Regulation (EC) No 1906/2006 of the European Parliament and of the Council of 18 December 2006 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)
Date: 2006-12-18
Institutions: Council of the European Union, European Parliament
Subjects: EU financing, EU programme, patents licence, popularising science, research and development, research body, research results, type of business, university

30.12.2006

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Official Journal of the European Union

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I

(Acts whose publication is obligatory)

REGULATION (EC) No 1906/2006 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 18 December 2006

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 EURO-
PEAN UNION,

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

Having regard to the proposal from the Commission,

Having regard to the Opinion of the European Economic and
Social Committee (1),

Having regard to the Opinion of the Court of Auditors (2),

Acting in accordance with the procedure referred to in Article
251 of the Treaty (3),

Whereas:

(1)

(2)

The Seventh Framework Programme was adopted by
Decision No 1982/2006/EC of the European Parliament
and of the Council of 18 December 2006 concerning the
Seventh Framework Programme of the European Com-
technological development and
munity for
demonstration activities (2007 to 2013) (4).
is the
responsibility of the Commission to ensure the imple-
mentation of that framework programme and its specific
programmes, including the related financial aspects.

research,

It

The Seventh Framework Programme is implemented in
accordance with Council Regulation (EC, Euratom) No
1605/2002 of 25 June 2002 on the Financial Regulation
applicable to the general budget of
the European
Communities (5), hereinafter ‘the Financial Regulation’,
and
Euratom) No
2342/2002 of 23 December 2002 laying down detailed
the Financial Regu-
the implementation of
rules for
lation (6), hereinafter ‘the Implementing Rules’.

Commission

Regulation

(EC,

(1) Opinion delivered on 5 July 2006 (not yet published in the Official

Journal).

(2) OJ C 203, 25.8.2006, p. 1.
(3) Opinion of the European Parliament of 30 November 2006 (not yet
and Council Decision of

Journal)

published in the Official
18 December 2006.

(3)

(4)

(5)

(6)

(7)

(8)

The Seventh Framework Programme is also implemented
in accordance with the State aid rules, in particular the
rules on State aid for research and development, currently
the Community Framework for State Aid for Research
and Development (7).

Treatment of confidential data is governed by all the rele-
vant Community legislation,
including the Institutions'
Decision
as
rules
internal
2001/844/EC, ECSC, Euratom of 29 November 2001
amending its internal Rules of Procedure (8) regarding
provisions of security.

Commission

such

The rules for the participation of undertakings, research
centres and universities
should provide a coherent,
comprehensive and transparent framework to ensure the
most
taking into
the need for easy access for all participants
account
through simplified procedures,
in accordance with the
principle of proportionality.

implementation possible,

efficient

The rules should also facilitate the exploitation of intellec-
tual property developed by a participant, taking also into
account the way in which the participant may be orga-
nised internationally, whilst protecting the other partici-
pants' and the Community's legitimate interests.

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

The definition of micro, small and medium-sized enter-
prises (SMEs) provided in Commission Recommendation
2003/361/EC (9) should apply, for reasons of coherence
and transparency.

(4) OJ L 412, 30.12.2006, p. 1.
(5) OJ L 248, 16.9.2002, p. 1.
(6) OJ L 357, 31.12.2002, p. 1. Regulation as last amended by Regulation

(EC, Euratom) No 1248/2006 (OJ L 227, 19.8.2006, p. 3).

(7) OJ C 45, 17.2.1996, p. 5.
(8) OJ L 317, 3.12.2001, p. 1. Decision as last amended by Decision

2006/548/EC, Euratom (OJ L 215, 5.8.2006, p. 38).

(9) OJ L 124, 20.5.2003, p. 36.

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(9)

(10)

(11)

(12)

(13)

(14)

(15)

(16)

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 implementation of the indirect
action concerned.

(18)

International organisations dedicated to developing coop-
eration 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.

It follows from Council Decision 2001/822/EC of 27
November 2001 on the association of the overseas coun-
tries and territories with the European Community
(‘Overseas Association Decision’) (1), that legal entities of
the overseas countries and territories are eligible to parti-
cipate 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 coun-
tries 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.

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

(21)

For the benefit of participants, there should be an effec-
tive and smooth transition from the cost calculation
regime used in the Sixth Framework Programme. The
Framework
monitoring
process
Programme should,
the budgetary
impact of this change in particular as regards its effect on
the administrative burden for participants.

the
therefore, address

Seventh

of

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 and
this Regulation, to govern the submission, evaluation and
selection of proposals and award of grants, as well as
redress procedures for participants. In particular the rules
governing the use of
independent experts should be
established.

(17)

It is appropriate for the Commission to establish further
rules and procedures, in addition to those provided for in

(1) OJ L 314, 30.11.2001, p. 1.

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. Such rules should strike the
right balance between protecting the Community's finan-
cial interests and simplifying and facilitating the participa-
tion of
in the Seventh Framework
Programme.

entities

legal

financial

In this context, the Financial Regulation and the Imple-
menting Rules and Council Regulation (Euratom, EC) No
2988/95 of 18 December 1995 on the protection of the
interests (2), govern
European Communities'
inter alia the protection of the Community's financial
interests,
the
procedures
sums owed to the
Commission, exclusion from contract and grant proce-
dures and related penalties, and audits, checks, and
inspections by the Commission and the Court of Audi-
tors, pursuant to Article 248(2) of the Treaty.

fraud and irregularity,

the fight against

the recovery of

for

(19)

It is necessary that the Community financial contribution
reaches the participants without undue delay.

(20)

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 (Euratom, EC) No 2185/96 of 11
November 1996 concerning on-the-spot checks and
inspections carried out by the Commission in order to
interests
protect
against fraud and other irregularities (3).

the European Communities'

financial

carried out under

The Commission should monitor both the indirect
actions
the Seventh Framework
Programme and the Seventh Framework Programme and
its Specific Programmes. With a view to ensuring the effi-
cient and coherent monitoring and evaluation of
the
the Commission
indirect actions,
implementation of
should set up and maintain an appropriate information
system.

(22)

The Seventh Framework Programme should reflect and
promote the general principles laid down in the European
Charter for Researchers and Code of Conduct for the
Recruitment of Researchers (4), while respecting their
voluntary character.

(23)

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.

(2) OJ L 312, 23.12.1995, p. 1.
(3) OJ L 292, 15.11.1996, p. 2.
(4) OJ L 75, 22.3.2005, p. 67.

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(24) While respecting the rights of the owners of intellectual
property, those rules should be designed to ensure that
participants and, where appropriate, their affiliated enti-
ties established in a Member State or associated country
have access to information they bring to the project and
to knowledge arising from research work carried out in
the project
the
research work or to use the resulting knowledge.

to the extent necessary to conduct

(25)

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. In this context, a participant guarantee
fund, managed by the Commission, should be established
to cover amounts due and not reimbursed by defaulting
partners. Such an approach will promote simplification
and facilitate the participation of, notably, SMEs, whilst
interests in a
safeguarding the Community's financial
manner
Framework
Programme.

appropriate

Seventh

the

for

(26)

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.

(27)

This Regulation respects the fundamental
rights and
observes the principles recognised in particular by the
Charter of Fundamental Rights of the European Union.

(28)

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 EIB 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.

(29)

The Community may provide financial support, as estab-
lished 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

independent
Article 17 of this Regulation,

for

experts

identified in

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 No 1982/2006/EC, hereinafter ‘indirect actions’.

Financial Regulation

It also lays down rules, in accordance with those laid down in
Implementing Rules
and
the
concerning the Community financial contribution to partici-
pants
the Seventh Framework
Programme.

actions under

in indirect

the

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
for protecting it, and
including the publication of foreground in any medium, herein-
after ‘dissemination’.

resulting from the formalities

In addition, it lays down rules for the direct or indirect utilisa-
tion 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’.

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 Regu-
lation and the Implementing Rules:

1)

‘legal entity’ means 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 in its own name,
exercise rights and be subject to obligations. In the case of
natural persons, references to establishment are deemed to
refer to habitual residence;

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2)

3)

4)

5)

6)

7)

‘affiliated entity’ means any legal entity that is under the
direct or indirect control of a participant, or under the
same direct or indirect control as the participant, control
taking any of the forms set out in Article 6(2);

‘fair and reasonable conditions’ means appropriate condi-
tions including possible financial terms, taking into account
the specific circumstances of the request for access, for
example the actual or potential value of the foreground or
background to which access is requested and/or the scope,
duration or other characteristics of the use envisaged;

the results,

including information,
‘foreground’ means
whether or not they can be protected, which are generated
by the indirect action concerned. 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 partici-
pants 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;

‘participant’ means a legal entity contributing to an indirect
action and having rights and obligations with regard to the
Community under the terms of this Regulation;

‘research organisation’ means a legal entity established as a
non-profit organisation which carries out research or tech-
nological development as one of its main objectives;

8)

‘third country’ means a State that is not a Member State;

9)

‘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;

10) ‘international organisation’ means an intergovernmental
organisation, other than the Community, which has legal
personality under international public law, as well as any
specialised agency set up by such an international organisa-
tion;

11) ‘international European interest organisation’ means an
international organisation, the majority of whose members
are Member States or Associated countries, and whose prin-
cipal objective is to promote scientific and technological
cooperation in Europe;

12) ‘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;

13) ‘public body’ means any legal entity established as such by

national law, and international organisations;

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

15) ‘work programme’ means a plan adopted by the Commis-
sion for the implementation of a specific programme as
identified in Article 3 of Decision No 1982/2006/EC;

16) ‘funding schemes’ mean the mechanisms for the Com-
munity funding of indirect actions as established in part (a)
of Annex III to Decision No 1982/2006/EC;

17) ‘specific groups’ means the beneficiaries of

‘research for
specific groups’ identified in the specific programme and/or
work programme;

18) ‘RTD performer’ means a legal entity carrying out research
or technological development activities in funding schemes
for the benefit of specific groups as identified in Annex III
to Decision No 1982/2006/EC.

Article 3

Confidentiality

Subject to the conditions established in the grant agreement,
appointment letter or contract, the Commission and the partici-
pants shall keep confidential any data, knowledge and docu-
ments communicated to them as confidential.

CHAPTER II

PARTICIPATION

SECTION 1

Minimum conditions

Article 4

General principles

1.
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 Arti-
cles 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.

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The Joint Research Centre of the Commission, hereinafter
2.
‘the JRC’, may participate in indirect actions on the same footing
and with the same rights and obligations as a legal entity estab-
lished in a Member State.

Article 5

Minimum conditions

The minimum conditions for indirect actions shall be the

1.
following:

(a) at least three legal entities must participate, each of which
must be established in a Member State or associated
country, and no two of which may be established in the
same Member State or associated country;

(b) all three legal entities must be independent of each other

within the meaning of Article 6.

For the purposes of point (a) of paragraph 1, where one
2.
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 asso-
ciated country other than any Member State or associated
country in which another participant in the same indirect action
is established.

Article 6

Independence

Article 7

Indirect actions for specific cooperation activities dedi-
cated to international cooperation partner countries

For collaborative projects for specific cooperation actions dedi-
cated to international cooperation partner countries identified in
the work programme, the minimum conditions shall be the
following:

(a) at least four legal entities must participate;

(b) at least two of the legal entities referred to in point (a) must
be established in Member States or associated countries, but
not established in the same Member State or associated
country;

(c) at least two of the legal entities referred to in point (a) must
be established in international cooperation partner coun-
tries, but not established in the same international coopera-
tion partner country, unless otherwise specified in the work
programme;

(d) all four legal entities referred to in point (a) must be inde-
pendent of each other within the meaning of 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.

1.
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.

The first paragraph shall not apply in the case of actions whose
purpose is to coordinate research activities.

For the purposes of paragraph 1, control may, in particu-

2.
lar, 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 share-
holders 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 rela-
tionships:

(a) the

investment

same public

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;

corporation,

(b) the legal entities concerned are owned or supervised by the

same public body.

Article 9

‘Frontier’ research projects

to support

indirect actions

For
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.

‘frontier’

Article 10

Sole participants

Where the minimum conditions for an indirect action are satis-
fied 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 asso-
ciated 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
provided that
the minimum conditions laid down in this
Chapter are met, as well as any conditions laid down 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 partici-
pants.

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 establish-
ment.

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, which
may include calls targeted at special groups such as SMEs.

In addition to the publicity specified in the Implementing Rules,
the Commission shall publish calls for proposals on 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:

(a) 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;

(b) coordination and support actions consisting of a purchase
of goods or services subject to the rules on public procure-
ment set out in the Financial Regulation;

(c) coordination and support actions relating to the appoint-

ment of independent experts;

(d) other actions, where so provided by the Financial Regulation

or the Implementing Rules.

Subsection 2

Evaluation and selection of proposals and award
of g rants

Article 15

Evaluation, selection and award

1.
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.

(a) The following criteria shall apply for the ‘Cooperation’ and

‘Capacities’ Programmes:

— scientific and/or technological excellence,

— relevance to the objectives of these specific programmes,

— the potential impact through the development, dissemi-

nation and use of project results,

— the quality and efficiency of the implementation and

management.

(b) The

following

criteria

shall

apply

for

the

‘People’

Programme:

— scientific and/or technological excellence,

— relevance to the objectives of this specific programme,

— quality and implementation capacity of the applicants
(researchers/organisations) and their potential for further
progress,

Calls for proposals shall have clear objectives so as to

3.
ensure that applicants do not respond needlessly.

— quality of the proposed activity in scientific training and/

or transfer of knowledge.

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(c) For support for ‘frontier’ research actions under the ‘Ideas’
Programme the sole criterion of excellence shall apply. For
coordination and support actions, project-related criteria
may apply.

Within this framework the work programmes shall specify the
evaluation and selection criteria and may add additional require-
ments, weightings and thresholds, or set out further details on
the application of the criteria.

2.
A proposal which contravenes fundamental ethical princi-
ples 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 ranked according to the evaluation
results. Funding decisions shall be made on the basis of this
ranking.

Article 16

Submission, evaluation, selection and award procedures

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

2. Where a call for proposals specifies a two-stage submis-
sion procedure, only those applicants whose proposals pass the
evaluation for the first stage shall be requested to submit a
complete proposal in the second stage.

All applicants shall be swiftly informed of the results of the
first-stage evaluation.

3.
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 and publish
guides for applicants including guidelines for evaluators. In par-
ticular, it shall lay down detailed rules for the two-stage submis-
sion procedure (including as regards the scope and nature of the
first-stage proposal as well as those of the complete second-
stage proposal), and rules for the two-step evaluation procedure.

The Commission shall provide information and set out redress
procedures for applicants.

The Commission shall refrain from renewing such verification
unless the situation of the participant concerned has changed.

Article 17

Appointment of independent experts

The Commission shall appoint

1.
assist with evaluations of proposals.

independent experts to

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

2.
Independent experts shall be chosen on the basis of skills
and knowledge appropriate to the tasks assigned to them. In
cases where independent experts will have to deal with classified
information, the appropriate security clearance shall be required
before appointment.

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

such as national

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

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

For ‘frontier’ research projects, experts shall be appointed by the
Commission on the basis of a proposal
from the Scientific
Council of the European Research Council.

3. 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 appointment

letter’, which shall

The Commission shall adopt a model appointment letter,
4.
include a
hereinafter
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.

4.
The Commission shall adopt and publish rules to ensure
consistent verification of the existence and legal status of partici-
pants in indirect actions as well as their financial capacity.

5.
The Commission shall publish once a year in any appro-
priate medium the list of the independent experts that have
assisted it for the Seventh Framework Programme and each
specific programme.

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Subsection 3

Implement ation and g rant ag reements

the grant agreement shall specify
2. Where appropriate,
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.

Article 18

General

1.
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.

2.
The Commission shall draw up, on the basis of the model
provided for in Article 19(8) and taking into account the char-
acteristics of the funding scheme concerned, a grant agreement
between the Community and the participants.

Participants shall make no commitments incompatible

3.
with the grant agreement.

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

If the implementation of an action becomes impossible or
5.
if the participants fail to implement it, the Commission shall
ensure the termination of the action.

3.
The grant agreement shall specify which changes in the
composition of the consortium are to require the prior publica-
tion of a competitive call.

4.
The grant agreement shall require the submission to the
Commission of periodic progress reports concerning the imple-
mentation of the indirect action concerned.

5. 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.

6. 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.

Participants shall ensure that the Commission is informed
6.
of any event which might affect the implementation of the
indirect action or the interests of the Community.

The grant agreement may lay down time-limits for partici-
7.
pants to give the various notifications referred to in this Regu-
lation.

7. Where provided for in the grant agreement, the partici-
pants may subcontract certain elements of
the work to be
carried out to third parties.

The Commission shall set out redress procedures for parti-

8.
cipants.

8.
The Commission shall, in close cooperation with Member
States, establish a model grant agreement in accordance with
this Regulation. If a significant modification of the model grant
in close
agreement proves necessary,
cooperation with Member States, revise it as appropriate.

the Commission shall,

Article 19

General provisions for inclusion in grant agreements

The grant agreement shall establish the rights and obliga-
1.
tions of
in
the participants with regard to the Community,
accordance with Decision No 1982/2006/EC, this Regulation,
the Financial Regulation, and the Implementing Rules, and in
accordance with the general principles of Community law.

9.
The model grant agreement shall reflect the general princi-
ples laid down in the European Charter for Researchers and the
Code of Conduct for the Recruitment of Researchers. 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.

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

10.
The model grant agreement shall provide for supervision
and financial control by the Commission or any representative
authorised by it, and the Court of Auditors.

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Article 20

Article 23

Provisions concerning access rights, use and dissemination

Signature and accession

The grant agreement shall establish the respective rights
1.
and obligations of the participants with regard to access rights,
use and dissemination, in so far as those rights and obligations
have not been laid down in this Regulation.

those purposes,

For
it shall require the submission to the
Commission of a plan for the use and dissemination of fore-
ground.

2.
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 termina-
tion, 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.

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

Consor tia

Article 24

Consortium agreements

1.
Save where otherwise provided in the call for proposals,
all participants in an indirect action shall conclude an agree-
ment, hereinafter ‘the consortium agreement’, to govern inter
alia the following:

(a) the internal organisation of the consortium;

(b) the distribution of the Community financial contribution;

(c) rules on dissemination, use and access rights, additional to
those in Chapter III and to the provisions in the grant agree-
ment;

Article 22

(d) the settlement of internal disputes including cases of abuse

of power;

Specific provisions

1.
In the case of indirect actions to support existing research
infrastructures and, where applicable, new research infrastruc-
tures, the grant agreement may lay down specific provisions
rights and
relating to confidentiality, publicity and access
commitments that might affect users of the infrastructure.

2.
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

3.
indirect actions in the field of security
research, the grant agreement may lay down specific provisions
in particular on changes to the consortium's composition, confi-
dentiality, classification of
information and information to
Member States, dissemination, access rights, transfer of owner-
ship of foreground and the use thereof.

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

the grant agreement

for

(e) liability,

indemnification and confidentiality arrangements

between the participants.

2.
The Commission shall establish and publish guidelines on
the main issues that may be addressed by participants in their
consortium agreements, including provisions on promoting the
participation of SMEs.

Article 25

Coordinator

The legal entities wishing to participate in an indirect
1.
action shall appoint one of their number to act as coordinator
to carry out the following tasks in accordance with this Regu-
lation, the Financial Regulation, the Implementing Rules, and
the grant agreement:

(a) to monitor the compliance by participants in the indirect

action with their obligations;

(b) to verify whether the legal entities identified in the grant
agreement complete the necessary formalities for accession
to the grant agreement;

5.
In the case of ‘frontier’ research actions, the grant agree-
ment may lay down specific provisions relating to dissemina-
tion.

(c) to receive the Community financial contribution and to
distribute it in accordance with the consortium and grant
agreement;

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(d) to keep the records and financial accounts relevant for the
Community financial contribution and to inform the
Commission of its distribution in accordance with Articles
24(1), point (b) and 36;

(e) to be intermediary for efficient and correct communication
between the participants and to report regularly to the parti-
cipants and to the Commission on the progress of
the
project.

2.

The coordinator shall be identified in the grant agreement.

The appointment of a new coordinator shall require the

3.
written approval of the Commission.

Article 26

Changes in the consortium

1.
The participants in an indirect action may agree to add a
new participant or to remove an existing participant in accord-
ance with the respective provisions in the consortium agree-
ment.

Any legal entity which joins an ongoing action shall

2.
accede to the grant agreement.

3.
In specific cases, where provided for in the grant agree-
ment, the consortium shall publish a competitive call and adver-
tise it widely using specific information support, particularly
Internet sites on the Seventh Framework Programme, the specia-
list 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 accord-
ance with the principles laid down in Articles 15 and 17 respec-
tively.

4.
The consortium shall notify any proposed 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

Monitori ng and evaluation of prog rammes and
indirect actions and communication of inform a-
tion

Article 27

Monitoring and evaluation

the plan for

In particular, the Commission shall monitor the implementation
of
foreground,
submitted pursuant to the second subparagraph of Article 20
(1).

the use and dissemination of

For those purposes, the Commission may be assisted by inde-
pendent experts appointed in accordance with Article 17.

2.
The Commission shall set up and maintain an information
system allowing for this monitoring to take place in an efficient
and
Framework
across
Programme.

coherent manner

Seventh

the

Subject to Article 3, the Commission shall publish information
on the funded projects in any appropriate medium.

3.
The monitoring and evaluation referred to in Article 7 of
Decision No 1982/2006/EC shall include aspects relating to the
application of this Regulation, in particular aspects relevant for
SMEs, and shall address the budgetary impact of the changes in
the cost calculation regime as compared to the Sixth Framework
Programme and its effects on the administrative burden for
participants.

The Commission shall appoint, in accordance with Article
4.
independent experts to assist with evaluations required
17,
under
the Seventh Framework Programme and its specific
programmes, and, as deemed necessary, for the evaluation of
previous Framework Programmes.

5.
In addition, the Commission may set up groups of inde-
pendent experts appointed in accordance with Article 17, to
advise on the design and implementation of Community
research policy.

Article 28

Information to be made available

Having due regard to Article 3, the Commission shall,
1.
upon request, 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.

1.
The Commission shall monitor the implementation of
indirect actions on the basis of the periodic progress reports
submitted pursuant to Article 19(4).

2.
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 partici-
pants.

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However, the recipient shall treat any such information as confi-
dential unless it becomes public or is made available publicly by
the participants, or unless it was communicated to the Commis-
sion without restrictions concerning confidentiality.

SECTION 3

Community financial contribution

Subsection 1

Eligibility for funding and for ms of g rants

Article 29

Eligibility for funding

The following legal entities participating in an indirect

1.
action may receive a Community financial contribution:

(a) any legal entity established in a Member State or an asso-

ciated 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 asso-
ciated country or 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) the contribution is essential for carrying out the indirect

action;

(c) such funding is provided for in a bilateral scientific and tech-
nological agreement or any other arrangement between the
Community and the country in which the legal entity is
established.

Article 30

Forms of grants

The Community financial contribution for grants identi-
1.
fied in part a) of Annex III to the Decision No 1982/2006/EC
shall be based on the reimbursement, in whole or in part, of
eligible costs.

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.

The work programmes and calls

shall
2.
specify the forms of grants to be used in the actions concerned.

for proposals

3.
Participants from international cooperation partner coun-
tries may opt for the Community financial contribution in the
form of lump-sum financing. The Commission shall establish
applicable lump sums in accordance with the Financial Regu-
lation.

Article 31

Reimbursement of eligible costs

Indirect actions financed by grants shall be co-financed by

1.
the participants.

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

Receipts shall be taken into consideration for the payment

2.
of the grant at the end of the implementation of the action.

3.
In order to be considered eligible, costs incurred in the
implementation of an indirect action must meet the following
conditions:

(a) they must be actual;

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

(c) 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, effi-
ciency and effectiveness;

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

(e) they must be exclusive of non-eligible costs,

in particular
identifiable indirect taxes including value added tax, duties,
for possible future losses or
interest owed, provisions
charges, exchange losses, costs related to return on capital,
costs declared, incurred, or reimbursed in respect of another
Community project, debt and debt service charges, excessive
or reckless expenditure, and any other costs that do not
meet the conditions laid down 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 signifi-
cantly from actual costs.

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

shall establish, for grants awarded under calls closing after 31
December 2009, an appropriate level of flat rate which should
be an approximation of the real indirect costs concerned but
not lower than 40 %. This will be based on an evaluation of
participation by non-profit public bodies, secondary and higher
research organisations and SMEs
education establishments,
which are unable to identify with certainty their real indirect
costs for the action concerned.

Article 32

Direct eligible costs and indirect eligible costs

All flat rates shall be set out in the model grant agree-

6.
ment.

Eligible costs shall be composed of costs attributable
1.
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’.

Article 33

Upper funding limits

The reimbursement of participants' costs shall be based on

2.
their eligible direct and indirect costs.

1.
For research and technological development activities, the
Community financial contribution may reach a maximum of
50 % of the total eligible costs.

In compliance with Article 31(3), point (c), a participant may
use a simplified method of calculation of its indirect eligible
costs at the level of its legal entity if this is in accordance with
its usual accounting and management principles and practices.
Principles to be followed in this respect shall be set out in the
model grant agreement.

3.
The grant agreement may provide that the reimbursement
of indirect eligible costs is to be limited to a maximum percen-
tage 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.

By derogation from paragraph 2,

for the coverage of
4.
indirect eligible costs a participant may opt for a flat rate of its
total direct eligible costs, excluding its direct eligible costs for
subcontracting or reimbursement of third parties' costs.

The Commission shall establish appropriate flat rates based on a
close approximation of the real
in
accordance with the Financial Regulation and its Implementing
Rules.

indirect costs concerned,

Non-profit public bodies, secondary and higher education
5.
establishments,
research organisations and SMEs which are
unable to identify with certainty their real indirect costs for the
action concerned, when participating in funding schemes which
include research and technological development and demonstra-
tion activities, as referred to in Article 33, may opt for a flat-
rate equal to 60 % of the total direct eligible costs for grants
awarded under calls for proposals closing before 1 January
2010.

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

For security-related research and technological development
activities, it may reach a maximum of 75 % in the case of the
development of capabilities in domains with very limited market
size and a risk of ‘market failure’ and for accelerated equipment
development in response to new threats.

For demonstration activities,

2.
the Community financial
contribution may reach a maximum of 50 % of the total eligible
costs.

3.
For activities supported by ‘frontier’ research actions, coor-
dination and support actions, and actions for the training and
the Community financial
career development of researchers,
contribution may reach a maximum of 100 % of the total
eligible costs.

For management activities,

4.
including certificates on the
financial statements, and other activities not covered by para-
graphs 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.

With a view to facilitating a transition to full application of the
general principle established in paragraph 2, the Commission

5.
For the purposes of paragraphs 1 to 4, eligible costs and
receipts shall be taken into consideration in order to determine
the Community financial contribution.

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Paragraphs 1 to 5 shall apply, as appropriate, in the case
6.
of indirect actions where flat-rate financing or lump-sum finan-
cing is used for the whole indirect action.

Article 34

Reporting and audit of eligible costs

1.
Periodic reports shall be submitted to the Commission
regarding eligible costs, financial interest yielded by pre-finan-
cing, and receipts in relation to the indirect action concerned
and, where appropriate, a certificate on the financial statements,
in accordance with the Financial Regulation and the Imple-
menting Rules.

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

2.
Notwithstanding the Financial Regulation and the Imple-
menting Rules, a certificate on the financial statements shall be
compulsory only whenever the cumulative amount of interim
payments and balance payments made to a participant is equal
to EUR 375 000 or more for an indirect action.

However, for indirect actions of a duration of 2 years or less,
not more than one certificate on the financial statements shall
be requested from the participant, at the end of the project.

Certificates on the financial statements shall not be required for
indirect actions entirely reimbursed by means of lump sums or
flat rates.

3.
In the case of public bodies, research organisations, and
higher and secondary education establishments, a certificate on
the financial statements as required under paragraph 1 may be
established by a competent public officer.

Article 35

Networks of Excellence

The work programme shall provide for the forms of

1.
grants to be used for Networks of Excellence.

2. Where the Community financial contribution to Networks
of Excellence takes the form of a lump sum, it shall be calcu-
lated 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 shall be EUR 23 500 per year
and per researcher.

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

3.
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. However, participants
over and above the maxima for the establishment of the finan-
cial contribution may participate as appropriate.

The payment shall be effected by means of periodic

4.
releases.

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

Subsection 2

Payment, dist r ibution, recover y and guarantees

Article 36

Payment and distribution

The Community financial contribution shall be paid to the

1.
participants via the coordinator without undue delay.

2.
The coordinator shall keep records making it possible to
determine at any time the portion of the Community funds that
has been distributed to each participant.

The coordinator shall communicate that
Commission upon request.

information to the

Article 37

Recovery

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

Article 38

Risk avoidance mechanism

The financial responsibility of each participant shall be

1.
limited to its own debt, subject to paragraphs 2 to 5.

2.
In order to manage the risk associated with non-recovery
of sums due to the Community, the Commission shall establish
and operate a participant guarantee fund (hereinafter ‘the Fund’)
in accordance with the Annex.

Financial interest generated by the Fund shall be added to the
Fund and shall serve exclusively for the purposes set out in
point 3 of the Annex, without prejudice to point 4 thereto.

3.
to an
The contribution to the Fund by a participant
indirect action taking the form of a grant shall not exceed 5 %
of the Community financial contribution due to the participant.
At the end of the action the amount contributed to the Fund
shall be returned to the participant, via the coordinator, subject
to paragraph 4.

If the interest generated by the Fund is insufficient to
4.
cover sums due to the Community,
the Commission may
deduct from the amount to be returned to a participant a
maximum of 1 % of the Community financial contribution to
it.

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The deduction referred to in paragraph 4 shall not apply
5.
to 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;

Article 40

Joint ownership of foreground

6.
The Commission shall verify ex-ante only the financial
capacity of coordinators, and of participants other than those
referred to in paragraph 5 applying for a Community financial
contribution in an indirect action in excess of EUR 500 000,
unless there are exceptional circumstances, when, on the basis
of information already available, there are justified grounds to
doubt the financial capacity of these participants.

The Fund shall be considered as a sufficient guarantee
7.
under
the Financial Regulation. No additional guarantee or
security may be requested from participants or imposed on
them.

CHAPTER III

DISSEMINATION AND USE, AND ACCESS RIGHTS

SECTION 1

Foreground

Subsection 1

Ownership

Article 39

Ownership of foreground

1. 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.

They shall establish an agreement regarding the allocation and
terms of exercise of that joint ownership in accordance with the
terms of the grant agreement.

2. Where no joint ownership agreement has yet been
concluded, 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:

(a) prior notice must be given to the other joint owners;

(b) fair and reasonable compensation must be provided to the

other joint owners.

3.
Upon request, the Commission shall give guidance on
possible matters to be included in the joint ownership agree-
ment.

Article 41

Ownership of foreground by specific groups

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

1.
Foreground arising from work carried out under indirect
actions other than those referred to in paragraph 3 shall be the
property of the participant carrying out the work generating
that foreground.

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 that foreground required for the purposes of using and
disseminating it in accordance with the technical annex to the
grant agreement.

If employees or other personnel working for a participant
2.
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.

Foreground shall be the property of the Community in the

3.
following cases:

(a) coordination and support actions consisting in a purchase
of goods or services subject to the rules on public procure-
ment set out in the Financial Regulation;

(b) coordination and support actions relating to independent

experts.

Article 42

Transfer of foreground

The owner of the foreground may transfer it to any legal

1.
entity, subject to paragraphs 2 to 5 and Article 43.

2. Where a participant transfers ownership of foreground, it
shall pass on its obligations regarding that foreground to the
assignee, including the obligation to pass them on to any subse-
quent assignee, in accordance with the grant agreement.

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Subject to its obligations concerning confidentiality, where
3.
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 trans-
fers of ownership from one participant to a specifically identi-
fied third party.

4.
Following notification in accordance with the first sub-
paragraph of paragraph 3, any other participant may object to
any transfer of ownership on the ground that it would adversely
affect their access rights.

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

5. Where appropriate, the grant agreement may provide that
the Commission is to be notified in advance of any intended
transfer of ownership or any intended grant of an exclusive
licence to a third party which is established in a third country
not associated to the Seventh Framework Programme.

Article 43

Where a participant who is not the owner of the foreground
invokes its legitimate interest,
in any given instance,
show that it would suffer disproportionately great harm.

it must,

2. Where the foreground is capable of industrial or commer-
cial application and its owner does not protect it, and does not
transfer it to another participant, an affiliated entity established
in a Member State or associated country or any other third
party established in a Member State or associated country along
with the associated obligations in accordance with Article 42,
no dissemination activities may take place before the Commis-
sion 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 dispropor-
tionately 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, which may include visual means, that
the foreground concerned was generated with the assistance of
financial support from the Community.

Preservation of European competitiveness and ethical prin-
ciples

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

The Commission may object to the transfer of ownership of
foreground, or to the granting of an exclusive licence regarding
foreground, to third parties 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 or security considerations.

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

Article 46

Use and dissemination

The participants shall use the foreground which they own,

1.
or ensure that it is used.

Each participant shall ensure that the foreground of which
2.
it has ownership is disseminated as swiftly as possible. If it fails
to do so the Commission may disseminate that foreground. The
grant agreement may set out time-limits in this respect.

Dissemination activities

3.
shall be compatible with the
protection of intellectual property rights, confidentiality obliga-
tions, and the legitimate interests of the owner of the fore-
ground.

Prior notice of any dissemination activity shall be given to

4.
the other participants concerned.

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

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SECTION 2

Access rights to background and foreground

Article 47

Background covered

Access rights to background shall be granted to the other
2.
participants in the same indirect action, if it is needed to enable
their own work under that
those participants to carry out
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.

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

However, RTD performers shall grant access rights to back-
ground on a royalty-free basis.

Article 48

Principles

1.

All requests for access rights shall be made in writing.

2.
Unless otherwise agreed by the owner of the foreground
or background, access rights shall confer no entitlement to
grant sub-licences.

3.
Exclusive licences for foreground or background may be
granted, subject to written confirmation by all the other partici-
pants that they waive their access rights thereto.

4. Without prejudice
agreement
providing access rights to foreground or background to partici-
pants or third parties shall be such as to ensure that potential
access rights for other participants are maintained.

to paragraph 3,

any

5. Without prejudice to Articles 49 and 50 and the grant
agreement, 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
6.
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 agree-
ment.

Article 49

Access rights for implementation of indirect actions

Access rights to foreground shall be granted to the other
1.
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.

Article 50

Access rights for use

1.
Participants in the same indirect action shall enjoy access
rights to foreground, if it is needed to use their own foreground.

Subject to agreement, such access rights shall be granted either
under fair and reasonable conditions or be royalty-free.

2.
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.

Subject to agreement, such access rights shall be granted either
under fair and reasonable conditions or be royalty-free.

An affiliated entity established in a Member State or asso-
3.
ciated country shall also have access rights, referred to in para-
graphs 1 and 2, to foreground or background under the same
conditions as the participant to which it is affiliated, unless
otherwise provided for in the grant agreement or consortium
agreement.

4.
A request for access rights under paragraphs 1, 2 and 3
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 back-

ground or foreground concerned.

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

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.

30.12.2006

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Official Journal of the European Union

L 391/17

RTD performers shall grant access on a royalty-free basis,
6.
or on fair and reasonable conditions to be agreed prior to the
signing of the grant agreement, to background needed to use
the foreground generated in the indirect action.

CHAPTER IV

EUROPEAN INVESTMENT BANK

Article 52

Article 51

Additional provisions regarding access rights for use for
‘frontier’ research actions and for actions for the benefit of
specific groups

1.
Participants in the same ‘frontier’ research action shall
enjoy royalty-free access rights to foreground and background
for implementation or for the purposes of pursuing further
research activities.

Access rights for use for purposes other than those of pursuing
further research activities shall be royalty free unless otherwise
provided in the grant agreement.

2. 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.

The Community may award a contribution to the Euro-
1.
pean Investment Bank (EIB) to cover the risk for loans granted
or guarantees given by the EIB in support of research objectives
set out under the Seventh Framework Programme (the Risk-
Sharing Finance Facility).

2.
The EIB shall provide these loans or guarantees in accord-
ance with the principles of fairness, transparency, impartiality
and equal treatment.

The Commission has the right to object to the use of the
3.
Risk-Sharing Finance Facility for certain loans or guarantees, on
terms to be defined in the grant agreement in accordance with
the Work Programmes.

CHAPTER V

ENTRY INTO FORCE

Article 53

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

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

Done at Brussels, 18 December 2006

For the European Parliament

The President

J. BORRELL FONTELLES

For the Council

The President

M. VANHANEN

L 391/18

EN

Official Journal of the European Union

30.12.2006

ANNEX

PARTICIPANT GUARANTEE FUND

1. The Fund will be managed by the Community represented by the Commission acting as executive agent on behalf of

the participants, under conditions to be established by the model grant agreement.

The Commission will entrust the financial management of the Fund either to the European Investment Bank or, in
accordance with Article 14, point (b), to an appropriate financial institution (hereinafter ‘the depository bank’). The
depository bank shall manage the Fund pursuant to a brief by the Commission.

2. The Commission may offset, from the initial pre-financing that it will pay to the consortium, the participants' contribu-

tion to the Fund, and pay it on their behalf to the Fund.

3. Where amounts are due to the Community by a participant, the Commission may, without prejudice to penalties

which may be imposed on the defaulting participant in accordance with the Financial Regulation, either:

(a) order the depositary bank to directly transfer the amount due from the Fund to the coordinator of the indirect
action if it is still on-going and the remaining participants agree to implement it to the identical regarding its objec-
tives, in accordance with Article 18(4). Amounts transfered from the Fund will be regarded as Community financial
contribution; or

(b) recover effectively the said amount from the Fund should the indirect action be terminated or already completed.

The Commission will emit to the benefit of the Fund a recovery order against that participant. The Commission may
adopt to that end a recovery decision in accordance with the Financial Regulation.

4. The amounts recovered from the Fund during the Seventh Framework Programme will constitute revenue assigned to

it within the meaning of Article 18(2) of the Financial Regulation.

Once the implementation of all grants under the Seventh Framework Programme is complete, any sums outstanding
from the Fund will be recovered by the Commission and entered into the budget of the Community, subject to deci-
sions on the Eighth Framework Programme