Commission Regulation (Euratom) No 1605/1999 of 22 July 1999 on the implementation of Council Decision 1999/66/Euratom concerning the rules for the participation of undertakings, research centres and universities for the implementation of the fifth framework programme of the European Atomic Energy Community (1998-2002)
Date: 1999-07-22
Institutions: European Commission
Subjects: EAEC, research body, research programme, shareholding, type of business, university

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Official Journal of the European Communities

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COMMISSION REGULATION (EURATOM) No 1605/1999

of 22 July 1999

on the implementation of Council Decision 1999/66/Euratom concerning the rules for the partici-
pation of undertakings, research centres and universities for the implementation of the fifth
framework programme of the European Atomic Energy Community (1998-2002)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Atomic
Energy Community,

Having regard to Council Decision 1999/66/Euratom of 22
December 1998 concerning the rules for the participation of
undertakings, research centres and universities in the imple-
mentation of the fifth framework programme of the European
Atomic Energy Community (Euratom) (1998-2002) (1) and in
particular Article 13 thereof,

(1) Whereas the fifth framework programme of the Euro-
pean Atomic Energy Community for
research and
training activities (1998-2002) (hereinafter referred to as
the ‘fifth framework programme') was adopted by
Council Decision 1999/64/Euratom (2); whereas, detailed
rules must be laid down for the implementation of the
rules regarding participation in the actions laid down by
Decision 1999/66/Euratom;

(2) Whereas participation in indirect research and techno-
logical activities including demonstration activities and
training activities (RTDT) requires the concept of partici-
pant to be defined taking into account, in particular, the
capacity in which he takes part in a project and his
rights and obligations;

(3) Whereas, in order to ensure that indirect RTDT actions
to be undertaken under the fifth framework programme
have a European dimension, the application of the rules
for the participation of undertakings, research centres
and universities should place the emphasis on the
requirement for several participants and on the transna-
tional nature of the projects;

(4) Whereas the particular nature of

the indirect RTDT
action or the RTDT activity to be undertaken may justify
making exceptions to those principles;

(5) Whereas, in view of their essentially transnational and
European dimension,
Interest
Groupings (EEIG) within the meaning of Council Regula-
tion (EEC) No 2137/85 (3) should be able to take part on
their own in indirect RTDT actions requiring several
participants;

European Economic

(1) OJ L 26, 1.2.1999, p. 56.
(2) OJ L 26, 1.2.1999, p. 34.
(3) OJ L 199, 31.7.1985, p. 1.

to carry out

(6) Whereas the Commission must be able to ensure that
the participants will have the necessary resources, of
whatever kind,
indirect RTDT actions;
whereas, in order to safeguard the Community’s finan-
cial interests and avoid obstacles to such actions being
carried out, the Commission must also be informed of
the importance and origin of such resources, and of the
conditions of their availability;

(7) Whereas the Community’s financial participation must

be compatible with competition rules (4);

(8) Whereas, the Community’s financial participation should
be paid to the participants against justification of the
eligible costs of the indirect RTDT action, although other
more appropriate methods may be used;

(9) Whereas, as regards indirect RTDT actions consisting of
research and technological projects, demonstration
projects and combined research/demonstration projects,
the participants should charge total costs unless their
accounting system allows only additional costs to be
charged;

(10) Whereas, with a view to promoting innovation, reim-
bursement should be allowed with respect to certain
costs of protecting knowledge and of measures to
demonstrate its potential for use;

(11) Whereas the costs of coordinating a project can be
significant and it should be possible to charge them
where they are borne by the project coordinator;

(12) Whereas provision should be made for charging over-
heads on a flat-rate basis, particularly with a view to
encouraging a transition towards the charging of total
costs;

(13) Whereas contracts may provide for payment of

the
contribution in instalments;
Community’s
whereas there may nevertheless be restrictions on the
possibility of the payment of an initial advance;

financial

(14) Whereas the Community’s financial contribution should
be paid without prejudice to financial controls carried
out by or on behalf of the Commission or the Court of
Auditors;

(4) OJ C 83, 11.4.1986, p. 2.

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(15) Whereas the indirect RTDT actions relating to controlled
thermonuclear fusion carried out in the context of asso-
ciation contracts, the NET Agreement, the quadripartite
Cooperation Agreement between the Community, Japan,
the Russian Federation and the United States of America
the
concerning the engineering design activities for
International
Experimental Reactor
(ITER), the Joint European Torus (JET) Joint Undertaking
and any other agreement concluded by the Community
shall comply with the procedures laid down in those
agreements,

Thermonuclear

HAS ADOPTED THIS REGULATION:

PART I

GENERAL PROVISIONS

Article 1

This Regulation lays down the detailed rules for applying
Articles 3, 7 and 10 of Decision 1999/66/Euratom.

Article 2

The definitions in Decision 1999/66/Euratom apply to

1.
this Regulation.

For the purposes of this Regulation, the following defini-

2.
tions shall apply:

(a) ‘participant': a legal entity or international organisation,
and the Joint Research Centre (JRC) under the conditions
provided for in Article 6 of Decision 1999/66/Euratom,
taking part in a project as principal contractor, assistant
contractor, member, or grant holder;

(b) ‘project': work to be carried out, under one or more
contracts, as part of an RTDT action provided for in the
fifth framework programme;

(c) ‘contract': agreement between the Community and one or
more principal contractors and, as
relevant, assistant
contractors, with the aim of carrying out or contributing
to a project;

(d) ‘principal contractor': a participant, other than an assistant
contractor, taking part in a project by virtue of the conclu-
sion of a contract and having the rights and obligations
provided for in this Regulation and in the contract;

(e) ‘assistant contractor': for indirect RTDT actions consisting
of
research and technology projects, demonstration
projects and combined research/demonstration projects, a
participant taking part in a project by virtue of the conclu-
sion of a contract, acting under the technical supervision
of one or more principal contractors and having the same
rights and obligations as them, except as regards the scope
of
the project
pursuant to the contract and intellectual and industrial
property rights;

its responsibility for

the execution of

(f) ‘member': for indirect RTDT actions consisting of research
training networks, thematic networks and accompanying
measures with similar objectives, and concerted actions, a

participant taking part in a project under a membership
contract signed with a principal contractor acting in agree-
ment with the Community and in accordance with the
contract, having the same rights and obligations pursuant
to the membership contract vis-(cid:133)-vis the Community as the
principal contractor except where otherwise stipulated;

(g) ‘grant holder': a natural person taking part in an indirect
RTDT action consisting of a grant, who either concludes a
contract with the Community or takes part, by virtue of an
agreement with a host institute, in a contract concluded
between the Community and that host institute;

(h) ‘subcontract': an agreement to provide services, supplies or
goods between a principal contractor, assistant contractor
or member and one or more subcontractors for the
specific needs of the project under the conditions provided
for in the contract;

(i) ‘subcontractor': a legal entity or international organisation,

or the JRC, which is a party to a subcontract;

(j) ‘complementary

an

contract':

the
Community covering work that is technically interdepen-
dent with one or more projects, including for the purpose
of using knowledge, and accepted as such by the partici-
pants in each contract;

agreement with

(k) ‘complementary contractor': a legal entity or international
organisation, or the JRC under the conditions provided for
in Article 6 of Decision 1999/66/Euratom, which is a
party to a complementary contract and is accepted as such
by the participants in each contract;

(l) ‘consortium agreement': one or more agreements between
participants in a project which aims to specify or supple-
ment as between them the provisions of a contract, but
without coming into conflict with them;

(m) ‘European Economic Interest Grouping (EEIG)': any legal
entity formed under the conditions, by the procedures
and with the effects laid down by Regulation (EEC) No
2137/85.

PART II

MODES OF PARTICIPATION OF UNDERTAKINGS, RESEARCH
CENTRES AND UNIVERSITIES IN INDIRECT RTDT ACTIONS

CHAPTER I

Number of participants

Section 1

I n d i r e c t R T D T a c t i o n s

i n v o l v i n g s e v e r a l p a r t i c i -

p a n t s

Article 3

The following indirect RTDT actions shall involve several
1.
participants,
two principal contractors
least
required to satisfy the conditions laid down in Article 3(1) of
Decision 1999/66/Euratom:

including at

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(a) research and technology projects;

Section 2

(b) demonstration projects;

(c) combined research/demonstration projects.

I n d i r e c t R T D T a c t i o n s w h i c h m a y i n v o l v e a s i n g l e
p a r t i c i p a n t

2.
An EEIG is, by its nature, regarded as satisfying the
conditions of Article 3(1) of Decision 1999/66/Euratom and
may therefore be a sole principal contractor in the indirect
RTDT actions referred to in paragraph l of this Article.

Where an EEIG merely coordinates and organises the activities
of its members, however, the conditions of Article 3(1) of
Decision 1999/66/Euratom must be satisfied by those of its
members which actually carry out the research on its behalf
under the project.

Article 4

Article 6

Indirect RTDT actions consisting of accompanying measures,
grants and support for access to research infrastructures may
be carried out by a single principal contractor or grant-holder
who must satisfy the conditions laid down in Article 3(2) of
Decision 1999/66/Euratom.

CHAPTER II

Conditions applicable to resources

Article 7

The following indirect RTDT actions shall
involve several
participants, including at least two principal contractors or one
principal contractor and one member satisfying the conditions
of Article 3(1) of Decision 1999/66/Euratom:

The resources referred to in Article 7(2) of Decision 1999/66/
Euratom shall be assessed according to and as far as is neces-
sary for the execution of the indirect RTDT action and with
regard to the nature of the work to be carried out.

(a) research training networks;

(b) thematic networks;

(c) concerted actions.

Article 5

1.
Two legal entities are independent of one another within
the meaning of Article 3(1) of Decision 1999/66/Euratom
where there is no controlling relationship between them.

A controlling relationship exists where one legal entity directly
or indirectly controls the other or one legal entity is under the
same direct or indirect control as the other.

Control may result in particular from:

(a) direct or indirect holding of a majority of share capital in a
legal entity or a majority of voting rights of the share-
holders or associates of that entity; or

(b) direct or indirect holding in fact or in law of decision-

making powers in a legal entity.

2.
Direct or indirect holding of a majority of share capital in
a legal entity or a majority of voting rights of the shareholders
or associates of such entity by public investment corporations,
institutional investors or venture-capital companies and funds
does not in itself constitute a controlling relationship.

Article 8

The resources needed to carry out the indirect RTDT action
include the participants’ own resources and, without prejudice
to Article 12(3), second subparagraph, resources made avail-
able to them by third parties by virtue of a prior commitment.

Article 9

1.
Participants must be able to demonstrate, when submit-
ting a proposal for an indirect RTDT action, that they have or
will have the resources needed to carry out the indirect RTDT
action, and in particular to specify the origin of those resources
and the terms on which they will have access to them.

Participants must have at their disposal the resources

2.
needed to carry out the work as it progresses.

CHAPTER III

Community financial participation and eligible costs

Section 1

G e n e r a l p r i n c i p l e s

Article 10

3.
Ownership or supervision of legal entities by the same
public body does not in itself generate a controlling relation-
ship between them.

1.
The Community’s financial participation under the fifth
framework programme shall consist of a partial or full refund
of the participants’ eligible costs as defined by Article 10(2) of
Decision 1999/66/Euratom.

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Contracts shall stipulate that the Community’s financial partici-
pation may not exceed a certain amount.

Section 3

appropriate,

contracts may provide

2. Where
a
Community financial participation under the fifth framework
programme in the form of preset amounts, amounts calculated
on the basis of flat rates, or an assessment of the estimated
costs, notably in the following cases:

for

(a) projects for which the Community’s financial contribution

is less than or equal to EUR 100 000;

(b) projects involving payments linked to the demonstration of
best efforts to complete contractually agreed objectives;

(c) projects consisting of grants and accompanying measures
covered by invitations to apply as independent experts.

3. Where the participants have so agreed among themselves
and with the Commission, and where appropriate, contracts
may provide for payments based on composite and flat rates,
provided that those rates do not significantly differ from the
actual costs of each participant.

E L I G I B L E C O S T C A T E G O R I E S

Article 12

1.
categories shall

According to the indirect RTDT action, the eligible cost
include the following generic costs:

(a) personnel;

(b) durable equipment;

(c) consumables;

(d) travel and subsistence;

(e) computing;

(f) subcontracting;

Section 2

(g) protection of knowledge and measures to demonstrate the

potential for use of knowledge;

C h a r g i n g o f

t o t a l o r a d d i t i o n a l e l i g i b l e c o s t s

(h) other specific costs;

(i) overheads.

Article 11

1. Without prejudice to Article 14(1), participants
in
indirect RTDT actions shall charge total eligible costs to the
Commission in the case of the following actions:

(a) research and technology projects;

(b) demonstration projects;

(c) combined research/demonstration projects;

(d) accompanying measures.

Participants in indirect RTDT actions shall charge additional
eligible costs to the Commission where, in the Commission’s
view, the participants do not have an accounting system that
allows the share of their direct and indirect costs relating to the
project to be distinguished.

2.
Participants in indirect RTDT actions shall charge addi-
tional eligible costs to the Commission when Annex III to the
fifth framework programme expressly provides for that prin-
ciple, namely in the case of the following actions:

(a) support for access to research infrastructures;

(b) training grants;

(c) research training networks;

(d) thematic networks;

(e) concerted actions.

The coordination costs of the principal contractor coordi-
2.
nating a project may be charged either under one or more of
the cost categories mentioned in paragraph 1(a) to (e), (g) and
(h), under the conditions laid down in the contracts, or as
overheads as referred to in paragraph 1(i). They must appear as
such in the cost statements.

3.
One cost incurred by a participant may be charged to
only one of the eligible cost categories set out in paragraph 1.

No cost shall be charged in connection with resources being
made available to a participant free of charge.

Article 13

1. Without prejudice to any special provisions contained in
the research and training programmes and in the contracts,
eligible costs other than the overheads referred to in Article 14
shall be charged in accordance with the rules laid down in
paragraphs 2 to 9 of this Article.

Personnel costs shall be charged on the basis of the time
2.
actually spent on the project by the personnel directly hired by
a participant, within the limits and under the terms laid down
in the contract. They shall include the participant’s expenses for
including their remuneration and
taking on the personnel,
related charges.

Contracts may allow a participant to charge average costs
provided that they are established in accordance with its usual
practices and do not differ significantly from actual costs.

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For a participant charging additional eligible costs within the
meaning of Article 11(1) second subparagraph, except
in
specific cases provided for
in the research and training
programme, personnel costs shall comprise the costs generated
by the sole participation in the indirect RTDT action, and shall
include costs which have to be borne irrespective of
not
whether the participant takes part.

For certain accompanying measures, the contract may provide
that overheads may not be refunded.

2. Where the participants in an indirect RTDT action charge
additional eligible costs within the meaning of Article 11,
overheads shall, except where the contract provides otherwise,
amount to 20 % of their costs, excluding subcontracting costs.

3.
The refundable amount of durable equipment costs shall
depend, except in specific cases provided for in the research
and training programme, on the life of the equipment and the
extent to which it is used for the needs of the project,
in
accordance with the conditions laid down in the contract.

Consumables costs shall cover only materials purchased
including software

4.
specifically for the needs of the project,
licences, where justified by its purpose.

The refunding of travel and subsistence costs shall require
5.
the Community for any destination
the prior approval of
outside the territory of
the Associated
States or a third country in which a participant in the same
project is established, unless such a destination is provided for
in the contract.

the Member States,

Computing costs shall comprise the costs arising out of

6.
the use of the participant’s computer services and media.

7.
The subcontracting costs of a participant in an indirect
RTDT action shall comprise the price paid to the subcontractor
or service provider, and must be in line with market prices.

8.
The costs of protecting knowledge and of measures to
demonstrate the potential for use of knowledge shall exclude
the costs of creating and marketing a product or process and
the costs of creating and providing a service. They shall be
refundable only with the Commission’s written consent.

The other specific costs are those necessary for an
9.
indirect RTDT action and different in nature from those set out
in paragraphs 2 to 8 of this Article and in Article 14. They
shall be refundable only with the Commission’s written consent
and may include,
in particular, direct costs incurred in the
setting-up of financial guarantees requested by the Commission
with a view to the payment of an initial advance.

Article 14

1.
Participants in an indirect RTDT action charging total
eligible costs may charge overheads either on a actual-cost
basis and in compliance with the contracts, provided that the
supporting documents are acceptable to the Commission, or
on a flat-rate basis.

Flat-rate overheads shall amount to 80 % of the costs of the
participants’ personnel for research and technology projects,
demonstration projects,
combined research/demonstration
projects. For the other categories of indirect RTDT actions,
contracts may provide for other percentages where applicable.

Section 4

P a y m e n t o f

t h e C o m m u n i t y c o n t r i b u t i o n

Article 15

The Community contribution shall be paid under the
1.
conditions provided for in the contracts and may include
several provisional payments in accordance with the rules laid
down in paragraphs 2 and 3.

To speed up or facilitate the start of

2.
the
Commission shall pay an initial advance. The advance shall
amount to 40 % of the maximum contribution referred to in
Article 10(1), second subparagraph.

the work,

The rate of the advance may, however, be reduced in accord-
ance with the requirement of protecting the Community’s
financial

interests.

It may also be reduced where there is a significant difference
between the needs the advance would cover during the first
year of the project and the real needs for the same period.

The cumulative amount of the initial advance and the succes-
the
sive provisional payments may not exceed 85 % of
maximum contribution referred to in the Article 10(1), second
subparagraph.

In the framework of the indirect RTDT actions consisting
3.
of accompanying measures and grants, contracts may provide
for the payment of an initial advance and specify its maximum
amount and the maximum amount of all
the provisional
payments.

Section 5

F i n a n c i a l a u d i t s

Article 16

1. Without prejudice to the provisions of the contracts, the
Commission and its authorised representatives are empowered
to carry out financial controls with a view in particular to
ensuring that the provisions of Chapter III are complied with.
Such controls may be carried out,
in accordance with the
requirements of confidentiality, at any time during the contract
and at the latest five years after each payment made by the
Commission.

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In order to carry out such controls and in conformity with the provisions of the contracts, the Commission
and its authorised representatives shall have access to any data they consider relevant, on whatever
medium, and may require that such data be handed over to them in an appropriate form.

The Court of Auditors may check on the use of the Community’s financial contribution in the

2.
contracts on the basis of its own rules.

PART III

FINAL PROVISIONS

Article 17

This Regulation shall not affect the provisions contained in the decision adopting the research and training
programme specifying or supplementing Decision 1999/66/Euratom.

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

Article 18

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

Done at Brussels, 22 July 1999.

For the Commission

(cid:144)dith CRESSON

Member of the Commission