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How Will the EU Control the Financial Assistance Given to Armenia? EU-RA Agreement (Reference)

Recently the EU published the "Comprehensive and Enhanced Partnership Agreement Between the European Union and the European Atomic Energy Community and Their Member States, of the One Part, and the Republic of Armenia, of the Other Part" initialized with Armenia, the final signing of which is expected in the near future. "Armedia" IAA presents a series of materials on the most important issues that have become topics of hot discussions.

Later, if necessary, taking into consideration public interests, we will also address those issues that are not included in this series.

The EU-RA Comprehensive and Enhanced Partnership Agreement contains a separate unit that refers to the EU financial assistance to the Republic of Armenia, as well as anti-fraud and control provisions on that assistance. Particularly, Article 343, referring to the financial assistance states: "The Republic of Armenia shall benefit from financial assistance through the relevant funding mechanisms and instruments of the European Union. The Republic of Armenia may also benefit from loans from the European Investment Bank, the European Bank for Reconstruction and Development and other international financial institutions. The financial assistance shall contribute to achieving the objectives of this Agreement and shall be provided in accordance this Chapter."

As for the spheres to get financial assistance, the agreement states that the financial support will be directed to areas laid down in annual action programmes in the framework of the EU-RA cooperation, taking into consideration "the Republic of Armenia's needs, sector capacities and progress with reforms, in particular in areas covered by this Agreement." In addition Armenia can turn to the EU for  macro-financial assistance, which will be provided inc case of presence of  "the applicable conditions."

What refers to the anti-fraud and control provisions, the agreement defines that to prevent the financial fraud; the EU can conduct "audits, on-the-spot checks, inspections, controls and anti-fraud measures, including those conducted by the European Court of Auditors and the European Anti-Fraud Office (OLAF)."

In this context point 3 of Article 357 reads: "The authorities of the Republic of Armenia shall be notified in good time of the object, purpose and legal basis of the checks and inspections, so that they can provide all the requisite help. To that end, officials of the competent authorities of the Republic of Armenia shall be entitled to participate in the on-the-spot checks and inspections."

The agreements states that in case fraud is revealed "administrative measures and penalties may be imposed on economic operators by the European Commission in accordance with Council Regulation (EC, Euratom) No 2988/95[1], Regulation (EU, Euratom) No 966/2012 of the European Parliament[2] and of the Council and Commission Delegated Regulation (EU) No 1268/2012[3]. Additional measures and sanctions complementing those mentioned in the first sentence may be imposed by the authorities of the Republic of Armenia in accordance with the applicable national law.

Finally it is important to state; the agreement also assumes the return of the financial resources provided by the EU. Particularly point 1 of Article 359 of the agreement states: "Where the authorities of the Republic of Armenia are entrusted with the implementation of EU funds, the European Commission is entitled to recover EU funds unduly paid, in particular through financial corrections. The authorities of the Republic of Armenia shall take any appropriate measure to recover EU funds unduly paid. The European Commission shall take into account the measures taken by the authorities of the Republic of Armenia to prevent the loss of the EU funds concerned.

[1] Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities' financial interests( OJ EU L 312, 23.12.1995, p. 1).  

[2] Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial  

[3] Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (OJ EU L 362, 31.12.2012, p. 1).  

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