The Financial and Administrative Framework Agreement (FAFA) between the European Union and the United Nations 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 Union on the principles applying to the financing or co-financing by the Community of programmes and projects administered by the United Nations".
The FAFA was revised a second time through an adaptation to the EU Financial Regulation 2018, which was signed in December 2018. The adapted FAFA applies since 1st January 2019. Here are the list of changes and the complete FAFA adaptation.
1. Contract templates
The FAFA sets the contractual framework for its implementation through contract templates or "contribution-specific agreements". In this respect, two sets of templates are applied : the first one concerns humanitarian aid, managed by ECHO. The second one concerns development co-operation and external assistance, and it is composed of Special Conditions and General Conditions.
Joint EC-UN Guidelines on Reporting (updated 2011)
3. Operational conclusions of the Working Group's meetings
The Financial and Administrative Framework Agreement applies to the UN Secretariat, including the funds and programmes attached to it, as mentioned in the Annex thereof (please note that the list provided in the Annex does not exhaust the number of entities attached to the UN Secretariat but only mention those with whom the EU is engaged in contractual relations).
The UN Organisations, which are autonomous from the Secretariat, are only covered by the FAFA if and once they further individually adhere to it. The UN Organisations covered by the FAFA are also listed in the Annex thereof.
The Annex is constantly updated.
On the EU side, the FAFA, being an administrative agreement, applies to the Commission only, representing the European Union. The European Agency for Reconstruction in Kosovo (EAR), Euratom and the European Environment Agency (EEA) have acceded to the FAFA by separate exchanges of letters with the UN Secretariat.
5. Main features
The main features of the EU-UN FAFA 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 aligned to the Commission contractual templates.
- Eligible indirect costs are limited to 7% of eligible costs, without a ceiling in absolute terms.
- Reporting methods rely on UN standard reports to donors, where these fulfil EC minimum requirements.
- Auditing, controlling, accounting and procurement procedures of the UN apply.
- Visibility of EU contributions and use of the currency of the UN Organisation are ensured.
- A general clause on cooperation in the respect for the EU restrictive measures has been included, which makes not necessary to replicate such a clause at the level of the contribution-specific agreement.
- New provisions on verifications have been introduced in 2018 and will be complemented in 2019 via adjustments to the Commission's terms of reference for verification missions. In the transitional period, the Common terms of reference mentioned under point 2 continue to apply.
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 described in the "Description of the Action", part of the EU-UN contribution specific agreement. 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 partner 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 standard contribution agreements as of 1.1.2019 and can provide for the EU to fund the whole or part of the Action (in the latter we refer to Multi-donor Actions).
- "Eligible costs": costs, which may be included in the budget of an Action and may be financed or co-financed by the EU. 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, in line with the provisions on eligible costs included in the contribution agreement template.
- "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 each DG, and the results will be released regularly.
- "Multi-donor Action": an Action where the EU 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 in the Financial Regulation 2018.
- "UN organisation": a UN entity which is part to the FAFA.
- "Verification": check, including on the spot, carried out by the Commission in relation to the Actions financed by it.