Proposal for a Council Regulation laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund {SEC(2004)924}
Date: 2004-07-14
Institutions: European Commission
Subjects: Cohesion Fund, European Regional Development Fund, European Social Fund, economic and social cohesion, enlargement of the Union, multiannual financial framework

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 14.7.2004 
COM(2004)492 final 

2004/0163(AVC) 

Proposal for a 

COUNCIL REGULATION 

laying down general provisions on the European Regional Development Fund,  
the European Social Fund and the Cohesion Fund 

(presented by the Commission) 

{SEC(2004)924} 

EN 

   EN 

 
 
 
  
 
 
EXPLANATORY MEMORANDUM 

1. 

INTRODUCTION: NECESSITY TO REVISE THE REGULATIONS 

On 10 February 2004, the Commission adopted a proposal for the financial perspectives of the 
enlarged European Union of 27 Member States for the period 2007-2013 [COM(2004)101]. 
In this context, the Commission took the  view that the Union’s intervention in a number of 
key  policy  fields  required  strengthening.  In  particular,  the  Commission  decided  that  an 
ambitious cohesion policy should be an essential element of the financial package. 

The decision reflected the work that had been undertaken since the publication of the Second 
cohesion  report  in  2001  which  launched  the  debate  on  the  future  of  cohesion  policy  in  the 
enlarged  Union  [COM(2001)24].  On  18  February  2004,  the  Commission  adopted  the  Third 
cohesion  report  [COM(2004)107]  which  presented  a  detailed  proposal  for  the  priorities  and 
delivery  system  for  the  new  generation  programmes  under  cohesion  policy  for  the  period 
2007-2013.  The  proposal is coherent with the broad guidelines set out in the  Commission’s 
communication on the next financial perspective. 

The Third cohesion report concluded that the enlargement of the Union to 25 Member States, 
and subsequently to 27 or more, presents an unprecedented challenge for the competitiveness 
and internal cohesion of the Union. Enlargement has resulted in the widening of the economic 
development  gap,  a  geographical  shift  in  the  problem  of  disparities  towards  the  east  and  a 
more difficult employment situation: 

– 

– 

– 

the  gap  in  per  capita  GDP  between  the  10%  of  the  population  living  in  the  most 
prosperous regions and the same percentage living in the least prosperous ones has 
more than doubled compared with the situation in EU15. 

in EU25, 123 million people - representing some 27% of the total population - live in 
regions with a per capita GDP below 75% of the EU average as against 72 million 
people, or 19% of the total, in EU15. Of these, four out of ten citizens are living in 
regions belonging to the 15 “old” Member States while the other six are nationals of 
the 10 “new” Member States. 

Four million jobs will have to be created if the average level of employment in the 10 
new  Member  States  is  to  be  aligned  with  that  of  the  rest  of  the  EU.  Within  the 
enlarged EU, appreciable employment gaps also persist according to age and gender. 

At the same time, the whole of the Union faces challenges arising from a likely acceleration in 
economic  restructuring  as  a  result  of  globalisation,  trade  opening,  the  technological 
revolution, the development of the knowledge economy and society, an ageing population and 
a growth in immigration. 

Finally,  economic  growth  in  the  EU  has  slowed  appreciably  since  2001.  As  a  result, 
unemployment  has  risen  again  in  many  parts  of  the  Union  with  all  the  social  implications 
which  this  entails.  As  a  springboard  to  the  future,  the  Union  should  fully  exploit  the 
opportunities provided by the current trend towards recovery. 

In  an  effort  to  improve  the  performance  of  the  EU  economy,  the  Heads  of  State  and  of 
Government  of  the  Union  meeting  in  Lisbon  in  March  2000  set  out  a  strategy  designed  to 

EN 

2 

   EN 

 
make Europe the most successful and competitive knowledge based economy in the world by 
2010.  The  Nice  Council  in  December  2000  translated  the  Lisbon  objectives  on  poverty 
reduction into a co-ordinated EU strategy for social inclusion. At the Gothenburg Council in 
June  2001,  the  Lisbon  strategy  was  widened  adding  a  new  emphasis  on  protecting  the 
environment and achieving a more sustainable pattern of development. 

Cohesion  policy  makes  an  important  contribution  to  realising  these  aims.  In  effect,  growth 
and cohesion are mutually supportive. By reducing disparities, the Union helps to ensure that 
all  regions  and  social  groups  can  contribute  to,  and  benefit  from,  the  overall  economic 
development of the Union. Articles 3 and 158 of the Treaty reflect this vision, which has been 
reinforced  in  the  draft  Treaty  establishing  a  Constitution  by  the  introduction  of  a  clearer 
reference to the territorial dimension of cohesion. 

Cohesion  policy  is  also  necessary  in  a  situation  where  other  Community  policies  have 
important benefits combined with limited but localised costs. Cohesion policy helps to spread 
the  benefits.  By  anticipating  change  and  facilitating  adaptation  cohesion  policy  can  help  to 
limit the negative impacts. 

For this reason, cohesion policy in all its dimensions must be seen as an integral part of the 
Lisbon  strategy,  even  if  today,  as  the  Commission  pointed  out  in  its  proposal  on  the  next 
financial perspective, the policy design underlying Lisbon needs to be completed and updated. 
In  other  words,  cohesion  policy  needs  to  incorporate  the  Lisbon  and  Gothenburg  objectives 
and  to  become  a  key  vehicle  for  their  realisation  via  the  national  and  regional  development 
programmes. 

Strengthening  regional  competitiveness  through  well-targeted  investment  throughout  the 
Union  and  providing  economic  opportunities  which  help  people  fulfil  their  capabilities  will 
thus underpin the growth potential of the EU economy as a whole to the common benefit of 
all.  By  securing  a  more  balanced  spread  of  economic  activity  across  the  Union,  regional 
policy helps to reduce the pressures of over-concentration, congestion and bottlenecks. 

The reform of cohesion policy also should provide an opportunity to bring greater efficiency, 
transparency and political accountability. This requires, first and foremost, the definition of a 
strategic  approach  for  the  policy  spelling  out  its  priorities,  ensuring  co-ordination  with  the 
system  of  economic  and  social  governance,  and  allowing  for  a  regular,  open  review  of 
progress  made.  It  calls  for  further  simplifying  the  management  system  by  introducing 
differentiation  and  proportionality 
the  context  of  sound  financial  management. 
Furthermore,  it  is  necessary  to  further  decentralise  the  responsibility  toward  the  partners  on 
the ground in Member States, regions and local authorities. 

in 

The  present  draft  regulation  is  the  proposal  of  the  Commission  for  the  next  generation  of 
cohesion  policy  programmes.  It  constitutes  the  basis  on  which,  according  to  Article  55  of 
Council Regulation (EC) No 1260/1999 of 21 June 199 laying down general provisions on the 
Structural Funds, the Council shall review the mentioned regulation by 31 December 2006 at 
the latest. The Commission outlines the need to adopt the regulations in the course of 2005 in 
order to dedicate 2006 to the programming for the period 2007-2013. 

EN 

3 

   EN 

 
2. 

THE NEW ARCHITECTURE FOR EU COHESION POLICY AFTER 2006  

The  Commission  proposes  that  actions  supported  by  cohesion  policy  should  focus  on 
investment  in  a  limited  number  of  Community  priorities,  reflecting  the  Lisbon  and 
Gothenburg  agendas,  where  Community  intervention  can  be  expected  to  bring  about  a 
leverage effect and significant added value. Accordingly, for the operational programmes, the 
Commission  proposes  a  core  list  of  a  limited  number  of  key  themes  as  follows:  innovation 
and the knowledge  economy, environment  and  risk prevention, accessibility and  services of 
general  economic  interest.  For  employment  related  programmes,  the  focus  will  be  on 
implementing the reforms needed to progress towards full employment, improve quality and 
productivity at work, and promote social inclusion and cohesion, in line with the guidelines 
and recommendations under the European Employment Strategy (EES). 

Concentration on three Community objectives  

The  pursuit  of  the  priority  themes  would  be  organised  around  a  simplified  and  more 
transparent  framework  with  the  future  generation  of  programmes  grouped  under  three 
headings: convergence; regional competitiveness and employment; territorial co-operation.  

2.1. 

Convergence 

The “Convergence” objective concerns the less developed Member States and regions which 
in accordance with the Treaty are the top priority for Community cohesion policy. The Treaty 
calls for a reduction in disparities between “the levels of development of the various regions 
and the backwardness of the least favoured regions or islands, including rural areas” (Article 
158).  Enlargement  will  bring  about  an  unprecedented  increase  in  the  disparities  within  the 
Union, the reduction of which will require long-term, sustained efforts.  

This objective concerns, first and foremost, those regions, whose per capita GDP is less than 
75% of the Community average. The key objective of cohesion policy in this context would 
be  to  promote  growth-enhancing  conditions  and  factors  leading  to  real  convergence. 
Strategies should plan for the development of long-term competitiveness and employment.  

The  Commission  also  proposes  that  temporary  support  should  apply  under  this  priority  to 
those regions where per capita GDP would have been below 75% of the Community average 
as calculated for the Union of Fifteen (the so-called statistical effect of enlargement). These 
are  regions  where  objective  circumstances  have  not  changed,  although  their  GDP  per  head 
will  be  relatively  higher  in  the  enlarged  Union.  In  the  interest  of  equity,  and  to  allow  the 
regions  concerned  to  complete  the  process  of  convergence,  support  will  be  higher  than 
decided in Berlin in 1999 for the so-called “phasing out” regions of the current generation. 

Programmes  would  be  supported  by  the  financial  resources  of  the  European  Regional 
Development  Fund  (ERDF),  the  European  Social  Fund  (ESF),  and  the  Cohesion  Fund,  in 
accordance with the principles set out in the Treaty. 

The  Cohesion  Fund  will  apply  to  Member  States  with  GNP  lying  below  90%  of  the 
Community  average.  The  assistance  of  the  Cohesion  Fund  will  be  conditioned  to  the 
fulfilment  of  the  conditions  of  economic  convergence  as  well  as  of  the  necessity  to  avoid 
excessive public deficits in accordance with Article 104 of the Treaty. 

EN 

4 

   EN 

 
In line with the priorities set by the financial perspective, the Cohesion Fund will strengthen 
its  contribution  to  sustainable  development.  In  this  respect,  trans-European  transport 
networks,  in  particular,  the  projects  of  European  interest,  and  environment  infrastructures 
would  remain  the  central  priorities.  In  order  to  reach  an  appropriate  balance  to  reflect  the 
particular  needs  of  the  new  Member  States,  it  is  envisaged  also  to  support  projects  such  as 
rail, maritime, inland waterways, and multimodal transport programmes outside the TEN-T, 
sustainable  urban  transport  and  environmentally  important  investments  in  the  key  fields  of 
energy efficiency or renewable energies. 

Emphasis will also be given to the strengthening of institutional capacity and the efficiency of 
public  administration,  including  the  capacity  for  managing  the  Structural  Funds  and  the 
Cohesion Fund. 

2.2. 

Regional competitiveness and employment: anticipating and promoting change 

While interventions in the less developed Member States and regions remain the priority of 
cohesion  policy,  there  are  important  challenges  that  concern  all  EU  Member  States  such  as 
rapid  economic  and  social  change  and  restructuring,  trade  globalisation,  a  move  towards  a 
knowledge-based  economy  and  society,  an  ageing  population,  growing  immigration,  labour 
shortages in key sectors and social inclusion problems. 

In this context, the Union must have an important role to play. For cohesion policy outside the 
least developed Member States and regions, the Commission proposes a two-fold approach: 

– 

– 

First, through regional programmes financed by the ERDF, cohesion policy will help 
regions  and  the  regional  authorities  to  anticipate  and  promote  economic  change  in 
industrial,  urban  and  rural  areas  by  strengthening  their  competitiveness  and 
territorial 
attractiveness, 
disparities. 

into  account  existing  economic,  social  and 

taking 

Second, through programmes, financed by the ESF, cohesion policy will help people 
to anticipate and to adapt to economic change, in line with the policy priorities of the 
EES,  by  supporting  policies  aiming  at  full  employment,  quality  and  productivity  at 
work, and social inclusion.  

Under  the  new  regional  programmes  financed  by  the  ERDF  the  Commission  proposes  a 
stricter  concentration  of  interventions  on  the  three  priority  themes:  innovation  and  the 
knowledge  economy,  environment  and  risk  prevention,  accessibility  and  services  of  general 
economic interest.  

The  single  funding  source  for  the  new  programmes  will  be  the  ERDF.  From  a  resource 
allocation point of view, two groups of regions need to be distinguished: 

– 

– 

The  regions  currently  eligible  for  Objective  1  not  fulfilling  the  criteria  for  the 
convergence priority even in the absence of the statistical effect of enlargement. Such 
regions will benefit from support on a transitional basis (under the heading “phasing 
in”)  which  will  follow  a  path  comparable  to  that  for  regions  no  longer  eligible  for 
Objective 1 in the period 2000-2006. 

All other regions of the Union covered neither by the convergence programmes nor 
by the “phasing in” support described above. 

EN 

5 

   EN 

 
As  regards  the  operational  programmes  financed  by  the  ESF,  the  Commission  proposes  to 
underpin  the  implementation  of  the  employment  recommendations  and  to  strengthen  social 
inclusion, in line with the objectives and guidelines of the EES.  

To  this  end,  support  should  focus  on  four  policy  priorities  that  are  crucial  for  the 
implementation  of  the  EES  and  where  Community  funding  can  provide  added  value: 
increasing the adaptability of workers and enterprises; enhancing access to employment and 
increasing  participation  in  the  labour  market;  reinforcing  social  inclusion  and  combating 
discrimination, mobilising reforms in the fields of employment and inclusion. 

2.3. 

European territorial cooperation 

Building on the experience of the present INTERREG Initiative, the Commission proposes to 
create  a  new  objective  dedicated  to  further  the  harmonious  and  balanced  integration  of  the 
territory of the Union by supporting co-operation between its different components on issues 
of Community importance at cross-border, transnational and interregional level. 

Action will be financed by the ERDF and will focus on integrated programmes managed by a 
single authority in pursuit of key Community priorities linked to the Lisbon and Gothenburg 
agendas. 

All  regions  along  the  internal  terrestrial  and  certain  regions  along  the  external  terrestrial 
borders  as  well  as  along  certain  neighbouring  maritime  borders  will  be  eligible  for  cross-
border co-operation. The aim will be to promote joint solutions to common problems between 
neighbouring  authorities,  such  as  urban,  rural  and  coastal  development  and  development  of 
economic relations and networking of SMEs. 

As far as the broader actions to promote transnational co-operation is concerned, the Member 
States  and  regions  are  invited  to  assess  the  usefulness  and  effectiveness  of  the  existing  13 
transnational cooperation zones (defined under INTERREG IIIB) in the light of enlargement. 
The  objective  will  be  to  decide  together  with  the  Commission  on  a  number  of  zones  for 
transnational  cooperation  which  are  sufficiently  coherent  and  where  there  are  common 
interests and opportunities to be developed. It is envisaged that such cooperation will focus on 
strategic priorities with a transnational character such as R&D, environment, risk prevention 
and integrated water management. 

Finally, the Commission proposes that regions should in future incorporate actions in the field 
of  interregional  cooperation  within  their  regional  programmes.  To  achieve  this,  regional 
programmes  will  need  to  dedicate  a  certain  amount  of  resources  to  exchanges,  cooperation 
and networking with regions in other Member States.  

3. 

AN INTEGRATED RESPONSE TO SPECIFIC TERRITORIAL CHARACTERISTICS 

An effective cohesion policy needs to take into account the specific needs and characteristics 
of territories such as the outermost regions of the Union, islands, mountain areas, in sparsely 
populated parts in the far north of the Union and certain border areas of the Union. 

It also needs to support in an appropriated manner, urban regeneration, rural areas and areas 
dependent  on  fisheries,  ensuring  complementarity  and  consistency  with  the  specific 
agricultural and fisheries financial instruments. 

EN 

6 

   EN 

 
Consequently, the Commission intends, within the convergence objective, to set up a specific 
allocation to compensate for the specific constraints of the outermost regions, as recognised 
by article 299.2 of the Treaty and requested by the European Council of 21-22 June 2002 in 
Seville.  In  addition,  an  action  “Grand  Voisinage”  aimed  at  facilitating  cooperation  with  the 
neighbouring  countries  will  be  included  under  the  new  “European  territorial  co-operation” 
programmes.  

Since the problems of accessibility and remoteness from large markets are particularly acute 
in many islands, mountain areas and sparsely-populated regions, particularly in the far north 
of the Union, the allocation of the resources for the regional competitiveness and employment 
priority  will  take  account  of  this  by  using  “territorial”  criteria,  thus  reflecting  the  relative 
disadvantage of regions with geographical handicaps.  

Member  States  should  ensure  that  the  specificities  of  these  regions  are  taken  into  account 
when  it  comes  to  the  targeting  of  resources  within  regional  programmes.  In  an  effort  to 
promote more action in these sometimes neglected areas and to take account of the higher cost 
of public investment in per capita terms, for the next period it is proposed that territories with 
permanent  geographical  handicaps  should  benefit  from  an  increase  in  the  maximum 
Community contribution.  

Building on the strengths of the URBAN initiative, the Commission intends to reinforce the 
place of urban issues by fully integrating actions in this field into the regional programmes. 
Regional programmes will need to indicate how urban actions are dealt with and how the sub-
delegation of responsibilities to city authorities for these actions is organised.  

4. 

A BETTER ORGANISATION OF THE INSTRUMENTS OPERATING IN RURAL AREAS AND 
IN FAVOUR OF THE RESTRUCTURING OF THE FISHERIES SECTOR 

The  Commission  proposes  to  simplify  and  to  clarify  the  role  of  the  different  instruments  in 
support of rural development and the fisheries sector. The current instruments linked to rural 
development policy will be grouped in one single instrument under the Common Agricultural 
Policy designed to:  

– 

– 

– 

Increase  the  competitiveness  of  the  agricultural  sector  through  support  for 
restructuring  

Enhance  the  environment  and  country  side  through  support  for  land  management, 
including  co-financing  of  rural  development  actions  related  to  Natura  2000  nature 
protection sites  

Enhance the quality of life in rural areas and promoting diversification of economic 
activities through measures targeting the farm sector and other rural actors. 

The  present  Community  Initiative,  LEADER+,  will  be  integrated  into  the  mainstream 
programming.  

Similarly, action in favour of the restructuring of the fisheries sector would be grouped under 
a single instrument, which would focus on actions to accompany the restructuring needs of the 
fisheries sector, and to improve the working and living conditions in areas where the fisheries 
sector, including aquaculture, plays an important role. 

EN 

7 

   EN 

 
An important part of these proposals is that the financial resources transferred from cohesion 
policy  to  these  new  instruments  will  continue  to  be  deployed  in  such  a  way  that  the  same 
degree  of  concentration  is  achieved  as  today  on  helping  the  less  developed  regions  and 
countries covered by the convergence programmes. 

Outside  these  interventions,  cohesion  policy  would  support  the  diversification  of  the  rural 
economy and of the areas dependent on fisheries away from traditional activities. 

5. 

SIMPLIFICATION AND DECENTRALISATION: A REFORMED DELIVERY SYSTEM 

Whereas  the  delivery  mechanism  for  cohesion  policy  has  demonstrated  its  capacity  to 
implement quality programmes and projects of European interest on the ground, a number of 
problems have been encountered in the management of current programmes. 

The  Commission  therefore  intends  to  maintain  the  key  principles  of  cohesion  policy  – 
programming, partnership, co-financing and evaluation. However, it proposes to enhance the 
efficiency of the policy by introducing a number of reforms designed, firstly, to encourage a 
more  strategic  approach  to  programming,  secondly,  to  introduce  further  decentralisation  of 
responsibilities  to  partnerships  on  the  ground  in  the  Member  States,  regions  and  local 
authorities,  thirdly,  to  reinforce  the  performance  and  quality  of  programmes  co-financed 
through  a  reinforced,  more  transparent  partnership  and  clear  and  more  rigorous  monitoring 
mechanisms,  and  fourthly,  to  simplify  the  management  system  by  introducing  more 
transparency, differentiation and proportionality while ensuring sound financial management. 

5.1.  More strategic orientation on the priorities of the Union 

The  Commission  proposes  that  an  overall  strategic  document  for  cohesion  policy  should  be 
adopted  by  the  Council,  with  an  opinion  of  the  Parliament,  in  advance  of  the  new 
programming period and on the basis of a Commission proposal, defining clear priorities for 
Member States and regions.  

This  strategic  approach  would  guide  the  policy  in  its  implementation  and  make  it  more 
politically accountable. It would help to more tightly specify the desired level of synergy to be 
achieved  between  cohesion  policy  and  the  Lisbon  and  Gothenburg  agendas  and  would 
increase  the  consistency  with  the  Broad  Economic  Policy  Guidelines  and  the  European 
Employment Strategy.  

Each  year,  the  European  Institutions  would  examine  progress  on  the  strategic  priorities  and 
results  achieved  on  the  basis  of  a  report  by  the  Commission  summarising  Member  States’ 
progress reports.  

In  addition,  the  Commission  proposes  to  simplify  further  the  system  in  a  number  of  key 
aspects.  

5.2. 

Programming 

The programming system will be simplified as follows: 

At  the  political  level:  on  the  basis  of  the  strategic  guidelines  adopted  by  the  Council,  each 
Member  State  would  prepare  a  national  framework  document  on  its  development  strategy, 
which would be negotiated with the Commission and constitute the framework for preparing 

EN 

8 

   EN 

 
the thematic and regional programmes, but not having the role – as the existing Community 
Support Framework – of a management instrument; 

At the operational level: on  the basis of the policy document, the  Commission would adopt 
national and regional programmes for each Member State. The programmes would be defined 
at an aggregate or priority level only, highlighting the most important operations. Additional 
detail, reflected today in the so-called “programme complement” would be abandoned as well 
as the management by measure. 

The number of funds will be limited to three (ERDF, ESF and Cohesion Fund) compared to 
the current six.  

As  opposed  to  current  multi-Fund  programmes,  future  ERDF  and  ESF  interventions  would 
aim at operating with only one fund per programme. In this respect, the action of each fund 
would  be  made  more  coherent  by  allowing  the ERDF  and  the  ESF  to  finance,  respectively, 
residual activities related to human and physical capital. Funding of these activities would be 
limited  and  directly  linked  to  the  main  domains  of  interventions  of  each  Fund.  This  would 
allow both for a simplification and increased effectiveness of programming. 

The Cohesion Fund and the ERDF will follow a single programming system, where transport 
and  environment  infrastructures  are  concerned.  Large  projects  would  be  adopted  by  the 
Commission separately, but managed within the related programmes. 

5.3. 

Financial management and control 

Within  the  framework  of  shared  management,  one  of  the  key  objectives  of  the  future 
regulatory package for the 2007-2013 programming period is to clearly delimit on the basis of 
experience gained from the current body of law, the framework, the nature, and the division 
of responsibility between the different actors concerned by the execution of the Community 
budget. These include the Member States and the implementing bodies, on the one hand, and 
the  Commission,  on  the  other.  In  this  respect,  a  clarification  will  contribute  to  improve 
efficiency, efficacy and the overall balance of the system. 

Management and control system 

The draft regulation laying down general provisions for the ERDF, the ESF and the Cohesion 
Fund increase the coherence and transparency of the overall architecture of the management 
and control systems of the Funds: 

– 

– 

The coherence, as is clearly define the minimum conditions applicable to the control 
and  audit  systems  at  all  levels  of  the  process,  as  well  as  the  respective  tasks  and 
obligations of the different actors; 

The transparency, as it is necessary that the different actors concerned by the controls 
become  aware  of  the  results  of  the  controls  of  each  part,  in  order  to  improve 
efficiency, efficacy and the overall balance of the system. 

The  draft  regulation  defines  a  common  basis  of  a  minimum  set  of  conditions  which  any 
management  and  internal  control  system  concerned  by  the  management  of  the  Funds  shall 
comply with, and the responsibilities of Member States and of the Commission for ensuring 
the respect of the principle of sound financial management. To this end, the Member States 
shall provide an assurance in relation with the management and control systems: 

EN 

9 

   EN 

 
– 

– 

– 

At the beginning of the period, via the opinion on the system by an independent audit 
body;  

Each  year,  via  the  opinion  of  the  audit  authority  supported  by  an  annual  control 
report; and 

At the end of the period, via the assurance on the final statement of expenditure. 

When  the  Commission  disposes  of  the  assurance  on  the  existence  and  sound  functioning  of 
the  national  management  and  control  systems  –  assurance  based  on  its  own  audits  and 
national audits -, it will be able to base its assurance concerning the legality and regularity of 
the  declared  expenditure  on  the  results  on  national  controls.  Accordingly,  it  will  be  able  to 
limit its own on-the-spot audits to exceptional circumstances only. 

Along  the  same  lines,  the  regulatory  architecture  proposes  that  the  degree  of  Community 
intervention in the management, evaluation, and control is a function – among other things – 
of  the  importance  of  its  contribution.  The  draft  general  regulation  allows  Member  States  to 
apply their own rules and management and control structures when the national contribution 
is prevailing to a significant degree. This option applies only if the Commission has received 
an assurance on the reliability of national management and control systems. 

The principle  of additionality  –  i.e. EU resources  should add  to rather  than  replace  national 
resources - will remain a key principle of cohesion policy. However, in line with the principle 
of proportionality, the Commission will verify its application only within the “convergence” 
objective. Member States would be responsible for ensuring that the principle of additionality 
applies within the “Regional competitiveness and employment” and “European territorial co-
operation” programmes. 

Financial management 

Concerning  financial  management,  two  important  aspects  are  introduced  to  simplify  the 
system. Indeed, payments will be operated at the level of the priorities, and no longer at the 
level of the measures as it is the case today. In addition, the Community contribution will be 
calculated on the basis of public expenditure only. The payment system (payment on account 
and reimbursement) as well as the principle of the automatic de-commitment are maintained. 

The draft regulation also proposes the setting up of a procedure of interruption, withholding 
and suspension of payments in case of serious problems at the moment of the presentation of 
the request for interim payment. 

With a view to simplify the financial management, the Commission proposes to allow partial 
closure  of  programmes  for  operations,  which  have  been  completed.  The  schedule  of  this 
closure is decided by each Member State. 

National  rules  would  largely  determine  eligibility  of  expenditure,  with  the  exception  of  a 
limited number of fields such as VAT, where Community rules would continue to apply. 

5.4. 

Concentration of resources 

The  major  concentration  of  resources  should  remain  on  the  poorest  Member  States  and 
regions  with  an  emphasis  on  the  new  Member  States.  At  the  level  of  the  individual 
development  programmes,  concentration  would  be  achieved  by  focusing  on  the  Lisbon  and 

EN 

10 

   EN 

 
Gothenburg  priorities  as  well  as,  in  the  “convergence”  regions,  on  institutional  capacity 
building.  

With  regard  to  the  regional  competitiveness  programmes,  the  current  emphasis  (under 
Objective  2)  on  the  zoning  of  eligible  areas  at  the  level  of  communes,  municipalities  and 
wards  has  meant  that  concentration  has  been  understood  almost  exclusively  in  micro-
geographical  terms. While the geographical concentration of resources in the worst affected 
pockets  or  areas  must  remain  an  essential  part  of  the  effort  in  the  future,  it  must  also  be 
recognised that the prospects of such areas are intimately linked to the success of the region as 
whole.  

As many regions have recognised, this requires the development of a coherent strategy for the 
whole  region  as  a  way  of  addressing  the  needs  of  its  weakest  parts.  For  the  future,  it  is 
therefore proposed to abandon the current system of micro-zoning, allowing the appropriate 
balance  between  the  geographical  and  other  forms  of  concentration  to  be  determined  in  the 
drawing up of the regional competitiveness programmes in partnership with the Commission. 

This should not imply any dilution of the level of effort in deploying EU financial resources. 
Under  the  “regional  competitiveness”  strand,  each  operational  programme  should  justify  its 
geographical, thematic and financial concentration. 

In the context of the partnership, regions would have the responsibility in the first instance for 
concentrating financial resources on the themes necessary to address the economic, social and 
territorial disparities at regional level. The Commission would verify and confirm consistency 
at the moment of deciding the programmes.  

Finally,  through  the  principle  of  de-commitment  of  unused  funds  (the  “N+2  rule”),  a 
discipline  unique  to  regional  and  cohesion  policy,  there  would  remain  a  strong  incentive  in 
favour of the efficient and rapid realisation of the programmes. 

5.5. 

A stronger accent on performance and quality 

Effectiveness calls for a greater focus on impact and performance, and for a better definition 
of the results to be achieved. Overall, the efficiency of cohesion policy would be improved by 
the  establishment  of  an  annual  dialogue  with  the  European  Institutions  to  discuss  –  on  the 
basis  of  the  Commission’s  yearly  report  –  the  progress  and  results  of  national  and  regional 
programmes,  so  to  enhance  transparency  and  accountability  towards  the  institutions  and  the 
citizens. 

Evaluation before, during and after the end of the programmes would remain essential to the 
overall  effort  to  maintain  quality.  In  addition,  the  Commission  proposes  to  set  up  a 
Community  performance  reserve  whose  main  objective  would  be  to  reward  the  Member 
States and regions which show the most significant progress towards the agreed objectives.  

Finally, the Commission proposes that Member State create within their national allocation a 
small  reserve  enabling  them  to  respond  swiftly  to  unexpected  sectoral  or  local  shocks 
resulting from industrial restructuring or the effects of trade agreements. This reserve would 
be  used  for  providing  ancillary  support  to  affected  workers  and  to  the  diversification  of  the 
economy  in  the  areas  concerned,  acting  as  a  complement  to  the  national  and  regional 
programmes which should constitute the principal instrument for restructuring in anticipation 
of economic change.  

EN 

11 

   EN 

 
These  proposed  changes  should  bring  greater  transparency  to  the  operation  of  the  policy, 
facilitating  the  access  of  citizens  and  companies  thus  increasing  the  number  of  projects 
coming  forward  and  helping  to  make  a  contribution  to  greater  value-for-money  through 
increased competition for support. 

6. 

FINANCIAL RESOURCES 

The financial resources dedicated to cohesion policy reflect the ambition of an enlarged Union 
to promote growth and job creation in its less favoured areas. For the period 2007-2013, the 
Commission  proposes  to  allocate  a  EUR  336.1  billion  (which  equates  to  EUR  373.9  billion 
before  the  transfers  to  the  proposed  single  rural  and  fisheries  instruments)  in  support  of  the 
three priorities of the reformed cohesion policy.  

The  indicative  repartition  of  this  amount  among  the  three  objectives  of  the  reformed  policy 
would be as follows: 

– 

– 

– 

Around  78%  for  the  “Convergence”  objective  (less  developed  regions,  cohesion 
fund, and “statistical effect” regions), with the emphasis on help to the twelve new 
Member States. The absorption limit (“capping”) for financial transfers to any given 
Member State under cohesion policy will be maintained at its current 4% of national 
GDP, taking into account amounts included under the rural development and fishery 
instruments.  The  regions  concerned  by  the  so-called  statistical  effect  would  benefit 
from  a  specific,  decreasing  allocation  under  the  Convergence  objective  to  facilitate 
their “phasing out”. 

Around 18% for the “Regional competitiveness and employment” objective. Outside 
the phasing-in regions the distribution between the regional programmes financed by 
the ERDF and the national programmes financed by the ESF would be 50-50.  

Around 4% for the “European territorial co-operation” objective.  

For  the  distribution  of  the  financial  resources  among  Member  States,  the  Commission 
proposes  to  apply  the  method  based  on  objective  criteria  used  at  the  time  of  the  Berlin 
Council  (1999)  for  the  “convergence”  priority,  taking  into  account  the  need  for  fairness 
regarding the regions affected by the statistical effect of enlargement. 

Resources  for  the  objective  “regional  competitiveness  and  employment”  would  be  allocated 
by the Commission between Member States on the basis of Community economic, social and 
territorial criteria. 

Finally,  the  population  living  in  the  eligible  regions  as  well  as  the  total  population  of  the 
Member  States  concerned  would  guide  the  distribution  of  resources  under  the  “European 
territorial co-operation” objective. 

EN 

12 

   EN 

 
2004/0163(AVC) 

Proposal for a 

COUNCIL REGULATION 

laying down general provisions on the European Regional Development Fund,  
the European Social Fund and the Cohesion Fund 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
161 thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the assent of the European Parliament2, 

Having regard to the opinion of the European Economic and Social Committee3, 

Having regard to the opinion of the Committee of the Regions4, 

Having regard to the opinion of the Court of Auditors, 

Whereas: 

(1) 

(2) 

(3) 

Article  158  of  the  Treaty  states  that,  in  order  to  strengthen  its  economic  and  social 
cohesion,  the  Community  shall  aim  at  reducing  disparities  between  the  levels  of 
development of the various regions and the backwardness of the least favoured regions 
or islands, including rural areas. Article 159 requires this action to be supported by the 
Structural Funds, the European Investment Bank (EIB) and the other existing financial 
instruments. 

Cohesion  policy  should  contribute  to  increasing  growth,  competitiveness  and 
employment by incorporating the Community’s priorities for sustainable development 
as defined at the European Councils in Lisbon and Göteborg.  

Economic,  social  and  territorial  disparities  at  both  regional  and  national  level  have 
increased  in  the  enlarged  Community.  Competitiveness  and  employment  should 
therefore be increased throughout the Community. 

1 
2 
3 
4 

OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 

EN 

13 

   EN 

 
                                                 
(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

The increase in the number of the Union’s land and sea borders and the extension of 
its territory mean that the value added of cross-border, transnational and interregional 
cooperation in the Union should be increased.  

The  work  of  the  Cohesion  Fund  should  be  integrated  into  the  programming  of 
structural assistance to seek greater coherence among the various Funds. 

Under  Article  55  of  Council  Regulation  (EC)  No  1260/99  of  21  June  1999  laying 
down  general  provisions  on  the  Structural  Funds5,  the  Council  is  to  review  that 
Regulation on the basis of a proposal from the Commission by 31 December 2006 at 
the latest. In order to implement the reform of the Funds proposed by this Regulation, 
Regulation (EC) No 1260/99 should be repealed. 

The  role  of  the  various  instruments  providing  aid  for  rural  development,  namely 
Regulation  (EC)  No  ,  and  for  the  fisheries  sector,  namely  to  Regulation  (EC)  No  6, 
should  be  specified  and  they  should  be  integrated  into  the  instruments  under  the 
common agricultural policy and the common fisheries policy; these instruments should 
be coordinated with those under the cohesion policy. 

The  number  of  Funds  providing  assistance  under  the  cohesion policy  is  therefore 
limited  to  the  European  Regional  Development  Fund  (ERDF),  the  European  Social 
Fund  (ESF)  and  the  Cohesion  Fund.  The  rules  applicable  to  each  Fund  are  to  be 
specified in implementing regulations adopted under Articles 148, 161 and 162 of the 
Treaty. 

To increase the value added of Community cohesion policy, the work of the Structural 
Funds  and  of  the  Cohesion  Fund  should  be  concentrated  and  simplified  and  so  the 
objectives  set  out  in  Regulation  (EC)  No 1260/99  should  be  redefined.  Accordingly, 
they  should  be  defined  as  seeking  the  convergence  of  the  Member  States  and  the 
regions, 
territorial 
regional  competitiveness  and  employment  and  European 
cooperation. 

(10)  Within those three objectives, both economic and social characteristics and territorial 

characteristics should be taken into account in an appropriate fashion. 

(11)  The outermost regions should benefit from specific measures and additional funding to 
offset  the  handicaps  resulting  from  the  factors  referred  to  in  Article  299(2)  of  the 
Treaty. 

(12)  The northern areas of the Union, which are very thinly populated, require appropriate 

financial treatment to offset the effects of that handicap. 

(13) 

In view of the importance of the urban dimension and the contribution of towns and 
cities,  particularly  medium-sized  ones,  to  regional  development,  greater  account 
should  be  taken  of  them  by  developing  their  role  in  programming  to  promote  urban 
regeneration. 

5 
6 

OJ L 161, 26.6.1999, p.1. Regulation as last modified by the Accession Act 2003. 
OJ L […], […], p. […]. 

EN 

14 

   EN 

 
                                                 
(14)  The Funds should take special and complementary action over and above that of the 
European  Agricultural  Fund  for  Rural  Development  (EAFRD)  and  of  the  European 
Fund for Fisheries (EFF) to promote the economic diversification of rural areas and of 
areas  dependent  from  fisheries.  Furthermore,  the  regions  whose  development  is 
lagging behind should continue to benefit from the same financial concentration as in 
the 2000-2006 period through assistance from these instruments supporting that from 
the Funds. 

(15)  Action  for  areas  with  a  natural  handicap,  i.e.  certain  islands,  mountainous  areas  and 
areas  with  a  low  density  of  population,  should  be  strengthened  to  cope  with  their 
particular  development  difficulties,  as  well  as  for  certain  border  areas  of  the 
Community following its enlargement. 

(16)  Objective  criteria  for  designating  eligible  regions  and  areas  should  be  fixed.  To  this 
end, the identification of the priority regions and areas at Community level should be 
based on the common system of classification of the regions established by Regulation 
(EC) No 1059/2003 of the European Parliament and the Council of 26 May 2003 on 
the establishment of a common classification of territorial units for statistics (NUTS)7. 

(17)  A  “Convergence”  objective  is  to  cover  the  Member  States  and  regions  whose 
development is  lagging  behind;  the  regions  targeted  by  the  “Convergence”  objective 
are  those  whose  per  capita  gross  domestic  product  (GDP)  measured  in  purchasing 
power parities is less than 75% of the Community average. The regions suffering from 
the  statistical  effect  linked  to  the  reduction  in  the  Community  average  following  the 
enlargement of the Union will benefit for that reason from substantial transitional aid 
in order to complete their convergence process. This aid will end in 2013 and would 
not  be  followed  by  a  further  transitional  period.  The  Member  States  targeted  by  the 
Convergence objective whose per capita gross national income (GNI) is less than 90% 
of the Community average will benefit under the Cohesion Fund. 

(18)  A  “Regional  competitiveness  and  employment”  objective  is  to  cover  the  territory  of 
the  Community  outside  the  “Convergence”  objective.  The  regions  eligible  are  those 
under  Objective  1  in  the  2000-06  programming  period  which  no  longer  satisfy  the 
regional eligibility criteria of the “Convergence” objective and which therefore benefit 
from a transitional aid, as well as all the other regions of the Community.  

(19)  A “European territorial cooperation” objective is to cover regions having land or sea 
frontiers,  the  areas  for  transnational  cooperation  defined  with  regard  to  actions 
territorial  development  and  support  for  networks  for 
promoting 
interregional  cooperation  and  exchange  of  experience.  The  improvement  and 
simplification of cooperation along the external borders of the Community entail the 
use of the European neighbouring and partnership instrument pursuant to Regulation 
(EC) No and of the pre-accession instrument pursuant to Regulation (EC) No . 

integrated 

(20)  The  activities  of  the  Funds  and  the  operations  which  they  help  finance  should  be 
coherent  and  compatible  with  the  other  Community  policies  and  comply  with 
Community legislation. 

7 

OJ L 154, 21.6.2003, p. 1. 

EN 

15 

   EN 

 
                                                 
(21)  Action by the Community should be complementary to that carried out by the Member 
States  or  seek  to  contribute  to  it.  The  partnership  should  be  strengthened  through 
arrangements  for  the  participation  of  various  types  of  partners,  in  particular  the 
regions, with full regard to the institutional arrangements of the Member States. 

(22)  Multiannual  programming  shall  be  directed  towards  achieving  the  Funds’  objectives 
by  ensuring  the  availability  of  the  necessary  financial  resources  and  the  consistency 
and continuity of joint action by the Community and the Member States. 

(23)  The Community may take steps, in accordance with the principle of subsidiarity laid 
down  in  Article  5  of  the  Treaty,  to  promote  the  objectives  of  “Convergence”, 
“Regional  competitiveness  and  employment”  and  “European  territorial  cooperation”. 
These  goals  cannot  be  achieved  adequately  by  the  Member  States  because  of  the 
extent of the disparities and the limit on the financial resources of the Member States 
and regions eligible under the “Convergence” objective. These goals can therefore be 
better achieved at Community level through the multiannual guarantee of Community 
finance  which  allows  cohesion  policy  to  be  concentrated  on  the  Community’s 
priorities. In  accordance  with  the  principle  of  proportionality  laid  down  in  the  above 
mentioned  Article,  this  Regulation  does  no  more  than  is  required  to  achieve  those 
goals. 

(24) 

It is appropriate to strengthen the subsidiarity and proportionality of the intervention of 
the Structural Funds and of the Cohesion Fund. 

(25)  Under Article 274 of the Treaty, in the context of shared management, the conditions 
allowing  the  Commission  to  exercise  its  responsibilities  for  implementation  of  the 
general budget of the European Communities should be specified and the obligations 
of cooperation on the Member States clarified. Applying these conditions will enable 
the Commission to satisfy itself that Member States are utilising the Funds in a lawful 
and  correct  manner  and  in  accordance  with  the  principle  of  sound  financial 
management within the meaning of the Financial Regulation. 

(26) 

In order to ensure a genuine economic impact, contributions from the Structural Funds 
may  not  replace  public  expenditure  by  the  Member  States  under  the  terms  of  this 
Regulation. Verification,  through  partnership,  of  the  principle  of  additionality  should 
concentrate on the regions under the “Convergence” objective because of the extent of 
the  financial  resources  allocated  to  them  and  may  result  in  a  financial  correction  if 
additionality is not respected. 

(27) 

In the context of its effort in favour of economic and social cohesion, the Community 
promotes the goal of eliminating inequalities and promoting equality between women 
and men as enshrined in Articles 2 and 3 of the Treaty. 

(28)  Financial concentration on the “Convergence” objective should be increased because 
of the greater disparities in the enlarged Union, the effort in favour of the “Regional 
competitiveness  and  employment”  objective  to  helping  improve  competitiveness  and 
employment  in  the  rest  of  the  Union  should  be  maintained  and  the  resources  for 
“European  territorial  cooperation”  objective  increased  in  view  of  its  particular  value 
added. 

EN 

16 

   EN 

 
(29)  There  should  be  provisions  on  the  allocation  of  the  available  resources.  These  are 
allocated annually and a significant concentration on the regions whose development 
is  lagging  behind,  including  those  receiving  transitional  support  because  of  the 
statistical effect, shall be ensured. 

(30)  The  annual  appropriations  allocated  to  a  Member  State  under  the  Funds  shall  be 

limited to a ceiling fixed with regard to its capacity for absorption. 

(31)  The Commission should establish the indicative breakdown of available commitment 
appropriations using an objective and transparent method. 3% of the appropriations of 
the  Structural  Funds  allocated  to  the  Member  States  under  the  “Convergence”  and 
“Regional  competitiveness  and  employment”  objectives  should  be  placed  in  a 
Community reserve for rewarding quality and performance. 

(32)  The appropriations available under the Funds should be indexed on a flat-rate basis for 

use in programming. 

(34)  To  increase  the  strategic  content  of  the  cohesion  policy  through  integration  with  the 
Community’s  priorities  and  so  promote  its  transparency,  the  Council  should  adopt 
strategic guidelines on a proposal from the Commission; the Council should examine 
their  implementation  by  the  Member  States  on  the  basis  of  a  report  by  the 
Commission. 

(35)  On  the  basis  of  the  strategic  guidelines  adopted  by  the  Council,  each  Member  State 
should  prepare  a  national  reference  document  on  its  development  strategy,  which  is 
negotiated with the Commission and decided by the Commission, and constitutes the 
framework for preparing the operational programmes. 

(36)  The  programming  and  management  of  the  Structural  Funds  should  be  simplified 
having regard to their specific features by providing for operational programmes to be 
financed  by  either  the  ERDF  or  the  ESF,  each  being  able  to  finance  in  a 
complementary  and  limited  fashion  actions  which  fall  under  the  scope  of  the  other 
Fund. 

(37)  With a view to improve their complementarity and to simplify their implementation, 
the assistance of the Cohesion Fund and the ERDF shall be jointly programmed in the 
operational programmes on transport and the environment. 

(38)  Programming  should  ensure  coordination of the Funds between  themselves  and  with 
the  other  existing  financial  instruments  and  the  EIB  and  the  European  Investment 
Fund. Such coordination also covers the preparation of complex financial schemes and 
public private partnerships. 

(39)  The  programming  period  is  to  last  for  a  single  period  of  seven  years,  in  order  to 
maintain the simplification of the management system defined in Regulation (EC) No 
1260/1999. 

(40)  The  Member  States  and  managing  authorities  should  organise  within  the  operational 
programmes co-financed by the ERDF the arrangements for interregional cooperation 
and take account of the special features of areas with natural handicaps. 

EN 

17 

   EN 

 
(41) 

In order to address the need for simplification and decentralisation, programming and 
financial  management  should  be  carried  out  at  the  level  of  the  priorities  alone,  the 
Community  support  framework  and  the  programme  complement  as  foreseen  by 
Regulation (EC) No 1260/99 being discontinued. 

(42)  The  Member  States,  regions  and  managing  authorities  should  organise,  within  the 
operational  programmes  co-financed  by  the  ERDF  under  the  “Convergence”  and  the 
“Regional  competitiveness  and  employment”  objectives,  sub-delegation  to  the  urban 
authorities for the priorities concerning the regeneration of towns and cities. 

(43)  The additional allocation to compensate for the additional costs faced by the outermost 
regions should be integrated into the operational programmes financed by the ERDF in 
those regions. 

(44)  There should be separate arrangements for implementation of the “European territorial 

cooperation” objective financed by the ERDF. 

(45)  The Commission should be able to approve major projects included in the operational 
programmes,  if  necessary  in  association  with  the  EIB,  in  order  to  evaluate  their 
purpose, impact and the arrangements for the planned use of Community resources. 

(46)  Under  technical  assistance,  the  Funds  should  provide  support  for  evaluations, 
improvement  of  administrative  capacity  linked  to  the  management  of  the  Funds, 
studies,  pilot  projects  and  exchanges  of  experience  intended,  in  particular,  to 
encourage innovative approaches and practices. 

(47)  The effectiveness of assistance from the Funds also depends on the incorporation of a 
reliable  evaluation  into  programming  and  monitoring;  the  responsibilities  of  the 
Member States and the Commission in this regard should be specified. 

(48)  Member  States  should 

the 
“Convergence”  and  “Regional  competitiveness  and  employment”  objectives,  a  small 
reserve to respond swiftly to unexpected sectoral or local shocks resulting from socio-
economic restructuring or the effects of trade agreements. 

their  national  envelope  under 

foresee,  within 

(49) 

It is necessary to determine the elements for modulating the participation of the Funds 
to  the  operational  programmes.  To  increase  the  multiplier  effect  of  Community 
resources,  it  is  therefore  necessary  to  take  into  account  the  nature  and  gravity  of 
problems faced by the concerned areas, the implementation of Community’s priorities 
including  the  protection  and  improvement  of  the  environment,  as  well  as  the 
mobilisation of private sources in the operational programmes through public private 
partnership. To that end, it is also necessary to define the notion of revenue-generating 
project  and  to  identify  for  this  type  of  projects  the  basis  for  calculating  the 
participation of the Funds. 

(50) 

In accordance with the principle of subsidiarity and subject to exceptions foreseen in 
the  Regulations  (EC)  No  on  the  European  Regional  Development  Fund,  No  on  the 
European Social Fund and No on the Cohesion Fund, there should be national rules on 
the eligibility of expenditure. 

EN 

18 

   EN 

 
(51)  To ensure the effectiveness, fairness and sustainable impact of the intervention of the 
Funds,  there  should  be  provisions  guaranteeing  that  investments  in  businesses  are 
long-lasting and avoiding these Funds being used to introduce unfair competition. It is 
necessary to ensure that investments which benefit from assistance from the Funds can 
be written off over a sufficiently long period. 

(52)  Member States shall adopt adequate measures to guarantee the proper functioning of 
management  and  control  system.  To  this  end,  it  is  necessary  to  establish  the  general 
principles and the necessary functions which the systems of all operation programmes 
shall fulfil on the basis of the Community body of law in force for the programming 
period 2000-2006. 

(53) 

It is therefore necessary to maintain the designation of a single managing authority for 
each intervention and to clarify its responsibility as well as the functions of the audit 
authority.  It  is  also  necessary  to  guarantee  uniform  quality  standards  concerning  the 
certification of expenditures and of the payment requests before their transmission to 
the Commission; it is necessary to clarify le nature and quality of the information on 
which  these  requests  are  based  and,  to  this  end,  to  establish  the  function  of  the 
certification authority. 

(54)  The monitoring of operational programmes is necessary to ensure the quality of their 
implementation. To this end, the responsibilities of the monitoring committees shall be 
defined as well as the information that needs to be transmitted to the Commission and 
the framework for examining this information. 

(55) 

In  accordance  with  the  principles  of  subsidiarity  and  proportionality,  Member  States 
have 
the 
the 
interventions. 

implementation  and  control  of 

the  primary  responsibility  for 

(56)  The obligations on the Member States as regards management and control systems, the 
certification  of  expenditure,  and  the  prevention,  detection  and  correction  of 
irregularities  and  infringements  of  Community  law  should  be  specified  to  guarantee 
the  efficient  and  correct  implementation  of  operational  programmes.  In  particular, 
concerning  management  and  control,  it  is  necessary  to  establish  the  modalities  by 
which  Member  States  give  the  assurance  that  the  systems  are  in  place  and  function 
satisfactorily. 

(57)  Without  prejudice  to  the  Commission’s  powers  as  regards  financial  control, 
cooperation  between  the  Member  States  and  the  Commission  in  this  field  should  be 
increased  and  the  criteria  should  be  established  which  allow  the  Commission  to 
determine,  in  the  context  of  its  strategy  of  control  of  national  systems,  the  level  of 
assurance it can obtain from national audit bodies. 

(58)  The extent and intensity of Community controls should be proportionate to the extent 
of its contribution. Where a Member State is very substantially the main provider of 
the financing for a programme, it is appropriate that there should be an option for that 
Member  State  to  organise  certain  elements  of  the  control  arrangements  according  to 
national  rules.  In  these  same  circumstances,  it  is  necessary  to  establish  that  the 
Commission  differentiates  the  means  by  which  Member  States  should  fulfil  the 
functions  of  certification  of  expenditures  and  of  verification  of  the  management  and 

EN 

19 

   EN 

 
control system and to establish the conditions under which the Commission is entitled 
to limit its own audit and rely on the assurances provided by national bodies. 

(59)  The payment on account at the start of operational programmes ensures a regular cash 
flow  which  facilitate  payments  to  beneficiaries  in  the  implementation  of  the 
operational  programme.  Therefore,  a  payment  on  account  of  7% for  the  Structural 
Funds  and  10,5%  for  the  Cohesion  Fund  will  help  speed  up  implementation  of 
operational programmes. 

(60) 

In  addition  to  the  suspension  of  payments  where  shortcomings  are  detected  in  the 
management and  control  systems,  there should be measures allowing the authorising 
officer  by  delegation  to  suspend  payments  where  there  are  doubts  about  the  sound 
operation of these systems or for the Commission to make a deduction from payments 
if  the  Member  State  concerned  has  not  implemented  all  remaining  measures  in  a 
corrective plan of action. 

(61)  The  rule  on  automatic  de-commitment  will  help  speed  up  the  implementation  of 
programmes and improve sound financial management. To this end, it is appropriate to 
define  the  modalities  of  its  application  and  the  parts  of  the  budgetary  commitment 
which  may  be  excluded  from  it,  notably  when  the  delays  in  implementation  result 
from circumstances which are independent from the subject appealing to it, abnormal 
or  unforeseeable  and  whose  consequences  cannot  be  avoided  despite  the  diligence 
which it has shown. 

(62)  The  procedures  for  closure  should  be  simplified  offering  the  possibility  to  those 
Member States which so wish, in accordance with the schedule they select, to partially 
close  an  operational  programme  in  respect  of  the  operations  completed;  the 
appropriate framework for doing so should be provided. 

(63) 

It  is  necessary  to  adopt  the  measures  required  for  the  implementation  of  this 
Regulation in conformity with Council Decision 1999/468/EC of 28 June 1999 laying 
down  the  procedures  for  the  exercise  of  implementing  powers  conferred  on  the 
Commission8, 

8 

OJ L 184, 17.7.1999, p. 23. 

EN 

20 

   EN 

 
                                                 
HAS ADOPTED THIS REGULATION: 

TITLE I 

OBJECTIVES AND GENERAL RULES ON ASSISTANCE 

CHAPTER I 
SCOPE AND DEFINITIONS 

Article 1 

Subject matter 

This Regulation lays down the general rules governing the European Regional Development 
Fund (ERDF), the European Social Fund (ESF) (hereinafter: the “Structural Funds”) and the 
Cohesion Fund, without prejudice of the specific provisions laid down in the Regulations on 
the ERDF, ESF and the Cohesion Fund. 

This Regulation defines the objectives to which the Structural Funds and the Cohesion Fund 
(hereinafter: the “Funds”) are to contribute, the criteria for Member States and regions to be 
eligible  under  those  Funds,  the  financial  resources  available  and  the  criteria  for  their 
allocation. 

This Regulation defines the context for cohesion policy, including the method for fixing the 
Community’s  strategic  guidelines  for  cohesion  policy,  the  national  strategic  reference 
framework and the annual examination at Community level. 

The Regulation lays down the principles and rules on partnership, programming, evaluation, 
management,  including  financial  management,  monitoring  and  control  on  the  basis  of 
responsibilities shared between the Member States and the Commission. 

Article 2  

Definitions 

For the purposes of this Regulation, the following terms shall have the meanings assigned to 
them here: 

1) 

‘operational programme’:  document  submitted  by  the  Member  State  and  adopted 
by  the  Commission  as  part  of  the  strategic  reference  framework  setting  out  a 
development strategy using a coherent set of priorities, to achieve which aid from a 
Fund,  or,  in  the  case  of  the  “Convergence”  objective,  the  Cohesion  Fund  and  the 
ERDF, will be sought; 

EN 

21 

   EN 

 
2) 

3) 

4) 

5) 

‘priority’:  one  of  the  priorities  of  the  strategy  in  an  operational  programme 
comprising  a  group  of  operations  which  are  related  and  have  specific  measurable 
goals;  

‘operation’: a project or group of projects selected by the managing authority of the 
operational  programme  concerned  or  under  its  responsibility  according  to  criteria 
laid  down  by  the  monitoring  committee  and  implemented  by  one  or  more 
beneficiaries allowing achievement of the goals of the priority to which it relates;  

‘beneficiary’:  an  operator,  body  or  firm,  whether public  or  private,  responsible  for 
initiating  and/or  implementing  operations.  In  the  context  of  aid  schemes  under 
Article  87  of  the  Treaty,  beneficiaries  are  public  or  private  firms  carrying  out  an 
individual action and receiving public aid; 

‘public expenditure’: any public contribution to the financing of operations whose 
origin  is  the  budget  of  the  State,  of  regional  and  local  authorities,  of  the  European 
Communities related to the Structural Funds and the Cohesion Fund and any similar 
expenditure.  Any  contribution  to  the  financing  of  operations  whose  origin  is  the 
budget  of  public  law  bodies  or  associations  of  one  or  more  regional  or  local 
authorities or public law bodies within the meaning of Directive 2004/18/EC of the 
European  Parliament  and  of  the  Council  of  31  March  2004  on  the  coordination  of 
procedures  for  the  award  of  public  works  contracts,  public  supply  contracts  and 
public service contracts9 shall be regarded as public contribution;  

6) 

‘intermediate  body’:  any  body  or  public  or  private  service  which  acts  under  the 
responsibility  of  a  managing  or  certifying  authority  or  which  carries  out  duties  on 
behalf of such an authority vis-à-vis beneficiaries implementing operations. 

CHAPTER II 
OBJECTIVES AND MISSIONS 

Article 3 

Objectives 

1. 

The  action  taken  by  the  Community  under  Article  158  of  the  Treaty  shall  be 
designed to strengthen the economic and social cohesion of the enlarged Community 
in  order  to  promote  the  harmonious,  balanced  and  sustainable  development  of  the 
Community.  This  action  shall  be  taken  with  the  aid  of  the  Funds,  the  European 
Investment Bank (EIB) and other existing financial instruments. It shall be aimed at 
meeting the challenges linked to the economic, social and territorial disparities which 
have  arisen  particularly  in  countries  and  regions  whose  development  is  lagging 
behind, to the speeding-up of economic and social restructuring, and to the ageing of 
the population. 

9 

OJ L 134, 30.04.2004, p. 114. 

EN 

22 

   EN 

 
                                                 
The action taken under the Funds shall incorporate, at national and regional level, the 
Community’s  priorities  in  favour  of  sustainable  development  by  strengthening 
growth, competitiveness and employment, social inclusion, as well as the protection 
and quality of the environment. 

2. 

To that end, the ERDF, the ESF, the Cohesion Fund, the European Investment Bank 
(EIB) and the other existing Community financial instruments shall each contribute 
in an appropriate way towards achieving the following three objectives: 

a) 

b) 

c) 

the “Convergence” objective shall be aimed at speeding up the convergence of 
the  least-developed  Member States  and  regions  by  improving  conditions  for 
growth  and  employment  through  increasing  and  improving  the  quality  of 
investment in physical and human capital, the development of innovation and 
of the knowledge society, the adaptability to economic and social changes, the 
protection  and  improvement  of  the  environment  as  well  as  administrative 
efficiency. This objective shall constitute the priority of the Funds. 

the  “Regional  competitiveness  and  employment”  objective  shall,  outside  the 
least-developed  regions,  be  aimed  at  strengthening  regions’  competitiveness 
and attractiveness as well as employment by anticipating economic and social 
changes, including those linked to the opening of trade, through innovation and 
the  promotion  of  the  knowledge  society,  entrepreneurship,  the  protection  and 
improvement  of  the  environment,  and  the  improvement  of  accessibility,  the 
adaptability of workers and businesses as well as the development of inclusive 
job markets. 

the “European territorial cooperation” objective shall be aimed at strengthening 
cross-border cooperation through joint local initiatives, at transnational level by 
means of actions conducive to integrated territorial development linked to the 
Community priorities, and through networking and exchange of experience at 
the appropriate territorial level. 

3. 

Under the three objectives, assistance from the Funds shall, according to their nature, 
take into account on the one hand specific economic and social features, and on the 
other  hand  specific  territorial  features.  The  assistance  shall,  in  an  appropriate 
manner, support urban regeneration particularly as part of regional development and 
the  renewal  of  rural  areas  and  of  areas  dependent  on  fisheries  through  economic 
diversification.  The  assistance  shall  also  support  areas  affected  by  geographical  or 
natural handicaps which aggravate the problems of development, particularly in the 
outermost  regions  (Guadeloupe,  French  Guiana,  Martinique,  Reunion,  the  Azores, 
Madeira  and  the  Canary  Islands)  as  well  as  the  northern  areas  with  very  low 
population density, certain islands and island Member States, and mountain areas. 

Article 4 

Instruments and missions 

1. 

The  Funds  shall  contribute,  each  in  accordance  with  the  specific  provisions 
governing it, towards achieving the three objectives as follows: 

EN 

23 

   EN 

 
a) 

b) 

the “Convergence” objective: the ERDF, the ESF and the Cohesion Fund; 

the “Regional competitiveness and employment” objective: the ERDF and the 
ESF; 

c) 

the “European territorial cooperation” objective: the ERDF. 

2. 

The Funds shall contribute towards financing technical assistance on the initiative of 
the Member States and the Commission. 

CHAPTER III 
GEOGRAPHICAL ELIGIBILITY 

Article 5 

Convergence 

1. 

2. 

3. 

4. 

5. 

The regions eligible for funding from the Structural Funds under the “Convergence” 
objective shall be regions corresponding to level II of the Nomenclature of Territorial 
Statistical  Units  (hereinafter  “NUTS  level  II”)  within  the  meaning  of  Regulation 
(EC) No 1059/2003 of the European Parliament and of the Council of 26 May 2003 
whose  per  capita  Gross  Domestic  Product  (GDP),  measured  in  purchasing  power 
parities  and  calculated  on  the  basis  of  Community  figures  for  the  last  three  years 
available on […], is less than 75% of the Community average. 

The  NUTS  level  II  regions  whose  per  capita  GDP,  measured  in  purchasing  power 
parities  and  calculated  on  the  basis  of  Community  figures  for  the  last  three  years 
available  on  […],  is  between  75%  and  […]  %  of  the  Community  average  shall  be 
eligible, on a transitional and specific basis, for financing by the Structural Funds. 

The  Member  States  eligible  for  funding  from  the  Cohesion  Fund  shall  be  Member 
States  whose  per  capita  Gross  National  Income  (GNI),  measured  in  purchasing 
power  parities  and  calculated  on  the  basis  of  Community  figures  for  the  last  three 
years available on […], is less than 90% of the Community average and which have 
a programme for meeting the economic convergence conditions referred to in Article 
104 of the Treaty. 

Notwithstanding  paragraphs  1  and  2  of  this  Article,  and  Article  6,  the  outermost 
regions (Guadeloupe, French Guiana, Martinique, Reunion, the Azores, Madeira and 
the Canary Islands) shall benefit from specific funding from the ERDF to facilitate 
their  integration  into  the  internal  market  and  to  compensate  for  their  specific 
constraints. 

Immediately following the entry into force of this Regulation, the Commission shall 
adopt  in  accordance  with  the  procedure  referred  to  in  Article  104(2)  the  list  of 
regions fulfilling the criteria under paragraphs 1 and 2 of this Article and of Member 
States fulfilling the criteria under Article 5(3). This list shall be valid from 1 January 
2007 to 31 December 2013. 

EN 

24 

   EN 

 
Article 6 

Regional competitiveness and employment 

1. 

2. 

3. 

1. 

2. 

3. 

The  areas  eligible  for  funding  from  the  Structural  Funds  under  the  “Regional 
competitiveness  and  employment”  objective  shall  be  those  not  covered  by  Article 
5(1) and 5(2). 

When presenting the national strategic reference framework referred to in Article 25, 
each  Member  State  concerned  shall  indicate  the  NUTS  I  or  NUTS  II  regions  for 
which it will present a programme for financing by the ERDF. 

The NUTS level II regions totally covered by Objective 1 in 2006 under Regulation 
(EC) No 1260/1999 which are not referred to in Article 5(1) and 5(2) shall be eligible 
for a specific and transitional financing from the Structural Funds. 

Immediately following the entry into force of this Regulation, the Commission shall 
adopt, in accordance with the procedure referred to in Article 104(2) the list of the 
regions  fulfilling  the  criteria  under  the  second  paragraph  of  this  Article.  This  list 
shall be valid from 1 January 2007 to 31 December 2013. 

Article 7 

European Territorial Cooperation 

For the purpose of cross-border cooperation, shall be eligible for financing the NUTS 
level  III  regions  of  the  Community  along  the  internal  and  certain  external  land 
borders  and  certain  NUTS  level  III  regions  of  the  Community  along  the  maritime 
borders  separated,  as  a  general  rule,  by  a  maximum  of  150  kilometres,  taking  into 
account  potential  adjustments needed to ensure the coherence and continuity of the 
cooperation action. 

Immediately following the entry into force of this Regulation, the Commission shall 
adopt, in accordance with the procedure referred to in Article 104(2) the list of the 
eligible regions. This list shall be valid from 1 January 2007 to 31 December 2013. 

For  the  purpose  of  transnational  cooperation,  on  the  basis  of  the  Community’s 
strategic guidelines referred to in Articles 23 and 24, the Commission in accordance 
with  the  procedure  referred  to  in  Article  104(2),  shall  adopt  the  list  of  the  eligible 
transnational  areas.  This  list  shall  be  valid  from  1 January  2007  to  31  December 
2013. 

For the purpose of cooperation networks and exchange of experience, the territory of 
the Community shall be eligible. 

EN 

25 

   EN 

 
 
 
 
 
 
CHAPTER IV 
PRINCIPLES OF ASSISTANCE 

Article 8 

Complementarity, consistency and compliance 

1. 

2. 

3. 

The Funds shall provide assistance which complements national, regional and local 
measures, integrating into them the priorities of the Community. 

The Commission and the Member States shall ensure that assistance from the Funds 
and the Member States is consistent with the activities, policies and priorities of the 
Community.  This  consistency  shall  be  indicated  in  particular  in  the  strategic 
guidelines  of  the  Community,  in  the  national  strategic  reference  framework  and  in 
the operational programmes. 

Operations financed by the Funds shall comply with the provisions of the Treaty and 
of acts adopted under them. 

Article 9 

Programming 

The  objectives  of  the  Funds  are  pursued  in  the  framework  of  a  multiannual  programming 
system  which  includes  the  priorities,  a  process  of  management,  decision  making  and 
financing organised in several stages. 

Article 10 

Partnership 

1. 

Assistance  from  the  Funds  shall  be  decided  by  the  Commission  within  the 
framework of close cooperation, hereinafter "partnership", between the Commission 
and  a  Member  State.  The  Member  State  organises,  in  accordance  with  current 
national  rules  and  practices,  a  partnership  with  the  authorities  and  bodies  which  it 
designates, namely: 

a) 

the competent regional, local, urban and other public authorities; 

b) 

the economic and social partners; 

c) 

any other appropriate body representing civil society, environmental partners, 
non-governmental organisations, and bodies responsible for promoting equality 
between men and women. 

Each  Member  State  shall  designate  the  most  representative  partners  at  national, 
regional and local level and in the economic and social or other spheres, hereinafter 

EN 

26 

   EN 

 
“partners”. The Member State shall ensure broad and effective involvement of all the 
appropriate bodies, in accordance with national rules and practices taking account of 
the need to promote equality between men and women and sustainable development 
through the integration of environmental protection and improvement requirements.  

2. 

The  partnership  shall  be  conducted  in  full  compliance  with  the  respective 
institutional, legal and financial jurisdiction of each partner category. 

The  partnership  shall  cover  preparation  and  monitoring  of  the  national  strategic 
reference  framework  as  well  as  the  preparation,  implementation,  monitoring  and 
evaluation of the operational programmes. Member States shall involve each of the 
appropriate partners, and particularly the regions, in the various programming stages 
within the time limit set for each stage. 

3. 

Each  year  the  Commission  shall  consult  the  organisations  representing  the  social 
partners at European level on assistance from the Funds. 

1. 

2. 

1. 

Article 11 

Subsidiary and proportional intervention 

Implementation  of  operational  programmes  referred  to  in  Article  23  shall  be  the 
responsibility  of  Member  States  at  the  appropriate  territorial  level,  in  accordance 
with the institutional system specific to each Member State. That responsibility shall 
be exercised in accordance with this Regulation. 

The  means  employed  by  the  Commission  and  the  Member  States  shall  vary 
according to the size of the Community contribution in relation to control provisions. 
Differentiation  also  applies  to  provisions  on  evaluation,  and  participation  by  the 
Commission  in  the  Monitoring  Committees  referred  to  under  Article  62  and  to  the 
annual reports on operational programmes. 

Article 12 

Shared management 

The  Community  budget  allocated  to  the  Funds  shall  be  implemented  within  the 
framework of shared management between the Member States and the Commission, 
in accordance with Article 53, paragraph 1, point b) of Regulation (EC, Euratom) No 
1605/200210 of the Council, with the exception of the technical assistance referred to 
in Article 43.  

The Member States and the Commission shall ensure compliance with the principle 
of sound financial management. 

10 

OJ L 248, 16.9.2002, p.1 

EN 

27 

   EN 

 
                                                 
2. 

The Commission exercises its responsibility for implementing the general budget of 
the European Communities in the following ways: 

a) 

b) 

c) 

the  Commission  shall  check  the  existence  and  proper  functioning  of 
management and control systems in the Member States in accordance with the 
procedures described in Article 69 and 70; 

the Commission shall interrupt, withhold or suspend all or part of payments in 
accordance with Articles 89, 90 and 91 if the national management and control 
systems  fail,  and  shall  apply  any  other  financial  correction  required,  in 
accordance with the procedures described in Articles 101 and 102; 

the  Commission  shall  check  reimbursement  of  payment  on  account  and 
automatically  de-commit  budget  commitments 
the 
procedures laid down in Articles 81(2), 93 and 96. 

in  accordance  with 

Article 13 

Additionality 

1. 

2. 

3. 

Contributions  from  the  Structural  Funds  shall  not  replace  public  or  equivalent 
structural expenditure by a Member State. 

For  regions  covered  by  the  “Convergence”  objective,  the  Commission  and  the 
Member State shall determine the level of public or equivalent structural expenditure 
which  the  Member  State  shall  maintain  in  all  the  regions  concerned  during  the 
programming period.  

That  expenditure  shall  be  agreed  by  the  Member  State  and  the  Commission  within 
the national strategic reference framework referred to in Article 25. 

The level of the expenditure referred to in paragraph 2 shall be at least equal to the 
amount  of  average  annual  expenditure  in  real  terms  attained  during  the  previous 
programming period. 

The  level  of  expenditure  shall  be  determined  with  reference  to  the  general 
macroeconomic  conditions  in  which  the  financing  is  carried  out  and  taking  into 
account  certain  specific  economic  situations,  namely  privatisations  as  well  as  an 
exceptional level of public or equivalent structural expenditure by the Member State 
during the previous programming period. 

4. 

The Commission shall, in cooperation with each Member State, verify additionality 
mid-term in 2011 and ex-post by 30 June 2016 for the “Convergence” objective.  

Where  a  Member  State  is  unable  to  prove  on  30  June  2016  that  the  additionality 
agreed  within  the  national  strategic  reference  framework  has  been  respected,  the 
Commission shall proceed to a financial correction in accordance with procedure laid 
down in Article 101. 

EN 

28 

   EN 

 
Article 14 

Equality between men and women 

The Member States and the Commission shall ensure that equality between men and women 
and  the  integration  of  gender  perspective  is  promoted  during  the  various  stages  of 
implementing the Funds. 

CHAPTER V 
FINANCIAL FRAMEWORK 

Article 15 

Global resources 

1. 

The resources available for commitment from the Funds for the period 2007 to 2013 
shall be EUR 336.1 billion at 2004 prices in accordance with the annual breakdown 
is shown in the Annex 1.  

2. 

1. 

For the purpose of their programming and subsequent inclusion in the general budget 
of  the  European  Communities,  these  amounts  referred  to  in  the  first  subparagraph 
shall be indexed at to 2 % per year. 

The breakdown of budgetary resources between the objectives defined in Article 3(2) 
shall  be  such  to  achieve  a  significant  concentration  on  the  regions  of  the 
“Convergence” objective.  

The  Commission  shall  make  indicative  annual  breakdowns  by  Member  States  in 
accordance  with  the  criteria  established  in  Articles  16,  17  and  18  and  without 
prejudice to the provisions referred to in Articles 20 and 21. 

Article 16 

Resources for the “Convergence” objective 

Overall  resources  for  the  “Convergence”  objective  shall  amount  to  78,54%  of  the 
resources  referred  to  in  the  first  paragraph  of  Article  15  (i.e.  a  total  of  EUR  264.0 
billion) and shall be distributed between the different components as follows: 

a) 

b) 

67.34% for the financing referred to in Article 5(1), using eligible population, 
regional  prosperity,  national  prosperity  and  unemployment  as  the  criteria  for 
calculating the indicative breakdowns by Member State; 

8.38% for the transitional and specific support referred to in Article 5(2), using 
eligible population, regional prosperity, national prosperity and unemployment 
as criteria for calculating the indicative breakdowns by Member State; 

EN 

29 

   EN 

 
c) 

23.86%  for  the  financing  referred  to  in  Article  5(3),  using  population,  per 
capita GNI taking into account of the improvement in national prosperity over 
the  previous  period,  and  surface  area  as  criteria  for  calculating  the  indicative 
breakdowns by Member State; and 

d) 

0.42% for the financing referred to in Article 5(4), using eligible population as 
criteria for calculating the indicative breakdowns by Member State. 

The annual breakdown of the appropriations referred to in paragraph 1, subparagraph 
b) shall be degressive from 1 January 2007. The appropriation in 2007 shall be lower 
than in 2006, except for those regions that are not fully eligible to Objective 1 on 1 
January 2000 pursuant to Regulation (EC) No 1260/1999 for which the appropriation 
in 2007 shall be objective and fair. 

Article 17 

Resources for the “Regional competitiveness and employment” objective 

Overall  resources  for  the  “Regional  competitiveness  and  employment”  objective 
shall amount to 17.22% of the resources referred to in the first paragraph of Article 
15  (i.e.  a  total  of  EUR  57.9  billion)  and  shall  be  distributed  between  the  different 
components as follows: 

a) 

b) 

83.44%  for  the  financing  as  referred  to  in  Article  6(1),  using  eligible 
population, 
rate  and 
regional  prosperity,  unemployment,  employment 
population density as the criteria for calculating the indicative breakdowns by 
Member State; and 

16.56%  for  the  transitional  and  specific  support  referred  to  in  Article  6(2), 
using  eligible  population,  regional  prosperity,  national  prosperity  and 
unemployment  as  the  criteria  for  calculating  the  indicative  breakdowns  by 
Member State. 

The  appropriations  referred  to  in  paragraph  1,  subparagraph  a)  shall  be  divided 
equally  between  the  programmes  financed  by  the  ERDF  and  the  programmes 
financed by the ESF. 

Operational  programmes  financed  by  the  ESF  benefit  from  up  to  50%  of  the 
available  credits  as  referred  to  in  paragraph  1,  subparagraph  b).  To  this  end, 
operational programmes financed by the ESF shall foresee a specific priority. 

The  annual  breakdowns  of  the  appropriations  referred  to  in  paragraph  1, 
subparagraph b) shall be degressive from 1 January 2007. The appropriations in 2007 
shall be lower than in 2006, except for those regions whose eligibility to Objective 1 
pursuant  to  Regulation  (EC)  No  1260/1999  started  in  2004  for  which  the 
appropriation in 2007 shall be objective and fair. 

2. 

1. 

2. 

3. 

4. 

EN 

30 

   EN 

 
Article 18 

Resources for the “European territorial cooperation” objective 

Overall resources for the “European territorial cooperation” objective shall amount to 3.94% 
of the resources referred to under  the first paragraph of  Article 15 (i.e.  a total  of EUR 13.2 
billion) and shall be distributed between the different components as follows: 

a) 

35.61% for the financing of cross-border co-operation as referred to in Article 7(1), 
using the eligible population as the criteria for calculating the indicative breakdowns 
by Member State. 

12.12% for the contribution of the ERDF to the cross-border strand of the European 
Neighbourhood and Partnership Instrument pursuant to Regulation (EC) No […] and 
of  the  Instrument  for  Pre-Accession  pursuant  to  Regulation  (EC)  No  […].  These 
Regulations  indicate  that  the  contribution  of  the  two  instruments  to  cross-border 
cooperation with Member States is equivalent to the one of the ERDF. 

b) 

c) 

47.73% for the financing of transnational co-operation as referred to in Article 7(2), 
using the eligible population as criteria for calculating the indicative breakdowns by 
Member State. 

4.54%  for  the  financing  of  co-operation  networks  and  exchange  of  experience  as 
referred to in Article 7(3). 

Article 19 

Non transferability of resources 

The total appropriations allocated by Member State under each of the objectives of the Funds 
and their components shall not be transferable between them. 

By  way  of  derogation,  the  financial  allocation  by  Member  State  under  the  “European 
territorial cooperation” objective may be subject to flexibility of 10% of the amounts allocated 
between the cross-border component and the transnational component. 

Article 20 

Resources for the performance and quality reserve 

3,0% of the resources referred to in Article 16(1), subparagraphs a) and b), and Article 17(1) 
shall be allocated in accordance with Article 48. 

EN 

31 

   EN 

 
 
 
 
Article 21 

Resources for technical assistance 

0,30% of the resources referred to in Article 15(1), shall be devoted to technical assistance for 
the Commission as defined in Article 43. 

Article 22 

Capping of resources 

The Commission ensures that total annual allocations from the Funds for any Member State 
pursuant  to  this  Regulation,  including  the  contribution  of  the  ERDF  to  the  financing  of  the 
cross-border  strand  of  the  European  Neighbourhood  and  Partnership  Instrument  pursuant  to 
Regulation (EC) No […] and of the Instrument for Pre-Accession pursuant to Regulation (EC) 
No  […],  and  from  the  part  of  the  European  Agricultural  Fund  for  Rural  Development 
(EAFRD)  pursuant  to  Regulation  (EC)  No  […]  originating  from  the  EAGGF  Guidance 
section, and of the European Fund for Fisheries (EFF) pursuant to Regulation (EC) No […] 
contributing  to  the  “Convergence”  objective,  shall  not  exceed  4%  of  that  Member  State’s 
GDP as estimated at the time of the adoption of the interinstitutional agreement. 

The Regulations of the financial instruments mentioned in the previous paragraph other than 
the Funds include a similar provision. 

TITLE II 

STRATEGIC APPROACH TO COHESION 

CHAPTER I 
COMMUNITY STRATEGIC GUIDELINES ON COHESION 

Article 23 

Content 

The  Council  establishes  at  Community  level  strategic  guidelines  on  economic,  social  and 
territorial cohesion defining a framework for the intervention of the Funds. 

For each of the objectives of the Funds, those guidelines shall in particular give effect to the 
priorities  of  the  Community  with  a  view  to  promote  balanced,  harmonious  and  sustainable 
development. 

These  guidelines  are  established  taking  into  account  the  medium-term  economic  policy 
strategy as contained in the Broad Economic Policy Guidelines (BEPGs). 

EN 

32 

   EN 

 
In  the  sphere  of  employment  and  human  resources,  the  priorities  shall  be  those  of  the 
European Strategy for Employment taking into account regional and local specificities. 

Article 24 

Adoption and review 

At  the  latest  three  months  after  the  adoption  of  this  Regulation,  the  Community  strategic 
guidelines referred to in Article 23 are adopted in accordance with the procedure laid down in 
Article  161  of  the  Treaty.  This  decision  shall  be  published  in  the  Official  Journal  of  the 
European Union. 

The  Community  strategic  guidelines  shall  be  subject,  if  necessary,  to  mid-term  review  in 
accordance with the procedure laid down in Article 161 of the Treaty, in order to take account 
in particular of changes in the priorities of the Community. 

CHAPTER II 
NATIONAL STRATEGIC REFERENCE FRAMEWORK 

Article 25 

Content 

1. 

2. 

3. 

The  Member  State  shall  present  a  national  strategic  reference  framework  which 
ensures  that  Community  structural  aid  is  consistent  with  the  Community  strategic 
guidelines,  and  which  identifies  the  link  between  Community  priorities,  on  the  one 
hand,  and  national  and  regional  priorities  in  order  to  promote  sustainable 
development, and the national action plan on employment, on the other hand. 

The  framework  shall  constitute  a  reference 
programming of the Funds. 

instrument  for  preparing 

the 

Each national strategic reference framework shall contain a summary description of 
the Member State’s strategy and its operational implementation. 

The strategic section of the national strategic reference framework shall specify the 
strategy chosen for the “Convergence” objective and the “Regional competitiveness 
and employment” objective, demonstrating how the choices made are consistent with 
the  Community  strategic  guidelines  on  the  basis  of  an  analysis  of  development 
disparities, weaknesses and potential related, in particular, to the expected changes in 
the European and world economies. It shall specify: 

a) 

the thematic and territorial priorities, including for urban regeneration and the 
diversification of rural economies and of areas dependent on fisheries; 

EN 

33 

   EN 

 
b) 

c) 

for the “Convergence” objective only, the action envisaged for reinforcing the 
Member State’s administrative efficiency, including as regards management of 
the Funds, and the evaluation plan referred to in Article 46(1); 

for the “Regional competitiveness and employment” objective only, the list of 
regions  chosen  for  regional  competitiveness  as  referred  to  in  the  second 
subparagraph of Article 6(1). 

In order to permit monitoring, the main goals of the priorities referred to in point a) 
shall be quantified and a limited number of performance and impact indicators shall 
be identified; 

4. 

the  “Convergence”  objective  and 

For 
employment” objective, the operational section shall contain: 

the  “Regional  competitiveness  and 

a) 

b) 

c) 

the  list  of  operational  programmes  and  the  indicative  annual  allocation  from 
each  Fund  by  programme,  ensuring  an  appropriate  balance  between  regional 
and  thematic  action.  This  list  shall  include  the  amount  of  the  national 
contingency reserve referred to in Article 49; 

the mechanisms for ensuring coordination between the operational programmes 
and the Funds; 

the  contribution  from  other  financial  instruments,  in  particular  the  EIB,  and 
their coordination with the Funds. 

5. 

For  the  regions  of  the  “Convergence”  objective,  the  operation  section  shall  also 
contain: 

a) 

b) 

the amount of the total annual appropriation provided for under the European 
Agricultural Fund for Rural Development and the European Fund for Fisheries; 

the  information  required  for  ex-ante  verification  of  compliance  with  the 
additionality principle referred to in Article 13. 

6. 

The  information  contained  in  the  national  strategic  reference  framework  takes 
account of the specific institutional arrangements of each Member State. 

Article 26 

Preparation and adoption 

1. 

2. 

The  national  strategic  reference  framework  shall  be  prepared  by  the  Member  State 
according  to  its  institutional  structure  and  in  close  cooperation  with  the  partners 
referred  to  in  Article  10.  It  shall  cover  the  period  1  January  2007  to  31  December 
2013. 

Each  Member  State  shall  send  the  Commission  a  proposal  for  a  national  strategic 
reference framework as soon as possible after adoption of the Community strategic 
guidelines.  Member  States  may  decide  to  present  at  the  same  time  the  operational 

EN 

34 

   EN 

 
programmes  referred  to  in  Article  31.  The  Commission  negotiates  this  proposal  in 
the framework of the partnership. 

3. 

Before  the  adoption  of  the  operational  programmes  referred  to  in  Article  36,  the 
Commission shall take a decision, after consultation of the committee referred to in 
Article 105, in accordance with the procedure referred to in Article 104(2) covering 
the following aspects: 

a) 

b) 

c) 

the strategy and the priority themes chosen for assistance from the Funds and 
their monitoring arrangements; 

the list of operational programmes and the indicative distribution of resources 
by programme for each of the objectives of the Funds, including the amount of 
the national contingency reserve referred to in Article 49; 

and,  for  the  “Convergence”  objective  only,  the  level  of  expenditure 
guaranteeing compliance with the additionality principle referred to in Article 
13  and  the  action  envisaged  for  reinforcing  the  administrative  efficiency  and 
sound management. 

That  decision  shall  be  without  prejudice  to  any  changes  to  the  operational 
programmes referred to in Article 32. 

CHAPTER III 
STRATEGIC FOLLOW-UP AND ANNUAL DEBATE 

Article 27 

Annual report by Member States 

1. 

For  the  first  time  in  2008  and  at  the  latest  by  1  October  each  year,  each  Member 
State  shall  present  to  the  Commission  a  report  on  the  progress  in  implementing  its 
strategy and  achieving its  goals,  taking particular account of the  indicators set, and 
their  contribution  towards  implementing  the  Community  strategic  guidelines  on 
cohesion, as well as of available evaluations. 

The report shall refer to the national action plan on employment. 

2. 

The national action plan on employment describes each year how the guidelines of 
the European strategy on employment are implemented in each Member State. 

Article 28 

Annual report by the Commission 

1. 

For  the  first  time  in  2009  and  at  the  beginning  of  each  year,  the  Commission  shall 
adopt  an  annual  report  summarising  the  main  developments,  trends  and  challenges 

EN 

35 

   EN 

 
2. 

1. 

2. 

3. 

relating  to  implementation  of  the  Community  strategic  guidelines  and  the  national 
strategic reference frameworks. 

The report shall be based on examination and assessment by the Commission of the 
Member  States’  annual  reports  referred  to  in  Article  27  and  of  any  other  available 
information.  The  report  shall  state  the  follow-up  measures  to  be  taken  by  the 
Member States and the Commission in the light of its conclusions. 

Article 29 

Annual examination 

The  annual  report  by  the  Commission  referred  to  in  Article  28  shall  be  sent  to  the 
Council  together  with  the  BEPG  implementation  report,  the  joint  report  on 
employment and the Internal Market Strategy implementation report, with a view to 
the spring European Council. 

It shall be sent for opinion to the European Parliament, the European Economic and 
Social Committee and the Committee of the Regions. 

Each spring the Council shall examine the annual report by the Commission, together 
with  the  BEPG  implementation  report,  the  joint  report  on  employment  and  the 
Internal Market Strategy implementation report. 

On the basis of the annual report by the Commission referred to in Article 28 and on 
a  proposal  from  the  Commission,  the  Council  shall  adopt  conclusions  on  the 
implementation of the Community strategic guidelines. The Commission shall ensure 
that the conclusions are followed up. 

Article 30 

Cohesion report 

The report of the Commission referred to in Article 159, second subparagraph, of the Treaty 
shall include in particular: 

a) 

b) 

a record of the progress made on economic and social cohesion, including the socio-
economic situation and development of the regions, as well as the integration of the 
Community priorities; 

a record of the role of the Funds, the EIB and the other financial instruments, as well 
as the effect of other Community and national policies on the progress made. 

The  report  shall  contain,  if  necessary,  any  proposals  on  Community  measures  and  policies 
which  should  be  adopted  in  order  to  strengthen  economic  and  social  cohesion.  It  shall  also 
propose, if necessary, proposals concerning any adjustments linked to new Community policy 
initiatives in the strategic guidelines on cohesion. 

EN 

36 

   EN 

 
In  the  year  in  which  the  report  is  presented,  it  shall  replace  the  annual  report  by  the 
Commission referred to in Article 28. It shall be the subject of an annual debate in accordance 
with the procedure laid down in Article 29. 

TITLE III 

PROGRAMMING 

CHAPTER I 
GENERAL PROVISIONS ON THE STRUCTURAL FUNDS AND THE 
COHESION FUND 

Article 31 

1. 

2. 

3. 

4. 

Preparation and approval of operational programmes 

The activities of the Funds in the Member States shall take the form of operational 
programmes  within  the  national  strategic  reference  framework.  Each  operational 
programme shall cover a period between 1 January 2007 and 31 December 2013. An 
operational  programme  shall  cover  only  one  of  the  three  objectives  referred  to  in 
Article 3, save as otherwise agreed between the Commission and the Member State. 

Each operational programme shall be drawn up by the Member State or any authority 
designated by the Member State, in close cooperation with the partners referred to in 
Article 10. 

The  Member  State  shall  submit  a  proposal  for  an  operational  programme  to  the 
Commission  containing  all  the  components  referred  to  in  Article  36,  as  soon  as 
possible following the Commission decision referred to in Article 26 or at the same 
of  the  presentation  of  the  national  strategic  reference  framework  referred  to  in  the 
same Article 26. 

The  Commission  shall  appraise  the  proposed  operational  programme  to  determine 
whether  it  contributes  to  the  goals  and  priorities  of  the  national  strategic  reference 
framework  and  to  the  Community  strategic  guidelines.  Where  the  Commission 
considers  that  an  operational  programme  is  inconsistent  with  the  Community 
strategic guidelines or the national strategic reference framework, it shall request the 
Member State to revise the proposed programme accordingly. 

5. 

The  Commission  shall  adopt  each  operational  programme  as  soon  as  possible  after 
its formal submission by the Member State. 

EN 

37 

   EN 

 
Article 32 

Revision of operational programmes 

At the initiative of the Member State or the Commission, and after approval by the 
Monitoring  Committee,  operational  programmes  shall  be  re-examined  and,  if 
necessary, revised for the rest of the programming period following significant socio-
economic changes or in order to take greater or different account of the Community 
priorities,  particularly  in  the  light  of  Council  conclusions.  Operational  programmes 
may  be  re-examined  in  the  light  of  evaluation  and  following  implementation 
difficulties.  Operational  programmes  shall,  if  necessary,  be  revised  following 
allocation of the reserves referred to in Articles 48 and 49. 

The  Commission  shall  adopt  a  decision  on  the  requests  for  revision  of  operational 
programmes  as  soon  as  possible  after  formal  submission  of  the  request  by  the 
Member State. 

Article 33 

Specific character of the Funds 

Operational  programmes  shall  receive  financing  from  only  one  Fund,  save  as 
otherwise provided in paragraph 3. 

Without  prejudice  to  the  derogations  laid  down  in  the  specific  regulations  of  the 
Funds, the ERDF and the ESF may finance, in a complementary manner and subject 
to  a  limit  of  5%  of  each  priority  of  an  operational  programme,  measures  falling 
within the scope of assistance from the other Fund, provided that they are necessary 
for the satisfactory implementation of the operation and are directly linked to it. 

In the Member States receiving support from the Cohesion Fund, the ERDF and the 
Cohesion  Fund  shall  jointly  provide  assistance  for  operational  programmes  on 
transport infrastructure and the environment, including major projects. 

Article 34 

Geographical scope 

Operational  programmes  submitted  under  the  “Convergence”  objective  shall  be 
drawn up at the appropriate geographical level and at least at regional level NUTS II. 

Operational  programmes  submitted  under  the  “Convergence”  objective  with  a 
contribution from the Cohesion Fund shall be drawn up at national level. 

Operational  programmes  submitted  under  the  “Regional  competitiveness  and 
employment” objective shall be drawn up at regional NUTS I or NUTS II level, in 
accordance  with  the  institutional  system  specific  to  the  Member  State,  for  regions 

1. 

2. 

1. 

2. 

3. 

1. 

2. 

EN 

38 

   EN 

 
 
benefiting  from  financing  by  the  ERDF,  safe  as  otherwise  agreed  between  the 
Commission and the Member State. They shall be drawn up by the Member State at 
the appropriate level if they are financed by the ESF. 

3. 

Operational  programmes  submitted  under  the  “European  territorial  cooperation” 
objective for cross-border cooperation shall be drawn up for each border or group of 
borders  by  an  appropriate  grouping  at  NUTS  III  level,  including  enclaves. 
Operational  programmes  submitted  under  the  “European  territorial  cooperation” 
objective  for  transnational  cooperation  shall  be  drawn  up  at  the  level  of  each 
transnational  cooperation  area.  Networking  programmes  shall  relate  to  the  whole 
territory of the Community. 

Article 35 

Participation by the European Investment Bank and the European Investment Fund 

1. 

2. 

3. 

4. 

The  EIB  and  the  European  Investment  Fund  (EIF)  may  participate,  in  accordance 
with the modalities laid down in their statutes, in the programming of assistance from 
the Funds. 

The  EIB  and  the  EIF  may,  at  the  request  of  Member  States,  participate  in  the 
preparation of national strategic reference frameworks and operational programmes, 
as well as in activities relating to the preparation of major projects, the arrangement 
of finance, and public-private partnerships. The Member State, in agreement with the 
EIB and the EIF, may concentrate the loans granted on one or more priorities of an 
operational programme, in particular in the spheres of innovation and the knowledge 
economy, human capital, the environment and basic infrastructure projects. 

The  Commission  may  consult  the  EIB  and  the  EIF  before  adoption  of  the  national 
strategic  reference  frameworks  and  the  operational  programmes.  That  consultation 
shall relate in particular to the operational programmes containing an indicative list 
of major projects or programmes which, by the nature of their priorities, are suitable 
for mobilising loans or other types of market-based financing. 

The  Commission  may,  if  it  considers  it  appropriate  for  the  appraisal  of  major 
projects, request the EIB to examine those projects’ technical quality and economic 
and financial viability, in particular as regards the financial engineering instruments 
to be implemented or developed. 

EN 

39 

   EN 

 
CHAPTER II 
PROGRAMMING CONTENT 

SECTION 1 
OPERATIONAL PROGRAMMES 

Article 36 

Operational programmes for the “Convergence” and “Regional competitiveness and 
employment” objectives 

1. 

Operational  programmes  relating 
competitiveness and employment” objectives shall contain: 

the  “Convergence”  and 

to 

the  “Regional 

a) 

b) 

c) 

an  analysis  of  the  situation  in  terms  of  strengths  and  weaknesses  and  the 
strategy chosen in response; 

a justification of the priorities chosen having regard to the Community strategic 
guidelines,  the  national  strategic  reference  framework  and  the  resultant 
priorities  of  the  operational  programme,  as  well  as  the  expected  impact 
resulting from the ex ante evaluation referred to in Article 46; 

an information on the priorities and their specific targets. Those targets shall be 
quantified using a limited number of indicators for implementation, results and 
impact,  taking  into  account  the  proportionality  principle.  The  indicators  must 
make  it  possible  to  measure  the  progress  in  relation  to  the  baseline  situation 
and the effectiveness of the targets implementing the priorities; 

d) 

a  breakdown  of  the  spheres  of  assistance  by  category  in  accordance  with  the 
detailed rules for the implementation of this Regulation; 

e) 

a financing plan containing two tables: 

i) 

ii) 

a  table  breaking  down  for  each  year,  in  accordance  with  Articles  50  to 
53,  the  amount  of  the  total  financial  appropriation  envisaged  for  the 
contribution  from  each  Fund.  The  financing  plan  shall  show  separately 
within the total contribution from the Structural Funds the appropriations 
provided for regions receiving transitional support. The total contribution 
from  the  Funds  provided  for  annually  shall  be  compatible  with  the 
applicable  Financial  Perspective  and  taking  into  account  the  phased 
reduction laid down in Articles 16(2) and 17(4); 

a  table  specifying,  for  the  whole  programming  period  and  for  each 
priority, the amount of the total financial appropriation of the Community 
contribution  and  the  public  national  counterparts  and  the  rate  of 
contribution  from  the  Funds.  It  shall  show,  for  information,  the 
contribution from the EIB and the other financial instruments; 

EN 

40 

   EN 

 
f) 

information  on  complementarity  with  measures  financed  by  the  European 
Agricultural Fund for Rural Development and those financed by the European 
Fund for Fisheries; 

g) 

the implementing provisions for the operational programme, including: 

i) 

ii) 

iii) 

iv) 

v) 

designation  by  the  Member  State  of  all  the  entities  stipulated  in  Article 
58 or, if the Member State exercises the option provided for in Article 73, 
the  designation  of  other  bodies  and  procedures  in  accordance  with  the 
rules laid down in Article 73; 

a  description  of  the  monitoring  and  evaluation  systems  as  well  as  the 
composition of the Monitoring Committee; 

a  definition  of  the  procedures  for  the  mobilisation  and  circulation  of 
financial flows in order to ensure their transparency; 

the  provisions  laid  down  to  ensure  that  the  operational  programme  is 
publicised; 

a description of the procedures agreed between the Commission and the 
Member  State  for  the  exchange  of  computerised  data  to  meet  the 
payment,  monitoring  and  evaluation  requirements  laid  down  by  this 
Regulation; 

h) 

designation of the “compliance assessment body” referred to in Article 70. 

i) 

an indicative list of major projects within the meaning of Article 38 due to be 
submitted  within  the  programming  period,  including  an  indicative  annual 
schedule. 

The  rules  of  implementation  of  point  d)  are  adopted  by  the  Commission  in 
accordance with the procedure referred to in Article 104(2). 

Operational programmes financed jointly by the ERDF and the Cohesion Fund with 
respect to transport and the environment shall be the subject of priorities specific to 
each Fund and a specific commitment by Fund. 

Each operational programme under the “Regional competitiveness and employment” 
objective  includes  a  justification  for  the  thematic,  geographical  and  financial 
concentration. 

2. 

3. 

For the operational programmes financed by the ERDF, this justification shall 
be based on: 

a) 

b) 

the verifiable link between the goal related to the balanced development 
of the region and the priorities chosen; 

the leverage effect on the key priorities for the development of the region 
concerned, particularly in the sphere of innovation, exerted by a financial 
critical mass and a significant number of beneficiaries. 

EN 

41 

   EN 

 
 
For the operational programmes financed by the ESF, this justification shall be 
based on: 

a) 

b) 

the  contribution  of  the  chosen  priorities  to  the  implementation  of  the 
recommendations  of  the  Council  on  the  implementation  of  employment 
policies in Member States; 

the  leverage  effect  on  the  key  priorities  and  goals  of  the  European 
Employment Strategy and on the goals of the Community in the sphere 
of social inclusion. 

4. 

Operational  programmes  financed  by  the  ERDF  shall  contain  in  addition  for  the 
“Convergence” and the “Regional competitiveness and employment” objective: 

a) 

b) 

c) 

d) 

actions  for  inter-regional  cooperation  with,  at  least,  one  region  of  another 
Member State in each regional programme; 

information  on  the  approach  to  the  urban  issue,  including  the  list  of  cities 
chosen and the procedures for sub-delegation to urban authorities, possibly by 
means of a global grant; 

actions  for  adapting  the  regional  economies,  in  a  preventive  manner,  to  the 
changes of the European and international economic environment; 

specific  priorities  for  the  measures  financed  under  the  additional  allocation 
referred  to  in  point  (d),  of  the  first  paragraph  of  Article  16  in  operational 
programmes providing assistance in outermost regions; 

By derogation to paragraph 1, the operational programme proposed by each Member 
State for the contingency reserve referred to in Article 49, in accordance with Article 
31, include only the information referred to in paragraph 1, points e) indent i), h) and 
g) as well as: 

a) 

b) 

an analysis of the situation of the vulnerable sectors and sectors, which may be 
affected by the consequences of trade opening; 

an indication of the priorities related to the adaptation of the worked potentially 
concerned and to the diversification of the regional economies. 

When one of the unforeseen event referred to in Article 49 takes place, the Member 
State  request  the  Commission  for  a  revision  of  the  operational  programme  in 
accordance with Article 32, including the information referred to points c), e) indent 
ii) of paragraph 1. 

5. 

6. 

Article 37 

Operational programmes for the “European territorial cooperation” objective 

Without  prejudice  to  Article  36,  specific  rules  on  programming  are  laid  down  in  the 
Regulation (EC)  No of the European Parliament and the Council on the European Regional 

EN 

42 

   EN 

 
 
Development  Fund  as  regards  operational  programmes  under  the  “European  territorial 
cooperation” objective. 

SECTION 2 
MAJOR PROJECTS 

Article 38 

Content 

As  part  of  an  operational  programme,  the  ERDF  and  the  Cohesion  Fund  may  finance 
expenditure  in  respect  to  an  operation  comprising  a  series  of  works,  activities  or  services 
intended in itself to accomplish an indivisible task of a precise economic or technical nature, 
which has clearly identified goals and whose total cost exceeds €25 million in the case of the 
environment and €50 million in other fields, hereinafter “major projects”. 

Article 39 

Information submitted to the Commission 

The  managing  authority  shall  provide  the  Commission  with  the  following  information  on 
major projects: 

a) 

b) 

c) 

d) 

e) 

f) 

g) 

h) 

i) 

information on the body to be responsible for implementation; 

information  on  the  nature  of  the  investment  and  a  description  of  it,  its  financial 
volume and location; 

the results of the feasibility studies; 

a  timetable  for  implementing  the  project  and,  where  the  implementation  period  for 
the  operation  concerned  is  expected  to  be  longer  than  the  programming  period,  the 
phases  for  which  Community  co-financing 
the  2007-
2013 programming period; 

is  requested  during 

a cost-benefit analysis, including a risk assessment and the foreseeable impact on the 
sector concerned and on the socio-economic situation of the Member State and/or the 
region and, when possible, of the other regions of the Community; 

a guarantee of compliance with Community law; 

an analysis of the environmental impact; 

a justification for the public contribution; 

the  financing  plan  showing  the  total  planned  financial  resources  and  the  planned 
contribution  from  the  Funds,  the  EIB,  the  EIF  and  all  other  sources  of  Community 
financing, including the annual schedule of the project. 

EN 

43 

   EN 

 
Article 40 

Decision of the Commission 

The  Commission  shall  appraise  the  major  project,  if  necessary  consulting  outside 
experts,  including  the  EIB,  in  the  light  of  the  factors  referred  to  in  Article  39,  its 
consistency  with  the  priorities  of  the  operational  programme,  its  contribution  to 
achieving  the  goals  of  those  priorities  and  its  coherence  with  other  Community 
policies. 

The  Commission  shall  offer  the  Member  States  methodological  support  and  shall 
agree reference values for the principal parameters of the cost-benefit analysis. 

The Commission shall adopt a decision as soon as possible after the submission by 
the  Member  State  or  the  managing  authority  of  all  the  information  referred  to  in 
Article  39.  That  decision  shall  define  the  physical  object,  the  amount  to  which  the 
co-financing rate for the priority applies, and the annual schedule. 

Where the Commission refuses to make a financial contribution to a major project, it 
shall notify the Member State of its reasons. 

SECTION 3 
GLOBAL GRANTS 

Article 41 

General provisions 

The  managing authority may  entrust the management  and implementation  of a part 
of an operational programme to one or more intermediate bodies, designated by the 
managing authority, including local authorities, regional development bodies or non-
governmental  organisations,  which  shall  ensure  the  implementation  of  one  or  more 
operations in accordance with the provisions of an agreement concluded between the 
managing authority and that body.  

Such  delegation  shall  be  without  prejudice  to  the  financial  responsibility  of  the 
managing authority and of the Member States. 

The  intermediary  body  responsible  for  managing  the  global  grant  must  provide 
guarantees  of  its  solvency  and  competence  in  administrative  and  financial 
management. It must normally be established or represented in the region or regions 
covered by the operational programme at the moment of its designation. 

1. 

2. 

3. 

4. 

1. 

2. 

EN 

44 

   EN 

 
Article 42 

Implementing rules 

The  agreement  concluded  between  the  managing  authority  and  the  intermediate  body  shall 
detail in particular: 

a) 

b) 

c) 

d) 

the operations to be implemented; 

the criteria for selecting beneficiaries; 

the  rates  of  assistance  from  the  Funds  and  the  rules  governing  that  assistance, 
including regarding the use of any interest accruing; 

the arrangements for monitoring, evaluating and ensuring the financial control of the 
global grant referred to in Article 58(1) vis-à-vis the managing authority, including 
the modalities for recovering amounts unduly paid and the presentation of accounts; 

e) 

the use of a financial guarantee or equivalent facility. 

SECTION 4 
TECHNICAL ASSISTANCE 

Article 43 

Technical assistance at the initiative of the Commission 

1. 

At the initiative of and/or on behalf of the Commission, subject to a ceiling of 0.30% 
of  their  respective  annual  allocation,  the  Funds  may  finance  the  preparatory, 
monitoring,  administrative  and  technical  support,  evaluation,  audit  and  inspection 
measures necessary for implementing this Regulation. These actions are executed in 
accordance with Article 53(2) of Regulation (EC, Euratom) No 1605/2002 and any 
other provisions of that Regulation and of its implementing modalities applicable to 
this form of execution of the budget. 

Those actions shall include: 

a) 

b) 

studies linked to the drawing up of the strategic guidelines of the Community, 
the Commission’s annual report and the three-yearly cohesion report; 

evaluations,  expert reports,  statistics  and  studies,  including  those  of  a  general 
nature concerning the operation of the Funds; 

c)  measures aimed at the partners, the beneficiaries of assistance from the Funds 

and the general public, including information measures; 

d)  measures  to  disseminate  information,  networking,  raise  awareness,  promote 

cooperation and exchange experiences throughout the Union; 

EN 

45 

   EN 

 
2. 

3. 

1. 

e) 

f) 

the  installation,  operation  and  interconnection  of  computerised  systems  for 
management, monitoring, inspection and evaluation; 

improvements  in  evaluation  methods  and  the  exchange  of  information  on 
practices in this field. 

The Commission adopts a decision for the actions listed under the first paragraph, in 
accordance  with  the  procedure  referred  to  in  Article  104(2),  when  a  contribution 
from the ERDF or the Cohesion Fund is foreseen. 

The  Commission  adopts  a  decision  for  the  actions  listed  under  the  first  paragraph, 
after  consulting  the  committee  referred  to  in  Article  105,  in  accordance  with  the 
procedure  referred  to  in  Article  104(2),  when  a  contribution  from  the  ESF  is 
foreseen. 

Article 44 

Technical assistance of the Member states 

At  the  initiative  of  the  Member  State,  for  each  operational  programme,  the  Funds 
may  finance  preparatory,  management,  monitoring,  evaluation,  information  and 
control  activities  and  activities  to  reinforce  the  administrative  capacity  for 
implementing the Funds within the following limits: 

a) 

b) 

4%  of  the  total  amount  allocated  to  each  operational  programme  under  the 
the  “Regional  competitiveness  and  employment” 
“Convergence”  and 
objectives; 

6%  of  the  total  amount  allocated  to  each  operational  programme  under  the 
“European territorial cooperation” objective. 

2. 

the  “Convergence”  objective, 

For 
technical  assistance  measures  may  be 
implemented,  up  to  the  limit  of  4%  of  the  total  allocation,  in  the  form  of  specific 
operational programmes. 

EN 

46 

   EN 

 
TITLE IV 

EFFECTIVENESS 

CHAPTER I 
EVALUATION 

Article 45 

General provisions 

1. 

The  strategic  guidelines  of  the  Community,  the  national  strategic  reference 
framework, and the operational programmes shall be the subject of evaluation. 

Evaluations shall aim to improve the quality, effectiveness and consistency of Fund 
assistance  and  the  implementation  of  operational  programmes.  They  shall  also 
appraise  their  impact  with  respect  to  the  strategic  objectives  of  the  Community,  to 
Article 158  of  the  Treaty  and  to  the  specific  structural  problems  affecting  the 
Member  States  and  regions  concerned,  while  taking  account  of  the  needs  of 
sustainable  development  and  of  the  relevant  Community  legislation  concerning 
environmental impact and strategic environmental assessment. 

Evaluation  can  be  of  a  strategic  nature  in  order  to  examine  the  evolution  of  a 
programme  or  group  of  programmes  in  relation  to  Community  and  national 
priorities. It can be of an operational nature in order to support the monitoring of an 
operational  programme.  Evaluations  are  carried  out  before,  during  and  after  the 
programming period. 

The  evaluation  activities  referred  to  in  paragraph 1  shall  be  organised  under  the 
responsibility of the Member State or the Commission, as appropriate, in accordance 
with  the  principle  of  proportionality  and  on  the  basis  of  a  partnership  between  the 
Member State and the Commission. Evaluations shall be carried out by independent 
assessors. The results shall be published, except where the authority responsible for 
the  evaluation expressly objects in accordance with Regulation (EC) No 1049/2001 
on access to documents11. 

Evaluations shall be financed from the budget for technical assistance. 

The  Commission  establishes  the  evaluation  methods  and  standards  to  be  applied  in 
accordance with the procedure referred to in Article 104(2). 

2. 

3. 

4. 

5. 

11 

OJ L 118, 19.5.2000, p. 26. 

EN 

47 

   EN 

 
                                                 
Article 46 

Responsibility of Member States 

1. 

2. 

3. 

4. 

5. 

The  Member  States  shall  provide  the  human  and  financial  resources  necessary  for 
carrying out evaluations, organise the production and gathering of the necessary data 
and use the various types of information provided by the monitoring system.  

They  shall  also  draw  up,  under  the  “Convergence”  objective,  an  evaluation  plan  to 
improve  the  management  of  operational  programmes  and  their  evaluation  capacity. 
This  plan  presents  the  indicative  evaluation  activities  the  Member  State  intends  to 
carry out in the different phases of the implementation. 

Member  States  shall  carry  out  an  ex-ante  evaluation  for  the  national  strategic 
reference  framework  to  assess  the  impact  of  the  intervention  proposed  and  the 
coherence  with  the  Community  strategic  guidelines  and  the  national  and  regional 
priorities chosen. 

Member States shall carry out an ex-ante evaluation for each operational programme 
under the “Convergence” objective.  

For the “Regional competitiveness and employment” objective, they shall carry out 
either  an  evaluation  covering  all  the  operational  programmes  or  an  evaluation  for 
each  Fund  or  an  evaluation  for  each  priority  or  an  evaluation  for  each  operational 
programme. 

Ex-ante evaluation shall aim to optimise the allocation of budgetary resources under 
operational  programmes  and  improve  programming  quality.  It  shall  identify  and 
appraise  medium-  and  long-term  needs,  the  goals  to  be  achieved,  the  results 
expected, the quantified targets, the coherence, if necessary, of the strategy proposed 
for  the  region,  the  Community  value-added,  the  extent  to  which  the  Community’s 
priorities  have  been  taken  into  account,  the  lessons  drawn  from  previous 
programming  and  the  quality  of  the  procedures  for  implementation,  monitoring, 
evaluation and financial management. 

To appraise the progress of programming in relation to the commitments taken at the 
beginning of the period, to the integration of the Community strategic guidelines, and 
to the national strategic reference framework, each Member State shall carry out, at 
the latest in 2010, either an evaluation covering all the operational programmes for 
each objective, or an evaluation for each operational programme. 

During the programming period, Member States carry out ad hoc evaluation linked to 
the  monitoring  of  operational  programmes  where  the  monitoring  of  programmes 
reveals  a  significant  departure  from  the  goals  initially  set  and  where  proposals  are 
made  for  the  revision  of  operational  programmes.  The  results  shall  be  sent  to  the 
monitoring committee for the operational programme and to the Commission. 

EN 

48 

   EN 

 
Article 47 

Responsibility of the Commission 

1. 

2. 

3. 

The Commission shall carry out evaluations to prepare and monitor the Community 
strategic guidelines. 

The  Commission  may  carry  out,  at  its  initiative  or  in  partnership  with  the  Member 
State concerned, ad hoc evaluations as referred to in Article 46(5). 

The  Commission  shall  carry  out  an  ex-post  evaluation  for  each  objective  in 
cooperation with the Member State and managing authorities, who shall provide for 
the gathering of the necessary data.  

It shall cover all the operational programmes under each objective and examine the 
extent  to  which  resources  were  used,  the  effectiveness  and  efficiency  of  Fund 
programming,  the  socio-economic  impact  and  the  impact  on  the  Community’s 
priorities.  

It shall be carried out for each of the Objectives and shall aim to draw conclusions 
for the policy on economic, social and territorial cohesion.  

It  shall  identify  the  factors  contributing  to  the  success  or  failure  of  the 
implementation of operational programmes, including in terms of sustainability, and 
identify good practice. 

Ex-post evaluation shall be completed by 31 December 2015. 

CHAPTER II 
RESERVES 

Article 48 

Community reserve for quality and performance 

1. 

Within the context of the annual debate referred to in Article 29, the Council shall in 
2011,  in  accordance  with  the  procedure  laid  down  in  Article  161  of  the  Treaty, 
allocate  the  reserve  referred  to  in  Article  20  among  the  Member  States  to  reward 
progress made as compared with the initial situation: 

a) 

for the “Convergence” objective, on the basis of the following criteria: 

i) 

growth  in  the  per  capita  gross  domestic  product  measured  at  NUTS II 
level,  in  relation  to  the  Community  average,  on  the  basis  of  the  data 
available for the 2004-2010 period; 

ii) 

growth in the employment rate at NUTS II level, on the basis of the data 
available for the 2004-2010 period; 

EN 

49 

   EN 

 
 
 
b) 

for the “Regional competitiveness and employment” objective, on the basis of 
the following criteria: 

i) 

pro  rata  to  those  regions  having  spent  between  2007  and  2010  at  least 
50% of their ERDF allocation on innovation-related activities as referred 
to in Article 5(1) of Regulation (EC) No […]; 

ii) 

growth in the employment rate at NUTS II level, on the basis of the data 
available for the 2004-2010 period. 

2. 

Each  Member  State  shall  allocate  the  amounts  concerned  among  operational 
programmes taking into account the criteria referred to in the previous paragraph. 

Article 49 

National contingency reserve 

1. 

2. 

The  Member  State  shall  reserve  an  amount  of  1%  of  the  Structural  Fund  annual 
contribution for the “Convergence” objective and 3% of the Structural Fund annual 
contribution for the “Regional competitiveness and employment” objective to cover 
unforeseen local or sectoral crises linked to economic and social restructuring or to 
the consequences of trade opening.  

This  reserve  assists  the  adaptability  of  the  concerned  workers  and  the  economic 
diversification  of  the  regions  concerned,  as  a  complement  to  the  operational 
programmes.  

Each  Member  State  proposes  specific  operational  programmes  for  the  budgetary 
commitments covering the entire period in order to respond to the crises referred to 
in the previous paragraph. 

TITLE V 

FINANCIAL CONTRIBUTION BY THE FUNDS 

CHAPTER I 
CONTRIBUTION OF THE FUNDS 

Article 50 

Modulation of the contribution rates 

The contribution of the Funds shall be modulated in the light of the following: 

EN 

50 

   EN 

 
a) 

b) 

c) 

d) 

1. 

2. 

3. 

the gravity of the specific problems, in particular of an economic, social or territorial 
nature; 

the  importance  of  each  priority  for  the  Community’s  priorities  as  set  out  in  the 
strategic guidelines of the Community; 

protection and improvement of the environment, principally through the application 
of  the  precautionary  principle,  the  principle  of  preventive  action,  and  the  polluter-
pays principle; 

the  rate  of  mobilisation  of  private  financing,  in  particular  under  public-private 
partnerships, in the fields concerned. 

Article 51 

Contribution by the Funds 

The decision adopting an operational programme shall fix the maximum rate and the 
maximum amount of the contribution by Fund for each operational programme under 
each  priority.  The  decision  shall  show  separately  the  appropriations  for  regions 
receiving transitional support. 

The  contribution  from  the  Funds  shall  be  calculated  in  relation  to  the  total  public 
expenditure. 

The  contribution  from  the  Funds  for  each  priority  shall  be  subject  to  the  following 
ceilings: 

a) 

b) 

c) 

d) 

e) 

85% of the public expenditure co-financed by the Cohesion Fund; 

75%  of  the  public  expenditure  co-financed  by  the  ERDF  or  the  ESF  under 
operational programmes in regions eligible under the “Convergence” objective; 

50% of  the  public  expenditure  co-financed  by  the  ERDF  or  the  ESF  under 
operational  programmes  under 
and 
the 
employment” objective; 

competitiveness 

“Regional 

75%  of  the  public  expenditure  co-financed  by  the  ERDF  under  operational 
programmes under the “European territorial cooperation” objective; 

the  co-financing  rate  for  specific  measures  financed  under  the  additional 
allocation for the outermost regions provided for in Article 5(4) shall be 50% 
of the public expenditure. 

By derogation to point b), where the regions are located in a Member State covered 
by the Cohesion Fund, the Community contribution may rise, in exceptional and duly 
justified cases, to a maximum of 80% of the public expenditure co-financed by the 
ERDF or the ESF. 

EN 

51 

   EN 

 
4. 

The  maximum  contribution  from  the  Funds  shall  be  increased  to  85%  of  public 
expenditure for operational programmes under the “Convergence” and the “Regional 
competitiveness  and  employment”  objectives  in  the  outermost  regions  and  for 
operational  programmes  of  the  outlying  Greek  islands  under  the  “Convergence” 
objective. 

Article 52 

Increase of the contribution 

1. 

Notwithstanding  the  ceilings  set  out  in  Article  51,  the  ERDF  contribution  for 
priorities of operational programmes may be increased by: 

a) 

b) 

10 percentage  points  for 
Article 36(4),  point  b),  under 
competitiveness and employment” objectives; 

the 

interregional  cooperation  as  referred 

“Convergence” 

and 

to 
in 
“Regional 

5 percentage  points  under  the  “Regional  competitiveness  and  employment” 
objective where the priority principally concerns areas with a geographical or 
natural handicap, defined as follows: 

i) 

island Member States eligible under the Cohesion Fund, and other islands 
except those where the capital of a Member State is sited or which have a 
fixed link to the mainland. 

ii)  mountain  areas  as  defined  by  the  national  legislation  of  the  Member 

State; 

iii) 

iv) 

sparsely (less than 50 inhabitants per square kilometre) and very sparsely 
(less than 8 inhabitants per square kilometre) populated areas; 

the  areas  which  were  external  borders  of  the  Community  on  30  April 
2004 and which are no longer so since that date. 

The increase for areas with a geographical or natural handicap must not result in the 
total  support  granted  for  a  priority  exceeding  60%  of  public  expenditure  on  that 
priority. 

2. 

Notwithstanding the ceilings set out in Article 51, the ESF contribution for priorities 
of operational programmes under the “Convergence” and “Regional competitiveness 
and employment” objectives for actions in favour of interregional and transnational 
cooperation may be increased by 10 percentage points. These actions shall be part of 
a specific priority. 

EN 

52 

   EN 

 
Article 53 

Other provisions 

1. 

2. 

3. 

4. 

5. 

1. 

2. 

3. 

4. 

The contribution from the Funds for each priority shall not be less than 20% of the 
public expenditure. 

Technical  assistance  measures  implemented  at  the  initiative  of  or  on  behalf  of  the 
Commission may be financed at the rate of 100%. 

During the period of eligibility referred to in Article 55(1): 

a)  A priority may receive assistance from only one Fund at a time; 

b)  An  operation  may  receive  assistance from a Fund  under only  one  operational 

programme at a time. 

For aid to businesses, public aid granted under operational programmes shall respect 
the ceilings on state aid. 

An  expenditure  co-financed  by  the  Funds  shall  not  receive  assistance  by  another 
Community financial instrument. 

CHAPTER II 
REVENUE-GENERATING PROJECTS 

Article 54 

Revenue-generating projects 

For the purposes of this Regulation, a revenue-generating project shall be any project 
involving an infrastructure the use of which involves fees borne directly by users and 
any operation resulting from the sale or rent of land or buildings. 

Public expenditure on revenue-generating projects shall be calculated on the basis of 
the investment cost less the current value of the net revenue from the investment over 
a  specific  reference  period.  The  calculation  shall  take  account  of  the  profitability 
normally expected of the category of investment concerned and of the application of 
the polluter-pays principle, and, if necessary, of the principle of equity linked to the 
relative prosperity of the Member State concerned. 

Paragraphs 1 and 2 shall not apply to projects subject to the rules on state aid within 
the meaning of Article 87 of the Treaty. 

Where  the  operation  involves  a  sale,  in  whole  or  in  part,  which  generates  revenue, 
that  revenue  must  be  deducted  from  the  base  for  calculating  the  eligible  amount 
which the Managing Authority declares to the Commission. 

EN 

53 

   EN 

 
CHAPTER III 
ELIGIBILITY OF EXPENDITURE 

Article 55 

Eligibility of expenditure 

1. 

2. 

3. 

4. 

1. 

Expenditure shall be eligible for a contribution from the Funds if it has actually been 
incurred by the beneficiary for carrying out an operation between 1 January 2007 and 
31 December 2015. Operations co-financed must not have been completed before the 
starting date for eligibility.   

Expenditure  on  major  projects  shall  be  eligible  from  the  date  of  submission  of  the 
project to the Commission. 

Expenditure shall be eligible for a contribution from the Funds only where incurred 
for  operations  decided  on  by  the  managing authority  of  the  operational  programme 
concerned  or  under  its  responsibility,  in  accordance  with  criteria  fixed  by  the 
monitoring committee. 

A  new  expenditure,  added  at  the  moment  of  the  modification  of  an  operational 
programme referred to in Article 32, shall be eligible from the date of the reception 
by  the  Commission  of  the  request  for  modification  of  the  operational  programme. 
This  provision  shall  not  apply  to  the  operational  programmes  referred  to  in  Article 
36(5). 

The rules on the eligibility of expenditure shall be laid down at national level subject 
to the exception provided in the specific Regulations for each Fund. They cover the 
entirety of the public expenditure declared under the operational programme. 

Paragraphs 1,  2  and  3  of  this  Article  shall  be  without  prejudice  to  the  expenditure 
referred to in Article 43. 

CHAPTER IV 
DURABILITY OF OPERATIONS 

Article 56 

Durability of operations 

The  Member  State  or  managing  authority  shall  ensure  that  an  operation  retains  the 
contribution from the Funds only if that operation does not, within seven years of the 
date of the financing decision of the competent national authorities or the Managing 
Authority, undergo a substantial modification: 

EN 

54 

   EN 

 
 
a) 

b) 

affecting  its  nature  or  its  implementation  conditions  or  giving  to  a  firm  or  a 
public body an undue advantage;  

resulting  either  from  a  change  in  the  nature  of  ownership  of  an  item  of 
infrastructure or the cessation of a productive activity. 

The Managing Authority shall inform the Commission of any such modification. The 
Commission shall inform the other Member States. 

Sums unduly paid shall be recovered in accordance with Articles 99 to 103. 

The Member States and the Commission shall ensure that undertakings which are or 
have  been  subject  to  a  procedure  of  recovery  in  accordance  with  paragraph 3 
following  the  transfer  of  a  productive  activity  within  a  Member  State  or  toward 
another Member State do not benefit from a contribution from the Funds. 

2. 

3. 

4. 

TITLE VI 
MANAGEMENT, MONITORING AND CONTROLS 

CHAPTER I 
MANAGEMENT AND CONTROL SYSTEMS 

Article 57 

General principles of the management and control systems 

1. 

The management and control systems of operational programmes set up by Member 
States shall provide for: 

a) 

b) 

a clear definition of the functions of the bodies concerned in management and 
control and a clear allocation of functions within each body; 

a  clear  separation  of  functions  between  bodies  concerned  in  management, 
certification  of  expenditure  and  control  and  between  those  functions  within 
each body; 

c) 

adequate resources for each body to carry out the functions allocated to it; 

d) 

effective internal audit arrangements; 

e) 

f) 

reliable  accounting,  monitoring  and 
computerised form; 

financial 

reporting 

systems 

in 

an  effective  system  of  reporting  and  monitoring  where  the  performance  of 
tasks is delegated; 

g) 

the existence of manuals of procedures for the functions to be performed; 

EN 

55 

   EN 

 
h) 

effective arrangements for auditing the proper operation of the system; 

i) 

j) 

systems and procedures to ensure an adequate audit trail; 

reporting  and  monitoring  procedures  of  irregularities  and  of  recovery  of 
amounts unduly paid. 

2. 

The  measures  laid  down  in  paragraph  1,  points b),  c),  d),  f),  and  h)  shall  be 
proportionate to public expenditure under the operational programme concerned. 

Article 58 

Designation of authorities 

1. 

For each operational programme the Member State shall designate the following: 

a) 

b) 

c) 

a  managing  authority:  an  authority,  or  public  or  private  national,  regional  or 
local body designated by the Member State, or the Member State itself when it 
carries out that task, to manage an operational programme; 

a certifying authority: a body or local, regional or national authority designated 
by the Member State to certify declarations of expenditure and applications for 
payment before they are sent to the Commission; 

an audit authority: a body operationally independent of the managing authority 
and  the  certifying  authority  designated  by  the  Member  State  for  each 
operational programme and responsible for verifying the sound operation of the 
management and control system. 

In addition to the authorities referred to in the previous paragraph, the Member State 
shall  also  designate  a  competent  body  for  receiving  the  payments  made  by  the 
Commission  and  a  body  or  bodies  responsible  for  making  payments  to  the 
beneficiaries. 

The Member State shall lay down rules governing its relations with those authorities 
and bodies and their relations with the Commission.  

Without  prejudice  to  this  Regulation,  the  Member  State  shall  lay  down  the  mutual 
relations of those authorities, which shall carry out their tasks in full accordance with 
the institutional, legal and financial systems of the Member State concerned. 

Subject to Article 57(1), point b), several or all management, payment, certification 
and control functions may be carried out by the same body. 

Specific rules on management and control shall be laid down in the Regulation (EC) 
No  […],  for  operational  programmes  under  the  “European  territorial  cooperation” 
objective. 

The  Commission  adopt  detailed  rules  to  implement  Articles  59,  60  and  61  in 
accordance with the procedure referred to in Article 104(3). 

2. 

3. 

4. 

5. 

6. 

EN 

56 

   EN 

 
Article 59 

Functions of the Managing Authority 

The Managing Authority shall be responsible for managing and implementing the operational 
programme efficiently, effectively and correctly and in particular for: 

a) 

b) 

c) 

d) 

e) 

f) 

g) 

h) 

i) 

j) 

ensuring  that  operations  are  selected  for  funding  in  accordance  with  the  criteria 
applicable  to  the  operational  programme  and  that  they  comply,  for  their  whole 
implementation period, with applicable Community and national rules; 

verifying  the  delivery  of  the  co-financed  products  and  services  and  that  the 
expenditure  declared  for  operations  has  actually  been  incurred  and  complies  with 
Community and national rules; 

ensuring  that  there  is  a  system  for  recording  and  storing  in  computerised  form 
detailed accounting records of each operation under the operational programme and 
that  the  data  on  implementation  necessary  for  financial  management,  monitoring, 
control and evaluation is collected; 

ensuring  that  beneficiaries  and  other  bodies  involved  in  the  implementation  of 
operations  maintain  either  a  separate  accounting  system  or  an  adequate  accounting 
code for all transactions relating to the operation; 

ensuring that the evaluations of operational programmes referred to in Article 46 are 
carried out within the time limits laid down in this Regulation and meet the quality 
standards agreed between the Commission and the Member State; 

setting up procedures to ensure that all documents regarding expenditure and audits 
required  to  ensure  an  adequate  audit  trail  are  held  in  accordance  with  the 
requirements of Articles 88 and 98; 

ensuring  that  the  certifying  authority  receives  all  necessary  information  on  the 
procedures  and  audits  carried  out  in  relation  to  expenditure  for  the  purpose  of 
certification; 

leading the Monitoring Committee and providing it with the documents required to 
permit  the  quality  of  the  implementation  of  the  operational  programme  to  be 
monitored in the light of its specific goals; 

drawing  up  and,  after  approval  by  the  Monitoring  Committee,  submitting  to  the 
Commission the annual and final reports on implementation; 

ensuring  compliance  with  the  information  and  publicity  requirements  laid  down  in 
Article 68; 

k) 

providing the Commission with information to allow it to appraise major projects. 

EN 

57 

   EN 

 
Article 60 

Functions of the Certifying Authority 

The Certifying Authority of an operational programme shall be responsible in particular for: 

a) 

drawing  up  and  submitting  to  the  Commission  certified  statements  of  expenditure 
and applications for payment in computerised form; 

b) 

certifying that: 

i) 

ii) 

the  statement  of  expenditure  is  accurate,  results  from  reliable  accounting 
systems and is based on verifiable supporting documents, 

the  expenditure  declared  complies  with  applicable  Community  and  national 
rules  and  has  been  incurred  in  respect  of  operations  selected  for  funding  in 
accordance with the criteria applicable to the programme and complying with 
Community and national rules; 

ensuring  for  the  purposes  of  certification  that  it  has  received  adequate  information 
from the Managing Authority on the procedures and audits carried out in relation to 
expenditure included in statements of expenditure; 

taking account for the purposes of certification of the results of all audits carried out 
by or under the responsibility of the Audit Authority; 

maintaining accounting records in computerised form of expenditure declared to the 
Commission; 

ensuring the recovery of any Community financing found to have been unduly paid 
as a result of irregularities detected, together with interest where appropriate, keeping 
an  account  of  amounts  recoverable  and  repaying  amounts  recovered  to  the 
Commission,  where  possible  by  deducting  them  from  the  next  statement  of 
expenditure. 

c) 

d) 

e) 

f) 

Article 61 

Functions of the Audit Authority 

1. 

The Audit Authority of an operational programme shall be responsible in particular 
for: 

a) 

b) 

ensuring  that  audits  are  carried  out  in  accordance  with  international  audit 
standards  to  verify  the  effective  operation  of  the  management  and  control 
system of the operational programme; 

ensuring that audits are carried out on operations on the basis of an appropriate 
sample to verify expenditure declared; 

EN 

58 

   EN 

 
c) 

presenting  to  the  Commission  within  six  months  of  the  approval  of  the 
operational  programme  an  audit  strategy  covering  the  bodies  which  will 
perform the audits referred to under subparagraphs a) and b), the method to be 
used, the sampling method for audits on operations and the indicative planning 
of audits to ensure that the main bodies are audited and that audits are spread 
evenly throughout the programming period; 

d)  where  common  systems  apply  in  more  than  one  operational  programme,  a 
single combined audit strategy may be submitted under subparagraph c); 

e) 

by 30 June each year from 2008 to 2016: 

i) 

ii) 

establishing an annual control report setting out the findings of the audits 
carried  out  in  accordance  with  the  audit  strategy  in  respect  of  the 
operational  programme  during  the  previous  year  and  reporting  any 
shortcomings found in the systems for the management and control of the 
programme. The information concerning years the 2014 and 2015 may be 
included in the final report to accompany the declaration of validity; 

issuing an opinion as to whether the management and control system has 
operated effectively to give a reasonable assurance on the correctness of 
the  statements  of  expenditure  presented  to  the  Commission  during  that 
year and the legality and regularity of the underlying transactions. 

f) 

g) 

providing the information on the audits and opinions, which can be grouped in 
a  single  report  when  a  common  system  applies  to  several  operational 
programmes; 

providing a declaration at the closure of the operational programme assessing 
the validity of the application for payment of the final balance and the legality 
and regularity of the underlying transactions covered by the final statement of 
expenditure, which shall be supported by a final control report. 

2. 

Where  the  audits  referred  to  in  subparagraphs a)  and  b)  are  carried  out  by  a  body 
other  than  the  Audit  Authority,  the  Audit  Authority  shall  ensure  that  such  bodies 
have  the  necessary  operational  independence  and  that  the  work  is  performed  to 
internationally accepted audit standards. 

CHAPTER II 
MONITORING 

Article 62 

Monitoring Committee 

The  Member  State  shall  set  up  a  monitoring  committee  for  each  operational  programme,  in 
agreement with the Managing Authority after consultation with the partners.  

EN 

59 

   EN 

 
Each Monitoring Committee shall be set up within three months of the decision approving the 
operational programme. 

It shall draw up its rules of procedure within the institutional, legal and financial framework 
of the Member State concerned and adopt them in agreement with the Managing Authority. 

Article 63 

Composition 

1. 

2. 

The Monitoring Committee shall be chaired by a representative of the Member State 
or the Managing Authority.  

Its composition shall be decided by the Member State and shall include the partners 
referred to in Article 10 and the Managing Authority. 

At its own initiative, a representative of the Commission may participate in the work 
of the monitoring committee in an advisory capacity. A representative of the EIB and 
the EIF may participate in an advisory capacity for those operational programmes to 
which it makes a contribution. 

Article 64 

Tasks 

The  Monitoring  Committee  shall  satisfy  itself  as  to  the  effectiveness  and  quality  of  the 
implementation of the operational programme, in accordance with the following provisions: 

a) 

b) 

c) 

d) 

e) 

f) 

it shall consider and approve the criteria for selecting the operations financed within 
four  months  of  the  approval  of  the  operational  programme.  The  selection  criteria 
shall be revised in accordance with programming needs; 

it  shall  periodically  review  progress  made  towards  achieving  the  specific  targets  of 
the  operational  programme  on  the  basis  of  documents  submitted  by  the  Managing 
Authority; 

it shall examine the results of implementation, particularly achievement of the targets 
set for each priority and the evaluations referred to in Article 46(5); 

it shall consider and approve the annual and final reports on implementation referred 
to in Article 66 before they are sent to the Commission; 

it  shall  be  informed  of  the  annual  control  report  and  of  any  comments  the 
Commission may make after examining that report; 

at the initiative of the Member State, it may be informed of the annual report referred 
to in Article 27; 

EN 

60 

   EN 

 
g) 

h) 

1. 

2. 

it  may  propose  to  the  Managing  Authority  any  adjustment  or  review  of  the 
operational  programme  likely  to  make  possible  the  attainment  of  the  Funds’ 
objectives  referred  to  in  Article  3  or  to  improve  its  management,  including  its 
financial management; 

it shall consider and approve any proposal to amend the contents of the Commission 
decision on the contribution of the Funds. 

Article 65 

Arrangements for monitoring 

The Managing Authority and the Monitoring Committee shall ensure the quality of 
the implementation of the operational programme. 

The Managing Authority and the Monitoring Committee shall carry out monitoring 
by  reference  to  financial  indicators  and  indicators  of  implementation,  results  and 
impact specified in the operational programme. 

Where the nature of the assistance permits, the statistics shall be broken down by sex 
and by the size of the recipient undertakings. 

3. 

The  Commission,  in  partnership  with  the  Member  States,  shall  examine  the 
indicators necessary for monitoring and evaluating the operational programme. 

Article 66 

Annual report and final report on implementation 

1. 

2. 

For  the  first  time  in  2008  and  by  30 June  each  year,  the  Managing  Authority  shall 
send  the  Commission  an  annual  report  on  the  implementation  of  the  operational 
programme. The Managing Authority shall send the Commission a final report on the 
implementation of the operational programme by 30 June 2016. 

The  reports  referred  to  in  paragraph  1  shall  include  the  following  information  in 
order to obtain a clear view of the implementation of the operational programme: 

a) 

b) 

the progress made in implementing the operational programme and priorities in 
relation to their specific, verifiable targets, with a quantification, wherever and 
whenever they lend themselves to quantification, of the physical indicators and 
the indicators of implementation, results and impact for the priority; 

the financial implementation of the operational programme, detailing for each 
priority  the  expenditure  paid  out  by  the  beneficiary  and  the  corresponding 
public  contribution,  the  total  payments  received  from  the  Commission,  and 
quantifying the financial indicators referred to in Article 65(2); 

EN 

61 

   EN 

 
 
 
c)  where  appropriate,  financial  implementation  in  areas  receiving  transitional 
support shall be presented separately within each operational programme; 

d) 

e) 

f) 

g) 

the financial implementation by field of assistance adopted by the Commission 
in accordance with the procedure referred to in Article 104(3); 

the  steps  taken  by  the  Managing  Authority  and  the  Monitoring  Committee  to 
ensure the quality and effectiveness of implementation, in particular: 

i)  monitoring  and  evaluation  measures, 

including  data  collection 

arrangements; 

ii) 

a summary of any significant problems encountered in implementing the 
operational programme and any measures taken, including in response to 
comments made under Article 67; 

iii) 

the use made of technical assistance; 

the  measures  taken  to  provide  information  on  and  publicise  the  operational 
programme; 

that  Community 

a  declaration 
law  has  been  complied  with  during 
implementation  of  the  operational  programme  and,  where  appropriate, 
identifying  any  problems  encountered  and  the  measures  taken  to  deal  with 
them; 

h) 

the progress and financing of major projects and global grants; 

i) 

j) 

information on the rules governing the grant of preferential financing in areas 
with a natural handicap; 

the  use  made  of  assistance  repaid  to  the  Managing  Authority  or  to  another 
public  authority  during  the  period  of  implementation  of  the  operational 
programme. 

The  breadth  of  information  transmitted  to  the  Commission  shall  be  proportional  to 
the total amount of public expenditure of the operational programme concerned.  

The reports shall be judged acceptable where they contain all the information listed 
in  paragraph 2.  The  Commission  shall  reach  a  decision  on  the  acceptability  of  the 
annual report within 10 working days. 

The  Commission  shall  reach  a  decision  on  the  content  of  the  annual  report  on 
implementation  submitted  by  the  Managing  Authority  within  two  months.  For  the 
final report on the operational programme, the time limit shall be five months. If the 
Commission  does  not  respond  within  the  time  limit  laid  down,  the  report  shall  be 
deemed to be accepted. 

3. 

4. 

EN 

62 

   EN 

 
Article 67 

Annual examination of programmes 

1. 

2. 

3. 

Every  year,  when  the  annual  report  on  implementation  referred  to  in  Article 66  is 
submitted  and  in  accordance  with  rules  to  be  laid  down  in  agreement  with  the 
Member  State  and  the  Managing  Authority  concerned,  the  Commission  and  the 
Managing  Authority  shall  examine  the  progress  made  in  implementing  the 
operational  programme,  the  principal  results  achieved  over  the  previous  year,  the 
financial implementation and other factors with a view to improving implementation. 

Any  aspects  of  the  operation  of  the  management  and  control  system  raised  in  the 
annual control report, referred to in Article 61(1), point e) i), may also be examined. 

After  the  examination  referred  to  in  paragraph  1,  the  Commission  may  make 
comments to the Member State and the Managing Authority, which shall inform the 
Monitoring Committee thereof. The Member State  shall  inform  the  Commission  of 
the action taken in response to those comments. 

When the ex-post evaluations of assistance granted over the 2000-2006 programming 
period  are  available,  the  overall  results  shall  be  examined  in  the  next  annual 
examination. 

CHAPTER III 
INFORMATION AND PUBLICITY 

Article 68 

Information and publicity 

The Member States shall provide information on and publicise co-financed programmes and 
operations. The information shall be addressed to European citizens and to the beneficiaries. It 
shall aim to highlight the role of the Community and ensure that assistance from the Funds is 
transparent. 

The Managing Authority for the operational programme shall be responsible for publicising it 
in  accordance  with  the  implementing  rules  of  this  Regulation  adopted  by  the  Commission 
according to the procedure referred to in Article 104(3). 

EN 

63 

   EN 

 
CHAPTER IV 
CONTROLS 

SECTION 1 
RESPONSIBILITIES OF MEMBER STATES 

Article 69 

Sound financial management 

1. 

2. 

3. 

Member  States  shall  be  responsible  for  ensuring  sound  financial  management  of 
operational programmes and the legality and regularity of underlying transactions. 

They  shall  ensure  that  managing  authorities,  certifying  authorities,  intermediate 
bodies, audit authorities and any other bodies concerned receive adequate guidance 
on setting up the management and control systems referred to in Articles 57 to 61 to 
ensure that Community financing is used efficiently and correctly.  

The Member States shall prevent, detect and correct irregularities. They shall notify 
these  to  the  Commission,  in  accordance  with  the  rules,  and  keep  the  Commission 
informed of the progress of administrative and legal proceedings. 

When amounts unduly paid to a beneficiary cannot be recovered, the Member State 
is  responsible  for  reimbursing  the  amounts  lost  to  the  budget  of  the  European 
Communities, save when it proves that the loss incurred has not been caused by its 
irregularity or negligence. 

4. 

The  detailed  rules  for  implementing  paragraphs  1,  2  and  3  shall  be  adopted  in 
accordance with the procedure referred to in Article 104(3). 

Article 70 

Management and control systems 

1. 

2. 

Prior to the adoption of an operational programme, the Member States shall ensure 
that management and control systems for operational programmes have been set up 
in accordance with Articles 57 to 61. They shall be responsible for ensuring that the 
systems function effectively throughout the programming period. 

Within  three  months  of  the  approval  of  each  operational  programme,  the  Member 
States  shall  submit  to  the  Commission  a  description  of  the  systems,  covering  in 
particular the organisation and procedures of the managing and certifying authorities 
and intermediate bodies and the internal audit systems operating in those authorities 
and  bodies,  the  audit  authority,  and  any  other  bodies  carrying  out  audits  under  its 
responsibility. 

EN 

64 

   EN 

 
3. 

4. 

5. 

1. 

2. 

3. 

This  description  shall  be  accompanied  by  a  report  by  a  “compliance  assessment 
body” setting out the results of an assessment of the systems and giving an opinion 
on  their  compliance  with  Articles 57  to  61.  In  the  event  that  the  opinion  contains 
reservations,  the  report  shall  indicate  the  shortcomings  and  their  seriousness.  The 
Member State shall draw up, in agreement with the Commission, a plan setting out 
the corrective measures to be taken and the timetable for their implementation. 

The  “compliance  assessment  body”  shall  be  designated  at  the  latest  when  the 
operational programme is adopted. The Commission may accept the Audit Authority 
for the operational programme as the “compliance assessment body” where it has the 
necessary  capacity.  The  “compliance  assessment  body”  must  have  the  necessary 
operational  independence  and  must  carry  out  its  work  to  international  audit 
standards. 

Where systems are used for more than one operational programme, a description of 
the common systems may be notified under paragraphs 2 and 3 in a single report. 

The detailed rules for implementing paragraphs 1 to 4 shall be adopted in accordance 
with the procedure referred to in Article 104(3). 

SECTION 2 
RESPONSIBILITIES OF THE COMMISSION 

Article 71 

Responsibilities of the Commission 

The  Commission  shall  satisfy  itself  in  accordance  with  the  procedure  laid  down  in 
Article 70 that the Member States have set up management and control systems that 
comply with Articles 57 to 61 and on the basis of the annual control reports and its 
own audits that the systems function effectively during the period of implementation 
of the operational programmes. 

Without prejudice to audits carried out by Member States, Commission officials or 
authorised Commission representatives may carry out on-the-spot audits to verify the 
effective  operation  of  the  management  and  control  systems,  which  may  include 
audits on operations included in the operational programme, with a minimum of one 
working  day’s  notice.  Officials  or  authorised  representatives  of  the  Member  State 
may take part in such audits. 

The Commission may require a Member State to carry out an on-the-spot check to 
verify  the  correct  functioning  of  the  systems  or  the  correctness  of  one  or  more 
transactions.  Commission  officials  or  authorised  Commission  representatives  may 
take part in such audits. 

EN 

65 

   EN 

 
1. 

2. 

3. 

1. 

2. 

Article 72 

Cooperation with the control bodies of the Member States 

the  audit  authorities  of  operational 
The  Commission  shall  cooperate  with 
programmes to coordinate their respective control plans and audit methods and shall 
immediately  exchange  the  results  of  audits  carried  out  on  management  and  control 
systems  in  order  to  make  the  best  possible  use  of  control  resources  and  to  avoid 
unjustified duplication of work.  

The Commission and the Audit Authorities shall meet on a regular basis, generally at 
least  once  a  year,  in  order  to  examine  together  the  annual  audit  report  presented 
under Article 61 and to exchange views on other issues relating to the improvement 
of the management and control of the operational programmes.  

The  Commission  shall  provide  its  comments  on  the  audit  strategy  presented  under 
Article 61 not later than three months or at the first meeting following its reception. 

In  determining  its  own  audit  strategy,  the  Commission  shall  identify  those 
operational  programmes  for  which  the  opinion  on  the  compliance  of  the  system 
under Article 61 is without reservations, or where reservations have been withdrawn 
following  corrective  measures,  where  the  audit  strategy  of  the  Audit  Authority  is 
satisfactory and where reasonable assurance has been obtained that the management 
and control systems function effectively on the basis of the results of audits by  the 
Commission and the Member State.  

For  those  programmes,  the  Commission  may  inform  the  Member  States  concerned 
that  it  will  rely  principally  on  the  opinion  of  the  Audit  Authority  as  to  the 
correctness, legality and regularity of expenditure declared and will carry out its own 
on-the-spot audits only in exceptional circumstances. 

SECTION 3 
PROPORTIONAL PROVISIONS IN THE SPHERE OF CONTROL 

Article 73 

Proportional control arrangements 

For programmes for which the level of co-financing from Community funds does not 
exceed 33% of public expenditure under the operational programme and the amount 
of the Funds does not exceed EUR 250 million, the provisions referred to in Article 
61, points c), d), and e) i) do not apply. 

For the programmes referred to in paragraph 1, the Member State may exercise the 
option to establish according to national rules the bodies and procedures for carrying 
out the functions laid down in Articles 59, point b), and in Articles 60 and 61. Where 
a Member State exercises this option, the provisions of Article 58(1), points b) and 
c), and of Articles 60(1), point c) shall not apply. 

EN 

66 

   EN 

 
3. 

4. 

When the Commission adopts the implementing rules of article 59, 60 and 61, it shall 
specify the provisions which shall not apply to those Member States which exercise 
the option referred to in the first subparagraph. 

Article 70(3)  shall  apply  mutatis  mutandis  where  a  Member  State  exercises  the 
option referred to in paragraph 2, first subparagraph. 

For  all  operational  programmes  referred  to  in  paragraph  1,  and  irrespective  of 
whether  a  Member  State  exercises  the  option  referred  to  paragraph  2,  where  the 
opinion  on  the  compliance  of  the  system  has  no  reservations,  or  where  all 
reservations  have  been  withdrawn  following  corrective  measures,  the  Commission 
may inform the Member State concerned that it will rely principally on the opinion 
provided by the Audit Authority, or the body designated by the Member State where 
it has exercised the option referred to, as to the correctness, legality and regularity of 
expenditure declared and will carry out its own on-the-spot audits only in exceptional 
circumstances. 

In the event that there are indications of irregularities which have not been detected 
in a timely way by the national audit authorities or which have not been subject to 
appropriate  corrective  measures,  the  Commission  may  require  the  Member  state  to 
carry out audits in accordance with Article 71(3) or it may carry out its own audits 
under  Article  71(2)  in  order  to  obtain  assurance  on  the  correctness,  legality  and 
regularity of expenditures declared. 

TITLE VII 

FINANCIAL MANAGEMENT  

CHAPTER I 
FINANCIAL MANAGEMENT 

SECTION 1 
BUDGET COMMITTMENTS 

Article 74 

Budget commitments 

1. 

The  Community  budget  commitments  in  the  operational  programmes  (hereinafter 
“budget  commitments”)  shall  be  effected  annually  for  each  Fund  during  a  period 
between 1 January 2007 and 31 December 2013. The first budget commitment shall 
be  made  before  the  adoption  by  the  Commission  of  the  decision  approving  the 
operational  programme.  Each  subsequent  commitment  shall  be  made  by  the 
Commission  on  the  basis  of  the  decision  to  grant  a  contribution  from  the  Funds 
referred to in Article 31. 

EN 

67 

   EN 

 
2. 

1. 

2. 

3. 

4. 

When  the  Member  State  does  not  propose  any  modification  of  the  operational 
programmes referred to in Article 36(5) or any payment has been made, the Member 
State  may  request,  by  September  30th  of  the  year  n  at  the  latest,  the  transfer  of  the 
commitments  of  the  operational  programmes  related  to  the  national  contingency 
reserve  to  other  operational  programmes.  The  Member  State  shall  specify  in  its 
request the operational programmes benefiting from that transfer. 

SECTION 2 
COMMON RULES FOR PAYMENTS 

Article 75 

Common rules for payments 

Payments  by  the  Commission  of  the  contribution  from  the  Funds  shall  be  made  in 
accordance  with  the  budget  commitments.  All  payments  shall  be  posted  to  the 
earliest open budget commitment. 

Payments shall take the form of pre-financing, interim payments and payment of the 
balance. They shall be made to the body designated by the Member State. 

At the latest by 31 January every year, the Member States shall send the Commission 
an  update  of  the  payment  request  forecasts  for  the  current  financial  year  and  the 
subsequent financial year. 

All  exchanges  concerning  financial  transactions  between  the  Commission  and  the 
authorities  designated  by  the  Member  States  shall  be  made  by  electronic  means  in 
accordance with the implementing rules adopted by the Commission according to the 
procedure referred to in Article 104(3).  

Article 76 

Rules for calculating interim payments and payments of the balance 

Interim  payments  and  payments  of  the  balance  shall  be  calculated  by  applying  the  co-
financing rate for each priority to public expenditure certified under that priority on the basis 
of a statement of expenditure certified by the authority responsible for certification. 

Article 77 

Statement of expenditure 

1. 

All  statements  of  expenditure  shall  include,  for  each  priority,  the  amount  of 
expenditure  incurred  by  beneficiaries  in  implementing  the  operations  and  the 
corresponding  contribution  from  public  funds.  Expenditure  paid  by  beneficiaries 

EN 

68 

   EN 

 
shall  be  substantiated  by  receipted  invoices  or  accounting  documents  of  equivalent 
probative value. 

As  regards  aid  schemes  within  the  meaning  of  Article  87  of  the  Treaty  only, 
expenditure  certified  to  the  Commission  shall  be  expenditure  paid  by  the 
beneficiaries for which a payment has been made by the body granting the aid. 

Statements  of  expenditure  shall  highlight,  for  each  operational  programme, 
expenditure paid relating to the regions receiving transitional assistance.  

As  regards  financial  engineering  actions  and  in  particular  venture  capital  funds, 
guarantee funds and loan funds, the expenditure certified to the Commission shall be 
the  expenditure  paid  in  establishing  such  funds. However  at  the  closure  of  the 
operational programme the expenditure shall be determined on the basis of the actual 
payments out of each Fund together with eligible management costs. 

Article 78 

Accumulation of pre-financing and of interim payments 

The  cumulative  total  of  pre-financing  and  interim  payments  made  shall  not  exceed 
95% of the Funds’ contribution to the operational programme. 

When this ceiling is reached, the certification authority shall continue transmitting to 
the Commission any certified expenditure on the 31 December of the year n, as well 
as the amounts recovered during the year for each Funds, at the latest by 31 January 
of year n+1.  

2. 

3. 

1. 

2. 

Article 79 

Wholeness of payment to beneficiaries 

Member  States  shall  satisfy  themselves  that  the  body  responsible  for  making  the  payments 
ensures that the beneficiaries receive the total amount of the contribution from public funds as 
quickly  as  possible  and  in  full.  No  amounts  shall  be  deducted  or  withheld,  nor  any  further 
specific charge or other charge with equivalent effect shall be levied that would reduce these 
amounts for the beneficiaries. 

Article 80 

Use of the euro 

Commission decisions on operational programmes, Commission commitments and payments, 
and  the  amounts  of  certified  expenditure  and  requests  for  payment  from  the  Member  States 
shall be denominated and carried out in euro, in accordance with the procedure referred to in 
Article 104(3). 

EN 

69 

   EN 

 
 
 
SECTION 3 
PRE-FINANCING 

Article 81 

Payment 

1. 

2. 

Following the Commission decision approving the contribution from the Funds to an 
operational  programme,  a  single  pre-financing  amount  shall  be  paid  by  the 
Commission to the body designated by the Member State. This pre-financing amount 
shall  represent  7%  of  the  contribution  from  the  Structural  Funds  and  10.5%  of  the 
contribution  from  the  Cohesion  Fund  to  that  operational  programme.  It  may  be 
spread over two financial years, in accordance with the availability of budget funds. 

The total amount paid as pre-financing shall be reimbursed to the Commission by the 
body  designated  by  the  Member  State  if  no  payment  request  under  the  operational 
programme is sent within twenty-four months of the date on which the Commission 
pays the first instalment of the pre-financing amount. 

Article 82 

Interests 

Any interest generated by the pre-financing shall be posted to the operational programme in 
question  and  must  be  deducted  from  the  amount  of  public  expenditure  declared  in  the  final 
statement of expenditure. 

Article 83 

Clearance 

The  amount  paid  as  pre-financing  shall  be  cleared  from  the  accounts  when  the  operational 
programme is closed. 

SECTION 4 
INTERIM PAYMENTS 

Article 84 

Interim payments 

1. 

Interim payments shall be made for each operational programme.  

EN 

70 

   EN 

 
 
2. 

The  Commission  shall  make  the  interim  payments,  subject  to  obtaining  reasonable 
assurance that the management and control systems for the operational programmes 
established  by  the  Member  State  are  in  accordance  with  Articles  58  to  61.  This 
assurance shall be based on the report by the independent audit body referred to in 
Article 70.  

Article 85 

Acceptability of payment requests 

1. 

Each  interim  payment  made  by  the  Commission  shall  be  subject  to  the  following 
conditions being met: 

a) 

b) 

c) 

d) 

the  Commission  must  have  been  sent  a  payment  request  and  statement  of 
expenditure, in accordance with Article 75; 

no  more  than  the  maximum  amount  of  assistance  from  the  Funds  may  have 
been granted during the whole period for each priority; 

the managing authority must have sent the Commission the most recent annual 
implementation  report  by 
in  accordance  with 
Article 66(3); 

the  required  deadline, 

neither  suspension  of  payments  as  detailed  in  Article  91  nor  any  reasoned 
opinion by the Commission in respect of an infringement under Article 226 of 
the Treaty, as regards the operation(s) for which the expenditure was incurred 
according to the payment request in question. 

If one of the conditions referred to in paragraph 1 is not met, the Member State and 
the certification authority shall be informed as soon as possible by the Commission 
that the payment request is unacceptable. 

Article 86 

Date of presentation of payment requests and payment delays 

The  certification  authority  shall  ensure  that  requests  for  interim  payments  for 
operational programmes are grouped together and sent to the Commission, as much 
as  possible,  on  three  separate  occasions  a  year.  For  a  payment  to  be  made  by  the 
Commission in the current year, the latest date on which a payment request may be 
submitted is 31 October. 

Subject  to  available  funding,  the  Commission  shall  make  the  interim  payment  no 
later than two months after the date on which a payment request meeting the above 
conditions referred to in Article 85 is registered. 

2. 

1. 

2. 

EN 

71 

   EN 

 
SECTION 5 
PAYMENT OF BALANCE AND PROGRAMME CLOSURE 

Article 87 

Conditions for the payment of the balance  

1. 

The  Commission  shall  pay  the  balance  provided  it  has  received  the  following 
documents by 30 June 2016: 

a) 

b) 

c) 

a  request  for  payment  of  the  balance  and  a  statement  of  expenditure  in 
accordance with Article 75; 

the  final  implementation  report  for  the  operational  programme,  including  the 
information set out in Article 66; 

a statement of validity for the request for payment of the balance provided for 
in Article 61, point g), together with the final audit report; 

The payment of the balance is subject to the acceptance of the final implementation 
report and of the statement of validity for the request for payment of the balance. 

Failure  to  send  any  of  the  documents  referred  to  in  previous  paragraph  to  the 
Commission  by  30  June  2016  at  the  latest  shall  automatically  result  in  the 
decommitment of the balance, in accordance with Article 92. 

Subject to available funding, the Commission shall pay the balance within no more 
than  forty-five  days  from  the  date  on  which  it  accepts  the  final  report  and  the 
statement of validity for the request for payment of the balance. Without prejudice to 
paragraph  5,  the  balance  of  the  budgetary  commitment  shall  be  decommitted  six 
months following the payment. 

After  30  June  2016,  no  further  expenditure  not  certified  before  that  date  may  be 
added to any statements of expenditure.  

Notwithstanding  the  results  of  any  audits  performed  by  the  Commission  or  the 
European Court of Auditors, the balance paid by the Commission for the operational 
programme  can  be  amended  within  nine  months  of  the  date  on  which  it  is  paid  or, 
where there is a negative balance to be reimbursed by the Member State, within nine 
months of the date on which the debit note is issued. 

2. 

3. 

4. 

5. 

EN 

72 

   EN 

 
 
Article 88 

Conservation of documents 

The Managing Authority shall ensure that all the supporting documents regarding expenditure 
and  audits  on  the  operational  programme  concerned  are  kept  available  for  the  Commission 
and the Court of Auditors. The documents shall be kept available at least for a period three 
years  following  the  closure  of  an  operational  programme,  without  prejudice  to  the  rules 
governing  State  aid.  The  documents  shall  be  kept  either  in  the  form  of  the  originals  or  in 
versions certified to be in conformity with the originals on commonly accepted data carriers. 
This period shall be interrupted either in the case of legal proceedings or at the request of the 
Commission stating the reasons. 

SECTION 6 
INTERRUPTION, WITHHOLDING AND SUSPENSION OF PAYMENTS 

Article 89 

Interruption  

1. 

2. 

1. 

The  payment  deadline  shall  be  interrupted  by  the  authorising  officer  by  delegation 
within  the  meaning  of  Regulation  (EC,  Euratom)  No  1605/2002  for  a  maximum 
period  of  six  months  where  there  are  doubts  as  to  the  proper  functioning  of  the 
management and control systems or that officer requires additional information from 
the national authorities in the process of monitoring the observations made under the 
annual review, or if s/he suspects that serious irregularities, detected or presumed, are 
included in the expenditure declared.  

The  Commission  shall  inform  the  Member  State  and  the  certifying  authority 
immediately  of  the  reasons  for  the  interruption.  The  Member  State  shall  take  the 
necessary steps to rectify the situation as soon as possible.  

Where it proves necessary to adopt a decision in accordance with Articles 90 and 91, 
and with paragraph 1 of this Article, the period of interruption referred to above shall 
be extended for a maximum period of six months. 

Article 90 

Withholding 

The Commission shall decide to withhold from interim payments 20% of the sums to 
be  reimbursed  by  the  Commission  where  the  essential  elements  of  the  corrective 
action  plan  referred  to  in  Article  70(3)  have  been  implemented  and  the  serious 
deficiencies referred to in the annual report by the audit authority for the programme 
referred to in Article 61, point e) i), have been rectified but amendments still need to 

EN 

73 

   EN 

 
 
be  made  to  give  the  Commission  reasonable  assurance  regarding  the  management 
and control systems. 

2. 

3. 

Any withholding decision shall be adopted by the Commission after having offered 
the  Member  State  the possibility of submitting observations within a period of two 
months. 

The balance of interim payments shall be paid when all the required measures have 
been  adopted.  Otherwise,  a  financial  correction  may  be  applied  in  accordance  with 
Article 100. 

Article 91 

Suspension 

1. 

All or part of the interim payments at the level of priorities or programmes may be 
suspended by the Commission where: 

a) 

b) 

there  is  a  serious  deficiency  in  the  management  and  control  system  of  the 
programme  which  affects  the  reliability  of  the  procedure  for  certification  of 
payments and for which corrective measures have not been taken; or 

expenditure  in  a  certified  statement  of  expenditure  is  linked  to  a  serious 
irregularity which has not been corrected; or 

c) 

a Member State has not complied with its obligations under Articles 69 and 70. 

2. 

3. 

The  Commission  may  decide  to  suspend  interim  payments  after  having  given  the 
Member  State  the  opportunity  to  present  its  observations  within  a  period  of  two 
months. 

The  Commission  shall  end  suspension  of  interim  payments  where  it  considers  that 
the  Member  State  has  taken  the  necessary  measures  to  enable  the  suspension  to  be 
lifted.  Where  the  required  measures  are  not  taken  by  the  Member  State,  the 
Commission  may  adopt  a  decision  to  reduce  the  net  amount  or  cancel  the 
Community  contribution  to  the  operational  programme  in  accordance  with 
Article 100. 

SECTION 7 
AUTOMATIC DECOMMITTMENT 

Article 92 

Principles 

1. 

The Commission shall automatically decommit any part of a budget commitment in 
an operational programme that has not been used for payment of the pre-financing or 

EN 

74 

   EN 

 
2. 

3. 

interim payments, or for which it has not received an acceptable payment request, as 
defined  in  Article  85,  by  31 December  of  the  second  year  following  the  year  of 
budget commitment under the programme. 

That  part  of  commitments  still  open  on  31  December  2015  shall  be  automatically 
decommitted if the Commission has not received an acceptable payment request for 
it by 30 June 2016. 

If this Regulation enters into force after 1 January 2007, the period after which the 
first  automatic  decommitment  as  referred  to  in  paragraph  1  may  be  made  shall  be 
extended,  for  the  first  commitment,  by  the  number  of  months  between  1 January 
2007 and the date of the first budget commitment. 

Article 93 

Delays for major projects and aid regimes 

Where a subsequent Commission decision  is  required to authorise a major project or an aid 
scheme, the annual amounts potentially concerned by the automatic decommitment referred to 
in Article 92(1) shall be corrected by the difference between the schedule of the major project 
or of the aid scheme initially transmitted by the Member State and the schedule of the major 
project or of the aid scheme, which is established at the time of the Commission decision on 
the major project or the aid scheme. The annual schedule may be modified in accordance with 
the procedure referred to in Article 40(3), in exceptional and duly justified cases. 

Article 94 

Interruption of delay for legal proceedings and administrative appeals 

The period for automatic decommitment referred to in Article 92(1) shall be interrupted, for 
the amount relating to the operations concerned, for  the  duration of legal proceedings or an 
administrative appeal having suspensory effect, on condition that the Member State sends the 
Commission information stating the reasons by 31 December of year n+2.  

For  that  part  of  commitments  still  open  on  31  December  2015,  the  time  limit  referred  to  in 
Article 92(2) shall be interrupted under the same conditions as those for the amount relating to 
the operations concerned. 

Article 95 

Exceptions to the automatic decommitment 

The following shall be disregarded in calculating the automatic decommitment: 

a) 

that part of the budget commitment for which a payment request has been made but 
whose  reimbursement  has  been  interrupted,  withheld  or  suspended  by  the 
Commission on 31 December of year n+2 in accordance with Article 89, 90 and 91. 

EN 

75 

   EN 

 
b) 

c) 

1. 

2. 

Whether  these  amounts  are  finally  taken  into  account  or  not  shall  depend  on  the 
outcome  of  the  problem  resulting  in  the  withholding,  interruption  or  suspension  of 
payment. 

that part of the budget commitment for which a payment request has been made but 
whose  reimbursement  has  been  capped  in  particular  due  to  a  lack  of  budget 
resources.  

that  part  of  the  budget  commitment  for  which  it  has  not  been  possible  to  make  an 
acceptable  payment  request  for  reasons  of  force  majeure  seriously  affecting 
implementation  of  the  operational  programme.  The  national  authorities  claiming 
force majeure must demonstrate the direct consequences on the implementation of all 
or part of the operational programme. 

Article 96 

Procedure 

The  Commission  shall  inform  the  Member  State  and  the  authorities  concerned  in 
good  time  whenever  there  is  a  risk  of  application  of  the  automatic  decommitment 
provided for in Article 92. The Commission shall inform the Member State and the 
authorities concerned of the amount of the automatic decommitment resulting from 
the information in its possession.  

The  Member  State  shall  have  two  months'  time  from  the  date  of  receipt  of  that 
information to agree to the amount or submit its observations. The Commission shall 
carry out the automatic decommitment not later than nine months after the time limit 
referred to in Article 92. 

The Fund’s contribution to the operational programme shall be reduced, for the year 
concerned,  by  the  amount  automatically  decommitted.  The  Member  State  shall 
produce a revised financing plan to spread the reduced amount of assistance over the 
priorities  of  the  operational  programme.  Failing  this,  the  Commission  shall  reduce 
the amounts allocated to each priority in proportion. 

SECTION 8 
PARTIAL CLOSURE 

Article 97 

Partial closure 

1. 

Partial  closure  of  operational  programmes  may  be  made  at  periods  selected  by  the 
Member State. 

Partial  closure  shall  relate  to  completed  operations  for  which  a  final  payment  has 
been  made  to  the  beneficiary  not  later  than  31 December  of  year  n-1.  For  the 

EN 

76 

   EN 

 
purposes  of  this  Regulation,  operations  shall  be  deemed  completed  where  the 
activities under it have been actually carried out and the beneficiary has received a 
final payment or the beneficiary has provided a document of equivalent effect to the 
managing authority. 

2. 

The amount of payments corresponding to completed operations shall be identified in 
the statements of expenditure. 

Partial  closure  shall  be  made  on  condition  that  the  managing  authority  sends  the 
following to the Commission by 30 June of year n: 

a) 

b) 

a statement of expenditure relating to those operations;  

a statement certifying the legality and regularity of the transactions concerned 
by  the  statement  of  expenditure,  issued  by  the  audit  authority  for  the 
programme referred to in Article 61. 

Article 98 

Withholding of documents 

1. 

2. 

The managing authority shall keep available to the Commission a list of completed 
operations for which a final payment has been received.  

The  managing  authority  shall  ensure  that  all  the  supporting  documents  regarding 
expenditure  and  audits  on  the  operations  concerned  are  kept  available  for  the 
Commission  and  the  European  Court  of  Auditors.  The  documents  shall  be  kept 
available  at  least  for  a  period  of  three  years  following  the  partial  closure  of  an 
operational  programme  without  prejudice  to  the  rules  governing  State  aid.  The 
documents shall be kept either in the form of the originals or in versions certified to 
be in conformity with the originals on commonly accepted data carriers. This period 
shall  be  interrupted  either  in  the  case  of  legal  proceedings  or  at  the  request  of  the 
Commission stating the reasons. 

3. 

Any financial corrections made in accordance with Articles 99 and 100 concerning 
operations subject to a partial closure shall be intended as net financial corrections. 

EN 

77 

   EN 

 
CHAPTER II 
FINANCIAL CORRECTIONS 

SECTION 1 
FINANCIAL CORRECTION BY THE MEMBER STATES 

Article 99 

Financial corrections by Member States 

1. 

2. 

3. 

The Member States shall in the first instance bear the responsibility for investigating 
irregularities, acting upon evidence of any major change affecting the nature or the 
conditions for the implementation or control of assistance and making the financial 
corrections required. 

The Member State shall make the financial corrections required in connection with 
the  individual  or  systemic  irregularities  detected  in  operations  or  operational 
programmes. The corrections made by a Member State shall consist in recovering all 
or part of the Community contribution. The Member State shall take into account the 
nature and gravity of the irregularities and the financial loss to the Fund.  

The  Community  funds  released  in  this  way  may  be  re-used  by  the  Member  State 
until  31 December  2015  for  the  operational  programme  concerned  in  accordance 
with the provisions referred to in paragraph 3.  

Member  States  shall  include  in  the  annual  execution  and  control  report  sent  to  the 
Commission under Article 61 and 66 a list of cancellation proceedings initiated in the 
year concerned. 

The contribution of the Funds cancelled in accordance with paragraph 2 may not be 
re-used  for  the  operation  or  operations  that  were  the  subject  of  the  correction,  nor, 
where a financial  correction is made for  a  systemic error,  for operations  within the 
priority where this systemic error occurred.  

Member States shall inform the Commission in the report referred to in Article 66 of 
how they have decided or propose to re-use the Funds cancelled and, if appropriate, 
to amend the financial plan for the operational programme. 

4. 

In the case of systemic irregularities the Member State shall extend its enquiries to 
cover all operations liable to be affected. 

EN 

78 

   EN 

 
SECTION 2 
FINANCIAL CORRECTIONS BY THE COMMISSION 

Article 100 

Criteria for the corrections 

1. 

The  Commission  may  make  financial  corrections  by  cancelling  all  or  part  of  the 
Community  contribution  to  an  operational  programme  where  after  carrying  out  the 
necessary examination it concludes that:  

a) 

b) 

c) 

there  is  a  serious  deficiency  in  the  management  and  control  system  of  the 
programme which has put at risk the Community contribution already paid to 
the programme; 

expenditure  contained  in  a  certified  statement  of  expenditure  is  irregular  and 
has  not  been  corrected  by  the  Member  State  prior  to  the  opening  of  the 
correction procedure under this paragraph; 

a Member State has not complied with its obligations under Article 69 prior to 
the opening of the correction procedure under this paragraph. 

The  Commission  shall  base  its  financial  corrections  on  individual  cases  of 
irregularity  identified,  taking  account  of  the  systemic  nature  of  the  irregularity  to 
determine whether a flat-rate or extrapolated correction should be applied. Where the 
case  of  irregularity  relates  to  a  statement  of  expenditure  for  which  a  positive 
assurance had previously been given in accordance with the Article 61(1), point e) ii) 
in an annual control report, there will be a presumption of a systemic problem giving 
rise  to  the  application  of  a  flat-rate  or  extrapolated  correction,  unless  the  Member 
State can provide proof within two months to rebut this presumption. 

The Commission shall, when deciding the amount of a correction, take account of the 
importance  of  the  irregularity  and  the  extent  and  financial  implications  of  the 
deficiencies found in the operational programme concerned. 

Where the Commission bases its position on the facts established by auditors other 
than  those  of  its  own  services,  it  shall  draw  its  own  conclusions  regarding  the 
financial  consequences,  after  examining  the  measures  taken  by  the  Member  State 
concerned under Article 70, the reports supplied under Regulation (EC) No 1681/94, 
and any replies from the Member State. 

When a Member State doe not respect its obligations as referred to in Article 13(4), 
the  Commission  may  make  a  financial  correction  by  cancelling  all  or  part  of  the 
Community contribution to the Member State concerned. 

2. 

3. 

4. 

5. 

EN 

79 

   EN 

 
Article 101 

Procedure 

1. 

Before  taking  a  decision  on  a  financial  correction,  the  Commission  shall  open  the 
procedure  by  informing  the  Member  State  of  its  provisional  conclusions  and 
requesting the Member State to submit its comments within two months. 

Where the Commission proposes financial corrections on the basis of extrapolation 
or  at  a  flat  rate,  the  Member  State  shall  be  given  the  opportunity  to  demonstrate, 
through  an  examination  of  the  files  concerned,  that  the  actual  extent  of  irregularity 
was less than the Commission's assessment. In agreement with the Commission, the 
Member State may limit the scope of this examination to an appropriate proportion 
or sample of the files concerned. Except in duly justified cases, the time allowed for 
this examination shall not exceed a further period of two months after the two-month 
period referred to above.  

The Commission shall take account of any evidence supplied by the Member State 
within the time limits. 

Where  the  Member  State  does  not  accept  the  provisional  conclusions  of  the 
Commission, the Member State shall be invited to a hearing by the Commission, in 
which  both  sides  in  cooperation  based  on  the  partnership  make  efforts  to  reach  an 
agreement concerning the observations and the conclusions to be drawn from them. 
The  Commission shall  take a decision on the financial correction in the absence of 
agreement within six months of the date of the hearing. If no hearing takes place, the 
six-month period shall begin to run from the date of reception of the Member State’s 
rejection of the invitation to a hearing. 

Article 102 

Repayment 

Any repayment due to be made to the Commission shall be effected before the due 
date indicated in the order for recovery drawn up in accordance with Article 72 of the 
implementing  rules  of  the  Financial  Regulation  applicable  to  the  general  budget  of 
the European Communities12. This due date shall be the last day of the second month 
following the issuing of the order. 

Any  delay  in  effecting  repayment  shall  give  rise  to  interest  on  account  of  late 
payment, starting on the due date and ending on the date of actual payment. The rate 
of such interest shall be one-and-a-half percentage points above the rate applied by 
the  European  Central  Bank  in  its  main  refinancing  operations  on  the  first  working 
day of the month in which the due date falls. 

2. 

3. 

1. 

2. 

12 

Regulation (EC) No 2352/2002, OJ L 351, 28.12.2002. 

EN 

80 

   EN 

 
                                                 
Article 103 

Obligations of Member States 

A financial correction by the Commission shall not prejudice the Member State's obligation to 
pursue recoveries under  Article 100 and to recover  state  aid  under  Article  14  of  Regulation 
(EC) No 659/1999. 

TITLE VIII 

COMMITTEES 

CHAPTER I 
ERDF, COHESION FUND AND FUND COORDINATION COMMITTEE 

Article 104 

Committee and procedures  

1. 

2. 

3. 

4. 

5. 

The  Commission  shall  be  assisted  by  the  ERDF,  Cohesion  Fund  and  Fund 
Coordination Committee (hereinafter: the “committee”). 

Where  reference  is  made  to  this  paragraph,  the  advisory  procedure  laid  down  in 
Article  3  of  Decision  1999/468/EC  shall  apply,  in  compliance  with  Article  7(3) 
thereof. 

Where reference is made to this paragraph, the management procedure laid down in 
Article  4  of  Decision  1999/468/EC  shall  apply,  in  compliance  with  Article  7(3) 
thereof. 

The period referred to in Article 4(3) of Decision 1999/468/EC is fixed at one month. 

The committee shall draw up its rules of procedure.  

The EIB and the EIF shall appoint a non-voting representative. 

EN 

81 

   EN 

 
CHAPTER II 
COMMITTEE UNDER ARTICLE 147 OF THE TREATY 

Article 105 

Committee under Article 147 of the Treaty 

1. 

2. 

3. 

The Committee set up under Article 147 of the Treaty which assists the Commission 
in the management of the ESF, shall be composed of one government representative, 
one  representative  of  the  workers'  organisations  and  one  representative  of  the 
employers' organisations from each Member State. The Member of the Commission 
responsible  for  chairing  the  Committee  may  delegate  that  responsibility  to  a  senior 
Commission official. 

Each  Member  State  shall  appoint  an  alternate  for  each  representative  of  each 
category  referred  to  in  the  previous  paragraph.  In  the  absence  of  one  member,  the 
alternate shall be automatically entitled to take part in the proceedings. 

The members and alternates shall be appointed by the Council, acting on a proposal 
from  the  Commission,  for  a  period  of  three  years.  They  may  be  reappointed.  The 
Council shall, as regards the composition of the Committee, endeavour to ensure fair 
representation  of  the  different  groups  concerned.  For  the  items  on  the  agenda 
affecting it, the EIB and the EIF may appoint a non-voting representative. 

4. 

The Committee shall be consulted where it discusses the following questions: 

a) 

b) 

draft Commission decisions on the strategic national reference frameworks;  

the categories of technical assistance measures referred to in Article 43 in the 
case of support from the ESF. 

5. 

The Commission may consult the Committee on questions other than those referred 
to in paragraph 4. 

TITLE IX 

FINAL PROVISIONS 

Article 106 

Transitional provisions  

1. 

This Regulation shall not affect the continuation or modification, including the total 
or partial cancellation, of assistance approved by the Council or by the Commission 
on the basis of Regulations (EEC) No 2052/88, (EEC) No 4253/88, (EC) No 1164/94 

EN 

82 

   EN 

 
and (EC) No 1260/1999, or any other legislation which applies to that assistance on 
31 December 2006. 

2. 

3. 

In  drawing  up  Community  assistance,  the  Commission  shall  take  account  of  any 
measure already approved by the Council or by the Commission before the entry into 
force of this Regulation and having financial repercussions during the period covered 
by that assistance.  

Partial  sums  committed  for  assistance  approved  by  the  Commission  between 
1 January 2000 and 31 December 2006 for which the documents required for closure 
of  the  assistance  have  not  been  sent  to  the  Commission  by  the  deadline  for 
submitting the final report shall be automatically decommitted by the Commission no 
later than 31 December 2010, giving rise to the repayment of amounts unduly paid. 

The documents required for closure of the assistance shall be the request for payment 
of  the  balance,  the  final  implementation  report  and  the  statement  drawn  up  by  a 
person  or  department  having  a  function  independent  of  the  managing  body 
summarising  the  conclusions  of  the  audits  carried  out  and  assessing  the  validity  of 
the  request  for  payment  of  the  final  balance  and  the  legality  and  regularity  of  the 
transactions  covered  by  the  final  certificate  of  expenditure,  as  referred  to  in 
Article 38(1)(f) of Regulation (EC) No 1260/1999.  

Amounts  relating  to  operations  or  programmes  which  have  been  suspended  due  to 
legal  proceedings  or  administrative  appeals  having  suspensory  effect  shall  be 
disregarded in calculating the amount to be automatically decommitted. 

Article 107 

Review clause 

The Council shall review this Regulation on by 31 December 2013 at the latest in accordance 
with the procedure laid down in Article 161 of the Treaty. 

Article 108 

Repeal 

Regulation (EC) No 1260/99 is hereby repealed with effect from 1 January 2007. 

References  to  Regulation  (EC)  No  1260/99  shall  be  construed  as  references  to  this 
Regulation. 

EN 

83 

   EN 

 
 
Article 109 

Entry into force  

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

It shall apply from 1 January 2007. 

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

Done at Brussels,  

For the Council 
The President 

EN 

84 

   EN 

 
 
 
 
 
ANNEX  

STRUCTURAL FUNDS AND COHESION FUND 

Annual breakdown of commitment appropriations for 2007 to 2013 
(referred to in Article 15) 

2007 

2008 

2009 

2010 

2011 

2012 

2013 

46 333 

47 168 

47 879 

48 024 

48 163 

48 923 

49 704 

(EUR million – 2004 prices) 

EN 

85 

   EN 

 
 
LEGISLATIVE FINANCIAL STATEMENT 

Policy area(s): Cohesion for growth and employment 

Activit(y/ies): 

TITLE  OF  ACTION:  COUNCIL  REGULATION  LAYING  DOWN  GENERAL  PROVISIONS  FOR  THE 
EUROPEAN  REGIONAL  DEVELOPMENT  FUND,  THE  EUROPEAN  SOCIAL  FUND  AND  THE 
COHESION FUND 

1. 

2. 

BUDGET LINE(S) + HEADING(S) 

OVERALL FIGURES  

2.1. 

Total allocation for action (Part B): 336 194 € million for commitment 

2.2. 

Period of application: 

1 January 2007 – 31 December 2013 

2.3. 

Overall multiannual estimate of expenditure: 

(a) 

Schedule  of  commitment  appropriations/payment  appropriations 
intervention) (see point 6.1.1) 

(financial 

€ million (to three decimal places) 

Commitments 

Year 
[n] 
49 021 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

[n+5 and 
subs. 
Years] 

Total 

50 903

52 704

53 921

55 159 

116 373 

378 082

Payments 

16 611 

29 483

33 468

38 808

45 042 

98 296 

261 709

(b) 

Technical and administrative assistance and support expenditure(see point 6.1.2) 

Commitments 

Payments 

148 

50 

153

89

159

101

162

117

166 

136 

350 

1 138

296 

787

Subtotal a+b 

Commitments 

46 169 

51 056

52 863

54 083

55 325  116 723 

379 219

Payments 

16 661 

29 572

33 570

38 924

45 178 

98 591 

262 496

EN 

86 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(c) 

Overall  financial  impact  of  human  resources  and  other  administrative  expenditure 
(see points 7.2 and 7.3) 

Les  besoins  en  ressources  humaines  et  administratives  seront  couverts  à  l’intérieure  de  la 
dotation allouée à la DG gestionnaire dans le cadre de la procédure d’allocation annuelle. 

L'allocation  de  postes  dépendra  d'une  part  de  l'organisation  interne  de  la  prochaine 
Commission  et  d'autre  part  d'une  éventuelle  réallocation  de  postes  entre  services  suite  aux 
nouvelles perspectives financières. 

TOTAL a+b+c 

Commitments 

Payments 

2.4. 

Compatibility with financial programming and financial perspective 

X 

Proposal is compatible with existing financial programming. 

Cette proposition est compatible avec la proposition de la Commission pour les 
perspectives financiers 2007-2013 [COM(2004)101 final du 10.02.2004]. Elle 
s’inscrit dans le cadre de la rubrique 1 « Croissance durable ». 

Proposal  will  entail  reprogramming  of  the  relevant  heading  in  the  financial 
perspective. 

Proposal  may  require  application  of  the  provisions  of  the  Interinstitutional 
Agreement. 

2.5. 

Financial impact on revenue:13 

X 

Proposal  has  no  financial  implications  (involves  technical  aspects  regarding 
implementation of a measure) 

OR 

Proposal has financial impact – the effect on revenue is as follows: 

(NB All details and observations relating to the method of calculating the effect on 
revenue should be shown in a separate annex.) 

13 

For further information, see separate explanatory note. 

EN 

87 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Budget line 

Revenue 

 (€ million to one decimal place) 

Prior to
action 
[Year 
n-1] 

[Yea
r n] 

Situation following action 

[n+1] [n+2] [n+3

[n+4]  [n+5] 

] 

a) Revenue in absolute terms 

b) Change in revenue 

 ∆ 

(Please specify each budget line involved, adding the appropriate number of rows 
to the table if there is an effect on more than one budget line.) 

3. 

BUDGET CHARACTERISTICS 

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
form applicant 
countries 

Heading in 
financial 
perspective 

Non-comp 

Diff 

YES/ 

NO 

NO 

No 1b 

4. 

LEGAL BASIS  

Article 161 

5. 

DESCRIPTION AND GROUNDS 

Voir  document  “Analyse  d’impact  étendue  de  la  proposition  de  paquet  législative  portent 
révision  des  règlements  applicables  à  la  gestion  des  Fonds  structurels  et  du  Fonds  de 
cohésion

EN 

88 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6. 

FINANCIAL IMPACT 

6.1. 

Total financial impact on Part B - (over the entire programming period) 

(The method of calculating the total amounts set out in the table below must be explained by 

the breakdown in Table 6.2. )6.1.1.  Financial intervention 

Commitments (in € million to three decimal places) 

Breakdown 

[Year 
n] 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

Total 

[n+5 
and 
subs. 
Years] 

Action 1 

Action 2 

etc. 

TOTAL  49 021 

50 903 

52 704 

53 921 

55 159 

116 373 

378 082 

EN 

89 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.1.2.  Technical  and  administrative  assistance,  support  expenditure  and  IT  expenditure 

(commitment appropriations) 

[Year 
n] 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

Total 

[n+5 
and 
subs. 
years] 

1) 
administrative assistance 

Technical 

and 

Technical 

a) 
offices

assistance 

b)  Other 
administrative assistance: 

technical 

and 

- intra muros: 

- extra muros: 

of  which  for  construction 
and 
of 
maintenance 
computerised  management 
systems 

Subtotal 1 

2) Support expenditure 

a) Studies 

b) Meetings of experts 

c) Information and 
publications 

Subtotal 2 

TOTAL  148 

153 

159 

162 

166 

350 

1 138 

EN 

90 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.2. 

Calculation  of  costs  by  measure  envisaged  in  Part  B  (over  the  entire 
programming period)14 

(Where  there  is  more  than  one  action,  give  sufficient  detail  of  the  specific  measures  to  be 
taken for each one to allow the volume and costs of the outputs to be estimated.) 

Breakdown  

Commitments (in € million to three decimal places) 

Type  
of outputs 
(projects, files ) 

Number of 
outputs 

Average unit 
cost 

(total for years 
1…n)  

Total cost 

(total for years 
1…n)  

1 

2 

3 

4=(2X3) 

Action 1 

- Measure 1 

- Measure 2  

Action 2 

- Measure 1 

- Measure 2 

- Measure 3 

etc. 

TOTAL COST 

If necessary explain the method of calculation 

7. 

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE  

7.1. 

Impact on human resources 

Staff to be assigned to management of the 
action using existing and/or additional 
resources 

Number of 
permanent posts 

Number of 
temporary posts 

Total 

Description of tasks deriving from the 
action 

If necessary, a fuller description of the 
tasks may be annexed. 

Types of post 

Officials 
temporary staff 

or 

A 

B 

C 

Other human resources 

Total 

14 

For further information, see separate explanatory note. 

EN 

91 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
7.2. 

Overall financial impact of human resources 

Type of human resources 

Amount (€) 

Method of calculation *  

Officials 

Temporary staff 

Other human resources 

(specify budget line) 

Total 

The amounts are total expenditure for twelve months. 

7.3. 

Other administrative expenditure deriving from the action 

Amount € 

Method of calculation 

Budget line 

(number and heading) 

Overall allocation (Title A7) 

A0701 – Missions 

A07030 – Meetings 
A07031 – Compulsory committees 1 
A07032 – Non-compulsory committees 1 

A07040 – Conferences 

A0705 – Studies and consultations 

Other expenditure (specify) 

Information systems (A-5001/A-4300) 

Other expenditure - Part A (specify) 

Total 

The amounts are total expenditure for twelve months. 

1 Specify the type of committee and the group to which it belongs. 

I. 

II. 

Annual total (7.2 + 7.3) 

Duration of action 

III. 

Total cost of action (I x II) 

€ 

years 

€ 

(In the estimate of human and administrative resources required for the action, DGs/Services 
must take into account the decisions taken by the Commission in its orientation/APS debate 
and when adopting the preliminary draft budget (PDB). This means that DGs must show that 
human  resources  can  be  covered  by  the  indicative  pre-allocation  made  when  the  PDB  was 
adopted.  

Exceptional cases (i.e. those where the action concerned could not be foreseen when the PDB 
was  being  prepared)  will  have  to  be  referred  to  the  Commission  for  a  decision  on  whether 
and how (by means of an amendment of the indicative pre-allocation, an ad hoc redeployment 

EN 

92 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
exercise,  a  supplementary/amending  budget  or  a  letter  of  amendment  to  the  draft  budget) 
implementation of the proposed action can be accommodated.) 

8. 

FOLLOW-UP AND EVALUATION 

8.1. 

Follow-up arrangements 

Un  comité  de  pilotage  est  créé  pour  chaque  programme  opérationnel  par  l'État  membre,  en 
accord  avec  l'autorité  de  gestion  après  consultation  des  partenaires.  Le  comité  de  pilotage 
s'assure  de  l'efficacité  et  de  la  qualité  de  la  mise  en  oeuvre  de  l'intervention.  Il  examine  et 
approuve les critères de sélection des opérations financées, évalue périodiquement les progrès 
réalisés  pour  atteindre  les  objectifs  spécifiques  du  programme  opérationnel,  examine  les 
résultats  de  la  mise  en  œuvre  et  examine  et  approuve  le  rapport  annuel  d'exécution  et  le 
rapport final d'exécution avant leur envoi à la Commission 

L'autorité  de  gestion  et  le  comité  de  pilotage  assurent  le  suivi  au  moyen  d'indicateurs  de 
résultat, y compris les indicateurs physiques, d’impact et financiers définis dans le programme 
opérationnel. Ces indicateurs se réfèrent au caractère spécifique du secteur de l’Etat membre 
et  aux  objectifs  poursuivis.  La  Commission  en  partenariat  avec  les  Etats  membres  et  en 
conformité avec le principe de proportionnalité examine les indicateurs nécessaires au suivi et 
à l’évaluation du programme opérationnel.  

L'autorité  de  gestion  envoie  un  rapport  annuel  d'exécution  et  de  contrôle  du  programme 
opérationnel à la Commission, dans les six mois suivant la fin de chaque année civile entière 
de mise en oeuvre. Avant leur transmission à la Commission, chaque rapport est examiné et 
approuvé par le comité de pilotage. 

8.2. 

Arrangements and schedule for the planned evaluation 

Les  programmes  opérationnels  des  Etats  membres  pour  la  mise  en  œuvre  du  Fonds  font 
l’objet d’une évaluation ex-ante, d’une évaluation intermédiaire et d’une évaluation ex-post. 

L’évaluation ex-ante vise à optimiser l’allocation des ressources budgétaires des programmes 
opérationnels  et  améliorer  la  qualité  de  la  programmation.  Elle  est  conduite  sous  la 
responsabilité de l’Etat membre. 

L’évaluation intermédiaire vise à examiner l’efficacité des programmes opérationnels en vue 
de leur adaptation pour améliorer la qualité des interventions et leur mise en œuvre. Elle est 
réalisée  lorsque  le  suivi  des  programmes  font  apparaître  que  les  réalisations  s’écartent  de 
manière  significative  des  objectifs  initialement  prévus  ou  lorsque  des  modifications 
substantielles  sont  proposées.  Elle  est  organisée  à  l’initiative  de  l’autorité  de  gestion,  en 
concertation  avec  la  Commission  ou  à  l’initiative  de  la  Commission  en  concertation  avec 
l’autorité de gestion.  

L’évaluation  ex-post  est  conduite  sous  la  responsabilité  de  la  Commission  en  concertation 
avec l’Etat membre et l’autorité de gestion qui doit assurer la collecte des données nécessaires 
à  sa  réalisation.  Elle  est  finalisée  au  plus  tard  deux  ans  à  la  fin  de  la  période  de 
programmation,  les  principaux  résultats  sont  intégrés  dans  les  rapports  de  clôture  des 
programmes. 

EN 

93 

   EN 

 
9. 

ANTI-FRAUD MEASURES 

La Commission s’assure de l’existence et du bon fonctionnement dans les Etats membres des 
systèmes de gestion et de contrôle. Elle se base également sur les rapports annuels de contrôle 
et sur ses propres contrôles sur place pour vérifier le bon fonctionnement des ces systèmes. La 
Commission  coopère  avec  les  autorités  nationales  d’audit  des  programmes  opérationnels, 
avec lesquelles elles se réunit au moins une fois par an.  

En  cas  de  défaillance  des  systèmes  de  gestion  et  de  contrôle  nationaux,  la  Commission 
interrompt, retient ou réduit tout ou partie des paiements. 

La  Commission  peut  effectuer  des  corrections  financière  en  annulant  tout  ou  partie  de  la 
contribution communautaire pour un programme opérationnel lorsqu’elle constate qu’il existe 
des  déficiences  dans  les  systèmes  de  gestion  et  de  contrôle  qui  mettent  en  péril  les 
contributions  communautaires  déjà  octroyées,  que  les  déclarations  des  dépenses  sont 
irrégulières et n’ont pas fait l’objet de mesures de correction par les Etats membres ou que les 
Etats  membres  n’ont  pas  donné  suite  aux  observations  formulées  par  la  Commission  sur  le 
rapport annuel d’exécution et de contrôle établit par l’autorité de gestion. 

EN 

94 

   EN