EUROPEAN UNION

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EUROPEAN UNION ATHENA
2007
Council decision 2007/384/CFSP of 14 May 2007
( OJ 13/06/2007 L152/14 )
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Financing of EU Military Operations ATHENA
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Treaty on the European Union

• No distinction between civilian and military
  operations as regards tasks
• Art 17(2)  humanitarian and rescue tasks,
  peacekeeping tasks and tasks of combat forces in
  crisis management, including peacemaking .
• But military operations may not be financed from
  the budget of the European Communities
• In principle, their operational expenditure are
  financed from contributions by Member States
  based on the GNI scale, except where the Council
  decides otherwise
• Art 28(3)  Operational expenditure shall also
  be charged to the budget of the European
  Communities, except for such expenditure arising
  from operations having military or defence
  implications.
• it shall be charged to the Member States in
  accordance with the gross national product scale,
  unless the Council acting unanimously decides
  otherwise. 

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ATHENA

•  A mechanism to administer the financing of the
  common costs of operations having military or
  defence implications 
• Based on the experience of CONCORDIA and ARTEMIS
  (2003)
• set up by Council Decision 2004/197/CFSP on 1
  March 2004
• amended by 2 Council Decisions at end 2004 / in
  early 2005
• amended again by a Council Decision adopted on 12
  Feb 2007
• NB what is new in 2007 is shown in italics

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ATHENA Overview

• A permanent mechanism, ready ahead of any EU
  military operation, endowed with legal capacity
  (sign contracts!)
• 1) Financing limited to certain common costs,
  based on GNI key
• 2) Pre-financing of  Nation Borne Costs ,
  managed in common but billed to States based on
  their consumption
• Annual budget includes provisional appropriations
  to finance the preparatory and early phases of
  operations
• Management bodies
• Special Committee
• The Administrator
• The Operation Commander(s)
• The Accountant
• College of auditors

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Management bodies The Special Committee

• Role a budget committee
• Approves the budgets, the accounts, the financial
  rules, the final destination of equipment at the
  end of each operation
• May extend common costs for a given operation
• Composition
• Member States contributing to the financing of
  each operation
• The Commission attends without taking part in
  votes
• Contributing Third States may attend without
  voting

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Management bodies the Administrator

• Permanent executive authority
• Authorising officer where there is no Operation
  Commander (before he is officially appointed,
  after he has left office, and for the EU
  supporting action to AMIS)
• Ensures that ATHENAs rules are complied with and
  may appoint an auditor at any time
• May adopt any measures which he deems necessary
  to implement the expenditure financed through
  ATHENA
• Contact point of national administrations and
  international organisations on financial questions

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Management bodies the Operation Commander(s)

• Authorising officer(s) for the operation, during
  term in office
• In this capacity, implement expenditure financed
  or pre-financed in common and keep funds provided
  by ATHENA
• Prepare draft budget(s) for the operation
• Provide quaterly budget implementation reports
• Provide ATHENAs accounting officer with the
  information necessary for the accounts by 31
  March of year n1

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Management bodies ATHENAs accounting officer

• Keeps the accounts at the central level
• Prepares the annual accounts at the central level
• ?OpCdr must provide information by 31 March each
  year
• ?annual accounts require cut-off at end of each
  year
• Lays down the accounting rules and methods and
  the chart of accounts
• Responsible for payments and recovery of amounts
  (contributions, Nation Borne Costs) at the
  central level
• Mid 2007 ATHENA has its own accounting software
• help in accounting and reporting

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ATHENAs auditors

• College of auditors
• 6 members appointed by Special Committee for 3
  years from national audit bodies
• work for ATHENA only when necessary
• An internal auditor must be appointed by the
  OpCdr
• The administrator may appoint auditors at any
  time
• Access to all premises and information

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Sound Financial Management

• ATHENA has its own Financial Rules
• (based on the EC Directive on Public Procurement
  
• and thus similar to national legislations)
• Mid 2007 ATHENA will have its own accounting
  software
• Reporting to the Special Committee by OpCdr(s)
  and Administrator
• every month when spending on reference amount,
  before a budget is approved
• every 3 months when Title for the operation
  introduced in budget
• Accounts
• information provided by each OpCdr by 31 March
  each year
• consolidation by ATHENAs accountant by 30 April
• Auditing
• Each OpCdr must audit its operation according to
  own rules (NATO if Berlin , Framework Nation)
  and must appoint an internal auditor
• ATHENAs College of Auditors
• Administrator and Special Committee may trigger
  audits

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Which operations?

•  A mechanism to administer the financing of the
  common costs of operations having military or
  defence implications 
• 2 sub-categories (new in 2007)
•  classical  military operations, i.e. with EU
  HQs
•  EU military supporting actions , in support of
  a Third State or a third organisation, without EU
  HQs
• (cf. EU supporting action to AMIS, military
  component)

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 Classical  military operations PREPARATORY
PHASE

• Before the operation commander is officially
  appointed
• Common costs
• Costs of transport and accommodation necessary
  for exploratory missions and preparations
  (including fact-finding missions and
  reconnaissance) by military forces
• MEDEVAC for those personnel
• Authorizing officer Administrator,
• (may delegate to future OHQ)
• Funds available General Part of annual budget
• (2007 480 000 euros)
• Small stock of CIS equipment available (bought
  in 2006)

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 Classical  military operations ACTIVE PHASE
(I)

• Start when the OpCdr is appointed (usually by
  Joint Action)
• Common costs, in all cases
• Mostly Headquarters (OHQ, FHQ, Component
  Headquarters) deployment, barracks and lodging,
  CIS, admin, public info, representation and
  hospitality, Locally Hired Personnel
• Forces as a whole infrastructure, Medevac
• Reimbursements to/from NATO or other
  organisations (UN)
• If the Council so decides Transport and lodging
  of forces, multinational HQs below FHQ,
  acquisition of information
• Authorizing officer the OpCdr
• OpCdr receives funds from ATHENA

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 Classical  military operations other common
costs

• The Special Committee may decide that any item
  other than transport and lodging of forces and
  multinational HQs below the FHQ is financed in
  common for one operation
• New in 2007!
• When requested by the Operation Commander and
  approved by the Special Committee, other items
  are financed in common
• Essential additional equipment
• Medical services (Roles 1, 2 and 3 facilities in
  theatre)
• Acquisition of information (satellite images,
  theatre level intelligence, reconnaissance and
  surveillance, including AGSR, human intelligence)
• Other critical theatre-level capabilities
  (demining, CBRN, fuel storage and supply
  facilities, storage and destruction of arms
  collected within the area of operations

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 Classical  military operations strategic
airlift

• New in 2007!
• During the next two years
• Financing in common of incremental costs
• For EU Member States
• When providing strategic airlift for short notice
  deployment of Battle Groups in accordance with
  the Battle Group concept.
• The Council will determine the flat rates, below
  actual costs, applicable to the payment or
  reimbursement of these costs.
•  The present arrangement will cease after two
  years, unless the Council agrees to extend it. 

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Nation Borne Costs

• Which costs? ?Decision by the Special Committee
  for each operation
• (So far Messing Laundry, Lodging, Utilities,
  POL, Maps Medical care)
• ALTHEA for FHQ, 3 million euros a year
• CONGO for HQs and forces, 16 million euros
• Advantages
• Management in common of procurement
• Prefinancing by ATHENA
• Drawbacks
• NBCs are billed to States based on their
  consumption, reimbursement due within 30 days
  from billing
• ? Administrative burden for personnel in theatre
• Financial burden for Troop Contributing Nations

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 Classical  military operations ACTIVE PHASE
(II)

• Funds and cash flow
• When Joint Action is approved by the Council
• Reference Amount in Joint Action
• Call for contributions 30 of Reference Amount
  unless Council or Special Committee sets a higher
  percentage
  (70 for EUFOR RD CONGO)
• Payable within 30 days from call
• Later period (no date set)
• Budget proposed by administrator with assistance
  of OpCdr
• Approved by Special Committee acting unanimously
• Call for contributions
• equal to the budget minus first call based on
  reference amount
• payable in 30 days or 2 installments if operation
  lasts more than 6 months

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The Early Financing scheme

• Contributions are called when Joint Action is
  adopted and are payable within 30 days ?Problem
  in funding the early phase of operations
• Solution provisional appropriations in ATHENAs
  budget
• (11 million euros provided by 18 Member States)
• Rapid Response
• these appropriations can be used
• Member States other than the 18 pay their
  contributions within 5 days
• Other operations
• Each of the 18 may use its deposit to pay their
  contribution to the operation
• 50 of the 11 million euros can be used with the
  assent of the 18 MS

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 Classical  military operations Winding up
phase

• Equipment purchased for an operation
• final destination proposed by OpCdr, decided by
  Special Committee
• CONGO storage by Germany (OHQ) and France (FHQ)
  during half-year where they make Battle Groups
  available
• Equipment stored after the operation in CONGO
  will be available for the next operation(s)
• Settling of invoices and drawing up of accounts
  must be completed even after repatriation of
  forces and termination of OpCdrs term in office
• importance of rear parties

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Military supporting actions

• Only experience so far
• EU military supporting action to AMIS, military
  component
• New in 2007!
• Common costs
• to be decided on a case-by-case basis by the
  Council, by reference to common costs for
   classical  operations
• The authority appointed to command the operation
  will play the role of  operation commander  for
  ATHENA
• (notably that of authorising officer during term
  in office)
• All other provisions apply as for  classical 
  military operations (including NBCs and Early
  Financing)

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EXERCISES

• Same financing as for operations,
• except that more limited
• Only headquarters, no forces
• No capital acquisitions
• No preparatory phase
• CME 04
• CMX 05
• CME 06
• CME 07 OpCentre / Sweden

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ACTUAL OPERATIONS

• ALTHEA
• since 2 December 2004
• common costs around 33 million euros spent per
  year
• Nation Borne Costs  around 3.5 millions per
  year
• budget for common costs 33.8 million euros for
  2007
• EU Supporting Action to AMIS
• 29 June 2005, extended until end June 2007 at
  present
• around 1 million euros spent per year
• EUSEC  Chain of payment  project
• civilian operation financed from EC budget
• start up phase by ATHENA (15.11. 2005-15.02.2006)
• 0.9 million euros provided by 6 Member States,
  0.6 million spent
• EUFOR RD CONGO
• Common costs 19.2 mio euros in budget, 14 mio
  spent
•  Nation Borne Costs  about 16 million euros
  spent

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CHALLENGES AHEAD

• Advanced parties / rear parties
• Advanced parties should be deployed sufficiently
  early
• Rear parties should remain in theatre until all
  financial issues settled
• Manning should be sufficient
• Should include  spending sections  (J1, J4, J6)
  together with J8 in same teams
• Organisation of the chain of command
• One single multinational team or HQ on each site,
  which includes  spending sections  (J1, J4, J6)
  together with J8
• Division of labour should be in line with
  concepts approved by Military Committee and
  ATHENAs Financial Rules

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CHALLENGES AHEAD

• Common costs examine adaptation to operational
  needs
• Tactical airlift, in a context where
  reinforcements could be called at short notice
  (cf. EUFOR RD CONGO)
• CIMIC increase EUFORs acceptability by local
  population
• Framework contracts
• organise access for OpCentre to Member States
  contracts
• Training
• Train military personnel to ATHENA for future
  operations
• J8s and  spending sections  (J1s, J4s, J6s)
• General training ahead of future operations
• Ad hoc training when a given operation starts
• ATHENA needs cooperation and support
• from Member States, on a voluntary basis

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EUROPEAN UNION ATHENA
QUESTIONS ?