a EU Member State Agency or International

Organisation. Candidate entities to be entrusted with budget-implementation tasks have to

demonstrate a level of financial management and protection of the EU's financial interest

equivalent to that of the Commission. International Organisations and Member States Agencies

have to provide Management declarations on the use of the funds they are entrusted of.

Ex-ante controls are carried out by the TF staff for all operations/transactions carried out under the

TF.

The Trust Fund Managers take into account reports and recommendations of the different control

bodies, notably the IAS and Court of Auditors, for the purpose of providing an assessment of the

effectiveness of risk management, control and governance processes, in addition to the results of

the audits carried out at the level of contractors/beneficiaries.

The European Anti-Fraud Office (OLAF) exercises the same powers over the Trust Fund in its

entirety, including its governance bodies and the representatives of donors and observers

participating in such bodies, as it does in respect of other activities of the Commission.

4.1.1.1. Results of ex-ante controls

N/A since only one report with a subsequent further pre-financing was received.

4.1.1.2. Results of external audits

N/A

4.1.2. Fraud prevention and detection11

N/A. No cases forwarded for investigation.

4.2. Observations and recommendations made by IAS/ECA

The MADAD Trust Fund (as well as the DG DEVCO managed Bekou EUTF) was subject of an IAS

audit (Ares (2016) 503448 29-01-2016). The IAS recommendations have resulted in an action plan

by DG NEAR to implement the 10 recommendations under its responsibility. By end of 2016, all

actions were implemented as planned except for parts of 1.3 and 5.2, which depend on DEVCO and

BUDG to agree the revised EUTF guidelines. Please see ARES(2016)6711979 by DEVCO stipulating

the new target date for the revised EUTF Guidelines as 30 June 2017. The status of the MADAD

EUTF action plan is provided as Annex 4.

11 EU Trust Funds are included in the anti-fraud strategy of the DG of the Authorising Officer in charge.


4.3. Assessment of the effectiveness of the internal control systems

The EU Trust Fund operates in the general system of internal control defined by the Commission. In

this framework, during its first year of operation the EU Trust Fund has put in place the

organisational structure and the internal control systems suited to the achievement of the policy

and control objectives, in accordance with the standards and having due regard to the risks

associated with the environment in which it operates.

Monitoring of the compliance and effectiveness of the internal control systems was done on a

continuous basis by the Trust Fund Manager and adjusted and complemented where necessary.

Exceptions, derogations, prior approvals and non-compliance events occurred during the reporting

period have been registered and documented.

The TF manager ensured availability of a business management workflow process in place based on

EC standard operating procedures in line with PRAG and the Companion. Respective was shared

with FCA and all Delegations involved in managing TF business management to ensure clarity of

goals and transparency for all. The workflow process also entails the timely appointment of

negotiation committees and a business management process structuring the negotiations.

The Trust Fund Manager has taken appropriate measures to ensure that, when actions financed by

the Trust Fund are implemented, the financial interests of the Union and of the donors are

protected by the application of preventive measures against irregularities and fraud, by effective

controls and, if irregularities or fraud are detected, by the recovery of the amounts wrongly paid.

The contracts and agreements signed with third parties authorise the Commission to carry out

controls on the spot, to suspend payments and implementation of actions where serious

irregularities or fraud are noted, and to apply, where appropriate, effective, proportionate and

deterrent contractual penalties.

The following aspects to improve can be signalled which are mainly attributed to the general

environment of external aid in crisis situations:

• Systems, circuits and procedures to be further fine-tuned to the specificities of the Trust Fund

(revised EUTF guidelines due by DEVCO in 2017).

• IT systems need to be developed in order to provide for an automatic registration of information

that is currently compiled manually (e.g. exceptions, derogations and non-compliance events,

contributions pledged). The risk involved in manual processing, which is more prone to error, will

grow as the volume of actions financed by the Trust Fund increases. This may lead to an

unacceptably high risk of error and a reduction of the efficiency of the Trust Fund.

4.4. Conclusions as regards assurance

The allocation of Human Resources in line with Trust Fund Management responsibilities and

priorities, including FCA staff, needs to be urgently increased and streamlined. Currently,

operational TF staff sits in NEAR/B1, while FCA staff is separated and attached to NEAR/R, with the

latter team still based on the evacuated EUDEL Syria FCA section. This is an unsustainable set-up

and leads to fragmentation and increases the risk of errors. An integrated EUTF taskforce in DG

NEAR remains the best option for the future.

5. Declaration of assurance (and reservations)

6. Annexes:


List of derogations, exceptions, non-compliance events, prior approvals and events to be

reported.

Questionnaire on the effectiveness of ICS implementation (to be filled in by the manager of the

EU Trust Fund).

Declaration of Assurance

I, the undersigned,

Manager of the European Union Trust Fund in Response to the Syrian Crisis, the ‘Madad

Fund’,

In my capacity as authorising officer by sub-delegation

Declare that the information contained in this report gives a true and fair view12.

State that I have reasonable assurance that the resources assigned to the activities

described in this report have been used for their intended purpose and in accordance with

the principles of sound financial management, and that the control procedures put in place

give the necessary guarantees concerning the legality and regularity of the underlying

transactions.

This reasonable assurance is based on my own judgement and on the information at my

disposal, such as the results of the self-assessment, ex-post controls, the opinion of the

Internal Auditor on the state of control. [the observations of the Internal Audit Service -

delete this if not applicable] [and the lessons learnt from the reports of the Court of

Auditors - delete this if not applicable] for years prior to the year of this declaration.

Confirm that I am not aware of anything not reported here which could harm the interests of

the European Union Trust Fund in Response to the Syrian Crisis, the ‘Madad Fund’

Brussels, 8 February 2017

(signature)

Nadim KARKUTLI

12 True and fair in this context means a reliable, complete and correct view on the state of affairs in the DG/Executive Agency.


ANNEX 8b: Annual AOSD Report – The European Union

Trust Fund for Africa North of Africa window

2016

Annual / AOSD Report for EU

Trust Funds

The European Union

Trust Fund for Africa

North of Africa

window


1. Policy and/or operational highlights of the year

1.1 Policy highlights of the year

The EUTF for Africa helps addressing current crises in the Sahel and Lake Chad, the Horn of Africa, and the North of Africa regions. It aims to help

fostering stability and contributing to better migration management. In line with the EU development-led approach to forced displacement, it also helps addressing the root causes of destabilisation, forced displacement and irregular

migration, by promoting economic and equal opportunities, security and development. The EU provides support to the three regions to face the growing

challenges of demographic pressure, environmental stress, extreme poverty, internal tensions, institutional weaknesses, weak social and economic infrastructures, and insufficient resilience to food crises, which have in some

places led to open conflict, displacement, criminality, radicalisation and violent extremism, as well as irregular migration, trafficking in human beings and the

smuggling of migrants. In June 2016, the Commission adopted a Communication13 on establishing a

new Partnership Framework with third countries under the European Agenda on Migration. The Communication sets out the plans for a new results-oriented

Partnership Framework, taking into account all policies and instruments at the EU's disposal. This is in line with the EU Global Strategy on Foreign and Security Policy which embeds challenges such as migration in the overall EU foreign policy

with third countries. This new comprehensive approach will allow the EU to manage the complex issues of migration more efficiently. At the end of June

2016, the EU Council adopted conclusions on migration14. Heads of States and Governments agreed that a more structured and balanced approach to bring

together the external aspects of the different EU policies was needed to maximise the leverage and effectiveness of our action in support of third countries' effort to manage crises and address migration challenges, as well as a

greater coordination between EU institutions and Member States.

This Communication on the Partnership framework also highlighted the fact that efforts should be continued so as to support Libya in its efforts to manage migration flows and that the EU should proceed with increased engagement with

the latter as well as with Tunisia. Commitments were also taken towards a stronger engagement with Egypt so as to provide some responses to increasing

migratory flows departing from Egypt on the Central Mediterranean route.

The EUTF for Africa has successfully positioned itself in complementarity with existing instruments, has acted as a flexible and swift instrument able to address

specific needs of beneficiary countries (which are not covered by other financial instruments). In the North of Africa region more specifically, it has consolidated

existing migration dialogue such as the ones undertaken under the Mobility partnerships with Tunisia and Morocco or dialogues undertaken under the sub-committees of the Association agreements (Governance and Democracy or

Justice and Home Affairs sub-committees), has created good synergies with

13 (COM(2016)385 final)

14 (EUCO 26/16)


existing programmes, building upon results achieved in programmes supporting

the implementation of mobility partnership programmes (Tunisia) or working in complementarity with other migration programmes (see the way the focused programme adopted for Morocco complements the ENI budget support

programme adopted in parallel). Finally it has contributed to initiate more structured institutional cooperation on migration with partner countries, building

on the proposals of our partner countries and formulating programmes fully aligned with their policies, while respecting the balanced approach set between

the five pillars of the Valletta Action Plan (VAP).

1.2 Operational highlights of the year The strategic Board of the EUTF for Africa so far met twice: in November 2015,

at the margins of the Valletta Summit on Migration, and in December 2016. The next Meeting of the Board is expected in June 2017. The Operational Committee of the Trust Fund met in a joint session in December 2015 and twice under the

North Africa window configuration.

In the course of 2016, a number of systems have also been set in place to

ensure the coordination of activities among the three regional windows of the Trust Fund as well as to ensure a proper monitoring of Trust Fund activities. Appropriate measures have been taken to ensure the recording of EU and other

donors' contributions to the Trust Fund.

The identification of the priorities of the North of Africa window of the EUTF for

Africa is the result of a thorough dialogue with partners and relevant national and regional stakeholders. The process is based on a review of quantitative data

(latest data available from numerous sources such as national statistics, IOM, Eurostat, Frontex, ICMPD, UNHCR notably) as well as a qualitative analysis of the situation on the ground, based on the expertise developed by EU Delegations and

its partners, constant dialogue with stakeholders and lessons learned from past projects. This enables a better understanding of local contexts and the

identification of geographical areas and beneficiaries to be targeted and the most suitable implementing partners.

The North of Africa window addresses situations that are constantly evolving

(migration flows are adapting to new routes, trafficking/smuggling networks adapt to new opportunities and border situations, etc.) and needs to adapt. To

do so, the North of Africa window also relies on a research facility, to mobilise the best available research partners, enhance the knowledge and understanding of the complex root causes of instability, irregular migration and forced

displacement, their drivers and underlying factors.

All these efforts have been complemented by economic and employment projects

targeting regions with a high migration potential in order to prevent irregular migration and to facilitate returns. The North of Africa window has also targeted main transit regions to transform local systems built around irregular migration

by providing economic opportunities to local communities and supporting authorities to deal with the impact of migration flows, reinforcing migration

management capacities and strengthening the authorities' capacities to fight against migrant smuggling and trafficking of human beings.


2. Programming, implementation and results

(including evaluations)

The North of Africa window of the 'EU Emergency Trust fund for Africa' managed by DG

NEAR is fully in line with the Commission's European agenda on migration and the

European Neighbourhood policy review. The North of Africa Window is very specific

compared to the two other windows as it is exclusively focused on pillar 3 of the

EUTF and aims at improving migration management in all its aspects.

The strategy of the North of Africa window has first of all been guided by the Strategic

Orientation Document adopted by the Board in November 2015, which sets out the

Trust Fund general objectives and strategic lines of action for each of the three windows.

Based on this document, the Operational framework of this window was adopted by

the Operational Committee of the North of Africa window in December 2016.

As of 31 December 2016, 6 actions have been approved by the Operational Board for a

total of EUR 64.5 million to capture the objectives of the EUTF Strategy and respond to

this Operational Framework.

2.1 Operational framework and strategic orientations: a logic exclusively focused on better migration management

The Operational framework of the North of Africa window adopted in December

2016 is focused on pillar 3 of the EUTF (“improved migration management”). Based on this strategic objective of the EU Trust Fund and fully in line with the

Valletta Action Plan, the European Agenda on Migration, the European Neighbourhood policy review and the regional policy dialogue of the Rabat and Khartoum processes, the North of Africa window aims at:

(i) improving migration governance including a rights-based migration management, which is expected to contribute to social cohesion, safe mobility

and security, as well as ensuring international protection, in accordance with international law. This includes capacity building on legislative and regulatory

issues, so as to progressively develop fully-fledged migration systems;

The EUTF is supporting the development of national and regional migration, asylum and integration policies and measures, so as to ensure that migrants'

needs and aspirations are addressed. To enhance the sustainability and coordination of the actions, capacity building of national authorities and key

stakeholders are included in all actions. For instance, in Egypt and Tunisia the EUTF aims at supporting the fulfilment of the national migration strategies and at reinforcing capacities of key institutions dealing with migration.


Support the implementation of the National Migration Strategy in Tunisia

– Component 1 (EUR 11.5 million) The EUTF seeks to support Tunisia in its efforts to budget, implement and

monitor its National Migration Strategy in order to contribute to the planning, implementation, monitoring and evaluation of an effective and coherent

migration policy. Tunisia's National Migration Strategy will be transposed into a short- and medium-term budget. It will be backed by a qualitative household survey on migration, based on a methodology carried out as part of the

'Mediterranean Household, which will enable an evidence-based and informed policy making.

International Migration Survey Programme' (MED-HIMS) which is a joint initiative of the European Commission/Eurostat, the World Bank, UNFPA, UNHCR, ILO, IOM and LAS, in collaboration with the National Statistical Offices of the Arab

countries in the southern and eastern Mediterranean region. It also seeks to build capacity of Tunisian Institutions, both at national and local

level.

(ii) advancing mutually beneficial legal migration and mobility and in particular the improving of skills and strengthening of labour market information systems, reinforcing cooperation and networking between labour agencies and

relevant institutions in the field of job creation with a view to facilitating job placements and opportunities;

The EUTF also promotes diaspora engagement in countries of origin by supporting migrants willing to invest in or going back to their countries of origin, so they can contribute to socio-economic development with the acquired skills

and knowledge. The EUTF will support in Tunisia the mobilisation of human and financial capacities for local business development and as a means of boosting

economic development, with a specific focus on areas most affected by emigration. In Morocco, it will also support the development of an institutional

framework aiming at preventing racism and xenophobia.

Country Number of projects Total amount

(million EUR)

Egypt 1 11,5

Tunisia 1 11,5

Total 2 23


Support the implementation of the National Migration Strategy in Tunisia – Component 2 (EUR 11.5 million)

The EUTF will contribute to strengthen the contribution of the Tunisian diaspora for the socio-economic development of the country, through support for

investment and creation of businesses and jobs, in areas most affected by emigration. The Action adopted in December 2016 consists in mobilizing the

talents of the Tunisian diaspora in EU Countries to foster socio-economic development in the Country, through support to investments for the creation of enterprises and job-opportunities. It will entail the set-up of incubators in several

regions of Tunisia, as well as capacity-building support to local authorities as well as the existing local structures aimed to accompany youngsters in the start-up of

new business. Project promoters will benefit from an incubation service, accompaniment during the critical phases of pre and post-creation, as well as

training and coaching in entrepreneurship.

(iii) ensuring protection for those in need, critical in strengthening the resilience of displaced populations together with their host communities. Capacities of partner countries to establish functioning policy, legislative and

institutional frameworks on asylum and international protection will be enhanced and the resilience of displaced populations together with their host communities

will be strengthened. These actions will build on the experience gained under the Regional and Development Protection Programmes (RDPP);

The EUTF contributes to reinforcing the protection and self-reliance of refugees

and displaced persons through an integrated approach in host communities. The Regional Development and Protection Programmes (RDPPs) are among key

instruments in North Africa as well as in the Horn of Africa. The RDPP for North Africa fully embeds the new approach put forward by the EU with the adoption of the Communication 'Lives in Dignity: from Aid-dependence to Self-reliance', by

looking at ways to help displaced persons and their host communities become more self-reliant in the countries where they reside, thus contributing to stabilise

host communities and prevent possible secondary movements.

Country Number of projects Total amount

(million EUR)

Tunisia 1 11,5

Morocco 1 5,5

Total 2 17


Regional Development and Protection Programme for North Africa

Development Pillar (EUR 10 million)

The Regional Development and Protection Programme for North Africa, implemented by IOM and civil society organisations, will be strengthened

(EUR 10M) to help establish sustainable, national and local systems to effectively deliver inclusive services (education, health and social

protection) and provide members of migrant and host communities with greater economic opportunities, including self-employment and short-term employment opportunities. Micro-lending and crowd funding platforms

across North Africa will be expanded and public-private partnerships between public employment agencies (and private job intermediaries,

whenever possible) and private sector will be promoted.

Web platforms – an innovative approach 1/ Supporting Economic Opportunities & Livelihoods through

Narwi – Crowdfunding Platform that supports and facilitates

micro-lending, philanthropy and knowledge-exchange across

the Arab region and among the Arab expatriate community

throughout the world.

Upwork – Online Outsourcing that allows skilled members of

migrants communities in North Africa as well as host

communities to engage in employment remotely for

employers across the world.

2/ Supporting Social Service Delivery Bosla – Information & Referral Platform that includes all

relevant and up-to-date information on services availability

and provides guidance to migrants in accessing these

services appropriate to their needs.

"Supporting protection and humanitarian repatriation and reintegration of vulnerable migrants in Libya" (EUR 20 million)

In Libya, a EUR 20 million programme will better protect and assist the

most vulnerable migrants and their host communities This programme will in particular set up a 'Protection Fund' to cover impellent needs on the

ground. Grants under this Fund will be allocated on the basis of an independent needs' assessment and costs' analysis mechanism and in

strict coordination with the UN-led protection and migration clusters.


(iv) addressing the drivers of irregular migration, in specific areas of origin, by supporting economic and social programmes creating employment and

education opportunities, especially for young people and women in local communities and support a sustainable reintegration of the returnees into their societies and communities;

Support to institutions in charge of preventing and fighting against smuggling and trafficking has been envisaged under the North of Africa window but has not

yet materialised. Support under this component has therefore concentrated on return and reintegration of highly vulnerable and stranded migrants (see below the cases of Libya and Tunisia), as well as on addressing root causes of irregular

migration through the contribution to the creation of increased socio-economic opportunities (mainly in Tunisia and Egypt).

Support the implementation of the National Migration Strategy in Tunisia

– Component 3 and 4 (EUR 11.5 million)

The EUTF will contribute to the establishment of a service for the social and economic reintegration of Tunisian returnees upon their arrival in Tunisia. This

common platform for reintegration aims to provide support to ensure the dignity of individuals and the sustainability of reintegration projects. The platform will offer a comprehensive and coordinated service from a single point of entry, in

cooperation with the Tunisian civil society operators and the territorial communities involved offering two types of assistance: Social assistance for the

installation for a duration of 6 months; Accompaniment to employment or start-up, covering a period of 12 months from the date of registration to the platform.

In the first phase, the project plans to accompany about 300 people. This activity will be backed up by a database that will allow statistics and monitoring the outcome of the reinsertion projects, allowing to improve over time the quality of

the services provided.

Country Number of projects Total amount (

million EUR)

Libya 2 26

Regional (RDPP) 1 10

Total 3 36

"Strengthening protection and resilience of displaced populations

in Libya" (EUR 6 million)

In Libya, the 'Strengthening protection and resilience of displaced populations in Libya' project (EUR 6M) is implemented by a Consortium of

NGOs led by the Danish Refugee Council, aims mainly at increasing access to protection spaces (especially health care) for stranded migrants and at

piloting alternatives to detention, in particular for minors. Whenever possible, this will be carried out with/through existing public service delivery facilities at local and regional level and local organisations.


The EUTF put forward an inclusive and holistic approach where all the relevant

stakeholders – Local Authorities in primis, CSOs, incubators, local structures assisting young people in creating new business – will be put together with the

aim to mainstream migration in local development. The lack of economic perspectives and of job opportunities with a high unemployment rate (+30%) are the main factors pushing young Tunisians to migrate to Europe, this

component will contribute to provide them with better perspectives.

and (v) improving information and the protection of vulnerable migrants along the migratory route.

This component has until now been mainly addressed through the setting up of a strategic partnership between the Sahel & Lake Chad window and Libya together

with IOM which aims at working on migration issues on a structured and comprehensive way along the route. Cooperation under this priority will intensify in 2017, since cross-window programmes targeting the central and western

migration routes are currently being formulated.

Activities funded under the EUTF are implemented through a range of operating

partners, including EU Member States cooperation agencies, NGOs, international organisations or private sector entities. Several implementation modalities are envisaged: delegated cooperation, calls for proposals, budget support and

blending, and direct awards in particular situations.

Country Number of projects Total amount (

million EUR)

Libya 1 20

Tunisia 1 11,5

Egypt 1 11,5

Total 3 43

"Supporting protection and humanitarian repatriation and reintegration of vulnerable migrants in Libya" (EUR 20 million)

The humanitarian repatriation and reintegration component of this Action, with a first target of 5,000 vulnerable migrants stranded in Libya, will be

implemented by the International Organisation for Migration (IOM) in the framework of the newly launched joint initiative for Protection and

Reintegration of returnees along the Central Mediterranean migration routes (strategic partnership between the EU and IOM under the Sahel & Lake Chad window and in Libya signed on 16 December 2016). For the

purpose of this Action, Assisted Voluntary Return (AVR) is renamed as 'humanitarian repatriation' considering the current crisis situation in Libya,

affecting also operational capacities to carry out fully-fledged AVR operations, and the extreme vulnerability of migrants in detention or stranded in communities. Humanitarian repatriation from Libya will be

undertook on an exclusively voluntary basis.


2.2 State of implementation of programmes in the North

of Africa region

Approved (million

EUR)

Contracted

(million EUR)

Disbursed

(million EUR)

64,5

0.2

Approved funding by strategic objectives of the EU Trust Fund for Africa

(MEUR)

North of Africa

window

1.Greater economic and employment

opportunities

2.Strengthening Resilience

3.Improving migration management 64,5

4.Improved governance

5.Other*

Grand Total 64,5

* Research facilities and Technical Cooperation Facility


In 2016 the Trust Fund signed 1 contract for a total value of EUR 187.040 and

one legal commitment for EUR 5.9 million contracted on January 2017. The details with a list amount contracted and legal commitment is shown in the table below:

Contract title Contractor Contracted

amount (EUR)

T05-EUTF-REG-

NAFR-02-01 EUTF

NA MONITORING

AND EVALUATION

FRAMEWORK

INTERNATIONAL CENTER OF

MIGRATION POLICY DEVELOPMENT

187.040

Total 187.040

2.3 Research, Monitoring & evaluation activities The North of Africa window has revised its Operational Framework on the basis of

strategic objectives formulated in a way deemed to ease the measurement of results and their reporting. Specific indicators are currently produced at project

level inputs, so as to feed into the results matrices of each priority area, tying into the overarching results framework. The EUTF Results Framework is thereby

a crosscutting tool that will be fed by the data and subsequent analysis at each phase of the project cycle.

The North of Africa window makes use of a Research Facility jointly designed especially where more in-depth analysis is needed (e.g. during identification,

evaluation). In particular, this Research Facility will conduct, synthesize, disseminate and make use of new and existing research on the drivers and dynamics of the root causes of instability, insecurity, irregular migration and

forced displacement in West and North Africa and along the migration routes. The Facility will also advise on the most successful policy responses aimed at

addressing current challenges and improving migration management. The IT platform, created for all three windows of the Trust fund, as well as an

ad-hoc EUTF website will ensure the timely dissemination of collected and analysed EUTF information in order to ensure greater visibility of the Trust Fund

response to crisis among the general public and relevant stakeholders. The European Commission monitors the implementation of projects to ensure a

swift and flexible delivery of results, impact and cost-effectiveness. In order to improve coordination and joint efforts, the EUTF encourages actions to be

implemented by a variety of implementing actors.


3. Financial report15 3.1 Amounts pledged and received The table below provides a summary of the contributions to the overall Trust

Fund as of 31/12/2016. Contributions are split between the three windows

according to the earmarking information contained in the Contribution Certificate

or if no earmarking has been requested according to the following distribution

key:

Window SAH(A) – Sahel and Lake Chad: 40%

Window HOA(B) – Horn of Africa: 40%

Window NOA(C) – North of Africa: 20%

Table I provides information on the contributions from external contributors (i.e.

Member States and other external donors), as follows:

Contributions pledged: total funding for the Trust fund as agreed by

donors (i.e. through a letter of intent);

Contributions certified: contributions supported by a certificate of the

external contributor;

Contributions received: contributions received in the Trust Fund bank

account, on the basis of which the amount available for commitment (i.e.

the total amount of legal obligations that can be incurred) and the amount

available for payment are subsequently established in the trust fund

accounting system (ABAC). As of 31/12/2016 an amount of EUR 62 million

for commitments and payments has been made available in the Trust

fund accounting system (ABAC). Contributions received in currencies other

than EURO are registered using the ECs official exchange rate.

Table II provides information on the contributions from the EU and EDF budgets,

as follows:

Contributions pledged: total funding for the trust fund as agreed by

donors;

Contributions certified: contributions supported by a Commission Financing

Decision, on the basis of which the amount available for commitment (i.e.

the total amount of legal obligations that can be incurred) is subsequently

established in the Trust Fund accounting system (ABAC). As of

31/12/2016 an amount available for commitments of EUR 1.865 million

had been made available in the Trust Fund accounting system (ABAC).

Contributions received: contributions received in the Trust Fund bank

account, on the basis of which the amount available for payment is

subsequently established in the Trust Fund accounting system (ABAC). As

15 Draft annual accounts of the EU Trust Fund will be annexed to the AAR of the AOD.


of 31/12/2016 an amount available for payment of EUR 129 million had

been made available in the trust fund accounting system (ABAC).

Interest generated by cash received in Trust Fund bank account is shown in

section III.


3.2 Amounts paid

In 2016 no payments have been initiated.

3.3 Beneficiaries and amounts contracted

Contract title Contractor Contracted

amount (EUR)

T05-EUTF-REG-

NAFR-02-01 EUTF

NA MONITORING

AND EVALUATION

FRAMEWORK

INTERNATIONAL CENTER OF MIGRATION

POLICY DEVELOPMENT

187.040

Total 187.040


4. Management and internal control

4.1 Control results

General

The North of Africa window of the EU Trust Fund operates in the general system of internal control defined by the Commission.

It was decided that the EU Financial Regulation and the rules and procedures developed by the Directorate General for International Cooperation and

Development (DEVCO) for the management and implementation of its operations are equally applicable to the EUTF. For the North of Africa window the

Directorate-General for Neighbourhood and Enlargement Negotiations (NEAR) benefits from a sub-delegation of DEVCO.

Once approved by the Operational Committee, actions are implemented in

accordance with the implementing procedures provided for in the applicable Commission rules and regulations.

As per the Constitutive Agreement of the Trust Fund and given its objective to operate in a crisis and post-crisis situation, flexible procedures appropriate to the local environment are used to ensure that the Fund is effective and responsive to

the needs identified. These procedures are in accordance with the FR provisions and are set up in NEAR financial guides. A register of exceptions, derogations

and prior approvals granted under the Trust Fund together with non-compliance events detected during the year is kept.

Project implementation is foreseen in direct management where the Trust Fund is

the Contracting Authority and signs procurement and grant contracts, or indirect management by which project implementation is delegated to a third party, a EU

Member State Agency or International Organisation. Candidate entities to be entrusted with budget-implementation tasks have to demonstrate a level of financial management and protection of the EU's financial interest equivalent to

that of the Commission. International Organisations and Member States Agencies have to provide Management declarations on the use of the funds they are

entrusted of.

Ex-ante controls are carried out by the TF staff for all operations/transactions carried out under the TF.

In line with NEAR contractual models and audit policy, audits/expenditure verifications are either foreseen in contracts or can be launched by the TF based

on a risk analysis.

The Trust Fund accounts are subject to an annual external audit.

To be noted that in 2017 the North of Africa window will perform a risk

assessment on the basis of the Annual Risk Assessment method as used by DG NEAR to asses all ongoing contracts and to prepare a control plan that will not

only determine external audits, verification missions and/or on the spot visits but equally will be used select the contracts that will be subject of the foreseen specific monitoring scheme/contract. This will come in addition to the

audit/expenditure verification contractual modalities.


The Trust Fund Managers take into account reports and recommendations of the

different control bodies, notably the IAS and Court of Auditors, for the purpose of providing an assessment of the effectiveness of risk management, control and governance processes, in addition to the results of the audits carried out at the

level of contractors/beneficiaries.

The European Anti-Fraud Office (OLAF) exercises the same powers over the Trust

Fund in its entirety, including its governance bodies and the representatives of donors and observers participating in such bodies, as it does in respect of other

activities of the Commission.

4.1.1 Results of ex-ante controls The first payments will be initiated in 2017. Within this framework no ex-ante controls proved to be necessary.

4.1.2 Results of external audits

No external audits were carried out. An Audit/verification Plan will be drawn-up

specifically for the Trust Fund in 2017.

4.1.3 Fraud prevention and detection16

No investigations by the European anti-fraud Office (OLAF) have yet been carried

out.

4.2 Observations and recommendations made by IAS/ECA

The Internal Audit Service of the Commission and the European Court of Auditors have not yet carried out reviews of this Trust Fund. The IAS report "Design and

implementation of EU trust funds excluded the Africa Trust Fund from its scope. Its recommendations will be considered by analogy.

4.3 Assessment of the effectiveness of the internal control systems

The EU Trust Fund operates in the general system of internal control defined by

the European Commission. In this framework, during its first year of operation the EU Trust Fund has put in place the organisational structure and the internal

control systems suited to the achievement of the policy and control objectives, in accordance with the standards and having due regard to the risks associated with the environment in which it operates.

Monitoring of the compliance and effectiveness of the internal control systems was done on a continuous basis by the Trust Fund Manager and adjusted and

complemented where necessary.

16 EU Trust Funds are included in the anti-fraud strategy of the DG of the Authorising

Officer in charge.


Exceptions, derogations, prior approvals and non-compliance events occurred

during the reporting period have been registered and documented (see table in annex 6). Approvals were given to a certain number of direct grant awards where this procedure could be justified by the urgency of the initiative or the

monopoly situation of the grantee. Only one negotiated procedure for service contracts was equally registered. Derogations were granted in 2016, but the

contracts will only be signed in 2017.

End 2016, the TF manager started to work on a business management workflow

process based on EC standard operating procedures in line with PRAG and the Companion, with the aim of clarifying the role of all the different stakeholders involved at Headquarters and Delegation level. This workflow process has been

formally adopted beginning 2017.

The actions approved to date are still at an early stage of implementation. The

Trust Fund Manager has taken appropriate measures to ensure that, when actions financed by the Trust Fund are implemented, the financial interests of the Union and of the donors are protected by the application of preventive measures

against irregularities and fraud, by effective controls and, if irregularities or fraud are detected, by the recovery of the amounts wrongly paid. The contracts and

agreements signed with third parties authorise the Commission to carry out controls on the spot, to suspend payments and implementation of actions where serious irregularities or fraud are noted, and to apply, where appropriate,

effective, proportionate and deterrent contractual penalties.

The following aspects to improve can be signalled which are mainly attributed to

the recent set-up of the Trust Fund and the general environment of external aid in crisis situations:

• Systems, circuits and procedures to be further fine-tuned to the

specificities of the Trust Fund

• IT systems need to be developed in order to provide for an automatic

registration of information that is currently compiled manually (e.g. exceptions, derogations and non-compliance events, contributions pledged). The risk involved in manual processing, which is more prone to error, will grow as the

volume of actions financed by the Trust Fund increases.

4.4 Conclusions as regards assurance The North of Africa window of the EU Trust Fund initiates its Operations Management in 2016, expected to reach cruising speed in 2017. Based on the

two Operational Committees held in 2016, 30% of the volume of the fund is expected to be contracted in Q1 2017.

Based on experience gained of the first two Operational Committee meetings, an

internal control business workflow process, based on PRAG and Companion was created to ensure priority setting in contracting, clarify procedures and

transparency for all involved in business management of the Trust Fund, including Delegation staff and FCA section.

A deputisation system is in place in order to ensure business continuity of the

Trust Fund business operations.


5. Declaration of assurance (and reservations)

DECLARATION OF ASSURANCE

I, the undersigned,

Manager of the North of Africa window of the European Union Trust Fund for Africa.

In my capacity as authorising officer by sub-delegation

Declare that the information contained in this report gives a true and fair view.

State that I have reasonable assurance that the resources assigned to the activities

described in this report have been used for their intended purpose and in accordance

with the principles of sound financial management, and that the control procedures put in

place give the necessary guarantees concerning the legality and regularity of the

underlying transactions.

This reasonable assurance is based on my own judgement and on the information at my

disposal for years prior to the year of this declaration.

Confirm that I am not aware of anything not reported here which could harm the

interests of the North of Africa window of the European Union Trust Fund for Africa.

Brussels, date 15 February 2017

Corinne André

6. Annexes:

List of derogations, exceptions, non-compliance events, prior approvals and events to be reported.

Region Action Document Signed amount Proposed

partner

Prior

approval

100%

financing

Prior approval

100% direct

award

Regional Development of a monitoring and

evaluation framework for the North

of Africa window of the EU

Emergency Trust Fund for Africa

187.040 ICMPD X X

Libya Strenghtening protection and

resilience of displaced populations

in Libya

5.900.000 DRC X X

Egypt Hand by hand.. Learn and stand 519.314 Caritas X X


ANNEX 9: Evaluations and other studies finalised or cancelled during the year

Reference

No of Annex 4 MP2016 Title Reason 1 Scope 2

Type of evaluation or other study Associated

DGs Costs (EUR) Comments Reference Cancelled

Focus 3 Author4 Type 5

I. Evaluations finalised/ cancelled in 2016

a. Evaluations finalised in 2016

DG NEAR Unit B2

Support to AGADIR Secretariat

Final evaluation

R E E

80,000

Implemented by EUD Jordan

DG NEAR Directorate B

EUROMED INVEST (EU Support to Business and Investment Partnerships in Southern Mediterranean)

Final evaluation

R E E

100,000

EUD Lebanon ENPI/2009/020-485 Programme de Deminage

Ex-post evaluation

R E E

39,984

EUD Tunisia Programme d'appui au système de recherche innovation

Final evaluation

132,142

ENPI/2009/20-512

EUD Tunisia Programme PCAM Final

evaluation

168,760

ENPI/2008/20-216

EUD Tunisia

Composante microfinance Programme d'appui aux zones défavorisées

Mid-term evaluation

75,588

ENPI/2011/23-202


EUD Tunisia Programme PEFESE Final

evaluation

160,000

ENPI/2009/20-511

EUD Tunisia Programme Environnement énergie

Final evaluation

100,496

ENPI/2007/19-239

EUD Tunisia Programme d'appui à la réforme de la justice

M-T

120,000

ENPI/2011/23-556; 557 et 560

EU Office West Bank and Gaza

Final evaluation of 'Livestock based livelihood programme institutional component (lbl-I)' (302119)

Final evaluation

15,000

The lbl-I programme


Evaluation of EIDHR-CBSS projects 2011-2014 (subject to available funds) as input into future prioritisation

thematic

180,000

EIDHR/CBSS support measures


Evaluation of PEGASE DFS programmes (2014-2015) and pilot Results-Oriented Framework.

Final ENPI/ENI

92,762

FA ENPI/2013/024-708

EUD Morocco

Programme d'appui à la stratégie de la lutte contre l'analphabétisme

Final

43,054

ENPI/2007/ 018-779 ; ENPI/2010/ 022-

376

EUD Albania

Evaluation of Justice and Home Affairs (JHA) sector IPA programmes in Albania

Thematic

88,660

FD 2015 Evaluation programme (FD 2015 /31-764).


b. Evaluations cancelled in 2016

DG NEAR Unit D5

SEECEL - 2 contracts Final

evaluation R E E 100,000

Evaluation finally integrated into the thematic evaluation on Competitiveness launched by A3

McP 2015 - EIF

Y

EUD Armenia 247956 - Yerevan Metro Rehabilitation

Final evaluation

R E E

Was subject to a regional evaluation Y

EUD Georgia

Evaluation of EU Support to Justice Sector in 2014-2015 (except BS operations)

Thematic evaluation

70,000

The Decision (with all listed projects) is included under Result Reporting 2015-2016 exercise and the management do not see an added value to repeat the exercise

Justice Decisions 22-562 & 24-344

Y

EUD Morocco

Appui aux dynamiques de Développement Intégré des Provinces et territoires ruraux du Nord

Mid-term evaluation

100,000

Pas d'avancement significatif dans le côté "soft" de la mise en œuvre. MT à transformer en évaluation finale.

Y

EUD Morocco

Programme d'appui à la

Couverture médicale de Base II

Final evaluation

Evaluation globale

sur la mise en œuvre du Régime d'Assurance Médicale pour les Démunis (RAMED) sera lancée par le partenaire, l'Agence nationale de l'Assurance maladie (ANAM)- Phase III du programme en cours

Y

II. Other studies finalised or cancelled in 2016


a. other studies finalised in 2016

DG NEAR Unit A3

Study on existing business linkages between SMEs from the EU and the Western Balkans. A focus on FDI in manufacturing sectors

P/R E O

151,300

b. other studies cancelled in 2016

DG NEAR Unit A3

Study for World Bank evaluation

Other - internal technical assistance

Support for former EC senior officials in preparatory activities for the launch of the evaluation of our cooperation with the World Bank

P E I

20,000

Y

1 L - legal act, LMFF - legal base of MFF instrument, FR - financial regulation, REFIT, CWP - 'evaluate first', O - other (please specify in Comments)

2 specify what programme/regulatory measure/initiative/policy area etc. has been covered

3 P - prospective, R - retrospective, P/R - prospective and retrospective

4 E - external, I - internal, M - mixed (internal with external support)

5 FC – fitness check, E – expenditure programme/measure, R – regulatory measure (not recognised as a FC), C – communication activity, I – internal Commission activity, O – other – please specify in the Comments


ANNEX 10: European Court of Auditors – Performance

audits

DG NEAR dealt with 11 performance audits (8 as the lead DG and 3 as an associated DG)

during 2016.

Six out of eight performance audit reports, for which DG NEAR was in the lead, have

been finalised and published in 2016 (the former Yugoslav Republic of Macedonia,

Migration, Montenegro, Moldova, Meta-Audit on Western Balkans and Ukraine). The

Commission has accepted most of the recommendations made by the Court. These are

valuable for DG NEAR's future reflections on how to deliver assistance in more efficient

manner; their implementation is already on-going.

The key points of the completed reports were as follows:

"Strengthening administrative capacity in the Former Yugoslav Republic of

Macedonia"

Objective

The audit looked at whether the EU pre-accession assistance contributes effectively to

strengthening administrative capacity in the former Yugoslav Republic of Macedonia in

the sectors of public administration, transport and environment.

Main findings of the Court

The Commission should address gaps in capacity building in procurement and in

the area of fight against corruption.

Projects should be part of a coherent and coordinated approach.

The capacity to fight against corruption should improve.

The sustainability of projects was poor.

The need to strengthen administrative capacity is addressed in bilateral dialogue

but not in regional processes and dialogues.

The contribution of other processes and dialogue towards strengthening

administrative capacity is weakened by political factors outside the control of the

Commission.

Commission position

The Commission considers the report as constructive, mentioning real issues and

weaknesses, while acknowledging the complex political situation in which pre-accession

assistance has been delivered. For many of the issues mentioned in the report, the

Commission has already taken mitigating measures. For example, DG NEAR:

introduced under IPA II stronger conditions for EU financial assistance;

focused on shortening time between programming and implementation of EU

assistance;

has started to gradually integrate the better regulation approach and the key

principles of public administration in EU sectoral assistance in order to ensure a

more coherent approach on building administrative capacity;


de-centralised management is now used more selectively. DG NEAR has

established a more balanced mix between direct and indirect management which

will improve the overall performance and effectiveness of IPA;

to secure the political commitment from the national authorities, DG NEAR is also

using a mix of positive and negative incentives. For example well performing

beneficiary countries will be rewarded, and for those performing below

expectations, the financial envelope will be reduced. In this respect, the

Commission has reduced the national envelope for the period 2014-2016 by

approximately EUR 50 million, because of the lack of reforms in the area of public

financial management.

"EU external migration spending in Southern Mediterranean and Eastern

Neighbourhood countries until 2014"

Objective

This audit aimed at assessing whether EU funded actions are aligned to the EU's

migration, mobility and asylum policy priorities.


lack of clarity and coherence of objectives (many policy and funding instruments);

absence of indicators or too complex indicators used;

projects difficult to measure and implementation delays;

complexity of links between migration and development.

Commission position

The report looked at a very limited sample of 23 migration projects in six neighbouring

countries, which were launched as of 2007 and concluded by 2014. They pre-date the

current migration/refugee crisis (as well as the mandate of the Juncker Commission). In

addition the following points need to be considered:

• Migration and asylum is a multifaceted, complex and constantly evolving policy

area at both international and EU level, and the Commission is obliged to operate

in this changing and challenging environment. As a result, it is an area that

requires similarly complex and multi-dimensional structures for its

implementation.

• Over the last year, the EU has stepped up its efforts to respond to the crisis:

reoriented and mobilised all external action instruments, with the objective to

save lives, ensure protection to those in need and manage borders and mobility.

• The Facility for Refugees in Turkey, special measures to assist Western Balkan

countries, the European Emergency Trust Fund for stability and addressing root

causes of irregular migration and displaced persons in Africa, the EU Regional

Trust Fund in response to the Syrian crisis, comprehensive aid and support

packages for Lebanon and Jordan (Compacts) - this non-exhaustive list of

measures and instruments proves the enormous efforts of the EU and its Member

States to respond rapidly and effectively to the crisis.

• On top of that, migration was embedded in the political dialogues with third


countries, in particular neighbourhood countries (via the specific JLS/Migration

and Social Affairs subcommittees with the relevant countries). With the current

Commission there is now a clearer impetus in linking further the internal with the

external dimension of migration and enhancing policy coherence (in the work of

the EEAS and relevant Commission Directorates-General).

• Looking at the Court's recommendations based on the audits of past projects, the

Commission underlines that much has been already done in 2015/2016. Tailor-

made monitoring and evaluation tools are being developed to allow the

measurement of achievements and progress, representing a key element towards

the delivery of more concrete and efficient co-operation frameworks on migration.

In line with the reviewed ENP, the Commission will seek to build reinforced

partnerships with a clearer focus and more tailored cooperation.

"EU pre-accession assistance contributes effectively to strengthening

administrative capacity in Montenegro?"

Objective

The objective of the audit was to address whether EU pre-accession assistance

contributes effectively to strengthening administrative capacity in Montenegro.


The Court concludes that overall there was fairly good progress in strengthening

administrative capacity in Montenegro during the period audited.

The challenge now is to build on the adoption of legislation and deliver results on

reform.

Many of the audited projects produced results but were weak or not sustainable

because the national authorities did not provide the necessary follow-up support.

The mechanisms for political dialogue have helped to make significant progress in

many areas over a relatively short period of time.

The Court observed that the decentralised mode of management of EU funds

provides a potentially useful tool for strengthening administrative capacity

through transfer of knowledge.

In 2015 the Commission initiated the publication of quantitative data over time

which would allow achievements arising from Commission support for capacity-

building to be better measured.

Commission position

The Commission welcomes the report and agrees with its main findings.

• The report acknowledges the positive contribution of pre-accession assistance in

addressing the capacity-building needs of Montenegro. The Commission has

already taken steps to improve the impact of its financial support and ensure

better follow-up by the national authorities, including embedding projects in a

sectorial approach and strengthening conditionality, as well as improving

coordination between regional and national financial assistance.

• The Commission stresses the importance of prioritising quality over speed of

reforms, in particular in areas such as the rule of law where reforms required are

often difficult and results take a certain time to materialise.


• On improving the measurement of progress on administrative capacity, the

Commission introduced with the 2015 Enlargement Package a new reporting

methodology in a number of pilot areas, such as the rule of law and public

administration reform, which will allow for better comparability of progress

between countries and also over time. The Commission has continued to expand

this new reporting methodology in the 2016 package.

• The Commission has also started to regularly check the coherence between sector

specific assistance and the horizontal public administration reform efforts, with

special emphasis on policy and legislative development and coordination

processes, accountability and rationality of public administration organisation, as

well as on coherence between general and special administrative procedures.

"Strengthening the Public Administration in the Republic of Moldova"

Objective

The audit considered the question of whether the EU assistance to Moldova did effectively

contribute to strengthening public administration.


Reasons for choosing SBS (Sector Budget Support) as an aid modality to be better

documented.

Conditionality was not always used consistently to stimulate reforms. In certain

cases, funds were disbursed or reprogrammed, when conditions were not fulfilled.

Projects were not systematically designed to provide relevant support to

administrations in charge of managing SBS programmes.

Donor coordination was not systematic.

Projects were relevant, but did not always create sustainable capacity in public

administrations.

Commission position

The Commission considers the report to be constructive and agrees with its

recommendations.

The report reflects the difficult political context in Moldova, including the

implications of macro-economic instability and lack of an IMF programme, as well

as risks related to corruption.

The Commission has already taken risk mitigating measures to address many

points highlighted by the Court, including regular updates of risk analysis in all

countries where budget support is applied.

Systemically, the Commission is now taking a more results-based approach to

provision of financing, thereby addressing a number of the Court's points.

The report rightly emphasizes the key importance of political will to genuinely

improve and strengthen the public administration capacity in the country in a

sustainable manner.

The Commission regularly brings these issues in the political and sector policy

dialogue. The Commission has also developed programmes to support better

public finance management and public administration capacities.


META- audit - "Effectiveness of pre-accession in the Western Balkans"

Objective

The Court was interested in whether EU funds used for Pre-accession assistance under

IPA I and IPA II (to a lesser extent) on all Western Balkans countries have been used in

an effective and efficient way in the field of rule of law, public administration reform

public finance management, fight against corruption and organised crime.


The EU pre-accession assistance was broadly effective that IPA I partly

strengthened administrative capacity in the region, despite shortcomings inherent

to the national authorities in the Western Balkans.

IPA I objectives were not always specific and measurable. Programmes and

projects were based on needs but some beneficiaries’ assessments in the rule of

law sector showed shortcomings.

IPA generally delivered the outputs and its support for the rule of law and public

administration reform was partly sustainable also because of the lack of political

will.

The political dialogue for the rule of law had limited impact, especially for non-

negotiating countries, while for the public administration reform it achieved some

progress.

The potential for using decentralised management to strengthen administrative

capacity has not yet been fully exploited.

Commission position

The Commission welcomes the report and agrees with its recommendations.

While mentioning some weaknesses, the report acknowledges the positive

contribution of pre-accession assistance in addressing the capacity-building in the

Western Balkans region despite shortcomings inherent to the IPA beneficiaries'

authorities. The Commission has already taken steps to improve the impact of its

financial support and ensure better follow-up by the authorities, including

embedding projects in a sectorial approach and strengthening conditionality, as

well as improving coordination between regional and national financial assistance.

The political dialogue can only encourage reform, but the ownership of the reform

process lies with the IPA beneficiaries' authorities.

The Commission is gradually ensuring that the EU better regulation approach that

promotes inclusive and evidence-based policy and legislative development and the

key principles of public administration, is integrated into sectorial capacity-

building projects. For example, specific attention will be paid to ensuring that

sectorial training programmes are better coordinated with the national civil service

training institutions in order to ensure continuation of trainings.

Regional cooperation is an essential element of the enlargement process fostering

good neighbourly relations, reconciliation, economic growth and competitiveness.

The Commission will pursue its support to relevant, inclusive and effective

regional organisations and initiatives in order to help the region achieve


measurable and sustainable results on the ground in line with the priorities set out

in the enlargement strategy.

"EU assistance to Ukraine"

Objective

The audit objective was to address the overall question: “Were the EU institutions’

actions and reactions well-prepared, adequate and effective in supporting the

transformation of Ukraine into a well-governed state, in the area of public finance

management (PFM) and in the sector of energy?”.


The Court concludes that overall, EU assistance to Ukraine has been partially effective in

supporting the transformation of Ukraine into a well governed state in the three areas

mentioned above. The Court mainly found that:

EU assistance to Ukraine was partially effective in improving public finance

management and the fight against corruption;

EU-Ukraine dialogue on public finance management has significantly improved

since 2013, and that on fight against corruption since 2011;

The design of the assistance enabled rapid disbursements but did not always take

sufficient account of the reforms to be achieved;

Monitoring of the implementation of EU assistance has improved;

The results of EU assistance remain fragile.

Overall, EU assistance to Ukraine was partially effective in improving governance

in the gas sector and the security of the EU’s gas supply via Ukraine.

Commission position

The Commission's position on the key areas was as follows:

• Even though EU assistance was partially effective, important structural reforms in

all audited areas have been triggered or supported by EU programmes.

• EU assistance played a key role in promoting the political association and

economic integration of Ukraine with the EU.

• The Commission will continue to work on strengthening monitoring of EU

assistance implementation and will use all tools at its disposal to speed up

progress in reforms.

• The Commission maintained throughout the audited period a coherent policy in

view of the strategic role of the Ukrainian gas transit system and the need for

fundamental reforms in the gas sector.

• The Commission also continues its efforts to mediate in the ongoing gas dispute

between Russia and Ukraine.


ANNEX 11: Analysis of Key Performance Indicators

2016

Analysis of Key Performance Indicators (KPIs)


I – Objective

KPIs are at the basis of the assurance provided by the Heads of Delegations and by NEAR

Directors in their External Assistance Management Reports. They feed directly into the

Annual Activity Report of DG NEAR, supporting the Declaration of Assurance of the

Director-General.

KPIs are also used by DG NEAR as a management tool. They identify targets or

benchmarks in key issues of financial management, audits and controls. An analysis of

KPIs' results versus targets is regularly presented to the Management and a follow-up is

ensured by the concerned services at Headquarters and the EU Delegations through the

established action plans and regular review of progress made.

The purpose of this report is to present the results of NEAR17 KPIs on 31/12/2016 for 22

"EAMR Delegations" implementing projects as per Budget devolution and HQ units

managing projects or financial transactions centrally and to decide on necessary actions.

The main variances compared to the annual benchmarks are highlighted. Correlations

between KPIs and constraints that may have a negative impact are examined. KPI values

are based on the data as registered in the systems (ABAC, CRIS, Audits, MIS) on

31/12/2016. They are presented in the frozen version of the 2016 KPI Dashboard.

17 NEAR KPIs only cover transactions for which the Director General of DG NEAR is the Authorising Officer by

Delegation. Transactions made in the framework of the cross-sub-delegation made by NEAR to other DGs are not covered by the report.

http://intragate.ec.europa.eu/devcodashboard_qv/QlikView/


II – Analysis

Global results for DG NEAR at the end of the 2016 are presented in the table below. The

arrows indicate the evolution compared to 2015.

KPI Name KPI result

2016

Annual

Target/Benchma

rk

A - Sound Financial Management and Efficient Use of EC Resources

K1

Accuracy of initial

annual financial

forecast for payments

95.06%

▲

From 90% to 110% Actuals

EUR

3,086

million

K2

Accuracy of initial

annual financial

forecast for contracts

91.45%

▼

From 90% to 110% Actuals

EUR

4,284

million

K3

Accuracy of initial

annual financial

forecast for decisions

99.06

% From 90% to 110% Actuals

EUR

4,408

million

K4 RAL absorption period 4.15ye

ars▼

Not more than 4 years

K5

% of projects with red

traffic light for

implementation

progress

3.91% Not more than 10%

Number

of

projects

with red

traffic

light

84

K6

% of projects with red

traffic light for

achieving results

4.98% Not more than 10%

Number

of

projects

with red

traffic

light

107

K7 Reduction of old pre-

financing

32.83%

▲

At least 25%

Old pre-

financing

amount

31/12/20

16

EUR

1,390

million

K8

Expired contracts as

% of the contract

portfolio

15.62%

▲

Not more than 15%

Number

of expired

contracts

852

K9 Reduction of old RAL 36.55%

▲

At least 25%

Old RAL

amount

31/12/20

16

EUR 376

million

K1

0

% of payments paid

within EC internal

target of 30 days

54.13%

▼

At least 66%

Number

of

invoices

paid

within

target

2,625

K1

1

Use of DEVCO/NEAR

staff and respect of

the flexibility

arrangements

100.00

%

Yes for 100% of

Delegations


B - Effectiveness of Internal Controls

K1

2

% of green traffic

lights for the


two ICS related to

mission and values in

Delegations

96.21%

▲

At least 80%

K1

3

% of green traffic

lights for the


two ICS related to

human resources in

Delegations

94.10%

▼

At least 80%

K1

4

% of green traffic

lights for the


two ICS related to

planning and risk

management in

Delegations

92.64%

▼

At least 80%

K1

5

% of green traffic

lights for the


five ICS related to

operations and control

activities in

Delegations

93.60%

▼

At least 80%

K1

6

% of green traffic

lights for the


two ICS related to

information and

financial reporting in

Delegations

93.18%

▲

At least 80%

K1

7

% of green traffic

lights for the


three ICS related to

evaluation and audit

in Delegations

95.20%

▼

At least 80%

K1

8

% of projects visited

by Commission staff

and/or the HoD, by

project value

81.77

% At least 80%

K1

9

% planned project

evaluations contracted

75.56

% At least 75%

K2

0

% ineligible amount

identified by ex-ante

controls

4.64%▲

At least 2%

Ex-ante

ineligible

amount

identified

EUR

129

milli

on

C - Effectiveness of Audit Systems

K2

1

% contracted of the

Annual Audit Plan

(year N)

61.81%▲ At least 60%

Number of

audits

implemented

191


K2

2

% contracted of the

Annual Audit Plan

(year N-1)

96.61%▲ At least 85%

Number of

audits

implemented

285

K2

3

% contracted of the

Annual Audit Plan

(year N-2)

100.00%▲ At least 95%

Number of

audits

implemented

208

K2

4

Ineligible amounts

identified by audits as

a % of the audited

amount

1.83%▲ At least 2%

Audit ineligible

amount

identified

EUR

7

milli

on

Results at Delegation level

Good results have been achieved at Delegation level with an increased number of

Delegations meeting targets for most of the KPIs in 2016:

All Delegations except Syria have met benchmarks for 60% their KPIs compared to 11

Delegations at the end of 2015:

Results at global level

20 KPIs out of 24 fully reached the aggregated 2016 targets at DG level corresponding to

an overall success rate of 84%.

Performance improved in 2016 in comparison with 2015: 20 KPIs met or exceeded

the benchmarks compared with only 12 in 2015:

8 in the category "Sound Financial Management and Efficient Use of EC

Resources"

Nbr of Delegations % Nbr of Delegations %

Total Delegations 22 22

80% and more 0 0% 6 27%▲

60% and more 11 50% 21 95%▲

Less than 60% 11 50% 1 5%▼

% of green KPIs 2015 2016

Overall Green KPI Result for 2015 2016

Albania 50% 74%

Belarus 59% 70%

Egypt 44% 83%

European Union Office in Kosovo 50% 70%

Georgia 56% 91%

Morocco 50% 83%

The former Yugoslav Republic of Macedonia 56% 74%

Syria 31% 22%

Serbia 56% 65%

Turkey 50% 70%

Ukraine 56% 78%


9 in the category "Effectiveness of Internal Controls resources in Delegations"

3 in the category "Effectiveness of Audit Systems"

The following four remaining KPIs show results that remain below targets:

RAL absorption period

Expired contracts as % of the contract portfolio

% of payments paid within EC internal target of 30 days

Ineligible amounts identified by audits as a % of the audited amount

The general trend at KPI level is positive with steady improvements achieved for most of

the KPIs.

Accuracy of initial annual financial forecast for payments: continuously accurate

and as good as within benchmarks over the last 2 years (2016: 95.06%, 2015:

90.68%).

Accuracy of initial annual financial forecasts for contracts: continuously accurate

and as good as within benchmarks over the last 2 years (2016: 91.43%, 2015:

104.52%).

In 2016, NEAR managed to considerably reduce its old pre-financing compared to

2015 when the target of at least 25% was not met (2016: 32.83%, 2015:

15.40%).

The KPI on expired contracts has deteriorated (2016: 15.66%, 2015: 13.32%)

and did not meet the target (not more than 15%).

The amount of old RAL has been considerably reduced since 2015. Both in 2015

and 2016 the KPI was within the target of minimum of 25% (2016: 36.55%,

2015: 25.92%).

Ex-ante ineligible amounts have the highest result over the last two years (2016:

4.64% - EUR 129 million, 2015: 3.88% - EUR 68 million). The guidance provided

on the proper encoding in particular related to budget support is reflected in this

result.

The implementation of all three audit plans has reached the highest results in 2

years.

III - Detailed analysis

A) Results at KPI level

KPI 1 – Accuracy of initial annual financial forecast for payments

In 2016, DG NEAR realized 95.06% of its financial forecasts for payments (EUR 3,086

million out of a total of EUR 3,246 million). In 2015, the result was lower at 90.68% and

EUR 2,336 million.


Within target: 6 Delegations18 and 4 HQ Units19 were well situated within the target

of 90%-110%.

Above target: Delegations exceeding the forecast were: Turkey (241.72%), Moldova

(149.32%), Ukraine (149.17%) and Syria (144.61%). HQ Units exceeding the

forecast were: NEAR A 01 (195.09%) and NEAR C 01 (118.41%).

Below target: The remaining 12 Delegations and 7 HQ Units performed below the

target of 90%:

18 Algeria DZ, Egypt EG, West Bank and Gaza Strip PS, Georgia GE, Jordan JO, Morocco MA. 19 NEAR A 04, NEAR B 01, NEAR C 03, NEAR R 03.

95.06%▲

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

NE

AR

R

SG

UA

Total

KPI Value 217,96% 86,68% 85,59% 66,47% 99,26% 149,17% 95,06%

Actuals (in M€) 517,7 1 304,7 540,3 433,5 76,7 213,0 3 086,0

Forecasts (in M€) 237,5 1 505,2 631,3 652,2 77,3 142,8 3 246,4

Variance (in M€) 280,2 -200,6 -91,0 -218,7 -0,6 70,2 -160,4


12 Delegations didn't meet the target of minimum 90% and 4 Delegations performed

above the target of 110%. The reasons for under/over execution of forecasts were:

Under execution in ENI Delegations is mainly due to EUR 88 million in Budget

Support payments for a number of countries which were not executed either

because of the failure of the beneficiary country to deliver on time on agreed

benchmarks or results or because of unforeseen significant political events.

An additional important source of under execution for ENI Delegations that

amounts to EUR 80.6 million relates to delays by IFIs -including the European

Investment Bank- in finalizing the contracting in the framework of Neighborhood

Investment Facility for both ENI South and East.

In addition, an amount of EUR 60 million had been factored in for a Trust Fund

Syria payment. However, it was finally decided not to proceed with this payment

in a view of the fact that amounts on the relevant accounts generate negative

interest and should therefore be kept to a minimum.

Under executed amount of EUR 83.8 million relates to payments that the EU

Delegations in the Western Balkans have not executed, mainly due to delayed

procurement and contracting.

The negative result for all Delegations was compensated by over performance of Turkey

Delegation (241.72%). This is due to payments for Turkish Facility for Refugees that

were not included in the initial forecast in February 2016, which is used in calculation of

KPI 1, as they were agreed only in April.

KPI 2 – Accuracy of initial annual financial forecast for contracts

In 2016, DG NEAR achieved 91.45% of its financial forecasts for contracts (EUR 4,284

million against a total of EUR 4,684MEUR). In 2015, the result was 104.52% and EUR

3,847 million.

Delegation/HQ Unit (in M€) KPI Actual Forecast Variance

Albania AL 81,13% 81,4 100,4 -18,9

Armenia AM 84,35% 62,1 73,7 -11,5

Azerbaijan AZ 85,36% 22,3 26,1 -3,8

Belarus BY 83,44% 26,2 31,4 -5,2

Bosnia & Herzegovina BA 67,18% 50,6 75,3 -24,7

European Union Office in Kosovo XK 76,01% 58,4 76,9 -18,4

Israel IL 71,31% 5,6 7,8 -2,2

Lebanon LB 67,65% 72,5 107,2 -34,7

Montenegro ME 68,59% 18,6 27,2 -8,5

The former Yugoslav Republic of Macedonia MK 79,24% 43,7 55,2 -11,5

Serbia RS 63,20% 98,8 156,3 -57,5

Tunisia TN 58,87% 116,4 197,7 -81,3

NEAR A 02 58,50% 4,4 7,5 -3,1

NEAR A 03 68,15% 15,9 23,3 -7,4

NEAR B 02 78,43% 116,8 148,9 -32,1

NEAR B 03 1,87% 1,0 52,2 -51,2

NEAR C 02 28,03% 47,6 170,0 -122,3

NEAR D 04 0,00% 0,0 3,2 -3,2

NEAR D 05 51,93% 82,0 157,8 -75,8

Payments forecast - KPI value below the target of 90%


Within target: 6 Delegations20 and 3 HQ Units21 were well situated within the target

of 90%-110%.

Above target: Delegations exceeding the forecast were: Algeria (121.18%), Israel

(189.27%), Jordan (135.89%), Lebanon (148.03%), Syria (879.58%), Moldova

(234.03%), Albania (171.93%) and the Former Yugoslav Republic of Macedonia

(159.38%). The HQ Unit exceeding the forecast was NEAR B 02 (131.97%).

Below target: The remaining 8 Delegations and 8 HQ Units performed below the

target of 90%:

20

Armenia AM, Azerbaijan AZ, Egypt EG, Morocco MA, Turkey TR, Ukraine UA. 21 NEAR A 02, NEAR C 03, NEAR R 03.

91.45%▲

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

NE

AR

R

SG

UA

Total

KPI Value 101,40% 90,43% 77,97% 86,43% 105,21% 106,15% 91,45%

Actuals (in M€) 1 191,3 1 623,9 509,6 727,9 3,1 228,6 4 284,3

Forecasts (in M€) 1 174,9 1 795,7 653,5 842,2 2,9 215,3 4 684,6

Variance (in M€) 16,4 -171,9 -144,0 -114,3 0,2 13,2 -400,3


KPI 3 – Accuracy of initial annual financial forecast for decisions

In 2016, DG NEAR reached 99.06% of its financial forecasts for decisions (EUR 4,408

million against a total of EUR 4,449 million). In 2015 this KPI was not available for DG

NEAR.

KPI 3 was calculated in 2016 in NEAR only at Directorate level.

KPI 4 – RAL absorption period

The RAL absorption period of 4.15 years is very close to the target which is less than 4

years. This is a net progress compared to the value of 5.02 years of the 2015 exercise. A

number of old NEAR commitments (average age 16.6 years) could not be linked to a

managing entity and were put under a column "N/A" in the table, as was the Trust Fund

for Syria (MADAD). KPI 4 is not being benchmarked for HQ Units.

The RAL absorption period is a snapshot of the situation of each Delegation at the end of

the year:

Delegation/HQ Unit (in M€) KPI Actual Forecast Variance

West Bank and Gaza Strip PS 68,39% 333,5 487,7 -154,2

Tunisia TN 87,34% 148,2 169,7 -21,5

Belarus BY 47,25% 14,1 29,9 -15,8

Georgia GE 73,80% 88,8 120,4 -31,5

Bosnia & Herzegovina BA 75,15% 45,7 60,8 -15,1

European Union Office in Kosovo XK 65,77% 52,2 79,4 -27,2

Montenegro ME 80,41% 34,3 42,7 -8,4

Serbia RS 42,12% 104,3 247,6 -143,3

NEAR A 03 86,19% 23,1 26,8 -3,7

NEAR A 05 0,00% 62,6 0,0 62,6

NEAR B 01 0,00% 2,0 0,0 2,0

NEAR B 03 0,52% 1,8 350,7 -348,9

NEAR C 01 0,00% 184,9 0,0 184,9

NEAR C 02 15,12% 57,3 378,9 -321,6

NEAR D 02 0,00% 15,0 0,0 15,0

NEAR D 05 87,81% 237,1 270,0 -32,9

Contracted forecast - KPI value below the target of 90%

99.06%

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

NE

AR

RTotal

KPI Value 96,01% 97,05% 106,64% 101,54% 102,38% 99,06%

Actuals (in M€) 1 448,7 1 278,7 641,7 834,2 204,8 4 408,1

Forecasts (in M€) 1 508,9 1 317,6 601,8 821,6 200,0 4 449,9

Variance (in M€) -60,2 -38,9 40,0 12,6 4,8 -41,8

4.15years▼

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

N/A

NE

AR

R

Total

KPI Value (years) 4,86 3,66 3,72 6,11 2,71 3,74 4.15

RAL (in M€) 2 524,8 4 791,0 2 009,5 2 761,3 577,5 500,2 13 164,4

Paid amount (in M€) 519,3 1 310,4 540,8 452,0 213,0 133,8 3 169,2


The main reasons for not meeting the target are:

Delays in the signature of the Financing Agreements22 by Beneficiaries and

subsequently delays in all the tenders related. (Turkey, Montenegro, Macedonia)

Blocked Budget Support operations. (Egypt)

Contributions to Trust Funds, which should be excluded from Delegation's

calculation of KPI 4. (Syria)

Outstanding audits for many projects hinder their formal closure and such

increase the RAL. (Serbia)

The substantial increase in the volume of aid in 2016 (EUR 213.5 million) and the

late adoption of decisions financed by the Neighborhood Investment Facility (NIF)

and the Trust Fund for Migration have almost mechanically increased the RAL.

(Tunisia)

Delays in projects implementation linked to the inertia of the local authorities and

to the resignations/changes of experts at the crucial moments of the

implementation of the projects. (Algeria)

KPI 5 – % of projects with red traffic light for implementation progress

Project assessment in the EAMR is a snapshot of the situation of each project at the end

of the year. Red and orange traffic lights highlight risks that are identified by project

managers with regards to the implementation of the activities or the achievement of the

objectives at the end of the year. This enables corrective measures to be taken. The

actual impact of the identified difficulties can only be assessed at the end of the project.

22 Indirect Management mode.

Delegation (in M€) KPI RAL Paid amount

Turkey TR 4,78 2 376,4 497,2

Algeria DZ 5,40 233,9 43,3

Egypt EG 5,80 801,5 138,2

West Bank and Gaza Strip PS 0,71 243,4 341,2

Israel IL 2,95 16,5 5,6

Jordan JO 2,88 441,0 153,1

Lebanon LB 4,48 324,9 72,5

Morocco MA 3,83 896,8 233,9

Syria SY 8,14 672,9 82,6

Tunisia TN 5,08 591,1 116,4

Armenia AM 3,20 198,9 62,1

Azerbaijan AZ 4,32 96,2 22,3

Belarus BY 3,46 90,6 26,2

Georgia GE 3,67 384,6 104,8

Moldova MD 5,06 486,3 96,1

Albania AL 3,70 302,1 81,7

Bosnia & Herzegovina BA 4,79 242,5 50,6

European Union Office in Kosovo XK 5,06 296,3 58,6

Montenegro ME 6,24 116,9 18,7

The former Yugoslav Republic of Macedonia MK 5,74 254,0 44,3

Ukraine UA 2,71 577,5 213,0

Serbia RS 7,68 759,5 98,9

RAL Absorption period


KPI 5 results are snapshots at a point in time, meant to draw specific attention on

performance of projects and programmes. The assessment takes into consideration other

factors than only financial ones.

One Delegation (Azerbaijan – 15.63%) and one HQ Unit (NEAR B 04 – 15.00%) have

more than 10% of projects with red traffic lights and therefore did not meet the target.

3.91%

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

NE

AR

R

Total

KPI result 2,00% 3,92% 4,76% 3,33% 3,79% 3.91%

Number of projects with red traffic light 1 31 26 21 5 84

Number of ongoing projects 50 790 546 631 132 2149

Project value with red traffic light (in M€) 2,6 371,6 168,5 194,8 49,0 786,5

Total project value (in M€) 658,0 6 264,9 2 143,4 2 775,9 722,0 12 564,1

Contextual indicator 0,39% 5,93% 7,86% 7,02% 6,79% 6,26%

Delegation/HQ Unit Green Orange RedNumber of

ProjectsKPI Value

Albania AL 57 13 4 74 5,41%

Algeria DZ 18 6 2 26 7,69%

Armenia AM 52 19 3 74 4,05%

Azerbaijan AZ 50 4 10 64 15,63%

Belarus BY 50 3 53 0,00%

Bosnia & Herzegovina BA 116 3 3 122 2,46%

Egypt EG 60 13 6 79 7,59%

European Union Office in Kosovo XK 174 3 9 186 4,84%

West Bank and Gaza Strip PS 117 10 3 130 2,31%

Georgia GE 131 12 2 145 1,38%

Israel IL 46 3 49 0,00%

Jordan JO 79 12 3 94 3,19%

Lebanon LB 52 14 5 71 7,04%

Moldova MD 70 12 4 86 4,65%

Montenegro ME 25 3 2 30 6,67%

Morocco MA 50 27 6 83 7,23%

NEAR A 03 19 1 20 5,00%

NEAR A 04 3 1 4 0,00%

NEAR A 05 5 5 0,00%

NEAR B 02 87 3 3 93 3,23%

NEAR B 04 12 5 3 20 15,00%

NEAR C 01 26 4 3 33 9,09%

NEAR C 02 57 12 4 73 5,48%

NEAR C 03 18 18 0,00%

NEAR D 05 119 3 1 123 0,81%

The former Yugoslav Republic of Macedonia MK 36 3 1 40 2,50%

Serbia RS 54 1 1 56 1,79%

Syria SY 25 7 32 0,00%

Tunisia TN 113 113 0,00%

Turkey TR 21 21 0,00%

Ukraine UA 119 8 5 132 3,79%

TOTAL 1861 204 84 2149 3,91%

Traffic Light

KPI 5 - % of projects with red traffic light for implementation progress


KPI 6 – % of projects with red traffic light for achieving results

General comment made above on KPI 5 is applicable also for KPI 6.

Two Delegations (Azerbaijan – 15.63%, Syria – 21.88%) and one HQ Unit (NEAR B 04 –

20.00%) have more than 10% of projects with red traffic lights and therefore did not

meet the target.

4.98%

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

NE

AR

R

Total

KPI result 0,00% 5,57% 5,31% 4,12% 6,06% 4.98%

Number of projects with red traffic light 0 44 29 26 8 107

Number of ongoing projects 50 790 546 631 132 2149

Project value with red traffic light (in M€) 0,0 350,9 189,1 220,9 51,8 812,7

Total project value (in M€) 658,0 6 264,9 2 143,4 2 775,9 722,0 12 564,1


Delegation/HQ Unit Green Orange RedNumber of

ProjectsKPI Value

Albania AL 47 24 3 74 4,05%

Algeria DZ 9 16 1 26 3,85%

Armenia AM 45 23 6 74 8,11%

Azerbaijan AZ 45 9 10 64 15,63%

Belarus BY 48 4 1 53 1,89%

Bosnia & Herzegovina BA 92 28 2 122 1,64%

Egypt EG 56 16 7 79 8,86%

European Union Office in Kosovo XK 147 26 13 186 6,99%

West Bank and Gaza Strip PS 100 23 7 130 5,38%

Georgia GE 122 21 2 145 1,38%

Israel IL 46 3 49 0,00%

Jordan JO 73 16 5 94 5,32%

Lebanon LB 39 27 5 71 7,04%

Moldova MD 60 20 6 86 6,98%

Montenegro ME 17 11 2 30 6,67%

Morocco MA 51 27 5 83 6,02%

NEAR A 03 19 1 20 0,00%

NEAR A 04 4 4 0,00%

NEAR A 05 5 5 0,00%

NEAR B 02 78 12 3 93 3,23%

NEAR B 04 9 7 4 20 20,00%

NEAR C 01 23 9 1 33 3,03%

NEAR C 02 41 29 3 73 4,11%

NEAR C 03 18 18 0,00%

NEAR D 05 110 10 3 123 2,44%

The former Yugoslav Republic of Macedonia MK 21 18 1 40 2,50%

Serbia RS 51 3 2 56 3,57%

Syria SY 9 16 7 32 21,88%

Tunisia TN 108 5 113 0,00%

Turkey TR 21 21 0,00%

Ukraine UA 100 24 8 132 6,06%

TOTAL 1614 428 107 2149 4,98%

KPI 6 – % of projects with red traffic light for achieving results

Traffic Light


Comments on KPI 5 and KPI 6

KPI5 and KPI6 are forward looking as they asses the probability to fully use the project

resources and to reach the expected level of outputs and outcomes at the end of the

projects. Orange or red traffic lights call for attention and indicate if corrective actions

are envisaged and if risks on implementation and on achieving results remain. A project

can be given an orange traffic light even if it is on schedule, if a risk remains. On the

other hand, a project behind schedule may be given a green traffic light if constraints or

issues have been solved and the project will now continue at full speed and make up for

delays. A project is defined as problematic if one of KPI5 and/or KPI6 is orange or red.

The table below shows statistics on traffic lights for Projects for both KPI 5 and KPI 6:

A problematic project is defined as a project for which at least one from two traffic lights

(of KPI 5 and KPI 6) is orange or red. In 2016 from 2149 Projects, 576 (27%) were

marked as problematic which represents EUR 4,529 million (36%) in total value of

projects. The table below shows the distribution of problematic projects between

Delegations/HQ Units ranked by total amount for problematic projects in million EUR:

KPI 5 and KPI 6 Green KPI 5 or KPI 6 Orange KPI 5 or KPI 6 Red Total

Number of Projects 1573 452 124 2149

% 73% 21% 6% 100%

Amount of Projects (in M€ ) 8 035,0 3 595,7 933,4 12 564,1

% 64% 29% 7% 100%

Delegation/HQ Unit Number Amount (M€)

Morocco MA 37 623,9

Egypt EG 27 556,7

Ukraine UA 32 528,8

Lebanon LB 33 334,2

Armenia AM 35 263,0

Moldova MD 26 261,1

Serbia RS 5 244,8

Jordan JO 26 179,9

Algeria DZ 18 179,2

The former Yugoslav Republic of Macedonia MK 19 177,0

Albania AL 29 173,1

West Bank and Gaza Strip PS 32 143,6

Georgia GE 26 132,8

NEAR C 02 37 111,9

NEAR C 01 10 105,3

Bosnia & Herzegovina BA 30 100,8

Syria SY 23 100,1

NEAR B 02 15 89,0

NEAR B 04 11 50,3

European Union Office in Kosovo XK 39 50,2

NEAR D 05 14 48,6

Belarus BY 8 27,8

Tunisia TN 5 17,7

Montenegro ME 15 12,3

Azerbaijan AZ 19 11,8

NEAR A 03 1 2,6

Israel IL 3 1,9

NEAR A 04 1 1,0

Total 576 4 529,2

Problematic Projects


The following tables show the top 10 projects based on their value and classified per

category (Green/Orange/Red) both across Delegations and HQ Units:

Delegation/HQ Unit Project Title EU Contribution (M€)

Turkey TR Action Programme for Turkey 2015 - Objective 1 196,6

Serbia RS Serbia National Programme 2011 178,6

Serbia RS Serbia National Programme IPA 2012 170,6

NEAR B 02 2016 Contribution to the NIF (Neighbourhood

Investment Facility) for the SOUTH

146,5

West Bank and Gaza Strip PS Individual Commitment for payments of PEGASE

component n 1: contrubition to Civil Servants and

Pensioners (CSP) - 2016

115,0

NEAR D 05 Contribution Arrangement with respect to the

European Western Balkans Joint Fund under the

Western Balkans Investment Framework

102,1

West Bank and Gaza Strip PS EU Contribution to the UNRWA 2016 Programme

Budget

102,0

Morocco MA PROGRAMME D'APPUI A LA CROISSANCE ET

LA COMPETITIVITE AU MAROC- PACC

100,0

Tunisia TN Progamme d'Appui à la Relance IV 100,0

Morocco MA Contrat pour le versement des différentes tranches

de l'appui budgétaire du programme PASS II

94,0

Top 10 "Green" Projects


Ukraine UA State Building Contract for Ukraine (AAP 2014) 232,0

Egypt EG Water Sector Reform Programme – Phase II (WSRP-II) 120,0

Egypt EG HSPSP II-Health Sector Policy Support Programme II 110,0

Ukraine UA U-LEAD with Europe: Ukraine Local Empowerment,

Accountability and Development Programme

90,0

Morocco MA Programme d’appui à la réforme éducative au Maroc

''Education II''

89,9

Morocco MA Réussir le Statut Avancé phase II - RSA II 87,0

Serbia RS Annual Action Programme Serbia IPA 2015 - Sector

Budget Support PAR

80,0

Morocco MA Contrat pour le versement des différentes tranches de

l'appui budgétaire du programme Justice

65,5

Egypt EG Energy Sector Policy Support Programme 60,0

Morocco MA Programme d’appui à la politique sectorielle agricole du

Maroc, phase 2 (AGRI II)

60,0

Top 10 "Orange" Projects


For problematic projects the following table shows an overview of the types of problems

or risks encountered in 2016:

Most of the problematic projects encountered issues with assumptions and/or risks as

well as in the intervention logic. Optimistic assumptions and risk analysis are in part due

the high expectations with regards the implementation. Projects are implemented in a

sometimes rapidly changing environment which may lead to the need of updating the

assumptions and risks, leading to a revised project plan.

Next to these issues, problematic projects are most often related to fiduciary risk

(corruption, fraud) and to low performance of the project implementation partner

(absorption, procedures).

For problematic projects the following table shows frequencies of corrective measures

proposed in 2016:


Serbia RS Serbia National Programme IPA 2013 (Decentralised part) 145,6

Egypt EG Targeted support for sector reforms-Transport 80,0

Morocco MA Contrat de décaissement des tranches de l'appui budgétaire

du Programme RSA I

70,0

Moldova MD Support to the Justice Sector 58,2

Ukraine UA Continued Support to the implementation of Ukraine`s

Energy Strategy

45,0

Morocco MA Contrat pour le versement des tranches d'appui budgétaire

du programme d'appui à la promotion de l'équité et de

l'égalité entre les femmes et les hommes au Maroc

37,5

Armenia AM Support to the Government of Armenia for the

implementation of the ENP AP and preparations for the

future Association Agreement – Phase II

36,8

Algeria DZ PAPS ENVIRONNEMENT (Programme d’Appui à la

Politique Sectorielle de l’Environnement)

34,0

Algeria DZ Programme d'appui à la protection et valorisation du

patrimoine culturel en Algérie

21,5

Gaza Strip PS Sewerage Nablus East 20,0

Top 10 "Red" Projects


An increase in policy dialogue and a possible extension of the project are the corrective

measures most frequently mentioned.

KPI 7 – Reduction of old pre-financing

Old pre-financing was reduced by 32.83% or EUR 679 million in 2016. It currently

(31/12/2016) stands at EUR 1,390 million. The total old pre-financing amount at the end

of 2016 represents 18% of the total pre-financing open in DG NEAR (EUR 2,070 million).

KPI results, cleared amounts and open amounts are presented in the tables below with a

split between HQ Units and Delegations, ranked by highest amount cleared.

32.83%▲

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

N/A

NE

AR

R

Total

KPI Value 77,85% 19,97% 11,29% 44,44% 18,74% 52,40% 32.83%

Old pre-financing 31/12/2016(in M€) 84,3 393,1 618,2 243,0 51,9 0,1 1 390,5

Reduction in amounts (in M€) 296,4 98,1 78,7 194,3 12,0 0,1 679,4


Delegations with the highest open amounts of old pre-financing at 31/12/2016 were

Egypt (EUR 109 million), Turkey (EUR 77 million) and Morocco (EUR 71 million). In HQ

two Units with highest open amounts were NEAR C 01 (EUR 495 million) and NEAR D 05

(EUR 159 million).

KPI 8 – Expired contracts as a % of the contract portfolio

At the end of 2016, 852 contracts or 15.62% of the total number of open contracts

(5,456) were expired. This is deterioration of result when compared to 2015 when the

KPI was green: 13.32% and 787 expired contracts (total of 5,910 open).

Delegation/HQ Unit (in M€) KPIStart open

amount

End open

amount

Cleared

amount

Turkey TR 79,03% 371,3 77,9 293,5

NEAR D 06 97,50% 93,0 2,3 90,7

NEAR D 05 19,92% 198,6 159,1 39,6

Bosnia & Herzegovina BA 69,96% 43,0 12,9 30,1

NEAR C 01 4,39% 518,2 495,5 22,7

Moldova MD 31,00% 66,6 46,0 20,7

Lebanon LB 25,82% 78,1 57,9 20,2

Egypt EG 12,79% 125,8 109,7 16,1

NEAR C 02 27,94% 48,1 34,6 13,4

Tunisia TN 22,35% 58,9 45,7 13,2

Albania AL 40,14% 32,1 19,2 12,9

Jordan JO 49,31% 25,6 13,0 12,6

Ukraine UA 18,74% 63,9 51,9 12,0

NEAR B 02 17,71% 53,5 44,0 9,5

Serbia RS 36,67% 25,7 16,3 9,4

West Bank and Gaza Strip PS 48,23% 18,8 9,7 9,0

Georgia GE 20,25% 40,5 32,3 8,2

Belarus BY 65,44% 11,7 4,0 7,6

Morocco MA 8,99% 78,7 71,7 7,1

European Union Office in Kosovo XK 26,29% 24,7 18,2 6,5

Algeria DZ 46,51% 11,5 6,1 5,3

Syria SY 13,32% 31,8 27,6 4,2

The former Yugoslav Republic of Macedonia MK 26,32% 15,9 11,7 4,2

Azerbaijan AZ 66,62% 4,7 1,6 3,1

NEAR A 03 76,87% 2,5 0,6 1,9

Armenia AM 28,92% 5,9 4,2 1,7

NEAR C 03 100,00% 1,2 0,0 1,2

Montenegro ME 23,75% 4,2 3,2 1,0

Israel IL 32,80% 2,5 1,7 0,8

NEAR A 02 90,08% 0,9 0,1 0,8

NEAR A 01 100,00% 0,1 0,0 0,1

NEAR B 04 2,84% 2,4 2,3 0,1

NEAR B 03 100,00% 0,0 0,0 0,0

NEAR A 05 0,00% 5,8 5,8 0,0

NEAR B 01 0,00% 3,7 3,7 0,0

Reduction of Old Pre-financing


Distribution of expired contracts between the Delegations/HQ Units is presented in below

table, ranked by RAL of expired contracts:

The table below shows the KPI results by contract type. Programme estimates, supplies

15.62%▲

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

NE

AR

R

SG

UA

Total

KPI Value 9,71% 12,79% 14,90% 20,23% 12,20% 2,12% 15.62%

Number of expired contracts 20 242 145 436 5 4 852

Number of all open contracts 206 1892 973 2155 41 189 5456

RAL of expired contracts (in M€) 2,0 30,7 92,8 31,5 0,0 0,1 157,0

Delegation/HQ Unit KPI

Number

of Expired

contracts

Number

of Open

contracts

RAL of

expired

contracts

(in M€)

NEAR C 01 36,84% 28 76 81,4

NEAR B 02 29,12% 53 182 11,5

Serbia RS 17,68% 73 413 11,2

European Union Office in Kosovo XK 18,24% 87 477 8,3

NEAR C 02 30,95% 52 168 8,1

Morocco MA 13,85% 27 195 6,8

NEAR D 05 30,27% 89 294 5,2

Albania AL 24,42% 63 258 4,2

Lebanon LB 14,09% 41 291 3,0

Algeria DZ 14,14% 27 191 2,7

West Bank and Gaza Strip PS 12,15% 26 214 2,2

Moldova MD 17,50% 28 160 1,9

Turkey TR 10,32% 13 126 1,8

Egypt EG 10,81% 24 222 1,8

NEAR B 01 25,00% 1 4 1,4

Bosnia & Herzegovina BA 16,04% 51 318 0,9

The former Yugoslav Republic of Macedonia MK 17,82% 31 174 0,9

Tunisia TN 9,17% 22 240 0,8

Armenia AM 10,85% 14 129 0,7

NEAR D 04 85,71% 12 14 0,6

Belarus BY 12,21% 16 131 0,6

Israel IL 10,58% 11 104 0,3

Montenegro ME 14,29% 29 203 0,2

Jordan JO 3,01% 5 166 0,2

NEAR A 03 9,76% 4 41 0,2

Azerbaijan AZ 4,71% 4 85 0,1

Ukraine UA 2,12% 4 189 0,1

Georgia GE 1,49% 3 202 0,1

Syria SY 6,38% 3 47 0,0

NEAR A 05 28,57% 2 7 0,0

NEAR C 03 0,00% 0 22 0,0

NEAR D 02 0,00% 0 2 0,0

NEAR A 02 5,26% 1 19 0,0

NEAR A 04 0,00% 0 11 0,0

NEAR B 03 5,56% 2 36 0,0

NEAR A 01 0,00% 0 2 0,0

NEAR R 03 12,20% 5 41 0,0

NEAR D 03 50,00% 1 2 0,0

Expired contracts


and works rate worst. 41% of the expired Programme-Estimates have an ongoing audit.

The main reasons, quoted by Delegations, for not meeting the benchmark are:

Managing a large portfolio of projects while facing obstacles during

implementation phase, late reporting, institutional environment and co-financing

issues that prevent the closure of expired contracts. (Serbia)

Contracts which cannot be closed due to their different outstanding contractual

and legal issues: arbitration or settlement of disputes, defects notification period

in progress, recovery orders to be issued, recovery orders not cashed, waivers

initiated, contracts pending final acceptance certificate or under warranty period,

ongoing audit. (Kosovo, Albania, Bosnia and Herzegovina, Macedonia)

For contracts under Indirect Management, payments and closure modalities are

different from the Grants or Service Contracts. (Moldova)

KPI 9 – Reduction of old RAL

The overall result of 36.55% exceeds the target of at least 25%. Except for NEAR C and

NEAR D all Directorates have reached the benchmark.

The amount at decision level (RAC) is 155MEUR (41%) and at contract level (RAP)

220MEUR (59%). The total amount of 376MEUR in 2016 is a significant reduction

compared to 663MEUR in 2015.

The Old RAL represents 2.86% of the total RAL in 2016 compared to 5.55% in 2015.

Distribution of old RAL between the Delegations/HQ Units is presented in below table,

ranked by RAL reduction level:

Contract type

Number

of Expired

contracts

Number

of Open

contracts

RAL of

expired

contracts

(in M€)

KPI by

Contract

type

Financing Memorandum 13 38 1,8 34,21%

Grant 410 2566 17,9 15,98%

Implementation 370 2212 135,6 16,73%

Reconciliation 0 21 0,0 0,00%

Specific contract (framework contract) 59 619 1,8 9,53%

TOTAL 852 5456 157,0 15,62%

36.55%▲

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

N/A

NE

AR

R

Total

KPI Value 32,75% 41,27% 21,25% 23,02% 62,70% 30,75% 36.55%

Reduction achieved in amounts (in M€) 7,3 154,5 7,4 29,5 15,3 2,9 216,9

Old RAL remaining 31/12/2016 (in M€) 15,0 220,0 27,3 98,7 9,1 6,4 376,5


Contracts holding an old RAL relate mainly to Pro-forma registration (58%) and National

Funds (13%):

Delegation/HQ Unit (in M€) KPIRAL

reduction

Period end

RAL

Egypt EG 34,63% 80,2 151,5

Morocco MA 87,53% 56,3 8,0

Ukraine UA 62,70% 15,3 9,1

NEAR B 02 39,93% 9,2 13,8

Serbia RS 62,58% 7,9 4,7

Albania AL 48,04% 7,4 8,0

European Union Office in Kosovo XK 45,49% 6,9 8,3

Turkey TR 27,42% 5,6 14,8

Azerbaijan AZ 89,58% 4,2 0,5

Jordan JO 28,84% 4,1 10,0

NEAR D 06 22,22% 3,9 13,6

Bosnia & Herzegovina BA 19,26% 3,2 13,2

N/A 30,75% 2,9 6,4

West Bank and Gaza Strip PS 44,10% 2,4 3,1

Georgia GE 32,19% 2,4 5,1

NEAR A 02 91,71% 1,8 0,2

Algeria DZ 28,64% 1,1 2,9

Armenia AM 51,19% 1,1 1,1

The former Yugoslav Republic of Macedonia MK 20,26% 0,9 3,4

Lebanon LB 4,94% 0,8 15,5

Belarus BY 34,90% 0,7 1,3

Tunisia TN 5,81% 0,6 9,8

NEAR D 02 2,28% 0,4 17,7

NEAR C 03 68,90% 0,2 0,1

NEAR D 05 0,72% 0,1 15,3

Montenegro ME 88,86% 0,1 0,0

Syria SY 0,00% 0,0 0,1

NEAR B 00 -2,52% -0,0 0,5

NEAR A 05 0,00% -0,1 0,1

NEAR D 01 -19,50% -0,1 0,7

NEAR C 02 -2,17% -0,2 7,3

NEAR B 01 -4,06% -0,2 4,8

NEAR C 01 -5,48% -0,4 8,4

NEAR D 04 -5,48% -0,5 10,5

NEAR D 03 -22,28% -0,6 3,3

Moldova MD -22,55% -0,7 3,6

Reduction of old RAL


KPI 10 – % of payments paid within the EC internal target of 30 days23

At NEAR level, 54.13% of the payments were paid within the EC internal target of 30

days which is below the benchmark of 66%. This is a similar result as in the 2015 EAMR

exercise - 54.81%.

In total, 4,849 invoices for a total amount of 2,553MEUR have been paid in 2016,

compared to 5,256 invoices for a total amount of 1,938MEUR in 2015.

In terms of amounts paid, the KPI is 67.46%. This is higher than it was in 2015

(52.27%).

Analysis of the contractual obligations shows that 82% of payments respected the

contractual deadlines in 2016.

The table below gives an overview by Directorate of the respect of the EC internal target

and the respect of payment deadline on a contractual basis.

23 With the latest release of the KPI Dashboard mid-December 2016, the computation of the baseline date for

payments was changed to consider the transfer date to EC of the invoice. This is also applied to figures of 2015.

54.13%▼

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

NE

AR

R

N/A Total

KPI Value 60,11% 54,73% 51,15% 47,65% 59,89% 100,00% 88,58% 54.13%

Number of On-target invoices 107 868 400 862 109 23 256 2625

Number of Total of invoices 178 1586 782 1809 182 23 289 4849

% of invoices paid within contractual delay 79,8% 77,7% 83,2% 83,4% 85,7% 100,0% 89,6% 81,9%


Distribution of KPI10 between the Delegations/HQ Units is presented in below table,

ranked descending by number of on-target invoices:

Most of the invoices paid outside the EC internal target of 30 days relate to action grants

(40%) and service contracts (34%) which is consistent with the distribution of the total

number of invoices amongst contract types.

Delegation/HQ Unit KPI

Number of

On-target

invoices

Number of

Total of

invoices

European Union Office in Kosovo XK 59,53% 256 430

N/A 88,58% 256 289

West Bank and Gaza Strip PS 48,39% 135 279

Georgia GE 66,34% 134 202

Lebanon LB 54,95% 122 222

Albania AL 34,01% 118 347

Bosnia & Herzegovina BA 49,33% 111 225

Serbia RS 29,81% 110 369

Ukraine UA 59,89% 109 182

Algeria DZ 66,24% 104 157

The former Yugoslav Republic of Macedonia MK 73,24% 104 142

Jordan JO 62,05% 103 166

Montenegro ME 61,35% 100 163

Tunisia TN 53,55% 98 183

Morocco MA 62,16% 92 148

Egypt EG 51,18% 87 170

Turkey TR 58,93% 66 112

Azerbaijan AZ 78,31% 65 83

NEAR B 02 42,64% 55 129

Moldova MD 50,00% 54 108

NEAR D 05 47,17% 50 106

Belarus BY 47,12% 49 104

NEAR C 02 31,62% 43 136

Armenia AM 41,98% 34 81

Israel IL 45,45% 25 55

NEAR R 03 100,00% 23 23

NEAR B 03 58,33% 21 36

NEAR A 03 66,67% 20 30

Syria SY 65,52% 19 29

NEAR A 02 62,96% 17 27

NEAR C 01 30,95% 13 42

NEAR D 06 48,15% 13 27

NEAR C 03 30,77% 8 26

NEAR B 04 54,55% 6 11

NEAR A 04 42,86% 3 7

NEAR A 01 50,00% 1 2

NEAR B 01 100,00% 1 1

Payments paid within the EC internal target of 30 days


The main reasons, quoted by Delegations, for not meeting the benchmark are:

Deadlines for contracts are different from KPI target value - for most Contracts

the legal obligation to pay is within 45 to 90 days. (All Delegations)

Change of the IT system for management of the financial transactions from CRIS

to ABAC in April 2016 partly hampered the timely processing of invoices. (Serbia,

Albania, West Bank and Gaza Strip)

Large number of decentralized payments, where the circuit is lengthened by the

beneficiary's processing of the invoice. (Egypt)

KPI 11 – Use of DEVCO staff and respect of the flexibility arrangements

Global DG NEAR result of 100.00% has met the target.

KPI 12 – % of green traffic lights for the effectiveness of the two ICS related to

mission and values in Delegations

The global DG NEAR result of 96.21% exceeds the target of 80% and has improved over

the 2015 result (95.14%).

Directorate KPI result

NEAR A 100,00%

NEAR B 92,59%

NEAR C 96,67%

NEAR D 100,00%

SGUA 100,00%

96.21%▲



human resources in Delegations

The global DG NEAR result of 94.10% exceeds the target of 80% but is slightly lower

than the result of 2015 (94.84%).


planning and risk management in Delegations



KPI 15 – % of green traffic lights for the effectiveness of the five ICS related to

operations and control activities in Delegations



KPI 16 – % of green traffic lights for the effectiveness of the three ICS related

to information and financial reporting in Delegations

The global DG NEAR result of 93.18% is well above the target of 80% and has improved

since 2015 (92.77%).


evaluation and audit in Delegations

The global NEAR result of 95.20% is well above the benchmark of 80% but slightly lower

than in 2015 (96.53%).


NEAR A 83,33%

NEAR B 90,74%

NEAR C 95,56%

NEAR D 99,02%

SGUA 100,00%

94.10%▼


NEAR A 100,00%

NEAR B 92,59%

NEAR C 90,48%

NEAR D 92,06%

SGUA 100,00%

92.64%▼


NEAR A 95,45%

NEAR B 90,91%

NEAR C 93,64%

NEAR D 96,21%

SGUA 100,00%

93.60%▼


NEAR A 100,00%

NEAR B 90,74%

NEAR C 92,22%

NEAR D 95,37%

SGUA 100,00%

93.18%▲


KPI 18 – % of projects visited by Commission staff and/or the HoD, by project

value

In 2016, 81.77% of the ongoing projects (in value) were visited by NEAR staff and/or by

the Heads of Delegations. This is above the target of 80%.

The secondary/contextual indicator by number of projects visited stands at 80.69%.

Results by Directorate in charge are presented in below table.

KPI 19 – % planned project evaluations contracted

The global DG NEAR result of 75.56% is satisfactory and above the benchmark of 75%.

The secondary/contextual indicator by number of projects visited stands at 75.22%.

Results by Directorate in charge are presented in below table.

KPI 20 – Ineligible amounts identified by ex-ante controls as a % of amount

claimed

At DG NEAR level, the percentage of ineligible amounts identified by ex-ante controls by

the end of 2016 is 4.64% which is above the minimum target of 2%. It represents a total

amount of EUR 129 million of undue payment prevented. This is higher than in 2015

(3.88% and EUR 68 million).

Results by Directorate are presented in the table below.


NEAR A 100,00%

NEAR B 91,98%

NEAR C 96,67%

NEAR D 97,22%

SGUA 100,00%

95.20%▼

81.77%

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

NE

AR

R

Total

KPI Value 29,28% 86,42% 75,48% 86,72% 88,97% 81.77%

Project value of visited projects (in M€) 192,7 5 414,0 1 617,9 2 407,3 642,4 10 274,2

Project value of all projects (in M€) 658,0 6 264,9 2 143,4 2 775,9 722,0 12 564,1

Number of visited projects 35 638 412 545 104 1734

Number of all projects 50 790 546 631 132 2149


75.56%

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

NE

AR

R

Total

KPI Value 0,00% 63,93% 94,44% 90,20% 0,00% 75.56%

Number of Evaluations implemented 0 39 17 46 0 102

Number of Evaluations planned 1 61 18 51 4 135

Evaluations implemented (in M€) 0,0 413,0 73,2 252,9 0,0 739,1

Evaluations planned (in M€) 5,0 625,1 74,5 257,0 20,9 982,5



Ineligible amounts were identified for 17.23% of the total number of invoices and cost

claims issued during the year 2016.

The majority of ex-ante ineligible amounts are identified by Delegations: EUR 128 million

or a share of 99% of the ineligible amount.


ranked descending by non-accepted amount:

4.64%▲

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

N/A

NE

AR

R

Total

KPI Value 0,08% 4,73% 5,03% 0,45% 25,17% 1,00% 4.64%

Total amount verified (in M€) 511,1 1 064,3 391,6 599,2 225,2 5,9 2 797,3

Ex-ante ineligible amount (in M€) 0,4 50,3 19,7 2,7 56,7 0,1 129,9

Total number of invoices verified 127 1179 534 1503 115 296 3754

Number of invoices with non-accepted amounts 31 280 128 174 28 6 647


EUR 118 million of the total ineligible amount relates to Program Estimates and Budget

Support payments making up 91% of the total ineligible amounts identified. The

distribution by contract nature is presented below:

Delegation/HQ Unit (in M€) KPI

Non-

accepted

amount

Total

amount

verified

Ukraine UA 25,17% 56,7 225,2

Morocco MA 15,97% 36,9 231,2

Moldova MD 7,82% 7,9 100,4

Israel IL 60,39% 5,7 9,5

Armenia AM 11,39% 5,1 44,4

Georgia GE 4,46% 4,2 93,7

Jordan JO 3,05% 3,6 117,8

Algeria DZ 7,95% 2,6 33,0


Albania AL 1,25% 1,0 79,8

Serbia RS 0,51% 0,5 106,9


Egypt EG 1,08% 0,5 46,1

Belarus BY 1,76% 0,5 27,1



Turkey TR 0,05% 0,3 484,8

NEAR B 02 0,29% 0,3 87,4

NEAR C 02 0,56% 0,2 43,2

Tunisia TN 0,23% 0,2 95,8


Lebanon LB 0,23% 0,1 57,9

NEAR A 03 0,64% 0,1 19,9

NEAR D 05 0,12% 0,1 89,9

NEAR C 01 0,19% 0,1 43,6

N/A 1,00% 0,1 5,9

NEAR D 06 0,01% 0,0 109,5


NEAR B 04 0,20% 0,0 4,1

NEAR A 04 0,79% 0,0 0,9

Syria SY 0,01% 0,0 51,7

NEAR A 02 0,08% 0,0 4,8

NEAR C 03 0,01% 0,0 19,9

NEAR A 01 0,13% 0,0 0,7

NEAR B 01 0,00% 0,0 0,0

NEAR B 03 0,00% 0,0 1,3

Ineligible amount identified by ex-ante controls


KPI 21 - % contracted of the Annual Audit Plan (year N)

At DG NEAR level, 61.81% of the audits foreseen in the Annual Audit Plan year N have

been contracted. This is above the benchmark of 60% and higher than the 39.55% of

2015.

All Directorates, except for NEAR B, are above the benchmark.

The main reason for not meeting the benchmark in Directorate B was due to re-

structuration of Directorate R and transfer of tasks. The situation will be brought up to

date during 2017.


ranked descending by number of contracted audits:

61.81%▲

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

NE

AR

RTotal

KPI Value 100,00% 54,79% 72,09% 64,36% 69,23% 61.81%

Number of audits in audit plan N 6 146 43 101 13 309

Number of audits contracted 6 80 31 65 9 191

Number of audits still to be contracted 0 66 12 36 4 118


Action grants, Services, Programme estimates and Budget support represent the highest

number of audits planned and contracted.

Delegation/HQ Unit KPIAudits

contracted

Total

Audits

planned

Serbia RS 100,00% 21 21

Tunisia TN 77,78% 14 18

NEAR D 05 100,00% 12 12

Egypt EG 91,67% 11 12

Morocco MA 78,57% 11 14

Jordan JO 76,92% 10 13

Albania AL 83,33% 10 12

Ukraine UA 69,23% 9 13

Lebanon LB 36,36% 8 22

Georgia GE 100,00% 8 8



Moldova MD 100,00% 7 7

Israel IL 75,00% 6 8


Algeria DZ 23,81% 5 21

NEAR B 02 45,45% 5 11



Turkey TR 100,00% 4 4

Armenia AM 66,67% 4 6


Syria SY 40,00% 2 5

Belarus BY 40,00% 2 5

NEAR C 02 25,00% 2 8

NEAR A 01 100,00% 1 1

NEAR A 03 100,00% 1 1

NEAR B 03 100,00% 1 1

NEAR C 01 50,00% 1 2

NEAR C 03 100,00% 1 1

% contracted of the Annual Audit Plan (year N)


KPI 22 - % contracted of the Annual Audit Plan (year N-1)

At DG NEAR level, 96.61% of the audits foreseen in the Annual Audit Plan year N-1 have

been contracted. This is above the benchmark of 85% and higher than the 90.82% of

2015.

All directorates are above the benchmark.


ranked descending by number of contracted audits:

96.61%▲

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

NE

AR

R

Total

KPI Value 100,00% 94,39% 96,00% 98,47% 100,00% 96.61%

Number of audits in audit plan N-1 2 107 50 131 5 295


Number of audits still to be contracted 0 6 2 2 0 10




Delegation/HQ Unit KPIAudits

contracted

Total

Audits

planned

Serbia RS 100,00% 49 49



Egypt EG 93,75% 15 16

Tunisia TN 100,00% 15 15

NEAR C 02 100,00% 15 15

Armenia AM 100,00% 12 12


Jordan JO 100,00% 11 11

Albania AL 100,00% 11 11

Algeria DZ 83,33% 10 12


Morocco MA 90,91% 10 11

Israel IL 100,00% 9 9

Georgia GE 100,00% 9 9

Lebanon LB 88,89% 8 9

NEAR B 02 100,00% 8 8



Ukraine UA 100,00% 5 5

Syria SY 100,00% 4 4

Moldova MD 100,00% 4 4

NEAR D 05 100,00% 3 3

Turkey TR 100,00% 2 2

Belarus BY 50,00% 2 4

NEAR B 03 100,00% 1 1

NEAR C 01 100,00% 1 1

% contracted of the Annual Audit Plan (year N-1)


KPI 23 - % contracted of the Annual Audit Plan (year N-2)

At DG NEAR level, 100.00% of the audits foreseen in the Annual Audit Plan year N-1

have been contracted. This is above the benchmark of 95% and higher than the 82.90%

of 2015.

All directorates are above the benchmark.



KPI 24 – Ineligible amounts identified by audits as a % of the audited amount

At DG NEAR level, 1.83% or EUR 8 million of audited expenditure was found to be

ineligible which is higher than the 1.80% or EUR 9 million of 2015 but still below

benchmark of at least 2%.


ranked descending by ineligible amount identified:

100.00%▲

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

NE

AR

R

Total

KPI Value 100,00% 100,00% 100,00% 100,00% 100,00% 100.00%

Number of audits in audit plan N-2 4 78 52 69 5 208


1.83%▲

NE

AR

A

NE

AR

B

NE

AR

C

NE

AR

D

SG

UA

NE

AR

R

Total

KPI Value 5,67% 1,14% 4,90% 2,14% 1,60% 1.83%

Ineligible expenditure (in M€) 0,3 3,5 2,6 1,4 0,2 8,0

Audited expenditure (in M€) 5,9 302,5 54,0 64,3 10,4 437,1


87% of the total ineligible amounts were identified by risk assessment based audits

which represent around 50% of the number of audit reports registered in 2016.

The main reasons for not meeting the target are:

For West Bank and Gaza Strip the audited amount includes the yearly mandatory

audit of the PEGASE DFS (PDFS) mechanism processed in 2015, which accounts

for EUR 178 million in the denominator of KPI. The management of PEGASE

payments follows established rules and procedures and the amounts in question

Delegation/HQ Unit (M€) KPIIneligible

amount

Audited

amount

NEAR C 02 10,29% 2,2 21,4


Tunisia TN 4,78% 0,7 15,4



Egypt EG 3,27% 0,5 14,7

NEAR A 01 9,00% 0,3 3,5

Georgia GE 2,92% 0,2 7,7

Belarus BY 2,75% 0,2 7,3

Ukraine UA 1,60% 0,2 10,4

Algeria DZ 1,23% 0,2 13,2

Jordan JO 1,52% 0,1 9,3

Albania AL 0,62% 0,1 11,9

NEAR B 02 0,95% 0,0 5,2



Serbia RS 0,88% 0,0 2,7

Turkey TR 0,74% 0,0 2,4

Morocco MA 0,95% 0,0 1,7

NEAR D 05 0,20% 0,0 6,6

Armenia AM 0,34% 0,0 3,3


Syria SY 0,00% 0,0 4,0

Moldova MD 0,00% 0,0 12,0

Ineligible amounts identified by audits


are submitted to ex-ante verifications by external auditors who exclude up-front

ineligible amounts.

Verification missions are performed on a limited sample basis and may skew the

global result for the Delegation. (Ukraine)

Ex-ante verification of the payments performed by the Delegation staff was

effective and resulted in failure of external auditors to identify sufficient % of

ineligible amounts to meet the benchmark of the KPI. (Moldova)


B) Results at Delegation level

Out of the 22 EAMR DG NEAR Delegations only Syria did not meet the minimum threshold of 60% of green KPIs at the end of 2016.

During 2016, the EU Delegation to Syria kept following a needs-based holistic (multi-

sector) approach to tackle the resilience needs of the Syrian population in a

comprehensive way. After more than six years of conflict, there is a need to move from

purely humanitarian to more resilience-focused and sustainable actions to better serve

the needs of the Syrians and avoid aid dependency. Due to security concerns the

Delegation has temporarily reduced its activities to a minimum and diplomatic staff in

2016 was still evacuated between Beirut and Brussels.

The extremely high value of KPI 2 is due amounts contracted for two Trust Funds

(Regional Trust Fund MADAD and Emergency Trust Fund for stability and addressing root

causes of irregular migration and displaced persons in Africa) which were not included in the Initial Forecast.

Syria SY

KPI 1 144,61%

KPI 2 879,58%

KPI 3 N/A

KPI 4 8,14

KPI 5 0,00%

KPI 6 21,88%

KPI 7 13,32%

KPI 8 6,38%

KPI 9 0,00%

KPI 10 65,52%

KPI 11 100,00%

KPI 12 66,67%

KPI 13 72,22%

KPI 14 47,62%

KPI 15 56,06%

KPI 16 27,78%

KPI 17 44,44%

KPI 18 28,69%

KPI 19 0,00%

KPI 20 0,01%

KPI 21 40,00%

KPI 22 100,00%

KPI 23 100,00%

KPI 24 0,00%


ANNEX 12: Performance tables

General objective 1:A stronger global actor

IPA II

Impact indicator: GDP per capita (current prices-PPS) as % of EU level in countries that are

candidates or potential candidates for EU accession

Source of the data: Eurostat

ENI

Impact indicator: Ranking to measure political stability and absence of violence in

countries part of the European Neighbourhood Policy

Definition: This indicator measures perceptions of the likelihood that the government will

be destabilized or overthrown by unconstitutional or violent means, including politically-

motivated violence and terrorism. Higher values in percentile rank indicate better

governance ratings.

For Neighbourhood South(NS) Number of countries in a percentile rank above 10

For Neighbourhood East (NE) -Number of countries in a percentile rank above 30

Source of the data: [same source of data as in the SP] Worldwide Governance Indicators

(WGI) project (WB group) http://info.worldbank.org/governance/wgi/index.aspx#home

Baseline

(year)

Interim Milestone

Target

2020


IPA II 2014

32.53% for

WEB (except

Kosovo24)

52% for Turkey

Increase by

2020

Turkey: 52%

The economic convergence process

did not improve in the Western

Balkans, also in relation to modest

growth. It slightly improved in

Turkey, where economic growth

was higher than in the EU average.

The proposed targets seem anyway

out of reach.

ENI – 2014

NEast: 33.89

4 countries

above 30

NSouth: 11.99

5 countries

above 10

2015: 4 countries

above 30

NEast:

Increase

the number

of countries

above 30 to

five

NSouth:

Increase

the number

of countries

above 10

In the last two years there has

been a dramatic decline in GDP in

Ukraine, and a substantial one in

Belarus in 2015

24

No 2014 data available for Kosovo

http://info.worldbank.org/governance/wgi/index.aspx#home


Specific objective: 1

Increased stability in the Neighbourhood in political, economic, and security

related terms

Related to

spending

program

me ENI

Result indicator: For Neighbourhood countries, development of more tailor-made

partnerships covering core issues of common interests

Definition: The purpose of the reviewed ENP is to build more effective partnerships

between the EU and the neighbourhood; hence having an indicator on the new partnerships

is highly relevant to measure the success of this policy.

Differentiation is the hallmark of the new ENP, recognising that not all partners aspire to EU

rules and standards, and reflecting the wishes of each country concerning the nature and

focus of its partnership with the EU. Therefore the partnerships should be tailor-made.

Core issues proposed for cooperation will notably include economic development for

stabilisation (e.g. economic modernisation, employment, transport, connectivity, energy,

climate action), the security dimension, and migration and mobility.

At the core of the revised ENP, there is also the idea that the ENP and the related

partnerships should reflect EU interests and the interests of our partners.

DG NEAR will contribute to launching work leading to the development of these new

partnerships, working in close cooperation with the EEAS. It will support the development

of partnerships, where relevant with its financial assistance.

Source of data: European Commission (DG NEAR)

Baseline

(year)

Interim Milestone

2017

Target

2020


(situation on

31/12/2016)

Not

applicable

- Complete negotiation on

new association agreements

with Armenia and

Azerbaijan.

- Complete discussions with

interested countries on

more tailor-made

partnerships

-New

association

agreements in

force or

provisionally

applied with

Azerbaijan and

Armenia.

- New priorities

established

The EU and Lebanon

adopted in November 2016

the Partnership Priorities for

the coming four years, as

well as a compact. The

partnership priorities set up

a renewed framework for

political engagement and

enhanced cooperation on

the following areas: security

and countering terrorism,

governance and the rule of

law, fostering growth and

job opportunities, and

migration and mobility.

The EU and Jordan adopted

in December 2016 their

partnership priorities as well

as a compact. Partnership

priorities in EU-Jordan

relations for the coming

years include strengthening


cooperation on regional

stability and security,

including counter-terrorism;

promoting economic

stability, sustainable and

knowledge-based growth,

quality education and job

creation; strengthening

democratic governance, the

rule of law and human

rights.

New EU-Egypt Partnership

Priorities have been

negotiated throughout 2016

in line with the revised ENP

and are expected to be

approved in the first

semester of 2017. A final

agreement was reached in

December 2016

(overcoming major

differences on issues of

human rights and civil

society) that should open

the way towards EU broader

cooperation with Egypt,

including on migration-

related issues, on security

and on regional stability

ISG process led to a joint

EEAS-COM note on the

implementation of the ENP

security chapter (note

presented to PSC)

Algeria and the EU

negotiation of Partnership

Priorities finalised in

December 2016 and are to

be approved at the

Association Council in 2017

Armenia: Negotiations on a

new agreement are

advanced on all issues.

Azerbaijan: The negotiation

mandate was approved by

the Council in November

2016. Negotiations started

in February 2017.

Partnership Priorities (PPs):

Discussions on PPs have

been launched with


Armenia, Azerbaijan and

Belarus.

Result indicator: Deep and Comprehensive Free Trade Agreements (DCFTA) with Morocco

and Tunisia

Definition: Continued participation in EU's awareness raising and negotiation efforts in

relation to DCFTA with Morocco and Tunisia. Ensure implementation of financial assistance

to accompany the DCFTA negotiations

Source of data: European Commission (DG TRADE and NEAR)

Baseline

2015

0

Interim Milestone

2017

Target

2020


Both DFCTA negotiated New DCFTA in force or provisionally applied

The year 2016 was marked

by Morocco's suspension of

all policy dialogue with the

EU. This followed the

European Court of Justice

Judgement of December

2015 annulling the Council

Decision of 8th March 2012

on an EU/Morocco

agreement on the trade of

agricultural products.

Consequently no progress

could be made regarding

DFCTA and no association

committee and sub-

committees could be held.

The Tunisia association

council took place in April

2016 during which the

mutual commitment by the

European Union (EU) and

Tunisia to deepen our

privileged partnership was

confirmed. Several sub-

committees were organised

throughout the year. The

first official round of DCFTA

negotiations took place in

April 2016. Contacts

between DG TRADE/NEAR

and Tunisia on the DCFTA

were maintained: although

no formal negotiation round

took place. ENI funds were

mobilised in an effort to

continue supporting Tunisia

in preparing for DCFTA

negotiations. The Joint EU

Communication on


"Strengthening EU support

for Tunisia" offers additional

flexibilities in order to make

the DCFTA offer more

tailored to Tunisia's needs.

Result indicator: Joint programming: development of joint programmes between the

Commission's financial assistance and that of the Member States

Definition: This indicator looks at the number of joint programmes for financial assistance

implementation which are concluded with EU Member States within the period covered by

the Strategic Plan

Source of data: European Commission (DG NEAR)

Baseline

2014

No joint

programme

s concluded

Interim Milestone

2018

Neighbourhood East : 3

programmes concluded

Neighbourhood South : 5

programmes concluded

(Algeria, Egypt, Lebanon,

Morocco, Palestine)

Target

2020

4 programmes

concluded

5 programmes

concluded


(situation on

31/12/2016)

The Joint Programming

exercise in Libya was

launched in December

2015. MS concluded it was

too early to start full Joint

Programming due to the

lack of a national Libyan

plan and clear counterparts.

An extension of one year of

the programming

documents ending in 2015

(EG, LEB, PAL, TUN) has

been completed in 2016..

Palestine has materialised

the Joint Programming

process in the first-ever

European Joint Strategy in

the Neighbourhood that will

cover 2017-2020

Towards the end of 2016,

productive preliminary

discussions took place with

Algeria on the Single

Support Framework 2018-

2020, revealing large

consensus on the jointly

identified priority axes for

programming of future

cooperation.










on an EU/Morocco



In the Eastern

Neighbourhood, the multi

annual programming

process has been launched

for Armenia, Georgia,

Moldova and Belarus for

2017-2020, mirroring

progress on the

development of a new set of

partnership priorities or

revised association

agendas. The joint analyses

were completed.

The multi-annual

programming process

(2018-2020) for Ukraine

started in September 2016

and it is expected to be

finalised by end of 2017.

For more details, see the

policy and main

expenditure outputs

hereafter


Policy–related outputs

Description Indicator (e.g. adoption by

the Commission;

completion)

Target date Latest known results

(situation on 31/12/2016)

Roll-out of

the revised

ENP

-Prioritise the


revised ENP and drive it

forward with Commission

Line DGs and EEAS so that

Commission policies and

spending programmes for

Neighbourhood are in line

with the new priorities.

-Contribute to launching

work leading to the

development of tailor-made

partnerships

Throughout

2016

Following the review of the

ENP, Partnership Priorities

have been adopted with

Lebanon and Jordan and

agreed with Egypt, in order

to develop more effective

partnerships.

Negotiations on EU-IL

Partnership Priorities have

not commenced yet. The

current Action Plan was

extended until the end of

2016 with the Prime

Minister expecting that this

period would be used to


develop new Partnership

Priorities.

In Palestine the Action Plan

is valid until 2018, so no PP

have been yet negotiated.

The UE has adopted

Compacts with Jordan and

Lebanon. These compacts

are the framework through

which the mutual

commitments made at the

London Conference on

"Supporting Syria and The

Region" (February 2016) are

translated into actions.

The EU-Jordan Compact

foresees amongst other EU

additional financial support

and simplified rules for

Jordanian exports of a large

number of products from 18

special economic zones

towards the EU for a 10

year duration, provided job

opportunities are given to

Syrian refugees, along with

Jordanians. Under the

compact, Jordan will make it

possible for more Syrian

children to take part in

education and vocational

training. Jordan currently

hosts more than half a

million Syrians.

The EU-Lebanon Compact

foresees EU additional

financial support and

increased assistance in a

number of policy areas.

Lebanon would continue

seeking ways to improve the

regulatory framework in

relation to registration and

residence permits for

refugees. The country

currently hosts at least 1.1

million Syrians. It is the

country hosting the highest

number of displaced persons


and refugees both per

capita and per square

kilometer.

2016 Regional Action

programme for ENI South

(including one individual

measure) is adopted.

Algeria and the EU made

very good progress in the

negotiation of Partnership

Priorities over 2016,

epitomizing Algeria's

eagerness to "reset" its

relation with the EU.

Negotiations on those

Partnership Priorities, which

will serve as a guide for our

bilateral relations in the

years to come, were

finalised in December 2016

and are to be approved at

the Association Council in

2017.

The Joint communication on

"Strengthening EU support

for Tunisia", released on the

29th September 2016

contributed to significantly

step-up our cooperation

with Tunisia. The

Communication provides for

a major financial effort on

the part of the EU with a

substantial increase in the

ENI allocation granted to

Tunisia. It also provides for

the adoption of non-financial

measures in support to

Tunisia's economic recovery

and further stabilisation.

The Communication also

calls for stepping up our

cooperation in the field of

migration and security, in

line with the priorities of the

revised ENP.

New

agreements

with

Contribute to negotiations

on new agreement with

Armenia

Armenia: to be

concluded by

the end of the

In Armenia, negotiations are

advanced on all issues and

close to agreement.


Armenia

and

Azerbaijan

Contribute to exploratory

talks, negotiation mandate

and possible launch of

negotiations on new

agreement with Azerbaijan

year

Azerbaijan:

Throughout

2016

The negotiation mandate for

Azerbaijan was approved by

the Council in November

2016. Negotiations started

in February 2017.

Association

/Cooperatio

n Councils

and

Association

/Cooperatio

n

Committee

s with

Neighbourh

ood

countries

Support implementation of

Association Cooperation

agreements/DCFTA.

Contribute to

Association/Cooperation

Councils and

Association/Cooperation

Committees

Throughout

2016

Association Council for

Jordan took place on 19th

December 2016 to adopt

the Partnership Priorities

and the Compact.

Association Committee took

place on 19th July 2016.

Association Council for

Lebanon took place on 11th

November 2016 to adopt

the Partnership Priorities

and the Compact.

Although no Association

Committee or Council

meetings concerning Israel

were held in 2016, a full

round of Working Group

meetings as well as bilateral

dialogue continued. At

political level there were

visits to Israel by high level

EU officials and at technical

level, regular meetings on

bilateral cooperation took

place, complemented by

technical discussions in the

context of the Twinning and

Taiex instruments.

The EU-Egypt Association

Committee took place in

Cairo on 23 May 2016.

For Algeria, two (ad hoc)

Association Committees,

held in February and

December 2016

respectively, saw excellent

progress on the negotiation

of Partnership Priorities on

the one hand and on the

Evaluation of the

Association Agreement on

the other hand.


Joint

Communica

tion to the

European

Parliament

and the

Council

aiming at

developing

an EU-wide

strategic

framework

for

supporting

Security

Sector

Reform

Co-leading (with DEVCO and

EEAS) the drafting of an

EC/HRVP joint

Communication on Sector

Security Reform, due to be

released mid-2016

Agenda planning ref:

2016/EEAS+/001

Mid-2016

Cooperation and

coordination with Tunisia on

security sector reform have

set an example for other

countries in the area. DG

NEAR B has contributed to

the drafting of the

communication.

DG NEAR C contributed to

the drafting of the EC/HRVP

joint communication on

Security Sector Reform. It

has also started to further

streamline support in the

security sector, in particular

in Georgia, Ukraine and

Moldova. The Joint

Communication was

adopted in July 2016.

Main expenditure outputs

Description Indicator Target date Latest known results


Multiannual

programmi

ng process

and joint

programmi

ng (2017–

2020)

Multiannual (2017–2020)

programming process with

four or five25 Neighbourhood

south countries is launched

and completed.

Multiannual (2017–2020)

programming process with 5

Neighbourhood East

countries and 1 regional is

launched.

Throughout

2016

An extension of one year of

the programming

documents ending in 2015

(EG, LEB, PAL, TUN) has

been completed in 2016.

The Second Phase of the

ENI programming (2017-

2020) has been launched on

the bases of the New

Partnership priorities

adopted with Egypt,

Lebanon and Jordan.

Outlines of the Single


20 for EEAS/NEAR political

validation and for the

Strategic Dialogue with the

European Parliament have

been drafted in Lebanon,

Palestine, Egypt and Jordan.

Palestine has materialised

the Joint Programming

process in the first-ever

European Joint Strategy in

25

Depends on a pending decision on the revision or extension of Libya's programming document


the Neighbourhood that will

cover 2017-2020. It is fully

in line with the FAC Council

Conclusions of 12 May 2016

on "Stepping up Joint

Programming" and the

follow-up Note to the

attention of Heads of

Delegation of 13 June 2016

from Mogherini / Mimica /

Hahn encouraging EU

Delegations to "lead by

example". It is also in line

with the EU Global Strategy,

the revised Neighbourhood

Policy and the revised

Consensus on Development.

The European Joint Strategy

was endorsed at local level

by EU/HoMs on 22

December 2016. NEAR B2:

EEAS/NEAR guidance note

(including annexes) for the

ENI South Regional

programming (2018-2020)

is adopted.

Towards the end of 2016,

productive preliminary

discussions took place with

Algeria on the Single


2020, revealing large

consensus on the jointly

identified priority axes for

programming of future

cooperation.









on an EU/Morocco




could be made regarding

the setting up of the


priorities for the 2018-2020

programming (SFF 2018-

2020)

A joint EEAS/DG NEAR

mission was organised in

October 2016 Tunisia to

discuss the preparation of

the new 2017-2020 Single

support framework.

In this context, several

meetings were organised

with Member states to

progress on joint

programming.

In the Eastern

Neighbourhood, the multi

annual programming

process has been launched

for Armenia, Georgia,

Moldova and Belarus for

2017-2020, mirroring

progress on the

development of a new set of

partnership

priorities/revised association

agendas. The joint analyses

were completed.

The multi-annual

programming process

(2018-2020) for Ukraine

started in September 2016

and it is expected to be

finalised by end of 2017

ENI Multi-

annual and

Annual

programme

s

2016 ENI country action

programmes adopted

Throughout

2016

Country Annual Action

Programmes have been

adopted according to the

revised ENP for the Middle-

East.

The 2016 Regional Action

programme for ENI South

(including one individual

measure) is adopted.

Algeria: programmes and

projects amounting to a

total of EUR 40 million were

adopted under the ENI

annual programme 2016 in

support to renewable

energy and energy

efficiency, the reform of

public finances and the



Association Agreement.

Programmes amounting to

EUR 150 million overall were

adopted for Morocco under

the ENI annual programme

2016 in support to social

protection reform, migration

policy and civil society.

in 2016, the EU adopted an

action programme for a

total of EUR 213.5 million

for Tunisia. Four

programmes were adopted

in key sectors including

education and research and

innovation, health, local

development and public

administration reform.

Programmes for a total

amount of EUR 10 million

have been adopted under

the ENI annual programme

2016 for Libya in support to

the health sector (supply

chain and health information

system) and governance

(Public Finance Management

and Media).

The 2016 ENI country action

programmes were adopted

between July and

September.

In 2016 three Special

Measures for Ukraine were

adopted: on anti- corruption

(EUR 43.5 million), on public

administration reform (EUR

104 million), on rule of law

(EUR 52.5 million)

Lebanon

and Jordan

'Compacts'

Finalize the Lebanon and

Jordan 'Compacts' following

the London Conference of 4

February 2016, in close

coordination with all

Commission services to

complement ENI support

with other EU funding

sources and initiatives.

Throughout

2016

Lebanon and Jordan

Compacts have been

adopted by the EU/Lebanon

Association Council on 11th

November 2016 and by the

EU/Jordan Association

Council on 19th December

2016.

ENI and

ENPI

implementa

tion/

budgetary

Benchmarks for KPIs on

contract and payment are

met.

December Not all benchmarks for

financial indicators could be

met.

KPI 1 Forecasted payments


execution vs payment execution

Under-execution of

payments on ENI budget

lines is mainly due to EUR

88 million in Budget Support

payments for a number of

countries which were not

executed either because of

the failure of the beneficiary

country to deliver on time

on agreed benchmarks or

results, or because of

unforeseen significant

political events (change of

government, etc.).

An additional important

source of under execution

that amounts to EUR 72

million (approximate figure)

relates to delays by

International Financing

Institutions (including EIB)

in finalising the contracting

in the framework of

Neighbourhood Investment

Facility (NIF).

Moreover, during the

forecast exercise, an

amount of EUR 60 million

had been factored in for a

Trust Fund payment.

However, it was finally

decided not to proceed with

this payment in view of the

fact that amounts on the

relevant accounts generate

negative interest and should

therefore be kept to a

minimum.

KPI 2: Forecasted contracts

vs signed contracts

Overall at Directorate level

including both Headquarters

and Delegations, the KPI

benchmark falls within an

acceptable value of 90 %.

Apparent under execution in

Headquarters and over

execution in Delegations can


be explained by the fact

that Delegations cannot

forecast correctly contracts

which are allocated to them

from regional calls for

proposals managed in NEAR

headquarters and thematic

calls for proposals managed

in DEVCO headquarters.

Further, NIF contracts are

negotiated in NEAR

headquarters and

transferred to Delegations

after contract signature and

making of an advance

payment.

KPI 4: RAL absorption

period

Directorate overall KPI is

only very slightly above the

benchmark (4.2 vs below

4), understandable given

the increased funding

allocated to the region.

KPI 7 Reduction of Old Pre-

financing

Directorate KPI exceeding

the benchmark is

understandable given the

increased funding allocated

to the region. Further, pre-

financing to IFIs tends to

remain open for long

periods, as pointed out for

example in EAMR of

Delegation to Tunisia.

KPI 8: Expired Contracts as

a % of the contract portfolio


only very slightly above the

benchmark (16 vs 15 %).

KPI 9: Reduction of Old RAL


above the benchmark,

understandable given the

increased funding allocated

to the region. Further, pre-

financing to IFIs tends to


remain open for long

periods, mainly due to the

reporting system and the

long duration of these

projects.

KPI 10: Payments paid

within the EC internal target

of 30 days


above the benchmark. This

can be partially explained by

payments made in

decentralised management

where more attention to

following payment time

limits has to be made.

Further, encoding of budget

support invoices and related

payment requests (which

tend to remain pending for a

long time in the accounting

system) has an effect.

Directorate B has been

consulted by Directorate A

on guidelines on budget

support and in this context

also updated guidance on

encoding is envisaged,

namely to first encode only

the invoice, and to encode

payment request only after

approval of payment by

Director. Once adopted this

should improve average of

payment delays.

Technical

Assistance

and

Information

Exchange

instrument

- TAIEX

TAIEX events contributing to

the implementation of

AA/DCFTA and to current or

future agreements implying

approximation with EU laws

and norms (East and South)

Throughout

2016

Throughout 2016, 258

TAIEX events contributing to

the implementation of

AA/DCFTA and to current or

future agreements implying

approximation with EU laws

and norms were organised.


Strengthened Eastern Partnership; support regional cooperation between

southern neighbours, including through the Union for the Mediterranean;

promote cross border cooperation between member states and partner

countries

Related to

spending

programm

es

ENI/ENPI


Result indicator: Number of ministerial, platform and panel meetings under the Eastern

Partnership.

Definition: DG NEAR, in coordination with the EEAS and the line DGs, is supporting policy

dialogue in the Eastern Partnership countries at different levels (ministerials, platforms,

panels), in view of enhancing relations with partner countries and developing our sectorial

reforms and cooperation. This process is expected to become more focused and results-

oriented ensuring closer links between policy priorities and financial support within the

spirit of the four priority areas agreed at the Riga Summit (May 2015) and on the basis of

the ENP Review Communication, which promotes partnership, ownership and

differentiation. DG NEAR provides funding for the organisation of policy dialogue events

through the dedicated Facility.

Source of data: Events facility contract managed by NEAR

Baseline

2014

Interim Milestone

2016

Target

2020


2016

Between

70 and 80

policy

dialogue

events

were

organised

80 policy dialogue events

organised

This target is

based on the

2014-2015

Management

Plans.

90 policy

dialogue

events

organised.

101 policy dialogue events

organised.

Result indicator: Progress on Eastern Partnership priorities

Definition: The main four priority areas of the EaP were defined at the Riga summit in

2015. Progress can be monitored in the sectoral policy platforms and other relevant

activities/events. DG NEAR mainly supports the different processes through policy

coordination and financial assistance

Source of data: DG NEAR, European Council and outcomes from platforms and ministerial

sectoral meetings, implementation of relevant assistance projects.

Baseline

2015

Interim Milestone

2016

Target

2020


2016

Establish

ment of

the main

priority

areas at

the Riga

Summit in

2015

1.strength

ening

institution

s and

good

governanc

e

Strategic progress mainly in

the areas of:

Interconnections:

Approval of the extension

of the core TEN-T network

at ministerial level.

Endorsement of the single

project pipeline by the

EaP countries, IFIs and

the EU.

Market opportunities:

Development of the three

DCFTAs (i.e. Ukraine,

To achieve

the 20 key

deliverables

(20 for

2020) as set

in the Joint

SWD

(2016)467.

Interconnections: The

extension of the core TEN-T

network to Neighbourhood East

was agreed among all partners

and a delegated act was

submitted to European

Parliament. Work on the single

project pipeline is under way.

Market opportunities: The

DCFTA Initiative East Facility,

with the EIB, was signed in

December. The DCFTA Facility

Phase I, managed by the


2.increasi

ng

mobility

and

people to

people

contacts;

3.market

opportunit

ies;

4.intercon

nections.)

Georgia, Moldova) and

assistance provided

EBRD, had committed almost

the full allocation

(predominantly in Moldova and

Georgia) by the end of 2016.

Result indicator: Increased credibility of the Union for the Mediterranean through a high

number of ministerial meetings establishing regional sector priorities and through the

engagement of regional cooperation, finance and planning ministers via the holding of UFM

ministerial conferences on regional cooperation and planning

Definition: DG NEAR, in coordination with the EEAS and the line DGs, is supporting policy

dialogue in the Southern Neighbourhood countries at different levels (ministerials,

platforms etc.), in view of enhancing relations with partner countries and developing our

sectorial reforms and cooperation. It also provides funding for the organisation of policy

dialogue events through its projects and a dedicated facility.

The Ministerial meetings are organised under the Union for the Mediterranean (UfM). A

dynamic regional dialogue could be expected to generate ministerial meetings in a given

sector about every 2 to 3 years.

This indicator is relevant to measure the results of DG NEAR's under this specific objective

as the Southern Neighbourhood as such remains one of the least integrated in the world,

hence organising regional cooperation meetings can prove already challenging. Indeed, the

overall political climate in this region remains tense, affecting the possibilities for regional

cooperation.

Whilst in recent years there has been progress on specific regional agenda-setting, there is

also a need to ensure cross-cutting political and financial support to these agendas. This

can be achieved with a closer involvement of ministers in charge of international

cooperation/national budgets etc.

Source of data:. Near B2 and events facility contract managed by NEAR

Baseline

2015

Interim Milestone26

2016

Target

2020


2016

Three

ministerial

s

establishi

ng

regional

sector

priorities

Three ministerials foreseen

in 2016 establishing regional

sector priorities

Three

ministerials

per year (15

in total)

Three UfM ministerial meetings

organised with the EC support

in the field of cooperation and

planning; energy; labour and

employment took place in

2016.

Ministries UFM Ministerial on Regional A regular UfM Ministerial Declaration on


of

Finance,

Planning

and

Internatio

nal

Cooperati

on

relatively

un-

engaged

in

regional

cooperati

on.

No

cooperati

on

ministerial

ever held

Cooperation and Planning

successfully organised

process of

coordination

around

financing of

regional

integration is

operational

Cooperation and Planning

adopted in June.

Result indicator: Progress on specific regional objectives defined in ministerial

declarations under the Union for the Mediterranean

Definition: Each Ministerial meeting indicates specific regional cooperation and integration

objectives, and progress is monitored in the various sectoral policy platforms put in place

to enable discussions on issues and progress. Progress is dependent on many stakeholders'

actions, and is not fully under control of DG NEAR directly. DG NEAR supports the

developments measured by this indicator through its policy coordination role and its

financial assistance (in particular regional projects)

Source of data: UFM Secretariat, line DGs and EU agencies, UN, and NEAR B2

Baseline

2014

Interim Milestone

Target

2020


2016

N.A. Tangible

progress in

the key

elements for

regional

integration

and

cooperation

identified in

the Ministerial

Declarations,

such as:

- Regional

transport

network

identified

- Progress in

depolluting

Mediterranean

Technical work on the

identification of the RTA

finalised.


- Electricity

connections

between

countries

enhanced

Result indicator: Number of Financing Agreements signed with partner countries under

the new ENI CBC programmes

Definition: The signature of the Financing Agreement (FAs) between the Commission and

partner countries in the new ENI-CBC programmes, allows for the implementation of the

ENI-CBC programmes adopted by the Commission.

16 ENI-CBC programmes were included in the ENI-CBC programming documents. An

additional programme was included (Baltic Sea) but its implementation is part of DG

REGIO's portfolio. The total EU's financial contribution amounts to approximately EUR 1

billion.

Out of the above 16 programmes, only 13 were adopted by the Commission in 2015. Due

to political reasons, two programmes (PL-RU and LT-RU) were not submitted to the

Commission for adoption in 2015, and the other programme (Mid-Atlantic), although

submitted, has not been adopted by the Commission yet.

23 FAs needs to be signed in 2016 to implement the 13 ENI-CBC adopted programmes. If

some of the remaining 3 programmes were adopted by the Commission in 2016 then

additional FAs would be signed in 2016/2017.

Source of data: DG Near as responsible DG for the ENI-CBC programmes

Baseline

2015

Interim Milestone

Target

2016


2016

0 n/a 23 FAs signed

between the

Commission &

participating

countries

which

correspond to

the 13 ENI-

CBC

programmes

adopted by

the

Commission

If some of the

3 remaining

ENI-CBC

programmes

were adopted,

then

additional FAs

would be

signed in

2016/2017

Out of the 23 Financing

Agreements, 17 were signed

by the end of 2016. The

implementation of the 13 ENI-

CBC programmes adopted in

2015 was secured. The two

remaining joint operational

programmes (Poland – Russia

and Lithuania – Russia) were

adopted. The 6 Financing

Agreements for sea basin

programmes will be signed in

2017.




Description Indicator (e.g.

adoption by the

Commission;

completion)

Target date Latest known

results

(situation on

31/12/2016)

Eastern Partnership

Follow closely and

provide support to

Eastern Partnership

in view of

strengthening

synergies with

bilateral co-operation

and national

strategies

Throughout 2016 The "20

Deliverables for

2020" (Staff

Working Document

2016/467) were

adopted – a set of

twenty concrete

deliverables across

the four Riga

priorities, to be

achieved by 2020 in

the Eastern

Neighbourhood. The

realignment of

multilateral and

bilateral actions

along the four Riga

priorities began

with the new Single

Support

Frameworks 2017-

2020 for Armenia,

Georgia, Moldova

and Belarus.

Union for the

Mediterranean (UfM)

Support the UfM

sector policy dialogue

with partner

countries. Provide

institutional support

to the UfM.

Qualitative

assessment of

commitments made

in declarations

adopted at the

Ministerial Meetings

of the Union for the

Mediterranean and

qualitative

assessment of

progress reports

presented at these

meetings.

Throughout 2016

Support to the

participation of

partner countries to

UfM ministerial (or

ad-hoc SOM)

meetings in 2016 in

the field of digital

economy,

cooperation and

planning,

employment and

labour, energy,

sustainable urban

development.

Operating grant for

the functioning of

the UfM Secretariat

in 2016 awarded.

Qualitative

assessment of the

2016 UfM Work

Plan.


Description Indicator Target date Latest known

results

(situation on

31/12/2016)


2016 ENI Multi-

country Programmes

2016 Programs

adopted by the

Commission

Throughout 2016

All Programs

adopted for

Neigbourhood East.

CBC Sign Financing

Agreements between

the European

Commission and

Partner Countries

participating in 13

ENI CBC Programs

adopted in 2015,

covering the period

2014-2020, worth 1

billion EUR.

Throughout 2016

2016 Regional

Action Program

(including one

individual measure)

for ENI South

adopted.

The implementation

of the 13 ENI-CBC

programs adopted

in 2015 was

secured. Out of the

23 Financing

agreements 17

were signed by the

end of 2016. The

two remaining joint

operational

programs (Poland –

Russia and

Lithuania – Russia)

were adopted. The

6 Financing

Agreements for sea

basin programs will

be signed in 2017.


The enlargement countries are more ready to join the EU, in

particular as regards the fundamental areas of rule of law, public

administration reform and economic development, reaping benefits

of closer integration with the EU before accession and ensuring

continued progress in the accession negotiations where relevant.

Related to

spending

programme IPA

Result indicator: Readiness indicators on fundamental areas of political criteria (Areas:

Judiciary, Fighting organised crime, Freedom of expression, Fight against corruption, Public

administration reform).

Definition: These indicators aim at showing where the seven enlargement countries stand

in terms of their preparations for meeting key areas of the political accession criteria,

namely the functioning of the judiciary, fight against corruption, fight against organised

crime, freedom of expression and Public administration reform.

In each of these areas, the state of play (i.e. the readiness) is assessed according to the

following five-tier standard assessment scale: Early stage – Some level of preparation -

Moderately prepared - Good level of preparation – Well Advanced

These indicators have been introduced in the enlargement country reports of 2015. For

further details, please see the Communication on the EU Enlargement Strategy27.

These result indicators are particularly relevant for DG NEAR since they show the results of

27

COM (2016) 715 final, 09.11.2016


its enlargement policy and financial assistance as regards two main fundamentals of the

enlargement strategy (i.e. The rule of law and fundamental rights and public administration

reform). DG NEAR role is to support the enlargement countries to address the core issues

measured by these indicators. These indicators provide also greater transparency in the

enlargement process and should facilitate greater scrutiny of reforms by all stakeholders..

Source of data: Annual enlargement country reports – European Commission

Baseline

2015

Interim Milestone

2018

Target

2020


2016

Five cases of

early stage of

preparation in

these areas

Reduced number of

cases of early stage of

preparation in these

areas

A majority of

countries are

moderately

prepared in these

areas28

Number of cases of early

preparation reduced to four.

Result indicator: Readiness indicators on fundamental areas of Economic criteria (i.e.

functioning market economy and competitiveness in the EU)


in terms of their preparations for meeting key areas of the two economic accession criteria,

namely the existence of a functioning market economy and the capacity to cope with

competitive pressures and market forces within the Union.

In each of these areas, the state of play, the state of play (i.e. the readiness) is assessed

according to the following five-tier standard assessment scale: Early stage – Some level of

preparation - Moderately prepared - Good level of preparation – Well Advanced.

These indicators have been introduced in the enlargement country reports of 2015. For

further details, please see the Communication on the EU Enlargement Strategy29.


its enlargement policy and financial assistance as regards one main fundamental of the

enlargement strategy (i.e. economic criteria). DG NEAR role is to support the enlargement

countries to address the core issues measured by these indicators. These indicators provide

also greater transparency in the enlargement process and should facilitate greater scrutiny

of reforms by all stakeholders.


Baseline

2015

Interim Milestone

2018

Target

2020


2016

Four cases of

early stage of

preparation in

Reduced number of

cases of early stage of

preparation in these

A majority of

countries reach a

good level of

Four cases of early

preparation in this area.

For the first economic

28

Assuming that there will not be any backsliding on these areas, the target implies that by 2020 at least 3 more countries become moderately prepared on the functioning of the judiciary; at least four more countries become moderately prepared on the fight against corruption; at least four more countries become moderately prepared on the fight against organised crime; at least four more countries become moderately prepared on freedom of expression. As for the public administration reform area, a majority of countries are moderately prepared in this area already in 2015.

29 COM (2016) 715 final, 09.11.2016


these areas areas

preparation in

these areas30

criterion, four countries

made some progress in

2015/2016, while one

country made no progress

(fYRoM) and one country

good progress (Serbia). For

the second economic

criterion, four countries

made some progress, while

one country made no

progress (Kosovo) and one

country made limited

progress (BiH).

For the first economic

criterion, there was

backsliding in Turkey in

2015/2016, while for the

second economic criterion,

Turkey made some

progress.

Result indicator: Degree of readiness and alignment to the acquis as reflected in the

country reports


in terms of their preparations for fulfilling the obligations stemming from the membership,

including the alignment to the acquis.

In each of the acquis chapters31, the state of play (i.e. the readiness) is assessed according

to the following five-tier standard assessment scale: Early stage – Some level of

preparation - Moderately prepared - Good level of preparation – Well Advanced

For further details, please see the Communication on the EU Enlargement Strategy32.


its enlargement policy and financial assistance as regards the third accession criteria33. DG

NEAR role is to support the enlargement countries to address the issues measured by these

indicators. These indicators provide also greater transparency in the enlargement process

and should facilitate greater scrutiny of reforms by all stakeholders.


Baseline

2015

Interim Milestone

2018

Target

2020


2016

51 cases of

early stage of

Reduced number of

cases of early stage

A majority of

countries are

Thirty-seven cases of early

preparation in this area.

30

Assuming that there will not be any backsliding on these areas, the target implies that by 2020 at least two more countries reach a good level of preparation on the functioning market economy; at least three more countries reach a good level of preparation on the capacity to cope with competitive pressures and market forces within the Union. 31

BiH and Kosovo are assessed according to the European Standards, not the chapter structure.

32 COM (2016) 715 final, 09.11.2016

33 This criteria is about the administrative and institutional capacity to effectively implement the acquis and

ability to take on the obligations of membership.

http://ec.europa.eu/enlargement/policy/glossary/terms/acquis_en.htm


preparation in

the 35

chapters34.

of preparation in

these areas

moderately

prepared in these

areas.

Result indicator: Public Administration Reform (PAR) strategy framework, which is in line

with the Principles of Public Administration

Definition: This indicator aims at showing the progress of the seven enlargement

countries with the preparation, adoption and implementation of a strategic framework on

PAR, addressing the following core areas of PAR: Policy development and coordination,

Public service and human resources management; Accountability of Administration and

Service delivery. These core areas are in line with the new approach on PAR, as advocated

since the 2014-15 enlargement strategy and further defined by the Principles of Public.

Source of data: National authorities in the Enlargement countries leading Public

Administration Reforms

Baseline

2015

Interim Milestone

2018

Target

2020


2016

3 countries 5 countries are

implementing a PAR

strategy framework in

line with the

Principles of Public

Administration

7 countries are

implementing a

PAR strategy

framework

4 countries (Albania,

Montenegro, Serbia and

Kosovo) are implementing a

PAR strategy in line with the

Principles of Public

Administration

In Albania, PAR Strategy is

in place since 2015 in line

with the Principles. The 6th

meeting of PAR Special

Group took place on 8

March 2016.

In Bosnia and Herzegovina,

PAR strategic framework is

under development.

Kosovo: PAR strategic

package adopted in 2015.

Both strategies have been

revised at the end of 2016.

Latest PAR Special Group

was held on 2 December

2016.

Montenegro adopted Public

Administration Reform

Strategy 2016-2020. PAR

Special Group was held on

16 June 2016.

Serbia is implementing a

PAR Strategy. The 3rd EU-

Serbia PAR Special Group

was held on 10 March 2016.

The former Yugoslav

34

BiH and Kosovo are assessed according to the European Standards, not the chapter structure.


Republic of Macedonia: PAR

Strategy for 2017-2022 is

under preparation and

should be finalised in the

first half of 2017.

PAR Special Group meets

once a year, however the

latest scheduled PAR SG on

31 May 2016 was cancelled

and PAR discussed at the SA

Committee on 15 June

2016.

Result indicator: Public Financial Management (PFM) reform programmes

Definition: This indicator aims at showing the progress of the seven enlargement

countries with the preparation, adoption and implementation of credible and relevant PFM

reform programmes.

The 2013-14 and 2014-15 enlargement strategies have gradually introduced a new policy

on Public Financial Management (PFM) in the enlargement countries. Improved public

financial management, including revenue administration and collection are of fundamental

importance for the functioning of the state and for implementing the reforms needed for EU

integration. Countries have been invited to prepare "credible and relevant" PFM reform

programmes/strategies

Both the enlargement strategy and the budget support guidelines highlight that an

acceptable PFM reform programme is both relevant and credible. Relevance means how key

constraints and weaknesses identified in different assessments (e.g. PEFA, SIGMA baseline

assessment, IMF Tax Administration Diagnostic Assessment Tool TADAT) are addressed in

the PFM strategy/programme. Credibility refers to the quality of the reform process in

terms of its 'realism', appropriate sequencing and prioritisation of actions, institutional

arrangements, allocation of resources, implementation track record and political

commitment to the reforms..

Source of data: Ministries of Finance in the Enlargement countries

Baseline

2015

Interim Milestone

2018

Target

2020


2016

Only 1 country

implements a

credible and

relevant PFM

reform

programmes

5 countries are

implementing credible

and relevant PFM

reform programmes

All 7 countries are

implementing

credible and

relevant PFM

reform

programmes by

2020

4 countries (Albania,

Serbia, Montenegro and

Kosovo) are implementing

credible and relevant PFM

reform programmes.

PFM strategy in Albania

implemented since

December 2014, country-led

PFM policy dialogue is

established and ongoing.

In Bosnia and

Herzegovina, country-wide

PFM strategy is under

development. No policy

dialogue is in place yet.

In June 2016 Kosovo

adopted the 2016-2020


public financial management

reform strategy. PFM policy

dialogue meeting took place

on 1 June 2016.

Montenegro has adopted a


reform programme 2016-

2020 in December 2015. Its

implementation has started

in January 2016.

Serbia is implementing a


reform programme, adopted

in December 2015

The former Yugoslav

republic of Macedonia: PFM

reform programme is still

under preparation.

Planned evaluations:

A key source for assessing the achievement of this specific objective and the related

indicators is the annual Enlargement Package. Planned or already launched strategic

evaluations in 2016 somewhat related to this objective are the following:

At programme/strategic level:

Mid-term review of IPA assistance, 2017 – IPA II;

Interim evaluation of IPA assistance, 2017 – ENI;

Ex-post evaluation of IPA I 2007-2013, 2021 – IPA I;

Ex-post evaluation of IPA II, 2018 – IPA II.

At thematic level,

Economic governance, 2016 - thematic;

Competitiveness, 2016 - thematic;

Social protection, 2016 - thematic;

Public administration reform, 2016 - thematic;

Security, 2016 - thematic;;

Rule of Law, 2018 - thematic;

Education and vocational training, 2019 – thematic;

Migration and border management, 2019 – thematic;

Transport, 2019 – thematic;

Public Financial Management, 2020 – thematic;

Energy, 2019 – thematic 2019;

Environment and Climate action, 2019 – thematic.

None of these evaluations has been completed in 2016.




results

(situation on

31/12/2016)


2016 enlargement

package

(communication and

country reports) and

contribution to council

conclusions.

- Ensure its adoption

including applying

the 2015 pilot

methodology to a

number of additional

areas, ensuring

support and buy-in

from all

stakeholders.

Agenda planning

reference:

2015/NEAR/008

- Work with

Presidency, Member

States and other DG

units on subsequent

General Affairs

Council Conclusions.

November 2016 for

adoption

End 2016 for

conclusions

Communication on

the EU

enlargement Policy

adopted by the

college on 9

November 2016.

DG NEAR expanded

the recalibrated

reporting

methodology to

chapters 1, 8, 14,

15 areas of 24 not

yet covered, as

well as 27. GAC on

13 December 2016

did not adopt

Council

conclusions;

instead; SK

Presidency issued

conclusions.

Accession negotiations Ongoing work with

negotiating countries

(Montenegro, Serbia

and Turkey) to

progress on

accession

negotiations. This

includes preparing

screening reports,

opening and closing

Benchmark Reports

(several per year, as

necessary), and Draft

Commission Positions

(DCP) (several per

year, as necessary)

Turkey: Updated

screening reports on

Chapter 15, 23, 24

and updated DCP for

Chapter 26

Serbia: complete all

screening reports

Montenegro: Draft

and present Opening

Benchmark (OBM)

Reports to COELA on

chapters where MNE

has fulfilled the

OBMs35 - several per

year, as necessary

For the other

negotiating

documents, several

per year, as

necessary.

Screening reports

for Chapters 15

and 31 were

updated and

submitted to

Council, together

with an updated

DCP for Chapter

26; A DCP was

prepared for

Chapter 33 which

was opened on 30

June; for 23/24:

awaiting

finalisation.

Montenegro

opened four

chapters in 2016

(11, 12, 13 and

19).

Serbia: All

screening reports

have been

presented to the

35

In cases where the fulfilment is ensured in time to allow this process to be completed within the timeframe


Council.

Five DCPs were

presented to the

Council (chapters

5, 23, 24, 25, 26).

2 opening

benchmark

assessment reports

for chapter 23 and

24 were adopted

by the Council.

Four chapters were

opened in 2016 (5,

23, 24, 25).

Turkey Customs Union

Complete

preparations for

negotiations of

modernised Customs

Union. Prepare in

close association with

DG TRADE the

Impact assessment

study and the Draft

mandate

Agenda planning

reference:

2015/TRADE+/035

Indicator:

Impact assessment

study Q3 2016

Draft mandate,

Q4.2016

Impact assessment

and draft mandate

adopted by College

on 21/12/2016 and

submitted to

Council.

Kosovo36 –Serbia Support the Pristina-

Belgrade dialogue

process

Throughout 2016

Technical dialogue

taking place on a

regular basis.

Limited progress

due to the electoral

process in Serbia

and the domestic

situation in Kosovo.

Momentum

regained in August

2016

DG NEAR provided

support to the

EEAS throughout

2016, leading to a

significant

36

The designation of Kosovo is without prejudice to positions on status, and is in line with UNSCR 1244/99 and the ICJ Opinion on the Kosovo declaration of independence.


breakthrough on

the telecoms

Dialogue.

Economic Reform

Programmes (ERP) for

the enlargement

countries

Coordination of the

2016 ERP exercise

for the enlargement

countries and

preparation of new

guidance note for the

2017 ERP exercise.

2016 assessments

and draft council

conclusions adopted

according to

schedule fixed in

2015. Adoption and

circulation of

guidance note to

partners before 1

July 2016

Commission

assessments

adopted on time

for discussion in

the Council working

group. ERP

guidance note

adopted on 30 May

2016.

In 2016, the

Turkish authorities

only sent the ERP

to the EC in March

(i.e. after the

deadline of 31

January). EC

assessment and

draft council

conclusions were

adopted according

to schedule. By 31

December, Turkish

preparations for

the 2017 ERP were

more advanced.

Monitoring the

Stabilisation and

association

agreements (SAA)

with Western Balkans

(WB) countries

SAA Council,

Committee, and sub-

committee meetings

taking place with

western Balkans

countries. DG NEAR

prepares,

participates in and

reports on these

meetings

All WB countries (for

Kosovo as from

entry into force of

SAA in April or May

2016 ):

SA Council (annual)

SA Committee

(annual) Sub-

committees (7/Yr)

For Kosovo: Until the

SAA enters into

force, continuation of

Meetings of the

Stabilisation and

Association Process

Dialogue (SAPD)

Adequate and

timely assessments

of Albania, Bosnia

and Herzegovina,

Kosovo,

Montenegro, Serbia

and the former

Yugoslav Republic

of Macedonia

Economic Reform

Programmes

provided according

to schedule.

Council conclusions

adopted on 25 May

2016.

For Albania the SA

Council took place

on 8 September

2016. 7th SA

Committee on 9


June 2016. Seven

sub-committees

were organized in

2016.

Concerning Bosnia

and Herzegovina,

the 1st SA Council

took place on 11

December 2015.

1st SA Committee

was held on 17

December 2015. 5

sub-committees

took place in 2016

as part of 1st cycle

(the remaining 2

scheduled for

2017).

SAA entered into

force in Kosovo on

1 April 2016.

1st SA council held

on 25 November

2016. SA

Committee is

scheduled for

2017. The 2016

cycle of 7 sub-

committees took

place in 2016.

In Montenegro, the

SA Council took

place on 20 June

2016, 6th SA

Committee 19

December 2016, 7

sub-committee

meetings and the

Special group on

PAR in the course

of 2016.

For Serbia, the SA

Committee and

Council took place

in April and

December 2016,

respectively. In

2016, the cycle of

2015-2016 sub-


committees was

completed and the

2016-2017 one

began.

Concerning the

former Yugoslav

Republic of

Macedonia, the SA

Council did not

take place in 2016.

The SA Committee

was held on 15

June 2016.

Seven sub-

committees were

organized in 2016.

Turkey - Joint Action

Plan on Migration and

visa liberalisation

roadmap

Monitor the Joint

Action Plan on

Migration and visa

liberalisation

roadmap

Throughout 2016

Visa reports in March

and September

Until 18 March

2016, EC was

monitoring

implementation of

the Action Plan and

issued a report in

March 2016. As of

18 March 2016, EU

and Turkey are

implementing the

EU-Turkey

Statement which

includes migration,

visa liberalisation,

Facility funding,

Customs Union,

etc. On the

Statement EC has

issued four

progress reports in

2016 in April, June,

September and

December. On Visa

Liberalisation, EC

issued 2 reports in

2016, in March and

May.

Thematic evaluation

on support to

Economic Governance

in enlargement

The evaluation

should serve to

provide advice and

evidence in future EU

assistance on

economic

The evaluation will

be completed end

2016 and will assess

the performance,

good examples and

lessons learned from

The evaluation has

reached the Open

Consultation Stage,

having

necessitated more

time than


governance.

(ongoing through

2016)

Agenda planning

reference:

2016/NEAR/001

the pre-existing

assistance in areas

related to economic

governance in the

enlargement

countries.

expected, also for

the preparation of

the OPC

Thematic evaluation

on social protection

(2007-2013)

The objective of the

evaluation is to

assess the EU

support provided in

external action for

social protection

during the period

2007-2013.

Agenda planning

reference:

2016/NEAR/002

4th quarter 2016 Evaluation still

ongoing. The

integration of non-

NEAR countries has

necessitated more

time and resources



results

(situation on

31/12/2016)

IPA II Multi-annual

and Annual

programmes

2016 IPA II country

action programmes

adopted

Throughout 2016

Serbia has adopted

the IPA II country

action programme

6.12.2016 for an

amount of EUR

166.4 million

2 Action

programmes for

Kosovo* for the

Year 2016 – PART I

and PART II

adopted for a total

amount of EUR

70.5 million

1 Action

programme for the

former Yugoslav

Republic of

Macedonia adopted

in 6 December

2016 for an

amount of EUR

27.7 million

Commission

implementing

Decision of

02/12/2016

adopting a Country


Action Programme

for Montenegro for

the year 2016 was

concluded for an

amount of EUR

22.9 million.

The 2016 IPA

country action

programme for

Bosnia and

Herzegovina was

adopted on 13

December 2016 for

a total amount of

EUR 47 million.

IPA 2016 country

programme for

Albania was

adopted on 13

December 2016 for

a total value of

EUR 64.94 million.

2016 action

programme for

Turkey was

adopted on 13

December 2016.

IPA I and II

implementation and

budgetary execution

The benchmarks for

KPIs on contract and

payment are met

December 2016 Albania:

Payments: KPI

Value: 81.13%

(benchmark

between 90% and

110%)

Contracting: KPI

Value 171.93%

(benchmark

between 90% and

110%)

Bosnia and

Herzegovina:

Payments: KPI

Value: 67.18%

Contracting: KPI

Value 75.15%

Kosovo:

Payments: KPI

Value: 76.01%

Contracting: KPI

Value 65.77%

Montenegro:

Payments: KPI

Value: 68.59%

Contracting: KPI

Value 80.41%


Serbia:

Payments: KPI

Value: 63.2%

Contracting: KPI

Value 42.12%

The former

Yugoslav Republic

of Macedonia:

Payments: KPI

Value: 79.24%

Contracting: KPI

Value 159.38%

Strategy papers for

IPA beneficiary

countries (i.e. these

papers define the

priorities for action to

be financed by IPA II

during 2014-2020).

Launch of the Mid-

term review (for BiH:

extension of country

strategy paper until

2020).

Launch mid 2016 The process was

launched mid-

2016. Expected

adoption in Q3

2017.

Facility for Refugees in

Turkey up and running

Set up the Facility

(governance, rules)

Q1, take strategic

decisions in Steering

Committee from Q1,

actions programmed

Q3 and contracting

started Q4.

Throughout 2016 Five Steering

Committees of the

Facility organised

in 2016- first one

in February 2016.

EUR 2.2 billion out

of the EUR 3 billion

for the years 2016-

2017 have already

been mobilised in

2016.

Technical Assistance

and Information

Exchange instrument -

TAIEX

Continued co-

ordination of the

TAIEX instrument

across the

Commission to assist

enlargement

countries with regard

to the approximation,

application and

enforcement of EU

legislation.

Throughout 2016 Throughout 2016,

714 TAIEX events

were organised for

IPA to assist

enlargement

countries with the

approximation,

application and

enforcement of EU

legislation.

Thematic evaluation

on the support to SME

competitiveness

The evaluation will

assess the

performance, good

examples and


the past assistance in

the area of SME

competitiveness in

the enlargement and

neighbourhood

3rd quarter 2016 Comments have

been

communicated on

the draft final

report, the

evaluation having

taken longer than

expected.


countries. It should

serve to provide

evidence and advice

in designing future

EU assistance.

Agenda planning

reference:

2016/NEAR/003

Mid-term evaluation of

the Civil Society

Facility (CSF) for the

Western Balkans and

Turkey

The evaluation

should provide advice

for future EU

assistance on the

support to civil

society (Q3-Q4

2016)

The evaluation will

be completed end of

2016 and will assess

the performance,

good examples and


the on-going

assistance to civil

society and media

through the CSF

The evaluation has

been recently

launched

Specific objective 4: Improved connectivity within the

Western Balkans and with the EU.

Improved good neighbourly relations among Enlargement

countries with a view to overcoming the legacy of the past

Related to

spending

programme IPA

Result indicator: Progress in completing the Core transport network and the Core

transport corridors.

Definition: The EU adopted, in January 2014, a new transport infrastructure policy to put

in place a powerful European transport network across the 28 Member States. These new

guidelines refocus transport financing on a tightly defined new core network, the Trans-

European Transport Core Network (TEN-T core network), which will form the

backbone for transportation in Europe's single market. It will remove bottlenecks, upgrade

infrastructure and streamline cross border transport operations for passengers and

businesses throughout the EU. Within the Western Balkans Six framework, the

European Commission and the six Prime Ministers from the Western Balkans agreed, on 21

April 2015 in Brussels, on indicative extensions of the TEN-T core network in the

Western Balkans region. In Riga, on 22 June 2015, the Western Balkans Six Transport

Ministers confirmed the maps of the comprehensive and core networks extending the TEN-

T network in the Western Balkans. A list of priority projects was agreed at the Vienna

Summit in August 2015.

Source of data: East Europe Transport Observatory (SEETO) Annual Report; Western

Balkans Investment Framework Annual Assessment

Baseline 2015

Interim Milestone

2018

Target

2020


2016

24 priority

projects on the

list agreed in

Vienna

At least 33% priority

projects

approved/under

implementation

75% of 24

priority projects

identified in

Vienna

approved/under

implementation

33.3% of the 24 priority

projects approved and under

implementation

Result indicator: Progress in implementing the Projects of Energy Community Interest.


Definition: The South East Europe Energy Strategy adopted in October 2013 outlines the

key objectives and actions needed to create a regional energy market, as well as the

investment needs for energy efficiency and renewable energy. A list of Projects of Energy

Community Interest (PECIs) was subsequently adopted, identifying in particular the

electricity and gas interconnections as key areas that would contribute to the Western

Balkans economic development and further EU integration

Source of data: Energy Community Annual Report (revision of the PECI list in 2016);

Western Balkans Investment Framework Annual Assessment

Baseline

2015

Interim Milestone

2018

Target

2020


2016

20 electricity

and gas

projects in

2013 PECI list

At least 33% of the 20

relevant PECI project

approved/under

implementation

At least 75% of

the 20 relevant

PECI projects

approved/under

implementation

20% of the 20 relevant PECI

projects approved/under

implementation; 4 projects on

investment grants approved

and under implementation;

In addition 3 technical

assistance projects approved

and under implementation

Result indicator: Progress in implementing the soft measures on energy and transport

Definition: As agreed at the Vienna Summit in August 2015, the Western Balkans

countries have to complement the investments through the implementation of soft

measures aiming to increase the added value of the infrastructure investments. The soft

measures will require limited funding but a strong political commitment. They

include measures such as aligning and simplifying border crossing procedures, railway

reforms, information systems (ITS), road safety and maintenance schemes, unbundling

and third party access, regulator independence, licensing and permitting regimes, customer

switching, etc.

Source of data: Conclusions of Western Balkans Ministerial meetings and Summits

Baseline

2015

Interim Milestone

2016

Target

2020


2016

40 short and

long term

measures for

energy and

transport

agreed in

Vienna

50% of short term

measures in Vienna

list implemented

85% of all 40

soft measures

in Vienna list

implemented

0.9 % of short term measures

in Vienna list implemented.

In July 2016, at the Paris

summit, the 40 short and

long term measures agreed in

Vienna were transformed into

86 measures for transport

and 84 measures for energy,

due to the subdivision of the

initial 40 measures into

individual country measures.

At the end of 2016, 1 of the

transport measures had been

completed. For energy, the

figures are 14 out of 84. The


measures have proven much

more difficult than foreseen to

implement but these absolute

figures hide a large amount of

preparation that has gone

into all the other measures.

Result indicator: European Commission contributes to smooth organisation of Berlin

process summits.

Definition: The European Commission is looking at boosting regional economic

development and connectivity in the Western Balkans as well as to improve good

neighbourly relations between Western Balkans countries. The aim will be to continue

progress achieved to date, notably through the "Berlin process" and the "Western Balkans

Six" format, which brings together heads of state and government from the region and is

strengthening the countries' ownership of regional co-operation.

Source of data: Conclusions of Western Balkans Ministerial meetings

Baseline

2015

Interim Milestone

2016-2018

Target 2020 Latest known results 2016

N/A Connectivity Package

endorsed by summit

At least 2 Western

Balkans Ministerial

meetings organised in

preparation of summit

Connectivity

Package

endorsed by

summit

At least 2

Western

Balkans

Ministerial

meetings

organised in

preparation of

summit

The connectivity package was

endorsed at the Paris summit

on 4 July 2016.




adoption by the

Commission;

completion)



Successful

Western Balkan

Summit in Paris

Prime Ministers

endorse 2016

connectivity package

including confirmation

of progress on the

soft measures on

transport and energy.

Progress in

completing the Core

transport network and

the Core transport

corridors.

Progress in

July 2016 At the Paris summit, Prime

Ministers endorsed 2016

connectivity package

including confirmation of

progress on the reform

measures on transport and

energy. The Energy

Connectivity Reform Measures

were reformed into a Regional

Electricity Market.

Through the package, there

has been significant progress

in completing the Core


implementing the

Projects of Energy

Community Interest.

transport network and the

Core transport corridors. (See

above indicator)

Progress in implementing the

Projects of Energy

Community Interest. (See

above indicator)

Western Balkan

6 Ministerial

meetings

Ministers confirm

progress on the

implementation of

soft measures for

transport and energy

Jan-June 2016 The Meeting of Ministers of

Energy and Transport in

March 2016 confirmed

(limited) progress on the

connectivity reform

measures.




2016 IPA II

Multi-country

Programmes

prepared in line

with national

and regional

needs

Programmes adopted

by the Commission

July &

November 2016

Multi-country programmes

adopted in July and December

2016 for a total value of EUR

262 million.

IPA I and II

implementation/

budgetary

execution

Benchmarks for KPIs

on contract and

payment are met.

December 2016 66.47% for KPI 1 (payment

forecast) and for KPI 2

(contracted forecast) 86.43%.

For both the benchmark was

between 90% and 110%.

Technical

Assistance and

Information

Exchange

instrument -

TAIEX

Continued

organisation of TAIEX

regional events to

assist enlargement

countries in improving

and consolidating

good neighbourly

relations through

TAIEX events of

common interest

(energy, transport,

connectivity,

migration, judicial and

police cooperation,

etc.)

Throughout

2016

Throughout 2016, 19 TAIEX

regional events organised to

assist enlargement countries

in improving and

consolidating good

neighbourly relations in the

area of information society,

connectivity and justice and

home affairs.


General objective 2 :

Towards a New Policy on Migration

Specific objective: 5 : Stem the influx of irregular

migrants to the EU by addressing the root causes of

destabilisation, forced displacement and irregular

migration in Enlargement and Neighbourhood

countries.

Promote mobility and mutually beneficial migration.

Related to spending

programmes IPA and

ENI

Result indicator:. Implementation of the Facility for Refugees in Turkey

Definition: The implementation of this facility will be measured by the amount for which

the Steering Committee of the Facility has provided guidance and by the amount

committed.

The Facility for Refugees in Turkey is the answer to the October 2015 European Council's

call for significant additional funding to support refugees in Turkey. The Facility will

provide a joint coordination mechanism for actions financed by the EU budget and national

contributions made by the Member States, designed to ensure that the needs of refugees

and host communities are addressed in a comprehensive and coordinated manner.

To ensure coordination, complementarity and efficiency in the financing, the Steering

Committee of the Facility will provide strategic guidance and decide on which types of

actions will be supported and through which financing instruments. The Steering

Committee will monitor and assess the implementation of the Facility. It will be composed

of representatives of Member States, the Commission and of Turkey, in an advisory

capacity.

The assistance provided under the Turkey Refugee Facility will be conditional on the

compliance by Turkey with the EU-Turkey Joint Action Plan, which aims to bring

order into migratory flows and help to stem irregular migration, and the EU-Turkey

Statement from 29 November 2015.

DG NEAR will be in charge of chairing the Steering Committee, managing its

secretariat; and implementing the actions conducted under IPA. This result indicator

is of high relevance to measure the results of DG NEAR's action on this specific objective

since the Facility will be managed by DG NEAR and because Turkey, by its geographical

position, is a major first reception and transit countries for migrants.

Source of data: Facility monitoring reports

Baseline

2015

Interim Milestone

2016

Target

2017


2016

Not

applicable

EUR 2 billion, on which

Steering Committee has

provided guidance

EUR 3 billion on

which Steering

Committee has

provided guidance.

Corresponding

amounts should be

committed by

31.12.17

EUR 2.2 billion out of the

EUR 3 billion from the

Facility for Refugees in

Turkey for the years 2016-

2017 have been mobilised in

2016. Implementation of 37

projects worth EUR 1.45

billion has effectively started

in 2016 and a total of EUR

748 million disbursed.

Result indicator:. Implementation of the EU Regional Trust Fund in response to the

Syrian Crisis

Definition: The EU Regional Trust Fund in response to the Syrian Crisis (EUTF) will

continue its activities, mainly linked to the contractualisation and delivery of projects

adopted by two Board meetings and identified until end 2015 and the preparation of a new


pipeline of projects, in all the countries affected by the Syrian crisis.

The EUTF was established in December 2014 with the overall objective to provide a

coherent and reinforced aid response to the Syrian crisis on a regional scale,

responding primarily in the first instance to the needs of refugees from Syria in

neighbouring countries, as well as of the communities hosting the refugees and their

administrations, in particular as regards resilience and early recovery.

Following the Commission Communication of 23 September 2015 with proposals on

Managing the refugee crisis, the Commission i.a. proposed a substantial increase of

funding in support of Syrian refugees and their host countries through the Trust Fund,

amounting to more than EUR 500 million in appropriations. It has also received

contributions and pledges from 19 Member States amounting to EUR 60 million.

The Trust Fund is managed by DG NEAR who chairs the TF board and is in charge of

developing actions to be submitted to the board.

Source of data: N/A

Baseline

2015

Interim Milestone

2016

Target 2020 Latest known results

2016

2 Board

meetings held

Actions for EUR

387.5 million

adopted

EUR 17 .5

million

contracted

At least 2 Board

meetings held

At least Actions for

EUR 250 million

adopted

At least EUR 300

million contracted

At least EUR 1

billion mobilised

and implemented

through the Fund

(target from 23

Sept 2015

communication)

The 3° Board meeting was

cancelled due to Brussels

bombing in March 2016 and

substituted with a telephone

conference on April/written

procedure on 11 April.

The 4° Board Meeting was

held on 21st June.

The 5° Board Meeting was

held on 6th December.

Total volume of the Fund at

31 December 2016: EUR

907.80 million (target: EUR

1 billion). Sources: 22 EU

Member States, Turkey and

EU instruments (ENI, IPA,

DCI). The fund is open to

international donors.

Actions worth EUR 377.8

million have been adopted

in 2016

3rd Board (Telephone

Conference/written

procedure):

- EUR 15 million for

Migration Management in

Western Balkans (Serbia,

FYROM)

- EUR 25 million for Higher

Education and TVET (JO, IQ,

LEB and TR)

4th Board



Education infrastructure

(TR)


Municipal services (TR)


Education (TR)

- EUR million 15 for UNWRA

(JO, LEB)

- EUR 21 million for Water

supplies (JO)

5th Board


Stabilisation (IQ)

- EUR 62 million for Health

(LEB)

- EUR 20 million for WASH

(LEB)

- EUR 5 million for WB/CFF

(JO LEB)

- EUR 1.8 million for M&E of

EUTF

EUR 321 million of the

committed funds have been

contracted in 2016.

Result indicator:. Implementation of the Emergency Trust Fund for stability and

addressing root causes of irregular migration and displaced persons in Africa – North of

Africa Window

Definition: The European Commission has launched an “Emergency Trust Fund for stability

and addressing root causes of irregular migration and displaced persons in Africa”, made

up of EUR 1.8 billion from the EU budget and European Development Fund, combined

with contributions from EU Member States and other donors. The EU Trust Fund for Africa

was signed by the President of the European Commission Jean Claude Juncker, along with

25 EU member states, as well as Norway and Switzerland, and was launched at the Valletta

Summit on Migration on November 12th 2015 by European and African partners

The Trust Fund benefits a coherent group of countries across Africa crossed by the major

migration routes. These countries are part of three regional operational windows: the Sahel

region and Lake Chad area, the Horn of Africa and the North of Africa.

DG NEAR is in charge of managing the North of Africa window, comprised of Morocco,

Algeria, Tunisia, Libya and Egypt.

The North of Africa window will be focused at improving migration management in all its

aspects, including contributing to the development of national and regional strategies on

migration management, containing and preventing irregular migration and fight against

trafficking of human beings, smuggling of migrants and other related crimes, effective

return and readmission, international protection and asylum, legal migration and mobility,

enhancing synergies between migration and development.

The first operational committee of the North of Africa window will take place around mid

2016 to examine a first pipeline of projects. The preparation of projects for 2017 will start

in parallel and it is expected that the following operational committees will be able to

achieve a higher level of commitments.

Source of data: Reports of the operational committee of the North of Africa window

https://ec.europa.eu/europeaid/regions/africa/eu-emergency-trust-fund/horn-africa_en


Baseline

2015

Interim Milestone

2016

Target

2020


2016

Launching of

the North of

Africa window

– No

operational

committee +

preparation of

a first pipeline

of projects

Operational

committees of the NA

window approve a

pipeline of EUR 40

million

Projects worth the

totality of ENI +

MS funds pledged

are approved by

the operational

committees.

Target set in 2016 was

reached. Operational

Committee of the NA

window adopted EUR 64,5

million

In April 2016 the EUTF for

Africa adopted three new

migration programmes

totalling EUR 27.5 million to

support the North Africa

region in addressing the

current migration situation.

- EUR 11.5 million for

actions in Egypt, as a first

strategic response to the

migration issues the country

is facing.

- EUR 6 million for projects

in Libya. The 'Strengthening

protection and resilience of

displaced populations in

Libya' programme

- EUR 10 million to Regional

level support providing

additional funding to the

Regional Development and

Protection Programme in the

North of Africa.

In December 2016 - A EUR

37 million EU assistance

package for North Africa

consisting of three

programmes addressing

migration challenges in

Libya, Tunisia and Morocco.

In Libya, a EUR 20 million

programme will better

protect and assist the most

vulnerable migrants and

their host communities.

In Tunisia, a EUR 11.5

million programme will

support the country in

implementing their National

Strategy on Migration.

In Morocco, a EUR 5.5

million programme will

support preventing racism


and xenophobia against

migrants through capacity

strengthening and improved

treatment of complaints.

Result indicator:. Further Visa liberalisation with relevant countries (i.e. Georgia,

Armenia, Ukraine, Kosovo, Turkey)

Definition: Visa liberalisation is the result of 'Visa Liberalisation Dialogues' conducted

between the EU and third countries. Through the Visa Dialogues, the EU takes gradual

steps towards the long-term goal of visa-free travel for short term stays on a case-by-

case basis, provided that conditions for well-managed and secure mobility are in place.

These dialogues are reserved for enlargement and East neighborhood countries.

Visa-free regime can fulfill the purpose of increasing people-to-people contacts

between the EU and the third countries, hence helping to develop special relationships

between the EU and the concerned Neighbourhood countries or helping to advance the

integration process in case of Enlargement countries.

In terms of process, the Commission reports on the implementation by the third country of

the related Visa Liberalisation Action Plan (VLAP). Once all benchmarks are met by the

third country in a sustainable manner, the Commission is in a position to propose to

transfer this country to the list of third countries whose nationals are exempt from visa

requirement (Regulation 539/2001). Finally, the European Parliament and the Council

decide whether to approve the Commission's proposal, taking into account possible

migration and security risks.

Within the Commission, DG HOME is in the lead for conducting Visa Liberalisation

Dialogues, with support from DG JUST, the EEAS and DG NEAR.

Source of data: European Commission (DG HOME and DG NEAR)

Baseline

2015

Interim Milestone

2016

Target

2020


2016

Ukraine:

Ukraine meets

criteria for visa

liberalisation,

based on the

commitments

taken in the

sixth VLAP

report

Georgia:

Positive

appraisal of

benchmarks

under the Visa

Liberalisation

Ukraine: Entry into

force of visa

liberalisation for

Ukraine

Georgia: Entry into

force of visa

liberalisation for

Georgia

Ukraine: In its sixth and

final progress report on Visa

Liberalisation Action Plan

(VLAP), adopted on 18

December 2015, the

European Commission

considered that Ukraine had

made the necessary

progress and had

undertaken all the required

reforms to ensure effective

and sustainable

implementation and

consequently put forward a

legislative proposal to lift

visa requirements for the

citizens of Ukraine in April

2016

Georgia: Visa liberalisation

was proposed for Georgia by

the European Commission in


Action Plan

Armenia:

Preliminary

discussions on

Visa

Liberalisation

Kosovo: visa

liberalisation

dialogue

launched with

Kosovo on 19

January 2012

Turkey: visa

liberalization

dialogue

started in

December

2013

Armenia:

Discussions on

Armenia's request to

launch a Visa

Liberalisation

Dialogue

Kosovo: Visa

liberalisation possibly

granted to Kosovo

Turkey: Visa

liberalisation granted

to Turkish citizens in

the Schengen zone by

October 2016 once

the requirements of

the Roadmap are

met.

Armenia:

Advancement on

fulfilling

benchmarks for

Visa Liberalisation

2015. On 2 February 2017,

the European Parliament

approved the visa

liberalisation process,

paving the way for its entry

into force in April 2017.

Armenia: The request to

launch a Visa Liberalisation

Dialogue has been

submitted to the Council.

Kosovo: the Commission

issued its proposal for visa

liberalisation in May 2016.

The remaining two

requirements for visa

liberalisation are the

ratification of the border

demarcation agreement with

Montenegro and the

strengthening of the track

record on organised crime

and corruption.

Turkey made progress in

the implementation of the

Roadmap. There are still 7

outstanding benchmarks,

out of 72, that Turkey must

meet. Once al benchmarks

are fulfilled, Commission will

report to Council and EP, to

which a final decision

belongs.


Migration and border management, 2019 – thematic;

Security, 2016 – thematic (not completed).




adoption by the

Commission;

completion)



Turkey - Joint

Action Plan on

Migration and

visa liberalisation

roadmap

Monitor the Joint

Action Plan on

Migration and visa

liberalisation

roadmap

Throughout 2016

Visa reports in

March and

September

Until 18 March 2016, EC was

monitoring implementation of

the Action Plan and issued a

report in March 2016. As of

18 March 2016, EU and

Turkey are implementing the

EU-Turkey Statement which


includes migration, visa

liberalisation, Facility funding,

Customs Union, etc. On the

Statement EC has issued four

progress reports in 2016. On

Visa Liberalisation, as

planned, EC issued 2 reports

in 2016, in March and May.

Alignment with

"acquis" by

candidates and

potential

candidates

Negotiations and

alignment by

candidates and

potential candidates

to EU standards and

acquis related to

chapter 24

monitoring

Throughout 2016

Albania adopted the law on

border control, which entered

into force in August 2016.

The law and associated by-

laws are aligned with the

acquis.

Bosnia and Herzegovina

Some progress was made

with the adoption of a

strategy on integrated border

management and a new

legislative framework for

migration and asylum.

Montenegro: Chapter 24

was opened in 2013 and has

38 interim benchmarks. In

2016, some progress was

made through the continued

implementation of the Action

Plan for Justice, Freedom and

Security. The law on asylum

adopted in December 2016

was further aligned with the

EU acquis.

Kosovo :The Stabilisation

and Association Agreement

(SAA) between the European

Union and Kosovo entered

into force on 1 April 2016,

Serbia: Ongoing alignment

with the acquis on chapter 24

following the opening of

negotiations in July 2016.

In the former Yugoslav

Republic of Macedonia,

during 2016, chapter 24

activities focused on

achieving full alignment of

the domestic legislation with

the asylum acquis

Visa liberalisation Kosovo: In 2016 Two requirements for visa


process for

Kosovo

Implementation of

2012 visa

liberalisation

roadmap

liberalisation remain : the

ratification of the border

demarcation agreement with

Montenegro and the

strengthening of the track

record on organised crime

and corruption.

Commission

Proposal on

Georgia Visa

Liberalisation

prepared

Drafting of the

proposal by the

Commission (DG

HOME in the lead)

and adoption by the

College

March 2016 Visa liberalisation was

proposed for Georgia by the

European Commission in

2015. On 2 February 2017,

the European Parliament

approved the visa

liberalisation process, paving

the way for its entry into

force in April 2017.

Launch of the

Mobility

Partnership with

Belarus

1. Finalising the

Annex to the

Mobility Partnership

with Belarus

2. Signature of the

Mobility Partnership

Declaration by the

EU, the Member

States and Belarus

Second half of

2016 (DG HOME

in the lead)

The Mobility Partnership was

signed in October.

Commission

Proposal on

Ukraine Visa

Liberalisation

prepared

Drafting of the

proposal by the

Commission (DG

HOME in the lead)

Early 2016 The European Commission

put forward a legislative

proposal to lift visa

requirements for the citizens

of Ukraine in April 2016

Joint ECHO,

DEVCO and

NEAR

Communication

on forced

displacement and

development

Adoption of this

Communication by

the College

Agenda planning

reference:

2015/ECHO+/009

April 2016 Lives in dignity – from aid

dependence to self-reliance.

Communication from the

Commission to the European

Parliament, the Council, the

European Economic and

Social Committee and the

Committee of the Regions —

(COM(2016) 234 final,

published on 26.4.2016 and

COM(2016) 234 final/2,

published on 2.5.2016)




Facility for

Refugees in

Turkey up and

running

Set up the Facility

(governance, rules)

Q1, , take strategic

decisions in

Steering Committee

from Q1, actions

Throughout 2016 EUR 2.2 billion out of the EUR

3 billion from the Facility for

Refugees in Turkey for the

years 2016-2017 have been

mobilised in 2016 in the

space of 8 months .

http://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=celex:52016DC0234

http://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=celex:52016DC0234R%2801%29


programmed Q3

and contracting

started Q4

Implementation of 37

projects worth EUR 1.45

billion has effectively started

in 2016 and a total of EUR

748 million disbursed.

EU regional Trust

Fund in response

to the Syrian

Crisis

Implementing

initiatives via the

EU regional Trust

Fund in response to

the Syrian Crisis

Throughout 2016 In 2016, the EU Regional

Trust Fund in Response to the

Syrian Crisis, the 'Madad

Fund', adopted new actions

for a total amount of EUR 378

million, signed contracts for a

total of EUR 321 million in the

same period, and disbursed

EUR 129 million to projects at

the same time.

Emergency Trust

Fund for stability

and addressing

root causes of

irregular

migration and

displaced

persons in Africa

– North Africa

Commitment of

35% of the funds

approved by the 1st

operational

committee for 2016

31.12.2016 Commitment of 22% of the

funds approved by the 1st

operational committee for

2016

Support to

Georgia VLAP

implementation

Support to the

continuous

implementation of

the VLAP

benchmarks, in

particular in the

fields of migration

and organised crime

Throughout 2016 To ensure the sustainable


benchmarks of the visa

liberalisation action plan

(VLAP) in the fields of border

management and migration,

DG NEAR support was

provided to Georgia in 2016

through a number of

measures including the

project 'Enhancing Georgian

Migration Management

(ENIGMMA).

Support to

migration

management in

Belarus

Commission

Financing Decision

to be adopted.

End July 2016 An action has been approved

under the 2016 Annual Action

Programme (EUR 7 million) to

address irregular migration in

Belarus and to help

implement the future EU-BY

readmission agreement.

TAIEX Support to VLAP,

border

management and

asylum related

matters, including

in collaboration with

interested line DGs

Throughout 2016 Throughout 2016, 34 TAIEX

events have been organised

to support to VLAP, border

management and asylum

related matters.



A Resilient Energy Union with a Forward-Looking

Climate Change Policy

Specific objective: 6 Increased energy security and

more effective climate policies in the Enlargement and

Neighbourhood countries as well as increased energy

connectivity between the EU and these countries.

Related to spending

programmes

IPA and ENI

Result indicator: Number of sector dialogues on gas, renewable energy and energy

Efficiency at regional level.

Definition:

Eastern Partnership (EaP):

At regional level, meetings of the regional EaP Platform 3 on Energy Security, which

supports dialogue in developing electricity, gas and oil interconnections, as well as

improving energy efficiency and renewable energy sources.

Neighbourhood South:

The progressive integration of the energy markets in the Mediterranean is a key aspect of

the ENP Review and one of its objectives. Such integration could only be achieved through

the establishment and functioning of dedicated international fora where the policy priorities

and the actions to implement them are discussed and adopted. In the Mediterranean

region, this is currently done through the sector policy dialogues under the UfM umbrella

(i.e.: the UfM Energy Platforms in the field of Gas; Regional Electricity Markets; Renewable

Energies and Energy Efficiency). The level of activity and relevance of these policy

dialogues is measured through the frequency of their meetings and the quantity and quality

of the results that are produced therein. Therefore the number of meetings held in the

framework of each policy dialogue can be considered as an appropriate indicator to be

employed.

Together with DG ENER, DG NEAR is leading the policy dialogues that are being shaped in

the framework of the three UfM Energy Platforms. More specifically, NEAR regularly

provides technical input regarding the following aspects: definition of the platforms' work

programmes and activities; identification and formulation of policy priorities in the energy

sector; logistical aspects that are linked to the organisation of the platforms' meetings. This

work is essential to achieve the desired frequency of policy dialogue meeting and the

quality of their results. In addition, DG NEAR provides a more political contribution, by

regularly cooperating with DG ENER in view of the UfM Energy Ministerial meetings. Finally,

DG NEAR manages two contracts with the key technical partners of the UfM Regional

Electricity Markets Platform: MEDREG and MED-TSO.

Source of data:

- EaP: Platform 3 meetings funded by regional EaP events facility.

- Neighbourhood South: DG NEAR and DG ENER internal reporting. UfMS activity report

and minutes of meetings.

Baseline

2015

Interim

Milestone 2016


EaP: 2 per year

UfM: 1 meeting

of the Regional

EaP: 2 meetings

per year

UfM :The target is

2 meetings per

UfM :30 meetings

in total

Eastern Partnership: Over

the course of 2016, two energy

security platform meetings and

one workshop took pace. A


Electricity

Platform (REM)

and 1 meeting

for the Gas

Platform

year for each UfM

Platform until 2020

high level conference 'EU

Energy Cooperation with the

Eastern Neighbourhood and

Central Asia' took place in

March 2016.

3 joint meetings, (all

platforms) and the December

energy Ministerial.

Result indicator: Neighbourhood East - Number of investments from the Neighbourhood

Investment Facility (NIF) adopted on Renewable Energy and Energy Efficiency

Definition: Strategic investment projects on Renewable Energy and Energy Efficiency

funded by the NIF – Neighbourhood East

Source of data: NIF Board decisions

Baseline

2015

Interim

Milestone 2018


0 2 per year 2 per year

(based on desk

evaluation)

Two investments from the


Facility (NIF) have been

adopted; a EUR 10.4 million

project for the extension of the

Georgian Transmission

Network (Renewable Energy),

and a EUR 3.2 million project

to improve energy savings in

universities in Ukraine (Energy

Efficiency). Both were

approved by the NIF Board in

2016.

Result indicator: Neighbourhood South - At least 30% of the Neighbourhood Investment

Facility (NIF) grant investments in the Southern Neighbourhood will be devoted by 2020 to

facilitate investments in the Renewable Energy and Energy Efficiency Sectors

Definition: Facilitating investments to establishing better and more sustainable energy

interconnections (between the EU and neighbouring countries and between the

neighbouring countries themselves), improving energy efficiency and demand

management, promoting the use of renewable energy sources, strengthening energy

security through diversification of energy supplies and energy market integration are part

of the NIF strategic orientations and priority objectives adopted by the Commission

with the agreement of partner countries for the period 2014-2020.

The NIF is a blending designed to combine EU grants with other public and private

financing. By reducing, through co-financing, the overall cost or risk of the project or by

subsidising interest rates and/or financing technical assistance, the Facility will encourage

the beneficiary governments, private sector and/or public institutions to carry out essential

investments in sectors which would otherwise be postponed due to lack of resources.

The role of DG NEAR is to discuss and promote with the European Financial Institutions,

in close association with the concerned EU Delegations, the identification and

submission to the NIF of investment projects in the targeted sector.

Source of data: NIF Secretariat and NIF Annual Reports


Baseline

2018-2013

Interim

Milestone 2018


The base line

was 20% to

25% of NIF

grants for the

Energy sector

At least 30% of

the NIF grant

investments in the

Southern

Neighbourhood

will be devoted by

2020 to facilitate

investments in the

Renewable Energy

and Energy

Efficiency Sectors

Jordan NEPCO green corridor,

total cost EUR 146.2 million

(EU grant contribution

17.787.000)

33% of NIF grant investments

in the Southern Neighbourhood

are devoted to energy

Result indicator: Progress in implementing the Projects of Energy Community

Interest

See description of this indicator under Specific objective 4




adoption by the

Commission;

completion)



Energy

Community

Treaty.

Level of

Enforcement of

existing Energy

Community Acquis

(through Berlin

Process ‘soft

measures’

Application of the

EU’s Security of

Supply (SoS)

Regulation to the

Energy

Community (EnC)

Inclusion of

climate elements

in Energy

Community Acquis

By the time of the

Paris Summit, the

level of

enforcement of

these ‘soft

measures’ should

allow investments

in energy projects.

Once the revised

SoS Regulation is

approved, this is

transposed in the

EnC countries,

allowing the SoS

Regulation to

apply to those

countries.

Transposition of

EU’s Monitoring

Mechanism

Regulation into

the Energy

Community by the

The transformation of the

Energy Connectivity Reform

Measures into a Regional

Electricity Market

demonstrates a high level of

enforcement of the Energy

Community Acquis.

This application has not been

possible following the legal

analysis.

In October 2016, the

Monitoring Mechanism

Regulation became a part of

the Energy Community Acquis.


end of the year.

Alignment with

"acquis" by

candidate

countries

Outputs related to

negotiations and

alignment by

candidate

countries to EU

standards, acquis

on related

chapters (Energy

etc.) and Energy

Community Treaty

obligations.

(see also the ‘level

of enforcement’

above)

Serbia and

Montenegro, in

particular, should

make further

progress to full

alignment.

Approve the

Screening Report

for Turkey for the

Energy Chapter

Accession negotiations

continued. However, the

formal progress in these

negotiations depends on the

countries themselves.

Montenegro made some

progress on chapter 14 -

transport policy and good

progress on chapter 15 –

Energy, in full alignment. Both

chapters were opened in

December 2015.

Serbia has a good level of

preparation in transport policy

(chapter 14). In energy

(chapter 15) Serbia has made

some progress in the internal

energy market

ENP review roll-

out – Priority

actions on

Energy

Strengthen energy

dialogue with

Neighbourhood

partners

Also develop

regional and sub-

regional

measures.

Throughout 2016,

on the basis of the

ENP Review roll-

out

"EU4Energy" has been

launched as a key action to

cover the preparation of

evidence-based policies in the

region and to help countries

prepare priority project

pipelines.

In Jordan, the energy dialogue

is under the auspices of the EU

Renewable Energy and Energy

Efficiency Budget Support.

In Egypt, the EU has kept a

very close dialogue with the

Government in the Energy

Sector through the “Energy

Sector Policy Support

Programme” (EUR 60 million)

signed in 2011. The

programme aims at improving

the energy policy and

regulatory framework, the

sector's financial transparency

and performance, and

promoting the development of

renewable energy and energy

efficiency.

In Lebanon, a policy dialogue

on energy is part of the mutual

commitments of EU-Lebanon


compact.

Furthermore, a contract

granted for the evaluation of

the EU support provided at

regional and bilateral level in

the field of energy.

In Tunisia, the Joint EU

Communication on Tunisia

details a number of axes for

cooperation in the sector of

energy. Specific measures will

be foreseen in 2017.

In the wake of the 2015 high-

level EU-Algeria dialogue on

Energy, an Energy Business

Forum took place in May 2016

in Algiers gathering public

institutions, energy regulators,

business organisations and

financial institutions to explore

cooperation and investment

opportunities in the area of

conventional but also

renewable energies and energy

efficiency.




Number of

Neighbourhood

Investment

Facility (NIF)

projects in

2016 on

renewables

energy and

efficiency

sectors

Neighbourdhood

East: 2

Two investments from the


Facility (NIF) have been

adopted; a EUR 10.4 million

project for the extension of the

Georgian Transmission

Network (Renewable Energy),

and a EUR 3.2 million project

to improve energy savings in

universities in Ukraine (Energy

Efficiency). Both were

approved by the NIF Board in

2016.

ENP review roll-

out – Priority

actions on

Energy

Contracting and

implementation of

new regional

energy

programme (EUR

20 million) to

support evidence-

based energy

policies and closer

energy

End 2016 In Jordan, the energy dialogue

happens under the auspices of

the EU Renewable Energy and

Energy Efficiency Budget

Support (EUR 90 million,

including 35 million granted to

EBRD to improve Energy

Efficiency of water pumps and

a waste to energy pilot project

in Amman). The programme

will install about 20,000 units


interconnections. of Solar Water Heating

systems in rural community

areas and CSOs will have a say

on where and to whom these

should be provided.

Thanks to Energy Sector Policy

Support Programme, the EU

has supported Egypt in

preparing the Integrated

Sustainable Energy Strategy to

2035, which covers all energy-

related topics with a special

focus on Renewable Energy,

Energy Efficiency, institutional

set up, and financial

mechanisms. In addition, a

Medium Term Action Plan has

been developed to support the


Strategy.

Initial identification of

components of the Energy, and

climate change regional action

programme have within this

context been carried out.


A New Boost for Jobs, Growth and Investment

Impact indicator: Europe 2020 target - Employment rate population aged 20-64

Source of the data: EUROSTAT

Baseline 2014 Target 2020

69.2% at least 75%

DG NEAR will contribute to the specific objective through a variety of policy-related

actions. These include completing preparations for the negotiations of modernised

Customs Union with Turkey, monitoring the Stabilisation and Association

Agreements with the countries of the Western Balkans as well as ensuring financial

assistance to Morocco and Tunisia to accompany them in the DCFTA

negotiations.

Specific objective 7: Increased prosperity in the Enlargement

and Neighbourhood countries and in the EU through increased

economic and trade opportunities between the EU and these

countries.

Related to spending

programmes IPA and

ENI

Result indicator: Initiative on the enhancement of EU-Turkey bilateral trade relations and

modernisation of the EU-Turkey Customs Union (CU).

Definition: The main policy objective of this initiative is to enhance the bilateral

preferential trade framework by extending the CU to other areas (agriculture,


services and public procurement) and improving the functioning of current mechanisms.

This indicator will measure the progress of the negotiation between Turkey and the EU with

a view to modernising the EU-Turkey Customs Union.

This indicator is particularly relevant to this specific objective since Turkey is the EU's 6th

biggest trading partner and accounts for nearly 4% of its total trade. Three fourths of

FDI inflows to Turkey originate in the EU, mainly greenfield and services investments.

Enhancing economic integration by improving market access in agricultural and public

procurement markets, and fostering investments in the services sectors through better

opening and regulatory alignment would increase further market integration to the benefits

of both parties.

DG NEAR will work jointly with DG TRADE on this initiative, in a supportive and

complementary role.

Source of data: European Commission (TRADE and NEAR)

Baseline

2016

Interim

Milestone 2017


Existing

Customs Union

Agreement EU-

Turkey (in

force since

1996)

Conduct

negotiations for

modernising

Customs Union

with Turkey

Upgraded/exten

ded CU in force

or provisionally

applied,

including new

mechanisms

On track. Negotiation directive

tabled by the Commission to

Council in December 2016.

Result indicator: DCFTA Facility for Georgia, Moldova and Ukraine

Definition: DG NEAR, jointly with European Financial Institutions (EFIs) – the European

Investment Bank (EIB) and the European Bank for Reconstruction and Development

(EBRD) in the first place – has put in place the DCFTA Facility for SMEs to help SMEs to

seize new trade opportunities opened thanks to the DCFTA and to comply with the DCFTA

provisions.

Source of data: European Commission (TRADE and NEAR)

Baseline

2015

Interim

Milestone


The two DCFTA

Facilitation

programmes with

the EIB and the

EBRD will generate

approximately

13,750 sub-loans to

companies. Other

objectives include

to:

- improve technical

and SPS standards

leading to enhance

the competitiveness

of SMEs in the

DCFTA signatory

countries

The DCFTA Initiative East

Facility, with the EIB, was

signed in December. The

DCFTA Facility Phase I,

managed by the EBRD, had

committed almost the full

allocation (predominantly in

Moldova and Georgia) by the

end of 2016. Programmes are

ongoing to improve technical

and SPS standards in the

DCFTA signatory countries.


- transfer

knowledge on how

to use the

opportunities and

address the

challenges resulting

from the DCFTA

implementation.


Economic governance, 2016 – thematic

Competitiveness, 2016 – thematic

None of these evaluations has been finalized in 2016

Result indicator: Deep and Comprehensive Free Trade Agreement with Morocco and

Tunisia

See description of this indicator under Specific objective 1



Enlargement



Turkey

Customs Union

Complete

preparations for

negotiations of

modernised

Customs Union.

Prepare in close

association with

DG TRADE the

Impact

assessment study

and the Draft

mandate

Agenda planning

reference:

2015/TRADE+/03

5

Indicator:

Impact assessment

study Q3 2016;

Draft mandate,

Q4.2016

On track. Impact

assessment of the

Customs Union was

validated by RSB in

October 2016, and

negotiation directive tabled

by the Commission in

December 2016.

Economic

Reform

Programmes for

the

enlargement

countries

Coordination of

the 2016 ERP

exercise for the

enlargement

countries and

preparation of new

guidance note for

the 2017 ERP

exercise.

2016 assessments and

draft council

conclusions adopted

according to schedule

fixed in 2015.

Adoption and

circulation of guidance

note to partners

before 1 July 2016

Adequate and timely

assessments of Albania,

Bosnia and Herzegovina,

Kosovo, Montenegro,

Serbia and the former

Yugoslav Republic of

Macedonia Economic

Reform Programmes

provided according to

schedule. Council

conclusions adopted on 25

May 2016.

Commission assessments

adopted on time for

discussion in the Council

working group. ERP


guidance note adopted on

30 May 2016.

Monitoring the

Stabilisation

and association

agreements

(SAA) with

Western

Balkans

countries

SAA Council,

Committee, and

sub-committee

meetings taking

place with western

Balkans countries.

DG NEAR

prepares,

participates in and

reports on these

meetings

All WB countries (for

Kosovo as from entry

into force of SAA in

April or May 2016 ):

SA Council (annual)

SA Committee

(annual) Sub-

committees (7 / year)

For Kosovo: Until the

SAA enters into force,

continuation of

Meetings of the

Stabilisation and

Association Process

Dialogue (SAPD)

Albania:

SA Council took place on 8

September 2016. 7th SA

Committee on 9 June

2016. Seven sub-

committees were

organized in 2016.

Bosnia and

Herzegovina: 1st SA

Council took place on 11

December 2015. 1st SA

Committee was held on 17

December 2015. 5 sub-

committees took place in

2016 as part of 1st cycle

(remaining 2 scheduled for

2017).

Kosovo:

SAA entered into force on

1 April 2016.

1st SA council held on 25

November 2016. SA

Committee is scheduled for

2017. The 2016 cycle of 7

sub-committees took place

in 2016.

Montenegro:

SA Council took place on

20 June 2016, 6th SA

Committee 19 December

2016, 7 sub-committee

meetings and the Special

group on PAR in the course

of 2016.

Serbia:

The SA Committee and

Council took place in April

and December 2016,

respectively. In 2016, the

cycle of 2015-2016 sub-

committees was completed

and the 2016-2017 one

began.

The former Yugoslav

Republic of Macedonia:

SA Council did not take

place in 2016. SA

Committee was held on 15

June 2016.

Seven sub-committees

were organized in 2016.

Alignment with

economic

criteria and

economic

Outputs related to

negotiations and

alignment by

candidates and

Throughout 2016 Alignment with economic

criteria and economic

related "acquis" chapters

was ongoing throughout


related "acquis"

chapters by

candidates and

potential

candidates

potential

candidates to EU

standards and

acquis on related

chapters (free

movement of

goods, services,

capital, public

procurement,

company law,

intellectual

property rights,

competition,

financial services,

taxation,

employment,

enterprise and

industrial policy,

research,

consumer

protection,

customs, etc.)

2016.

In Albania during 2016

the Market surveillance

inspectorate was

established and some

progress was achieved in

alignment with New and

Global Approach acquis,

adoption of a new Law on

services, establishing on-

line business registration,

and National Business

Centre, adoption of new

copyright and intellectual

property Laws, further

alignment of the state aid

law with the acquis,

amendment of the Labour

code adopted, and

adoption of a National

Strategy on Consumer

Protection and Market

Surveillance.

Bosnia and Herzegovina

is at an early stage of

preparation for the free

movement of goods and

services, employment,

education and research.

The country has some

level of preparation in the

area of public procurement

and competition. Bosnia

and Herzegovina is

moderately prepared in the

area of movement of

capital, customs and

taxation and intellectual

property rights.

Good progress was made

in Kosovo customs and

taxation, especially in

fighting corruption in

customs, collecting

customs revenue. Some

progress was achieved in

public procurement and

intellectual property rights.

In the employment area,

little progress was made

as Kosovo still needs to

amend the labour law to

align with the acquis.

Kosovo is at an early stage

in the area of competition.

In Montenegro, the


Commission continued to

assess the fulfilment of the

economic accession

criteria. One economic

related chapter was

opened in 2016 (ch19

employment). Monitoring

of benchmark-related work

in public procurement,

company law, intellectual

property law and financial

services continued (ch 5,

6, 7, 9). Slow progress

was made in the

competition policy, despite

of the substantial support

from Commission side

(opening benchmark).

For Serbia, two economic

related chapters were

opened in 2016 (5 public

procurement and 25

research). Serbia has good

level of preparation in the

area of public

procurement, company

law, intellectual property

law, research and

customs. The country is

moderately prepared for

the free movement of

goods, services and

capital, in the area of

competition policy,

financial services, taxation,

employment, enterprise

and industrial policy and

consumer protection.

The former Yugoslav

Republic of Macedonia

has good level of

preparation in the area of

company law, customs

union and research. In

most of the economic

related chapters, the

country is moderately

prepared: free movement

of goods, services and

capital, public

procurement, intellectual

property law, competition,

financial services, taxation,

employment, enterprise

and industrial policy,

consumer protection.

In summary, there has


been consistent and

marked progress in this

area, with a steady

reduction in cases of "early

stages of preparation",

from 51 cases in 2014, to

49 in 2015, and 37 in

2016.

Thematic

evaluation on

support to

Economic

Governance in

enlargement

The evaluation

should serve to

provide advice and

evidence in future

EU assistance on

economic

governance.

(ongoing through

2016)

Agenda planning

reference:

2016/NEAR/001

The evaluation will be

completed end 2016

and will assess the

performance, good

examples and lessons

learned from the pre-

existing assistance in

areas related to

economic governance

in the enlargement

countries.

Evaluation still ongoing

Neighbourhood

Policy-related outputs



DCFTA with

Morocco and

Tunisia.

Continued

participation in

EU's awareness

raising and

negotiation efforts

in relation to

DCFTA with

Morocco and

Tunisia.

Ensure

implementation of

financial

assistance to

accompany the

DCFTA

negotiations.

Throughout 2016 2016 was marked by

Morocco's suspension of all

policy dialogue with the






on an EU/Morocco




could be made regarding a

DFCTA.

In Tunisia, support

measures (studies,

assessment, awareness

raising events) to

accompany the DCFTA

negotiations were

implemented throughout

the year. While technical

discussions continued to

take place between the EU

and the Tunisian

Government on the

DCFTA, no formal

negotiation round took


place in 2016. Several EU-

civil society dialogues

however took place in the

course of the year with a

view to raise awareness on

the opportunities offered

by the DCFTA and

accompanying measures

DCFTA Facility

for Georgia,

Moldova and

Ukraine

The two DCFTA

Facilitation

programmes with

the EIB and the

EBRD will

generate

approximately

13750 sub-loans.

Improve technical

and SPS standards

leading to enhance

the

competitiveness of

SMEs in the

DCFTA signatory

countries.

From now up to 2020 The DCFTA Initiative East

Facility, with the EIB, was

signed in December. The

DCFTA Facility Phase I,

managed by the EBRD,

had committed almost the

full allocation

(predominantly in Moldova

and Georgia) by the end of

2016. Programmes are

ongoing to improve

technical and SPS

standards in the DCFTA

signatory countries.

Concerning Ukraine, the

programme EU-SURE

adopted as Special

Measure in 2015 was

contracted and launched

under the common

branding EU4Business

covering all EU country

and regional support to

economic development in

the Eastern

Neighbourhood.

The component related to

Business Support Centre

network started its

operation in April 2016

(EUR40 million).

The contract for the Credit

Guarantee Facility for

Ukraine (EUR40 million)

was signed with the

European Investment Fund

in December 2016.


Description Indicator Target

date



Technical Assistance and

Information Exchange

instrument - TAIEX

TAIEX events

contributing to the

implementation of

AA/DCFTA and to

Throug

hout

2016

Throughout 2016, 363

TAIEX events contributed

to the implementation of


current or future

agreements implying

approximation with EU

laws and norms (East

and South)

AA/DCFTA and to current

or future agreements

implying approximation

with EU laws and norms.

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