Memorandum of Understanding between the Government of the Republic of Latvia and the European Community on Latvia’s participation in the Community programme in the field of enterprise and entrepreneurship, and in particular small and medium-sized enterprises

THE GOVERNMENT OF the Republic of Latvia, hereinafter referred to as Latvia, of the one part, and

THE COMMISSION OF THE EUROPEAN COMMUNITIES, hereinafter referred to as “the Commission”, on behalf of the European Community, of the other part,

Whereas:

(1) Decision No 1/2002 of the EU-Latvia Association Council of 12 February 20021 establishes the general principles for the participation of Latvia in Community programmes, leaving the Commission and the competent authorities of Latvia to determine the specific terms and conditions, including financial contribution, with regard to such participation in each particular programme,

(2) The multiannual programme for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises (SMEs) (2001-2005) was established by Council Decision 2000/819/EC of 20 December 20002.

HAVE AGREED AS FOLLOWS:

Article 1

Programme

Latvia shall participate in the multiannual programme for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises (SMEs) (2001-2005), (hereinafter called « the Programme »), in accordance with the conditions laid down in Decision No 1/2002 of the EU-Latvia Association Council of 12 February 2002 establishing the general principles for the participation of Latvia in Community programmes, and under the terms and conditions referred to in Article 2 of this Memorandum of Understanding.

Article 2

Terms and conditions with respect to participation in the Programme

1. Latvia shall participate in the activities of the Programme in conformity with the objectives, criteria, procedures and deadlines as defined in Council Decision 2000/819/EC of 20 December 2000.

2. The terms and conditions applicable to the submission, assessment and selection of applications by eligible institutions, organisations and individuals of Latvia shall be the same as those applicable to eligible institutions, organisations and individuals of the Member States of the European Union.

3. To participate in the Programme, Latvia shall pay every year a financial contribution to the General Budget of the European Union.

4. The financial contribution of Latvia in respect of its participation and implementation of the Programme shall be added to the amount earmarked each year in the General Budget of the European Union for commitment appropriations to meet the financial obligations arising out of different forms of measures necessary for the execution, management and operation of the Programme.

5. One of the official languages of the Community shall be used for the procedures related to requests, contracts and reports, as well as for other administrative aspects of the Programme.

Article 3

Financial contribution

The rules governing the financial contribution of Latvia are set out in Annex I.

Part of that financial contribution may be financed under the relevant Community external aid instrument, if Latvia so requests3

Article 4

Reporting and evaluation

Without prejudice to the responsibilities of the Commission and the Court of Auditors of the European Communities in relation to the monitoring and evaluation of the Programme, the participation of Latvia in the Programme shall be continuously monitored on a partnership basis involving the Commission and Latvia. Latvia shall submit to the Commission relevant reports and take part in other specific activities provided for by the Community in the context of that Programme.

Article 5

Final provisions

This Memorandum of Understanding shall apply for the duration of the Programme. Nevertheless, should the European Community decide to extend the duration without any substantial change within the Programme, this Memorandum would also be extended correspondingly and automatically if no Party denounces it.

The annex forms an integral part of this Memorandum of Understanding.

This Memorandum of Understanding may only be amended in writing by common consent of the parties.

This Memorandum of Understanding shall enter into force when it has been signed by both parties.

It shall take effect on the day of signature

1 OJ Lo82, 26.3.2002, p. o6.

2 OJ L 333, 29.12.2000, p. 84.

3 The global amount of the assistance from Community external aid will be indicated in the Financing Memorandum on the annual National Programme regarding this assistance (Phare).

Annex I

Rules governing the financial contribution of Latvia in the multiannual programme for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises (SMEs) (2001–2005)

1. The financial contribution to be paid by Latvia to the General Budget of the European Union to participate in the Programme shall be the following:

— EUR 163 263 for the year 2002,

— EUR 177 823 for the year 2003,

— EUR 190 210 for the year 2004,

— EUR 203 770 for the year 2005

2. The contribution of Latvia shall cover costs related to the preparation, feasibility, development and execution of the projects of common interest, as well as for the development and implementation of horizontal measures as foreseen in the Programme.

3. Travel costs and subsistence costs incurred by representatives and experts of Latvia for the purposes of taking part as observers in the work of the committee referred to in Article 3 of the Council Decision 2000/819/EC of 20 December 2000 on a multiannual programme for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises (SMEs) (2001–2005) or other meetings related to the implementation of the Programme shall be reimbursed by the Commission on the same basis as and in accordance with the procedures currently in force for representatives of the Member States of the European Union.

4. The Financial Regulation applicable to the General Budget of the European Union shall apply to the management of the contribution of Latvia.

5. When this Memorandum of Understanding takes effect and at the beginning of each subsequent budgetary year, the Commission shall send to Latvia a call for funds corresponding to its contribution of the costs covered by this Memorandum of Understanding.

That contribution shall be paid in Euro to a Euro denominated bank account of the Commission.

6. Latvia shall pay its contribution to the annual costs in accordance with the call for funds request no later than three months after the date of the call. Any delay in the payment of the contribution shall give rise to the payment of default interest by Latvia on the outstanding amount from the due date. The interest rate shall be the rate applied by the European Central Bank to its main refinancing operations in Euro on the due date, increased by 1.5 percentage points. In case the delay in the payment of the contribution is such that it may significantly jeopardise the implementation and management of the programme, participation in the programme of Latvia for the concerned year will be suspended by the Commission following the absence of payment twenty working days after a formal letter of reminder sent to Latvia.