# L_2017252EN.01035701.xml

| 29.9.2017 | EN | Official Journal of the European Union | L 252/357 |
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29.9.2017

EN

Official Journal of the European Union

L 252/357

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RESOLUTION (EU) 2017/1742 OF THE EUROPEAN PARLIAMENT

of 27 April 2017

with observations forming an integral part of the decision on discharge in respect of the implementation of the budget of the Innovative Medicines Initiative 2 Joint Undertaking for the financial year 2015

THE EUROPEAN PARLIAMENT,

| — | having regard to its decision on discharge in respect of the implementation of the budget of the Innovative Medicines Initiative 2 Joint Undertaking for the financial year 2015, |
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having regard to its decision on discharge in respect of the implementation of the budget of the Innovative Medicines Initiative 2 Joint Undertaking for the financial year 2015,

| — | having regard to Rule 94 of and Annex IV to its Rules of Procedure, |
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having regard to Rule 94 of and Annex IV to its Rules of Procedure,

| — | having regard to the report of the Committee on Budgetary Control (A8-0083/2017). |
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having regard to the report of the Committee on Budgetary Control (A8-0083/2017).

| A. | whereas the Joint Undertaking for the implementation of the Joint Technology Initiative on Innovative Medicines (‘IMI Joint Undertaking’) was set up in December 2007 for a period of 10 years to significantly improve the efficiency and effectiveness of the drug development process with the long-term aim that the pharmaceutical sector produce more effective and safer innovative medicines; |
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A.

whereas the Joint Undertaking for the implementation of the Joint Technology Initiative on Innovative Medicines (‘IMI Joint Undertaking’) was set up in December 2007 for a period of 10 years to significantly improve the efficiency and effectiveness of the drug development process with the long-term aim that the pharmaceutical sector produce more effective and safer innovative medicines;

| B. | whereas following the adoption of Council Regulation (EU) No 557/2014 in May 2014 the Innovative Medicines Initiative 2 Joint Undertaking (‘IMI 2 Joint Undertaking’) replaced the IMI Joint Undertaking in June 2014 with the aim of finalising research activities of the Seventh Framework Programme and extended the lifetime of the Joint Undertaking until 31 December 2024; |
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B.

whereas following the adoption of Council Regulation (EU) No 557/2014 in May 2014 the Innovative Medicines Initiative 2 Joint Undertaking (‘IMI 2 Joint Undertaking’) replaced the IMI Joint Undertaking in June 2014 with the aim of finalising research activities of the Seventh Framework Programme and extended the lifetime of the Joint Undertaking until 31 December 2024;

| C. | whereas the Union, which is represented by the Commission, and the European Federation of Pharmaceutical Industries and Associations (EFPIA) are the founding members of the Joint Undertaking; |
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C.

whereas the Union, which is represented by the Commission, and the European Federation of Pharmaceutical Industries and Associations (EFPIA) are the founding members of the Joint Undertaking;

| D. | whereas the Joint Undertaking started to work autonomously on 16 November 2009; |
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D.

whereas the Joint Undertaking started to work autonomously on 16 November 2009;

| E. | whereas the maximum contribution for the period of 10 years from the Union to the IMI Joint Undertaking is EUR 1 000 000 000, to be paid from the budget of the Seventh Framework Programme and the founding members are to contribute equally to the running costs, each with an amount not exceeding 4 % of the total Union contribution; |
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E.

whereas the maximum contribution for the period of 10 years from the Union to the IMI Joint Undertaking is EUR 1 000 000 000, to be paid from the budget of the Seventh Framework Programme and the founding members are to contribute equally to the running costs, each with an amount not exceeding 4 % of the total Union contribution;

| F. | whereas the maximum contribution for the period of 10 years from the Union to the IMI 2 Joint Undertaking is EUR 1 638 000 000, to be paid from the budget of Horizon 2020 and the Members, other than the Commission, have to contribute 50 % of the running costs and should contribute to operational costs through cash or in-kind contributions, or both, equal to the financial contribution of the Union. |
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F.

whereas the maximum contribution for the period of 10 years from the Union to the IMI 2 Joint Undertaking is EUR 1 638 000 000, to be paid from the budget of Horizon 2020 and the Members, other than the Commission, have to contribute 50 % of the running costs and should contribute to operational costs through cash or in-kind contributions, or both, equal to the financial contribution of the Union.

Budgetary and financial management

Budgetary and financial management

| 1. | Notes that, in the Court of Auditors' (‘the Court’) opinion, the Joint Undertaking's annual accounts present fairly, in all material respects, its financial position as at 31 December 2015 and the results of its operations and cash flows for the year then ended, in accordance with its financial rules and the accounting rules adopted by the Commission's accounting officer; |
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1.

Notes that, in the Court of Auditors' (‘the Court’) opinion, the Joint Undertaking's annual accounts present fairly, in all material respects, its financial position as at 31 December 2015 and the results of its operations and cash flows for the year then ended, in accordance with its financial rules and the accounting rules adopted by the Commission's accounting officer;

| 2. | Notes the clean opinion of the Court on the legality and regularity of transactions underlying the annual accounts of the Joint Undertaking for the year 2015 and acknowledges that the Joint Undertaking has met the materiality threshold; |
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2.

Notes the clean opinion of the Court on the legality and regularity of transactions underlying the annual accounts of the Joint Undertaking for the year 2015 and acknowledges that the Joint Undertaking has met the materiality threshold;

| 3. | Takes note that the final budget of the Joint Undertaking in 2015 available for implementation included commitment appropriations of EUR 315 269 000 and payment appropriations of EUR 195 411 000; |
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3.

Takes note that the final budget of the Joint Undertaking in 2015 available for implementation included commitment appropriations of EUR 315 269 000 and payment appropriations of EUR 195 411 000;

| 4. | Notes that budget monitoring efforts during the financial year 2015 resulted in a budget implementation rate of 91,04 %, representing a decrease of 1,34 % compared to 2014; notes that the payment appropriations execution rate was at 72,68 %, representing a decrease of 1,22 % compared to 2014; notes from the Joint Undertaking that the lower-than-expected implementation rate for payment appropriations was mainly due to delays in the negotiations for several Horizon 2020 projects; notes that in the case of operational activities, the implementation rate was 91,17 % for commitment appropriations and 72,74 % for payment appropriations; |
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4.

Notes that budget monitoring efforts during the financial year 2015 resulted in a budget implementation rate of 91,04 %, representing a decrease of 1,34 % compared to 2014; notes that the payment appropriations execution rate was at 72,68 %, representing a decrease of 1,22 % compared to 2014; notes from the Joint Undertaking that the lower-than-expected implementation rate for payment appropriations was mainly due to delays in the negotiations for several Horizon 2020 projects; notes that in the case of operational activities, the implementation rate was 91,17 % for commitment appropriations and 72,74 % for payment appropriations;

| 5. | Notes that by the end of 2015, the Joint Undertaking made commitments of EUR 966 000 000 and payments of EUR 538 100 000 (55,7 % of operational commitments) from the resources funded by the Union under the Seventh Framework Programme; notes furthermore that the high level of outstanding operational payments was mainly due to the slow and delayed start of activities during the first years of the Joint Undertaking and they were to be used to cover future payments for the signed grant agreements running until the end of 2021; |
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5.

Notes that by the end of 2015, the Joint Undertaking made commitments of EUR 966 000 000 and payments of EUR 538 100 000 (55,7 % of operational commitments) from the resources funded by the Union under the Seventh Framework Programme; notes furthermore that the high level of outstanding operational payments was mainly due to the slow and delayed start of activities during the first years of the Joint Undertaking and they were to be used to cover future payments for the signed grant agreements running until the end of 2021;

| 6. | Notes that out of the total amount of EUR 1 billion resources determined under the Seventh Framework Programme for the other members' in-kind and cash contributions, EUR 503 100 000 of in-kind contributions to operational activities was reported to the Joint Undertaking by the end of 2015, of which EUR 321 800 000 or 63,9 % were validated by the governing board; |
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6.

Notes that out of the total amount of EUR 1 billion resources determined under the Seventh Framework Programme for the other members' in-kind and cash contributions, EUR 503 100 000 of in-kind contributions to operational activities was reported to the Joint Undertaking by the end of 2015, of which EUR 321 800 000 or 63,9 % were validated by the governing board;

| 7. | Notes that out of a total amount of resources of EUR 1 638 000 000 for the operational and administrative activities to be funded by the Union under Horizon 2020, the Joint Undertaking made operational commitments amounting to EUR 351 700 000 and payments amounting to EUR 45 900 000 (13 % of operational commitments); acknowledges that the low level of payments was mainly due to delays in negotiating the Horizon 2020 agreements with the industry partners; |
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7.

Notes that out of a total amount of resources of EUR 1 638 000 000 for the operational and administrative activities to be funded by the Union under Horizon 2020, the Joint Undertaking made operational commitments amounting to EUR 351 700 000 and payments amounting to EUR 45 900 000 (13 % of operational commitments); acknowledges that the low level of payments was mainly due to delays in negotiating the Horizon 2020 agreements with the industry partners;

| 8. | Notes that out of the total amount of EUR 1 425 000 000 resources determined under Horizon 2020 for the members' in-kind and cash contributions, EUR 68 600 000 was reported to the Joint Undertaking by the end of 2015; 11 grant agreements signed under Horizon 2020 programme contain a commitment of EUR 123,5 million for in-kind contribution; |
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8.

Notes that out of the total amount of EUR 1 425 000 000 resources determined under Horizon 2020 for the members' in-kind and cash contributions, EUR 68 600 000 was reported to the Joint Undertaking by the end of 2015; 11 grant agreements signed under Horizon 2020 programme contain a commitment of EUR 123,5 million for in-kind contribution;

| 9. | Notes that since September 2015 the Joint Undertaking outsourced the function of Accounting Officer to the Accounting Officer of the Commission; |
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9.

Notes that since September 2015 the Joint Undertaking outsourced the function of Accounting Officer to the Accounting Officer of the Commission;

| 10. | Recalls that the Court recommended in its report that the Commission should present clear guidelines for the Joint Undertaking's budget reporting and welcomes that those guidelines were issued on 20 December 2016 in line with this recommendation; |
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10.

Recalls that the Court recommended in its report that the Commission should present clear guidelines for the Joint Undertaking's budget reporting and welcomes that those guidelines were issued on 20 December 2016 in line with this recommendation;

Anti-Fraud Strategy

Anti-Fraud Strategy

| 11. | Notes that the updated Anti-Fraud Strategy of the Joint Undertaking was adopted by the governing board in July 2015 in order to take into account the changes introduced by Horizon 2020; |
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11.

Notes that the updated Anti-Fraud Strategy of the Joint Undertaking was adopted by the governing board in July 2015 in order to take into account the changes introduced by Horizon 2020;

| 12. | Regrets to discover that one case of suspicion of fraud was submitted to the European Anti-Fraud Office (OLAF) for assessment and the latter decided not to open an investigation; notes that the Joint Undertaking launched both a technical and a financial audit, and that the technical audit identified some scientific weaknesses in the work performed by a beneficiary, which resulted in the termination of participation of that beneficiary, with the corresponding costs disallowed and the amount of EUR 398 115,65 reimbursed to the project coordinator; notes that the financial audit of the project was concluded without any significant material findings; highlights in this respect the important role of whistle-blowers and internal auditing procedures in detecting, reporting, and investigating irregularities related to Union budgetary expenditure, and furthermore, to the recovery of the misused funds; |
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12.

Regrets to discover that one case of suspicion of fraud was submitted to the European Anti-Fraud Office (OLAF) for assessment and the latter decided not to open an investigation; notes that the Joint Undertaking launched both a technical and a financial audit, and that the technical audit identified some scientific weaknesses in the work performed by a beneficiary, which resulted in the termination of participation of that beneficiary, with the corresponding costs disallowed and the amount of EUR 398 115,65 reimbursed to the project coordinator; notes that the financial audit of the project was concluded without any significant material findings; highlights in this respect the important role of whistle-blowers and internal auditing procedures in detecting, reporting, and investigating irregularities related to Union budgetary expenditure, and furthermore, to the recovery of the misused funds;

Internal control systems

Internal control systems

| 13. | Notes that an audit on ex ante controls for grant management and related processes was conducted by the Internal Audit Service (IAS); points out that the Joint Undertaking has previously had deficiencies in its documentation of ex ante controls, and notes that the audit resulted in three recommendations which suggested that the Joint Undertaking should make its ex ante controls more effective by using a more risk-based and balanced approach, it should reinforce control procedures for the certificates on financial statements, and it should enhance management reporting on the results of ex ante controls; acknowledges the fact that no critical recommendation was issued in respect of the Joint Undertaking and that since March 2015 it has been implementing the IAS audit recommendations; |
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13.

Notes that an audit on ex ante

ex ante

ex ante

ex ante

| 14. | Notes that ex ante control procedures based on financial and operational desk reviews were set up; notes furthermore that the Joint Undertaking performed ex post audits of grant beneficiaries; takes note that the residual rate for the ex post audits reported was 1,5 %; |
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14.

Notes that ex ante

ex post

ex post

| 15. | Notes that internal control procedures have been established within the Joint Undertaking in order to provide a reasonable assurance that fraud and irregularities will be detected and prevented; |
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15.

Notes that internal control procedures have been established within the Joint Undertaking in order to provide a reasonable assurance that fraud and irregularities will be detected and prevented;

| 16. | In the light of the information obtained from the Joint Undertaking, acknowledges the fact that the Joint Undertaking has made progress in implementing the actions agreed with the IAS and that two recommendations from the audit conducted in the previous years concerning key performance indicators and reviews of interim project reports were implemented by the management in 2015 and closed by the IAS; notes furthermore that concerning the only outstanding recommendation on strengthening the project monitoring process and improving the IT systems, the Joint Undertaking completed the agreed actions and the IAS closed the issue in April 2016; |
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16.

In the light of the information obtained from the Joint Undertaking, acknowledges the fact that the Joint Undertaking has made progress in implementing the actions agreed with the IAS and that two recommendations from the audit conducted in the previous years concerning key performance indicators and reviews of interim project reports were implemented by the management in 2015 and closed by the IAS; notes furthermore that concerning the only outstanding recommendation on strengthening the project monitoring process and improving the IT systems, the Joint Undertaking completed the agreed actions and the IAS closed the issue in April 2016;

Other

Other

| 17. | Notes that 15,6 % of beneficiaries in 2015 were SMEs, which represents a slight decrease in comparison to 2014; encourages the Joint Undertaking to continue in its effort towards higher participation of SMEs in its projects; |
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17.

Notes that 15,6 % of beneficiaries in 2015 were SMEs, which represents a slight decrease in comparison to 2014; encourages the Joint Undertaking to continue in its effort towards higher participation of SMEs in its projects;

| 18. | Takes note that the Joint Undertaking published an in-depth report on the socioeconomic impact of IMI projects in May 2016, as requested by the discharge authority; |
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18.

Takes note that the Joint Undertaking published an in-depth report on the socioeconomic impact of IMI projects in May 2016, as requested by the discharge authority;

| 19. | Calls on the Commission to ensure the direct involvement of the Joint Undertaking in the process of the Horizon 2020 mid-term review in the sphere of further simplifications and harmonisation of Joint Undertakings. |
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19.

Calls on the Commission to ensure the direct involvement of the Joint Undertaking in the process of the Horizon 2020 mid-term review in the sphere of further simplifications and harmonisation of Joint Undertakings.

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