ANNEX 1a

[MODEL] CONTRIBUTION DECISION — PARTY

NUMBER: …[INSERT]…





Having regard to the Treaty on European Union, and in particular Article 10(4) thereof,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 224 thereof,

Having regard to Regulation (EU, Euratom) No 1141/2014 of the European Parliament and of the Council of 22 October 2014 on the statute and funding of European political parties and European political foundations (1), and in particular Article 25(1) thereof,

Having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union (2) (‘the Financial Regulation’),

Having regard to Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 (3) (‘the Rules of Application of the Financial Regulation’),

Having regard to the Commission Delegated Regulation (EU, Euratom) 2015/2401 of 2 October 2015 on the content and functioning of the Register of European political parties and foundations (4),

Having regard to the Rules of Procedure of the European Parliament, and in particular Rule 25(11) thereof,

Having regard to the Decision of the Bureau of the European Parliament of 12 June 2017 (5) laying down the procedures for implementing Regulation (EU, Euratom) No 1141/2014,

Having regard to the terms and conditions laid down by the European Parliament in the call for contributions with a view to awarding funding to political parties at European level,

Whereas:

(1) Article 10(4) of the Treaty on European Union provides that the political parties at European level are to contribute to forming European political awareness and to expressing the will of citizens of the Union.

(2) This decision is the result of a call for contributions by which the applicants were informed of the model Funding Decision, including the terms and conditions.

(3) [the beneficiary] introduced a request for financing on [date of reception by the European Parliament], and explicitly agreed to the terms and conditions of the Funding Decision,

THE BUREAU OF THE EUROEAN PARLIAMENT HAS EXAMINED the request in its meeting of [date] and HAS ADOPTED THIS DECISION:

Direct financial contributions within the meaning of Article 204a of the Financial Regulation (‘funding’) are awarded to:

[full official name of the beneficiary] [official legal form] [legal registration No] [full official address] [VAT number], (‘the beneficiary’),

represented, for the purposes of this Funding Decision by:

…[representative entitled to enter into legal commitments]…,

to support the beneficiary's statutory activities and objectives,

under the terms and conditions set out in the call for contributions and the present Contribution Decision (‘the Funding Decision’), including its Special Terms and Conditions, the General Terms and Conditions and the estimated budget in the Annex which shall form an integral part of this Funding Decision.

The provisions of the Special Terms and Conditions shall take precedence over those of the other parts of this Decision. The provisions of the General Terms and Conditions shall take precedence over those of the other Annexes.

Table of contents

I. SPECIAL TERMS AND CONDITIONS 9

Article I.1 - Subject matter of the Decision 9

Article I.2 - Period of eligibility 10

Article I.3 - Form of funding 10

Article I.4 - Provisional (maximum) funding amount 10

Article I.5 - Payments and payment arrangements 10

I.5.1 Pre-financing 10

I.5.2 Payment of the balance or recovery of pre-financing unduly paid 10

I.5.3 Currency 10

Article I.6 - Bank account 10

Article I.7 - General administrative provisions 11

Article I.8 - Entry into force of the Decision 11

II. GENERAL TERMS AND CONDITIONS 11

PART A: LEGAL AND ADMINISTRATIVE PROVISIONS 11

Article II.1 - Definitions 11

Article II.2 - General obligations of the beneficiary 12

Article II.3 - Obligations linked to bank account 12

Article II.4 - Liability for damages 12

Article II.5 - Confidentiality 13

Article II.6 - Processing of personal data 13

Article II.7 - Record keeping 13

Article II.8 - Visibility of Union funding 13

II.8.1 Information on Union funding 13

II.8.2 Disclaimers excluding European Parliament responsibility 13

II.8.3 Publication of information by the European Parliament 13

Article II.9 - Award of contracts by the beneficiary 13

II.9.1 Principles 13

II.9.2 Record keeping 14

II.9.3 Control 14

II.9.4 Liability 14

Article II.10 - Force majeure 14

Article II.11 - Suspension of payment of funding 14

II.11.1 Grounds for suspension 14

II.11.2 Procedure for suspension 14

II.11.3 Effects of the suspension 14

II.11.4 Resumption of payment 15

Article II.12 - Withdrawal of the Funding Decision by the European Parliament 15

II.12.1 Grounds for withdrawal 15

II.12.2 Procedure for withdrawal 15

II.12.3 Effects of withdrawal 15

Article II.13 - Termination of the Funding Decision 15

II.13.1 Termination at the request of the beneficiary 15

II.13.2 Termination by the European Parliament 15

II.13.3 Effects of termination 16

Article II.14 - Assignment 16

Article II.15 – Late-payment interest 16

Article II.16 - Applicable law 16

Article II.17 - Right to be heard 16

PART B: FINANCIAL PROVISIONS 16

Article II.18 - Reimbursable expenditure 16

II.18.1 Conditions 16

II.18.2 Examples for reimbursable expenditure 17

Article II.19 - Non-reimbursable expenditure 17

Article II.20 - Contributions in kind 18

Article II.21 - Budget transfers 18

Article II.22 - Reporting obligations 18

II.22.1 Annual report 18

II.22.2 External audit report 19

Article II.23 - Decision on annual report 19

Article II.24 - Decision on the final funding amount 20

II.24.1 Impact of the annual report 20

II.24.2 Threshold 20

II.24.3 Carry-over of unspent funding 20

II.24.4 Decision on final funding amount 20

II.24.5 Recovery of unspent funding 20

II.24.6 Balance of funding 20

II.24.7 Surplus of own resources 20

Article II.25 - Interest on pre-financing 21

Article II.26 - Recovery 21

II.26.1 Late-payment interest 21

II.26.2 Offsetting 21

II.26.3 Bank charges 21

Article II.27 - Financial guarantee 22

Article II.28 - Control 22

II.28.1 General provisions 22

II.28.2 Duty to keep documents 22

II.28.3 Obligation to provide documents and/or information 22

II.28.4 On-the-spot visits 22

II.28.5 Contradictory audit procedure 22

II.28.6 Effects of audit findings 23

II.28.7 Rights of control of OLAF 23

II.28.8 Rights of control of the European Court of Auditors 23

II.28.9 Failure to comply with the obligations under Article II.28.1 to 23

Annex- Estimated Budget 24

I. SPECIAL TERMS AND CONDITIONS

Article I.1

Subject matter of the Decision

The European Parliament awards funding for the implementation of the statutory activities and objectives of the beneficiary in the financial year [insert], in accordance with the terms and conditions set out in the Special Terms and Conditions and the General Terms and Conditions (‘terms and conditions’), as well as in accordance with the Annex to the Funding Decision. This constitutes implementation of the Funding Decision by the European Parliament.

The beneficiary will use the funding for the purpose of implementing its statutory activities and objectives, acting on its own responsibility and in accordance with the terms and conditions and the Annex to the Funding Decision. This constitutes implementation of the Funding Decision by the beneficiary.

Article I.2

Period of eligibility

The period of eligibility for Union funding shall run from [insert DD/MM/YY] to [insert DD/MM/YY].

Article I.3

Form of funding

The contributions awarded to the beneficiary pursuant to Title VIII of Part II of the Financial Regulation shall take the form of a reimbursement of a percentage of the reimbursable expenditure actually incurred.

Article I.4

Provisional (maximum) funding amount

The European Parliament shall contribute a maximum amount of EUR [insert amount], which shall not exceed 85 % of the total estimated reimbursable expenditure.

The estimated reimbursable expenditure of the beneficiary is set out in the Annex (‘estimated budget’). The estimated budget shall be in balance and shall give a breakdown of all the beneficiary's costs and revenue for the period of eligibility. The reimbursable expenditure shall be separated from non-reimbursable expenditure, pursuant to Article II.18.

Article I.5

Payments and payment arrangements

The funding shall be paid in accordance with the following timetable and arrangements.

I.5.1 Pre-financing

Pre-financing payment of EUR [insert amount], representing [100 % by default, otherwise insert the percentage decided by the European Parliament] of the maximum amount established in Article I.4 of this Funding Decision, shall be made to the beneficiary within 30 days following the date of entry into force of the Funding Decision or, if applicable, from the date when the European Parliament receives the financial guarantee of EUR [insert amount], whichever is the latest.

I.5.2 Payment of the balance or recovery of pre-financing unduly paid

The balance of funding shall be paid to the beneficiary or any pre-financing unduly paid shall be recovered within 30 days following the decision of the European Parliament on the annual report and the determination of the final funding amount as specified in Article II.24.

I.5.3 Currency

Payments shall be made by the European Parliament in euro. Any conversion of actual costs into euro shall be made at the daily rate published in the C series of the Official Journal of the European Union or, failing that, at the monthly accounting rate established by the European Parliament and published on its website, on the day when the payment order is issued by the European Parliament, save where the Special Terms and Conditions expressly provide otherwise.

Payments by the European Parliament shall be deemed to have been effected on the date on which they are debited to the European Parliament's account.

Article I.6

Bank account

Payments shall be made into a bank account or sub-account held by the beneficiary in the bank established in a European Union Member State, denominated in euro, details of which are given below:

Name of the bank: […] Address of the branch where the account is held: […] Precise denomination of the account holder: […] Full account number (including bank codes): […] IBAN: […] BIC / SWIFT: […]

Article I.7

General administrative provisions

Any communication addressed to the European Parliament in connection with the Funding Decision shall be in writing, shall bear the number of the Funding Decision and shall be sent to the following address:

European Parliament The President c/o the Director-General of Finance Office SCH 05B031 L-2929 Luxembourg

Ordinary mail shall be deemed to have been received by the European Parliament on the date on which it is formally registered by the European Parliament's Mail Service.

The Funding Decision is addressed to the beneficiary under the following address:

Mr/Mrs […] [Title] [Official name of the beneficiary body] [Full official address]

Any change of address by the beneficiary shall be communicated to the European Parliament in writing without delay.

Article I.8

Entry into force of the Decision

The Funding Decision shall enter into force on the date on which it is signed on behalf of the European Parliament.

II. GENERAL TERMS AND CONDITIONS

PART A: LEGAL AND ADMINISTRATIVE PROVISIONS

Article II.1

Definitions

For the purpose of this Funding Decision:

(1) ‘activity report’ means a written justification of the costs incurred during the period of eligibility. For example, an explanation of activities, administrative costs, etc. The activity report is part of the annual report;

(2) ‘annual report’ means a report to be submitted within six months following the end of the financial year in accordance with Article 23 of the Regulation (EU, Euratom) No 1141/2014 and Article 204l of the Financial Regulation;

(3) ‘balance of funding’ means the difference between the pre-financing amount pursuant to Article I.5.1 and the final funding amount established pursuant to Article II.24.4;

(4) ‘clearing of pre-financing’ means a situation where the final funding amount is established by the authorising officer and the amount paid to the beneficiary is no longer the property of the Union;

(5) ‘conflict of interests’ means a situation where the impartial and objective implementation of the Funding Decision by the beneficiary is compromised for reasons involving family, emotional life, national affinity, economic interest, or any other shared interest with any third party related to the subject matter of the Funding Decision. Political affinity does not, in principle, constitute a reason for a conflict of interests in the case of agreements concluded between the political party and organisations sharing the same political values. Nevertheless, in the case of such an agreement, compliance with Article 22 of the Regulation (EU, Euratom) No 1141/2014 must be observed;

(6) ‘contributions in kind’ or ‘offering in kind’ both mean non-financial resources, made available free of charge by third parties to the beneficiary, pursuant to Article 2(7) and 2(8) of Regulation (EU, Euratom) No 1141/2014;

(7) ‘financial year N’ or ‘period of eligibility’ both mean the period of implementation of the activities for which the funding was awarded under the Funding Decision, as specified in Article I.2;

(8) ‘force majeure’ means any unforeseeable, exceptional situation or event beyond the control of the beneficiary or the European Parliament that prevents either of them from fulfilling any of their obligations under the Funding Decision, that is not attributable to error or negligence on their part or on the part of the subcontractors affiliated entities or third parties in receipt of financial support and which proves to be inevitable despite their exercising due diligence. The following cannot be invoked as force majeure: labour disputes, strikes, financial difficulties or any default of a service, defect in equipment or materials or delays in making them available, unless they stem directly from a relevant case of force majeure;

(9) ‘formally notify’ means to communicate in writing by mail or electronic mail with proof of delivery;

(10) ‘fraud’ means any intentional act or omission affecting the Union's financial interests relating to the use or presentation of false, incorrect or incomplete statements or documents, or to the non-disclosure of information in violation of a specific obligation;

(11) ‘funding’ means ‘direct financial contributions’ within the meaning of Part Two, Title VIII of the Financial Regulation and Chapter IV of Regulation (EU, Euratom) No 1141/2014;

(12) ‘irregularity’ means any infringement of a provision of Union law resulting from an act or omission by the beneficiary, which has or would have the effect of prejudicing the Union's budget;

(13) ‘own resources’ means external sources of funding other than Union funding. For example: donations, contributions from members (as defined in points (7) and (8) of Article 2 of Regulation (EU, Euratom) No 1141/2014)), etc.;

(14) ‘related person’ means any person who has the power to represent the beneficiary or to take decisions on its behalf;

(15) ‘substantial error’ means any infringement of a provision of the Funding Decision resulting from an act or omission, which causes or might cause a loss to the budget of the European Union.

Article II.2

General obligations of the beneficiary

The beneficiary:

(a) shall bear sole responsibility for, and the burden of proving, compliance with any legal obligations incumbent on it;

(b) shall be required to make good any damage suffered by the European Parliament as a result of the implementation, including the incorrect implementation, of the Funding Decision, except in cases of force majeure;

(c) shall bear sole liability towards third parties, including for damage of any kind suffered by them during the implementation of the Funding Decision;

(d) shall inform the European Parliament immediately of any change in its legal, financial, technical, organisational or ownership situation and of any change in its name, address or legal representative;

(e) shall take all necessary measures to prevent any conflict of interests arising.

Article II.3

Obligations linked to bank account

The account or sub-account referred to in Article I.6 must make it possible to identify the amounts paid by the European Parliament and must be reserved exclusively for the receipt of amounts referred to in Article I.5 paid by the European Parliament.

If the amounts paid into this account as pre-financing yield interest or equivalent benefits under the law of the Member State on whose territory the account is opened, such interest or benefits shall be recovered by the European Parliament subject to the conditions laid down in Article II.25, in accordance with Article 204k(5) of the Financial Regulation.

Under no circumstances shall the amounts paid by the European Parliament be used for speculative purposes.

The pre-financing shall remain the property of the Union until it is cleared against the final funding amount.

Article II.4

Liability for damages

The European Parliament may not be held liable for any damage caused or sustained by the beneficiary, including any damage caused to third parties during or as a consequence of the implementation of this Funding Decision.

Except in cases of force majeure, the beneficiary or the related person shall compensate the European Parliament for any damage it sustains as a result of the implementation of the Funding Decision or because the Funding Decision was not implemented in full compliance with its provisions.

Article II.5

Confidentiality

Unless otherwise stipulated in this Funding Decision, in Article 32 of Regulation (EU, Euratom) No 1141/2014 and in other applicable Union legal acts, the European Parliament and the beneficiary undertake to preserve the confidentiality of any document, information or other material directly related to the subject matter of this Funding Decision.

Article II.6

Processing of personal data

Any personal data collected in the context of the Funding Decision shall be processed in accordance with Article 33 of Regulation (EU, Euratom) No 1141/2014, and with Regulation (EC) No 45/2001 of the European Parliament and of the Council (6).

Such data shall only be processed for the purpose of the implementation and monitoring of the Funding Decision without prejudice to their possible transfer to the bodies responsible for carrying out verification and audit tasks in accordance with Union law.

Article II.7

Record keeping

In accordance with Article 204o of the Financial Regulation, the beneficiary shall keep all records and supporting documents concerning the implementation of the Funding Decision for five years following the submission of the annual report, including the annual financial statements referred to in Article 204l(1) of the Financial Regulation.

Records related to audits, appeals, litigation or the settlement of claims arising out of the use of the funding shall be retained until the end of such audits, appeals, litigation or settlement of claims.

Article II.8

Visibility of Union funding

II.8.1 Information on Union funding

Unless the European Parliament requests or agrees otherwise, any communication or publication by the beneficiary that relates to the Funding Decision, including at a conference, seminar, or in any information or promotional materials (such as brochures, leaflets, posters, presentations, in electronic form, etc.), shall indicate that the programme has received financial support from the European Parliament.

II.8.2 Disclaimers excluding European Parliament responsibility

Any communication or publication by the beneficiary, in any form and any medium, shall indicate that sole liability rests with the author and that the European Parliament is not responsible for any use that may be made of the information contained therein.

II.8.3 Publication of information by the European Parliament

The European Parliament publishes on a website the information specified in Article 32 of Regulation (EU, Euratom) No 1141/2014.

Article II.9

Award of contracts by the beneficiary

II.9.1 Principles

In accordance with Article 204b(2) of the Financial Regulation, funding may be used to reimburse expenditure relating to contracts concluded by the beneficiary, provided that, there were no conflicts of interest when they were awarded.

For contracts with a value of more than EUR 60 000 per supplier and per good or service, the beneficiary shall collect at least three offers received in response to a written invitation to bid detailing the requirements for the procurement. The duration of the contracts concerned shall not exceed five years.

If there are fewer than three offers responding to the written invitation to bid, the beneficiary shall be required to prove that it was impossible to obtain more offers for the procurement in question.

II.9.2 Record keeping

The beneficiary shall keep a record of the evaluation of the offers and shall justify in writing its choice of the final supplier.

II.9.3 Control

The beneficiary shall ensure that the European Parliament, the Authority for European Political Parties and European Political Foundations, the European Court of Auditors and the European Anti-Fraud Office (OLAF) are able to exercise their powers of control under Chapter V of Regulation (EU, Euratom) No 1141/2014 and under Article 204n of the Financial Regulation. The beneficiary shall ensure that contracts concluded with third parties provide for the possibility that those powers of control may also be exercised in respect of those third parties.

II.9.4 Liability

The beneficiary shall bear sole liability in respect of the implementation of the Funding Decision and compliance with the provisions of the Funding Decision. The beneficiary shall undertake to make all the arrangements required to ensure that the contractor agrees to waive all rights against the European Parliament under the Funding Decision.

Article II.10

Force majeure

If either the European Parliament or the beneficiary is faced with a situation of force majeure, it shall inform the other without delay, by registered letter with proof of delivery or equivalent, stating the nature, probable duration and likely effects of the situation in question.

The European Parliament and the beneficiary shall make every effort to minimise any damage which might be caused by a situation of force majeure.

Neither the European Parliament nor the beneficiary shall be held to be in breach of any of its obligations under the Funding Decision if it has been prevented from fulfilling that obligation by force majeure.

Article II.11

Suspension of payment of funding

II.11.1 Grounds for suspension

The European Parliament shall have the power to suspend the payment of funding, in accordance with the applicable rules under the Financial Regulation, in the following circumstances:

(i) when it suspects that the beneficiary has failed to comply with the obligations related to the use of contributions laid down in Article 204k of the Financial Regulation until such suspicion is verified; or

(ii) when the beneficiary has been subject to the financial sanctions provided for in Article 27(4) of Regulation (EU, Euratom) No 1141/2014 until the financial sanction is paid.

II.11.2 Procedure for suspension

Step 1 — Before suspending the payment, the European Parliament shall formally notify the beneficiary, of its intention to suspend, stating its reasons for wishing to do so and inviting the beneficiary to submit observations within 30 calendar days after receiving that notification.

Step 2 — If after expiry of the period for submission of observations the European Parliament decides not to pursue the suspension procedure, it shall notify the beneficiary of that decision.

If, after expiry of the period for submission of observations, the European Parliament decides to pursue the suspension procedure, it shall formally notify the beneficiary by means of a reasoned decision on suspension informing it of:

(i) the indicative date of completion of the necessary verification in the case referred to in point (i) of Article II.11.1; and

(ii) any legal remedies.

II.11.3 Effects of the suspension

The suspension of payment shall have the effect that the beneficiary is not entitled to receive any payments from the European Parliament until the verification referred to in point (i) of Article II.11.2, under Step 2, is complete or the ground for suspension ceases to apply. This is without prejudice to the right of the European Parliament to terminate funding or to withdraw the Funding Decision.

II.11.4 Resumption of payment

From the moment that the ground for the suspension of payment ceases to apply, all payments concerned shall be resumed and the European Parliament shall notify the beneficiary thereof.

Article II.12

Withdrawal of the Funding Decision by the European Parliament

II.12.1 Grounds for withdrawal

The European Parliament shall have the power to withdraw the Funding Decision on the basis of a decision by the Authority to remove the beneficiary from the Register, except in the cases provided for in the third subparagraph of Article 30(2) of Regulation (EU, Euratom) No 1141/2014.

II.12.2 Procedure for withdrawal

Step 1 — Before withdrawing the Funding Decision, the European Parliament shall formally notify the beneficiary of its intention to withdraw, stating its reasons for wishing to do so and inviting the beneficiary to submit observations within 30 calendar days after receiving that notification.

Step 2 — If, after expiry of the period for submission of observations, the European Parliament decides not to withdraw the Funding Decision, it shall notify the beneficiary of that decision.

If, after expiry of the period for submission of observations, the European Parliament decides to withdraw the Funding Decision, it shall formally notify the beneficiary by means of a reasoned decision on withdrawal.

Any amount unduly paid to the beneficiary shall be recovered under the applicable rules of the Financial Regulation.

II.12.3 Effects of withdrawal

The decision to withdraw the Funding Decision shall have retroactive effect from the date of adoption of the Funding Decision.

Article II.13

Termination of the Funding Decision

II.13.1 Termination at the request of the beneficiary

The beneficiary may request the termination of the Funding Decision.

The beneficiary shall formally notify the European Parliament on termination, stating:

(a) the reasons for termination; and

(b) the date on which the termination is to take effect, which shall not be earlier than the date on which the formal notification was sent.

The termination shall take effect on the day specified in the decision of termination.

II.13.2 Termination by the European Parliament

(a) Grounds for termination

The European Parliament shall have the power to terminate the Funding Decision in any of the following circumstances:

(a) on the basis of a decision by the Authority to remove the beneficiary from the Register, in the cases provided for in the third subparagraph of Article 30(2) of Regulation (EU, Euratom) No 1141/2014;

(b) if the beneficiary no longer complies with Article 18(2) of Regulation (EU, Euratom) No 1141/2014;

(c) if the European Parliament establishes that the beneficiary has failed to comply with the obligations related to the use of contributions laid down in Article 204k of the Financial Regulation;

(d) if beneficiary is declared bankrupt, is being wound up or is subject of any other similar proceedings.

(b) Procedure for termination

Step 1 — Before termination of the Funding Decision, the European Parliament shall formally notify the beneficiary of its intention to terminate, stating its reasons for wishing to do so and inviting the beneficiary to submit observations within 30 calendar days after receiving that notification.

Step 2 — If, after expiry of the period for submission of observations, the European Parliament decides not to terminate the Funding Decision, it shall notify the beneficiary of that decision.

If, after expiry of the period for submission of observations, the European Parliament decides to terminate the Funding Decision, it shall formally notify the beneficiary, by means of a reasoned decision on termination.

The termination shall take effect on the day specified in the decision of termination.

II.13.3 Effects of termination

The decision to terminate the Funding Decision shall take effect ex nunc. The costs actually incurred by the beneficiary from the day that the decision to terminate takes effect are to be qualified as non-reimbursable expenditure.

Article II.14

Assignment

The beneficiary may not assign any of its claims for payment against the European Parliament to any third party, except if approved in advance by the European Parliament on the basis of a reasoned, written request by the beneficiary.

If the European Parliament does not accept in writing the assignment or the terms of such acceptance are not complied with, the assignment shall have no legal effect.

Under no circumstances may an assignment release the beneficiary from its obligations towards the European Parliament.

Article II.15

Late-payment interest

If the European Parliament does not pay within the time limits for payment, the beneficiary shall be entitled to late-payment interest at the rate applied by the European Central Bank for its main refinancing operations in euros (‘the reference rate’), plus three and a half points. The reference rate is the rate in force on the first day of the month in which the time limit for payment expires, as published in the C series of the Official Journal of the European Union.

If the European Parliament suspends the payments as provided for in Article II.11, these actions may not be considered to be cases of late payment.

Late-payment interest covers the period running from the day following the due date for payment, up to and including the date of actual payment.

As an exception to the first subparagraph, if the calculated interest is lower than or equal to EUR 200, the European Parliament shall only be required to pay it to the beneficiary if the beneficiary requests it within two months of receiving late payment.

Article II.16

Applicable law

This Funding Decision is governed by the applicable Union law, and in particular by Regulation (EU, Euratom) No 1141/2014 and the applicable rules of the Financial Regulation which fully apply. They are complemented, where necessary, by the national law of the Member State in which the beneficiary has its seat.

Article II.17

Right to be heard

In the cases in which, under this Funding Decision, the beneficiary is entitled to submit its observations, the beneficiary shall be given a period of 10 working days, save where expressly provided otherwise, to submit its written observations. This period may, upon reasoned request by the beneficiary, be extended once by another 10 working days.

PART B: FINANCIAL PROVISIONS

Article II.18

Reimbursable expenditure

II.18.1 Conditions

In order to be considered to be eligible for reimbursement from Union funding, and in accordance with Article 204k of the Financial Regulation, costs must meet the following criteria:

(a) be directly related to the subject matter of the Funding Decision and provided for in the estimated budget annexed to the Funding Decision;

(b) be necessary for the implementation of the Funding Decision;

(c) be reasonable and justified, and comply with the principle of sound financial management, in particular regarding economy and efficiency;

(d) be generated during the period of eligibility as defined in Article I.2, with the exception of costs relating to annual reports and certificates on the financial statements and underlying accounts;

(e) be actually incurred by the beneficiary;

(f) be identifiable and verifiable, and recorded in the beneficiary's accounts, in accordance with the accounting standards applicable to it;

(g) comply with the requirements of applicable tax and social security laws;

(h) comply with the first paragraph of Article II.9.1, and, as a general rule, with the second paragraph of Article II.9.1.

The beneficiary's accounting and internal audit procedures must make it possible to carry out a direct reconciliation of the costs and revenue declared in the annual report with the financial statements and the corresponding supporting documents.

II.18.2 Examples for reimbursable expenditure

In particular, and provided that they meet the criteria laid down in Article II.18.1, the following operating costs shall be regarded as reimbursable without prejudice to Article 204k of the Financial Regulation:

(a) administrative costs and costs linked to technical assistance, meetings, research, cross-border events, studies, information and publications;

(b) personnel costs, comprising actual salaries, social security contributions and other statutory costs included in remuneration, provided that they do not exceed the average rates under the beneficiary's usual policy on remuneration;

(c) travel and subsistence expenses for staff, provided that they are consistent with the beneficiary's usual practices regarding travel costs;

(d) the depreciation costs of equipment or other assets (new or second-hand) as recorded in the beneficiary's accounting statements, provided that the asset (i) is written off in accordance with the international accounting standards and the beneficiary's usual accounting practices; and (ii) has been purchased in accordance with the first paragraph of Article II.9.1 and, as a general rule, with the second paragraph of Article II.9.1 if the purchase occurred within the period of eligibility;

(e) costs of consumables and supplies and other contracts, provided that they are (i) purchased in accordance with the first paragraph of Article II.9.1 and, as a general rule, with the second paragraph of Article II.9.1, and (ii) directly assigned to the subject matter of the Funding Decision;

(f) costs arising directly from requirements imposed by the Funding Decision, including, if appropriate, the costs of financial services (in particular the cost of financial guarantees) provided that the corresponding services are purchased in accordance with the first paragraph of Article II.9.1 and, as a general rule, with the second paragraph of Article II.9.1;

(g) financial support for the following associated entities of the beneficiary: [insert the names of the associated entities, such as youth and women's organisations, as communicated with the funding application] on condition that the financial support for each entity does not exceed EUR 100 000, that it is used by the associated entity for reimbursable expenditure, that a lump sum paid to the associated entity does not exceed a quarter of the total financial support to that entity, and that the beneficiary guarantees a possible recovery of such financial support.

Article II.19

Non-reimbursable expenditure

Without prejudice to Article II.18.1 of this Decision and to Article 204k of the Financial Regulation, the following costs shall not be considered reimbursable:

(a) return on capital and dividends paid by the beneficiary;

(b) debt and debt service charges;

(c) provisions for losses or debts;

(d) interest owed;

(e) doubtful debts;

(f) exchange losses;

(g) costs of transfers from the European Parliament charged by the bank of the beneficiary;

(h) costs declared by the beneficiary under another action receiving a grant financed from the Union budget;

(i) contributions in kind;

(j) excessive or reckless expenditure;

(k) deductible VAT;

(l) prohibited funding of certain third parties pursuant to Article 22 of Regulation (EU, Euratom) No 1141/2014 and Article 204b(3) of the Financial Regulation.

Article II.20

Contributions in kind

The European Parliament shall allow the beneficiary to receive contributions in kind during the implementation of the Funding Decision, provided that the value of such contributions does not exceed:

(a) the costs actually borne and duly supported by accounting documents of the third parties who made these contributions to the beneficiary free of charge but bear the corresponding costs;

(b) in the absence of such documents, the costs that correspond to those generally accepted on the market in question;

(c) their value as accepted in the estimated budget;

(d) 50 % of own resources accepted in the estimated budget.

Contributions in kind:

(a) shall be presented separately in the estimated budget, in order to reflect the total resources;

(b) shall comply with Article 20 of Regulation (EU, Euratom) No 1141/2014, as well as the national tax and social security rules;

(c) shall only be accepted on a provisional basis, subject to a certification by the external auditor and to acceptance in the decision over the final funding amount;

(d) shall not be in the form of immovable property.

Article II.21

Budget transfers

The beneficiary shall be allowed to adjust the estimated budget set out in the Annex, by transfers between the different budget categories. This adjustment shall not require an amendment of the Funding Decision. Such transfers shall be justified in the annual report.

Article II.22

Reporting obligations

II.22.1 Annual report

Preferably by 15 May, and at the latest by 30 June, following the end of financial year N, the beneficiary shall submit an annual report, composed as follows:

(a) annual financial statements and accompanying notes, covering beneficiary's revenue and costs, assets and liabilities at the beginning and at the end of the financial year, in accordance with the law applicable in the Member State of beneficiary's seat;

(b) annual financial statements on the basis of the international accounting standards defined in Article 2 of Regulation (EC) No 1606/2002 of the European Parliament and of the Council (7);

(c) the list of donors and contributors and their corresponding donations or contributions reported in accordance with Article 20 of Regulation (EU, Euratom) No 1141/2014;

(d) activity report;

(e) financial statement based on the structure of estimated budget;

(f) detail of accounts as regards revenue, costs, assets and liabilities;

(g) reconciliation of financial statement referred to in point (e) with detail of accounts referred to in point (f);

(h) list of suppliers which in the given financial year charged the beneficiary over EUR 10 000, specifying the name, and address of the supplier as well as the scope of the goods or services provided.

The information included in the annual report must be sufficient to establish the final funding amount.

II.22.2 External audit report

The European Parliament shall receive directly from the independent external bodies or experts, mandated pursuant to Article 23(3) of Regulation (EU, Euratom) No 1141/2014, the external audit report specified in Article 23(1) of Regulation (EU, Euratom) No 1141/2014.

The purpose of the external audit shall be to certify the reliability of the financial statements and the legality and regularity of their expenditure, and in particular that:

(a) the financial statements were prepared in accordance with the national law applicable to the beneficiary, are free of material misstatement and show a true and fair view of the financial position and the operating results;

(b) the financial statements were prepared in accordance with the international accounting standards defined in Article 2 of Regulation (EC) No 1606/2002;

(c) the costs declared were actually incurred;

(d) the statement of revenue is exhaustive;

(e) the financial documents submitted by the beneficiary to Parliament are consistent with the financial provisions of the Funding Decision;

(f) the obligations arising from Regulation (EU, Euratom) No 1141/2014, in particular from Article 20 thereof, have been met;

(g) the obligations arising from the Funding Decision, in particular from Article II.9 and Article II.18 thereof, have been met;

(h) the contributions in kind have actually been provided to the beneficiary and have been valued in compliance with the applicable rules;

(i) any unused part of Union funding was carried-over to the next financial year;

(j) the unused part of Union funding was used in accordance with Article 204k(2) of the Financial Regulation;

(k) any surplus of own resources was transferred to the reserve.

Article II.23

Decision on annual report

By 30 September of the year following financial year N, the European Parliament shall approve or reject the annual report, as specified in Article II.22.1.

If the European Parliament does not respond in writing within a period of six months after the reception of the annual report, the annual report shall be deemed to have been approved.

The approval of the annual report is without prejudice to the establishment of the final funding amount under Article II.24 by means of which the European Parliament takes a final decision on the eligibility of the costs.

The European Parliament may request additional information from the beneficiary in order to be in a position to take a decision on the annual report. In the event of such request, the deadline for the decision on the annual report shall be extended until the requested information has been received and evaluated by the European Parliament.

If the annual report is flawed by substantial deficiencies, the European Parliament may reject it without requesting additional information from the beneficiary and may request that the beneficiary submit a new report within a period of 15 working days.

Requests for additional information or a new report shall be notified to the beneficiary in writing.

If the annual report that was initially submitted is rejected and a new report is requested, the approval procedure set out in this Article shall apply to the new report.

Article II.24

Decision on the final funding amount

II.24.1 Impact of the annual report

The decision of the European Parliament establishing the final funding amount shall be based on the annual report approved in accordance with Article II.23. In the event of a definitive rejection of the annual report by the European Parliament or failure of the beneficiary to submit any annual report within the applicable deadlines, no reimbursable costs may be established by the decision on the final funding amount.

II.24.2 Threshold

The final funding amount shall be limited to the amount laid down in Article I.4. It shall neither exceed 85 % of the reimbursable expenditure indicated in the estimated budget nor 85 % of the reimbursable expenditure that were actually incurred.

II.24.3 Carry-over of unspent funding

Any part of the contribution not spent within financial year N for which it was awarded, shall be carried over to financial year N+1 and spent on any reimbursable expenditure incurred by 31 December of year N+1. Remaining amounts of the previous year's contributions shall not be used to finance the part of the expenditure which European political parties must cover from their own resources.

The beneficiary shall first use the part of the contribution that has not been used within the financial year for which it was awarded and only then any contribution awarded after that year.

II.24.4 Decision on final funding amount

The European Parliament controls annually whether expenditure complies with the provisions of Regulation (EU, Euratom) No 1141/2014, the Financial Regulation and the Funding Decision. Each year it shall take a decision on the final funding amount, which shall be duly notified to the beneficiary.

If the amount of the funding defined in Article I.4 was entirely spent during financial year N, the final funding amount shall be established after the closing of that financial year, in year N+1.

In the event of a carry-over of unspent funding to financial year N+1 in accordance with Article II.24.3, the final funding amount of year N shall be established as follows:

Step 1 : In year N+1 the European Parliament shall decide on the reimbursable costs of financial year N and the first part of the final funding amount of year N, corresponding to those costs. In addition, the European Parliament shall establish the amount of unspent funding awarded for financial year N that is to be carried over to the financial year N+1;

Step 2 : In year N+2, the European Parliament shall decide on the reimbursable costs of financial year N+1, determining which of them will be covered by the unspent funding carried over to the financial year N+1 (second part of the final funding amount).

The final funding amount of year N shall be the sum of amounts established in steps 1 and 2.

At the moment of establishing the final funding amount, the clearing of pre-financing shall take place. In case of a carry-over, a partial clearing of pre-financing takes place at the moment of each of the aforementioned steps.

II.24.5 Recovery of unspent funding

Any remaining part of the contribution awarded for year N that is not spent until the end of the year N+1 shall be recovered in accordance with Chapter 5 of Title IV of Part One of the Financial Regulation.

II.24.6 Balance of funding

If the pre-financing paid exceeds the final funding amount the European Parliament shall recover the pre-financing unduly paid.

If the final funding amount exceeds the pre-financing paid, the European Parliament shall pay the balance.

II.24.7 Surplus of own resources

(a) Building of special reserve

The beneficiary may build a special reserve from the surplus of own resources.

The surplus of own resources to be transferred to the special reserve account shall be the amount of own resources that exceed the sum of own resources necessary to cover 15 % of reimbursable costs actually incurred in financial year N. The beneficiary must have previously covered the non-reimbursable costs of financial year N by using its own resources only.

The reserve shall only be used for the purpose of the co-financing of reimbursable costs and non-reimbursable costs which must be covered from own resources during the implementation of any future Funding Decisions.

(b) Profit

Profit is defined as a surplus of income over expenditure.

Income includes funding from the Union budget and own resources of the beneficiary.

Contributions by third parties to joint events shall not be considered to be part of the own resources of the beneficiary. Moreover, the beneficiary shall neither directly nor indirectly receive other funding from the Union budget. In particular, donations from the budgets of political groups in the European Parliament shall be prohibited.

The surplus allocated to the special reserve will not be taken into account for the calculation of the profit.

(c) Recovery

The funding may not produce a profit for the beneficiary. The European Parliament shall be entitled to recover the percentage of the profit corresponding to the Union contribution to the reimbursable costs.

Article II.25

Interest on pre-financing

The Beneficiary shall notify the European Parliament of the amount of interest or equivalent benefits yielded by the pre-financing that it has received from the European Parliament.

The European Parliament shall deduct the interest yielded by pre-financing when calculating the final funding amount. The interest shall not be included in the own resources.

Article II.26

Recovery

If amounts have been unduly paid to the beneficiary or if a recovery procedure is justified under the terms and conditions of the Funding Decision, Regulation (EU, Euratom) No 1141/2014 or the Financial Regulation, the beneficiary shall repay the amounts concerned to the European Parliament, in accordance with the terms and conditions and by the deadline laid down by the European Parliament.

II.26.1 Late-payment interest

If the beneficiary fails to make the repayment by the deadline laid down by the European Parliament, the European Parliament shall charge on the sums due late-payment interest at the rate laid down in Article II.15. The late-payment interest shall cover the period between the expiry of the deadline laid down for repayment and the date on which the European Parliament receives full repayment of the sums due, inclusive.

Any partial repayment shall first be entered against charges and late-payment interest and only then against the principal.

II.26.2 Offsetting

If no repayment has been made by the deadline laid down, the sums due to the European Parliament may be recovered by offsetting them against any sums owed to the beneficiary on any other account in accordance with Article 80 of the Financial Regulation and its Rules of Application. In exceptional circumstances, justified by the need to safeguard the financial interests of the Union, the European Parliament may recover by offsetting before the due date of the payment. The beneficiary's prior consent shall not be required.

II.26.3 Bank charges

Bank charges occasioned by the recovery of the sums owed to the European Parliament shall be borne solely by the beneficiary.

Article II.27

Financial guarantee

If the European Parliament requests a financial guarantee in accordance with Article 204j of the Financial Regulation, the following conditions must be fulfilled:

(a) the financial guarantee must be provided by a bank or an approved financial institution or, if requested by the beneficiary and accepted by the European Parliament, by a third party;

(b) the guarantor must stand as first-call guarantor and not require the European Parliament to first have recourse against the principal debtor (i.e. the beneficiary concerned); and

(c) the financial guarantee must explicitly remain in force until the pre-financing is cleared against interim payments or payment of the balance by the European Parliament; if payment of the balance takes the form of a recovery, the financial guarantee must remain in force until the debt is considered to be fully cleared; and the European Parliament must release the guarantee within the following month.

Article II.28

Control

II.28.1 General provisions

Within the scope of their competence and in accordance with Chapter V of Regulation (EU, Euratom) No 1141/2014 and of Article 204n(1) of the Financial Regulation, the European Parliament and the Authority for European Political Parties and European Political Foundations may at any moment exercise their respective powers of control in order to verify whether the beneficiary is in full compliance with the obligations laid down in the Funding Decision, in Regulation (EU, Euratom) No 1141/2014 and the Financial Regulation.

The beneficiary shall duly cooperate with the competent authorities and shall provide them with all necessary assistance for the conduct of their control.

The European Parliament and the Authority for European Political Parties and European Political Foundations may delegate the task of control to external bodies duly authorised to act on their behalf (‘the authorised bodies’).

II.28.2 Duty to keep documents

For a period of five years starting from the date of submission of the annual report, the beneficiary shall keep stored, on any appropriate medium, all original documents, and in particular accounting and tax records, including digitalised originals when they are authorised by their respective national law and under the conditions laid down therein.

The five-year period laid down in the first subparagraph shall not apply in the case of ongoing audits, appeals, litigation or pursuit of claims concerning the funding. In such cases, the beneficiary shall keep the documents until such audits, appeals, litigation or claims have been closed.

II.28.3 Obligation to provide documents and/or information

The beneficiary shall provide any document and/or information, including information in electronic format, which is requested by the European Parliament, the Authority for European Political Parties and European Political Foundations or the authorised body (‘the competent authority’).

Any documents or information provided by the beneficiary shall be processed in accordance with Article II.6.

II.28.4 On-the-spot visits

The competent authority may conduct on-the-spot-visits in the premises of the beneficiary. To this end, it may request in writing that the beneficiary make appropriate arrangements for such visit within an appropriate deadline to be fixed by the competent authority.

During an on-the-spot visit, the beneficiary shall allow the competent authority to have access to the sites and premises where the operation is being or was carried out, as well as to all the necessary information, including information in electronic format.

The beneficiary shall ensure that the information is readily available at the moment of the on-the-spot visit and that the information requested is handed over in an appropriate form.

II.28.5 Contradictory audit procedure

On the basis of the findings made during the control procedure, the European Parliament shall draw up a provisional audit report which shall be sent to the beneficiary. The beneficiary may submit observations within 30 calendar days from the date of receipt of the provisional audit report.

On the basis of the findings in the provisional audit report and possible observations of the beneficiary, the European Parliament shall lay down its final audit findings in a final audit report. The final audit report shall be sent to the beneficiary within 60 calendar days after expiry of the time limit fixed for the submission of observations to the provisional audit report.

II.28.6 Effects of audit findings

Without prejudice to the Parliament's right to take the measures under Article II.11 to Article II.13, the final audit findings shall be duly taken into consideration by the European Parliament in the context of the establishment of the final funding amount.

Cases of possible fraud or severe violation of the applicable rules revealed by the final audit findings shall be notified to the competent national or Union authorities for further action.

The European Parliament may retroactively adjust the decision on the final funding amount on the basis of the final audit findings.

II.28.7 Rights of control of OLAF

The European Anti-Fraud Office (OLAF) shall exercise its rights of control vis-a-vis the beneficiary in accordance with the applicable rules, and in particular with Council Regulation (Euratom, EC) No 2185/96 (8), Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council (9), Article 204n(1) of the Financial Regulation and Articles 24(4) and 25(7) of Regulation (EU, Euratom) No 1141/2014.

The beneficiary shall duly cooperate with OLAF and shall provide OLAF with all necessary assistance in its conduct of the control.

The European Parliament may at any time retroactively adjust the decision on the final funding amount on the basis of findings received from the European Anti-Fraud Office (OLAF) in accordance with Article 25(7) of Regulation (EU, Euratom) No 1141/2014. Before the European Parliament decides to retroactively adjust the decision on the final funding amount, the beneficiary shall be duly informed about the relevant findings and of Parliament's intention to adjust the decision on the final funding amount, and shall have the opportunity to submit its observations.

II.28.8 Rights of control of the European Court of Auditors

The European Court of Auditors shall exercises its right of control in accordance with the applicable rules, and notably with Article 204n(1) of the Financial Regulation and Article 25(6) of Regulation (EU, Euratom) No 1141/2014. Articles II.28.3 and II.28.4 apply.

The beneficiary shall duly cooperate with the Court of Auditors and shall provide that Court with all necessary assistance in its conduct of the control.

II.28.9 Failure to comply with the obligations under Article II.28.1 to 4

If the beneficiary does not comply with the obligations laid down in Article II.28.1 to 4, the European Parliament may consider to be non-reimbursable any cost that has been insufficiently substantiated by the beneficiary.