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Decision (EU) 2018/412 of the European Parliament and of the Council of 14 March 2018 amending Decision No 466/2014/EU granting an EU guarantee to the European Investment Bank against losses under financing operations supporting investment projects outside the Union
Recitals

Recitals

DECISION (EU) 2018/412 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 14 March 2018

amending Decision No 466/2014/EU granting an EU guarantee to the European Investment Bank against losses under financing operations supporting investment projects outside the Union

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

  • Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 209 and 212 thereof,
  • Having regard to the proposal from the European Commission,
  • After transmission of the draft legislative act to the national parliaments,
  • Acting in accordance with the ordinary legislative procedure(1),

Whereas:

  1. The international community faces an unprecedented migration and refugee crisis, which requires solidarity and the efficient mobilisation of financial resources and calls for the existing challenges to be confronted and surmounted in a concerted manner. All actors need to work together to apply sustained medium- and long-term policies and make efficient use of existing programmes in order to develop and support initiatives which contribute to the United Nations (UN) sustainable development goals and to addressing the political, social, economic and environmental factors that constitute the root causes of migration, including, but not limited to, poverty, inequality, demographic growth, lack of employment, limited access to education and economic opportunities, instability, conflict, climate change and the long-term consequences of forced displacement.
  2. While providing resources to address the root causes of migration is of paramount importance, the Union remains fully committed to policies in other areas of key strategic priority as outlined in the Global Strategy for the European Union's Foreign and Security Policy.
  3. A new results-oriented partnership framework with third countries which takes account of all Union policies and instruments has been developed. As part of that new partnership framework, the Union's External Investment Plan has been established in order to support investments in regions outside the Union while contributing to the achievement of the UN sustainable development goals and addressing the root causes of migration. It should also contribute to fulfilling the objectives of the UN 2030 Agenda for Sustainable Development and of the Paris Agreement adopted under the UN Framework Convention on Climate Change (the Paris Agreement), as well as the objectives pursued by other financing instruments for external action.
  4. On 28 June 2016, the European Council endorsed the proposal of the European Investment Bank (EIB) to contribute to the External Investment Plan through the EIB Resilience Initiative, which is designed to foster investments in the Southern Neighbourhood and Western Balkans.
  5. A key component of the EIB Resilience Initiative is the expansion, in both quantitative and qualitative terms, of the EIB External Lending Mandate. This should enable the EIB to rapidly contribute to the objectives of the External Investment Plan, in particular by providing additional financing to private-sector beneficiaries, with a view to crowding in private investments and boosting long-term investment.
  6. The Strategic Board of the European Fund for Sustainable Development, where the EIB is represented, will provide guidance on complementarity between the EIB Resilience Initiative and the components of the External Investment Plan in line with its rules of procedure and without prejudice to the EIB's internal governance rules.
  7. A budgetary guarantee for financing operations carried out outside the Union (the EU guarantee) was granted to the EIB by means of Decision No 466/2014/EU of the European Parliament and of the Council(2).
  8. In accordance with Decision No 466/2014/EU, the Commission, in cooperation with the EIB, prepared a mid-term review report evaluating the application of that Decision on the basis of an independent external evaluation.
  9. The long-term economic resilience of refugees, migrants, host and transit communities, and communities of origin as a strategic response to addressing root causes of migration should be added as a new objective supported by the EU guarantee (the new objective).
  10. Operations supported under the new objective should be distinct from Union efforts in the area of border control.
  11. In order to allow the External Lending Mandate to respond to potential upcoming challenges and Union priorities, as well as to fulfil the new objective, the maximum ceiling for the EIB financing operations under the EU guarantee should be increased to EUR 32300000000.
  12. Under the general mandate, EUR 1400000000 should be earmarked for projects in the public sector directed towards fulfilling the new objective.
  13. Under a new private-sector lending mandate, a maximum amount of EUR 2300000000 should be dedicated to projects directed towards fulfilling the new objective within the maximum increased ceiling and should benefit from the Comprehensive Guarantee by the Union.
  14. The success of one of the EIB's main objectives under the External Lending Mandate, namely support for local private-sector development, in particular support to micro, small and medium-sized enterprises (SMEs), hinges on factors such as SMEs' access to finance, credit and technical assistance, on the promotion of entrepreneurship and on efforts to stimulate the transition from the volatile informal economy to the formal sector. In that context, the EIB financing operations should seek to support small investment projects run by SMEs, as well as investment projects in remote rural areas and in the fields of drinking-water treatment, wastewater disposal and renewable energy.
  15. Complementarity and coordination with Union initiatives addressing root causes of migration should be ensured, including through Union support for the sustainable reintegration of returned migrants in the countries of origin.
  16. Following the Paris Agreement, the EIB should endeavour to sustain a high level of climate-relevant operations, the volume of which should represent at least 25 % of the total EIB financing operations outside the Union. EIB financing operations covered by Decision No 466/2014/EU should be consistent with reaching the target of at least 35 % of total EIB financing operations in emerging economies and developing countries outside the Union by 2020. The EIB should take into account the European Council conclusions of 22 May 2013 on phasing out environmentally or economically harmful subsidies, including those for fossil fuels.
  17. The risk to the general budget of the Union associated with EIB financing operations under the private-sector lending mandate should be priced. The revenues generated from such risk pricing should be paid into the Guarantee Fund for external actions established by Council Regulation (EC, Euratom) No 480/2009(3) in order to cover the commercial risk and to avoid market distortions.
  18. The EIB should develop and implement a set of indicators in its Results Measurement framework for projects directed towards fulfilling the new objective. Therefore, an assessment of the contribution of EIB financing operations towards the new objective, including, where applicable, the contribution to the UN sustainable development goals, the involvement of local civil society, and alignment with Union external policy priorities and budget priorities, should be included in the Commission's annual reporting to the European Parliament and to the Council on EIB financing operations.
  19. The visibility and transparency of EIB financing operations covered by Decision No 466/2014/EU, in particular with regard to projects financed through financial intermediaries, should be ensured by improving access to information for the Union's institutions and for the general public, taking into account the need to protect confidential and commercially sensitive information.
  20. The relevant Union policy on non-cooperative jurisdictions for tax purposes is laid down in the legal acts of the Union and in Council conclusions, in particular in the Annex to those of 8 November 2016, and any subsequent updates.
  21. Due diligence on EIB financing operations covered by Decision No 466/2014/EU should include a thorough check of compliance with applicable Union legislation and agreed international and Union standards on anti-money laundering, the fight against the terrorism financing, tax fraud and tax avoidance. Moreover, in the context of the External Lending Mandate reporting, the EIB should provide information, on a country-by-country basis, on the compliance of EIB financing operations with its policy on non-cooperative jurisdictions and the list of intermediaries with which the EIB cooperates.
  22. On 12 October 2016, the EIB approved the implementation of the EIB Resilience Initiative. It should be possible for projects under the EIB Resilience Initiative which were approved after that date and before the entry into force of this Decision and the conclusion of the guarantee agreement to be covered by the EU guarantee, subject to confirmation by the Commission that they are in line with the new objective and respect the terms of the guarantee agreement.
  23. EIB financing operations with corporates should only benefit from the private-sector comprehensive guarantee if they promote inclusive growth and enhanced job creation and are not adequately served by local financial markets.
  24. EIB financing operations should be consistent with the principles set out in the Commission communication of 25 October 2011 entitled A renewed EU strategy 2011-14 for Corporate Social Responsibility, including with regard to financial intermediaries.
  25. Where the Union external policy priorities change, or in cases of urgency and crisis situations that could arise within the mandate period, and in accordance with relevant European Parliament resolutions and Council decisions and conclusions, the ceiling for reallocation between the regions by the EIB in the course of the mandate should be increased from 10 % to 20 %. The Commission should regularly inform the European Parliament and the Council of such reallocations.
  26. Given the importance of the EIB Resilience Initiative in the Union strategy to address the root causes of migration and the needs of transit and host communities, it remains of the utmost importance that the amounts earmarked under the External Lending Mandate ceilings for projects directed to the new objective be absorbed completely. Nevertheless, if due to unforeseen circumstances the earmarked amounts cannot be absorbed completely, some increased flexibility should also be allowed. Therefore, if by 30 June 2019 the EIB concludes that it is not in a position to absorb its forecasted target under the EIB Resilience Initiative, it should be possible for up to 20 % of the EUR 1400000000 under the general mandate earmarked for public-sector projects and of the EUR 2300000000 under the private-sector lending mandate to be reallocated within and/or between pre-accession countries and beneficiaries and Neighbourhood and Partnership countries. Any such reallocation should be subject to prior agreement between the Commission and the EIB.
  27. The lists of eligible regions and countries and potentially eligible regions and countries should be modified in order to exclude high-income regions and countries with high credit ratings, namely Brunei, Chile, Iceland, Israel, Singapore, South Korea and Taiwan. In addition, Iran should be added to the list of potentially eligible regions and countries.
  28. Decision No 466/2014/EU should therefore be amended accordingly,

HAVE ADOPTED THIS DECISION: