EC guidelines on EU funds for Israeli bodies
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Israel may be barred from participation in Horizon 2020, ‘the financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing Europe’s global competitiveness’.
on the eligibility of Israeli entities and their activities in the territories occupied by Israel since June 1967 for grants, prizes and financial instruments funded by the EU from 2014 onwards
Section A. GENERAL ISSUES
1. These guidelines set out the conditions under which the Commission will implement key requirements for the award of EU support to Israeli entities or to their activities in the territories occupied by Israel since June 1967. Their aim is to ensure the respect of EU positions and commitments in conformity with international law on the non-recognition by the EU of Israel’s sovereignty over the territories occupied by Israel since June 1967. These guidelines are without prejudice to other requirements established by EU legislation.
2. The territories occupied by Israel since June 1967 comprise the Golan Heights, the Gaza Strip and the West Bank, including East Jerusalem.
3. The EU does not recognise Israel’s sovereignty over any of the territories referred to in point 2 and does not consider them to be part of Israel’s territory (1, irrespective of their legal status under domestic Israeli law (2. The EU has made it clear that it will not recognise any changes to pre-1967 borders, other than those agreed by the parties to the Middle East Peace Process (MEPP)(3. The EU’s Foreign Affairs Council has underlined the importance of limiting the application of agreements with Israel to the territory of Israel as recognised by the EU.(4
4. These guidelines do not cover EU support in the form of grants, prizes or financial instruments awarded to Palestinian entities or to their activities in the territories referred to in point 2, nor any eligibility conditions set up for this purpose. In particular, they do not cover any agreements between the EU, on the one hand, and the Palestinian Liberation Organisation or the Palestinian Authority, on the other hand.
Section B. SCOPE OF APPLICATION
5. These guidelines apply to EU support in the form of grants, prizes or financial instruments within the meaning of Titles VI, VII and VIII of the Financial Regulation (5 which may be awarded to Israeli entities or to their activities in the territories occupied by Israel since June 1967. Their application is without prejudice to specific eligibility conditions which may be laid down in the relevant basic act.
These guidelines apply:
(a) for grants – to all applicants and beneficiaries, irrespective of their role (sole beneficiary, coordinator or co-beneficiary). This includes entities participating in the action on a no-cost basis (6 and affiliated entities within the meaning of Article 122(2) of the Financial Regulation. This does not include contractors or sub-contractors selected by grant beneficiaries in conformity with procurement rules. As regards third parties referred to in Article 137 of the Financial Regulation, in the cases where the costs of financial support to such third parties are eligible under a call for proposals the authorising officer responsible may, where appropriate, specify in the call for proposals and in the grant agreements or decisions that the eligibility criteria set out in these guidelines also apply to the persons that
may receive financial support by the beneficiaries.
(b) for prizes – to all participants and winners in contests;
(c) for financial instruments – to dedicated investment vehicles, financial intermediaries and sub-intermediaries and to final recipients.
7. These guidelines apply to grants, prizes and financial instruments managed, as the case may be, by the Commission, by executive agencies (direct management) or by bodies entrusted with budget implementation tasks in accordance with Article 58(1)(c) of the Financial Regulation (indirect management).
8. These guidelines apply to grants, prizes and financial instruments funded from appropriations of the 2014 financial year and subsequent years and authorised by financing decisions adopted after the adoption of the guidelines.
Section C. CONDITIONS OF ELIGIBILITY OF ISRAELI ENTITIES
9. As regards the place of establishment of Israeli entities:
(a) In the case of grants and prizes, only Israeli entities having their place of establishment within Israel’s pre-1967 borders will be considered eligible.
(b) In the case of financial instruments, only Israeli entities having their place of establishment within Israel’s pre-1967 borders will be considered eligible as final recipients.
10. The place of establishment is understood to be the legal address where the entity is registered, as confirmed by a precise postal address corresponding to a concrete physical location. The use of a post office box is not allowed.
11. The requirements set out in section C:
(a) apply to the following types of legal persons: Israeli regional or local authorities and other public bodies, public or private companies or corporations and other private legal persons, including non-governmental not-for-profit organisations;
(b) do not apply to Israeli public authorities at national level (ministries and government agencies or authorities);
(c) do not apply to natural persons Section
D. CONDITIONS OF ELIGIBILITY OF ACTIVITIES IN THE TERRITORIES OCCUPIED BY ISRAEL
12. As regards the activities/operations of Israeli entities:
(a) In the case of grants and prizes, the activities of Israeli entities carried out in the framework of EU-funded grants and prizes will be considered eligible if they do not take place in the territories referred to in point 2, either partially or entirely.
(b) In the case of financial instruments, Israeli entities will be considered eligible as final recipients if they do not operate in the territories referred to in point 2, either in the framework of EU-funded financial instruments or otherwise.
13. Any activity or part thereof (7 included in an application for an EU grant or prize which does not meet the requirements set out in point 12(a) will be considered as ineligible and will not be considered as part of the application for the purpose of its further evaluation.
14. The requirements set out in section D:
(a) apply to activities under point 12 carried out by the following types of legal persons: Israeli regional or local authorities and other public bodies, public or private companies or corporations and other private legal persons, including non-governmental not-for-profit organisations;
(b) apply also to activities under point 12 carried out by Israeli public authorities at national level (ministries and government agencies or authorities);
(c) do not apply to activities under point 12 carried out by natural persons.
15. Notwithstanding points 12-14 above, the requirements set out in section D do not apply to activities which, although carried out in the territories referred to in point 2, aim at benefiting protected persons under the terms ofinternational humanitarian law who live in these territories and/or at promoting the Middle East peace process in line with EU policy (8.
Section E. IMPLEMENTATION ARRANGEMENTS
16. Each Israeli entity referred to in points 11(a)&(b) and 14(a)&(b), which applies for an EU grant, prize or financial instrument, shall submit a declaration on honour as follows:
(a) In the case of grants and prizes, the declaration will state that the application of the Israeli entity is in accordance with the requirements under points 9(a) and 12(a) of these guidelines, while also taking into account the applicability of point 15 thereof (9. For grants, this declaration will be drafted in accordance with Article 131(3) of the Financial Regulation.
(b) In the case of financial instruments, the declaration will state that the application of the Israeli entity as a final recipient is in accordance with the requirements under points 9(b) and 12(b) of these guidelines.
17. The declarations under point 16 are without prejudice to any other supporting documents required in the calls for proposals, rules of contests or calls for the selection of financial intermediaries or dedicated investment vehicles. They will be included in the package of application documents for each concerned call for proposals, rules of contests and call for the selection of financial intermediaries or dedicated investment vehicles. Their text will be adapted to the requirements relevant for each EU grant, prize or financial instrument.
18. The submission of a declaration under point 16 that contains incorrect information may be considered as a case of misrepresentation or a serious irregularity and may lead:
(a) for grants – to the measures set out in Article 131(5) and 135 of the Financial Regulation,
(b) for prizes – to the measures set out in Article 212(1)(viii) of the Rules of Application of the Financial Regulation10 and,
(c) for financial instruments – to the measures set out in Article 221(3) of the Rules of Application of the Financial Regulation.
19. The Commission will implement these guidelines in their entirety, and in a clear and accessible manner. It will notably announce the eligibility conditions set out in Sections C and D in the work programmes 11 and/or financing decisions, calls for proposals, rules of contests and calls for the selection of financial intermediaries or dedicated investment vehicles.
20. The Commission will ensure that the work programmes and calls for proposals, rules of contests and calls for the selection of financial intermediaries or dedicated investment vehicles published by the bodies entrusted with budget implementation tasks under indirect management contain the eligibility conditions set out in Sections C and D.
21. In order to clearly articulate EU commitments under international law, taking into account
relevant EU policies and positions, the Commission will also endeavour to have the content of these guidelines reflected in international agreements or protocols thereto or Memoranda of Understanding with Israeli counterparts or with other parties.
22. The award of EU support to Israeli entities or to their activities in the form of grants, prizes or financial instruments requires engagement with Israeli entities referred to in points 11 and 14, for example, by organising meetings, visits or events. Such engagement will not take place in the territories referred to in point 2, unless it is related to the activities referred to in point 15.
1) On the territorial application of the EU-Israel Association Agreement see Case C-386/08 Brita  ECR I-1289, paragraphs 47 and 53.
2) Under Israeli law, East Jerusalem and the Golan Heights are annexed to the State of Israel, whereas the Gaza Strip and the rest of the West Bank are referred to as ‘the territories’.
3) See inter alia the Foreign Affairs Council conclusions on the MEPP adopted in December 2009, December 2010, April 2011, May and December 2012.
4) The Foreign Affairs Council conclusions on the MEPP adopted on 10 December 2012 state that ‘all agreements between the State of Israel and the EU must unequivocally and explicitly indicate their inapplicability to the territories occupied by Israel in 1967′.
5) Regulation (EU, Euratom) No. 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No. 1605/2002, Official Journal of the EU L-298 of 26 October 2012.
6) In which case the Israeli entity will finance its participation with funding from other sources, but will nonetheless be treated as a beneficiary and may therefore have access to know-how, services, networking and other opportunities developed by the other beneficiaries as a result of the EU grant.
7) For example, these could be nation-wide projects to be implemented in Israel, which involve both activities within pre-1967 borders and activities beyond pre-1967 borders (e.g. in settlements).
8) For example, these could be activities under the European Instrument for Democracy and Human Rights, the Neighbourhood Civil Society Facility and/or the Partnership for Peace programme.
9) In the case of Israeli public authorities at national level (ministries and government agencies/authorities), the declaration will contain an address for communication purposes that is within Israel’s pre-1967 borders and that complies with point 10.
10) Commission Delegated Regulation (EU) No. 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU, Euratom) No. 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union, Official Journal of the EU L-362 of 31 December 2012.
11) Subject to the outcome of the comitology procedures that may be required by the relevant basic act.
Much of what you’ve read about this is wrong. Here’s why.
By Yair Rosenberg, Tablet
July 16, 2013
The European Union has issued new guidelines for its cooperation with Israel which explicitly curtail its involvement in the Occupied Territories. Naturally, this has sparked a diplomatic firestorm. Prime Minister Netanyahu immediately condemned the regulations, which are set to be included in the 2014-2020 EU financial framework, saying “we will not accept any external dictates regarding our borders. That issue will be decided only in direct negotiations between the sides.”
So, just how earth-shattering are these guidelines? Tablet has acquired the official document containing the regulations, published today by the European Union, and we’ve spoken to an EU diplomat with close knowledge of its contents and drafting. As it turns out, there’s a lot less in these guidelines than most press coverage would have you believe. Here’s why:
They do not bind EU member states in their bilateral relationships with Israel.
The new regulations only apply to the institutions of the European Union itself. They do not restrict its member states in their bilateral ties with Israel, whether economic, cultural or diplomatic. “Member states don’t have to abide by this,” the EU diplomat explained. “It applies to EU-funded programs, and to EU programs as such. It doesn’t apply to national programs. So concretely, if France wants to fund the Ariel college, it can do it, and it’s not violating any European law.” In EU parlance, this is what is known as a “commission notice” or “soft law,” as opposed to a “directive,” which has to be translated into national law by all EU members. (Haaretz erroneously used the language of “binding directive” in its original report, fueling much consternation and mistaken reporting in and out of Israel.) As for the EU’s own funding: European officials estimate that less than 1 percent of it currently goes to “settlement entities,” far from a substantial loss.
The guidelines do not affect trade.
In addition to not impacting Israel’s bilateral relationships with EU members, the new guidelines do not address trade, i.e. products originating in the settlements. The rules are a far cry from the platform of the Boycott, Divestment and Sanctions movement, which seeks an end to all commerce and other contact with Israel in toto, and don’t even approach the West Bank boycott advocated by some liberal Zionists like Peter Beinart. Rather, in their own words, the guidelines only prohibit “EU support in the form of grants, prizes or financial instruments” from being given to companies or organizations with activities in the West Bank, East Jerusalem or the Golan Heights. (Individuals living in those areas, however, are exempt.)
The regulations may affect the language of future EU-Israel trade agreements–again, not bilateral ones with EU members–though how this would play out in practice is unclear, and Israel has already signed accords with the EU in the past that explicitly excluded the settlements for certain purposes.
The regulations do not apply to Israeli governmental institutions, regardless of their location.
The new rules explicitly exempt all Israeli national authorities, like ministries and government agencies, even if they are based in the Occupied Territories. For example, “the Israeli Authority for Antiquities, which is based in East Jerusalem, are not affected by this commission notice,” said the EU diplomat.
The move is not, as some have suggested, a hardball attempt to assist John Kerry in restarting negotiations.
The reason these guidelines were issued now is simple: “The budget of the EU is based on a six-year program, so the next budget will be 2014 to 2020,” explained the diplomat. “So they wanted to have this commission notice included now, in this budget.” In others words, these updates to the EU’s settlement guidelines–which have been in the works for some time–had to be issued at this juncture due to the EU’s financial cycle, regardless of whether Secretary of State John Kerry was in the region attempting to restart peace talks.
The EU’s move is, according to the diplomat, simply an attempt to bring its own institutions formally in line with its long-stated policy position that the Occupied Territories are not part of Israel. (This is why the guidelines bar EU involvement in the Golan Heights, a territory that is claimed by Syria, not the Palestinians, and has little relevance to the peace process.) Thus, claims that the guidelines are part of an EU strategy to ratchet up pressure on Israel in advance of Kerry’s efforts–pressure which would increase should those efforts fail–insinuate a conspiracy where none is evident.
They do not take effect until 2014.
Contrary to Haaretz‘s reporting that the new guidelines “will go into effect by the end of this week,” they are only being published this week. Rather, as previously noted, the regulations are part of the next EU financial framework for 2014-2020, which takes effect on January 1, 2014. Whatever consequences these rules may have, they will not be sprung on Israel overnight and there will be time for Israel to explore options for working within (or around) them.
Bottom line: these regulations hardly seem the diplomatic “earthquake” some have called them, let alone “economic terrorism,” as Naftali Bennett has dubbed them. Rather, they are a largely symbolic shot across the bow, making explicit what was already the EU’s unwritten policy, and reflecting growing frustration within Europe at Israel’s settlement practices. Whether the EU or its members are willing to go farther than these limited restrictions, should Israeli policy continue and the peace process remain moribund, remains to be seen.