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1. Subject to paragraphs 2 and 3 of this Article, Title VI of Part One and Article 192 of Regulation (EU, Euratom) No 966/2012 shall apply.

2. Grants are direct financial contributions, by way of donation, from the EDF in order to finance any of the following:

(a) an action intended to help achieve an objective of the ACP-EU Partnership Agreement or the Overseas Association Decision, or of a programme or project adopted in accordance with that Agreement or Decision; or (b) the functioning of a body which pursues an objective referred to in point (a). A grant within the meaning of point (a) may be awarded to a body referred to in Article 208(1) of Regulation (EU, Euratom) No 966/2012.

3. When working with stakeholders of ACP States and OCTs, the Commission shall take into account their specificities, including needs and context, when defining the modalities of financing, the type of contribution, the award modalities and the administrative provisions for the management of grants with the purpose of reaching and best responding to the widest possible range of stakeholders of ACP States and OCTs, and most efficiently achieving objectives of the ACP-EU Partnership Agreement or the Overseas Association Decision. Specific modalities shall be encouraged, such as partnership agreements, financial support to third parties, direct award or eligibility-restricted calls for proposals or lump sums.

4. The following shall not constitute grants within the meaning of this Regulation:

(a) items referred to in points (b) to (f), (h) and (i) of Article 121(2) of Regulation (EU, Euratom) No 966/2012;

(b) financial assistance referred to in Article 35(2) of this Regulation.

5. Articles 175 and 177 of Delegated Regulation (EU) No 1268/2012 shall not apply.