(Codecision procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to the European Parliament and the Council (COM(2004)0470)(1),

–   having regard to Articles 251(2), 157(3) and 150(4) of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C6-0093/2004),

–   having regard to Rule 51 of its Rules of Procedure,

–   having regard to the report of the Committee on Culture and Education and the opinions of the Committee on Foreign Affairs, the Committee on Budgets, the Committee on Industry, Research and Energy, the Committee on Civil Liberties, Justice and Home Affairs, and the Committee on Women's Rights and Gender Equality (A6-0278/2005),

1.  Approves the Commission proposal as amended;

2.  Stresses that the appropriations set out in the Commission proposal for the post-2006 period are dependent on the decision on the next multiannual financial framework;

3.  Calls on the Commission to submit, where appropriate, a proposal to adjust the financial reference amount for this programme once the next multiannual financial framework has been adopted;

4.  Calls on the Commission to refer the matter to Parliament again if it intends to amend the proposal substantially or replace it with another text;

5.  Instructs its President to forward its position to the Council and Commission.

(1) Not yet published in OJ.

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 157(3) and 150(4) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Economic and Social Committee(1),

Having regard to the opinion of the Committee of the Regions(2),

Acting in accordance with the procedure referred to in Article 251 of the Treaty(3),

Whereas:

(1)  The European audiovisual sector has a key role to play in the emergence of European citizenship because it is one of the principal vectors for conveying the Union's common, fundamental, social and cultural values to Europeans and especially young people. Community support is designed to enable the European audiovisual sector to promote intercultural dialogue, increase mutual awareness amongst Europe's cultures and develop its political, cultural, social and economic potential, which constitutes genuine added value in the task of making European citizenship a reality. It is also intended to enhance competitiveness and, in particular, to increase the market share in Europe of non-national European works.

(2)  It is also necessary to promote active citizenship and to do more to ensure respect for the principle of human dignity, promote equality between women and men and combat all forms of discrimination and exclusion, including racism and xenophobia.

(3)  The increasing presence and empowerment of women in the audiovisual sector can bring about a change in its content and attract a wider female audience and is crucial for gender equality in society as a whole.

(4)  Community support to the audiovisual sector takes account of Article 151 of the Treaty, which provides that:

(5)  Community support to the audiovisual sector is also in keeping with the new strategic aim defined for the European Union by the Lisbon European Council of 23 and 24 March 2000, namely to boost training, employment, economic reform and social cohesion in a knowledge-based economy. In its conclusions, the Council stated that "the content industries create added value by exploiting and networking European cultural diversity". This approach was confirmed in the conclusions of the Brussels European Council of 20 and 21 March 2003.

(6)  Finally, Community support to the audiovisual sector is based on the considerable experience acquired in the MEDIA I, MEDIA II, MEDIA Plus and MEDIA–Training programmes(4), which have helped the European audiovisual industry to develop since 1991. This has emerged clearly in the evaluation of the above programmes(5).

(7)  This showed that Community action should concentrate mainly:

(8)  The MEDIA programme should encourage authors (such as scriptwriters and directors) in the creative process and encourage them to develop and adopt new creative techniques which will strengthen the innovative capacity of the European audiovisual sector.

(9)  There is more than one platform for digitisation in the projection of films, and the choice of platform depends on the various uses, users and needs. Pilot projects under the MEDIA programme could be a test ground from which new standards could be drawn as needed by the audiovisual sector.

(10)  The preparatory action "Growth and Audiovisual: i2i Audiovisual", complementary to the MEDIA Plus and MEDIA Training programmes, marked a further stage in implementing the policy of Community support for the audiovisual sector. It was intended specifically to provide a remedy for the problems of access to funding of small and medium-sized enterprises (SMEs) in the sector. The evaluation of "Growth and Audiovisual: i2i Audiovisual" confirmed that it met the sector's needs and confirmed the need to pursue Community action along these lines, but made clear that it should be more closely geared towards the specific needs of the sector.

(11)  The European audiovisual sector is characterised by its considerable potential for growth, innovation and dynamism, by the fragmentation of the market as a function of cultural and linguistic diversity and, consequently, by a large number of medium-sized, small and very small enterprises with chronic under-capitalisation. For the purposes of implementing Community support, the specific nature of the audiovisual sector must be taken into account and it must be ensured that administrative and financial procedures are proportionate to the amount of support at issue and, as far as possible, are greatly simplified and adapted to the aims pursued and the sector's practices and requirements. In particular, simplification must lead to a reduction in the time that elapses between the planning of projects and making them accessible to the public.

(12)  Throughout the European Union one major obstacle to competition is the almost complete lack of companies specialising in providing loan financing in the audiovisual sector.

(13)  All actions adopted under this programme must be compatible with the Charter of Fundamental Rights of the European Union and, in particular, Article 11 thereof, on freedom of expression and media pluralism.

(14)  The Commission and the Member States should review their support for the audiovisual sector, in particular the results of preparatory i2i action, to establish the extent to which future support can simplify the development of specialist products for SMEs in terms of loan financing.

(15)  Where loan finance systems have been developed in the Member States to promote national audiovisual projects and to mobilise private capital, it is necessary to examine how such capital can be made available, with the support of MEDIA 2007, for non-national European projects.

(16)  Article 3 of the Treaty establishing the European Community provides that for all activities it envisages the Community shall aim to eliminate inequalities and to promote equality between men and women, and Article 13 of the Treaty provides for the Community to take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. The programme will also meet the access needs of citizens with disabilities, in particular those with special needs and hearing problems.

(17)  Article II-82 of the Treaty establishing a Constitution for Europe provides that the Union shall respect cultural and linguistic diversity , and it is therefore necessary to take account of the specific requirements of the smaller Member States and of Member States containing more than one linguistic region.

(18)  Increased transparency and dissemination of information about the European audiovisual market can make operators in the sector, and especially SMEs, more competitive. Increased transparency and dissemination of information encourage private investors" confidence by improving understanding of the industry's potential. They also make it easier for Community action to be evaluated and followed up. Participation by the European Union in the European Audiovisual Observatory should help it to achieve these aims.

(19)  In a European Union of 25 Member States, cooperation is increasingly becoming a strategic approach designed to strengthen the competitiveness of the European film industry. There is therefore a need for greater support for EU-wide networks at all MEDIA programme levels - training, development, distribution and promotion. This applies in particular to cooperation with players from the Member States which joined the Union after 30 April 2004. It should be emphasised that any strategy for cooperation between players in the audiovisual sector must comply with European Union competition law.

(20)  Public financial support for cinema at European, national, regional or local level is essential for overcoming the sector's structural difficulties and enabling the European audiovisual industry to meet the challenge of globalisation. Public support schemes should be in accordance with Article 87(3)(d) and Article 151(4) of the Treaty and should not be open to liberalisation within the framework of international trade negotiations.

(21)  European Union accession countries and those EFTA countries which are parties to the EEA Agreement are recognised as potential participants in Community programmes in accordance with the agreements concluded with those countries.

(22)  Cooperation between the MEDIA programme and Eurimages needs to be strengthened, but this should not entail integration of financial and administrative matters.

(23)  The European Council in Thessalonica of 19 and 20 June 2003 adopted "The agenda for the Western Balkans: Moving towards European integration", providing that Community programmes should be open to countries in the process of stabilisation and association on the basis of framework agreements to be signed between the Community and those countries.

(24)  The other European countries which are parties to the Council of Europe Convention on Transfrontier Television are an integral part of the European audiovisual area and should therefore be enabled to participate in this programme on the basis of supplementary appropriations in accordance with conditions to be laid down in the agreements between the parties concerned; those countries should be able, if they wish and taking into account budgetary considerations or the priorities of their audiovisual industries, to participate in the programme or benefit under a more limited cooperation formula on the basis of supplementary appropriations and specific arrangements to be agreed between the parties concerned.

(25)  Cooperation with non-European third countries developed on the basis of mutual and balanced interests may create added value for the European audiovisual industry in terms of promotion, market access, distribution, dissemination and exhibition of European works in those countries; such cooperation should be developed on the basis of supplementary appropriations and specific arrangements to be agreed upon with the parties concerned.

(26)  Suitable measures should be implemented to prevent irregularities and fraud and to recover funds which have been lost or transferred or used improperly.

(27)  This Decision establishes a budget for the entire duration of the programme which constitutes a benchmark within the meaning of points 33 and 34 of the Interinstitutional Agreement of 6 May 1999 between the European Parliament, the Council and the Commission on budgetary discipline and improvement of budgetary procedure(6).

(28)  The measures required to implement this Decision should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission(7),

(29)  Provision needs to be made for measures governing the transition from the programmes established by Council Decision No 2000/821/EC and Decision No 163/2001/EC, and the programme established by this Decision.

HAVE DECIDED AS FOLLOWS:

Chapter 1

Global objectives and budget

Article 1

Objectives and priorities of the programme

1.  This Decision establishes a programme of support for the European audiovisual sector, hereinafter referred to as the "programme", for a period running from 1 January 2007 to 31 December 2013.

2.  The audiovisual sector is an essential vector for conveying and developing fundamental European social and cultural values and for creating highly skilled future-oriented jobs. Its creativity is a positive factor in terms of competitiveness and cultural appeal to the public. The programme is intended to strengthen the audiovisual sector economically to enable it to play its cultural roles more effectively by developing an industry with powerful and diversified content and a valuable and accessible heritage.

3.  In order to achieve these objectives, the programme shall support:

4.  The priorities in the areas for intervention set out in paragraph 3 shall be as follows:

Article 2

Budget

1.  The indicative financial framework for implementing this programme for the seven-year period as from 1 January 2007 set out in Article 1(1) is fixed at EUR 1 055 million.

2.  The annual appropriations shall be authorised by the budgetary authority within the limits of the financial perspectives.

3.  In the exceptional event of a change in the duration of the programme, the amount originally fixed shall be changed only with strict regard for proportionality.

Chapter 2

Specific objectives upstream of audiovisual production

Article 3

Acquisition and improvement of skills in the audiovisual field

In the field of acquisition and improvement of skills, the specific objectives of the programme shall be to:

1.   strengthen the skills of European audiovisual professionals in the fields of development, production, distribution/dissemination and promotion, in order to improve the quality and potential of European audiovisual works. The programme shall support action in, inter alia, the following areas:

Steps should also be taken to ensure the participation of professionals and trainers from countries other than those in which training activities supported under points (a) to (c) take place.

2.   improve the European dimension of audiovisual training activities by:

3.   enable, through special scholarships, professionals from the new Member States and from other Member States that have a low audiovisual production capacity and/or cover a small geographical and/or linguistic area to take part in the training activities set out in paragraph 1 .

The measures set out in paragraphs 1 to 3 shall be implemented in accordance with the provisions in the Annex.

Article 4

Development

1.  In the development sector, the specific objectives of the programme shall be to:

The measures set out in points (a) and (b) shall be implemented in accordance with the provisions of the Annex.

2.  The Commission shall take steps to ensure that the activities supported in the field of improving professional skills and those set out in paragraph 1 complement each other.

Chapter 3

Specific objectives downstream of audiovisual production

Article 5

Distribution and dissemination

The measures set out under points (a) to (f) shall be implemented in accordance with the provisions of the Annex.

Article 6

Promotion

The measures set out in points (a) to (e) shall be implemented in accordance with the provisions of the Annex.

Chapter 4

Pilot projects

Article 7

Pilot projects

1.  The programme may support pilot projects to ensure that the programme adapts to market developments, particularly in connection with the introduction and utilisation of information and communication technologies.

2.  For the purposes of implementing paragraph 1, the Commission shall be advised by technical advisory groups made up of experts designated by the Member States in response to a proposal by the Commission.

Chapter 5

Arrangements for implementing the programme and financial provisions

Article 8

Provisions concerning third countries

1.  The programme shall be open to the participation of the following countries as long as the required conditions are met and supplementary appropriations are received:

2.  The programme shall also be open to the participation of States which are parties to the Council of Europe Convention on Transfrontier Television other than those referred to in paragraph 1, assuming that supplementary appropriations are received in compliance with the conditions to be agreed upon between the parties concerned.

3.  Opening up of the programme to European third countries covered by paragraphs 1 and 2 may be subject to prior examination of the compatibility of their national legislation with Community legislation, including Article 6.1, paragraph 5, of Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by Law, Regulation or Administrative Action in Member States concerning the pursuit of television broadcasting activities(8). This provision does not apply to actions under Article 3.

4.  The programme shall also be open to cooperation with other third countries which have concluded association and cooperation agreements with the European Union incorporating clauses on the audiovisual sector and on the basis of supplementary appropriations and specific arrangements to be agreed upon. The Western Balkan countries referred to in paragraph 1 and those European countries covered by the European Neighbourhood Policy that do not wish to participate fully in the programme may benefit from cooperation with the programme under the conditions provided for in this paragraph.

Article 9

Financial provisions

1.  In accordance with Article 114(1) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities(9), the beneficiaries of the programme may be natural persons.

Without prejudice to the agreements and conventions to which the Community is a contracting party, enterprises which benefit from the programme must be owned and must continue to be owned, whether directly or by majority participation, by Member States and/or Member State nationals.

2.  In accordance with Article 176(2) and (4) of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities(10), the Commission may decide, depending on the beneficiaries and the type of action, whether they may be exempted from verification of the professional skills and qualifications required to successfully complete an action or programme of work.

3.  Depending on the type of action, financial aid may take the form of grants(11) or scholarships. The Commission may also award prizes for the programme's activities or projects. Depending on the nature of the activity, flat-rate financing or the use of scales of unit costs may be authorised in accordance with Article 181 of Regulation (EC, Euratom) No 2342/2002.

4.  The Commission shall adhere to the proportionality principle as regards the eligibility criteria and the documents to be supplied and filled in by applicants.

5.  Financial aid awarded under the terms of the programme may not exceed 50% of the final costs of the operation supported. However, in the cases expressly provided for in the Annex, financial aid may be as high as 75%. Furthermore, the procedures for granting such aid shall be transparent and objective.

6.  In keeping with the specific nature of the activities cofunded and Article 112(1) of Regulation (EC, Euratom) No 1605/2002, the Commission may deem costs directly linked with implementing the activity supported to be eligible, even if they were partially incurred by the beneficiary before the selection procedure.

7.  In accordance with Article 113(1) of Regulation (EC, Euratom) No 1605/2002(12), cofunding may be provided either entirely or partly in kind as long as the value of the contribution does not exceed the cost actually borne and duly supported by accounting documents, or the cost generally accepted in the market in question.

8.  Any sums reimbursed under the programme, those from the MEDIA programmes (1991 to 2006) and sums not used by selected projects shall be allocated to the requirements of the MEDIA 2007 programme.

Article 10

Implementation of this Decision

1.  The Commission shall be responsible for implementing the programme in accordance with the arrangements laid down in the Annex.

2.  The measures for the implementation of this Decision concerning the matters referred to below shall be adopted in accordance with the management procedure referred to in Article 11(2):

3.  The measures necessary for implementing this Decision with regard to any other matters shall be adopted in accordance with the advisory procedure referred to in Article 11(3).

Article 11

Committee

1.  The Commission shall be assisted by a committee made up of representatives of the Member States and chaired by a Commission representative.

2.  Where reference is made to this paragraph, Articles 4 and 7 of Decision No 1999/468/EC shall apply. The period laid down in Article 4(3) of Decision No 1999/468/EC shall be set at two months.

3.  Where reference is made to this paragraph, Articles 3 and 7 of Decision No 1999/468/EC shall apply, having regard to Article 8 thereof.

4.  The committee shall adopt its rules of procedure.

Article 12

MEDIA Desks

1.  The European network of MEDIA Desks shall act as an implementing body for disseminating information on the programme at national level, in particular for cross-border projects, whilst abiding by Article 54 (2)(c) and (3) of Regulation (EC, Euratom) No 1605/2002 as defined at point 2.2 of the Annex.

2.  The cooperation of MEDIA Desks in networks, especially proximity networks, shall be encouraged in order to facilitate exchanges and contacts between professionals, and create public awareness of key events in the programme as well as prizes and awards; the MEDIA Desks play a valuable role as information and service suppliers in facilitating the emergence of new audiovisual centres.

3.  The MEDIA Desks shall respect the following criteria:

4.  The Commission shall encourage the setting-up of MEDIA desks and MEDIA antennae in countries and regions with low production capacity in accordance with the priorities set out in Article 1(4), point (c), and promote their visibility.

Article 13

The programme's contribution to other Community policies and prerogatives

1.  The programme shall help to strengthen the European Community's horizontal policies by:

2.  The Commission shall ensure cooperation between this programme and other Community programmes in the areas of education, training and research and in relation to the information society.

3.  The Commission shall ensure effective cooperation between this programme and actions in the education and audiovisual field in the context of cooperation between the Union, non-member States and the relevant international organisations, in particular the Council of Europe (by way of Eurimages and the European Audiovisual Observatory).

4.  The Commission shall take steps to ensure that the activities carried out under this programme complement other Community and Europe-wide activities in the field of education and training that relate to film and the audiovisual sector.

Article 14

Monitoring and evaluation

1.  The Commission shall ensure that the actions covered by this Decision are subject to prior evaluation, monitoring and ex-post evaluation. It shall ensure that the programme is accessible and implemented in a transparent manner.

This monitoring process will comprise drawing up the reports mentioned in points 3(a) and (c) and specific activities.

2.  The Commission shall ensure that the programme is evaluated regularly, externally and independently.

3.  The Commission shall present to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions:

Article 15

Transitional provisions

Activities undertaken before 31 December 2006 on the basis of Decision No 2000/821/EC and Decision No 163/2001/EC will continue to be managed until they are terminated in compliance with the provisions of these Decisions.

The committee provided for by Article 8 of Decision No 2000/821/EC and Article 6 of Decision No 163/2001/EC shall be replaced by the committee provided for under Article 11 of this Decision.

Chapter 6

Information about the European audiovisual sector and participation in the European Audiovisual Observatory

Article 16

Information about the European audiovisual sector

The European Union shall contribute to increased transparency and dissemination of information about the European audiovisual sector.

Article 17

Participation in the European Audiovisual Observatory

For the purposes of implementing Article 16, the European Union shall be a member of the European Audiovisual Observatory throughout the programme.

The Commission shall represent the European Union in its dealings with the Observatory.

Article 18

Contribution to meeting the programme's objectives

Article 19

Monitoring and assessment

Monitoring and evaluation of the European Union's participation in the European Audiovisual Observatory shall be carried out within the framework of the evaluation and monitoring of the programme in accordance with Article 14.

Chapter 7

Entry into force

Article 20

Entry into force

This Decision shall enter into force on the day following its publication in the Official Journal of the European Union and shall take effect from 1 January 2007.

Done at

For the European Parliament For the Council

President President

ANNEX

Chapter 1: Operational objectives and actions to be implemented

1.  Acquisition and improvement of skills in the audiovisual field

1.1  Strengthen European audiovisual professionals" skills in the fields of development, production, distribution/dissemination and promotion in order to improve the quality and the potential of European audiovisual works.

1.1.1  Scriptwriting techniques

Operational objective:

–  Enable experienced scriptwriters to improve their capacities to develop techniques based on traditional and interactive methods of writing.

Action to be implemented

–  Support the development and the implementation of training modules on identifying the target public, editing and development of scripts for an international public, and the relationship between the scriptwriter, the script editor, the producer and the distributor.

–  Support distance learning and encourage exchanges and partnerships associating countries and regions with low audiovisual production capacity and/or with a restricted linguistic or geographical area.

1.1.2  Economic, financial and commercial management of production, distribution and promotion of audiovisual works

Operational objective

–  Develop the professionals" ability to grasp and integrate the European dimension into the fields of development, production, marketing, distribution/dissemination and promotion of audiovisual programmes.

Action to be implemented

–  Support, in addition to the actions carried out by the Member States, the development and updating of training modules in management, taking into account the European dimension.

–  Support distance learning and encourage exchanges and partnerships associating countries and regions with low audiovisual production capacity and/or with a restricted linguistic or geographical area.

–  Set a maximum charge for providing and making available the material of the 25 Member States' national film libraries when that material is to be used by SMEs producing films or programmes with similar content or by independent film producers who are nationals of or have their registered office in a Member State. Where the material is used for commercial purposes and the aim of the producer who requested the material is to create a similar product, financial negotiation shall be possible, provided that the principles of pluralism and knowledge and dissemination of cultural heritage are always observed.

1.1.3  Inclusion upstream of digital technologies for the production, post-production, distribution, marketing and archiving of European audiovisual programmes

Operational objective

–  Develop the professionals" capacity to use digital technologies, in particular in the fields of production, post-production, distribution, marketing, archiving and multimedia.

Action to be implemented

–  Support the development and implementation of training modules in digital audiovisual technologies, in addition to the actions carried out by the Member States.

–  Support distance learning and encourage exchanges and partnerships associating countries and regions with low audiovisual production capacity and/or with a restricted linguistic or geographical area.

1.2  Improve the European dimension of audiovisual training activities

1.2.1  Support for the networking and mobility of European training professionals (European film schools, training institutes, partners in the professional sector)

Operational objective

–  Encourage exchanges and regular cooperation between existing training institutions and/or activities.

Action to be implemented

–  Encourage the programme beneficiaries to intensify coordination of their initial and further training activities in order to develop a European network, eligible for Community support, in particular for cooperation involving players, including television broadcasters, from Member States which acceded to the European Union after 30 April 2004, and/or Member States with a low audiovisual production capacity and/or restricted geographical or linguistic area.

1.2.2  Training for trainers

Operational objective

–  Ensure that trainers are competent.

Action to be implemented

–  Contribute to training for trainers, in particular by distance learning.

1.2.3  Support for individual training maps

Operational objective

–  Encourage mobility of cinema students in Europe.

Action to be implemented

–  Mobility scholarships linked to a training project.

1.2.4  Introduction of coordination and promotion measures by the bodies supported under point 1.1.1 of this Annex

Operational objective

–  Promote coordination and promotion of the projects supported by the programme.

Action to be implemented

–  Contribute to the adoption of targeted actions of coordination and promotion of the training activities supported by the programme.

1.2.5  Enable, through special scholarships, the professionals from the Member States which acceded to the European Union after 30 April 2004 and from other Member States that have a low audiovisual production capacity and/or cover a small geographical and/or a linguistic area to take part in the training activities set out in point 1.1.1 of this Annex

Operational objective

–  Facilitate the participation by professionals from the Member States which acceded to the European Union after 30 April 2004 and from other Member States that have a low audiovisual production capacity and/or cover a small geographical area and/or linguistic area in the projects supported by the programme.

Action to be implemented

–  Contribute to setting up a grant mechanism.

2.  Development

2.1  Support the development of production projects intended for the European and international markets submitted by independent production companies

Operational objectives:

–  Support the development of European works of the following types: drama, animation, documentary and multimedia;

–  Encourage companies to produce quality projects with international potential;

–  Encourage the development of new talents and professionals through the establishment of the Pier Paolo Pasolini Prize for New Talent.

–  Encourage companies to use digital technologies in production and distribution as from the development phase.

–  Encourage companies to devise strategies for international screening, marketing and distribution as from the development phase.

–  Enable SMEs to access support for development and tailor actions to meet their needs.

–  Ensure complementarity with the actions supported by MEDIA to improve audiovisual professionals" skills.

Action to be implemented

–  Support the development of audiovisual projects or project catalogues, in particular for cooperation involving players from the Member States which acceded to the European Union after 30 April 2004 and/or Member States with a low audiovisual production capacity and/or restricted geographical or linguistic area.

–  Support digitisation of European audiovisual works as from the development phase.

2.2  Support the elaboration of financing plans for European production companies and projects, including co-production projects

Operational objectives:

–  Encourage the elaboration of financing plans by production companies for works of the following types: drama, animation, documentary and multimedia.

–  As a follow-up to the preparatory i2i action, encourage the search for financial partners at European level to achieve synergy between public and private investors and the devising of distribution strategies as from the production phase.

Action to be implemented

–  Support the side costs of private financing of production and co-production projects presented by SMEs (such as financial expenses, insurance and completion guarantee costs).

–  Support access by SMEs, in particular independent production companies, to financial companies active in drawing up investment plans for the development and co-production of audiovisual works with potential for international distribution.

–  Encourage financial intermediaries to support the development and co-production of audiovisual works with potential for international distribution.

–  Support cooperation between national agencies in the audiovisual sector.

3.  Distribution and dissemination

Horizontal operational objective

–  Enhance the linguistic diversity of European audiovisual works distributed.

Action to be implemented

–  Support dubbing and subtitling for distribution and dissemination, through all available channels, in particular by digital media, of European audiovisual works for the benefit of producers, distributors and broadcasters.

3.1  Strengthen European distribution by encouraging distributors to invest in the co-production, acquisition and promotion of non-national European films and to set up coordinated marketing strategies

Operational objective No 1

–  Encourage cinematographic distributors to invest in the co-production, acquisition, rights of exploitation and promotion of non-national European films.

Actions to be implemented

–  Establish a system of automatic support for European distributors, proportional to cinema admissions for non-national European films in the Member States taking part in the programme, subject to a ceiling for each film and adjusted for each country.

–  The support thus generated may be used by distributors only for investment in:

Operational objective No 2

–  Encourage European distributors to cooperate with a view to adopting joint strategies on the European market.

Action to be implemented

–  Establish a system of selective aid for non-national European film distribution intended for European distributor groupings and grant them direct aid where they exist on a permanent basis.

Operational objective No 3

–  Encourage cooperation between distributors, producers and sales agents in order to set up international marketing strategies for European audiovisual works right from the production phase.

Action to be implemented

–  Establish a system of support for the creation of a promotion kit for European cinematographic works (including a subtitled copy, an international sound track - music and effects - and promotion materials).

Operational objective No 4

–  Encourage access to financing of SMEs for distribution and international sale of non-national European works.

Action to be implemented

–  Support the side costs (such as financial expenses and completion guarantee costs) connected with distribution and/or international sales activities such as: acquisition of European film catalogues, searching for new markets for these films, and setting up of permanent groupings of European distributors.

3.2  Improve the circulation of non-national European films on the European and international markets by incentives measures for export, distribution on any medium and cinema exhibition

Operational objective No 1

–  Encourage cinematographic distributors to invest in appropriate editing and promotion of non-national European films.

Actions to be implemented

–  Establish a system of selective support for cinematographic distributors for the promotion and marketing of European films outside their production territory. The selection criteria for the films may include provisions aiming to differentiate between the projects according to their origin and the size of their budget.

–  Grant special support for films of interest for the development of European linguistic and cultural diversity, in particular in the form of aid for the release of a non-national European works catalogue over a given period.

Operational objective No 2

–  Encourage the screening of non-national European films on the European market, in particular by supporting the coordination of a cinema network.

Action to be implemented

–  Encourage cinema owners to screen a significant proportion of non-national European films in commercial cinemas for first release for a minimum defined period. The support granted to each cinema owner will be determined according to the number of tickets sold for non-national European films over a reference period.

–  Contribute to the development of educational and awareness-raising activities for young cinema-goers.

–  Support the creation and consolidation of a European cinema owners' network developing joint actions of this type.

Operational objective No 3

–  Encourage international sales and export of non-national European films in Europe and world-wide.

Action to be implemented

–  Establish a support system for European companies distributing cinema films internationally (sales agents) according to their performance on the market over a given period. This support will have to be invested in the acquisition and promotion of new European works on the European and international markets.

3.3  Promote the transnational broadcasting of European audiovisual works produced by independent production companies by encouraging cooperation between broadcasters on the one hand, and independent producers and distributors on the other.

Operational objective No 1

–  Encourage the broadcasting of non-national European audiovisual works from independent production companies.

Actions to be implemented

–  Encourage independent producers to produce works (drama, documentary and animation) involving the participation of at least three broadcasters from several Member States or at least two broadcasters from different Member States belonging to different linguistic areas. The selection criteria for the beneficiaries will include provisions aiming to differentiate between the projects according to the size of their budget.

–  Grant special support for films of interest for the enhancement of Europe's linguistic and cultural diversity and audiovisual heritage.

Operational objective No 2

–  Facilitate access to financing for European independent production companies.

Action to be implemented

–  Support the side costs (such as financial costs, insurance and completion guarantee costs) connected with the production of works (drama, documentary and animation) involving the participation of at least three broadcasters from several Member States or at least two broadcasters from different Member States belonging to different linguistic areas.

Operational objective No 3

–  Encourage the international distribution of European television programmes made by independent producers, bearing in mind that distribution of such programmes requires the approval of the independent producer, who should receive an appropriate percentage of the proceeds.

Action to be implemented

–  Establish a system of support for European international distribution companies of audiovisual works (international distributors) according to their performance on the market over a given period. Support thus generated will have to be invested by the international distributors in the acquisition and promotion of new European works on the European and international markets.

3.4  Encourage the digitisation of European audiovisual works

Operational objective No 1

–  Improve the distribution of non-national European works on digital media for private use (DVD), in particular by encouraging editors to cooperate on creating multilingual masters on a European scale.

–  Encourage the use of digital technologies in European works (creating digital masters which can be used by all European distributors).

–  Encourage editors in particular to invest in appropriate promotion and distribution of non-national European audiovisual works.

–  Support the multilingualism of European works (dubbing, subtitling and multilingual production).

Action to be implemented

–  Establish a system of automatic support for European cinematographic and audiovisual works editors on media intended for private use (such as DVD, DVD-ROM) according to their performance on the market over a given period. Support thus generated will have to be invested by the editors in the editing and distribution of new non-national European works on digital media.

–  Support companies specialising in the digitisation of content

Operational objective No 2

–  Encourage on-line distribution of non-national European works through advanced distribution services and new media (Internet, video-on-demand, pay-per-view).

–  Encourage the European audiovisual programme industry to adapt to developments in digital technology, in particular with regard to advanced on-line distribution services.

Action to be implemented

–  Encourage European companies (on-line access suppliers, special-interest channels, etc.) – by measures to digitise works and create promotion and publicity material on digital media – to create European works catalogues in digital format intended for use on the new media.

3.5  Encourage cinemas to exploit the possibilities offered by digital distribution

Operational objectives

–  Encourage cinemas to invest in digital equipment, by facilitating access to credit by cinema owners.

Action to be implemented

–  Support the side costs (such as financial expenses and insurance) incurred by cinema owners for investment in digital equipment.

4.  Promotion

4.1  Improve the circulation of European audiovisual works by ensuring that the European audiovisual sector has access to the professional European and international audiovisual markets.

Operational objective No 1

–  Improve the conditions of access for professionals to trade events and to professional audiovisual markets inside and outside Europe.

Action to be implemented

–  Provide technical and financial assistance in connection with events such as:

Operational objective No 2 and action to be implemented

–  Encourage and support the constitution of European catalogues and the setting up of databases of European programme catalogues intended for professionals.

Operational objective No 3

–  Encourage support for promotion from the pre-production or production phase.

Action to be implemented

–  Support the organisation of forums for the development, financing, co-production and distribution of European (or mainly European) works and programmes.

–  Set up and launch marketing and sales promotion campaigns for European cinematographic and audiovisual programmes during the production phase.

4.2  Improve access to European audiovisual works for the European and international public

Operational objectives and action to be implemented

–  Encourage and support audiovisual festivals to screen a majority or significant proportion of European works.

–  Prioritise and support festivals contributing to the promotion of works from Member States or regions with low audiovisual production capacity and of works produced by young Europeans, and enhancing linguistic and cultural diversity and intercultural dialogue.

–  Encourage and support initiatives for image education organised by youth festivals, in particular in close cooperation with schools and other institutions.

–  Encourage and support initiatives by professionals, in particular cinema owners, public or commercial television channels, festivals and cultural institutions which aim, in close cooperation with the Member States and the Commission, to organise promotional activities for the general public for European cinematographic and audiovisual creation.

–  Encourage and support the organisation of events with wide media coverage such as prize awards and European film festivals.

–  Support participation in festivals by young professionals and professionals from countries with a low audiovisual production capacity.

4.3  Encourage common actions between national film and audiovisual programme promotion organisations

Operational objective:

–  Encourage networking and coordination of European common actions and projects.

Action to be implemented

–  Support the creation of European promotion platforms.

–  Support European groupings and umbrella organisations for national and/or regional promotion on the European markets and worldwide.

–  Support the networking of festivals, in particular the exchange of programming and of expertise.

–  Support the grouping of projects pursuing identical, similar and/or complementary aims.

–  Support the setting up of networks of databases and catalogues.

–  Make arrangements for exploring, as part of the process of systematically collecting cinematographic works forming part of the national heritage of the Member States and the European heritage, and as provided for by Recommendation [No .../... of the European Parliament and of the Council of..... on film heritage and the competitiveness of related industrial activities](13), the possibility of establishing a network of databases encompassing the European audiovisual heritage, together with the relevant organisations, in particular the Council of Europe (by way of Eurimages and the European Audiovisual Observatory).

4.4  Encourage promotion of and access to Europe's cinematographic and audiovisual heritage

Operational objective and action to be implemented

–  Encourage and support the organisation of events, in particular those targeting young people, to promote Europe's cinematographic and audiovisual heritage.

–  Provide support for archives covering European cinematographic and audiovisual heritage.

–  Provide support for European cinematographic and audiovisual heritage on new and innovative distribution platforms.

5.  Pilot projects

Operational objective

–  Ensure that the programme adapts to market developments, mainly in connection with the introduction and use of information and communication technologies.

Action to be implemented

–  Support pilot projects in areas considered by audiovisual sector players to be likely to be influenced by the introduction and use of new information and communication technologies.

–  Disseminate widely the results of pilot projects by organising conferences or on- and off-line events to encourage the dissemination of good practices.

Chapter 2: Arrangements for implementation

1.  Community support

1.1  The share of the Community contribution in the cost of operations supported

The financial contribution from MEDIA may not exceed 50% of the costs of operations supported, except in the following cases.

The financial contribution from MEDIA may be up to 75% of the costs of operations supported for training activities in the new Member States of the European Union. Attention will be focused on this provision during the mid-term evaluation of the programme.

1.2  Arrangements for Community support

Community support is in the form of grants or scholarships.

In the training sector, at least 10% of the available funds each year must be allocated to new activities as far as possible.

1.3  Project selection

2.  Communication

2.1  Commission

The Commission may organise seminars, symposia or meetings to help implement the programme and may institute any suitable information, publication and dissemination measures, particularly in connection with monitoring and evaluation of the programme. Such activities may be funded by grants or calls for tender or may be organised and financed directly by the Commission.

2.2  MEDIA desks and MEDIA antennae

3.  INFORMATION ABOUT THE EUROPEAN AUDIOVISUAL MARKET, PARTICIPATION IN THE EUROPEAN AUDIOVISUAL OBSERVATORY AND COOPERATION WITH THE EURIMAGES SUPPORT FUND

The programme provides the legal basis for the expenditure necessary to monitor Community audiovisual policy measures.

It provides for the European Union to continue participating in the European Audiovisual Observatory. This will ease access to information for operators and dissemination in the sector. It will also contribute to greater transparency in the production process. The programme could likewise enable the European Union to explore possible cooperation with the Council of Europe's Eurimages Support Fund for the co-production of cinematographic works, with a view to promoting the competitiveness of the European audiovisual sector on the international market. Such cooperation should not be of a financial nature.

4.  Management tasks

The programme's financial allocation may also cover expenses pertaining to preparatory, monitoring, control, audit and evaluation activities, required directly for the management and the realisation of the objectives of the programme, in particular, studies, meetings, information and publication actions, expenses linked to computer networks focusing on information exchange, together with all other technical and administrative assistance expenses that the Commission may have recourse to for the management of the programme.

5.  Checks and audits

For the projects selected in accordance with the procedure described in Article 9(3) of this Decision, a system of random auditing shall be set up.

Any beneficiary of a grant shall keep at the Commission's disposal for a period of five years following the final payment all supporting documents on the expenditure incurred. Beneficiaries shall ensure that, if necessary, any supporting document in the possession of partners or members is made available to the Commission.

The Commission, either directly through its staff or through any other qualified external agency of its choice, is entitled to carry out an audit on the use of the grant. These audits may be carried out throughout the term of the contract and for a period of five years from the date of the payment of the balance of the grant. The outcome of these audits may lead to a decision by the Commission to recover funds.

The Commission's staff and external persons authorised by the Commission shall have suitable access, in particular to the offices of the beneficiary and to all information needed, including that in electronic form, to carry out the audits properly.

The Court of Auditors and the European Anti-Fraud Office shall have the same rights, especially of access, as the Commission.

Moreover, in order to protect the European Communities" financial interests against fraud and other irregularities, the Commission is authorised to carry out checks and verifications in situ under the present programme, in compliance with Council Regulation (Euratom, EC) No 2185/96(14). If necessary, investigations shall be carried out by the European Anti-Fraud Office and shall be governed by Regulation (EC) No 1073/1999 of the European Parliament and of the Council(15).

(1) OJ C 255 of 14.10.2005, p. 39. (2) OJ C 164 of 5.7.2005, p. 76. (3) Position of the European Parliament of 25 October 2005. (4) Programmes which were established by Council Decision 90/685/EEC of 21 December 1990 concerning the implementation of an action programme to promote the development of the European audiovisual industry (Media) (1991 to 1995) (OJ L 380, 31.12.1990, p. 37); Council Decision 95/563/EC of 10 July 1995 on the implementation of a programme encouraging the development and distribution of European audiovisual works (Media II - Development and distribution) (1996-2000) (OJ L 321, 30.12.1995, p. 25); Council Decision 95/564/EC of 22 December 1995 on the implementation of a training programme for professionals in the European audiovisual programme industry (Media II - Training) (OJ L 321, 30.12.1995, p. 33); Council Decision 2000/821/EC of 20 December 2000 on the implementation of a programme to encourage the development, distribution and promotion of European audiovisual works (MEDIA Plus - Development, Distribution and Promotion) (2001-2005) (OJ L 336 of 30.12.2000, p. 82), Decision as last amended by Decision No 846/2004/EC of the European Parliament and of the Council (OJ L 157, 30.4.2004, p.4) and Decision No 163/2001/EC of the European Parliament and the Council of 19 January 2001 on the implementation of a training programme for professionals in the European audiovisual programme industry (MEDIA-Training) (2001-2005) (OJ L 26, 27.1.2001, p. 1), Decision as last amended by Decision No 845/2004/EC of the European Parliament and of the Council (OJ L 157, 30.4.2004, p.1) respectively. (5) Report from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: Report on implementation and results of the MEDIA II programme (1996 to 2000) COM(2003)0802 18/12/2003, Report from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: Report on the implementation and mid-term results of the MEDIA Plus and the MEDIA-Training programmes (2001-2005) and the results of the preparatory action "Growth and audiovisual : i2i audiovisual" COM(2003)0725 24/11/2003. (6) OJ C 172 of 18.6.1999, p.1 (7) OJ L 184 of 17.7.1999, p. 23. (8) OJ L 298 of 17.10.1989, p. 23. Directive as amended by Directive 97/36/EC of the European Parliament and of the Council (OJ L 202 of 30.7.1997, p. 60). (9) OJ L 248 of 16.9.2002, p. 1. (10) OJ L 357 of 31.12.2002, p. 1. Regulation as amended by Regulation (EC, Euratom) No 1261/2005 (OJ L 201, 2.8.2005, p. 3). (11) In the case of selective aid for distribution and in compliance with Article 109 (2) of Regulation (EC, Euratom) No 1605/2002 and Article 168, first paragraph, of Regulation (EC, Euratom) No 2342/2002, overall takings during the first year of cinematographic marketing of the film will be reimbursed to the tune of the MEDIA contribution (excluding support for dubbing/subtitling). (12) In conjunction with Article 172 of Regulation (EC, Euratom) No 2342/2002. (13) OJ L ... (14) OJ L 292 of 15.11.1996, p. 2. (15) OJ L 136 of 31.5.1999, p. 1.