Report from the Commission to the Council and the European Parliament. Ninth annual report 2014 on the implementation of Community assistance under Council regulation (EC) No 389/2006 of 27 February 2006 establishing an instrument of financial support for encouraging the economic development of the Turkish Cypriot community

Council Regulation (EC) No 389/2006 (the "Aid Regulation") is the basis for the assistance to the Turkish Cypriot community (TCc) and requires annual reporting to the Council and the European Parliament. This report covers the year 2014.

Between 2006 and the end of 2014, €370 million was programmed for operations under the Aid Regulation. The amount of the 2014 annual programme was €32.96 million. The Multiannual Financial Framework (MFF) 2014-20 provides a multi-annual perspective to the programme with a provision for more stable, annual funding for the first time. The assistance programme is, however, temporary in nature, aiming to facilitate the reunification of Cyprus - Council Regulation No 1311/213 laying down the MFF allows for a revision in the case that a reunification is achieved during the MFF period. Following the Joint Declaration by the Greek Cypriot and Turkish Cypriot leaders in February 2014, the Commission promised to step up its efforts to help the TCc prepare for the implementation of the acquis.

The programme is implemented in the areas of the Republic of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control and where the application of the acquis is temporarily suspended pursuant to Protocol 10 of the Treaty of Accession. Assistance is implemented primarily through direct management by the European Commission, but some projects are indirectly managed by the United Nations Development Programme (UNDP) and by the British Council.

The Commission operates in a unique political, legal and diplomatic context. Ad hoc arrangements are needed to implement the programme while respecting the principles of sound financial management. In EU-funded aid programmes, in normal circumstances, agreements with a beneficiary government would establish the legal framework for development assistance. No such agreements can be made for the assistance to the TCc and the Commission has to rely on what it understands to be the rules and conditions applicable locally. Management and mitigation of the inherent risk is part of the Commission's responsibility and measures adopted include intensive monitoring and support to beneficiaries, revised payment conditions and a careful approach to the use of bank guarantees. The assistance includes a significant amount of grant support, requiring resource-intensive management.

To ensure successful and sustainable implementation in this environment, the TCc must fully engage in the move towards acquis alignment. Cooperation between the Turkish Cypriot and Greek Cypriot communities remains necessary for achieving the ultimate goal of reunification.

EUR-Lex: COM(2015)208: Follow the progress of this report through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2015:208:FIN

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