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1. Where it proves to be the most appropriate way to achieve policy objectives of the Union, the Union may establish financial instruments or provide budgetary guarantees or financial assistance backed by the budget by means of a basic act defining their scope and period of implementation.

2. Member States may contribute to the Union’s financial instruments, budgetary guarantees or financial assistance. If authorised by the basic act, third parties may also contribute.

3. Where financial instruments or budgetary guarantees are implemented under direct management, the Commission shall ensure compliance mutatis mutandis with Article 158(2) with respect to financial intermediaries and final recipients.

4. Where financial instruments are implemented under shared management with Member States, sector-specific rules shall apply.

5. Where financial instruments or budgetary guarantees are implemented under indirect management, the Commission shall conclude agreements with entities pursuant to Article 62(1), first subparagraph, points (c)(ii), (iii), (v) and (vi). Where the systems, rules and procedures of those entities have been assessed pursuant to Article 157(3) and (4), they may fully rely on those systems, rules and procedures. Those entities may, when implementing financial instruments and budgetary guarantees under indirect management, conclude agreements with financial intermediaries which shall be selected in accordance with procedures equivalent to those applied by the Commission. Those entities shall transpose the requirements pursuant to Article 158(2) in those agreements. The Commission shall remain responsible for ensuring that the implementation framework for financial instruments and budgetary guarantees complies with the principle of sound financial management and supports the attainment of defined and time-bound policy objectives, measurable in terms of outputs and/or results. The Commission shall be accountable for the implementation of financial instruments and budgetary guarantees without prejudice to the entrusted entities’ legal and contractual responsibility in accordance with the applicable law and Article 129. Where third countries contribute to financial instruments or budgetary guarantees pursuant to paragraph 2, the basic act may allow for the designation of eligible implementing entities or counterparts from the countries concerned.

6. The Court of Auditors shall have full access to any information related to the financial instruments, budgetary guarantees and financial assistance, including by means of on-the-spot checks. The Court of Auditors shall be the external auditor responsible for the projects and programmes supported by a financial instrument, a budgetary guarantee or a financial assistance.