PURPOSE: to amend Council Regulation (EC) No 1085/2006 establishing an Instrument for Pre-Accession Assistance (IPA) in order to transfer Iceland and Montenegro from the list of potential candidate countries to the list of candidate countries.

LEGISLATIVE ACT: Regulation (EU) No 153/2012 of the European Parliament and of the Council amending Council Regulation (EC) No 1085/2006 establishing an Instrument for Pre-Accession Assistance (IPA)

BACKGROUND: Iceland is a candidate country for EU membership since the European Council of 17 June 2010 noted that Iceland meets the political criteria set by the Copenhagen European Council in 1993 and decided to open negotiations with Iceland. Similarly, the European Council of 16-17 December 2010 endorsed the Council's conclusions of 14 December 2010 on enlargement and agreed to give Montenegro the status of candidate country.

Accordingly, it is necessary to amend Regulation (EC) No 1085/2006 in order to take into account the new status of these countries.

CONTENT: this Regulation provides that:

· Iceland and Montenegro are transferred from the list of potential candidate countries (Annex II) to the list of candidate countries (Annex I), in accordance with the decisions of the European Council;

· an amendment is made to Article 19 "Rules of participation and origin, eligibility for grants" of the IPA Regulation in order to align its provisions with those of Article 21 "Participation in tenders and contracts" of the ENPI Regulation (EC) No 1638/2006. This amendment inserts a new paragraph, which, considering the local nature of the CBC programmes, would allow participation in calls for proposals to be limited to local actors.

· an amendment is made to the IPA Regulation with the aim of allowing the Phare committee to continue to assist the Commission in the management of the financial assistance to the Turkish Cypriot community, as provided for in Regulation (EC) No 389/2006 on assistance to the Turkish Cypriot community.

ENTRY INTO FORCE: 1 March 2012.

The European Parliament adopted by 549 votes to 34, with 12 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1085/2006 establishing an Instrument for Pre-Accession Assistance (IPA).

Parliament adopted its position at first reading under the ordinary legislative procedure taking over the Commission proposal.

The Committee on Foreign Affairs adopted the report drafted by Gabriele ALBERTINI (EPP, IT) on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1085/2006 establishing an Instrument for Pre-Accession Assistance (IPA) and adopted its position at first reading, taking over the Commission proposal

PURPOSE: to amend Council Regulation (EC) No 1085/2006 establishing an Instrument for Pre-Accession Assistance (IPA) with a view to transferring Iceland and Montenegro from the list of potential candidate countries (Annex II) to the list of candidate countries (Annex I).

PROPOSED ACT: Regulation of the European Parliament and of the Council.

BACKGROUND: Iceland is a candidate country for EU membership since the European Council of 17 June 2010 noted that Iceland meets the political criteria set by the Copenhagen European Council in 1993 and decided to open negotiations with Iceland. Similarly, the European Council of 16-17 December 2010 agreed to give Montenegro the status of candidate country.

In addition, the Council has invited the Commission to propose an amendment to Article 19 of Council Regulation (EC) No 1085/2006 with a view to clarifying the rules regarding the participation in the award of grant contracts financed under the IPA Cross-Border Cooperation component and ensuring coherence with other external aid instruments and in particular with the European Neighbourhood and Partnership Instrument.

Lastly, Council Regulation (EC) No 389/2006 establishing an instrument of financial support for encouraging the economic development of the Turkish Cypriot community designates the committee provided for in Council Regulation (EEC) No 3906/89 (the "Phare committee") to assist the Commission in the management of the assistance to the Turkish Cypriot community. In accordance with Article 25 of Regulation (EC) No 1085/2006, Regulation (EEC) No 3906/89 has been repealed. However it continues to apply for legal acts and commitments implementing the budget years preceding 2007. As Regulation (EC) No 389/2006 continues to be the basic act for financial support to the Turkish Cypriot community beyond these budget years, the Phare committee should also be continued for that purpose.

IMPACT ASSESSMENT: no impact assessment was carried out.

LEGAL BASIS: Article 212(2) of the Treaty on the Functioning of the EU (TFEU).

CONTENT: the Commission proposes three amendments to the Council Regulation (EC) No 1085/2006 establishing an Instrument for Pre-Accession Assistance (IPA).

Iceland and Montenegro will be transferred from the list of potential candidate countries (Annex II) to the list of candidate countries (Annex I), following the decisions of the European Council. The Commission proposes to the Council and the Parliament an amendment to Article 19 "Rules of participation and origin, eligibility for grants" of the IPA Regulation in order to align its provisions with those of Article 21 "Participation in tenders and contracts" of the ENPI Regulation (EC) No 1638/2006. This amendment addresses the concern, expressed by EU Member States involved in IPA cross–border cooperation (CBC) programmes, with regard to the participation in calls for proposals. Member States asked for participation in calls for proposals to be limited to applicants from countries participating in the relevant IPA CBC programme, as is already the case for the ENPI CBC programmes. The Council invited the Commission to propose a possible solution at the earliest opportunity. The Commission proposes that Article 19 should be aligned with Article 21 of the ENPI Regulation (EC) No 1638/2006 by inserting a new paragraph which, considering the local nature of the CBC programmes, would allow participation in calls for proposals to be limited to local actors. The Commission proposes to amend the IPA Regulation with the aim of allowing the Phare committee to continue to assist the Commission in the management of the financial assistance to the Turkish Cypriot community, as provided for in Regulation (EC) No 389/2006 on assistance to the Turkish Cypriot community.

FINANCIAL IMPLICATIONS: this measure does not involve any additional expenditure.