The appropriations assigned by the Community to its cooperation policy shall be used either under cooperation agreements with a financial protocol ("preferential agreements'') or as aid granted unilaterally.
The Commission shall implement expenditure under ISPA in accordance with the Financial Regulation applicable to the general budget of the European Communities on the basis of the financing memorandum to be drawn up between the Commission and the beneficiary country. ... The details of the payment mechanism for measures shall be laid down in the financing memorandum with each beneficiary country. ... The detailed implementing provisions of the principles established in paragraphs 1 and 2 shall be contained in the financing memorandum, together with arrangements for cooperation and for coordination of programming and methodology of control between the Commission and the beneficiary country. ... The financing memorandum shall also contain provisions concerning the reduction, suspension and cancellation of assistance where the implementation of a measure does not justify either a part or the whole of the assistance allocated. ... The procedure to be followed for the award of works, supply or service contracts are to be specified in the financing memorandum and are to respect the key principles laid down in Title IX of the Financial Regulation and in particular: - measures covered by a financing memorandum are to be implemented by the beneficiary country in close collaboration with the Commission, which will retain responsibility for the utilisation of appropriations ... The financing memorandum with each beneficiary country is to contain the following provisions for financial corrections: If the implementation of a measure appears not to justify either a part or the whole of the assistance allocated, the Commission is to conduct an appropriate examination of the case, in particular requesting the beneficiary country to submit its comments within a specified period of time and to correct any irregularity.
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