7.3.2006 Official Journal of the European Union L 65/5 COUNCIL REGULATION (EC) No 389/2006 of 27 February 2006 establishing an instrument of financial support for encouraging the economic development of the Turkish Cypriot community and amending Council Regulation (EC) No 2667/2000 on the European Agency for Reconstruction THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 308 thereof, Having regard to the proposal from the Commission, Having regard to the Opinion of the European Parliament, Whereas: The European Council has repeatedly underlined its strong preference for accession by a reunited Cyprus. As yet, a comprehensive settlement has not been reached. The Council of 26 April 2004, considering that the Turkish Cypriot community had expressed their clear desire for a future within the European Union, recom- mended that the funds earmarked for the northern part of Cyprus in the event of a settlement should be used to put an end to the isolation of that community and to facilitate the reunification of Cyprus by encouraging the economic development of the Turkish Cypriot community, with particular emphasis on the economic integration of the island and on improving contact between the two communities and with the EU. Following the accession of Cyprus, the application of the acquis is suspended pursuant to Article 1(1) of Protocol No 10 of the Act of Accession 2003 in the areas of the Republic of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control (hereinafter referred to as ‘the areas’). Pursuant to Article 3(1) of Protocol No 10, nothing in the Protocol precludes measures with a view to promoting the economic development of the areas. ©) (10) (11) Measures to be financed under this Regulation are of an exceptional and transitional nature and are intended, in particular, to prepare and facilitate, as appropriate, the full application of the acquis communautaire in the areas following a solution to the Cyprus problem. With a view to allocating the financial support in the most efficient and rapid way, it is desirable to provide that assistance can be supplied directly to the benefi- ciaries. In order to supply assistance in accordance with the principles of sound financial management, the Commission should be in a position to delegate to the European Agency for Reconstruction implementation of assistance under this Regulation. Therefore, Council Regulation (EC) No 2667/2000 on the European Agency for Reconstruction (1) needs to be amended accordingly. The development and restructuring of infrastructure, in particular in the areas of energy and transport, the envir- onment, telecommunications and water supply should take account of island-wide planning, where appropriate. In the implementation of actions financed under this Regulation, the rights of natural and legal persons, including the rights to possessions and property, should be respected. Nothing in this Regulation is intended to imply recog- nition of any public authority in the areas other than the Government of the Republic of Cyprus. In accordance with Article 2 of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (%), measures for the imple- mentation of this Regulation should be adopted by use of the management procedure provided for in Article 4 of that Decision. () OJ L 306, 7.12.2000, p. 7. Regulation as last amended by Regu- lation (EC) No 2068/2004 O] L 358, 3.12.2004, p. 2). () OJ L 184, 17.7.1999, p. 23.