Council Regulation (EC) No 1265/1999 of 21 June 1999 amending Annex II to Regulation (EC) No 1164/94 establishing a Cohesion Fund
Date: 1999-06-21
Institutions: Council of the European Union
Subjects: Cohesion Fund, budgetary assessment, project evaluation, technology assessment

L 161/62

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Official Journal of the European Communities

26.6.1999

COUNCIL REGULATION (EC) No 1265/1999

of 21 June 1999

amending Annex II to Regulation (EC) No 1164/94 establishing a Cohesion Fund

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

(4) Whereas the desired simplification should be
accompanied
that
expenditure has actually been incurred and by
greater responibility by the Member State for
ensuring sound financial management;

improved

checks

by

Having regard to Council Regulation (EC) No 1164/
94 of 16 May 1994 establishing a Cohesion Fund (1),
and in particular Article K of Annex II thereto,

(5) Whereas the Commission and the Member State
should improve their cooperation on checking
projects and this cooperation should be made
systematic;

Having
regard
Commission (2),

to

the

proposal

from the

Having regard to the opinion of
Parliament (3),

the European

Having regard to the opinion of the Economic and
Social Committee (4),

Having regard to the opinion of the Committee of the
Regions (5),

(1) Whereas,

in order

to make the Fund more
effective, the concepts of (cid:28)project’,
(cid:28)groups of
projects’ and (cid:28)stages of a project’ and the criteria
for grouping should be defined;

(6) Whereas, where irregularities are detected, there
should be a system of financial corrections to
protect the financial interests of the Community;

(7) Whereas Annex II to Regulation (EC) No 1164/

94 should be amended accordingly,

HAS ADOPTED THIS REGULATION:

Article 1

(2) Whereas the system of

financial management
should be simplified, while retaining its link with
the actual implementation of operations;

Annex II to Regulation (EC) No 1164/94 is hereby
amended as follows:

(3) Whereas,

during

transitional

period
the
(1 January 1999 to 31 December 2001), all
references to the euro should normally also be
read as references to the euro as a monetary
unit, as provided for in the second sentence of
Article 2 of Council Regulation (EC) No 974/98
of 3 May 1998 on the introduction of
the
euro (6);

(1) OJ L 130, 25.5.1994, p. 1.
(2) OJ C 159, 26.5.1998, p. 11.
(3) Opinion delivered on 6 May 1999 (not yet published in

the Official Journal).

(4) OJ C 407, 28.12.1998, p. 74.
(5) OJ C 51, 22.2.1999, p. 10.
(6) OJ L 139, 11.5.1998, p. 1.

1. Article A shall be replaced by the following:

(cid:28)Article A

Designation of projects, of stages or groups of
projects

The Commission may, in agreement with the
1.
beneficiary Member State, group projects together
and designate technically and financially separate
stages of a project for the purpose of granting
assistance.

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For

2.
following definitions shall apply:

the purpose of

this Regulation,

the

3. Article C is hereby amended as follows:

(a) a

be

an

shall

“project”

economically
indivisible series of works fulfilling a precise
technical function and with clearly identified
aims
the
from which to judge whether
project complies with the criterion laid down
in the first indent of Article 10(5);

(b) a “technically and financially independent
stage” shall be a stage which can be
identified as operational in its own right.

A stage may

3.
feasibility
carrying out a project.

and technical

also

cover

preliminary,
studies needed for

4.
To comply with the criterion in the third
indent of Article 1(3), projects meeting the
following three conditions may be grouped:

(a)

they must be located in the same area or
situated along the same transport corridor;

(b)

(c)

they must be carried out under an overall
plan for the area or corridor with clearly
in
as
identified
Article 1(3);

provided

goals,

for

be

supervised

they must
body
responsible for coordinating and monitoring
the group of projects in cases where the
projects
different
carried
are
competent authorities.’

out

by

by

a

2. In Article B(2),

the second sentence shall be

replaced by the following:

(cid:28)The beneficiary Member States shall provide all
necessary information, as set out in Article 10(4),
including the results of feasibility studies and ex
ante appraisals. In order to make this appraisal as
effective as possible, Member States shall also
provide the results of the environmental impact
assessment in conformity with the Community
legislation, and their consistency with a general
environmental
at
administrative unit or sector level, and, where
appropriate:

transport

strategy

or

(a) paragraph 2 shall be amended as follows:

(i)

in the second subparagraph of point (a),
the second sentence shall be replaced by
the following:

(cid:28)Commitments in respect of subsequent
annual instalments shall be based on the
initial or revised financing plan for the
project and shall normally be made at
the beginning of each budget year and as
a general rule by 30 April each year,
based on the expenditure forecasts for
the project for that current year.’;

(ii) point

(b)
following:

shall be

replaced by the

(cid:28)(b) for projects to be carried out over a
period of
less than two years or
where Community assistance is less
than EUR 50 million, an initial
commitment of 80 % of assistance
may be made when the Commission
adopts
grant
decision
the
Community assistance.

to

The balance shall be committed
according to the implementation of
the project’;

(b)

the following paragraph 5 shall be added:

Except

in duly justified cases,

(cid:28)5.
the
assistance granted to a project, group of
projects or project stage on which work has
not begun within two years from the date of
its expected start as indicated in the decision
granting assistance or the date of its approval
if later, shall be cancelled.

In any case the Commission shall inform in
good time
the Member States and the
designated authority whenever there is a risk
of cancellation.’

4. Article D is hereby amended as follows:

— an indication of the possible alternatives that

were not chosen, and

(a)

in paragraph 1, the second sentence shall be
replaced by the following:

— the

links between projects of

common
located along the same transport

interest
corridor.’

(cid:28)Payments may take the form of payments on
interim payments or payments of
account,
Interim payments and
the final balance.

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the balance shall

payments of
relate to
expenditure actually paid out, which must be
supported by receipted invoices or accounting
documents of equivalent probative value.’;

(b) paragraphs 2 and 3 shall be replaced by the

following:

(cid:28)2.

Payments shall be made as follows:

(a) a single payment on account of 20 % of
the Fund assistance as initially decided
shall be paid when the decision granting
Community assistance is adopted and,
after
duly
except where
signature of
the contracts relating to
public procurement.

justified,

(c)

(d)

repaid by
or

All or part of a payment on account
the designated
shall be
authority
in
referred
paragraph 1 if no payment application is
to the Commission within 12
sent
months from the date on which the
payment on account is paid;

body

to

(b)

the

project

interim payments may be paid provided
that
progressing
satisfactorily towards completion and
shall be made to refund the expenditure
certified and actually paid, subject to the
following conditions:

is

— the Member State has submitted an
application describing the progress of
the project in terms of its physical
and financial
and its
conformity with the decision to grant
asssistance,
where
appropriate any specific conditions
attached to the assistance,

indicators

including

and recommen-
— the observations
and/or
national
the
of
dations
Community
authorities
inspection
have been acted on, in particular as
regards
any
observed or presumed irregularities,

correction

the

of

— the

steps

taken to publicise

the

project have been described.

The Member States shall be informed
without delay by the Commission if one
of the abovementioned conditions is not
fulfilled;

the total amount of the payments made
under (a) and (b) may not exceed 80 %
of
the total assistance granted. This
percentage may be increased to 90 % for
important projects committed in annual
instalments and in justified cases;

final

balance

the
of Community
assistance calculated on the basis of
expenditure certified and actually paid
shall be paid provided that:

— the project, stage of project, or group
of projects has been carried out
according to its objectives,

for payment

— the designated authority or body
referred to in paragraph 1 submits an
application
to the
Commission within six months of the
deadline for completion of the work
and for expenditure laid down in the
decision granting assistance to the
project, stage of project or group of
projects,

— the

final

Article F(4)
Commission,

report
is

referred to in
submitted to the

— the Member State certifies to the
Commission that
information
given in the application for payment
and in the report is correct,

the

— the Member State has

the
Commission the declaration referred
to in Article 12(1),

sent

— all

the information and publicity
measures
the
Commission under Article 14(3) have
been implemented.

drawn

up

by

— the main technical,

financial and
legal problems that have arisen and
the measures taken to correct them
have been indicated,

— any departures

from the original

financing plan have been analysed,

If

the

final

report

referred to in
3.
paragraph 2 is not sent to the Commission
within 18 months of
the final date for
completion of the works and payments as
given in the decision granting assistance, that

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the

part of
the
remaining balance for the project shall be
cancelled.’;

representing

assistance

(c)

in paragraph 4, the final words shall read (cid:28)in
paragraph 2(d).’;

(d)

the following paragraph shall be inserted:

shall

States

(cid:28)4a. Member
that
applications for payment are submitted to the
Commission as a general rule three times a
year, by 1 March, 1 July and 1 November at
the latest.’;

ensure

(e)

in paragraph 5,
payment’,
(cid:28)provided budget funds are available.’;

(cid:28)for
the following shall be added:

the words

after

(f)

the following paragraph shall be added:

The Commission

shall

rules

on

the

lay
eligibility

down
of

(cid:28)7.
common
expenditure.’

5. Article E is hereby amended as follows:

(b)

information on all publicity measures;

(c) certification that the work conforms to

the decision granting assistance;

(d) an initial assessment as to whether the
anticipated
in
Article 13(4) are likely to be achieved,
including in particular:

indicated

results

as

— the

actual

starting date of

the

project,

— the way in which it will be managed

once finished,

— confirmation,
financial
regards
expected revenue,

if appropriate, of the
as
and

especially
costs

forecasts,
the operating

— confirmation of

the socioeconomic
forecasts, in particular the expected
costs and benefits,

— an indication of the environmental
protection measures taken, and their
cost,
including compliance with the
polluter-pays principle.’;

(a)

in the title and in paragraphs 1 to 4, (cid:28)ecu(s)’
shall be replaced by (cid:28)euro’ where required;

(b)

the following subparagraph shall be added to
paragraph 5:

(b)

in paragraphs 1 and 3,
national currency’ shall be deleted;

the words (cid:28)or in

(c)

the following paragraph shall be added:

(cid:28)5.
For Member States not participating in
the euro, the conversion rate shall be the
Commission’s financial accounting rate.’

6. Article F is hereby amended as follows:

(a)

the following subparagraph shall be added to
paragraph 4:

(cid:28)This report shall include:

(a) a description of the work carried out,
accompanied by the physical indicators,
the expenditure by category of work and
specific
any measures
taken
clauses
granting
assistance;

decision

under

the

in

(cid:28)The decision granting assistance shall include
appropriate arrangements
for making the
modifications, differentiating between them
on the basis of their nature and importance.’

7. Article G shall be amended as follows:

Article G

Checks

Current paragraph 1 shall be transferred to
Article
subparagraph. New
paragraph 1 shall read as follows:

second

12(2),

The Commission and the Member State
(cid:28)1.
shall on the basis of bilateral administrative
arrangements
to coordinate plans,
methods and implementation of checks so as to
those carried out.
maximise the usefulness of

cooperate

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They shall
immediately exchange the results of
the checks carried out. At least once a year the
following shall be examined and evaluated:

(a)

the results of the checks carried out by the
Member State and the Commission;

(b) any comments made by other national or
Community control bodies or institutions;

(either

supporting documents
the originals or
versions certified to be in conformity with the
originals on commonly accepted data carriers)
regarding expenditure and checks on the project
concerned.

This period shall be interrupted either in the case
of legal proceedings or at the duly substantiated
request of the Commission.’

(c)

the

impact of

steps already taken or

the irregularities
the financial
still
noted,
required
them and, where
necessary, adjustments to the management
and control systems.

correct

to

Following this examination and evaluation and
without prejudice to the measures to be taken
immediately by the Member State under Article H,
the Commission may make
observations,
particularly regarding the financial impact of any
irregularities detected. These observations shall be
addressed to the Member State and the designated
concerned. The
authority
observations
accompanied, where
necessary, by requests for corrective measures to
remedy the management shortcomings found and
correct those irregularities detected which have
not already been corrected. The Member State
shall have the opportunity to comment on these
observations.

project
be

the
shall

of

Where following or in the absence of comments
the Member State the Commission adopts
of
conclusions,
take the
the Member State shall
necessary steps within the deadline set to comply
with the Commission’s request and inform the
Commission of its actions.

to this Article,

2. Without prejudice
the
Commission may suspend all or part of an
interim payment if it finds that the expenditure
concerned is linked to a serious irregularity. The
Commission shall
inform the Member State
concerned of the action taken and the reasons for
it.

the

For a period of three years, unless otherwise
3.
administrative
bilateral
in
decided
arrangements,
following the payment by the
Commission of the final balance in respect of a
project, the responsible body and authorities shall
the
keep available

the Commission all

for

8. Article H is hereby amended as follows:

(a)

the heading shall be replaced by:

(cid:28)Financial corrections’;

(b) paragraph 1 shall be replaced by:

If,

(cid:28)1.
the necessary
completing
verifications, the Commission concludes that:

after

(a)

to comply with one of

the implementation of a project does not
justify either part or the whole of the
including a
assistance granted to it,
failure
the
in the decision to grant
conditions
any
in
and
assistance
significant change affecting the nature or
conditions of
the
project
for which the Commission’s
approval has not been sought, or

implementation of

particular

(b)

there is an irregularity with regard to
assistance from the Fund and that the
Member State concerned has not taken
the necessary corrective measures,

the Commission shall suspend the assistance
the project concerned and
in respect of
stating its reason, request that the Member
State submits its comments within a specified
period of time.

to

objects

the Member

If
the
State
observations made by the Commission, the
Member State shall be invited to a hearing by
the Commission, in which both sides make
the
efforts
observations and the conclusions to be drawn
from them.’;

to reach an agreement about

(c) paragraph 2 shall be replaced by:

(cid:28)2.
At the end of the period set by the
Commission, the Commission shall, subject

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to the respect of due procedure,
if no
agreement has been reached within three
months, taking into account any comments
made by the Member State, decide to:

(a)

reduce the payment on account referred
to in Article D(2), or

(b) make the financial corrections required.
This shall mean cancelling all or part of
the assistance granted to the project.

These decisions shall respect the principle of
proportionality. The Commission shall, when
deciding the amount of a correction, take
account of the type of irregularity or change
financial
and the extent of
in
impact
the
of
management
systems. Any
reduction or cancellation shall give rise to
recovery of the sums paid.’;

the potential
shortcomings
control

any
or

(e)

the following paragraph shall be added:

(cid:28)4. The Commission shall
lay down the
detailed rules for implementing paragraphs 1
to 3 and shall inform the Member States and
the European Parliament thereof.’

9. In the second subparagraph of Article J,

the

following sentences shall be added:

At

(cid:28)4.
this meeting the Commission shall
inform the Member States in particular of the
relevant subjects for the annual report and its
actions and decisions taken. The Commission
shall send the Member States the appropriate
documents in good time before the meeting is
held.’

10. The Annex to Annex II is hereby amended as

follows:

(a) Point 2 shall be replaced by:

(cid:28)2.

the economic and social impact of the
Fund in the Member States and on
economic and social cohesion in the
on
Union,
employment;’

including

impact

the

(d)

in paragraph 3, the second sentence shall be
replaced by the following:

(b) Point 4 shall end with the words

(cid:28)…in

Article 6’.

sum received unduly

(cid:28)Any
and to be
recovered shall be paid to the Commission.
Interest on account of late repayment shall be
charged in accordance with the rules to be
adopted by the Commission.’;

Article 2

This Regulation shall enter into force on 1 January
2000.

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

Done at Luxembourg, 21 June 1999.

For the Council

The President

G. VERHEUGEN