Submission of Reform Agendas
1. In order to receive any support under the Facility, each beneficiary shall submit to the Commission a Reform Agenda for the duration of the Facility, based on the structural reforms part of the latest Economic Reform Programme and the related Joint Policy Guidance agreed at the Economic and Financial Dialogue in May 2023, its growth strategy where applicable, the enlargement policy framework and the Economic and Investment Plan for the Western Balkans.
2. The Reform Agendas shall provide an overarching framework to achieve the general and specific objectives set out in Article 3, setting out the reforms to be undertaken by the beneficiary, as well as investment areas. The Reform Agendas shall comprise measures for the implementation of reforms through a comprehensive and coherent package. In the areas of the fundamentals of the enlargement process, including the rule of law, the fight against corruption, including high-level corruption, fundamental rights and the freedom of expression, the Reform Agendas shall reflect the assessments in the enlargement policy framework.
3. The Reform Agendas shall be consistent with the latest macroeconomic and fiscal policy framework submitted to the Commission in the context of the Economic and Financial Dialogue with the Union.
4. The Reform Agendas shall be consistent with and support the reform priorities identified in the context of the beneficiary’s accession path, and in other relevant documents, such as the Stabilisation and Association Agreement, the Energy and Climate Plan, the Nationally Determined Contribution under the Paris Agreement and the ambition to reach climate neutrality by 2050 at the latest.
5. The Reform Agendas shall respect the general principles set out in Article 4.
6. The Reform Agendas shall be prepared in an inclusive and transparent manner, in consultation with social partners and civil society organisations.
7. The Commission shall invite the beneficiaries to submit their respective Reform Agendas within three months of the entry into force of this Regulation. The Commission shall transmit the beneficiaries’ Reform Agendas to the European Parliament and the Council as soon as they are received by the Commission.
8. In the event that a redistribution of support under the Facility leads to a beneficiary receiving additional support, the Commission shall invite that beneficiary to submit an amended Reform Agenda for the remaining duration of the Facility within three months. The Commission shall inform the European Parliament and the Council prior to taking any decision on the redistribution.
Principles for financing under the Reform Agendas
1. The Facility shall provide incentives for the implementation of the Reform Agenda of each beneficiary by setting payment conditions on the release of funds. Those payment conditions shall apply to funds under Article 6(2), point (a), and Article 6(3) and shall take the form of measurable qualitative or quantitative steps. Such steps shall reflect progress on specific socio-economic reforms and on the fundamentals of the enlargement process linked to the achievement of the objectives of the Facility set out in Article 3, consistent with the enlargement policy framework.
The fulfilment of those payment conditions shall trigger full or partial release of funds, depending on the degree of their completion.
2. In respect of financing implemented through the fund referred to in Article 19, the fulfilment of the payment conditions referred to in paragraph 1 of this Article shall constitute a preliminary validation. The funds shall be paid following receipt of a payment request from the ‘fund managers of the joint fund established under the WBIF for receiving donors’ contributions.
3. Macro financial stability, sound public financial management, transparency and oversight of the budget are general conditions for payments that shall be fulfilled for any release of funds.
4. Funds under the Facility shall not support activities or measures which undermine peace agreements in the region.
Content of the Reform Agendas
1. The Reform Agendas shall in particular set out the following elements, which shall be reasoned and substantiated:
(a)
measures constituting a coherent, comprehensive and adequately balanced response to the objectives set out in Article 3, including structural reforms, investments, and measures to ensure compliance with preconditions referred to in Article 5, where appropriate;
(b)
an explanation of how the measures are consistent with the general principles referred to in Article 4, as well as the requirements, strategies, plans and programmes referred to in Articles 4 and 11;
(c)
an explanation of how the measures are expected to further strengthen the fundamentals of the enlargement process as referred to in Article 3(2), point (a), including the rule of law, fundamental rights and the fight against corruption;
(d)
an indicative list of investment projects and programmes intended for financing under the WBIF, including respective overall investment volumes and envisaged timelines for implementation;
(e)
an explanation of the extent to which the measures are expected to contribute to climate and environmental objectives and their compatibility with the principle ‘do no significant harm’;
(f)
an explanation of the extent to which the measures are expected to contribute to digital transformation;
(g)
an explanation of the extent to which the measures are expected to contribute to education, training, employment and social objectives;
(h)
an explanation of the extent to which the measures are expected to contribute to gender equality and the empowerment of women and girls, and the promotion of women and girls’ rights;
(i)
for the reforms and investments, an indicative timetable, and the envisaged payment conditions for the release of funds in the form of measurable qualitative and quantitative steps planned to be implemented by 31 August 2027 at the latest;
(j)
an explanation of how the measures are expected to contribute to a progressive and continuous alignment with the CFSP, including Union restrictive measures;
(k)
the arrangements for the effective monitoring, reporting and evaluation of the Reform Agenda by the beneficiary, including the proposed measurable qualitative and quantitative steps and relevant indicators set out in paragraph 2;
(l)
an explanation of the beneficiary’s system to effectively prevent, detect and correct irregularities, fraud, corruption, including high-level corruption, and conflicts of interest and to enforce State aid control rules, and the proposed measures to address existing deficiencies in the first years of the implementation of the Reform Agenda;
(m)
for the preparation and, where available, for the implementation of Reform Agendas, a summary of the consultation process, conducted in accordance with the beneficiaries’ legal framework, of relevant stakeholders, including beneficiaries’ parliaments, local and regional representative bodies and authorities, social partners and civil society organisations, and how the input of those stakeholders is reflected in Reform Agendas;
(n)
a communication and visibility plan on the Reform Agendas for the local audiences of the beneficiaries;
(o)
any other relevant information.
2. The Reform Agendas shall be results-based and include indicators for assessing progress towards the achievement of the general and specific objectives set out in Article 3. Those indicators shall be based, where appropriate and relevant, on internationally agreed indicators and those already available related to the beneficiaries’ policies. Indicators shall also be coherent, to the extent possible, with the key corporate indicators included in the IPA III Results Framework, in the EFSD+ Results Measurement Framework and in the WBIF.
Commission assessment of the Reform Agendas
1. The Commission shall assess the relevance, comprehensiveness and appropriateness of each beneficiary’s Reform Agenda or, where applicable, any amendment to that Agenda, without undue delay. When carrying out its assessment, the Commission shall act in close cooperation with the beneficiary concerned, and may make observations, seek additional information or require the beneficiary to review or modify its Reform Agenda.
2. As regards the objective set out in Article 13(1)(j) of this Regulation, the Commission, in accordance with Decision 2010/427/EU, shall duly take into account the role and the contribution of the EEAS.
3. When assessing the Reform Agendas, the Commission shall take into account relevant available analytical information about the beneficiary, including its macroeconomic situation and debt sustainability, the justification and the elements provided by the beneficiary as referred to in Article 13, as well as any other relevant information such as the information listed in Article 11.
4. In its assessment, the Commission shall consider in particular the following criteria:
(a)
whether the Reform Agenda represents a relevant, comprehensive, coherent and adequately balanced response to the objectives set out in Article 3 and elements set out in Article 13;
(b)
whether the Reform Agenda and its measures are consistent with the principles, strategies, plans and programmes referred to in Articles 4 and 11;
(c)
whether the Reform Agenda can be expected to accelerate progress towards bridging the socio-economic gap between the beneficiary and the Union, and thereby enhances their economic, social and environmental development and supports the convergence towards the Union’s standards, reduces inequalities and reinforces social cohesion;
(d)
whether the Reform Agenda can be expected to further strengthen the fundamentals of the enlargement process as referred to in Article 3(2), point (a);
(e)
whether the Reform Agenda can be expected to accelerate the transition of the beneficiaries towards sustainable, climate-neutral and climate resilient and inclusive economies by improving regional connectivity, making progress on the twin transition of green and digital, including biodiversity, reducing strategic dependencies and boosting research and innovation, education, training, employment and skills and the wider labour market, with particular attention on youth;
(f)
whether the measures included in the Reform Agenda are compatible with the principles of ‘do no significant harm’ and of ‘leaving no one behind’;
(g)
whether the Reform Agenda appropriately addresses potential risks in compliance with preconditions and payment conditions;
(h)
whether the payment conditions proposed by the beneficiary are appropriate and ambitious, consistent with the enlargement policy framework, as well as sufficiently meaningful and clear to allow for the corresponding release of funds in case of their fulfilment and whether the proposed reporting indicators are appropriate and sufficient to monitor and report on the progress made towards the overall objectives;
(i)
whether the arrangements proposed by the beneficiary are expected to effectively prevent, detect and correct irregularities, fraud, corruption and conflicts of interest, organised crime and money laundering as well as to effectively investigate and prosecute criminal offences affecting the funds under the Facility, and ensure that there is no double funding from the Facility and other Union programmes, in particular support provided under Regulation (EU) 2021/1529, as well as other donors from the Facility and other Union programmes and also other donors;
(j)
whether the Reform Agenda effectively reflects the input of relevant stakeholders, including beneficiaries’ parliaments, local and regional representative bodies and authorities, social partners and civil society organisations.
5. For the purpose of the assessment of the Reform Agendas submitted by the beneficiaries, the Commission may be assisted by independent experts.
Commission implementing decision
1. In case of a positive assessment, the Commission shall approve by means of an implementing decision the Reform Agenda submitted by the beneficiary, in accordance with Article 14 or, where applicable, of the amended Agendas submitted in accordance with Article 16. That implementing decision shall be adopted in accordance with the examination procedure referred to in Article 31.
2. The Commission implementing decision shall set out the reforms to be implemented by the beneficiary concerned, the investment areas to be supported and the payment conditions stemming from the Reform Agenda, including the indicative timetable.
3. The Commission implementing decision shall also lay down:
(a)
the indicative amount of overall funds available to the beneficiary, and the scheduled instalments to be released including pre-financing, structured in accordance with Article 13, once the beneficiary has achieved satisfactory fulfilment of the relevant payment conditions in the form of qualitative and quantitative steps identified in relation to the implementation of the Reform Agenda;
(b)
the breakdown by instalment of financing between loan support and non-repayable support;
(c)
the time limit by which the final payment conditions for the reforms must be completed;
(d)
the arrangements and timetable for the monitoring, reporting and implementation of the Reform Agenda, including, where appropriate, through democratic scrutiny as referred to in Article 4(8) as well as, where relevant, measures necessary for complying with Article 25;
(e)
the indicators referred to in Article 13(2) for assessing progress towards the achievement of the general and specific objectives set out in Article 3.
Amendments to the Reform Agendas
1. Where the Reform Agenda, including relevant payment conditions, is no longer achievable by the beneficiary, either partially or totally, because of objective circumstances, the beneficiary may propose an amended Reform Agenda. In that case, the beneficiary may make a reasoned request to the Commission to amend its implementing decision referred to in Article 15(1).
2. The Commission may amend the implementing decision, in particular to take into account a change of the amounts available in line with the principles under Article 21.
3. Where the Commission considers that the reasons put forward by the beneficiary justify an amendment to its Reform Agenda, the Commission shall assess the amended Agenda in accordance with Article 14 and may amend the implementing decision referred to in Article 15(1) without undue delay.
4. In an amendment, the Commission may accept timelines for payment conditions extending into 2028. This shall not affect the final deadline set in Article 21(9).
Loan agreement, borrowing and lending operations
1. In order to finance the support under the Facility in the form of loans, the Commission shall be empowered, on behalf of the Union, to borrow the necessary funds on the capital markets or from financial institutions in accordance with Article 220a of the Financial Regulation.
2. By way of derogation from Article 220(4) of the Financial Regulation the disbursements of the loan may be implemented through the WBIF on behalf of the beneficiary. Recovered amounts shall be transferred to the beneficiary.
3. The Commission shall enter into a loan agreement with the beneficiary. The loan agreement shall lay down the maximum loan amount, the availability period and the detailed terms and conditions of the support under the Facility in the form of loans. The loans shall have maximum duration of 40 years from the date of the signature of the loan agreement.
In addition to and by way of derogation from Article 220(5) of the Financial Regulation, the loan agreement shall contain the amount of pre-financing and rules on clearing of pre-financing.
In respect of loan amounts implemented through the WBIF, the loan agreement shall also:
(a)
provide that the beneficiary irrevocably and unconditionally authorises the Commission to pay disbursements to the entity implementing the fund upon request by that entity and that the Commission is acquitted of its payment obligations towards the beneficiary by making the payment to that entity;
(b)
provide for the obligation of the beneficiary to bear the costs of implementation and any fees due in respect of the implementation of the fund in accordance with the conditions agreed between the Commission and the entity implementing the fund.
4. The loan agreement shall be made available, upon request, to the European Parliament and the Council.
Provisioning
1. Pursuant to Article 211(1) of the Financial Regulation, a provisioning for the loans under this Regulation shall be constituted at the rate of 9 % upon making available any funds falling under Article 6(3) of this Regulation. The provisioning shall be constituted from the envelope referred to in Article 6(2), point (a), of this Regulation.
Budgetary commitments for the provisioning shall be made by 31 December 2027. By way of derogation from Article 211(2), last sentence, of the Financial Regulation, the provisioning shall be paid progressively and fully constituted at the latest when the loans are fully disbursed.
2. The provisioning shall be paid to the common provisioning fund through a specific budget line and be used as part of provisions supporting similar risks. The provisioning rate shall be reviewed at least every three years from 24 May 2024.
3. The Commission is empowered to adopt a delegated act in accordance with Article 30 to amend the provisioning rate while applying the criteria set out in Article 211(2) of the Financial Regulation.
Implementation of investment projects and programmes under the Western Balkans Investment Framework
1. In order to benefit from the leverage of Union financial support to attract additional investment, infrastructure investments supporting the Reform Agendas shall be implemented through the WBIF.
2. The Commission implementing decision referred to in Article 15 shall lay down the amount of funds to be made available for use under the WBIF.
3. The Commission shall submit relevant investment project or programme proposals for the opinion of the WBIF Operational Board referred to in Article 35(8) of Regulation (EU) 2021/947 after the adoption of the decision referred to in Article 21(3) of this Regulation.
4. At least 37 % of the non-repayable financial support channelled through the WBIF shall account to climate objectives.
5. Financing under the Facility provided from the financial envelope referred to in Article 6(2), point (a), after deduction of the amount of provisioning, shall be implemented under indirect management taking into account a pipeline of investments and shall be gradually provided through contributions paid into the joint fund established under the WBIF for receiving donors contributions.
6. This financing shall not be made available for investments to be supported by the joint fund until the decision referred to in Article 21(3) has been adopted.
7. Financing under the Facility provided from the loans as referred to in Article 6(5) of this Regulation, shall be made available through the WBIF under the loan agreement between the Commission and the beneficiaries in accordance with Article 17(2) of this Regulation. Combined for all loan agreements, there shall be maximum twelve requests for disbursements per year from the fund managers of the joint fund referred to in Article 12(2) of this Regulation to the Commission. Investment projects and programmes may receive support from two financing sources, as referred to in paragraphs 2 and 3 of Article 6 of this Regulation, as well as from other Union programmes and instruments, subject to that such support from different sources, programmes and instruments provides for additionality and does not cover the same cost. For each investment project or programme, the Commission shall provide an assessment to the WBIF Operational Board, including on synergies and complementarities with other Union programmes, in particular support provided under Regulation (EU) 2021/1529, with a view to avoiding the duplication of assistance and double funding.
Pre-financing
1. Following the submission of the Reform Agenda to the Commission, the beneficiary may request the release of a pre-financing of up to 7 % of the total amount foreseen under this Facility in accordance with Article 6(4).
2. The Commission may release the requested pre-financing after the adoption of its implementing decision referred to in Article 15 and the entry into force of the Facility Agreement and of the loan agreement referred to in Articles 9 and 17 respectively. The funds shall be released in accordance with Article 21(3), first sentence, and subject to the respect of the preconditions set out in Article 5.
3. The Commission shall decide on the timeframe for the disbursement of the pre-financing, which may be disbursed in one or more tranches.
Assessment of the fulfilment of payment conditions, withholding, reduction and redistribution of funds, rules on payments
1. Twice per year, the beneficiary shall submit a duly justified request for the release of funds in respect of fulfilled payment conditions related to the quantitative and qualitative steps as set out in the Reform Agendas.
2. The Commission shall assess without undue delay whether the beneficiary has met the preconditions set out in Article 5 and the principles for financing set out in Article 12(3) and achieved satisfactory fulfilment of the payment conditions set out in the Commission implementing decision referred to in Article 15. The satisfactory fulfilment of those payment conditions shall presuppose that measures related to the same reforms for which the beneficiary had achieved satisfactory fulfilment in prior decisions have not been reversed by the beneficiary. The Commission may be assisted by experts, including experts from Member States.
3. Where the Commission makes a positive assessment of the satisfactory fulfilment of all applicable conditions, it shall adopt without undue delay a decision authorising the release of funds corresponding to those conditions. That decision shall, in accordance with Article 6(5), set the amount of funds to be made available as financial assistance, channelled directly to the treasuries of the beneficiaries and the amount to be made available through the WBIF. In respect of those amounts, the decision shall constitute the condition referred to in Article 12 for the amount of funds to be made available as financial assistance channelled directly to the treasuries of the beneficiaries and the preliminary validation referred to in Article 12 for the amount to be made available through the WBIF.
4. Where the Commission makes a negative assessment of the fulfilment of any conditions as per the indicative timetable, the release of funds corresponding to such conditions shall be withheld. The withheld amounts shall be released only when the beneficiary has duly justified, as part of the subsequent request for release of funds, that it has taken the necessary measures to ensure satisfactory fulfilment of the corresponding conditions.
5. Where the Commission concludes that the beneficiary has not taken the necessary measures within a period of 12 months from the initial negative assessment referred to in paragraph 4, the Commission shall reduce the amount of the non-repayable financial support and of the loan proportionately to the part corresponding to the relevant payment conditions. During the first year of implementation, a deadline of 24 months shall apply, calculated from the initial negative assessment referred to in paragraph 4. The beneficiary may present its observations within two months from the communication to them of the Commission’s conclusions.
6. Any amount corresponding to payment conditions that have not been fulfilled by 31 December 2028 shall not be due to the beneficiaries and shall be decommitted, or cancelled from the available amount of loan support, as appropriate.
7. The Commission may reduce the amount of the non-repayable financial support, including by offsetting in line with Article 102 of the Financial Regulation, or of the loan, in the event of identified cases of, or serious concerns in relation to, irregularities, fraud, corruption and conflicts of interest affecting the financial interests of the Union that have not been corrected by the beneficiary, or a serious breach of an obligation resulting from the Facility Agreements or from the loan agreements, including on the basis of information provided by OLAF or of the Court of Auditors’ reports. The Commission shall inform the European Parliament and the Council prior to taking any decision of such reductions.
8. The Commission may decide to redistribute any amount reduced pursuant to paragraph 6 or 7 of this Article among other beneficiaries of the Facility by amending the implementing decisions referred to in Article 15.
9. For the part of the Facility funding paid as financial assistance, channelled directly to the beneficiaries’ treasuries, by way of derogation from Article 116(2) of the Financial Regulation, the payment deadline as referred to in Article 116(1), point (a), of the Financial Regulation shall start running from the date of the communication of the decision authorising the disbursement to the beneficiary pursuant to paragraph 3 of this Article.
10. Article 116(5) of the Financial Regulation shall not apply to payments made as financial assistance, channelled directly to the beneficiaries’ treasuries pursuant to this Article and to Article 23 of this Regulation.
11. Payments of the non-repayable financial support and of the loans under this Article shall be made in accordance with the budget appropriations, as set in the annual budgetary procedure, and subject to the available funding, respectively. Funds shall be paid in instalments. An instalment may be paid in one or more tranches.
12. The amount made available as financial assistance, channelled directly to the treasuries of the beneficiaries, shall be paid following the decision referred to in paragraph 3 in accordance with the loan agreement.
13. Payment of any amount of the support in the form of loans, whether channelled directly to the treasuries of the beneficiaries or through the WBIF, shall be subject to the submission by the beneficiary of a request for payment in the form set out in the loan agreement.
14. The amount made available through the WBIF shall be paid following the decision referred to in paragraph 3, following the request for payment referred to in paragraph 13 and following receipt of a payment request from the fund managers of the joint fund established under the WBIF for receiving donors’ contributions.
Transparency with regard to persons and entities receiving funding for the implementation of the Reform Agendas
1. Beneficiaries shall publish up-to-date data on final recipients receiving amounts of funding exceeding the equivalent of EUR 50 000 cumulatively over the period of four years for the implementation of reforms and investments under this Facility.
2. For final recipients referred to in paragraph 1, the following information shall be published in a machine-readable format on a webpage, in the order of total funds received, having due regard to the requirements of confidentiality and security, in particular the protection of personal data:
(a)
in the case of a legal person, the recipient’s full legal name and VAT identification number or tax identification number, where available, or another unique identifier established by the legislation applicable to the legal person;
(b)
in the case of a natural person, the first and last name or names of the recipient;
(c)
the amount received by the recipient and the reforms and investments under the Reform Agendas that this amount contributes to implementing.
3. The information referred to in paragraph 2 shall not be published where disclosure risks threatening the rights and freedoms of the final recipients concerned or seriously harming their commercial interests. Such information shall be made available to the Commission.
4. Beneficiaries shall transmit electronically to the Commission at least once a year the data on the final recipients referred to in paragraph 1 of this Article, in a machine-readable format to be defined in the Facility Agreement, as referred to in Article 9(5)(k).
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
