CONVENTION

for the establishment of a

European Space Agency

ESA SP-1300 (English)September 2005

Publication: ESA Convention (English), 6th edition (30th anniversary issue),September 2005

Published by: ESA Publications Division, ESTECPostbus 2992200 AG NoordwijkThe NetherlandsTel: +31 71 565 3400Fax: +31 71 565 5433

ISBN: 92-9092-397-0

Copyright: © 2005 European Space Agency

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Contents

Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Introductory note . . . . . . . . . . . . . . . . . . . . . . . . 7Convention for the establishment of a EuropeanSpace Agency . . . . . . . . . . . . . . . . . . . . . . . . . . 11Article I Establishment of the Agency . . . 12Article II Purpose . . . . . . . . . . . . . . . . . . . 13Article III Information and Data . . . . . . . . 14Article IV Exchange of Persons . . . . . . . . . 16Article V Activities and Programmes . . . . 16Article VI Facilities and Services . . . . . . . 19Article VII Industrial Policy . . . . . . . . . . . . 20Article VIII Launchers and Other Space

Transport Systems . . . . . . . . . . . 22Article IX Use of Facilities, Assistance to

Member States, and Supply ofProducts . . . . . . . . . . . . . . . . . . 23

Article X Organs. . . . . . . . . . . . . . . . . . . . 25Article XI The Council. . . . . . . . . . . . . . . . 25Article XII Director General and Staff . . . . 33Article XIII Financial Contributions . . . . . . 36Article XIV Cooperation. . . . . . . . . . . . . . . . 39Article XV Legal Status, Privileges

and Immunities . . . . . . . . . . . . . 41Article XVI Amendments . . . . . . . . . . . . . . . 41Article XVII Disputes. . . . . . . . . . . . . . . . . . . 42

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Article XVIII Non-Fulfilment of Obligations . 44Article XIX Continuity of Rights and

Obligations . . . . . . . . . . . . . . . . 45Article XX Signature and Ratification . . . . 45Article XXI Entry into Force . . . . . . . . . . . . 46Article XXII Accession. . . . . . . . . . . . . . . . . . 47Article XXIII Notifications . . . . . . . . . . . . . . . 48Article XXIV Denunciation. . . . . . . . . . . . . . . 48Article XXV Dissolution . . . . . . . . . . . . . . . . 50Article XXVI Registration . . . . . . . . . . . . . . . . 51Annex I Privileges and Immunities . . . . 52

Annex II Financial Provisions . . . . . . . . 69

Annex III Optional Programmes Covered byArticle V, 1 b of the Convention . 76

Annex IV Internationalisation of NationalProgrammes . . . . . . . . . . . . . . . 84

Annex V Industrial Policy . . . . . . . . . . . . 87

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Foreword

The European Space Agency is Europe’s gatewayto space. Its mission is to shape the developmentof Europe’s space capability and ensure thatinvestment in space continues to deliver ever morebenefits to all the citizens of Europe.

ESA now has seventeen Member States. Bycoordinating the f inancial and intellectualresources of its members, it can undertakeprogrammes and activities far beyond the scope ofany single European country.

The Agency’s projects are designed to find outmore about the Earth, its immediate spaceenvironment, the Solar System and the Universe,as well as to develop satellite-based technologiesand services while elaborating and implementingthe appropriate industrial policy. ESA also worksclosely with space organisations outside Europeto share the benefits of space with the whole ofmankind.

Space spurs research, innovation, andtechnological developments. Space is the placewhere future meets present.

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To celebrate the 30th Anniversary of the Agency,we are publishing the ESA Convention in thetwelve languages used in the ESA Member States.This will allow people around Europe to betterunderstand the mechanisms through which ESAfunctions and is successful.

ESA has evolved and continues to evolve,enhancing the benefits delivered by space systemsto more and more Member States and theircitizens. The Convention was visionary enough topermit such evolutions.

Jean-Jacques DordainESA Director General

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Introductory Note

To celebrate the 30th Anniversary of the ESAConvention, this publication has been compiledand is available in the twelve languages used inthe ESA Member States. This publication isissued for purposes of public communicationonly, and is not intended to contain anyauthentic version of the Convention.

At the end of the Conference of Plenipotentiaries,held in Paris on 30 May 1975, the Convention forthe establishment of a European Space Agency(CSE/CS(73)19, rev.7) was opened for signatureby the Member States of the European SpaceConference, until 31 December 1975.

The Final Act of the Conference ofPlenipotentiaries and the associated Resolutions(CSE/CS(73)20, rev.7) established conditions forsignature of the Convention and for thefunctioning of the European Space Agency.

On 30 May 1975, the Convention was signed by:the Federal Republic of Germany, the Kingdom ofBelgium, the Kingdom of Denmark, Spain, theFrench Republic, the Italian Republic, theKingdom of the Netherlands, the United Kingdom

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of Great Britain and Northern Ireland, theKingdom of Sweden, and the Swiss Confederation.

On 31 December 1975, the Convention wassigned by Ireland.

The Convention entered into force on 30 October1980.

Date of deposit of instruments of ratification:Austria: 30 December 1986Belgium: 3 October 1978Denmark: 15 September 1977Finland: 1 January 1995France: 30 October 1980Germany: 26 July 1977Greece: 9 March 2005Ireland: 10 December 1980Italy: 20 February 1978Luxembourg: 30 June 2005Netherlands: 6 February 1979Norway: 30 December 1986Portugal: 14 November 2000Spain: 7 February 1979Sweden: 6 April 1976Switzerland: 19 November 1976United Kingdom: 28 March 1978

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In accordance with Article XVI, 3, the Councilhas amended certain provisions in Annexes to theConvention adopting the following Resolutions:

• ESA/C-M/CXXII/Res. 1 (Final), chapter IV,adopted on 20 October 1995;

• ESA/C-M/CLIV/Res. 2 (Final), chapter III,adopted on 15 November 2001;

• ESA/C/CLXXIX/Res. 6 (Final), adopted on 22 June 2005.

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Convention for the establishment of a European Space Agency

The States parties to this Convention,

CONSIDERING that the magnitude of thehuman, technical and financial resources requiredfor activities in the space field is such that theseresources lie beyond the means of any singleEuropean country,

CONSIDERING the Resolution adopted by theEuropean Space Conference on 20 December1972 and confirmed by the European SpaceConference on 31 July 1973, which decided that anew organisation, called the ‘European SpaceAgency’, would be formed out of the EuropeanSpace Research Organisation and the EuropeanOrganisation for the Development andConstruction of Space Vehicle Launchers, andthat the aim would be to integrate the Europeannational space programmes into a European spaceprogramme as far and as fast as reasonablypossible,

DESIRING to pursue and to strengthen Europeancooperation, for exclusively peaceful purposes, inspace research and technology and their space

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applications, with a view to their being used forscientific purposes and for operational spaceapplications systems,

DESIRING, in order to achieve these aims, toestablish a single European space organisation toincrease the efficiency of the total of Europeanspace efforts by making better use of theresources at present devoted to space and todef ine a European space programme forexclusively peaceful purposes,

HAVE AGREED as follows:

Article IESTABLISHMENT OF THE AGENCY

1. A European organisation, called the ‘EuropeanSpace Agency’, hereinafter referred to as ‘theAgency’, is hereby established.

2. The members of the Agency, hereinafterreferred to as ‘Member States’, shall be theStates which are parties to this Convention inaccordance with Articles XX and XXII.

3. All Member States shall participate in themandatory activities referred to inArticle V, 1 a, and shall contribute to the fixed

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common costs of the Agency, referred to inAnnex II.

4. The Headquarters of the Agency shall besituated in the Paris area.

Article IIPURPOSE

The purpose of the Agency shall be to provide forand to promote, for exclusively peacefulpurposes, cooperation among European States inspace research and technology and their spaceapplications, with a view to their being used forscientific purposes and for operational spaceapplications systems:

a. by elaborating and implementing a long-termEuropean space policy, by recommendingspace objectives to the Member States, and byconcerting the policies of the Member Stateswith respect to other national and internationalorganisations and institutions;

b. by elaborating and implementing activities andprogrammes in the space field;

c. by coordinating the European spaceprogramme and national programmes, and by

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integrating the latter progressively and ascompletely as possible into the European spaceprogramme, in particular as regards thedevelopment of applications satellites;

d. by elaborating and implementing the industrialpolicy appropriate to its programme and byrecommending a coherent industrial policy tothe Member States.

Article IIIINFORMATION AND DATA

1. Member States and the Agency shall facilitatethe exchange of scientific and technicalinformation pertaining to the fields of spaceresearch and technology and their spaceapplications, provided that a Member Stateshall not be required to communicate anyinformation obtained outside the Agency if itconsiders that such communication would beinconsistent with the interests of its ownsecurity or its own agreements with thirdparties, or the conditions under which suchinformation has been obtained.

2. In carrying out its activities under Article V,the Agency shall ensure that any scientific

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results shall be published or otherwise madewidely available after prior use by thescientists responsible for the experiments. Theresulting reduced data shall be the property ofthe Agency.

3. When placing contracts or entering intoagreements, the Agency shall, with regard tothe resulting inventions and technical data,secure such rights as may be appropriate forthe protection of its interests, of those of theMember States participating in the relevantprogramme, and of those of persons and bodiesunder their jurisdiction. These rights shallinclude in particular the rights of access, ofdisclosure, and of use. Such inventions andtechnical data shall be communicated to theparticipating States.

4. Those inventions and technical data that arethe property of the Agency shall be disclosedto the Member States and may be used for theirown purposes by these Member States and bypersons and bodies under their jurisdiction,free of charge.

5. The detailed rules for the application of theforegoing provisions shall be adopted by the

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Council, by a two-thirds majority of allMember States.

Article IVEXCHANGE OF PERSONS

Member States shall facilitate the exchange ofpersons concerned with work within thecompetence of the Agency, consistent with theapplication to any person of their laws andregulations relating to entry into, stay in, ordeparture from, their territories.

Article VACTIVITIES AND PROGRAMMES

1. The activities of the Agency shall includemandatory activities, in which all MemberStates participate, and optional activities, inwhich all Member States participate apartfrom those that formally declare themselvesnot interested in participating therein.

a. With respect to the mandatory activities,the Agency shall:i. ensure the execution of basic activities,

such as education, documentation,

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studies of future projects andtechnological research work;

ii. ensure the elaboration and execution ofa scientif ic programme includingsatellites and other space systems;

iii. collect relevant information anddisseminate it to Member States, drawattention to gaps and duplication, andprovide advice and assistance for theharmonisation of international andnational programmes;

iv. maintain regular contact with the usersof space techniques and keep itselfinformed of their requirements.

b. With respect to the optional activities, theAgency shall ensure, in accordance with theprovisions of Annex III, the execution ofprogrammes which may, in particular,include:i. the design, development, construction,

launching, placing in orbit, and controlof satellites and other space systems;

ii. the design, development, construction,and operation of launch facilities andspace transport systems.

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2. In the area of space applications the Agencymay, should the occasion arise, carry outoperational activities under conditions to bedefined by the Council by a majority of allMember States. When so doing the Agencyshall:

a. place at the disposal of the operatingagencies concerned such of its ownfacilities as may be useful to them;

b. ensure as required, on behalf of theoperating agencies concerned, thelaunching, placing in orbit and control ofoperational application satellites;

c. carry out any other activity requested byusers and approved by the Council.

The cost of such operational activities shall beborne by the users concerned.

3. With respect to the coordination andintegration of programmes referred to inArticle II c, the Agency shall receive in goodtime from Member States information onprojects relating to new space programmes,facilitate consultations among the MemberStates, undertake any necessary evaluation and

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formulate appropriate rules to be adopted bythe Council by a unanimous vote of allMember States. The objectives and proceduresof the internationalisation of programmes areset out in Annex IV.

Article VIFACILITIES AND SERVICES

1. For the execution of the programmes entrustedto it, the Agency:

a. shall maintain the internal capabilityrequired for the preparation and supervisionof its tasks and, to this end, shall establishand operate such establishments andfacilities as are required for its activities;

b. may enter into special arrangements for theexecution of certain parts of itsprogrammes by, or in cooperation with,national institutions of the Member States,or for the management by the Agency itselfof certain national facilities.

2. In implementing their programmes, theMember States and the Agency shallendeavour to make the best use of their

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existing facilities and available services as af irst priority, and to rationalise them;accordingly they shall not set up new facilitiesor services without having first examined thepossibility of using the existing means.

Article VIIINDUSTRIAL POLICY

1. The industrial policy which the Agency is toelaborate and apply by virtue of Article II dshall be designed in particular to:

a. meet the requirements of the Europeanspace programme and the coordinatednational space programmes in a cost-effective manner;

b. improve the world-wide competitiveness ofEuropean industry by maintaining anddeveloping space technology and byencouraging the rationalisation anddevelopment of an industrial structureappropriate to market requirements,making use in the first place of the existingindustrial potential of all Member States;

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c. ensure that all Member States participate inan equitable manner, having regard to theirfinancial contribution, in implementing theEuropean space programme and in theassociated development of spacetechnology; in particular the Agency shall,for the execution of its programmes, grantpreference to the fullest extent possible toindustry in all Member States, which shallbe given the maximum opportunity toparticipate in the work of technologicalinterest undertaken for the Agency;

d. exploit the advantages of free competitivebidding in all cases, except where thiswould be incompatible with other definedobjectives of industrial policy.

Other objectives may be defined by theCouncil by a unanimous decision of allMember States.

The detailed arrangements for the attainmentof these objectives shall be those set out inAnnex V and in rules which shall be adoptedby the Council by a two-thirds majority of allMember States and reviewed periodically.

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2. For the execution of its programmes, theAgency shall make the maximum use ofexternal contractors consistent with themaintenance of the internal capability referredto in Article VI, 1.

Article VIIILAUNCHERS AND OTHER SPACE

TRANSPORT SYSTEMS

1. When defining its missions, the Agency shalltake into account the launchers or other spacetransport systems developed within theframework of its programmes, or by a MemberState, or with a signif icant Agencycontribution, and shall grant preference to theirutilisation for appropriate payloads if this doesnot present an unreasonable disadvantagecompared with other launchers or spacetransport means available at the envisagedtime, in respect of cost, reliability and missionsuitability.

2. If activities or programmes under Article Vinclude the use of launchers or other spacetransport systems, the participating Statesshall, when the programme in question is

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submitted for approval or acceptance, informthe Council of the launcher or space transportsystem envisaged. If during the execution of aprogramme the participating States wish to usea launcher or space transport system other thanthe one originally adopted, the Council shallmake a decision on this change in accordancewith the same rules as those applied in respectof the initial approval or acceptance of theprogramme.

Article IXUSE OF FACILITIES,

ASSISTANCE TO MEMBER STATES, AND SUPPLY OF PRODUCTS

1. Provided that their use for its own activitiesand programmes is not thereby prejudiced, theAgency shall make its facilities available, atthe cost of the State concerned, to any MemberState that asks to use them for its ownprogrammes. The Council shall determine, bya two-thirds majority of all Member States, thepractical arrangements under which thefacilities will be made available.

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2. If, outside the activities and programmesreferred to in Article V but within the purposeof the Agency, one or more Member Stateswish to engage in a project, the Council maydecide by a two-thirds majority of all MemberStates to make available the assistance of theAgency. The resulting cost to the Agency shallbe met by the Member State or Statesconcerned.

3. a. Products developed under a programme ofthe Agency shall be supplied to anyMember State that has taken part in thefunding of the programme in question andasks for such products to be supplied for itsown purposes.

The Council shall determine by a two-thirdsmajority of all Member States the practicalarrangements under which such productswill be supplied and in particular themeasures to be taken by the Agency inregard to its contractors to enable therequesting Member State to obtain thoseproducts.

b. This Member State may ask the Agency tostate whether it considers that the prices

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proposed by the contractors are fair andreasonable and whether, under similarcircumstances, it would consider themacceptable for the purposes of its ownrequirements.

c. The fulfilment of the requests referred to inthis paragraph shall not involve the Agencyin any additional costs, and all costsresulting from such requests shall be borneby the requesting Member State.

Article XORGANS

The organs of the Agency shall be the Council,and the Director General assisted by a staff.

Article XITHE COUNCIL

1. The Council shall be composed ofrepresentatives of the Member States.

2. The Council shall meet as and when required,either at delegate level or at ministerial level.The meetings shall be held at the Agency’s

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Headquarters unless the Council decidesotherwise.

3. a. The Council shall elect for two years aChairman and Vice-chairmen, who may bere-elected once for a further year. TheChairman shall direct the proceedings ofthe Council and ensure the preparation ofits decisions; he shall inform the MemberStates of proposals for the execution of anoptional programme; he shall assist incoordinating the activities of the organs ofthe Agency. He shall maintain liaison withthe Member States, through their delegatesto the Council, on general policy mattersaffecting the Agency and shall endeavour toharmonise their views thereon. In theinterval between meetings, he shall advisethe Director General and shall obtain fromhim all necessary information.

b. The Chairman shall be assisted by aBureau, the composition of which shall bedecided by the Council and which shall beconvened by the Chairman. The Bureaushall advise the Chairman in thepreparation of Council meetings.

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4. When the Council meets at ministerial level itshall elect a chairman for the meeting. Thenext ministerial meeting shall be convened byhim.

5. In addition to the functions set forth elsewherein this Convention and in accordance with itsprovisions, the Council shall:

a. as regards the activities and programmereferred to in Article V, 1 a (i) and (ii):i. approve the activities and programme by

a majority of all Member States;decisions to this effect may only bechanged by new decisions adopted by atwo-thirds majority of all MemberStates;

ii. determine, by a unanimous decision ofall Member States, the level of resourcesto be made available to the Agency forthe coming five-year period;

iii. determine, by a unanimous decision ofall Member States, towards the end ofthe third year of each five-year periodand after a review of the situation, thelevel of resources to be made availableto the Agency for the new five-year

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period starting at the end of this thirdyear;

b. as regards the activities referred to inArticle V, 1 a (iii) and (iv):i. define the policy to be followed by the

Agency in pursuit of its purpose;ii. adopt, by a two-thirds majority of all

Member States, recommendationsaddressed to Member States;

c. as regards the optional programmesreferred to in Article V, 1 b:i. accept each programme by a majority of

all Member States;ii. determine, as appropriate, in the course

of their implementation, the order ofpriority of programmes;

d. adopt the annual work plans of the Agency;

e. as regards the budgets as defined inAnnex II:i. adopt the annual general budget of the

Agency by a two-thirds majority of allMember States;

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ii. adopt each programme budget by a two-thirds majority of the participatingStates;

f. adopt, by a two-thirds majority of allMember States, the Financial Regulationsand all other financial arrangements of theAgency;

g. keep under review expenditure on themandatory and optional activities referredto in Article V, 1;

h. approve and publish the audited annualaccounts of the Agency;

i. adopt the Staff Regulations by a two-thirdsmajority of all Member States;

j. adopt, by a two-thirds majority of allMember States, rules under whichauthorisation will be given, bearing in mindthe peaceful purposes of the Agency, for thetransfer outside the territories of theMember States of technology and productsdeveloped under the activities of theAgency or with its help;

k. decide on the admission of new MemberStates in accordance with Article XXII;

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l. decide on the arrangements to be made inaccordance with Article XXIV in the eventof a Member State’s denouncing thisConvention or ceasing to be a memberunder Article XVIII;

m. take all other measures necessary for thefulfilment of the purpose of the Agencywithin the framework of this Convention.

6. a. Each Member State shall have one vote inthe Council. However, a Member State shallnot have the right to vote on mattersconcerning exclusively an acceptedprogramme in which it does not take part.

b. A Member State shall have no vote in theCouncil if the amount of its arrears ofcontributions to the Agency in respect of allactivities and programmes covered byArticle V in which it participates exceedsthe assessed amount of its contributions forthe current financial year. Moreover, if theamount of a Member State’s arrears ofcontributions to any one of the programmesunder Article V, 1 a (ii) or V, 1 b inwhich it participates exceeds the assessedamount of its contributions to that

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programme for the current financial year,then that Member State shall have no votein the Council on questions relatingexclusively to that programme. In any suchcase, the Member State may nevertheless beauthorised to vote in the Council if a two-thirds majority of all Member Statesconsiders that the non-payment ofcontributions is due to circumstancesbeyond its control.

c. The presence of delegates from a majorityof all Member States shall be necessary toconstitute a quorum at any meeting of theCouncil.

d. Except where this Convention providesotherwise, decisions of the Council shall betaken by a simple majority of MemberStates represented and voting.

e. In determining the unanimity or majoritiesprovided for in this Convention, accountshall not be taken of a Member State whichhas no vote.

7. The Council shall adopt its own rules ofprocedure.

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8. a. The Council shall establish a ScienceProgramme Committee, to which it shallrefer any matter relating to the mandatoryscientif ic programme underArticle V, 1 a (ii). It shall authorise thatCommittee to take decisions regarding thatprogramme, subject always to the Council’sfunctions of determining the level ofresources and adopting the annual budget.The terms of reference of the ScienceProgramme Committee shall be determinedby the Council by a two-thirds majority ofall Member States and in accordance withthis Article.

b. The Council may establish such othersubordinate bodies as may be necessary forthe purpose of the Agency. Theestablishment and terms of reference ofsuch bodies, and the cases in which theyhave powers of decision, shall bedetermined by the Council by a two-thirdsmajority of all Member States.

c. When a subordinate body examines aquestion relating exclusively to one of theoptional programmes referred to inArticle V, 1 b, non-participating States

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shall have no vote unless all participatingStates decide otherwise.

Article XIIDIRECTOR GENERAL AND STAFF

1. a. The Council shall, by a two-thirds majorityof all Member States, appoint a DirectorGeneral for a defined period and may, bythe same majority, terminate hisappointment.

b. The Director General shall be the chiefexecutive officer of the Agency and its legalrepresentative. He shall take all measuresnecessary for the management of theAgency, the execution of its programmes,the implementation of its policy and thefulfilment of its purpose, in accordancewith the directives issued by the Council.He shall have authority over theestablishments of the Agency. He shall, inregard to the financial administration of theAgency, act in accordance with theprovisions of Annex II. He shall make anannual report to the Council, and this reportshall be published. He may also submit

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proposals concerning activities andprogrammes as well as measures designedto ensure the fulfilment of the Agency’spurpose. He attends meetings of theAgency without the right to vote.

c. The Council may postpone the appointmentof the Director General for such period as itconsiders necessary either upon the entryinto force of this Convention or in the eventof a subsequent vacancy. In this event, itshall appoint a person to act in his place,who shall have such powers andresponsibilities as the Council maydetermine.

2. The Director General shall be assisted by suchscientif ic, technical, administrative andclerical staff as he may consider necessary,within the limits authorised by the Council.

3. a. Senior management staff, as defined by theCouncil, shall be appointed and may bedismissed by the Council on therecommendation of the Director General.Appointments and dismissals made by theCouncil shall require a two-thirds majorityof all Member States.

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b. Other staff members shall be appointed andmay be dismissed by the Director General,acting on the authority of the Council.

c. All staff shall be recruited on the basis oftheir qualifications, taking into account anadequate distribution of posts amongnationals of the Member States.Appointments and their termination shallbe in accordance with the StaffRegulations.

d. Scientists who are not members of the staffand who carry out research in theestablishments of the Agency shall besubject to the authority of the DirectorGeneral and to any general rules adopted bythe Council.

4. The responsibilities of the Director Generaland the staff in regard to the Agency shall beexclusively international in character. In thedischarge of their duties they shall not seek orreceive instructions from any government orfrom any authority external to the Agency.Each Member State shall respect theinternational character of the responsibilitiesof the Director General and the staff, and shall

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not seek to influence them in the discharge oftheir duties.

Article XIIIFINANCIAL CONTRIBUTIONS

1. Each Member State shall contribute to thecosts of the activities and programme referredto in Article V, 1 a and, in accordance withAnnex II, to the common costs of the Agency,in accordance with a scale adopted by theCouncil, by a two-thirds majority of allMember States, either every three years at thetime of the review referred to inArticle XI, 5 a (iii), or whenever the Council,by a unanimous vote of all Member States,decides to establish a new scale. The scale ofcontributions shall be based on the averagenational income of each Member State for thethree latest years for which statistics areavailable. Nevertheless,

a. no Member State shall be required to paycontributions in excess of twenty-fivepercent of the total amount of contributionsassessed by the Council to meet these costs;

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b. the Council may, by a two-thirds majorityof all Member States, decide in the light ofany special circumstances of a MemberState to reduce its contribution for a limitedperiod. In particular, when the annual percapita income of a Member State is lessthan an amount to be decided by theCouncil by the same majority, this shall beconsidered as a special circumstance withinthe meaning of this provision.

2. Each Member State shall contribute to thecosts of each optional programme covered byArticle V, 1 b, unless it has formally declareditself not interested in participating therein andis therefore not a participant. Unless allparticipating States decide otherwise, the scaleof contributions to a given programme shall bebased on the average national income of eachparticipating State for the three latest years forwhich statistics are available. This scale shallbe revised either every three years or wheneverthe Council decides to establish a new scale inaccordance with paragraph 1. However, noparticipating State shall, by the operation ofthis scale, be required to pay contributions inexcess of twenty-five percent of the total

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amount of contributions to the programmeconcerned. Nevertheless, the percentagecontribution to be made by each participatingState shall be equivalent to at least twenty-fivepercent of its percentage contributionestablished under the provisions of paragraph1, unless all the participating States decideotherwise when adopting the programme orduring the execution of the programme.

3. The statistical systems to be used forestablishing the scales of contribution referredto in paragraphs 1 and 2 shall be the same, andshall be determined in the FinancialRegulations.

4. a. Any State that was not a party to theConvention for the establishment of aEuropean Space Research Organisation orto the Convention for the establishment of aEuropean Organisation for theDevelopment and Construction of SpaceVehicle Launchers and which becomes aparty to this Convention shall make, inaddition to its contributions, a specialpayment related to the current value of theassets of the Agency. The amount of thisspecial payment shall be fixed by the

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Council by a two-thirds majority of allMember States.

b. Payments made in accordance with theprovisions of sub-paragraph a shall beused to reduce the contributions of the otherMember States unless the Council decidesotherwise by a two-thirds majority of allMember States.

5. Contributions due under this Article shall bepaid in accordance with Annex II.

6. Subject to any directions given by the Council,the Director General may accept gifts orlegacies to the Agency provided that they arenot subject to any conditions inconsistent withthe purpose of the Agency.

Article XIVCOOPERATION

1. The Agency may, upon decisions of theCouncil taken by unanimous votes of allMember States, cooperate with otherinternational organisations and institutions andwith Governments, organisations and

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institutions of non-member States, andconclude agreements with them to this effect.

2. Such cooperation may take the form ofparticipation by non-member States orinternational organisations in one or more ofthe programmes under Article V, 1 a (ii) andV, 1 b. Subject to the decisions to be takenunder paragraph 1, the detailed arrangementsfor such cooperation shall be defined in eachcase by the Council by a two-thirds majority ofthe States participating in the programme inquestion. These arrangements may provide thata non-member State shall have a vote in theCouncil when the latter examines matterspertaining exclusively to the programme inwhich that State participates.

3. Such cooperation may also take the form ofaccording associate membership to non-member States which undertake to contributeat least to the studies of future projects underArticle V, 1 a (i). The detailed arrangementsfor each such associate membership shall bedefined by the Council by a two-thirdsmajority of all Member States.

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Article XVLEGAL STATUS, PRIVILEGES AND

IMMUNITIES

1. The Agency shall have legal personality.

2. The Agency, its staff members and experts, andthe representatives of its Member States, shallenjoy the legal capacity, privileges andimmunities provided for in Annex I.

3. Agreements concerning the Headquarters ofthe Agency and the establishments set up inaccordance with Article VI shall be concludedbetween the Agency and the Member States onwhose territories the Headquarters andestablishments are situated.

Article XVIAMENDMENTS

1. The Council may recommend to MemberStates amendments to this Convention and toAnnex I thereto. Any Member State thatwishes to propose an amendment shall notifythe Director General thereof. The DirectorGeneral shall inform the Member States of any

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amendment so notified at least three monthsbefore it is discussed by the Council.

2. Any amendment recommended by the Councilshall enter into force thirty days after theGovernment of France has receivednotification of acceptance from all MemberStates. The Government of France shall notifyall Member States of the date of entry intoforce of any such amendment.

3. The Council may, by a unanimous vote of allMember States, amend any of the otherAnnexes to this Convention, provided that suchamendments do not conflict with theConvention. Any such amendment shall enterinto force on a date to be decided by theCouncil by a unanimous vote of all MemberStates. The Director General shall inform allMember States of any such amendment and ofthe date on which it will enter into force.

Article XVIIDISPUTES

1. Any dispute between two or more MemberStates, or between any of them and the Agency,concerning the interpretation or application of

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this Convention or its Annexes, and likewiseany dispute referred to in Article XXVI ofAnnex I, which is not settled by or through theCouncil, shall, at the request of any party to thedispute, be submitted to arbitration.

2. Unless the parties to the dispute decideotherwise, the arbitration procedure shall be inaccordance with this Article and withadditional rules to be adopted by the Councilby a two-thirds majority of all Member States.

3. The Arbitration Tribunal shall consist of threemembers. Each party to the dispute shallnominate one arbitrator; the f irst twoarbitrators shall nominate the third arbitrator,who shall be the chairman of the ArbitrationTribunal. The additional rules referred to inparagraph 2 shall determine the procedure tobe followed if the nominations have not takenplace within a specified time.

4. Member States or the Agency, not beingparties to the dispute, may intervene in theproceedings with the consent of the ArbitrationTribunal if it considers that they have asubstantial interest in the decision of the case.

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5. The Arbitration Tribunal shall determine itsseat and establish its own rules of procedure.

6. The award of the Arbitration Tribunal shall bemade by a majority of its members, who maynot abstain from voting. This award shall befinal and binding on all parties to the disputeand no appeal shall lie against it. The partiesshall comply with the award without delay. Inthe event of a dispute as to its meaning orscope, the Arbitration Tribunal shall interpret itat the request of any party to the dispute.

Article XVIIINON-FULFILMENT OF OBLIGATIONS

Any Member State which fails to fulfil itsobligations under this Convention shall cease tobe a member of the Agency on a decision of theCouncil taken by a two-thirds majority of allMember States. The provisions of Article XXIVshall apply in such a case.

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Article XIXCONTINUITY OF RIGHTS AND

OBLIGATIONS

On the date when this Convention enters intoforce, the Agency shall take over all rights andobligations of the European Space ResearchOrganisation and of the European Organisationfor the Development and Construction of SpaceVehicle Launchers.

Article XXSIGNATURE AND RATIFICATION

1. This Convention shall be open until31 December 1975 for signature by the Stateswhich are members of the European SpaceConference. The Annexes to this Conventionshall form an integral part thereof.

2. This Convention shall be subject to ratificationor acceptance. Instruments of ratification oracceptance shall be deposited with theGovernment of France.

3. After the entry into force of the Conventionand pending the deposit of its instrument ofratification or acceptance, a signatory State

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may take part in the meetings of the Agency,without the right to vote.

Article XXIENTRY INTO FORCE

1. This Convention shall enter into force whenthe following States, being members of theEuropean Space Research Organisation or theEuropean Organisation for the Developmentand Construction of Space Vehicle Launchers,have signed it and have deposited with theGovernment of France their instruments ofratification or acceptance: the Kingdom ofBelgium, the Kingdom of Denmark, theFrench Republic, the Federal Republic ofGermany, the Italian Republic, the Kingdom ofthe Netherlands, Spain, the Kingdom ofSweden, the Swiss Confederation and theUnited Kingdom of Great Britain andNorthern Ireland. For any State ratifying,accepting or acceding to this Convention afterits entry into force, the Convention shallbecome effective on the date of deposit by suchState of its instrument of ratif ication,acceptance or accession.

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2. The Convention for the establishment of aEuropean Space Research Organisation andthe Convention for the establishment of aEuropean Organisation for the Developmentand Construction of Space Vehicle Launchersshall terminate on the date of the entry intoforce of this Convention.

Article XXIIACCESSION

1. After the entry into force of this Convention,any State may accede thereto following adecision of the Council taken by a unanimousvote of all Member States.

2. A State that wishes to accede to thisConvention shall notify the Director General,who shall inform the Member States of thisrequest at least three months before it issubmitted to the Council for decision.

3. Instruments of accession shall be depositedwith the Government of France.

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Article XXIIINOTIFICATIONS

The Government of France shall notify allsignatory and acceding States of:

a. the date of deposit of each instrument ofratification, acceptance or accession;

b. the date of entry into force of this Conventionand of amendments covered by Article XVI, 2;

c. the denunciation of the Convention by aMember State.

Article XXIVDENUNCIATION

1. After this Convention has been in force for sixyears, any Member State may denounce it bynotifying the Government of France, whichshall notify the other Member States and theDirector General. The denunciation shall takeeffect at the end of the financial year followingthat during which it was notified to theGovernment of France. After the denunciationhas taken effect, the State concerned shallremain bound to honour its due share of the

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payment appropriations corresponding toapproved contract authority used both underthe budgets to which it was contributing for theyear in which the denunciation was notified tothe Government of France, and under previousbudgets.

2. A Member State denouncing the Conventionshall indemnify the Agency for any loss ofproperty on its territory, unless a specialagreement can be concluded with the Agencyfor the continued use of this property by theAgency or the continuation of certain activitiesof the Agency on the territory of the said State.Any such special agreement shall determine inparticular to what extent and on whatconditions the provisions of this Conventionshall continue to apply, after the denunciationhas taken effect, to the continued use of thisproperty and the continuation of theseactivities.

3. A Member State denouncing the Convention,and the Agency, shall jointly determine anyadditional obligations to be borne by the saidState.

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4. The State concerned shall retain the rights ithas acquired up to the date on which thedenunciation takes effect.

Article XXVDISSOLUTION

1. The Agency shall be dissolved if the number ofMember States becomes less than five. It maybe dissolved at any time by agreement betweenthe Member States.

2. In the event of dissolution the Council shallappoint a liquidation authority, which willnegotiate with the States on whose territoriesthe Headquarters and establishments of theAgency are situated at the time. The legalpersonality of the Agency shall subsist for thepurposes of the liquidation.

3. Any surplus shall be distributed among thoseStates that are members of the Agency at thetime of the dissolution, in proportion to thecontributions actually made by them from thedates of their becoming parties to thisConvention. In the event of a deficit, this shallbe met by the same States in proportion to their

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contributions as assessed for the financial yearthen current.

Article XXVIREGISTRATION

Upon the entry into force of this Convention, theGovernment of France shall register it with theSecretariat of the United Nations in accordancewith Article 102 of the Charter of the UnitedNations.

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ANNEX I

PRIVILEGES AND IMMUNITIES

Article I

The Agency shall have legal personality. It shall inparticular have the capacity to contract, to acquireand dispose of movable and immovable property,and to be a party to legal proceedings.

Article II

Without prejudice to Articles XXII and XXIII,the buildings and premises of the Agency shall beinviolable.

Article III

The archives of the Agency shall be inviolable.

Article IV

1. The Agency shall have immunity fromjurisdiction and execution, except:

a. to the extent that it shall, by decision of theCouncil, have expressly waived such

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immunity in a particular case; the Councilhas the duty to waive this immunity in allcases where reliance upon it would impedethe course of justice and it can be waivedwithout prejudicing the interests of theAgency;

b. in respect of a civil action by a third partyfor damage arising from an accident causedby a motor vehicle belonging to, oroperated on behalf of, the Agency, or inrespect of a motor traffic offence involvingsuch a vehicle;

c. in respect of an enforcement of anarbitration award made under eitherArticle XXV or Article XXVI;

d. in the event of the attachment, pursuant to adecision by the judicial authorities, of thesalaries and emoluments owed by theAgency to a staff member.

2. The Agency’s property and assets, whereversituated, shall be immune from any form ofrequisition, confiscation, expropriation andsequestration. They shall also be immune fromany form of administrative or provisionaljudicial constraint, except insofar as may be

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temporarily necessary in connection with theprevention and investigation of accidentsinvolving motor vehicles belonging to, oroperated on behalf of, the Agency.

Article V

1. Within the scope of its official activities, theAgency, its property and income shall beexempt from direct taxes.

2. When purchases or services of substantialvalue and strictly necessary for the exercise ofthe official activities of the Agency are madeor used by or on behalf of the Agency, andwhen the price of such purchases or servicesincludes taxes or duties, appropriate measuresshall, whenever possible, be taken by theMember States to grant exemption from suchtaxes or duties or to provide for theirreimbursement.

Article VI

Goods imported or exported by the Agency or onits behalf, and strictly necessary for the exerciseof its official activities, shall be exempt from all

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import and export duties and taxes and from allimport or export prohibitions and restrictions.

Article VII

1. For the purpose of Articles V and VI, theofficial activities of the Agency shall includeits administrative activities, including itsoperations in connection with the socialsecurity scheme, and activities undertaken inthe field of space research and technology andtheir space applications in pursuance of thepurpose of the Agency as defined in theConvention.

2. The extent to which other applications of suchresearch and technology and activities carriedout under Articles V, 2 and IX of theConvention may be considered part of theAgency’s official activities shall be decided ineach case by the Council after consultationwith the competent authorities of the MemberStates concerned.

3. The provisions of Articles V and VI shall notapply to taxes and duties that are no more thancharges for public utility services.

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Article VIII

No exemption shall be granted under Articles Vor VI in respect of goods purchased or imported,or services provided, for the personal benefit ofthe staff members of the Agency.

Article IX

1. Goods acquired under Article V or importedunder Article VI shall not be sold or givenaway except in accordance with conditions laiddown by the Member States which havegranted exemptions.

2. The transfer of goods and services between theHeadquarters and the establishments of theAgency, and between its variousestablishments, or, for the purpose ofimplementing a programme of the Agency,between them and a national institution of aMember State, shall be free of charges orrestrictions of any kind; if necessary, theMember States shall take all appropriatemeasures to grant exemption from orreimbursement of such charges or to lift suchrestrictions.

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Article X

The circulation of publications and otherinformation material sent by or to the Agencyshall not be restricted in any way.

Article XI

The Agency may receive and hold any kind offunds, currency, cash or securities; it may disposeof them freely for any purpose provided for in theConvention and hold accounts in any currency tothe extent required to meet its obligations.

Article XII

1. For its official communications and thetransfer of all its documents, the Agency shallenjoy treatment not less favourable than thataccorded by each Member State to otherinternational organisations.

2. No censorship shall be applied to officialcommunications of the Agency by whatevermeans of communication.

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Article XIII

Member States shall take all appropriate measuresto facilitate the entry into, stay in, or departurefrom their territories of staff members of theAgency.

Article XIV

1. Representatives of Member States shall, whileexercising their functions and in the course oftheir journeys to and from the place ofmeeting, enjoy the following privileges andimmunities:

a. immunity from arrest and detention, andfrom seizure of their personal luggage;

b. immunity from jurisdiction, even after thetermination of their mission, in respect ofacts, including words spoken and written,done by them in the exercise of theirfunctions; this immunity shall not apply,however, in the case of a motor trafficoffence committed by a representative of aMember State, nor in the case of damagecaused by a motor vehicle belonging to ordriven by him;

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c. inviolability for all their official papers anddocuments;

d. the right to use codes and to receivedocuments or correspondence by specialcourier or sealed bag;

e. exemption for themselves and their spousesfrom all measures restricting entry andfrom aliens’ registration formalities;

f. the same facilities in the matter of currencyand exchange control as are accorded to therepresentatives of foreign governments ontemporary official missions;

g. the same customs facilities as regards theirpersonal luggage as are accorded todiplomatic agents.

2. Privileges and immunities are accorded torepresentatives of Member States, not for theirpersonal advantage, but in order to ensurecomplete independence in the exercise of theirfunctions in connection with the Agency.Consequently, a Member State has the duty towaive the immunity of a representativewherever retaining it would impede the courseof justice and it can be waived without

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prejudicing the purposes for which it wasaccorded.

Article XV

In addition to the privileges and immunitiesprovided for in Article XVI, the Director Generalof the Agency and, when the office is vacant, theperson appointed to act in his place, shall enjoythe privileges and immunities to which diplomaticagents of comparable rank are entitled.

Article XVI

The staff members of the Agency:

a. shall have, even after they have left the serviceof the Agency, immunity from jurisdiction inrespect of acts, including words written andspoken, done by them in the exercise of theirfunctions; this immunity shall not apply,however, in the case of a motor traffic offencecommitted by a staff member of the Agency,nor in the case of damage caused by a motorvehicle belonging to or driven by him;

b. shall be exempt from all obligations in respectof military service;

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c. shall enjoy inviolability for all their officialpapers and documents;

d. shall enjoy the same facilities as regardsexemption from all measures restrictingimmigration and governing aliens’ registrationas are normally accorded to staff members ofinternational organisations, and members oftheir families forming part of their householdsshall enjoy the same facilities;

e. shall enjoy the same privileges in respect ofexchange regulations as are normally accordedto staff members of internationalorganisations;

f. shall, in time of international crisis, enjoy thesame facilities as to repatriation as diplomaticagents, and the members of their familiesforming part of their households shall enjoythe same facilities;

g. shall have the right to import duty-free theirfurniture and personal effects at the time offirst taking up their post in the Member Stateconcerned, and the right on the termination oftheir functions in that Member State to exportfree of duty their furniture and personaleffects, subject, in both cases, to the conditions

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considered necessary by the Member State onwhose territory the right is exercised.

Article XVII

Experts other than the staff members referred toin Article XVI, in the exercise of their functionsin connection with the Agency or in carrying outmissions for the Agency, shall enjoy the followingprivileges and immunities, to the extent that theseare necessary for the exercise of their functions,including during journeys made in the exercise oftheir functions and in the course of such missions:

a. immunity from jurisdiction in respect of acts,including words written and spoken, done bythem in the exercise of their functions, exceptin the case of a motor traff ic offencecommitted by an expert, or in the case ofdamage caused by a motor vehicle belongingto or driven by him; experts shall continue toenjoy this immunity after they have ceased tobe employed by the Agency;

b. inviolability for all their official papers anddocuments;

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c. the same facilities as regards monetary andexchange regulations and as regards theirpersonal luggage as are accorded to theofficials of foreign governments on temporaryofficial missions.

Article XVIII

1. Subject to the conditions and following theprocedure laid down by the Council, theDirector General and the staff members of theAgency shall be subject to a tax, for the benefitof the Agency, on salaries and emolumentspaid by the Agency. Such salaries andemoluments shall be exempt from nationalincome tax; but the Member States shall retainthe right to take these salaries and emolumentsinto account for the purpose of assessing theamount of taxation to be applied to incomefrom other sources.

2. The provisions of paragraph 1 shall not applyto annuities and pensions paid by the Agencyto its former Directors General and staffmembers.

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Article XIX

Articles XVI and XVIII shall apply to allcategories of staff members to which the StaffRegulations of the Agency apply. The Councilshall decide the categories of experts to whichArticle XVII shall apply. The names, titles andaddresses of the staff members and expertsreferred to in the present Article shall becommunicated from time to time to the MemberStates.

Article XX

In the event that it establishes its own socialsecurity scheme, the Agency, its Director Generaland staff members shall be exempt from allcompulsory contributions to national socialsecurity bodies, subject to agreements concludedwith the Member States in accordance withArticle XXVIII.

Article XXI

1. The privileges and immunities provided for inthis Annex are not granted to the DirectorGeneral, staff members and experts of theAgency for their personal advantage. They are

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provided solely to ensure, in all circumstances,the unimpeded functioning of the Agency andthe complete independence of the persons towhom they are accorded.

2. The Director General has the duty to waive anyrelevant immunity in all cases whereverretaining it would impede the course of justiceand it can be waived without prejudicing theinterests of the Agency. In the case of theDirector General, the Council is competent towaive such immunity.

Article XXII

1. The Agency shall cooperate at all times withthe competent authorities of Member States inorder to facilitate the proper administration ofjustice, to ensure the observance of policeregulations and regulations concerning thehandling of explosives and inflammablematerial, public health, labour inspection orother similar national legislation, and toprevent any abuse of the privileges, immunitiesand facilities provided for in this Annex.

2. The procedure for the cooperation referred toin paragraph 1 may be laid down in the

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complementary agreements referred to inArticle XXVIII.

Article XXIII

Each Member State shall retain the right to takeall precautionary measures in the interests of itssecurity.

Article XXIV

No Member State shall be obliged to accord theprivileges and immunities referred to in ArticlesXIV, XV, XVI b, e and g and XVII c, to its ownnationals or persons who, at the moment of takingup their duties in that Member State, arepermanent residents thereof.

Article XXV

1. When concluding written contracts, other thanthose concluded in accordance with the StaffRegulations, the Agency shall provide forarbitration. The arbitration clause or thespecial arbitration agreement concluded to thisend shall specify the law applicable and thecountry where the arbitrators sit. The

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arbitration procedure shall be that of thatcountry.

2. The enforcement of the arbitration award shallbe governed by the rules in force in the Stateon whose territory the award is to be executed.

Article XXVI

Any Member State may submit to theinternational Arbitration Tribunal referred to inArticle XVII of the Convention any dispute:

a. arising out of damage caused by the Agency;

b. involving any other non-contractualresponsibility of the Agency;

c. involving the Director General, a staff memberor an expert of the Agency and in which theperson concerned can claim immunity fromjurisdiction under Articles XV, XVI a orXVII a, if this immunity is not waived inaccordance with Article XXI. In such disputeswhere the claim for immunity fromjurisdiction arises under Articles XVI a orXVII a, the responsibility of the Agency shallin such arbitration be substituted for that of thepersons referred to in those Articles.

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Article XXVII

The Agency shall make suitable provision for thesatisfactory settlement of disputes arisingbetween the Agency and the Director General,staff members or experts in respect of theirconditions of service.

Article XXVIII

The Agency may, on a decision of the Council,conclude with one or more Member Statescomplementary agreements to give effect to theprovisions of this Annex as regards such State orStates, and other arrangements to ensure theefficient functioning of the Agency and thesafeguarding of its interests.

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ANNEX II

FINANCIAL PROVISIONS

Article I

1. The financial year of the Agency shall runfrom the first of January to the thirty-first ofDecember following.

2. The Director General shall, not later than thefirst of September of each year, forward to theMember States:

a. a draft general budget;

b. draft programme budgets.

3. The general budget shall comprise:

a. an expenditure part, showing the estimatedexpenditure relating to the activitiesreferred to in Article V, 1 a (i), (iii) and (iv)of the Convention, including the fixedcommon costs, as well as to the non-fixedcommon costs and the support costsconcerning the programmes referred to inArticle V, 1 a (ii) and V, 1 b of theConvention; the f ixed and non-f ixed

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common costs and the support costs shallbe defined in the Financial Regulations; theestimates shall be broken down by type ofactivity and by general heading;

b. an income part, showing:i. the contributions of all Member States

towards the expenditure relating to theactivities referred to in Article V, 1 a (i),(iii) and (iv) of the Convention,including the fixed common costs;

ii. the contributions of participating Statesto the non-fixed common costs andsupport costs allocated, in accordancewith the Financial Regulations, to theprogrammes referred to inArticle V, 1 a (ii) and V, 1 b of theConvention;

iii. other income.

4. Each programme budget shall comprise:

a. an expenditure part, showing:i. the estimated direct expenditure relating

to the programme and broken down bygeneral heading as defined in theFinancial Regulations;

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ii. the estimated non-fixed common costsand support costs allocated to theprogramme;

b. an income part, showing:i. the contributions of participating States

to the direct expenditure referred to insub-paragraph a (i);

ii. other income;iii. for information, the contributions of

participating States to the non-fixedcommon costs and the support costsreferred to in sub-paragraph a (ii), asprovided for in the general budget.

5. The approval of the general budget and of eachprogramme budget by the Council shall takeplace before the beginning of each financialyear.

6. The general budget and the programmebudgets shall be prepared and executed inaccordance with the Financial Regulations.

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Article II

1. If circumstances so require, the Council mayask the Director General to present a revisedbudget to it.

2. No decision involving additional expenditureshall be deemed to have been approved untilthe Council has approved the DirectorGeneral’s estimate of the additionalexpenditure involved.

Article III

1. The Director General shall, if so requested bythe Council, include in the general budget or inthe programme budget concerned theestimates of expenditure for subsequent years.

2. In connection with the adoption of the annualbudgets of the Agency, the Council shall re-examine the level of resources and make thenecessary adjustments in the light of price-level variations and any unforeseen changesduring the execution of the programmes.

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Article IV

1. The expenditure approved for activitiescovered by Article V of the Convention shallbe met by contributions assessed in accordancewith Article XIII of the Convention.

2. When a State accedes to the Convention inaccordance with Article XXII thereof, thecontributions of the other Member States shallbe reassessed. A new scale, which shall takeeffect on a date to be decided by the Council,shall be established on the basis of the nationalincome statistics for the years used incalculating the existing scale. Whereappropriate, reimbursements shall be made toensure that the contributions paid by allMember States for the current year are inaccordance with the decision of the Council.

3. a. The arrangements by which contributionsare to be made, which shall ensure theproper financing of the Agency, shall bedetermined in the Financial Regulations.

b. The Director General shall notify MemberStates of the amount of their contributionsand of the dates on which payments shall bemade.

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Article V

1. The budgets of the Agency shall be expressedin ECU as currently defined by the EuropeanUnion’s competent bodies and subsequently inthe European payment unit which may replaceit as soon as it is set into force by these bodies.

2. Each Member State shall pay its contributionin ECU and in the subsequent replacement forit as referred to in paragraph 1 above.

Article VI

1. The Director General shall keep an accurateaccount of all income and expenditure. At theend of each financial year the Director Generalshall, in accordance with the FinancialRegulations, draw up separate annual accountsfor each programme covered by Article V ofthe Convention.

2. Budgetary accounts, the budget and thefinancial management, as well as any othermeasure having financial implications, shall beexamined by an Audit Commission. TheCouncil shall designate, by a two-thirdsmajority of all Member States, the Member

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States which, in rotation on an equitable basis,shall be invited to nominate, preferably fromamong their own senior officials, auditors toserve on this Commission, and shall nominateby the same majority, from among the auditors,a Chairman of the Commission for a period notexceeding three years.

3. The purpose of the audit, which shall be basedon records and, if necessary, done on the spot,shall be to verify that expenditure hasconformed with the budget estimates and thatthe records are lawful and correct. TheCommission shall also report on the economicmanagement of the Agency’s f inancialresources. At the end of each financial year,the Commission shall draw up a report, whichshall be adopted by the majority of itsmembers and thereupon transmitted to theCouncil.

4. The Audit Commission shall discharge suchother functions as are set out in the FinancialRegulations.

5. The Director General shall furnish the auditorswith such information and help as they mayrequire to carry out their duties.

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ANNEX III

OPTIONAL PROGRAMMESCOVERED BY ARTICLE V, 1 b OF

THE CONVENTION

Article I

1. If a proposal for the carrying out of an optionalprogramme covered by Article V, 1 b of theConvention is made, the Chairman of theCouncil shall communicate it to all MemberStates for examination.

2. Once the Council has, in accordance withArticle XI, 5 c (i) of the Convention,accepted the carrying out of an optionalprogramme within the framework of theAgency, any Member State that does not intendto take part in the programme shall, withinthree months, formally declare that it is notinterested in participating therein; theparticipating States shall draw up aDeclaration which, subject to Article III, 1,shall set out their undertaking in respect of:

a. the phases of the programme;

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b. the conditions under which it is to becarried out, including the timing, theindicative financial envelope and sub-envelopes relating to phases of theprogramme, and any other provisions for itsmanagement and execution;

c. the scale of contributions determined inaccordance with Article XIII, 2 of theConvention;

d. the duration and amount of the first bindingfinancial commitment.

3. The Declaration shall be transmitted to theCouncil for information, together with draftimplementing rules submitted to it forapproval.

4. If a participating State is unable to accept theprovisions set out in the Declaration andimplementing rules within the time limit laiddown in the Declaration, it shall cease to be aparticipating State. Other Member States maysubsequently become participating States byaccepting these provisions in accordance withconditions to be determined with theparticipating States.

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Article II

1. The programme shall be executed inaccordance with the provisions of theConvention and, unless otherwise stipulated inthis Annex or in the implementing rules, withthe rules and procedures in force in theAgency. Decisions of the Council shall betaken in accordance with this Annex and theimplementing rules. Failing any specificprovisions in this Annex or in theimplementing rules, the voting rules laid downin the Convention or the rules of procedure ofthe Council shall apply.

2. Decisions on the start of a new phase shall betaken by a two-thirds majority of allparticipating States, provided that this majorityrepresents at least two-thirds of thecontributions to the programme. If the decisionto start a new phase cannot be taken, theparticipating States that wish, nevertheless, tocontinue with the programme shall consultamong themselves and determinearrangements for such continuation. They shallreport accordingly to the Council, which shalltake any measures that may be required.

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Article III

1. If the programme includes a project definitionphase, the participating States shall, at the endof the phase, reassess the cost of theprogramme. If the reassessment shows thatthere is a cost overrun greater than 20% of theindicative financial envelope referred to inArticle I, any participating State maywithdraw from the programme. Theparticipating States that wish, nevertheless, tocontinue with the programme shall consultamong themselves and determine thearrangements for such continuation. They shallreport accordingly to the Council, which shalltake any measures that may be required.

2. During each phase, as def ined in theDeclaration, the Council shall, by a two-thirdsmajority of all participating States, adoptannual budgets within the relevant financialenvelope or sub-envelopes.

3. The Council shall lay down a procedureenabling the f inancial envelope or sub-envelopes to be revised in the event of price-level variations.

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4. When the financial envelope or a financialsub-envelope has to be revised for reasonsother than those referred to in paragraphs 1and 3, the participating States shall apply thefollowing procedure:

a. No participating State shall be entitled towithdraw from the programme unless thecumulative cost overrun is greater than 20%of the initial financial envelope, or of therevised envelope defined in accordancewith the procedure laid down inparagraph 1.

b. If the cumulative cost overrun is greaterthan 20% of the relevant f inancialenvelope, any participating State maywithdraw from the programme. ThoseStates that wish, nevertheless, to continuewith the programme shall consult amongthemselves, determine the arrangements forsuch continuation and report accordingly tothe Council, which shall take any measuresthat may be required.

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Article IV

The Agency, acting on behalf of the participatingStates, shall be the owner of the satellites, spacesystems and other items produced under theprogramme as well as of the facilities andequipment acquired for its execution. Any transferof ownership shall be decided on by the Council.

Article V

1. Denunciation of the Convention by a MemberState shall entail the withdrawal of thatMember State from all the programmes inwhich it participates. Article XXIV of theConvention shall apply to the rights andobligations arising out of these programmes.

2. Discontinuations under Article II, 2 andwithdrawals under Article III, 1 and III, 4 bshall take effect on the date on which theCouncil receives the information referred to inthose articles.

3. A participating State that decides not tocontinue with a programme under Article II, 2,or withdraws from a programme underArticle III, 1 and III, 4 b, shall retain the

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rights acquired by the participating States up tothe effective date of its withdrawal. Thereafter,no further right or obligation shall arise fromthe remaining part of the programme in whichit no longer participates. It shall remain boundto f inance its share of the paymentappropriations corresponding to contractauthority approved under the budget for thecurrent or previous financial years and relatingto the programme phase whose execution is inprogress. However, the participating Statesmay unanimously agree, in the Declaration,that a State which decides not to continue with,or withdraws from, a programme shall bebound to finance its total share of the initialenvelope or the sub-envelopes of theprogramme.

Article VI

1. The participating States may decide todiscontinue a programme by a two-thirdsmajority of all participating Statesrepresenting at least two-thirds of thecontributions to the programme.

2. The Agency shall notify the participatingStates of the completion of the programme in

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accordance with the implementing rules; theseimplementing rules shall cease to be in forceupon receipt of such notification.

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ANNEX IV

INTERNATIONALISATION OFNATIONAL PROGRAMMES

Article I

The principal objective of the internationalisationof national programmes shall be that eachMember State shall make available forparticipation by other Member States, within theframework of the Agency, any new civil spaceproject which it intends to undertake, either aloneor in collaboration with another Member State.With this end in view:

a. each Member State shall notify to the DirectorGeneral of the Agency any such project beforethe beginning of its phase B (project definitionphase);

b. the timing and content of proposals forparticipation in a project should make itpossible for other Member States to undertakea significant share of the work involved; anearly indication shall be given to the Agency ofany reasons which make this impracticable andof any conditions which the initiating Member

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State may wish to place on the allocation ofwork to other Member States;

c. the initiating Member State shall explain thearrangements it proposes for the technicalmanagement of the project and indicate thereasons for them;

d. the initiating Member State shall use its bestendeavours to accommodate all reasonableresponses, subject to agreement being reached,within the time scale demanded by projectdecisions, on the level of the cost and the wayin which the cost and work are shared; it shallsubsequently submit a formal proposal underAnnex III where the project is to be executedin accordance with the terms of that Annex;

e. the execution of a project within theframework of the Agency shall not be excludedmerely because that project has failed to attractthe participation of other Member States to theextent originally proposed by the initiatingMember State.

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Article II

Member States shall use their best endeavours toensure that the bilateral and multilateral spaceprojects which they undertake with non-memberStates do not prejudice the scientific, economic orindustrial objectives of the Agency. In particular,they shall:

a. inform the Agency of such projects, in so far asthey judge that this would not prejudice theprojects;

b. discuss with the other Member States projectsso communicated, with the object ofestablishing the scope for wider participation.If wider participation proves possible, theprocedures laid down in Article I, b to e shallapply.

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ANNEX V

INDUSTRIAL POLICY

Article I

1. In implementing the industrial policy referredto in Article VII of the Convention, theDirector General shall act in conformity withthe provisions of this Annex and with thedirectives of the Council.

2. The Council shall keep under review theindustrial potential and industrial structure inrelation to the Agency’s activities, and inparticular:

a. the general structure of industry, andindustrial groupings;

b. the degree of specialisation desirable inindustry and methods of achieving it;

c. the coordination of relevant nationalindustrial policies;

d. interaction with any relevant industrialpolicies of other international bodies;

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e. the relationship between industrialproduction capacity and potential markets;

f. the organisation of contacts with industry,

in order to be able to monitor and, whereappropriate, adapt the Agency’s industrialpolicy.

Article II

1. In the placing of all contracts, the Agency shallgive preference to industry and organisationsof the Member States. However, within eachoptional programme covered by Article V, 1 bof the Convention, particular preference shallbe given to industry and organisations in theparticipating States.

2. The Council shall determine whether and towhat extent the Agency may derogate from theabove preference clause.

3. The question whether an enterprise should beconsidered to belong to one of the MemberStates shall be settled in the light of thefollowing criteria: location of the enterprise’sregistered office, decision-making centres andresearch centres, and territory on which the

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work is to be carried out. In doubtful cases theCouncil shall decide whether an enterpriseshall be considered to belong to one of theMember States, or not.

Article III

1. The Director General shall, at an early stage inthe contract action and before invitations totender are sent out, submit for the approval ofthe Council his proposal on the procurementpolicy to be followed, for any contract whicheither:

a. has an estimated value above limits whichshall be defined in the rules concerningindustrial policy and which will depend onthe nature of the work; or

b. is, in the opinion of the Director General,not adequately covered by the rulesconcerning industrial policy or byadditional guidelines established by theCouncil, or might give rise to a conflictwith those rules or guidelines.

2. The additional guidelines referred to inparagraph 1 b shall be established from time

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to time by the Council if it considers themhelpful for the purpose of distinguishing thoseareas where prior submission underparagraph 1 is necessary.

3. The Agency’s contracts shall be awardeddirectly by the Director General withoutfurther reference to the Council except in thefollowing cases:

a. when the evaluation of the offers receivedsuggests a recommendation for the choiceof a contractor which would be contraryeither to the prior instructions issued by theCouncil under the terms of paragraph 1, orto any general guidelines on industrialpolicy adopted as a result of the Council’sstudies under Article I, 2; the DirectorGeneral shall then submit the case to theCouncil for decision, explaining why heconsiders a deviation to be necessary andindicating also whether another decision bythe Council would constitute, technically,operationally or otherwise, an advisablealternative;

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b. where the Council has decided for specificreasons to undertake a review before acontract is awarded.

4. The Director General shall report to theCouncil, at regular intervals to be specified, onthe contracts awarded during the previousperiod, and on the contract actions planned forthe subsequent period, in order that the Councilmay monitor the implementation of theAgency’s industrial policy.

Article IV

The geographical distribution of all the Agency’scontracts shall be governed by the followinggeneral rules:

1. A Member State’s overall return coefficientshall be the ratio between its percentage shareof the total value of all contracts awardedamong all Member States and its totalpercentage contributions. However, in thecalculation of this overall return coefficient, noaccount shall be taken of contracts placed in,or contributions made by, Member States in aprogramme undertaken:

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a. under Article VIII of the Convention forthe establishment of a European SpaceResearch Organisation, provided that therelevant Arrangement contains provisionsto this effect or that all participating Statessubsequently unanimously so agree;

b. under Article V, 1 b of the presentConvention provided that all originalparticipating States unanimously so agree.

2. For the purpose of calculating returncoefficients, weighting factors shall be appliedto the value of contracts on the basis of theirtechnological interest. These weighting factorsshall be defined by the Council. Within asingle contract having a significant value,more than one weighting factor may beapplied.

3. Ideally the distribution of contracts placed bythe Agency should result in all countrieshaving an overall return coefficient of 1.

4. The return coefficients shall be computedquarterly and shown cumulatively for thepurpose of the formal reviews referred to inparagraph 5.

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5. Formal reviews of the geographicaldistribution of contracts shall take place everyfive years, with an interim review before theend of the third year.

6. The distribution of contracts between formalreviews of the situation should be such that, atthe time of each formal review, the cumulativeoverall return coefficient of each MemberState does not substantially deviate from theideal value. At the time of each formal review,the Council may revise the lower limit for thecumulative return coeff icient for thesubsequent period, provided that it shall neverbe lower than 0.8.

7. Separate assessments shall be made, andreported to the Council, of the returncoefficients for various categories of contractto be defined by it, in particular advancedresearch and development contracts andcontracts for project-related technology. TheDirector General shall discuss theseassessments with the Council, at regularintervals to be specified, and in particular atthe interim review, with the aim of identifyingthe action needed to redress any imbalances.

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Article V

If, between two formal reviews, a trend isidentified indicating that the overall returncoefficient of any Member State is likely to bebelow the lower limit defined according toArticle IV, 6, the Director General shall submit tothe Council proposals in which the need toremedy the situation takes precedence over theAgency’s rules governing the placing of contracts.

Article VI

Any decision taken on industrial policy groundswhich has the effect of excluding a particular firmor organisation of a Member State fromcompeting for the Agency’s contracts in aparticular field shall require the agreement of thatMember State.

* * *

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IN WITNESS WHEREOF, the undersignedplenipotentiaries, having been duly authorisedthereto, have signed this Convention.

DONE at Paris, on 30 May 1975, in the German,English, Spanish, French, Italian, Dutch andSwedish languages, all these texts being equallyauthentic, in a single original, which shall bedeposited in the archives of the Government ofFrance, which shall transmit certified copies to allsignatory and acceding States.

Texts of this Convention drawn up in other officiallanguages of the Member States of the Agencyshall be authenticated by a unanimous decision ofall Member States. Such texts shall be depositedin the archives of the Government of France,which shall transmit certified copies to allsignatory and acceding States.

For the Federal Republic of GermanySigismund Freiherr Von BRAUNHans MATTHÖFER

For the Kingdom of Belgium Ch. de KERCHOVE

For the Kingdom of Denmark Paul FISCHER

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For Spain Miguel de LOJENDIO

For the French Republic Michel d’ORNANO

For Ireland David NELIGAN

For the Italian Republic Mario PEDINI

For the Kingdom of Norway[no signature]

For the Kingdom of the Netherlands Onder voorbehoud van aanvaardingJ.A. de RANITZ

For the United Kingdom of Great Britain andNorthern Ireland

BESWICK

For the Kingdom of Sweden Sous réserve de ratificationIngemar HÄGGLÖF

For the Swiss Confederation Pierre DUPONT

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