Common Position (EC) No 2/2008 of 21 January 2008 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council establishing the European Institute of Innovation and Technology
Date: 2008-01-21
Institutions: Council of the European Union
Subjects: EU office or agency, EU research policy, cooperation policy, higher education, innovation, operation of the Institutions, powers of the institutions (EU), technological change

26.2.2008

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Official Journal of the European Union

C 52E/7

COMMON POSITION (EC) No 2/2008

adopted by the Council on 21 January 2008

with a view to adopting Regulation (EC) No …/2008 of the European Parliament and of the Council
of … establishing the European Institute of Innovation and Technology

(2008/C 52 E/02)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

(6)

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 157(3) thereof,

Having regard to the proposal from the Commission,

The EIT should primarily have the objective of contri-
buting to the development of the Community's and the
Member States' innovation capacity, by involving higher
education,
the
highest standards. In so doing, the EIT should facilitate
and enhance networking and cooperation and create
synergies between innovation communities in Europe.

research and innovation activities at

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

(7)

Having regard to the opinion of
Regions (2),

the Committee of

the

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

laid down in

Whereas:

(1)

(2)

(3)

(4)

(5)

The Lisbon Growth and Jobs Agenda underscores the
need to develop conditions which are attractive to invest-
ment in knowledge and innovation in Europe in order to
boost competitiveness, growth and jobs in the European
Union.

Member States are primarily responsible for sustaining a
strong European industrial, competitive and innovative
base. However, the nature and scale of the innovation
challenge in the European Union also require action to
be taken at Community level.

in particular

The Community should provide support to foster innova-
tion,
through the Seventh Framework
Programme for Research, Technological Development
and Demonstration Activities, the Competitiveness and
Innovation Framework Programme, the Lifelong Learning
Programme and the Structural Funds.

A new initiative at Community level, the European Insti-
tute of Innovation and Technology (hereinafter referred
to as ‘the EIT’) should be established to complement
existing Community and national policies and initiatives
by fostering the integration of the knowledge triangle —
higher education, research and innovation — across the
European Union.

The European Council of 15 and 16 June 2006 invited
the Commission to prepare a formal proposal for the
establishment of
the EIT to be presented in autumn
2006.

activities of

the EIT should address

The
strategic
long-term challenges for innovation in Europe, particu-
larly in trans- and/or inter-disciplinary areas including
those already identified at European level. In so doing,
the EIT should promote periodic dialogue with civil
society.

(8)

(9)

The EIT should give priority to the transfer of its higher
education, research and innovation activities to the busi-
ness context and their commercial application, as well as
to supporting the creation of start-ups, spin-offs and
small and medium-sized enterprises (SMEs).

The EIT should primarily operate through excellence-
driven, autonomous partnerships of higher education
institutions, research organisations, companies and other
stakeholders in the form of sustainable and long-term
self-supporting strategic networks
in the innovation
process. These partnerships should be selected by the
Governing Board of the EIT on the basis of a transparent
and excellence-based process and designated as Knowl-
edge and Innovation Communities (hereinafter referred
to as ‘KICs’). The Governing Board should also steer the
activities of the EIT and evaluate the activities of the
KICs. Membership of
the Governing Board should
balance experience from the business and the higher
education and/or research worlds as well as from the
innovation sector.

(10)

In order to contribute to the competitiveness and to rein-
the European
force the international attractiveness of
economy and its innovation capacity, the EIT and the
KICs should be able to attract partner organisations,
researchers and students
the world,
including by encouraging their mobility, as well as to
cooperate with third country organisations.

from all over

(1) OJ C 161, 13.7.2007, p. 28.
(2) OJ C 146, 30.6.2007, p. 27.
(3) Opinion of the European Parliament of 26 September 2007 (not yet
Journal), Council Common Position of

published in the Official
21 January 2008.

(11)

Relations between the EIT and the KICs should be based
on contractual agreements, which will set out the KICs'
rights and obligations, ensure an adequate level of coordi-
nation and outline the mechanism for monitoring and
evaluating KICs' activities and outcomes.

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Official Journal of the European Union

26.2.2008

(12)

(13)

There is a need to support higher education as an inte-
gral, but often missing, component of a comprehensive
innovation strategy. The agreement between the EIT and
the degrees and diplomas
KICs should provide that
awarded through the KICs should be awarded by partici-
pating higher education institutions, which should be
encouraged to label
them also as EIT degrees and
diplomas. Through its activities and work, the EIT should
help promote mobility within the European Research
Area and the Higher Education Area as well as encourage
the transferability of grants awarded to researchers and
students in the context of the KICs. All these activities
should be carried out without prejudice to Directive
2005/36/EC of
the
Council of 7 September 2005 on the recognition of
professional qualifications (1).

the European Parliament and of

the management of
the use of

The EIT should establish clear and transparent guidelines
intellectual property, which
for
should foster
intellectual property under
appropriate conditions. These guidelines should provide
that due account is taken of the contributions to be
made by the various partner organisations of the KICs,
irrespective of their size. In the event of the activities
being
Framework
Programmes for Research and Technological Develop-
ment, the rules of those programmes should apply.

the Community

funded

under

(14) Appropriate provisions should be made to guarantee the
liability and transparency of the EIT. Appropriate rules
governing its functioning should be laid down in the
Statutes of the EIT.

(15)

(16)

(17)

The EIT should possess legal personality and, in order to
guarantee its functional autonomy and independence, it
should administer its own budget whose revenue should
include a contribution from the Community.

The EIT should seek to raise an increasing financial
contribution from the private sector and from income
generated by its own activities. Therefore, it is expected
that industry, the finance and service sectors will contri-
bute significantly to the budget of the EIT and, in particu-
lar, to the budget of the KICs. The KICs should aim at
maximising the share of contributions from the private
sector. The KICs and their partner organisations should
publicize the fact that their activities are undertaken in
the context of the EIT and that they receive a financial
contribution from the general budget of the European
Union.

The Community contribution to the EIT should finance
the costs arising from the establishment, administrative
and coordination activities of the EIT and the KICs. In
order to avoid double funding, these activities should not
benefit simultaneously from a contribution from other
Community programmes,
Framework
Programme for Research, Technological Development

such as

the

(18)

(19)

(20)

(21)

(22)

and Demonstration Activities, the Competitiveness and
Innovation Framework Programme, the Lifelong Learning
Programme, or from the Structural Funds. Furthermore,
in the event that a KIC or its partner organisations apply
from these
directly
programmes or
should be
treated without any preference over other applications.

assistance
their applications

Community
funds,

for

The Community budgetary procedure should be applic-
able as far as the Community subsidy and any other
grants chargeable to the general budget of the European
Union are concerned. The auditing of accounts should be
undertaken by the Court of Auditors 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 (2).

This Regulation establishes a financial envelope for the
period 2008 to 2013 which is to be the prime reference
the budgetary authority, within the meaning of
for
point 37 of the Interinstitutional Agreement of 17 May
2006 between the European Parliament, the Council and
the Commission on budgetary discipline and sound
financial management (3).

The EIT is a body set up by the Communities within the
meaning of Article 185(1) of Regulation (EC, Euratom)
No 1605/2002 and should adopt
rules
Regulation
accordingly.
(EC, Euratom) No 2343/2002 of 19 November 2002 on
the framework Financial Regulation for
the bodies
referred to in Article 185 of Council Regulation
(EC, Euratom) No 1605/2002 (4) should apply to the EIT.

Consequently

Commission

its financial

The EIT should produce an annual report, outlining the
activities conducted in the preceding calendar year and a
rolling triennial work programme outlining its planned
initiatives and allowing the EIT to respond to internal
and external developments in the fields of science, tech-
nology, higher education, innovation and other relevant
areas. These documents should be transmitted to the
European Parliament, the Council, the Commission, the
Court of Auditors, the European Economic and Social
Committee and the Committee of the Regions for infor-
mation. The European Parliament, the Council and the
Commission should be entitled to present an opinion on
the draft of the EIT's first triennial work programme.

The strategic, long-term priority fields and financial needs
for the EIT for a period of seven years should be laid
down in a Strategic Innovation Agenda (hereinafter
referred to as ‘SIA’). Given the importance of the SIA for
the Community innovation policy and the resulting poli-
tical significance of its socio-economic impact for the
Community the SIA should be adopted by the European
Parliament and the Council on the basis of a Commission
proposal prepared on the basis of a draft provided by the
EIT.

(2) OJ L 248, 16.9.2002, p. 1. Regulation as amended by Regulation

(EC, Euratom) No 1995/2006 (OJ L 390, 30.12.2006, p. 1).

(1) OJ L 255, 30.9.2005, p. 22. Directive as amended by Council Directive

2006/100/EC (OJ L 363, 20.12.2006, p. 141).

(3) OJ C 139, 14.6.2006, p. 1.
(4) OJ L 357, 31.12.2002, p. 72.

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(23)

(24)

(25)

It is appropriate that the Commission initiate an indepen-
dent, external evaluation of the operation of the EIT, in
particular with a view to preparing the SIA. Where
appropriate, the Commission should make proposals to
amend this Regulation.

It is appropriate to pursue a gradual, phased implementa-
tion of the EIT in view of its long-term development. An
initial phase with a limited number of KICs is needed in
order to evaluate properly the functioning of the EIT and
the KICs and, where necessary, to introduce improve-
ments. Within a period of eighteen months from its crea-
tion, the Governing Board should select two or three
KICs in areas that help the European Union to face
current and future challenges, which could include such
fields as climate change, renewable energy and the next
generation of information and communication technolo-
gies. The selection and designation of further KICs should
be enabled after the adoption of the first SIA, which, in
order to address the long-term perspective, should also
include detailed modalities on the operation of the EIT.

Since the objective of the action to be taken, namely to
establish the EIT, cannot be sufficiently achieved by the
Member States and can therefore, for reasons of scale and
transnationality, be better achieved at Community level,
the Community may adopt measures, in accordance with
the principle of subsidiarity as set out in Article 5 of the
Treaty. In accordance with the principle of proportion-
ality, as set out in that Article, this Regulation does not
go beyond what is necessary in order to achieve that
objective,

HAVE ADOPTED THIS REGULATION:

Article 1

Subject matter

A European Institute of Innovation and Technology (hereinafter
referred to as ‘the EIT’) is hereby established.

and generate new products, services or business and organi-
sational models that are successfully introduced into an
existing market or that are able to create new markets;

2.

‘Knowledge and Innovation Community’
(KIC) means an
autonomous partnership of higher education institutions,
research organisations, companies and other stakeholders in
the innovation process in the form of a strategic network
based on joint mid- to long-term innovation planning to
achieve the EIT challenges, regardless of
its precise legal
form;

3.

‘participating State’ means either a Member State of
the
European Union or another country having an agreement
with the Community on the EIT;

4.

‘third country’ means any State which is not a participating
State;

5.

6.

7.

8.

9.

‘partner organisation’ means any organisation which is a
member of a KIC and may include in particular: higher
education institutions,
research organisations, public or
private companies, financial institutions, regional and local
authorities, foundations;

‘research organisation’ means any public or private legal
entity which undertakes research or technological develop-
ment as one of its main objectives;

‘higher education institution’ means a university or any type
of higher education institution which,
in accordance with
national legislation or practice, offers degrees and diplomas
at masters or doctoral level, irrespective of its denomination
in the national context;

‘degrees and diplomas’ means qualifications resulting in
masters or doctorates awarded by participating higher educa-
tion institutions in the context of higher education activities
undertaken in a KIC;

‘Strategic Innovation Agenda’ (SIA) means a policy document
outlining the priority fields of the EIT for future initiatives,
including an overview of
the planned higher education,
research and innovation activities, for a period of seven years.

Article 2

Definitions

Article 3

Objective

For the purpose of this Regulation, the following definitions
shall apply:

1.

‘innovation’ means the process,
including its outcome, by
which new ideas respond to societal or economic demand

The EIT's objective is to contribute to sustainable European
economic growth and competitiveness by reinforcing the inno-
vation capacity of the Member States and the Community. It
shall do this by promoting and integrating higher education,
research and innovation of the highest standards.

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Official Journal of the European Union

26.2.2008

Article 4

EIT bodies

1.

The bodies of the EIT shall be:

(a) a Governing Board composed of high-level members experi-
enced in higher education, research,
innovation and busi-
ness. It shall be responsible for steering the activities of the
the
for the selection, designation and evaluation of
EIT,
KICs, and for all other strategic decisions;

(b) an Executive Committee which shall oversee the running of
the EIT and take such decisions as are necessary between
meetings of the Governing Board;

(c) a Director who shall be responsible to the Governing Board
for the administrative and financial management of the EIT
and shall be the legal representative of the EIT;

(d) an Internal Auditing Function which shall advise the
Governing Board and the Director on financial and adminis-
trative management and control structures within the EIT,
on the organisation of financial links with KICs and on any
other subject requested by the Governing Board.

(e) encourage the recognition in the Member States of degrees
and diplomas which are awarded by higher education insti-
tutions that are partner organisations and which may be
labelled EIT-degrees and diplomas;

(f) promote the dissemination of good practices for the integra-
to develop a

tion of
the knowledge triangle in order
common innovation and knowledge transfer culture;

(g) seek to become a world class body for excellence in higher

education, research and innovation;

(h) ensure complementarity and synergy between EIT activities

and other Community programmes.

The EIT shall have power to establish a Foundation (here-
2.
inafter referred to as ‘the EIT Foundation’) with the specific
objective of promoting and supporting the activities of the EIT.

Article 6

KICs

The Commission may appoint observers to take part in

2.
the meetings of the Governing Board.

1.

KICs shall undertake in particular:

The detailed provisions regarding the EIT bodies are set

3.
out in the Statutes of the EIT, annexed to this Regulation.

Article 5

Tasks

1.

In order to achieve its objective, the EIT shall:

(a)

identify its priority fields;

(b) raise awareness among potential partner organisations and

encourage their participation in its activities;

(c) select and designate KICs in the priority fields in accordance
with Article 7 and define their rights and obligations by
agreement; provide them with appropriate support; apply
appropriate quality control measures; continuously monitor
and periodically evaluate their activities; and ensure an
appropriate level of coordination between them;

(d) mobilise funds from public and private sources and use its
resources in accordance with this Regulation. It shall in par-
ticular seek to raise a significant and increasing proportion
of its budget from private sources and from income gener-
ated by its own activities;

(a)

innovation activities and investments with European added
value, fully integrating the higher education and research
dimensions to attain a critical mass and stimulating the
dissemination and exploitation of results;

(b) cutting-edge and innovation-driven research in areas of key
economic and societal interest and drawing on the results of
European and national
to
research, with the potential
strengthen Europe's competitiveness at international level;

in disciplines with the potential

(c) education and training activities at masters and doctoral
level,
future
European socio-economic needs and which promote the
development of innovation-related skills, the improvement
of managerial and entrepreneurial skills and the mobility of
researchers and students;

to meet

(d) the dissemination of best practices in the innovation sector
with a focus on the development of cooperation between
including the
higher education,
service and financial sectors.

research and business,

2.
KICs shall have substantial overall autonomy to define
their internal organisation and composition, as well as their
precise agenda and working methods. In particular, KICs shall
aim to be open to new members whenever these members add
value to the partnership.

The relationship between the EIT and each KIC shall be

3.
based on a contractual agreement.

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Article 7

Selection of KICs

majority of the partner organisations forming a KIC shall be
established in the Member States. At least one higher education
institution and one private company shall be part of each KIC.

1.
A partnership shall be selected and designated by the EIT
to become a KIC on the basis of a competitive, open and trans-
parent procedure. Detailed criteria for the selection of the KICs,
based on the principles of excellence and innovation relevance,
shall be adopted and published by the EIT; external and inde-
pendent experts shall be involved in the selection process.

In accordance with the principles enshrined in paragraph 1,

2.
the selection of a KIC shall take particular account of:

(a)

the current and potential
innovation capacity within the
partnership as well as its excellence in higher education,
research and innovation;

(b) the partnership's capacity to achieve the goals of the SIA;

(c)

capacity

the partnership's
and
long-term self-supporting financing including a substantial
and increasing contribution from the private sector, industry
and services;

sustainable

to ensure

(d) the participation in the partnership of organisations active
in the knowledge triangle of higher education, research and
innovation;

(e)

the demonstration of a plan for the management of intellec-
tual property appropriate to the sector concerned and
consistent with the EIT principles and guidelines for the
management of intellectual property, including the way in
which contributions from the various partner organisations
have been taken into account;

(f) measures to support the involvement of and cooperation
with the private sector,
including the financial sector and
in particular SMEs, as well as the creation of start-ups,
spin-offs and SMEs, in view of the commercial exploitation
of the results of the activities of KICs;

(g) readiness to interact with other organisations and networks
outside the KIC with the aim of sharing good practices and
excellence.

3.
The minimum condition to form a KIC is the participation
of at least three partner organisations, established in at least two
different Member States. All these partner organisations must be
independent of each other, within the meaning of Article 6 of
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 universi-
ties in actions under the Seventh Framework Programme and
for the dissemination of research results (2007-2013) (1).

4.
tries, subject

A KIC may include partner organisations from third coun-
the Governing Board. The

to the approval of

(1) OJ L 391, 30.12.2006, p. 1.

Article 8

Degrees and diplomas

1.
Degrees and diplomas relating to the higher education
activities referred to in Article 6(1)(c) shall be awarded by parti-
cipating higher education institutions
in accordance with
national
rules and accreditation procedures. The agreement
between the EIT and the KICs shall provide that these degrees
and diplomas may also be labelled EIT-degrees and diplomas.

The EIT shall encourage participating higher education

2.
institutions to:

(a) award joint or multiple degrees and diplomas, reflecting the
integrated nature of the KICs. However, these may also be
awarded by a single higher education institution;

(b) take into account:

(i) Community action undertaken in accordance with Arti-

cles 149 and 150 of the Treaty;

(ii) action undertaken in the context of

the European

Higher Education Area.

Article 9

Independence of the EIT and consistency with Community,
Member State or intergovernmental action

The EIT shall carry out

1.
national authorities and external pressures.

its activities independently of

The activity of

2.
the EIT shall be consistent with other
action and instruments to be implemented at Community level,
in particular in the fields of higher education, research and inno-
vation.

3.
The EIT shall also take appropriate account of policies and
initiatives at regional, national and intergovernmental levels in
order to make use of best practices, well established concepts
and existing resources.

Article 10

Management of intellectual property

The EIT shall adopt guidelines for the management of
inter alia, Regulation (EC)

1.
intellectual property based on,
No 1906/2006.

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2.
On the basis of these guidelines, the partner organisations
of each KIC shall conclude among themselves an agreement on
the management and use of intellectual property which shall
the various
define,
partner organisations,
including SMEs, will be taken into
account.

in particular, how the contributions of

Article 11

Legal Status

The EIT shall be a Community body and shall have legal
1.
personality. In each of the Member States,
it shall enjoy the
widest possible legal capacity accorded to legal persons under
national legislation. In particular, it may acquire or dispose of
movable and immovable property and be a party to legal
proceedings.

accessible, free website providing information about the activ-
ities of the EIT and individual KICs.

2.
its
The EIT shall make public its rules of procedure,
specific financial rules referred to in Article 21(1) and the
detailed criteria for the selection of the KICs referred to in
Article 7 before the first call of proposals for the selection of
the first KICs.

3.
The EIT shall make public without delay its rolling trien-
nial work programme and annual activity report referred to in
Article 15.

4. Without prejudice to paragraphs 5 and 6, the EIT shall not
divulge to third parties confidential information it has received
for which confidential treatment has been requested and is justi-
fied.

The Protocol on the Privileges and Immunities of

2.
European Communities shall apply to the EIT.

the

5.
The members of the EIT bodies shall be subject to the
confidentiality requirement referred to in Article 287 of the
Treaty.

Article 12

Liability

The EIT shall be solely responsible for meeting its obliga-

1.
tions.

2.
The contractual liability of the EIT shall be governed by
the relevant contractual provisions and the law applicable to the
contract in question. The Court of Justice shall have jurisdiction
pursuant
to any arbitration clause contained in a contract
concluded by the EIT.

In the case of non-contractual

in
3.
accordance with the general principles common to the laws of
the Member States, make good any damage caused by it or its
servants in the performance of their duties.

liability, the EIT shall,

The Court of
relating to compensation for such damage.

Justice shall have jurisdiction in any dispute

Any payment by the EIT for covering the liability referred
4.
to in paragraphs 2 and 3 and the costs and expenses incurred in
connection therewith shall be considered expenditure of the EIT
and shall be covered by the resources of the EIT.

The Court of

5.
Justice shall have jurisdiction in actions
brought against the EIT under the conditions provided for in
Articles 230 and 232 of the Treaty.

Article 13

Transparency and access to documents

1.
The EIT shall ensure that its activities are conducted with a
high level of transparency. In particular, the EIT shall set up an

the

The information gathered by the EIT in accordance with this
Regulation shall be subject to Regulation (EC) No 45/2001
of
of
18 December 2000 on the protection of individuals with regard
to the processing of personal data by the Community institu-
tions and bodies and on the free movement of such data (1).

European Parliament

the Council

and

of

the

Regulation (EC) No 1049/2001 of

6.
European
Parliament and of the Council of 30 May 2001 regarding public
access to European Parliament, Council and Commission docu-
ments (2) shall apply to the documents held by the EIT. The
Governing Board shall
for
applying that Regulation no later than six months after the EIT
has been set up.

adopt practical

arrangements

7.
Official documents and publications of the EIT shall be
translated in accordance with the Regulation No 1 of 15 April
1958 determining
the
languages
European Economic Community (3). The required translation
services shall be provided by the Translation Centre for the
bodies of the European Union, set up by Council Regulation
(EC) No 2965/1994 (4).

to be used by

the

Article 14

Financial resources

The EIT shall be financed through a contribution from the
1.
general budget of
the European Union within the financial
envelope as set out in Article 19 and other private and public
sources.

(1) OJ L 8, 12.1.2001, p. 1.
(2) OJ L 145, 31.5.2001, p. 43.
(3) OJ 17, 6.10.1958, p. 385. Regulation as last amended by Regulation

(EC) No 1791/2006 (OJ L 363, 20.12.2006, p. 1).

(4) OJ L 314, 7.12.1994, p. 1. Regulation as last amended by Regulation

(EC) No 1645/2003 (OJ L 245, 29.9.2003, p. 13).

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The KICs

2.
following sources:

shall be financed,

in particular,

from the

Committee and the Committee for the Regions for informa-
tion;

(a) contributions

from companies or private organisations,

forming a substantial source of funding;

(b) contributions from the general budget of

the European

Union;

(c) statutory or voluntary contributions

from participating

States, third countries or public authorities within them;

(b) an annual report by 30 June each year. The report shall
outline the activities conducted by the EIT during the
preceding calendar year and assess the results with respect
to the objectives and timetable set, the risks associated with
the use of resources and the
the activities carried out,
general operation of the EIT.

(d) bequests, donations and contributions from individuals,

institutions, foundations or any other national bodies;

Article 16

(e) revenue generated by the KICs' own activities and royalties

Monitoring and evaluation of the EIT

from intellectual property rights;

(f)

revenue generated by the EIT's activities outcomes or capital
endowments, including those managed by the EIT Founda-
tion;

(g) contributions from international bodies or institutions;

(h) loans and contributions from the European Investment
including the possibility to use the Risk Sharing
Bank,
Finance Facility, pursuant to the eligibility criteria and the
selection procedure.

Contributions may include contributions in kind.

The modalities for accessing funding from the EIT shall be
the EIT referred to in

rules of

3.
defined in the financial
Article 21(1).

4.
The contribution from the general budget of the European
Union to the establishment, administrative and coordination
costs of the KICs shall be provided from the financial envelope
as set out in Article 19.

5.
The KICs or their partner organisations may apply for
Community assistance, in particular in the framework of Com-
munity programmes and funds, in accordance with their respec-
tive rules and on an equal footing with other applications. In
that case, such assistance shall not be attributed for activities
already funded through the general budget of
the European
Union.

Article 15

Programming and reporting

The EIT shall adopt:

The EIT shall ensure that its activities,

including those
1.
managed through KICs, shall be subject
to continuous and
systematic monitoring and periodic independent evaluation, to
ensure both the highest quality of outcome, scientific excellence
and the most efficient use of resources. The outcomes of the
evaluations shall be made public.

By June 2011 and every five years after the entry into
2.
force of a new financial
the Commission shall
framework,
provide for an evaluation of the EIT. This shall be based on an
independent external evaluation and shall examine how the EIT
fulfils its mission. It shall cover all activities of the EIT and the
KICs and shall assess the added value of the EIT, the impact,
effectiveness, sustainability, efficiency and relevance of the activ-
ities pursued and their relationship and/or complementarity
to support
with existing national and Community policies,
It shall take into
higher education, research and innovation.
account
the views of stakeholders, at both European and
national level.

The Commission shall forward the results of the evalua-
3.
tion, together with its own opinion and, where appropriate, any
proposals to amend this Regulation, to the European Parliament,
the Council, the European Economic and Social Committee and
the Committee of the Regions. The Governing Board shall take
due account of the findings of evaluations in the programmes
and operations of the EIT.

Article 17

SIA

1.
By 30 June 2011 at the latest and every seven years there-
after, the EIT shall prepare a seven-year draft SIA and submit it
to the Commission.

(a) a rolling triennial work programme, based on the SIA, once
it is adopted, containing a statement of its major priorities
and planned initiatives, including an estimate of financing
needs and sources. The work programme shall be trans-
mitted by the EIT to the European Parliament, the Council,
and Social
the Commission,

the European Economic

2.
The SIA shall define long-term priority fields for the EIT
and shall include an assessment of its socio-economic impact
and its capacity to generate the best innovation added-value.
The SIA shall take into account the results of the monitoring
and evaluation of the EIT as referred to in Article 16.

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3.
The SIA shall include an estimate of financial needs and
sources in view of the future operation, long-term development
and funding of the EIT. It shall also contain an indicative finan-
cial plan covering the period of the financial framework.

Article 20

Preparation and adoption of the annual budget

Acting on a proposal from the Commission, the SIA shall
in

4.
be adopted by the European Parliament and the Council
accordance with Article 157(3) of the Treaty.

1.
The expenditure of the EIT shall include the staff, adminis-
trative, infrastructure and operational expenses. Administrative
expenditure shall be kept to a minimum.

Article 18

Initial phase

referred to in Article 15(a),

1. Within twelve months after its creation, the Governing
Board shall submit the draft of the first rolling triennial work
programme,
to the European
Parliament, the Council and the Commission. The European
Parliament, the Council and the Commission may each address
an opinion to the Governing Board on any subject covered in
draft within three months of the day on which they received it.
Where such opinions are addressed to it, the Governing Board
shall reply within a period of
indicating any
adjustments in the priorities and planned activities.

three months,

2. Within a period of eighteen months from the date of crea-
tion of the Governing Board, the EIT shall select and designate
two or three KICs in accordance with the criteria and proce-
dures set out in Article 7.

2.

The financial year shall correspond to the calendar year.

The Director shall draw up an estimate of the revenue and
3.
expenditure of the EIT for the following financial year and shall
forward it to the Governing Board.

4.

Revenue and expenditure shall be in balance.

The Governing Board shall adopt

5.
the draft estimate,
accompanied by a draft establishment plan, and the preliminary
rolling triennial work programme and forward them by
31 March to the Commission.

6.
On the basis of the estimate, the Commission shall enter
in the preliminary draft general budget of the European Union
the estimates it deems necessary for the amount of the subsidy
to be charged to the general budget.

The budgetary authority shall authorise the appropriations

7.
for the subsidy to the EIT.

The Commission shall submit the proposal for the first
the draft provided by the EIT, to the

3.
SIA, on the basis of
European Parliament and the Council before the end of 2011.

8.
The Governing Board shall adopt the EIT budget, which
shall become final following the final adoption of the general
budget of the European Union. Where appropriate, it shall be
adjusted accordingly.

In addition to the content of a SIA in accordance with
Article 17, the first SIA shall include:

(a) detailed specifications and terms of reference concerning the

operation of the EIT;

(b) the modalities

for cooperation between the Governing

Board and the KICs;

(c) modalities of the funding of the KICs.

4.
After the adoption of the first SIA in accordance with
Article 17(4), the Governing Board may select and designate
additional KICs pursuant to the provisions of Articles 6 and 7.

Article 19

Budgetary commitments

The financial envelope for the implementation of this Regu-
lation during the period from 1 January 2008 to 31 December
2013 is set at EUR 308,7 million. The annual appropriations
shall be authorised by the budgetary authority within the limits
of the financial framework.

9.
The Governing Board shall, as soon as possible, notify the
budgetary authority of its intention to implement any project
which may have significant
the
funding of the EIT budget, in particular any projects relating to
property such as the rental or purchase of buildings. It shall
inform the Commission thereof.

implications

financial

for

Any substantial modification of the budget shall follow

10.
the same procedure.

Article 21

Implementation and control of the budget

1.
The EIT shall adopt its financial rules in accordance with
Article 185(1) of Regulation (EC, Euratom) No 1605/2002.
from Regulation (EC, Euratom)
These may not depart
No 2343/2002 except where the EIT's specific operating needs
so require and with the Commission's prior consent. Due
account shall be given to the need for adequate operational flex-
ibility in order to enable the EIT to achieve its objectives and
attract and retain private sector partners.

2.

The Director shall implement the budget of the EIT.

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The accounts of the EIT shall be consolidated with the

3.
Commission's accounts.

Upon a recommendation from the Council, the European
4.
Parliament shall, before 30 April of the year n + 2, give a
discharge for the year n to the Director in respect of the imple-
mentation of the EIT budget and to the Governing Board in
respect to the EIT Foundation.

Article 22

Protection of the financial interests of the Community

1. With a view to combating fraud, corruption and other
illegal acts, Regulation (EC) No 1073/1999 of the European
Parliament and of the Council of 25 May 1999 concerning
investigations conducted by the European Anti-Fraud Office
(OLAF) (1) shall apply to the EIT in its entirety.

2.
The EIT shall accede to the Interinstitutional Agreement of
25 May 1999 between the European Parliament, the Council of
the European
the European Union and the Commission of
Communities
the
by
European Anti-fraud Office (OLAF) (2). The Governing Board
shall formalise this accession and adopt the necessary measures
to help OLAF carry out internal investigations.

investigations

concerning

internal

3.
All decisions adopted and contracts concluded by the EIT
shall provide explicitly that OLAF and the Court of Auditors
may carry out on-the-spot inspections of the documents of all
contractors and sub-contractors which have received Com-
munity funds, including at the premises of the final benefici-
aries.

The provisions set out in paragraphs (1), (2) and (3) shall

4.
apply, mutatis mutandis, to the EIT Foundation.

Article 23

Statutes

The Statutes of the EIT, as set out in the Annex, are hereby
adopted.

Article 24

Entry into force

This Regulation shall enter into force on the twentieth 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 …

For the European Parliament

The President

For the Council

The President

(1) OJ L 136, 31.5.1999, p. 1.
(2) OJ L 136, 31.5.1999, p. 15.

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STATUTES OF THE EUROPEAN INSTITUTE OF INNOVATION AND TECHNOLOGY

ANNEX

Article 1

Composition of the Governing Board

1.
The Governing Board shall consist both of appointed members providing a balance between those with experience
in business, higher education and research (hereinafter referred to as ‘appointed members’) and members elected by and
from among the higher education, research and innovation, technical and administrative staff, students and doctoral candi-
dates of the European Institute of Innovation and Technology (EIT) and the Knowledge and Innovation Communities
(KICs) (hereinafter referred to as ‘representative members’).

As a transitional provision, the initial Governing Board shall consist exclusively of appointed members until elections for
representative members can be held, after the first KIC has been established.

2.
There shall be eighteen appointed members. They shall have a six-year non-renewable term of office. They shall be
appointed by the Commission, in accordance with a transparent procedure. The Commission shall inform the European
Parliament and the Council about the selection process and the final appointment of those members of the Governing
Board.

The appointed members of the initial Governing Board shall be appointed on the basis of a list of potential candidates
proposed by an ad hoc Identification Committee, which shall be composed of four independent high level experts
appointed by the Commission. The subsequent appointed members shall be appointed on the basis of a list of potential
candidates proposed by the Governing Board.

3.
The Commission shall have regard to the balance between higher education, research, innovation and business
experience as well as to gender balance and an appreciation of the higher education, research and innovation environ-
ments across the Union.

One third of the appointed members shall be replaced every two years. An appointed member who has served for a

4.
period of less than four years shall be eligible for reappointment, subject to an overall limit of six years in office.

During a transitional period, twelve appointed members of the initial Governing Board shall be chosen by lot to serve for
a four-year term of office. At the end of the initial four-year period, six of the twelve newly appointed members shall be
chosen by lot to serve for a four-year term of office. The Chairperson of the Governing Board is not part of this transi-
tional process.

5.
There shall be four representative members. They shall have a three-year term of office, renewable once. Their term
of office shall cease if they leave the EIT or a KIC. They shall be replaced through the same election process for the
remainder of the term of office.

6.
The conditions and modalities for election and replacement of the representative members shall be approved by the
Governing Board on the basis of a proposal from the Director before the first KIC is in operation. This mechanism shall
ensure an appropriate representation of the diversity and shall take into account the evolution of the EIT and the KICs.

7.
In the event that a member of the Governing Board is unable to complete his term of office, a substitute member
shall be appointed or elected by the same procedure as the incapacitated member in order to complete the latter's term of
office.

Article 2

Responsibilities of the Governing Board

The Governing Board members shall act in the interests of the EIT, safeguarding its goals and mission, identity and

1.
coherence, in an independent way.

2.

The Governing Board shall, in particular:

(a) define the EIT strategy as enshrined in the Strategic Innovation Agenda (SIA), the triennial rolling work programme,
its budget, its annual accounts and balance-sheet and its annual activity report on the basis of a proposal from the
Director;

(b)

specify the priority fields in which to establish the KICs;

(c) provide a contribution in view of the preparation of the SIA;

(d) draw up detailed specifications and terms of references on the operation of the EIT in the framework of the SIA,

including criteria and procedures for the financing, monitoring and evaluating of the activities of the KICs;

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Official Journal of the European Union

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(e)

select and designate a partnership as a KIC or withdraw the designation if necessary;

(f)

ensure continuing evaluation of the activities of KICs;

(g)

adopt its rules of procedure, including those for the selection of the KICs, those for the Executive Committee, as well
as the specific financial rules of the EIT;

(h) define, with the Commission's agreement, appropriate honoraria for members of the Governing Board and of the

Executive Committee; these honoraria shall be benchmarked against similar provision in the Member States;

(i)

(j)

adopt a procedure for choosing the Executive Committee and the Director;

appoint and if necessary dismiss the Director, and exercise disciplinary authority over him/her;

(k) appoint the Accounting Officer, the members of the Executive Committee and the members of the Internal Auditing

Function;

(l)

establish where appropriate advisory groups which may have a defined duration;

(m) promote the EIT globally, so as to raise its attractiveness and make it an world class body for excellence in higher

education, research and innovation;

(n) adopt a code of good conduct regarding conflicts of interest;

(o) define principles and guidelines for the management of intellectual property rights;

(p)

set up an internal auditing function in accordance with Commission Regulation (EC, Euratom) No 2343/2002;

(q) be empowered to establish a Foundation (hereinafter referred to as ‘the EIT Foundation’) with the specific objective of

promoting and supporting the activities of the EIT;

(r)

ensure complementarity and synergy between EIT activities and other Community programmes;

(s) decide on EIT's language regime, taking into account the existing principles on multilingualism and the practical

requirements of its operations.

3.

The Governing Board may delegate specific tasks to the Executive Committee.

The Governing Board shall elect its Chairperson from among the appointed members. The term of office of the

4.
Chairperson shall be three years, renewable once.

Article 3

Functioning of the Governing Board

1. Without prejudice to paragraph 2, the Governing Board shall adopt decisions by simple majority of all its members.

However, decisions under Article 2, paragraph 2(a), (b), (c), (d), (i) and (s), and paragraph 4 shall require a majority of two
thirds of all its members.

2.

The representative members may not vote on decisions under Article 2, paragraph 2(e), (g), (i), (j), (k), (q) and (s).

The Governing Board shall meet in ordinary session at least three times a year and in extraordinary session when

3.
convened by its Chairperson or on request of at least one third of its members.

Article 4

The Executive Committee

The Executive Committee shall consist of five persons including the Chairperson of the Governing Board who will

1.
also chair the Executive Committee.

The four members other than the Chairperson shall be chosen by the Governing Board from among the Governing
Board's appointed members.

The Executive Committee shall meet on a regular basis as convened by its Chairperson or on the request of the

2.
Director.

3.

The Executive Committee shall take its decisions by simple majority of all its members.

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4.

The Executive Committee shall:

(a) prepare the meetings of the Governing Board;

(b) oversee the implementation of the SIA and rolling triennial work programme;

(c) oversee the selection procedure for KICs;

(d) take any decisions delegated to it by the Governing Board.

Article 5

The Director

1.
The Director shall be a person with expertise and high reputation in the areas where the EIT operates. The Director
shall be appointed by the Governing Board for a term of office of four years. The Governing Board may extend that term
of office once by four years when it considers that the interests of the EIT are best served by so doing.

2.
The Director shall be responsible for the day-to-day management of the EIT and be its legal representative. The
Director shall be accountable to the Governing Board and report to it on an ongoing basis on the development of the EIT
activities.

3.

The Director shall in particular:

(a) support the Governing Board and the Executive Committee in their work and provide the secretariat for their meet-

ings;

(b) prepare a draft SIA, a draft rolling triennial work programme, the annual report and the annual budget for submission

to the Governing Board through the Executive Committee;

(c) administer the selection process for KICs and ensure that the various stages of that process are carried out in a trans-

parent and objective manner;

(d) organise and manage the activities of the EIT;

(e) ensure the implementation of effective monitoring and evaluation procedures relating to the performance of the EIT

in accordance with Article 16 of the Regulation;

(f) be responsible for administrative and financial matters, including the implementation of the EIT budget. In this the

Director shall take due account of advice received from the internal auditing function;

(g) be responsible for all staff matters;

(h) submit the draft annual accounts and balance sheet to the internal auditing function, and subsequently to the

Governing Board, through the Executive Committee;

(i) ensure that the obligations of the EIT with regard to the contracts and agreements it concludes are met;

(j) provide the Executive Committee and the Governing Board with all information necessary for the performance of

their functions.

Article 6

Preparation of establishment of the support structure

For a transitional period, the Commission shall provide the necessary support towards the establishment of the EIT struc-
ture. For that purpose, until such time as the first appointed members of the Governing Board are appointed, an official
appointed by the Commission shall be the EIT legal representative and be responsible for staff, administrative and financial
matters, including the implementation of the EIT budget. Thereafter, the Governing Board shall designate, according to a
transparent procedure, a person who shall fulfil these functions or extend the mandate of the official appointed by the
Commission, until such time as the Director takes up his/her duties following his/her appointment by the Governing
Board, in accordance with Article 5. The Governing Board shall launch the procedure for choosing the Director of the EIT
without delay.

Article 7

Staff of the EIT

The staff of the EIT shall consist of personnel employed directly by the EIT under fixed term contracts. The condi-

1.
tions of employment of other servants of the European Communities shall apply to the Director and the Staff of the EIT.

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2.

Experts may be seconded to the EIT for a limited duration by participating States or other employers.

The Governing Board shall adopt provisions enabling seconded experts from participating States or other employers to
work at the EIT and defining their rights and responsibilities.

The EIT shall exercise, with regards to its staff, the powers which are devolved to the authority authorized to

3.
conclude the contracts with the staff members.

A member of staff may be required to make good, in whole or in part, any damage suffered by the EIT as a result of

4.
serious misconduct on his/her part in the course of or in connection with the performance of his/her duties.

Article 8

Principles for the evaluation and monitoring of KICs

The EIT shall organise continuous monitoring and periodic independent evaluations of the outcomes and results of each
KIC. These evaluations shall be based on good administrative practice and result oriented parameters and avoid unneces-
sary formal and procedural aspects.

Article 9

Duration, continuation and termination of a KIC

Subject to the outcomes of periodic evaluations and to the specificities of particular fields, a KIC shall normally have

1.
a time-frame of 7 to 15 years.

The Governing Board may decide to extend the operation of a KIC beyond the period initially set if this is the most

2.
appropriate way to achieve the objective of the EIT.

In the event that evaluations of a KIC show inadequate results, the Governing Board shall take appropriate measures

3.
including reduction, modification or withdrawal of its financial support or termination of the agreement.

Article 10

Winding up of the EIT

In the event of winding up of the EIT, its liquidation shall intervene under the supervision of the Commission in confor-
mity with the laws applicable. The agreements with the KICs and the act establishing the EIT Foundation shall lay down
the appropriate provisions in such situation.

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STATEMENT OF THE COUNCIL'S REASONS

I.

INTRODUCTION

The Council reached political agreement on the text of the draft Regulation of the European Parliament
and of the Council establishing the European Institute of Innovation and Technology at its meeting on
22 and 23 November 2007 (1).

Following this political agreement the Council by unanimity adopted its common position on 21 January
2008.

II. ANALYSIS OF THE COMMON POSITION

The Council common position to a very large extent takes over the position of the European Parliament
adopted at first reading on 26 September 2006. Most of the amendments adopted by the European
Parliament have been incorporated in the common position. This therefore meets the wishes of the
European Parliament as expressed by the latter and as accepted by the Council during the informal
contacts which took place after the adoption of the European Parliament's position at first reading.

In fact, the only amendment which the Council has not accepted is the one relating to the fields of
activities of the first Knowledge Innovation Communities (recital 24). However, following informal nego-
tiations with the European Parliament, the Council opted for the most appropriate compromise, i.e. to
keep the reference to renewable energy, instead of referring simply to energy.

The text of the political agreement, as approved by the Council, was also subsequently agreed by the
ITRE Committee of the European Parliament, with a view to the approval by the European Parliament of
the resulting Common Position.

III. CONCLUSION

The Council considers the text of the common position to be a well balanced text and the best achiev-
able compromise.

(1) Doc. 14699/07 EIT 19 EDUC 196 RECH 329 COMPET 352 CODEC 1291.