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Aim and Scope

  1. The Trust Fund has proven to be an effective Partnership for Peace (PfP) tool. The scope of the Trust Fund policy is two fold – to assist PfP Partner nations to destroy their anti-personnel land mines (APLs) stockpiles, surplus munitions, unexploded ordnance and SALW; and to assist Partner nations to manage the consequences of defence reform. This may include, but is not limited to projects promoting civil and democratic reform of the armed forces, retraining of military personnel, base conversion and promoting effective defence planning and budgeting under democratic control. All initiatives will be run on a project basis. Regarding projects for destruction of APLs, priority will be given to signatories of the Ottawa Convention. On a case-by-case basis, in those situations where having greater flexibility might allow for greater efficiency, the possibility of establishing a Trust Fund for multiple related projects should not be excluded, provided that fiscal accountability can be ensured.
  2. The Trust Fund policy may also be used to support the Mediterranean Dialogue (MD) countries and Istanbul Cooperation Initiative (ICI), as endorsed by Heads of State and Government at Istanbul.

Development of Project Proposals

  1. Nations are responsible for developing proposals and presenting them to other EAPC nations. The decision on whether to permit the establishment of a Trust Fund is the sole prerogative of Allies. Projects aimed at destruction will include the number and type of mines, munitions or SALW to be destroyed, method of destruction and assessment of costs. For projects managing the consequences of defence reform, this will include a description of the activities to be undertaken and the results to be achieved. The proposal must also set out how the project will be implemented and verified and include a financial and communication plan. An environmental assessment may also be required, dependent on the scope of the project. Nations are invited to consult the enclosed checklist.
  2. The project proposal will identify an Executing Agent responsible for implementation of the technical and financial aspects of the project.
  3. While NATO staff can provide advice and guidance, nations are responsible for deciding which ideas are developed and presented as project proposals.

Role of Nations

  1. Nations are responsible for sponsoring and developing specific project proposals. The Partner/MD/ICI Host Nation that benefits directly from the proposed project is expected to take an active part in this work.
  2. A Lead Nation will be designated for each project and is expected to identify potential contributors and to steer the project through the different stages of its development including presentation to the PMSC in EAPC/PfP format. There may be more than one Lead Nation. The Lead Nation is responsible for the selection of the Executing Agent, completion of the Financial Management Agreement and Executing Agreement. The Lead Nation may engage an agent for day-to-day activities and/or site visits relating to the project, including development of a feasibility study and project proposal.
  3. The Lead Nation, together with the Host Nation, is invited to keep the PMSC in EAPC/PfP format informed on the progress of the PfP project and to make a final written report upon completion of the PfP project. In case of a Trust Fund project in an MD country, information will be provided to the PMSC and the Mediterranean Cooperation Group (MCG). In the case of the ICI, appropriate mechanisms remain to be developed.
  4. On a case-by-case basis, and with PMSC approval, PfP trust fund projects can also be led by a PfP Partner nation.

Contributors

  1. Projects are funded on a voluntary basis. There is no NATO common funding for these projects. Any nation or organisation may contribute resources to a specific project. This may include funding, equipment or contributions in kind as set out in the specific project proposal. Contributions from contact countries shall be subject to rules and procedures adopted by the Council with regard to the Alliance’s relations with those countries. In case of contributions from international organisations, the Lead Nation will inform Allies of potential funding sources for a specific PfP Trust Fund project. Unless there is an objection, the Lead Nation will proceed with the further development of the specific project. Contributions will be set out in the Financial Management Agreement prepared by the Lead Nation. This will identify funding shares and other contributions in kind. Contributors to a project will provide their agreed financial share to an account managed by either the NATO Executive Management Financial Control (EM(FC)) or NAMSA.
  2. Contributions of the Partner/MD/ICI Host Nation will be set out in the project proposal and the Financial Management Agreement. The Partner/MD/ICI Host Nation is expected to provide maximum support within its means. This will include, but is not limited to assuring funds and equipment may enter tax free and assisting with customs or visa requirements for personnel responsible for executing the project. This may also include contributions in kind such as office space, vehicles and services of an interpreter.

Role of Committees

  1. The PMSC is the NATO body responsible for providing policy advice to the NAC on the implementation of the present policy. Project proposals, containing, in the written form, the main parameters referred to in paragraphs 3 and 4 above, will be submitted by the Lead Nation at an early stage to the PMSC for their assessment in light of this policy.
  2. Project proposals will be presented and discussed at a special meeting of the PMSC in EAPC/PfP format which may be reinforced by experts. Nations may also initiate dialogue and exchange ideas at the PMSC in EAPC/PfP format during the development phase of a proposal.
  3. In case of a Trust Fund project in an MD country, information will be provided to the MCG along with the submission of the project proposal to the PMSC. In the case of the ICI, appropriate mechanisms remain to be developed.

Role of NATO International Staff

  1. Within the International Staff, Political Affairs and Security Policy (PASP) will facilitate the development of specific project proposals by providing advice and guidance, including identifying possible Lead Nations for specific projects. This may include preparatory meetings at NATO HQ and in capitals. However, Nations are responsible for deciding which ideas are developed into a project proposal for presentation to NATO committees.
  2. PASP will coordinate with other IS divisions and agencies as necessary – in particular the Defence Investment, Public Diplomacy Divisions, and NAMSA. PASP will also coordinate with the IMS and NMAs and ensure transparency and avoid duplication with other international organisations as appropriate. PASP will keep other IS divisions and the Executing Agent informed regarding exchanges in the PMSC EAPC/PfP format and serve as an overall NATO IS point of contact for each project.
  3. The Public Diplomacy Division will support the development and conduct of communications-related aspects of the project proposal. The communications plan should aim at building public awareness of the Trust Fund projects and how they support cooperation objectives. Lead Nation and the Executing Agent should make maximum use of existing national and NATO tools and mechanisms, including the NATO/PfP website as an important vehicle for disseminating information and ensuring transparency.

Financial Management

  1. The EM(FC) will review the financial aspects of the project proposal, providing advice as appropriate. The projects will be organised to limit financial and administrative operations on the IS. For example, the Lead Nation will select and contract an Executing Agent who will perform the work authorised by the project. Any conferences or seminars organised by the project will be under the financial and administrative responsibility of nations.
  2. The Financial Management Agreement is signed by the Lead Nation and the EM(FC). It will include details of the amount to be paid, financial commitment of each contributor, number of payments and account number. The individual contributions by nations are laid out in country – specific annexes (or equivalent). This allows donor nations to join the project in a non-bureaucratic way even after the signature of the Agreement. The EM(FC) will manage funds in a separate account for each project. The accounting and auditing arrangements will be determined and set out in the Financial Management Agreement. As the EM(FC) cannot transfer funds to the Executing Agent based on commitments only, donor nations should follow with transfer of money as soon as commitments have been made in order to allow for smooth implementation of the project. Funds not used for a specific project will be returned in proportion by the EM(FC) to the contributing parties.

Executing Agent

  1. The Lead Nation is responsible for identifying an Executing Agent. The Lead Nation also signs the Executing Agent Agreement with the chosen agent. The Executing Agent will be responsible for the technical and financial aspects of the project. This includes preparing the statement of requirements, circulation of tenders, review and award of contracts in support of the project. The Executing Agent will make regular reports to the Lead Nation with regard to the implementation of the project. The Executing Agent will also be responsible for authorisation of payments.

Role of NAMSO and NAMSA

  1. The NATO Maintenance and Supply Organisation (NAMSO) is prepared to consider NAMSA as an Executing Agent for Trust Fund projects that fall generally within the mandate of its charter, and within the Agency’s competence and expertise. In addition to serving as Executing Agent NAMSA may provide technical advice on specific questions such as:

    • technical and quality audit of proposals and plans;
    • preparation and/or audit of statements of work;
    • advice for contract award;
    • provision of Quality Assurance; and
    • verification and certification.
  2. Cooperation between NAMSO and PfP Nations is done within the legal framework of a signed Memorandum of Understanding and a signed specific agreement for a Trust Fund project. Similar arrangements will be developed to support MD projects. In the case of the ICI, appropriate mechanisms remain to be developed. Payment for the services of NAMSA is calculated on a cost recovery basis. Such costs will be included in the project proposal.
  3. Financial support similar to the services provided by EM(FC) may be provided by NAMSA in those cases where NAMSA is the Executing Agent.

Illustrative Steps for Development of a proposal
under the NATO/PfP Trust Fund Policy

Preparatory stage

  • Meetings between delegations and IS in Brussels and capitals (supported by experts if needed) to confirm information, and if wanted, development of a feasibility study.
  • After the feasibility study the Lead Nation will submit written information to the PMSC indicating the main parameters (see the checklist in Appendix 2) concerning the possible Trust Fund.

Step I

  • Nations inform PMSC in EAPC/PfP format of interest in developing a proposal. In case of a Trust Fund project in an MD country, information will be provided to the MCG along with the submission of the project proposal to the PMSC. In the case of the ICI, appropriate mechanisms remain to be developed. On a case-by-case basis and with PMSC approval, PfP projects can be led by Partner nations.
  • Interested nations meet to consult and develop proposal outlining technical and financial aspects (at least one NATO and one Partner nation to participate).
  • Development of proposal.
  • Lead Nation to draft detailed proposal, work done by Lead Nation, expert group or proposed Executing Agent.
  • Review of proposal by IS including Executive Management Financial Control.
  • Review by NAMSA regarding financial and technical arrangements as appropriate.
  • Identification of Executing Agent.

Step II

  • Circulation of proposal and meeting of PMSC in EAPC/PfP format (1 or 2 meetings as necessary). In case of a Trust Fund project in an MD country, information will be provided to the PMSC and the MCG. In the case of the ICI appropriate mechanisms remain to be developed.
  • Lead Nation amend proposal as necessary.
  • Contributing nations agree shares and sign Financial Management Agreement.
  • Notice to nations, confirming arrangements, is in place.
  • Call for financial contributions to fund implementation.

Step III

  • Contributions provided in accordance with the Financial Management Agreement.
  • Statement of Requirements and call for tenders by Executing Agent.
  • Implementation of project by Executing Agent.
  • Status report by Lead Nation to the PMSC in EAPC/PfP format. In case of a Trust Fund project in an MD country, information will be provided to the PMSC and the MCG. In the case of the ICI, appropriate mechanisms remain to be developed.
  • Verification of destruction (depending on specific project).

Step IV

  • Executing Agent reports to EM(FC) on completion of project and financial execution.
  • Lead Nation reports to PMSC in EAPC/PfP format on completion of project. In case of a Trust Fund project in an MD country, information will be provided to the PMSC and the MCG. In the case of the ICI, appropriate mechanisms remain to be developed.
  • Lead Nation circulates final report to contributors including return of any unused funds.

Checklist for Nations developing a Proposal
for the Trust Fund

  • Proposals should be developed by at least two Nations. This must include the Partner/MD/ICI Host Nation that benefits directly from the proposed project.
  • Lead Nation identified. On a case-by-case basis, and with PMSC approval, PfP projects can also be led by PfP Partner nations.
  • Proposal must identify an Executing Agent (NAMSA or other).
  • Description of project, e.g. destruction projects - to include the number, type and location of the APLs, munitions and SALW to be destroyed, condition of the mines and munitions, can they be moved or safely transported, description of the proposed method of destruction; projects to support Partner nations in managing consequences of defence reform should include description of capabilities to be developed - to include initiatives to promote civil and democratic reform of the armed forces, retraining of military personnel, base conversion and promoting effective defence planning and budgeting under democratic control.
  • Environmental considerations (as appropriate).
  • Description of the management framework to oversee implementation, including point of contact in Lead Nation and Executing Agent.
  • Assessment of overall costs.
  • Financial plan detailing all funding aspects, including costs, source of funds, amount and how payments are to be made.
  • Point of contact for all contributors.
  • Identification of authority responsible for authorising payments.
  • Details of implementation; for destruction plans this should include details regarding verification of destruction.
  • Communication plan.
  • Timetable for completion.