BETWEEN THE GOVERNMENT OF THE REPUBLIC OF ARMENIA AND THE EUROPEAN COMMISSION ON THE PARTICIPATION OF THE REPUBLIC OF ARMENIA IN "CREATIVE EUROPE": THE UNION PROGRAMME FOR THE CULTURAL AND CREATIVE SECTORS

THE GOVERNMENT OF THE REPUBLIC OF ARMENIA, hereinafter referred to as "Armenia" of the one part,

and

THE EUROPEAN COMMISSION, hereinafter referred to as "the Commission", on behalf of the European Union, of the other part,

jointly referred to as ''the Parties''

Whereas:

1. The Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Republic of Armenia, of the other part ('the Partnership and Cooperation Agreement')1, which was signed on 22 April 1996, establishes a partnership between the European Communities and their Member States, of the one part, and the Republic of Armenia, of the other part.

2. The Protocol to the Partnership and Cooperation Agreement between the Republic of Armenia, of the one part and the European Communities and their Member States of the other part on a Framework Agreement between the Republic of Armenia and the European Union on the general principles for the participation of the Republic of Armenia in European Union programmes2 entered into force on 1 March 2014, hereinafter referred to as "the Framework Agreement". The Framework Agreement allows the Commission and the competent authorities of Armenia to determine the specific terms and conditions regarding its participation in each programme, in particular the financial contribution payable, and reporting and evaluation procedures, on the basis of the criteria established by the programme concerned.

3. "Creative Europe": the Union programme for the cultural and creative sectors was established by Regulation (EU) No 1295/2013 of the European Parliament and of the Council3 (hereinafter, the "Regulation 1295/2013"). This Regulation establishes the Creative Europe Programme for supporting the European cultural and creative sectors from 1 January 2014 to 30 December 2020.

4. Entities established in Armenia should be entitled to participate in recurrent activities, which may start before the entry into force of this Memorandum of Understanding. As a consequence, costs incurred for such activities, the implementation of which starts in 2018, may be considered eligible under the same conditions as those applicable to costs incurred by entities established in Member States provided that this Memorandum of Understanding enters into force before the adoption of the relevant award decision of the action concerned.

HAVE AGREED AS FOLLOWS:

1. Armenia shall participate in the Culture Sub-programme and the Cross-sectoral Strand of "Creative Europe": the Union programme for the cultural and creative sectors, ('the Programme'), in accordance with the present Memorandum of Understanding and the conditions laid down in the Framework Agreement.

1. Armenia shall participate:

(a) in the Culture Sub-programme;

(b) in the Cross-sectoral Strand of the Programme, with the exception of the

Cultural and Creative Sectors Guarantee Facility, as mentioned in Article 14 and in accordance with Article 8(4) of Regulation (EU) No 1295/2013.

2. The participation of Armenia in the activities of the Programme shall be in conformity with the objectives, criteria, procedures and deadlines defined in Regulation (EU) No 1295/2013.

3. The terms and conditions applicable to the submission, assessment and selection of applications, and for the implementation of actions by eligible entities from Armenia shall be the same as those applicable to eligible entities from the Member States of the European Union and other participating countries in the Programme.

4. Armenia shall establish the appropriate structures and mechanisms at national level and shall adopt all other necessary measures for national coordination and organisation of activities to implement the Programme in accordance with the relevant provisions in Regulation 1295/2013. In particular, Armenia undertakes to establish a Creative Europe Desk in accordance with Article 16 of the Regulation and under the guidance provided by the Commission.

5. In order to participate in the Programme, Armenia shall pay every year a financial contribution to the General Budget of the European Union in accordance with Article 3.

6. The financial contribution of Armenia in respect of its participation in 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.

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

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

1. Without prejudice to the responsibilities of the Commission and the European Court of Auditors in relation to the monitoring and evaluation of the Programme, the participation of Armenia in the Programme shall be continuously monitored on a partnership basis involving the Parties. Armenia shall submit to the Commission relevant reports and take part in other specific activities supported by the European Union in that context.

2. The rules concerning financial control, recovery and other antifraud measures are laid down in Annex II.

1. This Memorandum of Understanding shall enter into force on the date of the receipt of the written notification by which Armenia notifies the Commission through diplomatic channels that its internal legal requirements for its entry into force have been fulfilled.

2. The Memorandum of Understanding may only be amended in writing by the common written consent of the Parties.

3. The Annexes shall form an integral part of this Memorandum of Understanding.

4. This Memorandum of Understanding shall apply for the duration of the Programme.

5. Each Party may terminate the Memorandum of Understanding at any time upon twelve months' notice in writing. Projects and activities in progress at the time of termination shall continue until their completion under the conditions laid down in this Memorandum of Understanding, as well as the contractual arrangements applying to these projects and activities and the provisions of the Annexes.

Done in Brussels on 20 March 2018 in two original copies, in the Armenian and English languages. In case of divergences of interpretation of the provisions of this Memorandum of Understanding, the English text shall prevail.

The annual financial contribution to be paid by Armenia to the General Budget of the European Union to participate in the Culture Sub-programme and the Cross- sectoral Strand of the Programme (with the exception of the Cultural and Creative Sectors Guarantee Facility as mentioned in Article 14 and in accordance with Article 8(4) of Regulation 1295/2013) shall be EUR 52,000.

Armenia's financial contribution for the subsequent years will be reassessed and may be amended by the European Commission on a yearly basis.

Travel costs and subsistence costs incurred by representatives and experts of Armenia for the purposes of taking part as observers in the work of the committee referred to in Article 23 of Regulation 1295/2013 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 and other countries participating in the Programme.

The maximum amount of financial support to be allocated by the Programme to the activities of the Creative Europe Desk shall not exceed 50 percent of the total budget for those activities, and will not exceed two thirds of the financial contribution of the country as specified in this Annex I. No financial support will be given to the Desk when the country does not pay any financial contribution to the Programme.

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 European Union and repealing Council Regulation (EC, Euratom) No 1605/20024 ("the Financial Regulation") shall apply to the management of the contribution of Armenia.

When this Memorandum of Understanding enters into force and at the beginning of each subsequent budgetary year, the Commission shall send Armenia 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.

Armenia shall pay its contribution to the annual costs no later than three months after the date of the call, provided that the call for funds is sent by the Commission before 1 March, or at the latest one month after the call for funds if it is sent later. Any delay in the payment of the contribution shall give rise to the payment of default interest by Armenia 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, as published in the C series of the Official Journal of the European Union, in force on the first calendar day of the month in which the deadline falls, increased by 3.5 percentage points. If the delay in the payment of the contribution is such that it may significantly jeopardise the implementation and management of the Programme, and in the absence of payment 20 working days after a formal letter of reminder has been sent by the Commission to Armenia, participation of Armenia in the Programme for the relevant year will be suspended.

I. Controls and antifraud measures by the Union

1. In accordance with the Financial Regulation, and with the other rules referred to in this Memorandum of Understanding, the contracts and grant agreements concluded with beneficiaries of the Programme established in Armenia shall provide for financial or other audits to be conducted at any time during the implementation of the contract or the grant agreement and for a period of 5 years, starting from the date of payment of the balance, except for grants of an amount equal or lower than EUR 60 000 for which this period shall be limited to 3 years. The financial or other audits shall be conducted on the premises of the contractors and their subcontractors and on the premises of the beneficiaries and their contractors and subcontractors by Commission agents or by other persons mandated by the Commission.

2. Commission agents and other persons mandated by the Commission shall have appropriate access to sites, works and documents and to all the information required in order to carry out such audits, including in electronic form. This right of access shall be stated explicitly in the contracts and grant agreements concluded to implement the instruments referred to in this Memorandum of Understanding. The European Court of Auditors shall have the same rights as the Commission.

3. Within the framework of this Memorandum of Understanding, the Commission/OLAF (the European Anti- Fraud Office) shall be authorised to carry out on-the-spot checks and inspections on territory of Armenia, in accordance with the procedural provisions of Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities' financial interests against fraud and other irregularities5.

These checks and inspections shall be prepared and conducted in close collaboration with the competent authorities of Armenia designated by the authorities of Armenia, which shall be notified in good time of the object, purpose and legal basis of the checks and inspections, so that they can provide all the requisite help.

If the authorities of Armenia concerned so wish, the on-the-spot checks and inspections may be carried out jointly with them.

Where the participants in the Programme resist an on-the-spot check or inspection, the authorities of Armenia, acting in accordance with national rules, shall give Commission/OLAF inspectors such assistance as they need to allow them to discharge their duty in carrying out an on-the-spot check or inspection.

The Commission/OLAF shall report as soon as possible to the authorities of Armenia any fact or suspicion relating to an irregularity which has come to its notice in the course of the on-the-spot check or inspection. In any event the Commission/OLAF shall be required to inform the above-mentioned authority of the result of such checks and inspections.

II. Information and consultation

1. For the purposes of proper implementation of this Annex, the competent authorities of Armenia and European Union authorities shall regularly exchange information and, at the request of one of the Parties, shall conduct consultations.

2. The competent authorities of Armenia shall inform the Commission without delay of any fact or suspicion which has come to their notice relating to an irregularity in connection with the conclusion and implementation of the contracts and grant agreements concluded in application of the instruments referred to in this Memorandum of Understanding.

III. Administrative measures and penalties

Without prejudice to application of the provisions of criminal legislation of Armenia, administrative measures and penalties may be imposed by the Commission in accordance with the Financial Regulation.

IV. Recovery

Decisions taken by the Commission within the scope of this Memorandum of Understanding which impose a pecuniary obligation on persons other than States shall be enforceable in Armenia. The enforcement shall be governed by the rules of civil procedure in force in the State in the territory of which it is carried out. The enforcement order shall be appended to the decision, without other formality than verification of the authenticity of the decision, by the national authority which the Government of Armenia shall designate for this purpose and shall make known to the Commission. When these formalities have been completed on application by the Commission, the latter may proceed to enforcement in accordance with the national law, by bringing the matter directly before the competent authority. The legality of the Commission decision shall be subject to control by the Court of Justice of the European Union.

Judgments delivered by the Court of Justice of the European Union pursuant to an arbitration clause in a contract and a grant agreement within the scope of this Memorandum of Understanding shall be enforceable on the same terms.

V. Direct communication

The Commission shall communicate directly with the participants in "Creative Europe: the Union programme for the cultural and creative sectors" established in Armenia. They may submit directly to the Commission all relevant information and documentation which they are required to submit on the basis of the instruments referred to in this Memorandum of Understanding and of the contracts and grant agreements

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1 OJ L 239, 9.9.1999, p.3.

2 OJ L 174, 13.6.2014, p. 3.

3 Regulation (EU) No 1295/2013 of the European Parliament and of the Council of 11 December 2013 establishing the Creative Europe Programme (2014 to 2020) and repealing Decisions No 1718/2006/EC, No 1855/2006/EC and No 1041/2009/EC (OJ L 347, 20.12.2013, p. 221).

4 OJ L 298, 26.10.2012, p. 1.

5 OJ L 292, 15.11.1996, p. 2.