Explanatory Memorandum to COM(2022)64 - Signing and on provisional application of the Agreement with the Government of the Faroe Islands on the participation of the Faroe Islands in Union programmes - Main contents
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dossier | COM(2022)64 - Signing and on provisional application of the Agreement with the Government of the Faroe Islands on the participation of the ... |
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source | COM(2022)64 ![]() |
date | 24-02-2022 |
1. CONTEXT OF THE PROPOSAL
Article 16 (1)(d) of the Horizon Europe Regulation1 concerning the association of third countries to the programme provides for the possibility of association of third countries and territories that jointly fulfil all of the criteria spelled out therein. Such third countries or territories are to participate in the Horizon Europe programme on the basis of an agreement covering the participation of the third country or territory to any Union programme.
The Faroe Islands became formally associated to the Seventh Framework Programme (FP7) in 2010, and a range of European projects attest to the active involvement of Faroese researchers and institutes in areas such as environment, oceanology, climate change, ecosystems and fisheries management. The Faroese association to Horizon 2020 as of 2014 gave researchers, research institutes and enterprises in the Faroe Islands full access to Union funding and collaborative activities for research and innovation on an equal footing with entities from Member States and other third countries that were also associated to Horizon 2020. This participation has become very important for the research community of the Faroe Islands, and establishes an important new and successful pillar of the Faroese-EU relations. With the successive agreements on the association to the Union Research and Innovation Framework Programmes being limited in time for the duration of each subsequent EU programme, there is currently no international agreement in place regulating the participation of Faroese entities in Horizon Europe or fostering the scientific, research and innovation cooperation between the EU and Faroese research communities.
On 14 May 2020, by a Letter of Intent, the Faroe Islands expressed their formal interest to associate to Horizon Europe. The Faroe Islands fulfil the criteria for association of third countries or territories to the Horizon Europe Framework Programme, as set forth by the Horizon Europe Regulation (Article 16(1)(d)). They dispose, notably, of good capacity in science, technology and innovation; are committed to a rules-based open market economy, including fair and equitable dealing with intellectual property rights, respect of human rights, and backed by democratic institutions; and actively promote policies to improve the economic and social well-being of their citizens.
On 13 July 2021, the Council authorised the Commission to open negotiations, on behalf of the Union, with the Faroe Islands on an Agreement between the European Union and the Faroe Islands on the general principles for the participation of the Faroe Islands in Union programmes and the association of the Faroe Islands to Horizon Europe – the Framework Programme for Research and Innovation (2021-2027). The Research Working Party and the EFTA Working Party were appointed by the Council to act in the capacity of the special committees to assist the Commission during the negotiations.
The negotiations started on 3 September 2021 and were successfully completed on 8 October 2021 when the text of the draft Agreement was initialled by representatives from each of the future Parties. The Research Working Party and EFTA Working Party of the Council and the European Parliament were regularly kept informed during the negotiations.
The Agreement annexed to this proposal for a Council decision is composed of two parts, notably the ‘umbrella agreement’ on the general principles for the participation of the Faroe Islands in Union Programmes and a Protocol on the association of the Faroe Islands to Horizon Europe – the Framework Programme for Research and Innovation (2021-2027) (‘the Horizon Europe Protocol’) in line with the negotiating directives which the Commission obtained from the Council.
The ‘umbrella agreement’ comprehensively regulates the conditions of association of the Faroe Islands applicable across all EU programmes. It governs the terms and conditions for participation in EU programmes, modalities for establishing participation in (association to) any given Union programme and the involvement of Faroe Islands in the governance of the Union Programmes or activities, reflecting the principle of no decision making powers. It contains detailed rules for the establishment of the financial contribution of the Faroe Islands to the Union Programmes, including, where applicable, an automatic correction mechanism. The ‘umbrella agreement’ contains comprehensive rules for the protection of EU financial interests, including powers which the Commission, European Court of Auditors, OLAF and EPPO exercise to that end, as well as rules on enforcement of Commission decisions on recovery and judgments of the Court of Justice of the European Union on the territory of the Faroe Islands. It also establishes institutional structures, i.e. a Joint Committee tasked with inter alia monitoring of the implementation of the Agreement and examining how to improve and develop the cooperation under the Agreement.
The ‘umbrella agreement’ is meant to create a lasting legal framework for cooperation between the Union and the Faroe Islands in relation to EU programmes. It is expected to remain in force for several Multi-annual Financial Frameworks of the EU, similarly to the Agreement on the European Economic Area, the EU-UK Trade and Cooperation Agreement or the framework agreements with Enlargement and European Neighbourhood Partnership countries on the general principles for participation of these countries in EU programmes. Eventual Protocols on association of the Faroe Islands to each specific Union programme could be added to this ‘umbrella agreement’ in the future, if such Programmes are open to Faroese participation under EU basic acts establishing each relevant Programme, if this is the political wish of both Parties, and following the required internal procedures. The duration of the Protocols will be limited in time to the implementation of any particular Union programme.
It is proposed that the Protocols will be adopted via decisions of the Joint Committee, which this agreement will establish. All essential elements pertaining to cooperation between the EU and the Faroe Islands in EU programmes are comprehensively regulated in the ‘umbrella agreement’. Article 3 i of the Agreement specifically restricts the content of the future Protocols to: identifying the relevant Union Programme, activity or part thereof; setting the duration of the association; regulating matters which are programme-specific and not otherwise regulated in the ‘umbrella agreement”; and – in specific cases where the Union programme is implemented through a financial instrument or a budgetary guarantee - laying down the amount of the Faroe Islands’ contribution to such a Union programme.
The first such Protocol on Horizon Europe association exceptionally will not be adopted by the Joint Committee but was negotiated in parallel to the ‘umbrella agreement’ as its integral part, and is expected to be concluded and enter into force together with the ‘umbrella agreement’. This way of proceeding was authorised by the Council in the negotiating directives. It was necessary to achieve an association of the Faroe Islands to the Horizon Europe Programme from the start of the Programme and to ensure an uninterrupted cooperation between the EU and Faroese research communities. To that end, provisional application coupled with a retroactive application from 1 January 2021 of the entire Agreement (i.e. ‘the umbrella agreement’ including its Horizon Europe Protocol) is now being proposed.
Regarding the programme-specific terms and conditions providing for the association of the Faroe Islands to the Horizon Europe, they provide for association to all parts of the Programme, except for the specific programme on defence research established by Regulation (EU) 2021/6972. This will ensure the continuity of the previous full association to Horizon 2020, and its predecessor FP7. This participation has been assessed as beneficial to both parties, with a particular value-added in thematic areas such as environment, health and food, as well as ocean research.
The Faroe Islands have been a net contributor to the two predecessor Framework Programmes by a significant margin. The proposed new agreement sets out fair and balanced conditions concerning the financial contribution of the Faroe Islands to the Horizon Europe. The ‘umbrella agreement’ provides in its Article 6(6) for the possibility of an application of a co-efficient and regulates respectively in Article 7 and Article 8 the adjustment and the correction mechanisms in relation to Programmes where – as is the case of Horizon Europe – these mechanisms are applicable. The Horizon Europe Protocol in its Annex I further regulate the payment schedule, the level of the applicable co-efficient to the Faroese financial contribution and the technical details for the functioning of the correction mechanism.
The Horizon Europe Protocol builds on the Horizon 2020 and FP7 experience and, as in the previous association agreement, includes a reciprocity clause, ensuring that researchers and legal entities established in the Union have as far as possible access to participate to the Faroese research and innovation programmes that are equivalent to the Horizon Europe, in accordance with the conditions laid down in the domestic legislation of the Faroe Islands. Annex II to the Protocol contains a list of Faroese programmes open to participation of EU based research entities.
The draft Agreement attached to this proposal for a Council decision is in line with the negotiating directives issued by the Council.
2. LEGAL elements of the proposal
The proposal for a Council decision is based on Article 186 and Article 218(5) of the Treaty on the Functioning of the European Union.
3. BUDGETARY IMPLICATIONS
The Legislative Financial Statement presented with this Decision sets out the indicative budgetary implications.
- decide on the signature and provisional application of the Agreement on behalf of the Union;
- authorise the negotiator of the Agreement to sign, on behalf of the Union, the Agreement between the European Union and the Government of the Faroe Islands on the participation of the Faroe Islands in Union programmes and submit the notification required under Article 15 i of the Agreement informing that the Union completed required internal procedures necessary for the provisional application of the said Agreement.