Proposal for a Regulation of the European Parliament and of the Council laying down the rules for the participation of undertakings, research centres and universities in actions under the Seventh Framework Programme and for the dissemination of research results (2007-2013)
Date: 2005-12-23
Institutions: European Commission
Subjects: EU programme, cooperation policy, dissemination of information, research and development, research programme, research results, type of business, university

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 23.12.2005 
COM(2005) 705 final 

2005/0277 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

laying down the rules for the participation of undertakings, research centres 
and universities in actions under the Seventh Framework Programme and 
for the dissemination of research results (2007-2013) 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

The  Commission’s  proposal  for  the  Seventh  Framework  Programme  (FP7),  adopted  on  6 
April  2005,  was  accompanied  by  a  Commission  Staff  working  document  “Simplification  in 
the  7th  Framework  Programme”  setting  out  10  main  measures  to  be  implemented,  and 
highlighting the importance of simplification as a “critical success factor”.  

The  Commission’s  proposal  for  the  Rules  for  Participation  for  the  Seventh  Framework 
Programme provides the vehicle for implementing many aspects of that simplification and to 
build upon principles established in FP6. 

2. 

LEGAL BASIS 

This  proposal  for  a  Regulation  of  the  European  Council  and  Parliament  is  based  on  Article 
167 of Chapter XVIII of the European Community Treaty that foresees the adoption of rules 
for  participation  of  undertakings,  research  centres  and  universities  and  rules  for  the 
dissemination  of  results  to  implement  the  Community  multi-annual  framework  programme 
for research. These rules define the rights and obligations of legal entities wishing to take part 
in  the  framework  programme  and  establish  the  principles  for  the  use  and  dissemination  of 
their  work  resulting  from  that  participation.  The  Seventh  Framework  Programme  is 
implemented  in  accordance  with  the  provisions established  by  the  Financial  Regulation  and 
its implementing rules, and the state aid rules, in particular the rules on state aid for research 
and development.  

3. 

PRIOR CONSULTATION 

Stakeholders,  Member  States  and  Associated  states  have  been  consulted  on  the  possible 
changes to the FP7 Rules for Participation in seminars and via a consultation website. Further 
the Sounding Board of smaller actors has been consulted on the proposals in order to ensure 
that the changes will not create disadvantages for such participants. 

4. 

CONTENT 

The  current  proposal  contains  four  chapters:  introductory  provisions  (subject  matter, 
definitions  and  confidentiality  ),  participation  in  indirect  actions  (minimum  conditions  to 
participate,  procedural  aspects,  including  minimum  numbers  of  participants,  their  place  of 
establishment,  proposal  submission  and  evaluation,  implementation  and  grant  agreements, 
monitoring  of  projects  and  programmes,  Community  financial  contribution:  eligibility  for 
funding  and  forms  of  grants,  reimbursement  rates,  payment,  distribution,  recovery  and 
guarantees),  the  European  Investment  Bank,  and  rules  for  dissemination  and  use  and 
access rights (ownership, protection, publication, dissemination and use, and access rights to 
background and foreground). 

The  minimum  number  of  participants  and  conditions  of  place  of  establishment  of  the 
participants  is  established  according  to  the  type  of  action.  Legal  entities  established  in 
Associated countries may participate on the same basis as those established in Member States. 

The Rules identify the procedures for issuing calls for proposals and the exceptions to calls 
for proposals, for submission, evaluation, selection and award of procedures. In addition, they 

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establish the procedures for the appointment of external experts. Further detailed internal rules 
governing the procedures for submission, evaluation, selection and award of proposals are to 
be  established  by  the  Commission  and  include  provisions  relating  to  the  appointment  of 
independent  experts.  Those  rules  will  include  special  provisions  for  two-stage  submission 
procedures (which is to be used to a greater extent where applicable, for example where high 
over-subscription is expected, for very large projects and in order to limit costs of preparing 
proposals  that  may  never  be  funded,  etc.)  and  for  two-step  evaluation  (with  single 
submission).  The  evaluation  process  developed  over  previous  framework  programmes  and 
reflected in these internal rules will continue without substantial changes. Greater use will be 
made  of  remote  evaluation  where  possible  and  continued  improvements  are  being  made  to 
briefings  of  evaluators.  The  use  of  hearings  will  be  rationalised.  The  evaluation  criteria  are 
now in the Specific Programmes rather than in the Rules and can be developed further in the 
work programmes (and calls for proposals).  

Although not specified in the Rules it is proposed that full electronic submission will be the 
rule in FP7, as it has been well tested and used in FP6. Also the use of pre-filled forms/pre-
registration  using  data  from  a  central  source  and  changes  to  the  content  and  format  of 
proposals  should  permit  successful  proposals  to  begin  earlier.  A  single  registration  system 
comprising a common database for all Commission services should help significantly.  

In  order  to  ensure  consistent  assessment  of  the  financial  viability  of  the  participants  and 
related  financial  procedures,  the  Commission  will  adopt  and  publish  internal  rules  for  their 
application. 

A model grant agreement will be established by the Commission that will establish the rights 
and  obligations  of  participants  vis-à-vis  the  Community  and  each  other.  The  autonomy  and 
flexibility of the consortium, in particular with respect to changes in its composition that were 
established in FP6 will be continued. The grant agreement will come into force upon signature 
by  the  coordinator  and  Commission  authorising  officer,  as  was  the  case  in  FP6.  All 
participants  must  accede  to  the  grant  agreement  in  order  to  benefit  from  their  rights  and 
obligations under the project. 

Participants will be required to conclude consortium agreements, except where exempted by 
the call for proposals, as they were in FP6. However, many of the new provisions relating to 
intellectual property should make these easier to establish and to adapt as necessary.  

The Commission will monitor all indirect actions financed by the Community as well as the 
Seventh Framework Programme and its Specific Programmes, as and when necessary with the 
assistance of external experts. 

The participants that are eligible  for Community funding are identified in the subsection on 
Community  financial  contribution  that  also  covers  forms  of  grants,  reimbursement  rates, 
payment, distribution, recovery and guarantees. 

Three  forms  of  grants  are  proposed  for 
the  Community  financial  contribution: 
reimbursement of eligible costs, lump sums, and flat-rate financing (the latter can be based on 
scale of unit costs but also includes flat rates for indirect costs). These may be used to cover 
the  entire  Community  financial  contribution  for  a  funding  scheme  or  in  combination.  For 
most  funding  schemes,  reimbursement  of  eligible  costs  will  be  the  preferred  method, 
particularly  at  the  beginning  of  FP7.  The  use  of  lump  sum  and  flat  rate  financing  will  be 
introduced gradually and if successful will be used more extensively. 

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For  frontier  research  actions,  the  European  Research  Council’s  Scientific  Council  will 
propose  appropriate  funding  modalities  within  the  terms  established  by  the  Rules  for 
Participation  and  the  Financial  Regulation.  The  Commission  will  provide  any  necessary 
assistance to the Scientific Council to enable it to arrive at the best possible approach. 

The definition of eligible costs has been simplified and the three cost reporting models used 
in previous Framework Programmes are abandoned. This means that participants can charge 
all their direct and indirect costs and have the option of a flat rate for indirect costs. Costs will 
be  determined  according  to  the  usual  accounting  and  management  principles  of  the 
participants to achieve the project objectives based on principles of economy, efficiency and 
effectiveness. 

The  Community  financial  contribution  will  cover  a  maximum  of  50%  of  eligible  costs 
minus  receipts  both  for  research  and  for  demonstration  activities.  For  SMEs,  public  bodies, 
secondary  and  higher  education  establishments  and  non-profit  research  organisations,  there 
will be a top up of a maximum of 25% for research activities. Frontier research actions would 
be  reimbursed  at  100%  for  all  entities.  All  other  activities,  including  those  relating  to 
coordination  and  support  actions,  and  actions  for  the  training  and  career  development  of 
researchers, would be reimbursed at up to 100% for all entities.  

The maxima indicated above are applied to all eligible costs of such entities even where part 
of the reimbursement of costs is based on lump sums or flat rates. The maxima also apply to 
such entities participating in projects where flat rate financing and, where appropriate, when 
lump sum financing is used for the whole project. 

For Networks of Excellence, a special lump sum is proposed. The amount of the lump sum is 
established by the Rules as a fixed amount per researcher and per year. Periodic payments of 
portions  of  the  lump  sum  would  be  paid  according  to  the  attainment  of  indicators  showing 
progressive implementation of the Joint Programme of Activities (JPA). 

Public  bodies,  non-profit  research  organisations,  and  higher  and  secondary  education 
establishments would be permitted to provide an audit certificate established by a competent 
public officer. The number of audit certificates per grant agreement and participant would be 
reduced and reports and reporting periods are to be rationalised. 

As in FP6, participants in a consortium will have the responsibility to fully carry out the tasks 
entrusted to them even if one of the participants fails to comply with assigned tasks. However, 
the  principle  of  financial  collective  responsibility  established  in  FP6  for  most  actions  is  not 
continued  in  order  to  remove  barriers  of  participation,  in  particular  for  SMEs.  This  should 
also  accelerate  procedures  and  be  more  cost-effective.  Depending  on  an  assessment  of  the 
risks inherent in European Research funding to the Community budget, a mechanism may be 
introduced to cover the financial risk of a participant’s failure to reimburse any amount due 
to  the  Community.  This  mechanism  would  be  financed  by  a  small  contribution  from 
undertakings and other participants that are not public bodies, secondary and higher education 
establishments, or whose participation is not guaranteed by their Member State or Associated 
country.  Participants  in  actions  to  support  training  and  career  development  of  researchers, 
participants in actions for the benefit of specific groups with the exception of actions for the 
benefit  of  SMEs,  and  participants  in  frontier  research  actions  will  not  contribute  to  the 
mechanism. The contribution will be effected by retaining the amounts due. The Commission 
will explore together with the EIB ways to entrust this mechanism to the EIB. In compliance 
with  Article  18(2)  of  the  Financial  Regulation,  retained  amounts  no  longer  needed  to  cover 

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the  financial  risks  will  be  reassigned  to  research  actions  under  the  relevant  research 
framework programme. Therefore, bank guarantees will only be requested in the rare case in 
which  pre-financing  represents  over  80%  of  the  grant,  which  is  the  sole  case  for  which  the 
Financial  Regulation  imposes  the  provision  of  a  guarantee.  Also,  the  Commission  will  take 
any  actions  necessary  to  ensure  that  specific  risks  pertaining  to  a  particular  participant  are 
reduced. 

With  respect  to  the  dissemination  and  use  and  access  rights  (ownership,  protection, 
publication,  dissemination  and  use,  and  access  rights  to  background  and  foreground)  the 
objective was to keep as much continuity as possible with FP6 with only improvements/fine-
tuning  based  on  necessary  changes  that  were  identified  during  the  implementation  of  FP6. 
The main changes are a) remove most of the obligations for participants to finalise conditions 
prior  to  their  accession  to  the  EC  contract  and  b)  remove  most  obligations  to  request  prior 
approval from the Commission for publication, transfers of ownership and provision of access 
rights  to  third  parties,  where  all  other  partners  agree.  The  changes  should  allow  more 
flexibility  to  participants  as  their  projects  progress.  Changes  to  the  definitions  are: 
“background” replaces “pre-existing know-how” and no longer includes side-ground and, as a 
consequence, “foreground” replaces “knowledge”. The possibility to exclude background and 
to  define  terms  and  conditions  other  than  those  established  by  the  Rules  continues  but  in  a 
manner  that  is  much  more  flexible  and  permits  adjustments  by  participants  as  their  project 
progresses. For joint ownership a default regime for use of the results is introduced in order to 
facilitate the exploitation of jointly owned results in the absence of a clear agreement between 
parties.  Where  a  participant  does  not  wish  to  protect  knowledge  it  can  offer  the  other 
participants the option to take over ownership before offering this option to the Commission. 
In addition, it will be possible for a participant to offer exclusive access rights to a third party 
if all the other participants agree to waive their rights to access. 

The  coherence  of  dissemination  and  publication  requirements  has  been  improved.  Prior 
notification of the Commission for publication of results is eliminated. 

Additional or different provisions are included for specific actions with special requirements 
(e.g.  for  frontier  research  actions,  security  research,  research  for  the  benefit  of  specific 
groups etc.). 

Other measures that are not addressed in the Rules 

Programme Committees 

Full and timely information on projects funded will be provided to Programme Committee but 
their role in approving individual projects has been removed as reflected in the proposals for 
the  FP7  Specific  Programmes  adopted  by  the  Commission  on  21.09.05.  This  will  eliminate 
the need for a Commission decision for each project selected for funding or rejected (and all 
the  associated  internal  procedures)  which  will  speed  up  the  “time  to  contract”  process. 
Programme  Committees  will  continue  with  their important  role  of  reviewing  and  approving 
work programmes and other major policy issues, but will continue to be fully informed of all 
the processes and results of evaluations. 

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Helpdesks 

Uniform interpretation, particularly relating to legal and financial provisions of projects is to 
be ensured across all of the Commission services concerned. To a certain extent this can be 
achieved  via  the  Commission  rules  that  are  to  be  established  in  accordance  with  the 
provisions  of  the  draft  Rules  for  Participation.  However,  helpdesks  and  “clearing  houses” 
should ensure that the messages given out by the Commission are consistent and uniform. The 
assistance of an IPR helpdesk will be continued. 

Communication 

Further efforts will be made to ensure that information is as clear and accessible as possible. 
The  number  and  size  of  documents  is  to  be  reduced  and  consolidated.  Duplication  of 
information and variations in the presentation of the same information in different documents 
will be avoided. 

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2005/0277 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

laying down the rules for the participation of undertakings, research centres 
and universities in actions under the Seventh Framework Programme and 
for the dissemination of research results (2007-2013) 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 167 and the second paragraph of Article 172 thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the Opinion of the European Economic and Social Committee2, 

Having regard to the Opinion of the Court of Auditors3, 

Acting in accordance with the procedure referred to in Article 251 of the Treaty4, 

Whereas: 

(1) 

The Seventh Framework  Programme was adopted  by  Decision No  […/…/EC]  of  the 
European  Parliament  and  of  the  Council  of  […]  concerning  the  seventh  framework 
programme of the European Community for research, technological development and 
demonstration activities (2007 to 2013)5. It is the responsibility of the Commission to 
ensure the implementation of the framework programme and its specific programmes, 
including the related financial aspects. 

(2) 

The  Seventh  Framework  Programme  is  implemented  in  accordance  with  Regulation 
(EC,  Euratom)  No  1605/2002  on  the  Financial  Regulation  applicable  to  the  general 
budget  of  the  European  Communities6,  hereinafter  “the  Financial  Regulation”,  and 

1 
2 
3 
4 
5 
6 

OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
Opinion of the European Parliament of April 2005, and Council Decision of […]. 
OJ C […], […], p. […]. 
OJ L 248, 16.9.2002, p. 1. 

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(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

(11) 

Regulation  (EC,  Euratom)  No  2342/2002  laying  down  detailed  rules  for  the 
implementation of the Financial Regulation7, hereinafter “the Implementing Rules”. 

The Seventh Framework Programme is also implemented in accordance with the state 
aid rules, in particular the rules on state aid for research and development8. 

The rules for the participation of undertakings, research centres and universities should 
provide a coherent and transparent framework to ensure efficient implementation and 
ease of access for all participants in the Seventh Framework Programme. 

The Seventh Framework Programme should promote participation from the outermost 
regions  of  the  Community,  as  well  as  from  a  wide  range  of  undertakings,  research 
centres and universities. 

The  definition  of  micro,  small  and  medium-sized  enterprises  (SMEs)  provided  in 
Commission  Recommendation  2003/361/EC9  should  apply,  for  reasons  of  coherence 
and transparency. 

It  is  therefore  appropriate  to  permit  not  only  the  participation  of  legal  persons, 
provided  that  they  are  entitled  to  exercise  rights  and  assume  obligations,  but  natural 
persons.  The  participation  of  natural  persons  will  ensure  that  the  creation  and 
development of scientific excellence and ability are not limited to Community funding 
of projects involving only legal persons, ensuring also the participation of SMEs that 
are not legal persons. 

It is necessary to establish the minimum conditions for participation, both as a general 
rule  and  with  regard  to  the  specificities  of  indirect  actions  under  the  Seventh 
Framework Programme. In particular, rules should be laid down regarding the number 
of participants and their place of establishment. 

It is appropriate that any legal entity should be free to participate once the minimum 
conditions  have  been  satisfied.  Participation  over  and  above  the  minimum  should 
ensure the efficient performance of the indirect action concerned. 

International organisations dedicated to developing cooperation in the field of research 
in  Europe  and  largely  made  up  of  Member  States  or  Associated  countries  should  be 
encouraged to participate in the Seventh Framework Programme. 

In  line  with  the  objectives  of  international  cooperation  as  described  by  Articles  164 
and 170 of the Treaty, the participation of legal entities established in third countries 
should  also  be  envisaged,  as  should  the  participation  of  international  organisations. 
However, it is appropriate to require that such participation be justified in terms of the 
enhanced  contribution  thereby  made  to  the  objectives  sought  under  the  Seventh 
Framework Programme. 

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OJ L 357, 31.12.2002, p. 1, as amended by Commission Regulation (EC, EURATOM) No 1261/2005 
(OJ L 201, 2.8.2005, p. 3). 
Currently  Community  Framework 
OJ C 45, 17.2.1996, p. 5. 
OJ L 124, 20.5.2003, p. 36. 

and  Development, 

for  State  Aid 

for  Research 

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(12) 

(13) 

(14) 

(15) 

In line with the objectives mentioned above, it is necessary to establish the terms and 
conditions for providing Community funding to participants in indirect actions. 

It  is  necessary  for  the  Commission  to  establish  further  rules  and  procedures,  in 
addition to those provided for in the Financial Regulation and its Implementing Rules, 
to  govern  the  submission,  evaluation,  selection  and  award  of  proposals.  In  particular 
the rules governing the use of independent experts should be established. 

It  is  appropriate  for  the  Commission  to  establish  further  rules  and  procedures,  in 
addition to those provided for in the Financial Regulation and its Implementing Rules, 
to govern the assessment of the legal and financial viability of participants in indirect 
actions under the Seventh Framework Programme. 

In this context, the Financial Regulation and the Implementing Rules, govern inter alia 
the  protection  of  the  Community’s  financial  interests,  the  fight  against  fraud  and 
irregularity,  the  procedures  for  the  recovery  of  sums  owed  to  the  Commission, 
exclusion from contract and grant procedures and related penalties, and audits, checks, 
and  inspections  by  the  Commission  and  the  Court  of  Auditors,  pursuant  to  Article 
248(2) of the Treaty. 

(16)  The agreements concluded for each action should provide for supervision and financial 
control  by  the  Commission,  or  any  representative  authorised  by  the  Commission,  as 
well  as  audits  by  the  Court  of  Auditors  and  on-the-spot  checks  carried  out  by  the 
European Anti-Fraud Office (OLAF), in accordance with the procedures laid down in 
Council Regulation N° 2185/96. 

(17)  The  Commission  should  monitor  both  the  indirect  actions  carried  out  under  the 
Seventh  Framework  Programme  and  the  Seventh  Framework  Programme  and  its 
Specific Programmes.  

(18)  The  rules  governing  the  dissemination  of  research  results  should  ensure  that,  where 
appropriate, the participants protect the intellectual property generated in actions, and 
use and disseminate those results.  

(19)  While respecting the rights of the owners of intellectual property, those rules should be 
designed  to  ensure  that  participants  have  access  to  information  they  bring  to  the 
project and to knowledge arising from research work carried out in the project to the 
extent necessary to conduct the research work or to use the resulting knowledge. 

(20)  The obligation established in the sixth Framework Programme for certain participants 
to  take  financial  responsibility  for  their  partners  in  the  same  consortium  will  be 
waived. Depending on the level of risk associated with non-recovery of sums, part of 
the Community financial contribution may be retained to cover amounts due and not 
reimbursed  by  defaulting  partners.  The  participants  that  would  have  been  obliged  to 
cover  the  financial  responsibility  for  other  participants  would  contribute  to  risk 
avoidance, which the Commission shall retain at the time it makes payments. 

(21)  Community contributions to a joint undertaking or any other structure set up pursuant 
to Article 171 of the Treaty, or pursuant to Article 169 of the Treaty do not fall within 
the scope of this Regulation. 

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(22)  This Regulation respects the fundamental rights and observes the principles recognised 

in particular by the Charter of Fundamental Rights of the European Union. 

(23)  The Community may award a grant to the European Investment Bank (EIB) to foster 
private  sector  investment  in  eligible  large  European  RTD  actions  by  increasing  the 
capacity  of  the  Bank  to  manage  risk,  thus  allowing  for  (i)  a  larger  volume  of  EIB 
lending  for  a  certain  level  of  risk,  and  (ii)  the  financing  of  riskier  European  RTD 
actions than would be possible without such Community support. 

(24)  The  Community  may  provide  financial  support,  as  established  in  the  Financial 

Regulation, inter alia by means of: 

(a) 

public procurements, in the form of a price for goods or services established by 
contract and selected on the basis of calls for tender; 

(b)  grants; 

(c) 

subscriptions to an organisation in the form of a membership fee; 

(d)  honoraria for independent experts identified in Article 17 of this Regulation. 

HAVE ADOPTED THIS REGULATION: 

Chapter I 
Introductory provisions 

Article 1 

Subject matter 

This Regulation lays down the rules for the participation of undertakings, research centres and 
universities  and  other  legal  entities  in  actions  undertaken  by  one  or  more  participants  by 
means of funding schemes identified in part (a) of Annex III to Decision […/…] establishing 
the Seventh Framework Programme, hereinafter “indirect actions”. 

It also lays down rules, in accordance with those laid down in Regulation (EC/Euratom) No 
1605/2002,  hereinafter  “the  Financial  Regulation”,  and  Regulation  (EC/Euratom)  No 
2342/2002,  hereinafter  “the  Implementing  Rules”,  concerning  the  Community  financial 
contribution to participants in indirect actions under the Seventh Framework Programme. 

As regards the results of research carried out under the Seventh Framework Programme, this 
Regulation lays down rules for the disclosure of foreground by any appropriate means other 
than  that  resulting  from  the  formalities  for  protecting  it,  and  including  the  publication  of 
foreground in any medium, hereinafter “dissemination”. 

In  addition,  it  lays  down  rules  for  the  direct  or  indirect  utilisation  of  foreground  in  further 
research  activities  other  than  those  covered  by  the  indirect  action  concerned,  or  for 
developing,  creating  and  marketing  a  product  or  process,  or  for  creating  and  providing  a 
service, hereinafter “use”. 

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In  respect  of  both  foreground  and  background,  this  Regulation  lays  down  rules  concerning 
licences and user rights thereto, hereinafter “access rights”. 

Article 2 

Definitions 

For the purposes of this Regulation, the following definitions shall apply in addition to those 
set out in the Financial Regulation and the Implementing Rules: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

(11) 

“foreground”  means  the  results,  including  information,  whether  or  not  they  can  be 
protected,  which  are  generated  by  actions.  Such  results  include  rights  related  to 
copyright;  design  rights;  patent  rights;  plant  variety  rights;  or  similar  forms  of 
protection; 

“background”  means  information  which  is  held  by  participants  prior  to  their 
accession to the grant agreement, as well as copyrights or other intellectual property 
rights pertaining to such information, the application for which has been filed before 
their  accession  to  the  grant  agreement,  and  which  is  needed  for  carrying  out  the 
indirect action or for using the results of the indirect action; 

“research  organisation  ”  means  a  non-profit  making  organisation  which  carries  out 
scientific or technical research as its main objective; 

“third country” means a State that is not a Member State; 

“Associated  country”  means  a  third  country  which  is  party  to  an  international 
agreement with the Community, under the terms or on the basis of which it makes a 
financial contribution to all or part of the Seventh Framework Programme; 

“international organisation” means an intergovernmental organisation, other than the 
European Community, which has legal personality under international public law, as 
well as any specialised agency set up by such an international organisation; 

“international  European  interest  organisation”  means  an  international  organisation, 
the  majority  of  whose  members  are  Member  States  or  Associated  countries,  and 
whose  principal  objective  is  to  promote  scientific  and  technological  cooperation  in 
Europe; 

“international  cooperation  partner  country”  means  a  third  country  which  the 
Commission  classifies  as  a  low-income,  lower-middle-income  or  upper-middle-
income country and which is identified as such in the work programmes; 

“public body” means any legal entity established as such by national public law, and 
international organisations; 

“SMEs”  mean  micro,  small  and  medium-sized  enterprises  within  the  meaning  of 
Recommendation 2003/361/EC in the version of 6 May 2003; 

“work programme” means a plan adopted by the Commission for the implementation 
of a specific programme as identified in Article 3 of Decision […/…]; 

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(12) 

(15) 

“funding  schemes”  mean  the  mechanisms  for  the  Community  funding  of  indirect 
actions as established in part (a) of Annex III to Decision […/…]; 

“RTD  performer”  means  a  legal  entity  carrying  out  research  and  technological 
development activities for the benefit of specific groups in research projects for the 
benefit of those groups. 

Article 3 

Confidentiality 

Subject  to  the  conditions  established  in  the  grant  agreement,  appointment  letter  or  contract, 
the  Commission  and  the  participants  shall  keep  confidential  any  data,  knowledge  and 
documents communicated to them as confidential. 

Chapter II 
Participation 

SECTION 1 
MINIMUM CONDITIONS 

Article 4 

General principles 

1. 

2. 

3. 

Any  undertaking,  university  or  research  centre  or  other  legal  entity,  whether 
established  in  a  Member  State  or  Associated  country,  or  in  a  third  country,  may 
participate in an indirect action provided that the minimum conditions laid down in 
this  Chapter  have  been  met,  including  any  conditions  specified  pursuant  to  Article 
12. 

However, in the case of an indirect action as referred to in Articles 5(1), 7, 8 or 9, 
under  which  it  is  possible  for  the  minimum  conditions  to  be  met  without  the 
participation  of  a  legal  entity  established  in  a  Member  State,  the  attainment  of  the 
objectives laid down in Articles 163 and 164 of the Treaty must thereby be enhanced. 

A  legal  entity  is  any  natural  person,  or  any  legal  person  created  under  the  national 
law  of  its  place  of  establishment,  or  under  Community  law  or  international  law, 
which  has  legal  personality  and  which  may,  acting  under  its  own  name,  exercise 
rights and be subject to obligations. 

In the case of natural persons, references to establishment shall be deemed to refer to 
habitual residence. 

The Joint Research Centre of the European Commission, hereinafter “the JRC”, may 
participate  in  indirect  actions  on  the  same  footing  and  with  the  same  rights  and 
obligations as a legal entity established in a Member State. 

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Article 5 

Minimum conditions 

1. 

The minimum conditions for indirect actions shall be the following: 

2. 

1. 

2. 

(a) 

at  least  three  legal  entities  must  participate,  each  of  which  is  established  in  a 
Member  State  or  Associated  country,  and  no  two  of  which  are  established  in 
the same Member State or Associated country; 

(b) 

all  three  legal  entities  must  be  independent  of  each  other  in  accordance  with 
Article 6. 

For the purposes of point (a) of paragraph 1, where one of the participants is the JRC, 
or  an  international  European  interest  organisation  or  an  entity  created  under 
Community  law,  it  shall  be  deemed  to  be  established  in  a  Member  State  or 
Associated  country  other  than  any  Member  State  or  Associated  country  in  which 
another participant in the same action is established. 

Article 6 

Independence 

Two  legal  entities  shall  be  regarded  as  independent  of  each  other  where  neither  is 
under the direct or indirect control of the other or under the same direct or indirect 
control as the other. 

For  the  purposes  of  paragraph  1,  control  may  in  particular  take  either  of  the 
following forms: 

(a) 

the  direct  or  indirect  holding  of  more  than  50%  of  the  nominal  value  of  the 
issued share capital in the legal entity concerned, or of a majority of the voting 
rights of the shareholders or associates of that entity; 

(b) 

the direct or indirect holding, in fact or in law, of decision-making powers in 
the legal entity concerned. 

3. 

However,  the  following  relationships  between  legal  entities  shall  not  in  themselves 
be deemed to constitute controlling relationships: 

(a) 

the same public investment corporation, institutional investor or venture-capital 
company  has  a  direct  or  indirect  holding  of  more  than  50%  of  the  nominal 
value  of  the  issued  share  capital  or  a  majority  of  voting  rights  of  the 
shareholders or associates;  

(b) 

the legal entities concerned are owned or supervised by the same public body. 

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Article 7 

Indirect actions concerning international cooperation partner countries 

For  collaborative  projects  addressing  the  participation  of  international  cooperation  partner 
countries  in  parity  with  Member  States  or  Associated  countries,  as  identified  in  the  work 
programme, the minimum conditions shall be the following: 

(a) 

(b) 

(c) 

(d) 

at least four legal entities must participate; 

at  least  two  of  the  legal  entities  referred  to  in  point  (a)  must  be  established  in 
Member States or Associated countries, but no two may be established in the same 
Member State or Associated country; 

at  least  two  of  the  legal  entities  referred  to  in  point  (a)  must  be  established  in 
international  cooperation  partner  countries,  but  no  two  may  be  established  in  the 
same international cooperation partner country; 

all  four  legal  entities  referred  to  in  point  (a)  must  be  independent  of  each  other  in 
accordance with Article 6. 

Article 8 

Coordination and support actions, and training and career development of researchers 

For  coordination  and  support  actions,  and  actions  in  favour  of  training  and  career 
development  of  researchers,  the  minimum  condition  shall  be  the  participation  of  one  legal 
entity. 

The first paragraph shall not apply in the case of actions that coordinate research projects. 

Article 9 

Investigator-driven “frontier” research projects 

For  indirect  actions  to  support  investigator-driven  “frontier”  research  projects  funded  in  the 
framework  of  the  European  Research  Council,  the  minimum  condition  shall  be  the 
participation of one legal entity established in a Member State or in an Associated country. 

Article 10 

Sole participants 

Where  the  minimum  conditions  for  an  indirect  action  are  satisfied  by  a  number  of  legal 
entities,  which  together  form  one  legal  entity,  the  latter  may  be  the  sole  participant  in  an 
indirect action, provided that it is established in a Member State or Associated country. 

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Article 11 

International organisations and legal entities established in third countries 

Participation in indirect actions shall be open to international organisations and legal entities 
established  in  third  countries  after  the  minimum  conditions  laid  down  in  this  Chapter  have 
been  met,  as  well  as  any  conditions  specified  in  the  specific  programmes  or  relevant  work 
programmes. 

Article 12 

Additional conditions 

In  addition  to  the  minimum  conditions  laid  down  in  this  Chapter,  specific  programmes  or 
work programmes may lay down conditions regarding the minimum number of participants. 

They  may  also  lay  down,  according  to  the  nature  and  objectives  of  the  indirect  action, 
additional conditions to be met as regards type of participant and, where appropriate, place of 
establishment. 

SECTION 2 
PROCEDURES 

SUBSECTION 1 
CALLS FOR PROPOSALS 

Article 13 

Calls for proposals 

1. 

The  Commission  shall  issue  calls  for  proposals  for  indirect  actions  in  accordance 
with  the  requirements  laid  down  in  the  relevant  specific  programmes  and  work 
programmes. 

In  addition  to  the  publicity  specified  in  the  Implementing  Rules,  the  Commission 
shall  publish  calls  for  proposals  in  the  Internet  pages  of  the  Seventh  Framework 
Programme, through specific information channels, and at the national contact points 
set up by the Member States and the Associated countries. 

2. 

Where  appropriate,  the  Commission  shall  specify  in  the  call  for  proposals  that  the 
participants need not establish a consortium agreement. 

Article 14 

Exceptions 

The Commission shall not issue calls for proposals for the following: 

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(a) 

(b) 

(c) 

(d) 

1. 

2. 

coordination and support actions to be carried out by legal entities identified in the 
specific  programmes  or  in  the  work  programmes  when  the  specific  programme 
permits  the  work  programmes  to  identify  beneficiaries,  in  accordance  with  the 
Implementing Rules; 

coordination  and  support  actions  consisting  of  a  purchase  or  service  subject  to  the 
rules on public procurement set out in the Financial Regulation; 

coordination and support actions relating to the appointment of independent experts; 

other  actions,  where  so  provided  by  the  Financial  Regulation  or  the  Implementing 
Rules. 

SUBSECTION 2 
EVALUATION OF PROPOSALS 

Article 15 

Evaluation, selection and award 

The Commission shall evaluate all the proposals submitted in response to a call for 
proposals on the basis of the principles  for  evaluation, and the selection and  award 
criteria set out in the specific programme and the work programme. 

The  work  programme  may  set  out  specific  criteria  or  further  details  on  the 
application of the criteria. 

A proposal which contravenes fundamental ethical principles or which does not fulfil 
the conditions set out in the specific programme, the work programme or in the call 
for  proposals  shall  not  be  selected.  Such  a  proposal  may  be  excluded  from  the 
evaluation, selection and award procedures at any time. 

3. 

Proposals shall be selected on the basis of the evaluation results. 

Article 16 

Submission, evaluation, selection and award procedures 

1. 

2. 

The  Commission  shall  adopt  and  publish  rules  governing  the  procedure  for  the 
submission  of  proposals,  as  well  as  the  related  evaluation,  selection  and  award 
procedures. In particular, it shall lay down detailed rules for the two-stage procedure 
for submission, and rules for the two-step evaluation procedure. 

Where  a  call  for  proposals  specifies  a  two-stage  submission  procedure,  only  those 
proposals  that  pass  the  evaluation  criteria  for  the  first  stage  shall  be  requested  to 
submit a complete proposal in the second stage. 

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3. 

4. 

1. 

2. 

3. 

4. 

Where  a  call  for  proposals  specifies  a  two-step  evaluation  procedure,  only  those 
proposals that pass the first step, based on the evaluation of a limited set of criteria, 
shall go forward for further evaluation. 

The Commission shall adopt and publish rules to ensure consistent verification of the 
existence and legal status of participants in indirect actions as well as their financial 
capacity. 

Article 17 

Appointment of independent experts 

The  Commission  shall  appoint  independent  experts  to  assist  with  evaluations 
required under the Seventh Framework Programme, and its specific programmes. 

For coordination and support actions, referred to in Article 14, independent experts 
shall be appointed only if the Commission deems it appropriate. 

Independent  experts  shall  be  chosen  considering  the  skills  and  knowledge 
appropriate to the tasks assigned to them. 

Independent  experts  shall  be  identified  and  selected  on  the  basis  of  calls  for 
applications  from  individuals  and  calls  addressed  to  national  research  agencies, 
research  institutions  or  enterprises  with  a  view  to  establishing  lists  of  suitable 
candidates. 

The  Commission  may,  if  deemed  appropriate,  select  any  individual  with  the 
appropriate skills from outside the lists. 

Appropriate  measures  shall  be  taken  to  ensure  reasonable  gender  balance  when 
appointing groups of independent experts. 

When  appointing  an  independent  expert,  the  Commission  shall  take  all  necessary 
steps to ensure that the expert is not faced with a conflict of interests in relation to the 
matter on which the expert is required to provide an opinion. 

The  Commission  shall  adopt  a  model  appointment 
letter,  hereinafter  “the 
appointment letter”, which shall include a declaration that the independent expert has 
no conflict of interest at the time of appointment and that he undertakes to inform the 
Commission  if  any  conflict  of  interest  should  arise  in  the  course  of  providing  his 
opinion  or  carrying  out  his  duties.  The  Commission  shall  conclude  an  appointment 
letter between the Community and each independent expert. 

5. 

The Commission shall publish periodically in any appropriate medium the list of the 
independent experts that have assisted it for each specific programme. 

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SUBSECTION 3 
IMPLEMENTATION AND GRANT AGREEMENTS 

Article 18 

General 

1. 

2. 

3. 

4. 

5. 

6. 

1. 

2. 

3. 

4. 

The participants shall implement the indirect action and shall take all necessary and 
reasonable  measures  to  that  end.  Participants  in  the  same  indirect  action  shall 
implement the work jointly and severally towards the Community. 

The  Commission  shall  draw  up,  on  the  basis  of  the  model  provided  for  in  Article 
19.7 and taking into account the characteristics of the funding scheme concerned, a 
grant agreement between the Community and the participants. 

Participants shall make no commitments incompatible with the grant agreement. 

Where a participant fails to comply with its obligations, the other participants shall 
the  grant  agreement  without  any  complementary  Community 
comply  with 
contribution unless the Commission expressly relieves them of that obligation. 

If  the  implementation  of  an  action  becomes  impossible  or  if  the  participants  fail  to 
implement it, the Commission shall ensure the termination of the action. 

Participants shall ensure that the Commission is informed of any event which might 
affect the implementation of the indirect action or the interests of the Community. 

Article 19 

General provisions for inclusion in grant agreements 

The grant agreement shall establish the rights and obligations of the participants with 
regard to the Community, in accordance with Decision […/…], this Regulation, the 
Financial  Regulation,  and  the  Implementing  Rules,  and  in  accordance  with  the 
general principles of Community law. 

It  shall  also  establish,  in  accordance  with  the  same  conditions,  the  rights  and 
obligations  of  legal  entities  who  become  participants  when  the  indirect  action  is 
ongoing. 

Where appropriate, the grant agreement shall provide which part of the Community 
financial  contribution  will  be  based  on  the  reimbursement  of  eligible  costs,  and 
which part will be based on flat rates (including scale of unit costs) or lump-sums. 

The  grant  agreement  shall  specify  which  changes  in  the  composition  of  the 
consortium are to require the prior publication of a competitive call. 

The  grant  agreement  shall  require  the  submission  to  the  Commission  of  periodic 
progress reports concerning the implementation of the indirect action concerned. 

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5. 

6. 

7. 

8. 

1. 

2. 

Where  appropriate,  the  grant  agreement  may  provide  that  the  Commission  is  to  be 
notified  in  advance  of  any  intended  transfer  of  ownership  of  foreground  to  a  third 
party. 

Where  the  grant  agreement  requires  participants  to  carry  out  activities  that  benefit 
third  parties,  the  participants  shall  advertise  this  widely  and  identify,  evaluate  and 
select third parties transparently, fairly and impartially. If provided for in the work-
programme, the grant agreement shall establish criteria for the selection of such third 
parties.  The  Commission  reserves  the  right  to  object  to  the  selection  of  the  third 
parties. 

The  Commission  shall  establish  a  model  grant  agreement  in  accordance  with  this 
Regulation. 

The  model  grant  agreement  shall  reflect  the  principles  laid  down  in  the  European 
Charter  for  Researchers  and  the  Code  of  Conduct  for  the  Recruitment  of 
Researchers10. It shall address, as appropriate, synergies with education at all levels; 
readiness and capacity to foster dialogue and debate on scientific issues and research 
results with a broad public beyond the research community; activities to increase the 
participation  and  role  of  women  in  research;  and  activities  addressing  socio-
economic aspects of the research. 

Article 20 

Provisions concerning access rights, use and dissemination 

The grant agreement shall establish the respective obligations of the participants with 
regard to access rights, use and dissemination, in so far as those obligations have not 
been laid down in this Regulation. 

For those purposes, it shall require the submission to the Commission of a plan for 
the use and dissemination of foreground. 

The  grant  agreement  may  specify  the  conditions  under  which  the  participants  may 
object to a technological audit of the use and dissemination of the foreground being 
carried out by certain authorised representatives of the Commission. 

Article 21 

Provisions concerning termination 

The  grant  agreement  shall  specify  the  grounds  for  its  termination,  in  whole  or  in  part,  in 
particular for non-compliance with this Regulation, non-performance or breach, as well as the 
consequences for participants of any non-compliance on the part of another participant. 

10 

OJ L 75, 22.3.2005, p. 67. 

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Article 22 

Specific provisions 

1. 

2. 

3. 

4. 

In the case of indirect actions to support existing research infrastructures and, where 
applicable, new research infrastructures, the grant agreement may lay down specific 
provisions  relating  to  confidentiality,  publicity  and  access  rights  and  commitments 
that might affect users of the infrastructure. 

In  the  case  of  indirect  actions  to  support  training  and  career  development  of 
researchers, the grant agreement may lay down specific provisions on confidentiality, 
access rights and commitments relating to the researchers benefiting from the action. 

In  the  case  of  indirect  actions  in  the  field  of  security  and  space  research,  the  grant 
agreement  may  lay  down  specific  provisions  on  confidentiality,  classification  of 
information, access rights, transfer of ownership of foreground and the use thereof.  

Where  appropriate,  the  grant  agreement  for  indirect  actions  addressing  security 
issues,  other  than  those  referred  to  in  paragraph  3,  may  also  include  such  specific 
provisions. 

Article 23 

Signature and accession 

The  grant  agreement  shall  enter  into  force  upon  signature  by  the  coordinator  and  the 
Commission. 

It shall apply to each participant that has formally acceded thereto. 

SUBSECTION 4 
CONSORTIA 

Article 24 

Consortium agreements 

Save  where  otherwise  provided  in  the  call  for  proposals,  all  legal  entities  wishing  to 
participate  in  an  indirect  action  shall  draw  up  an  agreement,  hereinafter  “the  consortium 
agreement”, to govern the following: 

(a) 

(b) 

(c) 

the internal organisation of the consortium; 

the distribution of the Community financial contribution; 

additional  rules  on  dissemination  and  use  including  intellectual  property  rights 
arrangements, as appropriate; 

(d) 

the settlement of internal disputes. 

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Article 25 

Coordinator 

1. 

The  legal  entities  wishing  to  participate  in  an  indirect  action  shall  appoint  one  of 
their number to act as coordinator to carry out the following tasks in accordance with 
this  Regulation,  the  Financial  Regulation,  the  Implementing  Rules,  and  the  grant 
agreement: 

(a) 

to ensure that the legal entities identified in the grant agreement complete the 
necessary  formalities  for  accession  to  the  grant  agreement,  as  provided  for 
therein; 

(b) 

to receive the Community financial contribution and to distribute it ; 

(c) 

to  keep  the  financial  accounts  in  order,  to  keep  records  and  to  inform  the 
Commission  of  the  distribution  of  the  Community  financial  contribution  in 
accordance with Article 36; 

(d) 

to ensure efficient and correct communication between the participants and the 
Commission. 

2. 

The coordinator shall be identified in the grant agreement. 

The  appointment  of  a  new  coordinator  shall  require  the  written  approval  of  the 
Commission. 

Article 26 

Changes in the consortium 

1. 

2. 

3. 

The participants in an indirect action may propose the addition of a new participant 
or the removal of an existing participant. 

Any legal entity which joins an ongoing action shall accede to the grant agreement. 

Where  provided  for  in  the  grant  agreement,  the  consortium  shall  publish  a 
competitive  call  and  advertise  it  widely  using  specific  information  support, 
particularly Internet sites on the seventh framework programme, the specialist press 
and  brochures,  and  the  national  contact  points  set  up  by  the  Member  States  and 
Associated countries for information and support. 

The consortium shall evaluate offers in the light of the  criteria which governed the 
initial  action  and  with  the  assistance  of  independent  experts  appointed  by  the 
consortium, in accordance with the principles laid down in Articles 15, and Article 
17, respectively. 

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4. 

The consortium shall notify any change of its composition to the Commission, which 
may object within 45 days of the notification. 

Changes  in  the  composition  of  the  consortium  associated  with  proposals  for  other 
changes  to  the  grant  agreement  which  are  not  directly  related  to  the  change  in 
composition shall be subject to written approval by the Commission. 

SUBSECTION 5 
MONITORING OF PROGRAMMES AND INDIRECT ACTIONS AND COMMUNICATION 
OF INFORMATION 

Article 27 

Monitoring 

The  Commission  shall  monitor  the  implementation  of  indirect  actions  on  the  basis  of  the 
periodic progress reports submitted pursuant to Article 19(4). 

In  particular,  the  Commission  shall  monitor  the  implementation  of  the  plan  for  the  use  and 
dissemination of foreground, submitted pursuant to the second subparagraph of Article 20(1). 
For  those  purposes,  the  Commission  may  be  assisted  by  independent  experts  appointed  in 
accordance with Article 17. 

The  Commission  shall  monitor  the  seventh  framework  programme,  its  specific  programmes 
and, where appropriate, previous framework programmes, with the assistance of independent 
experts  appointed  in  accordance  with  Article  17.  In  addition,  it  may  set  up  groups  of 
independent experts appointed in accordance with Article 17, to advise on the implementation 
of Community research policy. 

Article 28 

Information to be made available 

1. 

2. 

Upon  request,  the  Commission  shall  make  available  to  any  Member  State  or 
Associated  country  any  useful  information  in  its  possession  on  foreground  arising 
from work carried out in the context of an indirect action, provided that the following 
conditions are met: 

(a) 

the information concerned is relevant to public policy; 

(b) 

the participants have not provided sound and sufficient reasons for withholding 
the information concerned. 

Under  no  circumstances  shall  the  provision  of  information  pursuant  to  paragraph  1 
be deemed to transfer to the recipient any rights or obligations of the Commission or 
of the participants. 

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However,  the  recipient  shall  treat  any  such  information  as  confidential  unless  it 
becomes  public  or  is  made  available  publicly  by  the  participants,  or  unless  it  was 
communicated to the Commission without restrictions on its confidentiality. 

SECTION 3 
COMMUNITY FINANCIAL CONTRIBUTION 

SUBSECTION 1 
ELIGIBILITY FOR FUNDING AND FORMS OF GRANTS 

Article 29 

Eligibility for funding 

1. 

Where  any  of  the  following  legal  entities  participates  in  an  indirect  action,  it  may 
receive a Community financial contribution: 

(a) 

any  legal  entity  established  in  a  Member  State  or  an  Associated  country,  or 
created under Community law,  

(b) 

any international European interest organisation,  

(c) 

any legal entity established in an international cooperation partner country. 

2. 

In  the  case  of  a  participating  international  organisation,  other  than  an  international 
European interest organisation, or a legal entity established in a third country other 
than  an 
international  cooperation  partner  country,  a  Community  financial 
contribution may be granted provided that at least one of the following conditions is 
satisfied: 

(a) 

provision  is  made  to  that  effect  in the specific programmes or in the relevant 
work programme,  

(b) 

it is essential for carrying out the indirect action,  

(c) 

such  funding  is  provided  for  in  a  bilateral  scientific  and  technological 
agreement or any other arrangement between the Community and the country 
in which the legal entity is established. 

Article 30 

Forms of grants 

1. 

The Community financial contribution for grants identified in part a) of Annex III to 
the Seventh Framework Programme shall be based on the reimbursement of eligible 
costs. 

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However,  the  Community  financial  contribution  may  take  the  form  of  flat  rate 
financing,  including  scale  of  unit  costs,  or  lump  sum  financing,  or  it  may  combine 
the reimbursement of eligible costs with flat rates and lump sums. The Community 
financial contribution may also take the form of scholarships or prizes. 

2. 

While  the  Community financial  contribution shall be  calculated by reference to the 
cost of the indirect action as a whole, it shall be based on the reported costs of each 
participant. 

Article 31 

Reimbursement of eligible costs 

1. 

Grants shall be co-financed by the participants. 

The Community financial contribution to reimburse eligible costs shall not give rise 
to a profit. 

2. 

3. 

Receipts shall be taken into consideration for the payment of the grant at the end of 
the implementation of the action. 

In  order  to  be  considered  eligible,  costs  incurred  for  the  implementation  of  an 
indirect action shall meet the following conditions: 

(a) 

they must be actual; 

(b) 

(c) 

(d) 

(e) 

they  must  have  been  incurred  during  the  duration  of  the  action,  with  the 
exception of final reports when provided for in the grant agreement; 

they must have been determined in accordance with the usual accounting and 
management  principles  and  practices  of  the  participant  and  used  for  the  sole 
purpose  of  achieving  the  objectives  of  the  indirect  action  and  its  expected 
results, in a manner consistent with the principles of economy, efficiency and 
effectiveness; 

they  must  be  recorded  in  the  accounts  of  the  participant  and  paid  and,  in  the 
case  of  any  contribution  from  third  parties,  they  must  be  recorded  in  the 
accounts of the third parties; 

they must be exclusive of non-eligible costs, in particular identifiable indirect 
taxes including value added tax, duties, interest owed, provisions for possible 
future losses or charges, exchange losses, cost related to return on capital, costs 
declared or  incurred, or reimbursed in respect of another Community project, 
debt and debt service charges, excessive or reckless expenditure, and any other 
cost that does not meet the conditions referred to in points (a) to (d). 

For  the  purposes  of  point  (a),  average  personnel  costs  may  be  used  if  they  are 
consistent  with  the  management  principles  and  accounting  practices  of  the 
participant and do not differ significantly from actual costs. 

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Article 32 

Direct eligible costs and indirect eligible costs 

1. 

2. 

3. 

Eligible  costs  shall  be  composed  of  costs  attributable  directly  to  the  action, 
hereinafter  “direct  eligible  costs”  and,  where  applicable,  of  costs  which  are  not 
attributable directly to the action, but which have been incurred in direct relationship 
with  the  direct  eligible  costs  attributed  to  the  action,  hereinafter  “indirect  eligible 
costs”. 

For the coverage of indirect eligible costs, a participant may opt for a flat-rate of its 
total direct eligible costs, excluding its direct eligible costs for subcontracting. 

The grant agreement may provide that the reimbursement of indirect eligible costs is 
to  be  limited  to  a  maximum  percentage  of  the  direct  eligible  costs,  excluding  the 
direct eligible costs for subcontracting, in particular in the case of coordination and 
support actions, and, where appropriate, actions for training and career development 
of researchers. 

Article 33 

Upper funding limits 

1. 

For  research  and  technological  development  activities,  the  Community  financial 
contribution may reach a maximum of 50% of the total eligible costs. 

in 

the  case  of  public  bodies,  secondary  and  higher  education 
However, 
establishments, research organisations and SMEs, it may reach a maximum of 75% 
of the total eligible costs. 

For  demonstration  activities,  the  Community  financial  contribution  may  reach  a 
maximum of 50% of the total eligible costs. 

For  activities  supported  by  frontier  research  actions,  coordination  and  support 
actions,  and  actions  for  the  training  and  career  development  of  researchers,  the 
Community  financial  contribution  may  reach  a  maximum  of  100%  of  the  total 
eligible costs. 

For  management  and  audit  certificates,  and  other  activities  not  covered  by 
paragraphs 1, 2 and 3, the Community financial contribution may reach a maximum 
of 100% of the total eligible costs. 

The other activities referred to in the first subparagraph include, inter alia, training in 
actions that do not fall under the funding scheme for training and career development 
of researchers, coordination, networking, and dissemination. 

For  the  purposes  of  paragraphs  1  to  4,  eligible  costs  minus  receipts  shall  be  taken 
into consideration in order to determine the Community financial contribution. 

Paragraphs 1 to 5 shall apply, as appropriate, in the case of indirect actions where flat 
rate financing or lump sum financing is used for the whole indirect action. 

2. 

3. 

4. 

5. 

6. 

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1. 

2. 

1. 

2. 

3. 

4. 

Article 34 

Reporting and audit of eligible costs 

Periodic  reports  shall  be  submitted  to  the  Commission  regarding  eligible  costs, 
financial interest yielded by pre-financing, and receipts in relation with the indirect 
action  concerned  and,  where  appropriate,  certified  by  an  audit  certificate,  in 
accordance with the Financial Regulation and the Implementing Rules. 

The existence of co-financing in relation with the concerned action shall be reported 
and, where appropriate, certified at the end of the action. 

In  the  case  of  public  bodies,  research  organisations,  and  higher  and  secondary 
education establishments, an audit certificate as required under paragraph 1 may be 
established by a competent public officer. 

Article 35 

Networks of Excellence 

Unless  otherwise  provided  for  in  the  work  programme,  the  Community  financial 
contribution to Networks of Excellence shall be in the form of a lump-sum calculated 
according to the number of researchers to be integrated in the Network of Excellence 
and the duration of the action. 

The unit value for lump sums paid under paragraph 1 shall be EUR 23 500 per year 
and per researcher. 

That amount shall be adjusted by the Commission in accordance with the Financial 
Regulation and the Implementing Rules. 

The  work  programme  shall  establish  the  maximum  number  of  participants  and, 
where appropriate, the maximum number of researchers that may be used as the basis 
for  the  calculation  of  the  maximum  lump  sum  pursuant  to  paragraph  1.  However, 
participants  over  and  above  the  maxima  for  the  establishment  of  the  financial 
contribution may participate as appropriate. 

The payment of lump sums under paragraph 1 shall be effected by means of periodic 
releases. 

Those periodic releases shall be made according to the assessment of the progressive 
implementation  of  the  Joint  Programme  of  Activities  through  the  measurement  of 
integration  of  research  resources  and  capacities  based  on  performance  indicators 
negotiated with the consortium and specified in the grant agreement. 

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SUBSECTION 2 
PAYMENT, DISTRIBUTION, RECOVERY AND GUARANTEES 

Article 36 

Payment and distribution 

1. 

2. 

The  Community  financial  contribution  shall  be  paid  to  the  participants  via  the 
coordinator. 

The coordinator shall keep records making it possible to determine at any time what 
portion of the Community funds has been distributed to each participant. 

The  coordinator  shall  communicate  that  information  to  the  Commission  upon 
request. 

Article 37 

Recovery 

The Commission may adopt a recovery decision in accordance with the Financial Regulation. 

Article 38 

Retained amounts for risk avoidance 

1. 

Depending  on  the  level  of  risk  associated  with  non-recovery  of  sums  due  to  the 
Community,  the  Commission  may  retain  a  small  percentage  of  the  Community 
financial contribution to each participant in an indirect action in order to cover any 
amounts due and not reimbursed by defaulting participants in indirect actions. 

2. 

Paragraph 1 shall not apply to the following: 

(a) 

public  bodies,  legal  entities  whose  participation  in  the  indirect  action  is 
guaranteed  by  a  Member  State  or  an  Associated  country,  and  higher  and 
secondary education establishments; 

(b)  participants  in  actions  to  support  training  and  career  development  of 
researchers,  frontier  research  actions,  and  actions  for  the  benefit  of  specific 
groups with the exception actions for the benefit of SMEs. 

The types of participant referred to in points (a) and (b) shall each be responsible for 
their own debts. 

3. 

The  amounts  retained  shall  constitute  revenue  assigned  to  the  Seventh  Framework 
Programme within the meaning of Article 18(2) of the Financial Regulation. 

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4. 

At the end of the framework programme an assessment shall be made of the amounts 
required  to  cover  outstanding  risks.  Any  sums  in  excess  of  these  amounts  shall  be 
reimbursed to the framework programme and constitute earmarked revenue. 

Chapter III 
Dissemination and use, and access rights 

SECTION 1 
FOREGROUND 

SUBSECTION 1 
OWNERSHIP 

Article 39 

Ownership of foreground 

1. 

Foreground shall be the property of the Community in the following cases: 

(a) 

coordination and support actions consisting in a purchase or service subject to 
the rules on public procurement set out in the Financial Regulation; 

(b) 

coordination and support actions relating to independent experts. 

Foreground  arising  from  work  carried  out  under  indirect  actions  other  than  those 
referred  to  in  paragraph  1  shall  be  the  property  of  the  participants  carrying  out  the 
work generating that foreground. 

If employees or other personnel working for a participant are entitled to claim rights 
to foreground, the participant shall ensure that it is possible to exercise those rights in 
a manner compatible with its obligations under the grant agreement.  

Article 40 

Joint ownership of foreground 

Where several participants have jointly carried out work generating foreground and 
where their respective share of the work cannot be ascertained, they shall have joint 
ownership of such foreground. 

Where  no  joint  ownership  agreement  has  been  concluded  regarding  the  allocation 
and  terms  of  exercising  that  joint  ownership,  each  of  the  joint  owners  shall  be 
entitled  to  grant  non-exclusive  licenses  to  third  parties,  without  any  right  to  sub-
licence subject to the following conditions: 

2. 

3. 

1. 

2. 

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(a) 

prior notice must be given to the other joint owners; 

(b) 

fair and reasonable compensation must be provided to the other joint owners. 

Article 41 

Ownership of foreground by specific groups 

In the case of actions for the benefit of specific groups, Article 39(2) and Article 40(1) shall 
not  apply.  In  such  cases,  foreground  shall  be  jointly  owned  by  the  participants  which  are 
members of the  specific group benefiting from  the action, unless otherwise  agreed by those 
participants. 

Where the owners of the foreground are not members of that group, they shall ensure that the 
group is provided with all the rights to foreground that are required for the purposes of using 
and  disseminating  that  foreground  in  accordance  with  the  technical  annex  to  the  grant 
agreement. 

Article 42 

Transfer of foreground 

1. 

2. 

3. 

4. 

Where a participant transfers ownership of foreground, it shall pass on its obligations 
to  the  assignee,  in  particular  those  relating  to  the  granting  of  access  rights,  and 
dissemination and use, in accordance with the grant agreement. 

Subject to its obligations concerning confidentiality, where the participant is required 
to pass on access rights, it shall give prior notice to the other participants in the same 
action,  together  with  sufficient  information  concerning  the  new  owner  of  the 
foreground to permit them to exercise their access rights under the grant agreement. 

However,  the  other  participants  may,  by  written  agreement,  waive  their  right  to 
individual prior notice in the case of transfers of ownership from one participant to a 
specifically identified third party. 

Following notification in accordance with the first subparagraph of paragraph 2, the 
other  participants  may  object  to  any  transfer  of  ownership  on  the  ground  that  it 
would adversely affect their access rights. 

Where  the  other  participants  demonstrate  that  their  rights  would  be  adversely 
affected, the intended transfer shall not take place until agreement has been reached 
between the participants concerned. 

Where  appropriate,  the  grant  agreement  may  provide,  by  way  of  an  additional 
requirement,  that  the  Commission  is  to  be  notified  in  advance  of  any  intended 
transfer of ownership to a third party. 

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Article 43 

Preservation of European competitiveness and ethical principles 

The Commission may object to the transfer of ownership of foreground, or to the granting of 
an  exclusive  licence  regarding  foreground,  to  a  legal  entity  which  is  established  in  a  third 
country not associated to the Seventh Framework Programme, if it considers that this is not in 
accordance with the interests of developing the competitiveness of the European economy or 
is inconsistent with ethical principles. 

In  such  cases,  the  transfer  of  ownership  or  grant  of  exclusive  licence  shall  not  take  place 
unless the Commission is satisfied that appropriate safeguards will be put in place. 

SUBSECTION 2 
PROTECTION, PUBLICATION, DISSEMINATION AND USE 

Article 44 

Protection of foreground 

1. 

2. 

Where foreground is capable of industrial or commercial application, its owner shall 
provide  for  its  adequate  and  effective  protection  in  conformity  with  relevant 
legislation,  and  having  due  regard  to  the  legitimate  interests,  particularly  the 
commercial interests, of the participants in the indirect action concerned. 

Where a participant invokes legitimate interest, it must, in any given instance, show 
that it would suffer disproportionately great harm. 

Where  the  owner  of  foreground  does  not protect foreground  that it  owns,  and does 
not  transfer  it  to  another  participant  in  accordance  with  Article  42(1)  and  (2),  no 
dissemination activities may take place before the Commission has been informed. 

In  such  cases,  the  Commission  may,  with  the  consent  of  the  participant  concerned, 
assume  ownership  of  that  foreground  and  adopt  measures  for  its  adequate  and 
effective  protection.  The  participant  concerned  may  refuse  consent  only  if  it  can 
demonstrate that its legitimate interests would suffer disproportionately great harm. 

Article 45 

Statement relating to Community financial support 

All  publications,  patent  applications  filed  by  or  on  behalf  of  a  participant,  or  any  other 
dissemination relating to foreground, shall include a statement that the foreground concerned 
was generated with the assistance of financial support from the Community. 

The terms of that statement shall be established in the grant agreement. 

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Article 46 

Use and dissemination 

1. 

2. 

3. 

4. 

The participants shall use the foreground which they own, or ensure that it is used. 

Each  participant  shall  ensure  that  the  foreground  of  which  it  has  ownership  is 
disseminated  as  swiftly  as  possible.  If  it  fails  to  do  so,  the  Commission  may 
disseminate that foreground. 

Dissemination  activities  shall  be  compatible  with  intellectual  property  rights, 
confidentiality, and the legitimate interests of the owner of the foreground. 

Prior  notice  of  any  dissemination  activity  shall  be  given  to  the  other  participants 
concerned. 

Following  notification,  any  of  those  participants  may  object  if  it  considers  that  its 
legitimate interests in relation to its foreground could suffer disproportionately great 
harm. In such cases, the dissemination activity may not take place unless appropriate 
steps are taken to safeguard these legitimate interests. 

Article 47 

Dissemination in relation to frontier research actions 

In  the  case  of  frontier  research  actions,  participants  shall  actively  ensure  dissemination  of 
foreground, taking into account the need to safeguard intellectual property rights, the benefits 
of swift dissemination, confidentiality, and the legitimate interests of the participants. 

SECTION 2 
ACCESS RIGHTS TO BACKGROUND AND FOREGROUND 

Article 48 

Background covered 

Participants  may  define  the  background  needed  for  the  purposes  of  the  indirect  action  in  a 
written agreement and, where appropriate, may exclude specific background. 

Article 49 

Principles 

1. 

2. 

All requests for access rights shall be made in writing. 

Unless otherwise agreed by the owner of the foreground or background, access rights 
shall confer no entitlement to grant sub-licences. 

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3. 

4. 

5. 

6. 

1. 

2. 

1. 

2. 

Exclusive licences for foreground or background may be granted, subject to written 
confirmation  by  all  the  other  participants  concerned  that  they  waive  their  access 
rights thereto. 

Without  prejudice  to  paragraph  3,  any  agreement  providing  access  rights  to 
foreground or background to participants or third parties shall be such as to ensure 
that potential access rights for other participants are maintained. 

Participants  in  the  same  action  shall  inform  each  other  as  soon  as  possible  of  any 
limitation to the granting of access rights to background, or of any other restriction 
which might substantially affect the granting of access rights. 

The  termination  of  its  participation  in  an  indirect  action  shall  in  no  way  affect  the 
obligation  of  that  participant  to  grant  access  rights  to  the  remaining  participants  in 
the same action under the terms and conditions established by the grant agreement. 

Article 50 

Access rights for implementation of indirect actions 

Access rights to foreground shall be granted to other participants in the same indirect 
action, if it is needed to enable those participants to carry out their own work under 
that indirect action. 

Such access rights shall be granted on a royalty-free basis. 

Access  rights  to  background  shall  be  granted  to  the  other  participants  in  the  same 
indirect action, if it is needed to enable those participants to carry out their own work 
under that indirect action provided that the participant concerned is entitled to grant 
them. 

Such access rights shall be granted on a royalty-free basis, unless otherwise agreed 
by all participants before their accession to the grant agreement. 

However, RTD Performers shall grant access rights to background on a royalty-free 
basis. 

Article 51 

Access rights for use 

Participants in the same indirect action shall enjoy access rights to foreground, if it is 
needed to use their own foreground. 

Such  access  rights  shall  be  granted  either  under  fair  and  reasonable  conditions,  or 
royalty-free. 

Participants in the same indirect action shall enjoy access rights to background, if it 
is  needed  to  use  their  own  foreground  provided  that  the  participant  concerned  is 
entitled to grant them. 

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Such  access  rights  shall  be  granted  either  under  fair  and  reasonable  conditions,  or 
royalty-free. 

3. 

A request for access rights under paragraphs 1 or 2 may be made up to one year after 
either of the following events: 

(a) 

the end of the indirect action ; 

(b) 

termination  of  participation  by  the  owner  of  the  background  or  foreground 
concerned. 

However, the participants concerned may agree on a different time-limit. 

4. 

5. 

Subject  to  the  agreement  of  all  the  owners  concerned,  access  rights  to  foreground 
shall be granted to a RTD performer, on fair and reasonable conditions to be agreed, 
for the purposes of pursuing further research activities.  

RTD performers shall grant access on a royalty-free basis to background needed to 
use the foreground generated in the indirect action.  

Article 52 

Additional provisions regarding access rights for “frontier” research actions and for actions 
for the benefit of specific groups 

1. 

2. 

1. 

2. 

3. 

In the case of frontier research actions, access rights to foreground and background 
for implementation or use shall be royalty-free, notwithstanding Articles 50 and 51. 

Where the specific group benefiting from the action is represented by a legal entity 
that participates in the action in their place, that legal entity may grant a sub-licence, 
in  respect  of  any  access  right  granted  to  it,  to  those  of  its  members  which  are 
established in a Member State or an Associated country. 

Chapter IV 
European Investment Bank 

Article 53 

The Community may award a grant to the European Investment Bank (EIB) to cover 
the risk for loans the EIB makes in support of research objectives set out under the 
seventh Framework Programme (Risk-Sharing Finance Facility). 

The  EIB  shall  provide  these  loans  in  accordance  with  the  principles  of  fairness, 
transparency, impartiality and equal treatment. 

The  Commission  has  the  right  to  object  to  the  use  of  the  Risk-Sharing  Finance 
Facility for certain loans, on terms to be defined in the grant agreement in accordance 
with the Work Programmes. 

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Chapter V 
Final provisions 

Article 54 

This Regulation shall enter into force on the third day following 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 European Parliament 
The President 

For the Council 
The President 

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