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1. The Programme shall be open to association of the following third countries (associated countries):

(a) Members of the European Free Trade Association, which are members of the EEA, in accordance with the conditions laid down in the Agreement on the European Economic Area;

(b) acceding countries, candidate countries and potential candidates, in accordance with the general principles and general terms and conditions for the participation of those countries in Union programmes established in the respective framework agreements and Association Council decisions or similar agreements and in accordance with the specific conditions laid down in agreements between the Union and those countries;

(c) European Neighbourhood Policy countries, in accordance with the general principles and general terms and conditions for the participation of those countries in Union programmes established in the respective framework agreements and Association Council decisions or in similar agreements and in accordance with the specific conditions laid down in agreements between the Union and those countries;

(d) third countries and territories that fulfil all of the following criteria:

(i) a good capacity in science, technology and innovation;

(ii) commitment to a rules-based open market economy, including fair and equitable dealing with intellectual property rights, respect of human rights, backed by democratic institutions;

(iii) active promotion of policies to improve the economic and social well-being of citizens.

2. Association to the Programme of each of the third countries under point (d) of paragraph 1 shall be in accordance with the conditions laid down in an agreement covering the participation of the third country to any Union programme, provided that the agreement:

(a) ensures a fair balance as regards the contributions and benefits of the third country participating in the Union programmes;

(b) lays down the conditions of participation in the Union programmes, including the calculation of financial contributions to individual programmes, and their administrative costs;

(c) does not confer on the third country any decision-making power in respect of the Union programme;

(d) guarantees the rights of the Union to ensure sound financial management and to protect the Union's financial interests. The contributions referred to in point (b) of the first subparagraph of this paragraph shall constitute assigned revenues in accordance with Article 21(5) of the Financial Regulation.

3. The scope of association of each third country to the Programme shall take into account an analysis of the benefits for the Union and the objective of driving economic growth in the Union through innovation. Accordingly, with the exception of EEA members, acceding countries, candidate countries and potential candidates, parts of the Programme may be excluded from an association agreement for a specific country.

4. The association agreement shall, as far as possible, provide for the reciprocal participation of legal entities established in the Union in equivalent programmes of associated countries in accordance with the conditions laid down in those programmes.

5. The conditions determining the level of financial contribution shall ensure a regular automatic correction of any significant imbalance compared to the amount that entities established in the associated country receive through participation in the Programme, taking into account the costs in the management, execution and operation of the Programme. The allocation of the financial contributions shall take into account the level of participation of the legal entities of the associated countries in each part of the Programme.