Financial and Administrative Framework Agreement between the European Community and the United Nations
The Financial and Administrative Framework Agreement [703 KB] between the European Community and the United Nations (FAFA) was signed on 29 April 2003 by Deputy Secretary General Fréchette and Commissioner Nielson. It applies to all contribution-specific agreements signed between both organisations after that date. It replaces the 9 August 1999 "agreement between the United Nations and the European Community on the principles applying to the financing or co-financing by the Community of programmes and projects administered by the United Nations", which however continues to govern the contracts signed between 9 August 1999 and 29 April 2003.
The Financial and Administrative Framework Agreement applies to the UN Secretariat and the funds and programmes mentioned in footnote 1 thereof:
- the United Nations Secretariat (including: the Department of Political Affairs, the Department for Disarmament Affairs, the Department of Peacekeeping Operations (the United Nations Mine Action Service), the Department of Economic and Social Affairs, the United Nations Conference on Trade and Development, the Office for the Coordination of Humanitarian Affairs, the Office on Drugs and Crime, the Office of the United Nations Security Coordinator, the Economic Commission for Africa, the Economic Commission for Europe, the Economic Commission for Latin America and the Caribbean, the Economic and Social Commission for Asia and the Pacific, the Economic and Social Commission for Western Asia, the Office of the United Nations High Commissioner for Human Rights, the Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Islands Developing States);
- the United Nations Children’s Fund;
- the United Nations Development Programme;
- the United Nations Development Fund for Women;
- United Nations Volunteers;
- the United Nations Relief and Works Agency for Palestine Refugees in the Near East;
- the Office of the United Nations High Commissioner for Refugees;
- the United Nations Population Fund;
- the United Nations Environment Programme;
- the United Nations Human Settlements Programme;
- the United Nations Drug Control Programme;
- the Center for International Crime Prevention;
- the International Trade Centre;
- the United Nations University;
- the United Nations Institute for Training and Research;
- the United Nations Research and Training Institute for the Advancement of Women;
- the World Food Programme.
The UN specialised agencies, which are autonomous from the Secretariat, are only covered by the agreement if and once they individually adhere to it. So far, the following specialised agencies have acceded to the framework agreement:
the International Labour Organisation,
by an agreement [92 KB] signed on 4 July 2003;
the Food and Agriculture Organization of the United Nations,
by an agreement [956 KB] signed on 17 July 2003.
the United Nations Industrial Development Organization,
by an agreement [723 KB] signed on 23 October 2003.
the World Health Organization,
by an agreement [39 KB] signed on 11 December 2003;
the World Meteorological Organization,
by an agreement [2 MB] signed on 18 December 2003;
the United Nations Educational, Scientific and Cultural Organization,
The International Atomic Energy Agency,
by an agreement [53 KB] signed on 17 September 2004
The International Fund for Agricultural Development,
by an agreement [273 KB] signed on 27 September 2004.
The International Civil Aviation Organization,
by an agreement [493 KB] signed on 14 January 2005
On the European side, the agreement, being an administrative agreement, applies to the Commission only, representing the European Community. The European Agency for Reconstruction in Kosovo has also acceded to it by a separate exchange of letters [69 KB] with the UN Secretariat. Euratom has also acceded to the FAFA through a specific exchange of letters [84 KB] between the Commission and the UN Secretariat.
The agreement is, on the other hand, meant to apply in the case of "decentralised management with ex ante control", although it is recommended, wherever possible, to sign contribution-specific agreements on a centralised basis.
2 Main features
The main features of the new framework agreement are as follows:
- A clear focus is placed on results, with objective indicators of achievement being included in all contribution-specific agreements and reported on.
- Provisions on inputs are simplified accordingly: eligible direct costs are defined as real costs actually and necessarily incurred in implementing the action. Maximum reimbursable amounts for personnel and other costs, which were part of the 1999 agreement, are deleted.
- Eligible indirect costs are limited to 7 % of eligible costs as defined above, without a ceiling in absolute terms.
- Reporting methods rely on UN standard reports to donors, where these fulfil EC minimum requirements. So do auditing, controlling, accounting and procurement procedures.
- The level of advance payment in any contribution-specific agreement is conditioned by the past performance of the relevant UN organisation, in particular as regards the timely submission of the final report.
- Enhanced visibility of EC contributions and use of the Euro are ensured.
- The 6 November 2001 agreement on the application of the verification clause is confirmed and annexed to the new draft framework agreement.
- Rules of origin for participation in tenders are to be decided on a case by case basis, due to the fragmented nature of EC legislation in this respect.
The following terms and phrases must be correctly understood when using the framework agreement:
- "Action": an operation (usually referring to emergency operations), project or programme undertaken by a UN organisation. This may be much wider (in scope as well as in duration) than the EC contribution financing part of it.
- "Contribution-specific agreement": a contract between the Commission (or the beneficiary country in the case of decentralised management) and a UN organisation, through which the former contributes to the eligible costs of the whole or part of an Action. Great care needs to be taken to distinguish between the references to a whole UN Action and those to the contribution-specific agreement which may finance only part of it. Contribution-specific agreements will normally take the form of co-financing, grants or multi-donor funding for humanitarian actions ("Contribution Agreement with an international organisation – Humanitarian Aid") and of the "European Community contribution agreement with an international organisation" in other areas (see point 4 below for further details).
- "Eligible costs": costs which may be included in the budget of an Action and may be financed or co-financed by the EC. These must fulfil the requirements of article 3 of the framework agreement in the case of direct costs, and of article 4 in the case of indirect costs.
- "Internationally accepted standards": standards which the rules and regulations of UN organisations as regards accounting, audit, control and procurement must meet. The verification of this is a joint responsibility of EuropeAid and ECHO, and the results will be released regularly.
- "Multi-donor Action": an Action where the EC funds are pooled with those of other donors (whether in a trust fund or via other means, e.g. a special account). This corresponds to the notion of "joint management" in the Financial Regulation of 25.06.2002 applicable to the general budget of the European Communities (and in the Financial Regulation of 27.03.2003 applicable to the 9th EDF): an action, "performance of which requires the pooling of resources from a number of donors, where it is not reasonably possible or appropriate to assign the share contributed by each donor to each type of expenditure."
- "Programmatic partnership": this is used in the preamble to the framework agreement and refers both to actions that have been jointly defined by the EC and the UN and to the financing of programmes managed by the UN.
- "UN organisation": a UN entity which is party to the framework agreement.
- "Verification": check, including on the spot, carried out by the EC in relation to the Actions financed by it. These must conform to the annex to the framework agreement (agreement on the application of the verification clause to operations administered by the United Nations and financed or co-financed by the European Community). EuropeAid’s "external audit of operations" Unit co-ordinates all verification missions carried out by Commission services.
The new framework agreement needs to be implemented through contract templates or "contribution-specific agreement". Two draft templates have been prepared pursuant to Commission Decision n° 608 of 24 February 2003 approving the framework agreement. The first one concerns humanitarian aid as managed by ECHO. The second one concerns all other fields of co-operation, and is attached as Annex F1 to the Practical Guide. Both templates, which are very similar, are meant to apply to all international organisations, whether parties to the framework agreement or not. In these templates:
- The "end date" (see article 13.9 of the ECHO template and 12.5 of the general one) is the final date for implementation to be set for any legal commitment contracted with third parties involving a budget commitment and the payment of Community funds, pursuant to article 77.3 of the Financial Regulation.
- In article 18.3 of the ECHO template and 17.2 of the general one, the mention that the contribution may be limited to the amount produced by multiplying the actual expenditure by the percentage laid down in article 3(2) of the special conditions refers to article 10.1 of the framework agreement. This states that: "Where the EC contribution is expressed as the lower of an absolute amount and a percentage of projected total eligible expenditures, and such percentage is likely to change, the UN organisation will consult the Commission without delay so as to agree on appropriate measures, such as increasing the percentage of eligible expenditures."