2 Colum. J. Eur. L. 387 (1996)
Christopher Wyeth Kirkham.
With a view to promoting Community private sector participation in ongoing EC financial, technical and economic cooperation efforts in the developing world, on January 29, 1996 the Council adopted Council Regulation 213/96 on the implementation of the European Communities investment partners financial instrument for the countries of Latin America, Asia, the Mediterranean region and South Africa (1996 O.J. (L 28)). The Regulation, adopted under Article 130w of the EC Treaty, aims to build on the Council’s consensus regarding the importance of private sector involvement in key development-oriented activities such as technology transfer, employment generation, the increase of export capacity and the satisfaction of local needs. Accordingly, the Regulation continues and consolidates the implementation of the European Community Investment Partners (ECIP) financial instrument that was initiated in 1988, and whose extension by Council Regulation 319/92 of February 3, 1992 expired on December 31, 1994.
The ECIP instrument is an integral part of EC development policy, but also supports the Community’s industrial strategy. Initially instituted through a three-year pilot scheme in 1988, it was designed to foster direct investment and joint venture efforts by Community small and medium-sized enterprises (SMEs) in Asia, Latin America and the Mediterranean (ALAMED). At that preliminary stage, the Commission did not propose a specific legal basis for the instrument. Instead, it invoked Article 205 of the Treaty of Rome, and cooperation agreements with ALAMED countries, for authority to sponsor the initiative. The European Parliament provided the necessary credits from within its Non- Obligatory Spending margin. Subsequently, in December 1990, the Commission proposed to the Council additional reinforcement for the instrument by means of a specific Regulation. On February 3, 1992, the Council adopted Council Regulation 319/92, validating those aspects of the ECIP instrument that had ensured the pilot project’s success since 1988. This legislation also introduced regular monitoring and evaluation of the project’s management and impact, and raised the financing limit for each project from ECU 500,000 to ECU 1,000,000.
The present Regulation leaves largely intact the key provisions of Council Regulation 319/92, which had originally extended the 1988 pilot scheme and served as the legal basis of the ECIP instrument. In its current form, the instrument still serves to promote joint venture investments of mutual interest to both Community and developing country partners (Article I(C)(1)). It also continues to accord priority to small and medium-sized enterprises, and to refuse eligibility to large multinational undertakings (Article 1(2)).
Moreover, the Regulation preserves the decentralized and flexible management of the ECIP instrument through a network of financial instruments and agencies (Articles 3, 5(1), 6, 9(3)). At present, the continued success of the instrument depends on a network of 95 financial institutions in both the Member States and the ALAMED countries to promote and administer each its four financing facilities. Organizations representing groups of companies-such as investment promotion bodies, chambers of commerce and federations of industry-are also eligible to present and administer projects under aegis of Facility 1 of the ECIP instrument (Articles 3(1), 4(1)).
The Regulation does make certain minor changes to the earlier legislation. These changes were made pursuant to recommendations of the Opinion of the Court of Auditors on the implementation of the instrument delivered to the Council in December 1993,11 and the Independent Appraisal forwarded to the Council and Parliament in April 1994.Most importantly, while the Regulation preserves the integrity of the ECIP instrument and its ability to cover each step in the establishment of a joint venture, it has widened the scope of coverage offered by its first, second and fourth facilities.