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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 THE PRESIDENT OF THE REPUBLIC OF CYPRUS

OF THE OTHER PART ,

CONSCIOUS OF THE NEED TO PROMOTE THE DEVELOPMENT OF THE CYPRIOT ECONOMY OF THE ONE PART AND WITH A VIEW TO FACILITATING THE PURSUIT OF THE OBJECTIVES OF THE AGREEMENT ESTABLISHING AN ASSOCIATION BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND THE REPUBLIC OF CYPRUS OF THE OTHER PART ,

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 :

GUNNAR RIBERHOLDT ,

AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY ,

PERMANENT REPRESENTATIVE TO THE EUROPEAN COMMUNITIES ;

THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY :

HELMUT SIGRIST ,

AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY ,

PERMANENT REPRESENTATIVE TO THE EUROPEAN COMMUNITIES ;

THE PRESIDENT OF THE FRENCH REPUBLIC :

LUC DE LA BARRE DE NANTEUIL ,

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 :

EUGENIO PLAJA ,

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 :

J . H . LUBBERS ,

AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY ,

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 :

JOSEPH VAN DER MEULEN ,

AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY ,

PERMANENT REPRESENTATIVE OF BELGIUM ,

CHAIRMAN OF THE PERMANENT REPRESENTATIVES COMMITTEE ;

ROLAND DE KERGORLAY ,

ASSISTANT DIRECTOR-GENERAL IN THE DIRECTORATE-GENERAL FOR EXTERNAL RELATIONS OF THE COMMISSION OF THE EUROPEAN COMMUNITIES ;

THE PRESIDENT OF THE REPUBLIC OF CYPRUS :

TITOS PHANOS ,

AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY ,

PERMANENT DELEGATE TO THE EUROPEAN ECONOMIC COMMUNITY ,

HEAD OF THE MISSION OF THE REPUBLIC OF CYPRUS ;

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 CYPRUS .

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 30 MILLION EUROPEAN UNITS OF ACCOUNT MAY BE COMMITTED AS FOLLOWS :

( A ) 20 MILLION EUROPEAN UNITS OF ACCOUNT IN THE FORM OF LOANS FROM THE EUROPEAN INVESTMENT BANK , HEREINAFTER CALLED " THE BANK " , GRANTED FROM ITS OWN RESOURCES ON THE TERMS SET OUT IN ITS STATUTE ;

( B ) FOUR MILLION EUROPEAN UNITS OF ACCOUNT IN THE FORM OF LOANS ON SPECIAL TERMS ;

( C ) SIX MILLION EUROPEAN 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 INTEREST RATE SUBSIDIES OF 2 % MAXIMUM 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 INFRASTRUCTURE , AIMED IN PARTICULAR AT DIVERSIFYING THE ECONOMIC STRUCTURE OF CYPRUS AND , ESPECIALLY , AT PROMOTING ITS INDUSTRIALIZATION AND THE MODERNIZATION OF ITS AGRICULTURE ,

- 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 PROPORTIONALLY HIGHER AMOUNT MAY , 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 GRANTED BY THE BANK FROM ITS OWN RESOURCES SHALL BE SUBJECT TO 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 TO IN ARTICLE 2 ( 2 ) .

2 . LOANS ON SPECIAL TERMS SHALL BE GRANTED FOR 40 YEARS WITH A PERIOD OF GRACE OF 10 YEARS . THE INTEREST RATE SHALL BE FIXED AT 1 % .

3 . THE LOANS MAY BE GRANTED THROUGH THE INTERMEDIARY OF THE STATE OR APPROPRIATE CYPRIOT PUBLIC BODIES , ON CONDITION THAT THEY ONLEND THE AMOUNTS 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 CYPRUS , TAKE THE FORM OF CO-FINANCING IN WHICH , IN PARTICULAR , CREDIT AND DEVELOPMENT BODIES AND INSTITUTIONS OF CYPRUS , 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 CYPRUS ;

( B ) WITH THE AGREEMENT OF THE STATE OF CYPRUS , FOR PROJECTS OR MEASURES APPROVED BY IT :

- CYPRIOT OFFICIAL DEVELOPMENT AGENCIES ,

- PRIVATE AGENCIES WORKING IN CYPRUS FOR ECONOMIC AND SOCIAL DEVELOPMENT ,

- UNDERTAKINGS , CARRYING ON THEIR ACTIVITIES IN ACCORDANCE WITH THE METHODS OF INDUSTRIAL AND BUSINESS MANAGEMENT , WHICH ARE SET UP AS COMPANIES OR FIRMS UNDER CYPRIOT LAW ,

- GROUPS OF PRODUCERS THAT ARE NATIONALS OF CYPRUS , AND EXCEPTIONALLY , WHERE NO SUCH GROUPS EXIST , THE PRODUCERS THEMSELVES ,

- SCHOLARSHIP HOLDERS AND TRAINEES SENT BY CYPRUS UNDER THE TRAINING SCHEMES REFERRED TO IN ARTICLE 3 .

ARTICLE 9

1 . ON THE ENTRY INTO FORCE OF THIS PROTOCOL , THE COMMUNITY AND CYPRUS SHALL ESTABLISH BY MUTUAL AGREEMENT THE SPECIFIC OBJECTIVES OF FINANCIAL AND TECHNICAL COOPERATION , BY REFERENCE TO THE PRIORITIES SET BY CYPRUS'S DEVELOPMENT PLAN .

THESE OBJECTIVES MAY BE REVIEWED BY MUTUAL AGREEMENT TO TAKE ACCOUNT OF CHANGES IN CYPRUS'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 CYPRUS 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 CYPRUS , BY THOSE REFERRED TO IN ARTICLE 8 ( B ) .

2 . THE COMMUNITY SHALL APPRAISE THE REQUESTS FOR FINANCING IN COLLABORATION WITH THE STATE OF CYPRUS 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 SCHEMES THAT ARE THE SUBJECT OF FINANCING UNDER THIS PROTOCOL SHALL BE THE RESPONSIBILITY OF CYPRUS 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 CYPRUS AND OF THE MEMBER STATES .

2 . TO PROMOTE PARTICIPATION BY CYPRIOT UNDERTAKINGS IN THE PERFORMANCE OF WORKS 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 CYPRIOT UNDERTAKINGS .

THIS ACCELERATED PROCEDURE MAY BE USED FOR INVITATIONS TO TENDER ESTIMATED AT LESS THAN 1 000 000 EUROPEAN UNITS OF ACCOUNT .

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

CYPRUS 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 GRANTED TO A BENEFICIARY OTHER THAN THE STATE OF CYPRUS , THE PROVISION OF A GUARANTEE BY THE LATTER OR OF OTHER ADEQUATE GUARANTEES MAY BE REQUIRED BY THE COMMUNITY AS A CONDITION OF THE GRANT OF THE LOAN .

ARTICLE 15

THROUGHOUT THE DURATION OF THE LOANS GRANTED PURSUANT TO THIS PROTOCOL , CYPRUS SHALL UNDERTAKE TO MAKE AVAILABLE TO DEBTORS , BENEFICIARIES OR GUARANTORS OF 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 .

ARTICLE 17

THIS PROTOCOL SHALL FORM AN INTEGRAL PART OF THE AGREEMENT ESTABLISHING AN ASSOCIATION BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND THE REPUBLIC OF CYPRUS .

ARTICLE 18

1 . THIS PROTOCOL SHALL BE SUBJECT TO 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 SHALL ENTER INTO FORCE ON THE FIRST DAY OF THE SECOND MONTH FOLLOWING THAT IN WHICH THE EXCHANGE OF ACTS REFERRED TO IN PARAGRAPH 1 IS 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

TIL BEKRAEFTELSE HERAF HAR UNDERTEGNEDE BEFULDMAEGTIGEDE UNDERSKREVET DENNE FINANSPROTOKOL .

ZU URKUND DESSEN HABEN DIE UNTERZEICHNETEN BEVOLLMAECHTIGTEN IHRE UNTERSCHRIFTEN UNTER DIESES FINANZPROTOKOLL GESETZT .

IN WITNESS WHEREOF , THE UNDERSIGNED PLENIPOTENTIARIES HAVE AFFIXED THEIR SIGNATURES BELOW THIS FINANCIAL PROTOCOL .

EN FOI DE QUOI , LES PLENIPOTENTIAIRES SOUSSIGNES ONT APPOSE LEURS SIGNATURES AU BAS DU PRESENT PROTOCOLE FINANCIER .

IN FEDE DI CHE , I PLENIPOTENZIARI SOTTOSCRITTI HANNO APPOSTO LE LORO FIRME IN CALCE AL PRESENTE PROTOCOLLO FINANZIARIO .

TEN BLIJKE WAARVAN DE ONDERGETEKENDE GEVOLMACHTIGDEN HUN HANDTEKENING ONDER DIT FINANCIEEL PROTOCOL HEBBEN GESTELD .

UDFAERDIGET I BRUXELLES , DEN FEMTENDE SEPTEMBER NITTEN HUNDREDE OG SYVOGHALVFJERDS .

GESCHEHEN ZU BRUESSEL AM FUENFZEHNTEN SEPTEMBER NEUNZEHNHUNDERTSIEBENUNDSIEBZIG .

DONE AT BRUSSELS ON THE FIFTEENTH DAY OF SEPTEMBER IN THE YEAR ONE THOUSAND NINE HUNDRED AND SEVENTY-SEVEN .

FAIT A BRUXELLES , LE QUINZE SEPTEMBRE MIL NEUF CENT SOIXANTE-DIX-SEPT .

FATTO A BRUXELLES , ADDI QUINDICI SETTEMBRE MILLENOVECENTOSETTANTASETTE .

GEDAAN TE BRUSSEL , DE VIJFTIENDE SEPTEMBER NEGENTIENHONDERD ZEVENENZEVENTIG .

POUR SA MAJESTE LE ROI DES BELGES

VOOR ZIJNE MAJESTEIT DE KONING DER BELGEN

FOR HENDES MAJESTAET DANMARKS DRONNING

FUER DEN PRAESIDENTEN DER BUNDESREPUBLIK DEUTSCHLAND

POUR LE PRESIDENT DE LA REPUBLIQUE FRANCAISE

FOR THE PRESIDENT OF IRELAND

PER IL PRESIDENTE DELLA REPUBBLICA ITALIANA

POUR SON ALTESSE ROYALE LE GRAND-DUC DE LUXEMBOURG

VOOR HARE MAJESTEIT DE KONINGIN DER NEDERLANDEN

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

FOR RAADET FOR DE EUROPAEISKE FAELLESSKABER

FUER DEN RAT DER EUROPAEISCHEN GEMEINSCHAFTEN

FOR THE COUNCIL OF THE EUROPEAN COMMUNITIES

POUR LE CONSEIL DES COMMUNAUTES EUROPEENNES

PER IL CONSIGLIO DELLE COMUNITA EUROPEE

VOOR DE RAAD VAN DE EUROPESE GEMEENSCHAPPEN

FOR THE PRESIDENT OF THE REPUBLIC OF CYPRUS