FINANCIAL PROTOCOL

HIS MAJESTY THE KING OF THE BELGIANS ,

HER MAJESTY THE QUEEN OF DENMARK ,

THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY ,

THE PRESIDENT OF THE FRENCH REPUBLIC ,

THE PRESIDENT OF IRELAND ,

THE PRESIDENT OF THE ITALIAN REPUBLIC ,

HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG ,

HER MAJESTY THE QUEEN OF THE NETHERLANDS ,

HER MAJESTY THE QUEEN OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND ,

and

THE COUNCIL OF THE EUROPEAN COMMUNITIES ,

of the one part , and

THE PRESIDENT OF THE REPUBLIC OF MALTA ,

of the other part ,

CONSCIOUS of the need to promote the accelerated development of the Maltese economy with a view to facilitating the pursuit of the objectives of the Agreement establishing an association between the European Economic Community and Malta ,

HAVE DESIGNATED as their Plenipotentiaries :

HIS MAJESTY THE KING OF THE BELGIANS :

Joseph VAN DER MEULEN ,

Ambassador Extraordinary and Plenipotentiary , Permanent Representative to the European Communities ;

HER MAJESTY THE QUEEN OF DENMARK :

Niels ERSBOELL ,

Ambassador Extraordinary and Plenipotentiary , Permanent Representative to the European Communities ;

THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY :

Ulrich LEBSANFT ,

Ambassador Extraordinary and Plenipotentiary , Permanent Representative to the European Communities ;

THE PRESIDENT OF THE FRENCH REPUBLIC :

Jean-Marie SOUTOU ,

Ambassador of France , Permanent Representative to the European Communities ;

THE PRESIDENT OF IRELAND :

Brendan DILLON ,

Ambassador Extraordinary and Plenipotentiary , Permanent Representative to the European Communities ;

THE PRESIDENT OF THE ITALIAN REPUBLIC :

Giorgio BOMBASSEI FRASCANI DE VETTOR ,

Ambassador of Italy , Permanent Representative to the European Communities ;

HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG :

Jean DONDELINGER ,

Ambassador Extraordinary and Plenipotentiary , Permanent Representative to the European Communities ;

HER MAJESTY THE QUEEN OF THE NETHERLANDS :

E. J. KORTHALS ALTES ,

Minister , Plenipotentiary , Deputy Permanent Representative to the European Communities ;

HER MAJESTY THE QUEEN OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND :

Sir Donald MAITLAND , CMG , OBE .

Ambassador Extraordinary and Plenipotentiary , Permanent Representative to the European Communities ;

THE COUNCIL OF THE EUROPEAN COMMUNITIES :

Jean DONDELINGER ,

Ambassador Extraordinary and Plenipotentiary , Permanent Representative of Luxemburg , Chairman of the Permanent Representatives Committee ;

Theodorus HIJZEN ,

Director-General of External Relations of the Commission of the European Communities ;

THE PRESIDENT OF THE REPUBLIC OF MALTA :

Joseph Attard KINGSWELL ,

Ambassador Extraordinary and Plenipotentiary , Permanent Delegate of the Republic of Malta to the European Economic Community ,

WHO , having exchanged their full powers , found in good and due form ,

HAVE AGREED AS FOLLOWS :

Article 1

The Community shall participate , within the framework of financial and technical cooperation , in the financing of projects designed to contribute to the economic and social development of Malta .

Article 2

1 . For the purposes specified in Article 1 , and for a period expiring five years after the entry into force of this Protocol , an aggregate amount of 26 million units of account may be committed as follows :

( a ) 16 million units of account in the form of loans from the European Investment Bank , hereinafter called ' the bank ' , accorded from its own resources on the terms set out in its statute ;

( b ) five million units of account in the form of loans on special terms ;

( c ) five million units of account in the form of grants ,

Provision may be made for contributions to risk capital formation , to be charged against the amount shown in ( b ) .

2 . The loans referred to in paragraph 1 ( a ) shall generally be combined with 2 % interest rate subsidies financed by means of the funds shown in paragraph 1 ( c ) .

Article 3

1 . The amount fixed in Article 2 shall be used for the financing or part-financing of projects such as :

- capital projects in the fields of production and economic and social infrastructure , aimed in particular at diversifying the economic structure of Malta and , especially , at promoting its industrialization and the modernization of its agriculture , fisheries and tourist industry ;

- technical cooperation as a preliminary or complement to capital projects and , as a corollary , technical cooperation schemes in the field of training .

2 . Community aids shall be used to cover costs necessarily incurred in carrying out approved projects or schemes . They may not be used to cover current administrative , maintenance or operational expenditure .

Article 4

1 . Capital projects shall be eligible for financing either by loans from the bank , combined with interest rate subsidies on the terms set out in Article 2 , or by loans on special terms , or by a combination of these two means .

2 . Technical cooperation shall normally be financed by grants .

Article 5

1 . The amounts to be committed each year for each of the various forms of aid shall be distributed as evenly as possible throughout the period of application of this Protocol . During the initial period of application , however , a proportionately higher amount way , within reasonable limits , be committed .

2 . Any funds not committed by the end of the fifth year following the entry into force of the Protocol shall be used , until exhausted , in accordance with the same arrangements as provided for in this Protocol .

Article 6

1 . Loans accorded by the bank from its own resources shall be combined with terms as to duration established on the basis of the economic and financial characteristics of the projects for which such loans are intended . The interest rate shall be that applied by the bank at the time of signature of each loan contract , subject to the interest rate subsidy referred in Article 2 ( 2 ) .

2 . Loans on special terms shall be accorded for 40 years with a grace period of 10 years . The interest rate shall be fixed at 1 % .

3 . The loans may be granted through the intermediary of the State of Malta or appropriate Maltese public bodies , on condition that they onlend the mounts to the recipients on terms decided , by agreement with the Community , on the basis of the economic and financial characteristics of the projects .

Article 7

Aid contributed by the Community for the execution of certain projects may , with the agreement of Malta , take the form of co-financing in which , in particular , credit and development bodies and institutions of Malta , of Member States or of third States or international finance organizations would take part .

Article 8

The following shall be eligible for financial and technical cooperation :

( a ) in general :

- the State of Malta ;

( b ) with the agreement of the State of Malta , for projects or measures approved by it :

- Maltese official development agencies ;

- private agencies working in Malta for economic and social development ;

- firms , carrying on their activities in accordance with the methods of industrial and business management , which are set up as companies of firms under Maltese law ;

- groups of producers that are nationals of Malta , and exceptionally , where no such groups exist , the producers themselves ;

- scholarship holders and trainees sent by Malta under the training schemes referred to in Article 3 .

Article 9

1 . On the entry into force of this Protocol , the Community and Malta shall establish by mutual agreement the specific objectives of financial and technical cooperation , by reference to the priorities set by Malta ' s development plan .

These objectives may be reviewed by mutual agreement to take account of changes in Malta ' s economic situation or in the objectives and priorities set by its development plan .

2 . Within the framework established pursuant to paragraph 1 , financial and technical cooperation shall apply to projects and measures drawn up by Malta or by other beneficiaries approved by that country .

Article 10

1 . For each request for financial aid under this Protocol , a dossier shall be submitted to the Community by the beneficiary referred to in Article 8 ( a ) or , with the agreement of Malta , by those referred to in Article 8 ( b ) .

2 . The Community shall appraise the requests for financing in collaboration with the State of Malta and the beneficiaries in accordance with the objectives set out in Article 9 ( 1 ) , and shall inform them of the decisions taken on such requests .

Article 11

The execution , management and maintenance of works that are the subject of financing under this Protocol shall be the responsability of Malta or the other beneficiaries referred to in Article 8 of this Protocol .

The Community shall ensure that this financial aid is expended in accordance with the agreed allocations and to the best economic advantage .

Article 12

1 . As regards projects and measures financed by the Community , participation in tendering procedures and other procedures for the award of contracts shall be open , on equal terms , to all natural or legal persons of Malta and of the Member States .

2 . To promote participation by Maltese firms in the performance of contracts , an accelerated procedure for issuing invitations to tender involving shorter time limits for the submission of tenders may be used after approval by the relevant Community body where the works in question , because of their scale , are mainly of interest to Maltese firms .

3 . Where the relevant Community body considers it useful , participation by other countries in contracts financed by the Community may be authorized exceptionally on a case-by-case basis .

Participation by third countries may also be authorized on the same conditions where the Community is financing schemes jointly with other sources of funds .

Article 13

Malta shall apply to contracts awarded for the execution of projects or measures financed by the Community fiscal and customs arrangements as favourable as those applied in respect of other international organizations .

Article 14

Where a loan is accorded to a beneficiary other than the State of Malta , the provision of a guarantee by the latter or of other guarantees considered adequate may be required by the Community as a condition of the grant of the loan .

Article 15

Throughout the duration of the loans accorded pursuant to this Protocol , Malta shall undertake to make available to debtors enjoying such loans the foreign currency necessary for the payment of interest and commission and the repayment of principal .

Article 16

The results of financial and technical cooperation shall be examined annually by the Association Council which shall define , where appropriate , the general guidelines of such cooperation .

Article 17

This Protocol forms an integral part of the Agreement establishing an association between the European Economic Community and Malta .

Article 18

1 . This Protocol shall require ratification , acceptance or approval in accordance with the procedures in force in each of the signatory States and the European Economic Community . The acts necessary for this purpose shall be exchanged at Brussels .

2 . This Protocol will enter into force on the first day of the second month following the date on which the exchange of acts referred to in paragraph 1 has been carried out .

Article 19

This Protocol is drawn up in two copies in the Danish , Dutch , English , French , German and Italian languages , each of these texts being equally authentic .

In witness whereof , the undersigned Plenipotentiaries have affixed their signatures below this Financial Protocol .

Done at Brussels on the fourth day of March in the year one thousand nine hundred and seventy-six .