# EUR-Lex - 52011PC0611 - EN

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# 52011PC0611

**Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on specific provisions for the support from the European Regional Development Fund to the European territorial cooperation goal /* COM/2011/0611 final - 2011/0273 (COD) */**

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EXPLANATORY MEMORANDUM

1.
CONTEXT OF THE PROPOSAL

On 29 June 2011, the Commission adopted a
proposal for the next multi-annual financial framework for the period
2014-2020: a budget for delivering the Europe 2020 strategy. In its proposal,
the Commission decided that cohesion policy should remain an essential element
of the next financial package and underlined its pivotal role in delivering the
Europe 2020 strategy.

The Commission proposed a number of
important changes to the way cohesion policy is designed and implemented.
Concentrating funding on a smaller number of priorities better linked to the
Europe 2020 Strategy, focusing on results, monitoring progress towards agreed
objectives, increasing the use of conditionalities and simplifying the delivery
are among the major hallmarks of the proposal.

This Regulation sets out the general
provisions governing European Territorial Cooperation. It draws on the work
undertaken since the publication of the Fourth Cohesion Report in May 2007
which outlined the main challenges facing regions in the next decades and
launched the debate on the future cohesion policy. On 9 November 2010, the
Commission adopted the Fifth Cohesion Report which provided an analysis of
social and economic trends and outlined orientations for the future cohesion
policy.

Cohesion policy is the main investment
instrument for supporting the main priorities of the Union as enshrined in the
Europe 2020 strategy. It does so by focusing on the countries and regions where
needs are greater. One of the greatest successes of the EU has been its
capacity to raise living standards for all its citizens. It does this not only
by helping poorer Member States and regions to develop and grow but also
through its role in the integration of the Single Market whose size delivers
markets and economies of scale to all parts of the EU, rich and poor, big and
small. The Commission's evaluation of past cohesion policy spending has shown
many examples of added value and of growth- and job-creating investment that
could not have happened without the support of the EU budget. However, the
results also show the effects of dispersion and lack of prioritisation. At a
time when public money is scarce and when growth-enhancing investment is more
needed than ever, the Commission has decided to propose important changes to
cohesion policy.

The proposal is part of the cohesion policy
legislative package for the 2014-2020 period. European Territorial Cooperation
is one of the goals of cohesion policy and provides a framework for the
implementation of joint actions and policy exchanges between national, regional
and local actors from different Member States. This is all the more important
given that the challenges faced by Member States and regions increasingly cut
across national /regional boundaries and require joint, co-operative action at
the appropriate territorial level. European Territorial Cooperation can thus
also provide an important contribution to fostering the new Treaty objective of
territorial cohesion.

European Territorial Cooperation is of
particular value because:

·
Transboundary problems can most effectively be
solved with the cooperation of all regions concerned to avoid disproportionate
costs for some, and free-riding by others (e.g. cross-border environmental
pollution).

·
Cooperation can provide an effective mechanism
for sharing good practice and learning to spread know-how (e.g. enhancing
competitiveness).

·
Cooperation can ensure that a solution to a
specific problem becomes more effective due to economies of scale and the
achievement of a critical mass (establishment of clusters to foster research
and innovation).

·
Governance can improve as a result of
coordination of the sector policies, actions and investments on a cross-border
and transnational scale.

·
Relations with EU neighbours through cooperation
programmes on the EU’s external borders can contribute to safety and stability,
and mutually beneficial relationships.

·
In some contexts such as sea basins and coastal
regions, cooperation and transnational action are indispensable to support
growth, employment and eco-system-based management

The overarching policy orientations for
future cohesion policy are also applicable in the context of European
Territorial Cooperation. The proposed regulation therefore contains the
alignment with the Europe 2020 strategy, elements to increase the effectiveness
of Fund interventions and an overall simplified approach to implementation.

2.
RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES
AND IMPACT ASSESSMENTS
2.1.
Consultation and expert advice

This regulation draws on extensive
consultation with stakeholders, including Member States, regions and social and
economic partners.

The public consultation on the Conclusions of
the 5th Cohesion Report was held between 12 November 2010 and
31 January 2011. A total of 444 contributions were received. Respondents
included Member States, regional and local authorities, social partners, European
interest organisations, non-governmental organisations, citizens and other
stakeholders. The public consultation asked a series of questions about the
future of cohesion policy. A summary of the results was published on 13 May
2011[1].

The results of the ex-post evaluations
carried out on the INTERREG 2000-2006 programmes[2],
the parliamentary "Report on objective 3" [3] and a broad range of studies
and expert advice for example through the INTERACT programme were used as
input. Expert advice was also provided through the High Level Group reflecting
on future Cohesion Policy, composed of experts from national administrations, which
held two meetings with more specific discussions on European Territorial
Cooperation.

The results of the public consultation on the
5th cohesion report show a broad consensus about the high value
added of European Territorial Cooperation. There are, however, calls for a
greater standardisation of rules and procedures across Member States[4]. A number of Member State
contributions also underline the need for a separate regulation or a separate
legal framework for cooperation programmes to better address the multi-national
context [5].

A key point from the ex-post evaluation is
that territorial cooperation programmes do not always focus on a limited number
of priority topics, but adopt rather broad intervention strategies, making it
difficult to achieve clearly-identifiable impacts[6]. Another major recommendation
relates to the need to establish more pro-active and ongoing interaction with
the Convergence and Competitiveness programmes and other territorial
cooperation programmes operating in the programme area, to ensure
complementarity, coordination and synergies. The evaluation explicitly
recommends a more complementary and integrated approach be developed for the
period post-2013[7].

Likewise, experts underlined in the High Level
Group the need for more coordination and strategic focus, both at general
policy and individual programme level[8].
They also indicated that there should be strengthened links to the Convergence
and Competitiveness programmes and called for specific regulatory provisions on
territorial cooperation and overall harmonisation of applicable rules and
simplification[9].

The parliamentary report underlined the need
to better integrate European Territorial Cooperation at all levels of strategic
planning, better coordinate programming between cooperation and regional
programmes and to simplify implementation through a separate regulation for
cooperation to better reflect the specificities[10].

2.2.
Impact assessment

The options assessed in the impact assessment
relate to the improvement of the strategic focus and of the coordination
between cooperation and regional programmes. The options considered included
the continuation of the status quo (broad priorities, no formal link between
cooperation and regional programmes), a scenario focused on thematic
concentration and integration of cooperation in overall strategic framework
(limited number of thematic objectives that cross-border and transnational
programmes can choose, integration of cooperation aspects in Common Strategic
Framework and Partnership Contract) and finally a scenario that would fully
integrate cooperation aspects in the regional programmes without the need for
separate cooperation programmes. The second option was chosen as the preferred
one since it will ensure a better focus on European priorities, strengthen the
programme intervention logic and ensure a better link and coherence with
regional programmes.

As a result of the consultations and impact
assessment carried out and the input received, the legislative proposal for the
Common Provisions Regulation foresees a firm integration of European
Territorial Cooperation both in the Common Strategic Framework and the
Partnership contract as well as in the related reporting procedures. In
addition, elements on coherence between the regional and cooperation programmes
operating in the same area are part of the programming documents. This will
improve coherence of cohesion policy as a whole.

In order to provide a more tailor-made frame
for cooperation programmes, a separate regulation for European Territorial
cooperation programmes is proposed. This regulation contains provisions on
thematic concentration and an increased focus on results as well as a number of
simplification elements (see below).

3.
LEGAL ELEMENTS OF THE PROPOSAL

Article 174 of the Treaty on the Functioning
of the European Union (TFEU) calls for action by the European Union to
strengthen its economic, social and territorial cohesion and promote overall
harmonious development by reducing disparities between the levels of
development of regions and promoting development in least favoured regions.

The goal of economic, social and territorial
cohesion is promoted through three EU funds. As stipulated in Article 176 of
the TFEU, the aim of the ERDF is promote the development and structural
adjustment of lagging regions and of declining industrial regions.

Article 174 of the TFEU states that
particular attention shall be paid to rural areas, areas affected by industrial
transition, and regions which suffer from severe and permanent natural or
demographic handicaps such as the northernmost regions with very low population
density and island, cross-border and mountain regions.

Article 349 of the TFEU states that specific
measures shall be adopted to take account of the structural social and economic
situation of the outermost regions, which is compounded by certain specific
features which severely restrain their development. The specific measures shall
include conditions of access to the structural funds.

A separate regulation is proposed for
European Territorial Cooperation to take better account of multi-country
context of the programmes and make more specific provisions for cooperation
programmes and operations, as has been requested by a large number of
stakeholders. The proposal establishes the scope of the European Regional Development
Fund with regard to the European Territorial Cooperation goal. It defines the
priority objectives and organisation of the ERDF, eligibility criteria,
financial resources available and criteria for their allocation. It also sets
the implementation arrangements, including provisions for financial management
and control. The Common Provisions Regulation and the ERDF regulation both
apply subject to the specific provisions contained in this regulation.

The legislative instrument, and the type of
measure (i.e. funding) are both defined in the TFEU, which provides the legal
basis for the Structural Funds, and states that the tasks, priority objectives and the
organisation of the Structural Funds shall be defined in regulations. As indicated above, the proposal to have a separate regulation is
justified given that the general provisions applying to the Funds and the ERDF
regulation need to be translated into a cooperation context.

4.
BUDGETARY IMPLICATION

The Commission's proposal for the
Multi-Annual Financial Framework foresees an amount of EUR 376 billion for economic,
social and territorial cohesion for the period 2014-2020.

Proposed budget 2014-2020 || EUR billion

Less developed regions Transition regions More developed regions Territorial cooperation Cohesion fund Extra allocation for outermost and sparsely populated regions || 162,6 39 53,1 11,7 68,7 0,926

Connecting Europe Facility for transport, energy and ICT || EUR 40 billion (with an additional EUR 10 billion ring fenced inside the Cohesion Fund)

*All figures in
constant 2011 prices

The proposed regulation sets out the
division of the funding foreseen for Territorial Cooperation between the
different cooperation components as follows:

(a)
73,24 % (i.e., a total of EUR 8 569 000
003) for cross-border cooperation;

(b)
20,78 % (i.e., a total of EUR 2 431 000 001)
for transnational cooperation;

(c)
5,98 % (i.e., a total of EUR 700 000 000)
for interregional cooperation.

5.
SUMMARY OF CONTENT OF REGULATION

The aim of a separate regulation for ETC is
to allow clearer presentation of the specificities of ETC to facilitate
implementation , since terminology can be directly adapted to the multi-country
context of cooperation programmes. The proposal thus makes references to third
country participation where necessary to better reflect the reality of
cooperation. It also contains more systematic references to the role that
European Groupings of Territorial Cooperation (EGTC) can play in a cooperation
context.

The regulation establishes the scope of the
ERDF with regard to the European territorial cooperation goal.

The proposal sets out the financial resources
available for each strand and the criteria for their allocation to Member
States. This also includes the continuation of the mechanism for the transfer
of resources for cooperation activities at the external borders of the Union,
to be supported under the European Neighbourhood and Partnership Instrument and
the instrument for Pre-Accession Assistance. Synergies and complementarity
between programmes under the European Territorial Cooperation goal and
programmes financed under external instruments shall be promoted.

A new element in the proposal are the
provisions on thematic concentration and investment priorities. This is to be
seen in the overall context of improving the strategic focus of programmes and
their results orientation. Programmes can choose a limited number of priorities
from a thematic menu with corresponding investment priorities, thus ensuring
the focus on European priorities and interventions where cooperation will yield
most added value. In addition, selection criteria have been defined more
strictly to ensure that funding is given to genuinely joint operations.
Programmes will also contain a performance framework defining
programme-specific milestones against which progress in implementation can be
assessed.

The 2007-2013 programming period has seen the
emergence of new forms of territorial cooperation, tailor-made responses to
address macro-regional challenges. At the request of the European Council, two
macro-regional strategies have been prepared by the Commission for the Baltic
Sea and the Danube Regions respectively[11].
In addition, a significant component of the Integrated Maritime Policy concerns
the systematic approach to integrated policy action under maritime and coastal
policies in the context of sea-basins and ecosystems. Macro-regional and
sea-basin strategies are broad-based integrated instruments covering several
Member States and regions focusing on the alignment of policies and funding to
increase policy coherence and overall impact of public spending. Given the
possible overlap between existing and future macro-regions, sea-basins and
transnational programme areas, the proposed regulation explicitly foresees that
transnational cooperation can also support the development and implementation
of macro-regional strategies and sea-basin programmes (including the ones
established on the external borders of the EU).

The implementation modalities have been
streamlined for cooperation programmes. The number of authorities involved in
programme implementation has been reduced and roles and responsibilities
further clarified.. Content requirements for cooperation programmes and
implementation reports have been made more precise in order to reduce
administrative burden for programme authorities. Common indicators have been
defined to better capture the outputs of and increase the overall orientation
on results.

The proposal foresees a greater harmonisation
of rules. Eligibility rules will be either fixed at EU level or by the
Monitoring Committee for the programme as a whole. National rules will only
apply in the absence such rules. This will also facilitate a joint approach in
carrying out the management verifications and audits by the audit authority and
thus contribute to greater harmonisation in this field.

Finally, an extension of the deadline for the
de-commitment rule and specific provisions for the application of the rules on
state aid and the conversion of foreign currencies into Euro will further
facilitate programme implementation.

2011/0273 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

on specific provisions for the support
from the European Regional Development Fund to the European territorial
cooperation goal

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 178 thereof,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national Parliaments,

Having regard to the opinion of the
European Economic and Social Committee[12],

Having regard to the opinion of the
Committee of the Regions[13],

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)
Article 176 of the Treaty provides that the
European Regional Development Fund (ERDF) is intended to help to redress the
main regional imbalances in the Union. In accordance with Article 174 of the
Treaty, the ERDF contributes to reducing disparities between the levels of
development of the various regions and the backwardness of the least favoured
regions, among which particular attention should be paid to regions which
suffer from severe and permanent natural or demographic handicaps such as
island, cross-border and mountain regions.

(2)
The provisions common to the ERDF, the European
Social Fund (the 'Structural Funds') and the Cohesion Fund (together with the
'Structural Funds': the 'Funds') are set out in Regulation (EU) No [...]/2012 of
[...] laying down common provisions on the European Regional Development Fund,
the European Social Fund, the Cohesion Fund, the European Agricultural Fund for
Rural Development and the European Maritime and Fisheries Fund covered by the
Common Strategic Framework and laying down general provisions on the European
Regional Development Fund, the European Social Fund and the Cohesion Fund and
repealing Regulation (EC) No 1083/2006[14]
[Common Provisions Regulation - CPR]. Specific provisions concerning the type
of activities which may be financed by the ERDF under the goals defined in that
Regulation (EU) No /2012 of the European Parliament and of the
Council on the European Regional Development Fund and repealing Regulation (EC)
No 1080/2006[15]
[ERDF Regulation] are set out in that Regulation. Those Regulations are not fully
adapted to the specific needs of the European territorial cooperation goal,
where at least two Member States or one Member State and third countries cooperate.
It is therefore necessary to lay down provisions specific to the European
territorial cooperation goal concerning scope and geographical coverage,
financial resources, investment priorities and concentration, programming, monitoring
and review, technical assistance, financial support and eligibility, management,
control and accreditation, and financial management.

(3)
To increase the value added of the Union's
cohesion policy, the specific provisions should lead to considerable simplification
on all levels involved: beneficiaries, programme authorities, participating
Member States and third countries, as well as the Commission.

(4)
Under the European territorial cooperation goal,
the ERDF supports cross-border, transnational and interregional cooperation.

(5)
Cross-border cooperation should aim to tackle
common challenges identified jointly in the border regions (such as poor
accessibility, inappropriate business environment, lack of networks among local
and regional administrations, research and innovation and take-up of
information and communication technologies, environmental pollution, risk
prevention, negative attitudes towards neighbouring country citizens) and
exploit the untapped potentials in the border area (development of cross-border
research and innovation facilities and clusters, cross-border labour market
integration, cooperation among universities or health centres), while enhancing
the cooperation process for the purpose of the overall harmonious development
of the Union. In the case of any cross-border programme between Northern
Ireland and the border counties of Ireland in support of peace and
reconciliation, the ERDF shall also contribute to promoting social and economic
stability in the regions concerned, notably by actions to promote cohesion between
communities.

(6)
Transnational cooperation should aim to
strengthen cooperation by means of actions conducive to integrated territorial
development linked to the Union's cohesion policy priorities.

(7)
Interregional cooperation should aim to reinforce
the effectiveness of cohesion policy by encouraging exchange of experience between
regions to enhance design and implementation of operational programmes under
the Investment for growth and jobs goal. It should, in particular, foster
cooperation between innovative research-intensive clusters and exchanges
between researchers and research institutions, based on "Regions of
Knowledge" and "Research potential in Convergence and Outermost
regions" under the Seventh Framework Programme for Research.

(8)
Objective criteria for designating eligible
regions and areas should be fixed. To this end, the identification of eligible
regions and areas at Union level should be based on the common system of
classification of the regions established by Regulation (EC) No 1059/2003 of the
European Parliament and of the Council of 26 May 2003 on the establishment of a
common classification of territorial units for statistics (NUTS)[16].

(9)
Cross-border cooperation should support regions located
on land or sea borders. Based on experience from previous programming periods,
the Commission should be empowered to define the list of cross-border areas to
receive support under cross-border cooperation programmes in a simpler way, by
cooperation programme. In drawing up that list, the Commission should take into
account adjustments needed to ensure coherence, in particular on land and
maritime borders, and continuity of programme areas established for the
2007-2013 programming period. These adjustments may reduce or enlarge existing
programme areas or the number of cross-border cooperation programmes, but may
allow for geographical overlap.

(10)
Areas for transnational cooperation should be defined
having regard to actions needed to promote integrated territorial development.
The Commission should be empowered to define transnational cooperation areas.

(11)
Any interregional cooperation programme should
cover the whole Union.

(12)
It is necessary to continue supporting or –
where needed – to establish cross-border, transnational and interregional
cooperation with the Union's neighbouring third countries, as this will benefit
the regions of the Member States which border third countries. To that effect,
the ERDF will contribute to the cross-border and sea basin programmes
established under the European Neighbourhood Instrument (ENI) pursuant to
Regulation (EU) No [...]/2012[17]
and the Instrument for Pre-Accession (IPA) pursuant to Regulation (EU) No
[...]/2012[18].

(13)
For the benefit of the regions of the Union, a
mechanism to organise support from the ERDF to external policy instruments such
as ENI and IPA should be set up, including where external cooperation
programmes cannot be adopted or have to be discontinued.

(14)
Apart from interventions on external borders
supported by external policy instruments of the Union covering border regions
inside and outside the Union, there may be cooperation programmes supported by
the ERDF that cover regions both inside and outside the Union where the regions
outside the Union are not covered by external policy instruments, either
because they are not a defined beneficiary country or because such external
cooperation programmes cannot be set up. The Commission should therefore be
empowered, when drawing up the lists of cross-border and transnational
programme areas, to cover regions from third countries as well.

(15)
It is necessary to fix the resources allocated
to each of the different components of the European territorial cooperation
goal, while maintaining a significant concentration on cross-border cooperation
and securing sufficient funding levels for outermost regions' cooperation.

(16)
The selection of thematic objectives should be
limited in order to maximise the impact of cohesion policy across the Union.
However, the concentration under interregional cooperation should be reflected in
the aim of each operation rather than in a limitation of the number of thematic
objectives, in order to get the most out of interregional cooperation for the
reinforcement of the effectiveness of cohesion policy under the Investment for
growth and jobs and the European territorial cooperation goals.

(17)
In order to deliver on the targets and
objectives of smart, sustainable and inclusive growth set out in the Europe
2020 strategy[19],
the ERDF should contribute under the European territorial cooperation goal to
the thematic objectives of developing an economy based on knowledge, research
and innovation, promoting a greener, more resource-efficient and competitive
economy, fostering high employment that delivers social and territorial
cohesion, and developing administrative capacity. However, the list of the
investment priorities under the different thematic objectives should be adapted
to the specific needs of the European territorial cooperation goal, in
particular by allowing for the continuation under cross-border cooperation of
legal and administrative cooperation and cooperation between citizens and
institutions, of cooperation in the fields of employment, training and social
inclusion in a cross-border perspective, by allowing for the continuation under
transnational cooperation of maritime cross-border cooperation not covered by
cross-border cooperation programmes, and by the development and implementation
of macro-regional and sea-basin strategies.

(18)
It is necessary to adapt the content requirements
of cooperation programmes under the European territorial cooperation goal to
their specific needs. Therefore they also need to cover aspects necessary for
effective implementation on the territory of participating Member States, such
as the bodies responsible for audit and control, the procedure to set up a
joint secretariat, and the allocation of liabilities in case of financial
corrections. In addition, due to the horizontal character of interregional
cooperation programmes, the content of such cooperation programmes should be
adapted, especially as regards the definition of the beneficiary or
beneficiaries under the current INTERACT and ESPON programmes.

(19)
Consistent with the goal of smart, sustainable
and inclusive growth, the Structural Funds should provide a more integrated and
inclusive approach to tackling local problems. In order to strengthen this
approach, support from the ERDF support in border regions should be coordinated
with support from the European Agricultural Fund for Rural Development (EAFRD)
and the European Maritime and Fisheries Fund(EMFF) and should, where
appropriate, involve European groupings of territorial cooperation set up under
Regulation (EC) No 1082/2006 of the European Parliament and of the
Council of 5 July 2006 on a European grouping of territorial cooperation
(EGTC)[20]
where local development figures among their objectives.

(20)
Based on the experience from the 2007-13
programming period, the conditions for the selection of operations should be
clarified and strengthened in order to ensure selection of only genuinely joint
operations. The notion of sole beneficiaries should be defined and it should be
clarified that they are permitted to carry out cooperation operations by
themselves.

(21)
The responsibilities of lead beneficiaries, retaining
overall responsibility for the implementation of an operation, should be specified.

(22)
The requirements for implementation reports
should be adapted to the cooperation context and reflect the programme
implementation cycle. In the interests of sound management, annual review meetings
may be carried out in writing.

(23)
A common set of indicators to assess progress of
programme implementation adapted to the specific character of cooperation
programmes should be set out before the Member States draft their cooperation
programmes. These indicators should be complemented by programme-specific
indicators.

(24)
Due to the involvement of more than one Member
State and the resulting higher administrative costs, in particular in respect
of controls and translation, the ceiling for technical assistance expenditure should
be higher than under the Investment for growth and jobs goal. In addition,
cooperation programmes with limited ERDF support should receive a certain
minimum amount to ensure sufficient funding for effective technical assistance
activities.

(25)
Due to the involvement of more than one Member
State, the general rule laid down in the Regulation (EU) No [...]/2012 [CPR] that
each Member State adopts its national eligibility rules is not appropriate for
the European territorial cooperation goal. Based on experience from the 2007-13
programming period, a clear hierarchy of eligibility rules should be
established with a strong move towards joint eligibility rules.

(26)
Due to the frequent involvement of staff from more
than one Member State in the implementation of operations, and given the number
of operations for which staff costs is a significant element, a flat-rate for
costs covering staff should be applied to the other direct costs of cooperation
operations, thus avoiding individual accounting for the management of such
operations.

(27)
The rules on flexibility concerning the location
of operations outside the programme area should be simplified. In addition, it
is necessary to support effective cross-border, transnational and interregional
cooperation with the Union's neighbouring third countries where this is
necessary to ensure that the regions of the Member States which border third
countries can be effectively assisted in their development. Accordingly, it is
appropriate to authorise on an exceptional basis and under certain conditions the
financing of assistance from the ERDF for operations located on the territory
of third countries where the operations are for the benefit of the regions of
the Union.

(28)
Member States should be encouraged to confer the
task of the managing authority on an EGTC or to make such a grouping
responsible for managing the part of a cooperation programme covering the
territory concerned by the EGTC.

(29)
The managing authority should set up a joint
secretariat which should provide information to applicants for support, deal
with project applications and assist beneficiaries in implementing their
operations.

(30)
Managing authorities should be responsible for
all functions of the managing authority listed in Article 114 of Regulation
(EU) No [...]/2012 [CPR], including for management verifications in order to
ensure uniform standards across the whole programme area. However, where an
EGTC is designated as managing authority, it should be authorised to carry out
such verifications, as all participating Member States are represented in its
organs. Even where no EGTC is designated, the managing authority should be
authorised by the participating Member States to carry out verifications on the
whole programme area.

(31)
A single audit authority should be responsible for
carrying out all functions listed in Article 116 of Regulation (EU) No [...]/2012
[CPR] in order to ensure uniform standards across the whole programme area. Where
this is not possible, a group of auditors should be able to assist the programme
audit authority.

(32)
A clear chain of financial liability in respect
of recovery for irregularities should be established, from beneficiaries to lead
beneficiary to the managing authority to the Commission. Provision should be
made for liability of Member States where no recovery can be obtained.

(33)
Based on the experience from the 2007-2013
programming period, an explicit derogation should be established for the
conversion of expenditure incurred in a currency other than the euro, by
applying the conversion rate at a date as close to the point in time of the
expenditure as possible. Financing plans, reports and accounts concerning joint
cooperation operations should in any event only be submitted in euro to the
joint secretariat, the programme authorities and the monitoring committee. The
correctness of conversion should be verified.

(34)
Having regard to the difficulties and delays
experienced in setting up genuinely joint programme structures, the timeframe
for justifying payments in respect of budget commitments under the European
territorial cooperation goal should be three years following the year of the
budget commitment.

(35)
It is necessary to clarify the applicable rules
concerning financial management, programming, monitoring, evaluation and
control regarding the participation of third countries in transnational and
interregional cooperation programmes. Those rules should be established in the relevant cooperation programme and/or the relevant financing
agreement between the Commission, each of the third countries and the Member
State hosting the managing authority of the relevant cooperation programme.

(36)
In order to set out specific eligibility rules,
the power to adopt acts in accordance with Article
290 of the Treaty should be delegated to the Commission in respect of the content
and scope set out in Article 17. It is of particular importance that the
Commission carries out appropriate consultations during its preparatory work,
including at expert level. The Commission, when preparing
and drawing up delegated acts, should ensure a simultaneous, timely and
appropriate transmission of relevant documents to the European Parliament and
Council.

(37)
In order to ensure uniform conditions for the
implementation of this Regulation, implementing powers
should be conferred on the Commission in respect of the lists of cross-border
areas and of transnational areas, of the submission of
draft cooperation programmes, the nomenclature concerning categories of intervention and of
implementation reports. Those powers should be exercised in accordance with
Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16
February 2011 laying down the rules and general principles concerning
mechanisms for control, by Member States, of the Commission’s exercise of
implementing powers[21].

HAVE ADOPTED THIS REGULATION:

Chapter I
GENERAL PROVISIONS

Article 1
Subject-matter and scope

1.
This Regulation establishes the scope of the
European Regional Development Fund (ERDF) with regard to the European
territorial cooperation goal and lays down specific provisions concerning that
goal.

2.
This Regulation defines, for the European
territorial cooperation goal, the priority objectives and organisation of the ERDF,
the criteria for Member States and regions to be eligible for support from the ERDF,
the financial resources available for support from the ERDF and the criteria
for their allocation.

It also lays down the provisions necessary to
ensure effective implementation, financial management and control of operational
programmes under the European territorial cooperation goal ('cooperation
programmes'), including when third countries participate in such cooperation
programmes.

3.
Regulation (EU) No [...]/2012 [CPR] and Chapter I
of Regulation (EU) No [...]/2012 [ERDF Regulation] shall apply to the European
territorial cooperation goal and to cooperation programmes thereunder, except
as specifically provided under this Regulation or where such provisions can only
apply to the Investment for growth and jobs goal.

Article 2
Components of the European
territorial cooperation goal

Under the European territorial cooperation goal, the ERDF
shall support:

(1)          cross-border cooperation between
adjacent regions to promote integrated regional development between
neighbouring land and maritime border regions from two or more Member States or
between neighbouring border regions from at least one Member State and one
third country on external borders of the Union other than those covered by programmes
under the external financial instruments of the Union;

(2)          transnational cooperation over
larger transnational territories, involving national, regional and local
authorities and also covering maritime cross-border cooperation in cases not
covered by cross-border cooperation, with a view to achieving a higher degree
of territorial integration of those territories, thus contributing to
territorial cohesion across the Union;

(3)          interregional cooperation to
reinforce the effectiveness of cohesion policy by promoting:

(a)     exchange of experience on thematic
objectives among partners throughout the Union on the identification and
dissemination of good practice with a view to its transfer to operational
programmes under the Investment for growth and jobs goal;

(b)     exchange of experience concerning the
identification, transfer and dissemination of good practice on sustainable
urban and rural development;

(c)     exchange of experience concerning the
identification, transfer and dissemination of good practice and innovative
approaches in relation to actions concerning territorial cooperation and to the
use of EGTCs;

(d)     analysis of development trends in
relation to the aims of territorial cohesion and harmonious development of the
European territory through studies, data collection and other measures.

Article 3
Geographical coverage

1.
For cross-border cooperation, the regions to be
supported shall be the NUTS level 3 regions of the Union along all internal and
external land borders other than those covered by programmes under the external
financial instruments of the Union, and all NUTS level 3 regions of the Union
along maritime borders separated by a maximum of 150 km, without prejudice to
potential adjustments needed to ensure the coherence and continuity of
cooperation programme areas established for the 2007-2013 programming period.

The Commission shall adopt the list of
cross-border areas to receive support, broken down by cooperation programme, by
means of implementing acts. Those implementing acts shall be adopted in
accordance with the advisory procedure referred to in Article 30(2).

That list shall also specify those NUTS level 3
regions in the Union taken into account for the ERDF allocation to cross-border
cooperation on all internal and those external borders covered by the external
financial instruments of the Union, such as ENI pursuant to Regulation (EU) No
[...]/2012 [the ENI Regulation] and IPA pursuant to Regulation (EU) No [...]/2012
the IPA Regulation].

When submitting draft cross-border cooperation
programmes, Member States may request that additional NUTS level 3 regions
adjacent to those listed in the decision referred to in the second subparagraph
are added to a given cross-border area and shall give reasons for the request.

2.
Without prejudice to Article 19(2) and (3),
cross-border cooperation programmes may cover regions from Norway, Switzerland,
Liechtenstein, Andorra, Monaco and San Marino and third countries or
territories neighbouring outermost regions.

Such regions shall be NUTS level 3 regions or
equivalent regions.

3.
For transnational cooperation, the Commission
shall adopt the list of transnational areas to receive support, broken down by cooperation
programme and covering NUTS level 2 regions while ensuring the continuity of
such cooperation in larger coherent areas based on previous programmes, by
means of implementing acts. Those implementing acts shall be adopted in
accordance with the advisory procedure referred to in Article 30(2).

When submitting draft transnational cooperation
programmes, Member States may request that additional NUTS level 2 regions
adjacent to those listed in the decision referred to in the first subparagraph
are added to a given transnational cooperation area and shall give reasons for
the request.

4.
Without prejudice to Article 19(2) and (3), transnational
cooperation programmes may cover regions from the following third countries or
territories:

(a)
the third countries or territories listed or
referred to in paragraph 2; and

(b)
the Faroe Islands and Greenland.

Without prejudice to Article 19(2) and (3),
transnational cooperation programmes may also cover regions from third
countries covered by the external financial instruments of the Union, such as
ENI pursuant to Regulation (EU) No [...]/2012, including the relevant regions of the Russian Federation, and IPA
pursuant to Regulation (EU) No [...]/2012. Annual appropriations corresponding to
the support of the ENI and IPA to these programmes will be made available,
provided that the programmes adequately address the relevant external
cooperation objectives.

Such regions shall be NUTS level 2 regions or
equivalent regions.

5.
For interregional cooperation, support from the
ERDF shall cover the entire territory of the Union.

Without prejudice to Article 19(2) and (3),
interregional cooperation programmes may cover the whole or part of the territory
of third countries referred to in paragraph 4(a) and (b).

6.
For information purposes, regions of third
countries or territories referred to in paragraphs 2 and 4 shall be mentioned
in the lists referred to in paragraphs 1 and 3.

Article 4
Resources for European
territorial cooperation

1.
Resources for the European territorial cooperation
goal shall amount to 3,48 % of the global resources available for budgetary
commitment from the Funds for the period 2014 to 2020 and set out in Article
83(1) of Regulation (EU) No[.../2012 [CPR] (i.e., a total of EUR 11 700 000 004)
and shall be allocated as follows:

(a)     73,24 % (i.e., a total of EUR 8
569 000 003) for cross-border cooperation;

(b)     20,78 % (i.e., a total of EUR 2
431 000 001) for transnational cooperation;

(c)     5,98 % (i.e., a total of EUR 700
000 000) for interregional cooperation.

2.
Cooperation programmes involving the outermost
regions shall receive not less than 150% of the ERDF support they received in
the 2007-2013 period. In addition, EUR 50 000 000 from the allocation for
interregional cooperation shall be set aside for outermost regions' cooperation.
Concerning thematic concentration, Article 5 (b) applies to this additional
allocation.

3.
The Commission shall adopt a single decision
setting out the list of all cooperation programmes and indicating the amounts
of the total ERDF support per programme and of the 2014 allocation per
programme by means of implementing acts. Those implementing acts shall be
adopted in accordance with the advisory procedure referred to in Article 30(2).

Population in the areas referred to in the 3rd
sub-paragraph of Article 3(1) and the first sub-paragraph of Article (3)(3)
shall be used as the criterion for the annual breakdown by Member State.

4.
The support from the ERDF to cross-border and
sea-basin programmes under ENI and to the cross-border programmes under IPA
shall be established by the Commission and the Member States concerned.

5.
Support from the ERDF to each cross-border and
sea-basin programme under ENI and IPA shall be granted provided that at least
equivalent amounts are provided by ENI and IPA. This equivalence shall be
subject to a maximum amount set out in the ENI Regulation or the IPA Regulation].

6.
The annual appropriations corresponding to the
support from the ERDF to programmes under ENI and IPA shall be entered in the
relevant budget lines of those instruments with the 2014 budgetary exercise.

7.
In 2015 and 2016, the annual contribution from
the ERDF to the programmes under ENI and IPA for which no programme has been
submitted to the Commission by 30 June under the cross-border and sea-basin programmes
under ENI and IPA shall be allocated to the internal cross-border cooperation
programmes under paragraph 1(a) in which the Member State concerned
participates.

If by
30 June
2017, there are still programmes
under the cross-border and sea-basin programmes under ENI and IPA which have not been submitted to the Commission, the entire
support from the ERDF mentioned in paragraph
4 for the remaining years up to 2020
shall be allocated to the internal cross-border cooperation programmes
under paragraph 1(a) in which the Member State concerned participates.

8.
Cross-border and sea basin programmes referred
to in paragraph 4 that have been adopted by the Commission shall be
discontinued if:

(a)
none of the partner countries covered by the
programme have signed the relevant financing agreement by the deadline
established in Regulation (EU) No./2012 [the ENI regulation] or Regulation (EU)
No. /2012 [IPA]; or

(b)
the programme
cannot be implemented owing to problems arising in relations between the
participating countries.

In
such event, the support from the ERDF mentioned in paragraph 4 corresponding to annual instalments not yet committed shall be allocated to the internal cross-border cooperation programmes
under paragraph 1(a) in which the Member State concerned participates, at its
request.

CHAPTER II
thematic concentration and investment
priorities

Article 5
Thematic concentration

The thematic objectives referred to in
Article 9 of Regulation (EU) No [...]/2012 [the CPR] shall be concentrated
as follows:

(a)          up to 4 thematic objectives shall
be selected for each cross-border cooperation programme;

(b)          up to 4 thematic objectives shall
be selected for each transnational cooperation programme;

(c)          all thematic objectives may be
selected for interregional cooperation programmes pursuant to Article 2(3)(a).

Article 6
Investment priorities

In addition to Article 5 of Regulation (EU)
No [...]/2012 [the ERDF Regulation], the ERDF shall support the sharing of human
resources, facilities and infrastructures across borders under the different
investment priorities, as well as the following investment priorities within
the thematic objectives:

(a)          under cross-border cooperation:

(i)      integrating cross-border labour
markets, including cross-border mobility, joint local employment initiatives
and joint training (within the thematic objective of promoting employment and supporting
labour mobility);

(ii)     promoting gender equality and equal
opportunities across borders, as well as promoting social inclusion across
borders (within the thematic objective of promoting social inclusion and
combating poverty);

(iii)     developing and implementing joint education
and training schemes (within the thematic objective of investing in skills,
education and lifelong learning);

(iv)    promoting legal and administrative
cooperation and cooperation between citizens and institutions (within the
thematic objective of enhancing institutional capacity and an efficient public
administration);

(b)          under transnational cooperation: development
and implementation of macro-regional and sea-basin strategies (within the
thematic objective of enhancing institutional capacity and an efficient public
administration).

CHAPTER III
PROGRAMMING

Article 7
Content of cooperation programmes

1.
A cooperation programme shall consist of
priority axes. A priority axis shall concern one Fund, shall correspond to a
thematic objective and comprise one or more investment priorities of that
thematic objective in line with Articles 5 and 6 of this Regulation.

2.
A cooperation programme shall set out:

(a)
a strategy for the cooperation programme's
contribution to the Union strategy of smart, sustainable and inclusive growth
including:

(i)      an identification of the needs
addressing the challenges as regards
the programme area as a whole;

(ii)      a justification of the choice of
thematic objectives and corresponding investment priorities, having regard to
the Common Strategic Framework and the results of the ex ante
evaluation;

(b)
for each priority axis:

(i)      the investment priorities and
corresponding specific objectives;

(ii)      the common and specific output and
result indicators, with where appropriate a baseline value and a quantified
target value, in line with the Fund-specific rules;

(iii)     a description of actions to be supported
including the identification of the main target groups, specific territories
targeted and types of beneficiaries where appropriate and the planned use of
financial instruments;

(iv)     the corresponding categories of intervention
based on a nomenclature adopted by the Commission by means of implementing acts
in accordance with the examination procedure referred to in Article 30(3) and
an indicative breakdown of the programmed resources;

(c)
the contribution to the integrated strategy for
territorial development set out in the partnership contract including;

(i)      the mechanisms that ensure
coordination between the Funds, the EAFRD, the EMFF and other Union and
national funding instruments and with the European Investment Bank (EIB);

(ii)      where appropriate, a planned
integrated approach to the territorial development of urban, rural, coastal
areas and areas with particular territorial features, in particular the implementation
arrangements for Articles 28 and 29 of Regulation (EU) No./2012 [CPR];

(iii)     where appropriate, the list of
cities where integrated actions for sustainable urban development will be
implemented; the indicative annual allocation of the ERDF support for these
actions, including the resources delegated to cities for management under
Article 7(2) of Regulation (EU) No./2012 [ERDF];

(iv)     the
identification of the areas in which community-led local development will be
implemented;

(v)     where appropriate, the contribution of
the planned interventions towards macro regional strategies and sea basin
strategies;

(d)
arrangements to ensure the effective
implementation of the funds including:

(i)      a performance framework in accordance
with Article 19(1) of Regulation (EU) No./2012 [CPR];

(ii)      the actions taken to involve the
partners in the preparation of the cooperation programme, and the role of the
partners in the implementation, monitoring and evaluation of the cooperation
programme;

(e)
arrangements to ensure the efficient
implementation of the funds including:

(i)      the planned use of technical assistance
including actions to reinforce the administrative capacity of authorities and
beneficiaries with the relevant information referred to in paragraph 2(b) for
the priority axis concerned;

(ii)      an assessment of the administrative
burden for beneficiaries and the actions planned to achieve a reduction
accompanied by targets;

(iii)     a list of major projects for which
the estimated start date for the execution of the main works is before 1
January 2018;

(f)
a financing plan containing two tables (without
any division per participating Member State):

(i)      a table specifying for each year, in
accordance with Articles 53, 110 and 111 of
Regulation (EU) No./2012 [CPR], the amount of the total financial appropriation envisaged for the support
from the ERDF;

(ii)      a table specifying, for the whole
programming period, for the cooperation
programme and for each priority axis, the amount of the total financial
appropriation of the support from the ERDF and the national co-financing. Where
the national co-financing is made up of
public and private co-financing, the
table shall give the indicative breakdown between the public and the private components. It shall show, for information purposes, the envisaged
participation from the EIB;

(g)
the implementing provisions for the cooperation
programme containing:

(i)      identification of the accreditation
body, the managing authority and the audit authority;

(ii)      the body or bodies designated to carry out control tasks;

(iii)     the body or bodies designated to be
responsible for carrying out audit tasks;

(iv)     the procedure for setting up the
joint secretariat;

(v)     a summary description of the
management and control arrangements;

(vi)     the apportionment of liabilities
among the participating Member States in case of financial corrections imposed
by the managing authority or the Commission.

Information required under points (a) to (d)
shall be adapted to the specific character of cooperation programmes under
Article 2(3)(b), (c) and (d) of this Regulation.

Information required under point (e)(ii) and
(iii) shall not be included in cooperation programmes under Article 2(3)(b),
(c) and (d) of this Regulation.

3.
Each cooperation programme shall include:

(i)      a description of specific actions to
take into account environmental protection requirements, resource efficiency, climate
change mitigation and adaptation, and risk prevention and risk management in
the selection of operations;

(ii)     a description of the specific actions to
promote equal opportunities and prevent any discrimination based on sex, racial
or ethnic origin, religion or belief, disability, age or sexual orientation
during the preparation, design and implementation of the cooperation programme
and in particular in relation to access to funding taking
account of the needs of the various target groups at
risk of such discrimination and in particular the requirements of ensuring
accessibility for disabled persons;

(iii)     a description of its contribution to
the promotion of equality between men and women and where appropriate the
arrangements to ensure the integration of gender perspective at programme and
operation level.

Member States shall submit an opinion of the
national equality bodies on the measures set out in points (ii) and (iii) with
the proposal for a cooperation programme.

The first and second subparagraph shall not
apply to cooperation programmes under Article 2(3)(b), (c) and (d).

4.
Cooperation programmes under Article 2(3)(c) and
(d) shall define the beneficiary or beneficiaries for such a cooperation
programme and may specify the granting procedure.

5.
The participating Member States and third
countries or territories, where applicable, shall confirm in writing their
agreement to the contents of a cooperation programme prior to its submission to
the Commission. This agreement shall also include a commitment of all
participating Member States to provide the co-financing necessary to implement
the cooperation programme.

6.
Member States shall draft the cooperation
programmes according to the model adopted by the Commission.

7.
The Commission shall adopt that model by means
of implementing acts. Those implementing acts shall be adopted in accordance
with the advisory procedure referred to in Article 30(2).

Article 8
Joint Action Plan

Where a joint action plan referred to in Article
93(1) of Regulation (EU) No./2012 [CPR] is carried out under the responsibility
of an EGTC as beneficiary, staff of the joint secretariat of the cooperation
programme and members of the Assembly of the EGTC may become members of the
steering committee referred to in Article 97(1) of Regulation (EU) No./2012
[CPR]. The members of the Assembly of the EGTC shall not form the majority
within that steering committee.

Article 9
Community-led local
development

Community-led local development under Article
28 of Regulation (EU) No./2012 [CPR] may be implemented in cross-border
cooperation programmes, provided that the local development group is composed
of representatives of at least two countries, of which one is a Member State.

Article 10
Integrated territorial
investment

For cooperation programmes, the
intermediate body to carry out the management and implementation of an
Integrated territorial investment referred to in Article 99(3) of Regulation
(EU) No./2012 [CPR] shall be an EGTC or other legal body established under the
laws of one of the participating countries provided that it is set up by public
authorities from at least two participating countries.

Article 11
Selection of operations

1.
Operations under cooperation programmes shall be
selected by the monitoring committee referred to in Article 41 of Regulation
(EU) No [...]/2012 [CPR].

2.
Operations selected under cross-border and
transnational cooperation shall involve beneficiaries from at least
two participating countries, at least one of which shall be from a Member
State. An operation may be implemented in a single country, provided that it is
for the benefit of the programme area.

Operations concerning interregional cooperation
under Article 2(3)(a) and (b) shall involve beneficiaries from at least three
countries, at least two of which shall be Member States.

3.
Notwithstanding paragraph 2, an EGTC or other
legal body established under the laws of one of the participating countries may
apply as sole beneficiary for an operation provided that it is set up by public
authorities and bodies from at least two participating countries, for
cross-border and transnational cooperation, and from at least three participating
countries, for interregional cooperation.

4.
Beneficiaries shall cooperate in the development,
implementation, staffing and financing of operations.

5.
The managing authority shall provide to the lead
or sole beneficiary for each operation a document setting out the conditions
for support the operation, including the specific requirements concerning the
products or services to be delivered under the operation, the financing plan,
and the time-limit for execution.

Article 12
Beneficiaries

1.
Where there are two or more beneficiaries for an
operation in a cooperation programme, one of them shall be designated by all the
beneficiaries as the lead beneficiary.

2.
The lead beneficiary shall carry out the
following tasks:

(a)     lay down the arrangements with other
beneficiaries in an agreement comprising provisions that, inter alia,
guarantee the sound financial management of the funds allocated to the
operation, including the arrangements for recovering amounts unduly paid;

(b)     assume responsibility for ensuring
implementation of the entire operation;

(c)     ensure that expenditure presented by
all beneficiaries has been incurred in implementing the operation and
corresponds to the activities agreed between all the beneficiaries;

(d)     verify that the expenditure presented
by other beneficiaries has been validated by a controller(s) where this
verification is not carried out by the managing authority pursuant to Article 22(3).

3.
The lead beneficiary shall ensure that the other
beneficiaries receive the total amount of the public support as quickly as
possible and in full. No amount shall be deducted or withheld and no specific
charge or other charge with equivalent effect shall be levied that would reduce
those amounts for the other beneficiaries.

4.
Lead beneficiaries shall be located, and sole
beneficiaries shall be registered, in a Member State.

CHAPTER IV
MONITORING AND EVALUATION

Article 13
Implementation reports

1.
By 30 April 2016 and by 30 April of each
subsequent year until and including 2022, the managing authority shall submit
to the Commission an annual report in accordance with Article 44(1) of
Regulation (EU) No [...]/2012 [CPR]. The report submitted in 2016 shall cover the
financial years 2014 and 2015, as well as the period between the starting date
for eligibility of expenditure and 31 December 2013.

2.
Annual implementation reports shall set out
information on:

(a)
implementation of the cooperation programme in
accordance with Article 44(2) of Regulation (EU) No [...]/2012 [CPR];

(b)
progress in preparation and implementation of
major projects and joint action plans.

3.
The annual implementation reports submitted in
2017 and 2019 shall set out and assess the information required under Articles
44(3) and (4) of Regulation (EU) No [...]/2012 [CPR] respectively and the
information set out in paragraph 2 together with:

(a)
progress in implementation of the integrated
approach to territorial development, including sustainable urban development,
and community-led local development under the operational programme;

(b)
 progress in implementation of actions to
reinforce the capacity of authorities and beneficiaries to administer and to
use the ERDF;

(c)
progress in implementation of the evaluation
plan and the follow-up given to the findings of evaluations;

(d)
the specific actions taken to promote equality
between men and women and to prevent discrimination, including accessibility
for disabled persons, and the arrangements implemented to ensure the
integration of the gender perspective in the operational programme and
operations;

(e)
actions taken to promote sustainable
development;

(f)
the results of the information and publicity
measures carried out under the communication strategy;

(g)
progress in the implementation of actions in the
field of social innovation, where appropriate;

(h)
the involvement of the partners in the
implementation, monitoring and evaluation of the cooperation programme.

4.
The annual and final implementation reports
shall be drawn up following models adopted by the Commission by means of
implementing acts. These implementing acts shall be adopted in accordance with
the advisory procedure referred to in Article 30(2).

Article 14
Annual review

Where an annual review meeting is not organised
pursuant to Article 45(3) of Regulation (EU) No [...]/2012 [CPR], the annual
review may be carried out in writing.

Article 15
Indicators for the
European territorial cooperation goal

Common indicators, as set out in the Annex
to this Regulation, shall be used where relevant and in accordance with Article
24(3) of Regulation (EU) No./2012 [CPR]. Their baselines shall be set at zero
and cumulative targets shall be fixed for 2022.

For programme-specific output indicators,
baselines shall be set at zero and cumulative targets shall be fixed for 2022.

For programme-specific result indicators,
baselines shall be set using the latest available data and targets shall be
fixed for 2022, but may be expressed in quantitative or qualitative terms.

Article 16
Technical assistance

The amount of the ERDF allocated to
technical assistance shall be limited to 6% of the total amount allocated to a
cooperation programmes, but shall not be less than EUR 1 500 000.

CHAPTER VI
ELIGIBILITY

Article 17
General rules on eligibility
of expenditure

1.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 29 to set additional specific rules
on eligibility of expenditure for cooperation programmes.

2.
Without prejudice to the eligibility rules laid
down in or on the basis of Articles 55 to 61 of Regulation (EU) No [...]/2012
[CPR], Regulation (EU) No [...]/2012 [ERDF] or this Regulation, the monitoring
committee shall establish eligibility rules for the cooperation programme as a
whole.

3.
For matters not covered by eligibility rules
laid down in or on the basis of Articles 55 to 61 of Regulation (EU) No
[...]/2012 [CPR], Regulation (EU) No [...]/2012 [ERDF] or this Regulation or by the
monitoring committee, the national rules of the country in which the
expenditure is incurred shall apply.

Article 18
Staff costs

Staff costs of an operation may be calculated
as a flat rate of up to 15 % of the direct costs other than the staff costs of
that operation.

Article 19
Eligibility of operations
in cooperation programmes depending on location

1.
Operations under cooperation programmes, subject
to the derogations referred to in paragraphs 2 and 3, shall be located in the part
of the programme area comprising Union territory (the 'Union part of the programme
area').

2.
The managing authority may accept that all or
part of an operation is implemented outside the Union part of the programme
area, provided that all the following conditions are satisfied:

(a)
the operation is for the benefit of the
programme area;

(b)
the total amount allocated under the cooperation
programme to operations located outside the Union part programme area does not
exceed 20 % of the support from the ERDF at programme level, or 30 % in the
case of cooperation programmes for which the Union part of the programme
consists of outermost regions;

(c)
the obligations of the managing and audit authorities
in relation to management, control and audit concerning the operation are
fulfilled by the cooperation programme authorities or they enter into
agreements with authorities in the Member State or third country or territory in
which the operation is implemented provided that the obligations in relation to
management, control and audit concerning the operation are fulfilled.

3.
For operations concerning promotional activities
and capacity-building, expenditure may be incurred outside the Union part of
the programme area provided that the conditions in paragraphs 2(a) and 2(c) are
fulfilled.

CHAPTER VII
MANAGEMENT, CONTROL AND ACCREDITATION

Article 20
Designation of authorities

1.
For the purposes of Articles 113(1) and (2) of Regulation
(EU) No [...]/2012 [CPR], Member States participating in a cooperation
programme shall appoint a single managing authority and, for the purpose of
Article 113(4) of that Regulation, a single audit authority, which shall be
situated in the same Member State.

2.
The managing authority shall receive the
payments made by the Commission and shall make payments to the lead beneficiary
in accordance with Article 122 of Regulation (EU) No [...]/2012 [CPR].

Article 21
European grouping of
territorial cooperation

Member States participating in a cooperation
programme may make use of an EGTC with a view to making the grouping
responsible for managing the cooperation programme or part thereof, notably by
conferring on it the responsibilities of a managing authority.

Article 22
Functions of the managing
authority

1.
The managing authority of a cooperation
programme shall carry out the functions of the managing authority and of the
certifying authority laid down in Articles 114 and 115 of Regulation (EU) No
[...]/2012 [CPR].

2.
The managing authority, after consultation with
the Member States and any third countries participating in a cooperation
programme, shall set up a joint secretariat.

The joint secretariat shall assist the managing
authority and the monitoring committee in carrying out their respective functions.
The joint secretariat shall also provide information to potential beneficiaries
about funding opportunities under cooperation programmes and shall assist beneficiaries
in the implementation of operations.

3.
Verifications under Article 114(4)(a) of Regulation
(EU) No [...]/2012 [CPR] shall be carried out by the managing authority for
the whole programme area where the managing authority is an EGTC.

4.
Where the managing authority cannot carry out
verifications under Article 114(4)(a) of Regulation (EU) No [...]/2012 [CPR] throughout
the whole programme area, each Member State or third country shall designate
the body or person responsible for carrying out such verifications in relation
to beneficiaries on its territory ('controller(s)').

Those controllers shall, where possible, be the
same bodies responsible for carrying out such verifications for the operational
programmes under the Investment for growth and jobs goal or, in the case of third
countries, for carrying out comparable verifications under external policy
instruments of the Union.

Each Member State or third country shall be responsible
for verifications carried out on its territory.

5.
Where the delivery of co-financed products or services
can be verified only in respect of an entire operation, the verification shall
be performed by the managing authority or by the controller of the Member State
where the lead beneficiary is located.

Article 23
Functions of the audit
authority

1.
The Member States and third countries participating
in a cooperation programme may decide that the audit authority is authorised to
carry out directly the functions provided for in Article 116 of Regulation
(EU) No [...]/2012 [CPR] in the whole of the territory covered by a
cooperation programme. They shall specify when the audit authority shall be
accompanied by an auditor of a Member State or a third country.

2.
Where the audit authority does not have the authorisation
referred to in paragraph 1, it shall be assisted by a group of auditors
composed of a representative from each Member State or third country participating
in the cooperation programme and carrying out the functions provided for in
Article 116 of Regulation (EU) No [...]/2012 [CPR].

Each representative shall be responsible for
providing the factual elements relating to expenditure on its territory that is
required by the audit authority in order to perform its assessment.

The group of auditors shall be set up at the
latest within three months of the decision approving the cooperation programme.
It shall draw up its own rules of procedure and be chaired by the audit
authority for the cooperation programme.

3.
The auditors shall be functionally independent
from controllers who carry out verifications under Article 22.

Article 24
Accreditation

The managing authority shall be accredited by
the accrediting body of the Member State in which the managing authority is
located.

CHAPTER VIII
FINANCIAL MANAGEMENT

Article 25
Budget commitments,
payments and recoveries

1.
The ERDF support to cooperation programmes shall
be paid into a single account with no national sub-accounts.

2.
The managing authority shall ensure that any
amount paid as a result of an irregularity is recovered from the lead or sole
beneficiary. Beneficiaries shall repay the lead beneficiary any amounts unduly
paid.

3.
If the lead beneficiary does not succeed in
securing repayment from other beneficiaries or if the managing authority does
not succeed in securing repayment from the lead or sole beneficiary, the Member
State or third country on whose territory the lead or sole beneficiary
concerned is located or, in the case of an EGTC, is registered shall reimburse
the managing authority the amount unduly paid to that beneficiary. The managing authority shall be responsible for reimbursing the
amounts concerned to the general budget of the Union, in accordance with the
apportionment of liabilities among the participating Member States as laid down
in the cooperation programme.

Article 26
Use of the euro

By way of derogation from Article 123 of Regulation
(EU) No [...]/2012 [CPR], expenditure incurred in a currency other than the euro
shall be converted into euro by the beneficiaries in the month during which
expenditure was incurred.

The conversion shall be verified by the
managing authority or by the controller in the Member State or third country in
which the beneficiary is located.

Article 27
Decommitment

By way of derogation from the first
subparagraph of Article 127(1), but without prejudice to Article 127(4), of Regulation
(EU) No [...]/2012 [CPR], the Commission shall de-commit any part of the
amount calculated in accordance with the second subparagraph of that Article in
a cooperation programme that has not been used for payment of the initial and
annual pre-financing, interim payments and annual balance by 31 December of the
third financial year following the year of budget commitment under the
cooperation programme or for which a payment application has not been sent in
accordance with Article 126(1) of Regulation (EU) No [...]/2012 [CPR].

Article 28
Participation of third
countries

Detailed rules concerning financial
management as well as programming, monitoring, evaluation and control of the
participation of third countries in transnational and interregional cooperation
programmes as referred to in Article 3(4), second sub-paragraph, and (5) shall be established in the relevant cooperation programme and/or
the relevant financing agreement between the Commission, each of the third
countries and the Member State hosting the managing authority of the relevant
cooperation programme, as appropriate.

CHAPTER X
FINAL PROVISIONS

Article 29
Exercise of the delegation

1.
The power to adopt delegated acts is conferred
on the Commission subject to the conditions laid down in this Article.

2.
The power to adopt delegated acts referred to in
Article 17(1) shall be conferred on the Commission for an indeterminate period
of time from the date of entry into force of this Regulation.

3.
The delegation of power referred to in Article
17(1) may be revoked at any time by the European Parliament or by the Council.

A decision to revoke shall put an end to the
delegation of the power specified in that decision. It shall take effect the
day following the publication of the decision in the Official Journal of the
European Union or at a later date specified therein. It shall not affect
the validity of any delegated acts already in force.

4.
As soon as it adopts a delegated act, the
Commission shall notify it simultaneously to the European Parliament and to the
Council.

5.
A delegated act adopted pursuant to Article 17(1)
shall enter into force only if no objection has been expressed either by the
European Parliament or the Council within a period of two months of
notification of that act to the European Parliament and the Council or if,
before the expiry of that period, the European Parliament and the Council have
both informed the Commission that they will not object. That period shall be
extended by two months at the initiative of the European Parliament or of the
Council.

Article 30
Committee procedure

1.
The Commission shall be assisted by the Coordination
Committee of the Funds. That committee shall be a committee within the meaning
of Regulation (EU) No 182/2011.

2.
Where reference is made to this paragraph, Article
4 of Regulation (EU) No 182/2011 shall apply.

3.
Where reference is made to this paragraph,
Article 5 of Regulation (EU) No 182/2011 shall apply.

Article 31
Transitional provisions

1.
As far as the European territorial cooperation objective
is concerned, this Regulation
shall not affect either the continuation or modification, including the total
or partial cancellation, of support approved by the Commission on the basis of
Council Regulation (EC) No 1080/2006 or any other legislation applying to
that assistance on 31 December 2013, which shall consequently apply
thereafter to that assistance or the projects concerned until their closure.

2.
Applications concerning the European territorial
cooperation objective in the 2007-2013 period to receive support made under Regulation
(EC) No 1080/2006 before 1 January 2014 shall remain valid.

Article 32
Review

The European Parliament and the Council shall
review this Regulation by 31 December 2022, in accordance with Article 178 of
the Treaty.

Article 33
Entry into force

This Regulation shall enter into force on the
day following that of its publication in the Official Journal of the
European Union.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament                       For
the Council

The
President                                                 The President

ANNEX

Common
indicators for the European territorial cooperation goal
(referred to in Article 15)

|| || UNIT || NAME ||

|| Productive investment || || ||

|| || enterprises || Number of enterprises receiving grants ||

|| || enterprises || Number of enterprises receiving financial support other than grants ||

|| || enterprises || Number of enterprises receiving non-financial support ||

|| || enterprises || Number of new enterprises supported ||

|| || EUR || Private investment matching public support to SMEs (grants) ||

|| || EUR || Private investment matching public support to SMEs (non-grants) ||

|| || full time equivalents || Number of jobs created in assisted SMEs ||

|| Tourism || visits || Number of visits to supported attractions ||

|| ICT Infrastructure || persons || Population covered by broadband access of at least 30 Mbps ||

|| Transport || || ||

|| Railway || km || Total length of new railway line ||

|| || || of which: TEN-T ||

|| || km || Total length of reconstructed or upgraded railway line ||

|| ||  of which: TEN-T ||

|| Roads || km || Total length of newly built roads ||

|| || || of which: TEN-T ||

|| km || Total length of reconstructed or upgraded roads ||

|| || of which: TEN-T ||

|| Urban transport || passenger trips || Increase of passenger trips using supported urban transport service ||

|| Inland waterways || tonne-km || Increase of cargo transported on improved inland waterways ||

|| Environment || || ||

|| Solid waste || tonnes || Additional waste recycling capacity ||

|| Water supply || persons || Additional population served by improved water supply ||

|| || m3 || Estimated reduction of leakage in water distribution network ||

|| Wastewater treatment || population equivalent || Additional population served by improved wastewater treatment ||

|| Risk prevention and management || persons || Population benefiting from flood protection measures ||

|| || persons || Population benefiting from forest fire protection and other protection measures ||

|| Land rehabilitation || hectares || Total surface area of rehabilitated land ||

|| Soil sealing || hectares || Change in land sealed due to development ||

|| Nature and biodiversity || hectares || Surface area of habitats in better conservation status ||

|| Research, Innovation || || ||

|| || Persons || Number of R&D personnel/researchers working in newly built or equipped research infrastructures ||

|| || Enterprises || Number of enterprises cooperating with assisted research institutions ||

|| || Full time equivalents || Number of posts for R&D personnel/researchers created in assisted entities ||

|| || EUR || Private investment matching public support in innovation or R&D projects ||

|| || Enterprises || Number of enterprises that introduced new or significantly improved products, new to the market as a result of supported innovation or R&D projects ||

|| || Enterprises || Number of enterprises that introduced new or significantly improved products, new to the firm as a result of supported innovation or R&D projects ||

|| Energy and Climate change || || ||

|| Renewables || MW || Additional capacity of renewable energy production ||

|| Energy efficiency || households || Number of households with improved energy consumption classification ||

|| || kWh/year || Decrease of primary energy consumption of public buildings

|| || users || Number of additional energy users connected to smart grids

|| GHG reduction || tonnes of CO2eq || Estimated decrease of GHG in CO2 equivalents ||

|| Social infrastructure || || ||

|| Childcare & education || persons || Service capacity of supported childcare or education infrastructure ||

|| Health || persons || Capacity of supported health services ||

|| Housing || households || Number of households benefiting from improved housing conditions ||

|| Tourism || visits || Number of visits to supported attraction ||

|| Cultural heritage || visits || Number of visits at supported sites ||

|| Urban development || Persons || Population living in areas with integrated urban development strategies ||

|| || square metres || New open space in urban areas ||

|| || square metres || New public or commercial buildings in urban areas ||

|| || square metres || New housing in urban areas ||

Labour Market and Training[22] || || ||

|| persons || Number of participants in cross-border mobility initiatives ||

|| persons || Number of participants in joint local employment initiatives and joint training ||

|| persons || Number of participants in projects promoting gender equality, equal opportunities and social inclusion across borders ||

|| persons || Number of participants in joint education and training schemes to support youth employment, educational opportunities and higher and vocational education across borders ||

Institutional and Administrative Capacity || || ||

|| number || Number of projects promoting legal and administrative cooperation and cooperation between citizens and institutions ||

|| number || Number of projects developed and implemented to support the implementation of macro-regional strategies and sea basin strategies ||

|| number || Number of projects in interregional cooperation developed to reinforce the effectiveness of cohesion policy ||

|| number || Number of projects in interregional cooperation developed and implemented to reinforce the effectiveness of cohesion policy ||

[1]               "Results of the public consultation on the
conclusions of the fifth report on economic, social and territorial cohesion
Brussels", Commission Staff Working Paper, SEC(2011) 590 final, 13.5.2011.

[2]               "INTERREG III Community Initiative (2000-2006)
Ex Post evaluation", by Panteia and Partners, May 2010.

[3]               "Report on Objective 3: a challenge for
territorial cooperation – the future agenda for cross-border, transnational and
interregional cooperation (2010/2155(INI))", adopted on 23 June 2011.

[4]               "Results of the public consultation on the
conclusions of the fifth report on economic, social and territorial cohesion
Brussels", Commission Staff Working Paper, SEC(2011) 590 final, 13.5.2011.

[5]               Contributions from FR, HU, AT, MT, IT, ES, RO.

[6]               "INTERREG III Community Initiative (2000-2006)
Ex Post evaluation", by Panteia and Partners, May 2010, p. 3, 4.

[7]               INTERREG III Community Initiative (2000-2006) Ex Post
evaluation", by Panteia and Partners, May 2010, p. 9.

[8]               "High level Group reflecting on future cohesion
policy ‑ report of fourth meeting – 25-26 March 2010", p. 2.

[9]               "High level Group reflecting on future cohesion
policy- report of Fifth meeting – 7-8 June 2010", p. 6.

[10]             "Report on Objective 3: a challenge for
territorial cooperation – the future agenda for cross-border, transnational and
interregional cooperation (2010/2155(INI))", adopted on 23 June 2011.

[11]             Communication "European Union Strategy for the
Baltic Sea Region", COM (2009) 248, 10.6.2009 and Communication
"European Union Strategy for Danube Region", Brussels, 8.12.2010,
COM(2010) 715.

[12]             OJ C , , p. .

[13]             OJ C , , p. .

[14]             OJ L , , p. .

[15]             See page yy of this Official Journal.

[16]             OJ L 154, 21.6.2003, p. 1.

[17]             OJ L

[18]             OJ L

[19]             Communication from the Commission: Europe 2020 - A
strategy for smart, sustainable and inclusive growth, COM(2010) 2020 final,
3.3.2010.

[20]             OJ L 210, 31.7.2006, p. 19.

[21]             OJ L 55, 28.2.2011, p. 13.

[22]             Where relevant, the information on participants shall
be broken down by their labour market status, indicating whether they are
"employed", "unemployed", "long-term unemployed",
"inactive" or "inactive and not in education or training".