Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council Regulation (EC) No 1083/2006 as regards repayable assistance and financial engineering
Date: 2011-08-01
Institutions: European Commission
Subjects: Cohesion Fund, European Social Fund, balance of payments assistance, non-refundable aid, technology

EUROPEAN COMMISSION 

Brussels, 1.8.2011 
COM(2011) 483 final 

2011/0210 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Council Regulation (EC) No 1083/2006 as regards repayable assistance and 
financial engineering 

 
 
  
 
EXPLANATORY MEMORANDUM 

1. 

BACKGROUND TO THE PROPOSAL 

•  Reasons and objectives for the proposal 

Article 28(3) of Council Regulation (EC) 1260/1999 identified the various forms of 
assistance  that  could  be  provided  through  Structural  Funds  contributions,  namely 
"non  repayable  direct  assistance  […]  as  well  as  other  forms,  such  as  repayable 
assistance, an interest-rate subsidy, a guarantee, an equity holding, a venture-capital 
holding  or  another  form  of  finance".  The  Commission  Regulation  (EC)  448/2004 
defined  as  the  general  eligibility  rule  that expenditure  shall  actually  be  paid  out  by 
final beneficiaries as supported by receipted invoices or by accounting documents of 
equivalent probative value (Rule no. 1) and defined further specific eligibility rules 
regarding Structural Funds contributions to venture capital and loan funds (Rule no. 
8) and guarantee funds (Rule no. 9) also setting out that payments into such funds are 
treated as eligible expenditure actually paid out (Rule no. 1 paragraph 1.3). Member 
States  have  established  during  the  2000-2006  programming  period  for  Structural 
Funds these forms of assistance by setting up specific funds in accordance with rules 
no.  8  and  9,  and  through  repayable  assistance  delivered  via  other  instruments.  At 
least  in  one  Member  State,  independent  evaluation  has  recommended  these 
instruments as good practice. 

Council  Regulation  (EC)  1083/2006  does  not,  by  contrast,  provide  a  definition  of 
assistance  as  either  repayable  or  non-repayable.  The  Regulation  contains  in  Article 
44 provisions for "Financial Engineering Instruments". These provisions  are, in the 
current programming period, rather narrow as they allow financing of expenditure in 
respect of an operation comprising contributions to support a) financial engineering 
instruments  for  enterprises,  b)  urban  development  funds  and  c)  funds  or  other 
incentive schemes for energy efficiency and use of renewable energy in buildings. As 
a  result,  strictly  speaking  -  and  without  prejudice  to  provisions  of  Article  11  of 
Council Regulation (EC) 1081/2006, which already provides that assistance can take 
the form of reimbursable grant – repayable assistance seems not to be covered by the 
applicable Regulation.  

Member  States  have  continued  to  use  repayable  forms  of  assistance  based  on  the 
positive  experience  of  the  past  programming  period  2000-2006  and  some  also 
included descriptions of these systems in their 2007-2013 programming documents, 
which were approved by the Commission. Furthermore, such schemes have also been 
started anew in the current programming period in some Member States. 

It is therefore necessary to introduce a general definition of repayable assistance in 
the Regulation (EC) 1083/2006 and further provide that the assistance repaid shall be 
kept  in  a  separate  account  and  reused  to  the  same  purpose  or  in  line  with  the 
objectives  of  the  programme.  The  "repayable  assistance"  as  defined  covers 
reimbursable grants (i.e. grants which can be totally or partially reimbursed without 
interests) and credit lines managed by the managing authority via intermediate bodies 
(which are public financial institutions).  

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Moreover, as regards financial engineering, i.e. instruments covered by Article 44 of 
Regulation  (EC)  1083/2006,  it  is  a  current  practice  of  interpretation  by  the 
Commission  that  the  rules  on  major  projects,  revenue  generating  projects  and  on 
durability  of  operations  do  not  apply.  Having  regard  to  this  current  practice,  for 
reasons of legal certainty, it is opportune to clarify in an appropriate legal text that 
the  provisions  on  major  projects,  revenue  generating  projects  and  on  durability  of 
operations  (Articles  39,  55  and  57  of  Council  Regulation  (EC)  1083/2006)  do  not 
apply  to  the  operations  falling  under  Article  44.  Indeed,  in  the  case  of  financial 
engineering  under  Article  44,  the  operation  is  constituted  by  the  financial 
contribution to the financial engineering instrument and by the subsequent assistance 
undertaken  by  the  financial  engineering  instruments  into  final  recipients.  Such 
assistance  is  made  through  repayable  support  and  the  related  resources  returned  to 
operations must be reused pursuant to the specific rules laid down by Article 78(7) of 
Regulation (EC) 1083/2006. It follows from the above that the application of Articles 
39, 55 and 57 is neither necessary nor justified in respect of operations under Article 
44. 

In  addition,  having  regard  to  the  need  to  ensure  a  timely  spending  (for  eligible 
expenditure)  of  the  resources  made  available  by  the  operational  programmes  to 
financial  engineering  instruments  and  an  appropriate  monitoring,  by  the  Member 
States as well as by the Commission, of the implementation of financial engineering 
instruments which are established under Article 44, it is necessary to introduce: (i) a 
legal  obligation  for  financial  engineering  instruments  to  spend,  in  line  with  Article 
78(6)  (a)  to  (e)  of  Regulation  (EC)  1083/2006,  the  financial  contribution  paid  by 
managing authorities in establishing or contributing to such funds within a timeframe 
of two  years  (if  that is not  the  case, subsequent declarations of expenditure will be 
corrected  acordingly  by  deducing  the  unspent  amounts);  (ii)  a  legal  provision  in 
respect of monitoring of the implementation, inter alia in order to allow the Member 
States  to  provide  appropriate  reporting  to  the  Commission  as  regards  the  type  of 
instruments put in place and the relevant actions undertaken by such instruments on 
the ground.  

•  General context 

New  forms  of  finance  for  assistance  have  been  developed  in  the  2007-2013 
programming  period,  moving  away  from  traditional  grant-base  financing  to 
revolving forms of finance. These new financial instruments are seen as catalysts of 
public and private resources, to achieve the investment levels  needed  to implement 
the EU 2020 strategy. 

In  terms  of  scope,  currently  revolving  forms  of  finance  are  being  used  for  a  wider 
rage  of  activities  than  financial  engineering.  A  modification  of  the  regulation  is 
necessary to include support for operations where it is foreseen that financial support 
is  repaid  and  which  do  not  have  the  characteristics  of  and  fall  outside  the 
mechanisms of financial engineering instruments as defined in Article 44 of Council 
Regulation (EC) 1083/2006. This covers reimbursable grants and credit lines directly 
managed by the managing authority or intermediate bodies. 

At  the  same  time,  in  view  of  the  increasing  degree  of  implementation  of  financial 
engineering  instruments  under  Article  44  on  the  ground  and  of  the  limited 

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information available to the Commission so far on such instruments, a modification 
of  the  regulation  is  necessary  to  ensure  that  Member  States  as  well  as  the 
Commission  can  properly  monitor  these  forms  of  repayable  assistance  and  report 
them to the Commission. This, at the same time, will provide the Commission with a 
useful tool for the global assessment of the performance of these types of assistance. 

•  Provisions in force in the policy sphere of the proposal 

Article 44 of Council Regulation (EC) 1083/2006 defines the forms which financial 
engineering instruments can take in the current programming period as well as their 
scope of intervention: supporting SMEs access to finance, urban renewal and energy 
efficiency.  Special  provisions  for  reimbursement  of  expenditure  paid  by  Member 
States  or  managing  authorities  and  based  on  contributions  to  such  instruments  are 
contained in Article 78(6) of the above regulation. 

Article  11  of  Regulation  (EC)  1081/2006  indicates  the  form  of  assistance  provided 
by the ESF: non reimbursable individual or global grants, reimbursable grants, loan 
interest  rebates,  micro-credits,  guarantee  funds  and  the  purchase  of  goods  and 
services in compliance with public procurement rules.  

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2. 

CONSULTATION OF INTEREST PARTIES AND IMPACT ANALYSIS 

•  Consultation of interested parties 

The  European  Court  of  Auditors  has  identified  the  issue  of  repayable  assistance 
outside  Article  44  in  its  audits  of  ERDF  operations,  which  led  to  this  proposal  of 
amendment of Council Regulation (EC) 1083/2006. The proposed modification has 
been initiated after a thorough mapping of the situation on the ground in the Member 
States and, as a result, has been evocated with Member States in the framework of 
COCOF  meetings.  Furthermore,  based  on  the  recommendation  of  the  European 
Court of Auditors regarding monitoring of the financial engineering instruments, the 
current  proposal  includes  separate  provisions  on  timely  and  effective  spending  and 
on reporting of financial engineering instruments under Article 44. 

•  Procurement and use of expertise 

Use of external expertise has not been necessary. 

•  Impact analysis 

The present proposal will clarify the use of repayable forms of assistance at project 
level,  a  practice  which  has  been  well  established  in  the  programming  period  2000-
2006 and will give the use of structural funds a further boost and higher leverage. 

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The  clarification  of  rules  governing  cohesion  policy  provides  Member  States  with 
reassurance  that  the  schemes  based  on  repayable  forms  of  assistance  used 
successfully in the past programming period can be continued and built upon further. 
It  will  also  have  a  positive  impact  on  the  pace  of  programme  implementation, 
particularly by providing national, regional and local authorities a possibility to reuse 
funds for the same purpose.  

The  new  obligation  on  timely  spending  (within  two  years  of  the  payment  into  the 
fund)  and  on  reporting  of  financial  engineering  instruments  will  provide  the 
Commission  with  a  useful  tool  for  the  monitoring  and  global  assessment  of  the 
performance of these types of support. 

The proposal aims to provide clarity about the legality of an existing legal practice; 
the main expected impact is thus the reduction of legal risk. The proposal will have 
only  limited  practical  impacts,  linked  to  increased  reporting  obligation  on  financial 
engineering instruments already in place. No new budget is requested. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed measures 

The proposed modification builds on the wider scope of different forms of assistance 
as  specified  in  Article  28(3)  of  Council  Regulation  (EC)  1260/1999  and  provides 
necessary  complements  or  adjustments  to  the  current  regulatory  framework  as 
described below in detail. 

The proposed new point 8 of Article 2 provides for a definition of reimbursable grant 
as  a  direct  financial  contributions  by  way  of  donation  which  can  be  totally  or 
partially reimbursable without interest. 

The  proposed  new  Section  3a  under  Title  III,  Chapter  II  introduces  provisions  on 
"repayable  assistance".  The  new  Article  43a  seeks  to  establish  that  the  Structural 
Funds may finance expenditure in respect of an operation comprising contributions 
to support repayable assistance. This provision covers reimbursable grants and credit 
lines managed by the managing authority through intermediate bodies which are "in-
house"  public  financial  institutions.  For  the  sake  of  clarity,  the  mechanism  for 
declaration of expenditure and reimbursement for such repayable assistance remains 
the same as for non-repayable assistance (i.e. for outright grants), since it is based on 
receipted invoices or documents having equivalent probative value (as per Article 78 
(1) to (5) of Regulation (EC) 1083/2006). 

In  addition  the  new  Article  43b  clarifies  that  the  assistance  repaid,  to  the  body 
providing  the  assistance  or  to  another  competent  public  authority  of  the  Member 
State  shall  be  kept  in  a  separate  account  and  reused  to  the  same  purpose  or  in  line 
with the objectives of the operational programme.  

The  proposed  new  Article  44a  intends  to  clarify  that  provisions  regarding  major 
projects  (Article  39),  revenue  generating  projects  (Article  55)  and  durability  of 
operations  (Article  57)  shall  not,  as  a  matter  of  principle,  apply  to  financial 

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engineering instruments under Article 44, since these rules are rather conceived for 
other types of assistance.  

In  the  same  context,  a  new  Article  67a  on  reporting  of  financial  engineering 
instruments under Article 44 is introduced. This is done having regard to the need to 
ensure appropriate monitoring, by the Member States as well as by the Commission, 
of  the  implementation  of  financial  engineering  instruments,  inter  alia  in  order  to 
allow  the  Member  States  to  provide  appropriate  information  to  the  Commission  as 
regards the type of instruments put in place and  the relevant  actions undertaken by 
such instruments on the ground.  

In the same context, the proposed new paragraph within Article 78(6) of Regulation 
(EC)  1083/2006  aims  to  introduce  a  legal  obligation  in  order  to  ensure  that  the 
financial contribution paid by managing authorities for establishing or contributing to 
financial engineering instruments is spent for eligible expenditure within a timeframe 
of  two  years  of  the  payment  into  the  fund.  If  this  is  not  the  case,  the  subsequent 
statement  of  expenditure  will  have  to  be  corrected  accordingly  by  deducing  the 
unspent amounts. This is with a view to avoiding that money remains parked in such 
funds and unspent for long periods.  

The proposed new Article 78a inserts a general provision on the requirements of the 
statement of expenditure. With reference to Article 61 (2) of the Council Regulation 
(EC) 1605/2002 on the Financial Regulation applicable to the general budget of the 
European  Communities,  it  shall  allow  the  Commission  the  production  of  accounts 
which  give  a  true  image  of  the  Communities  assets  and  of  the  budgetary 
implementation. 

•  Legal basis 

Council  Regulation  (CE)  No  1083/2006  of  11  July  2006  laying  down  general 
provisions on the European Regional Development Fund, the European Social Fund 
and  the  Cohesion  Fund  and  repealing  Regulation  (EC)  No  1260/1999  defines  the 
common  rules  applicable  to  the  three  Funds.  Based  on  the  principle  of  shared 
management  between  the  Commission  and  the  Member  States,  this  regulation 
includes  provisions  for  the  programming  process  as  well  as  arrangements  for 
programme  (including  financial)  management,  monitoring,  financial  control  and 
evaluation of projects. 

•  Subsidiarity principle 

The proposal complies within the subsidiarity principle to the extent that it seeks to 
provide  legal  security  at  the  level  of  European  Union  that  support  provided  by 
Member  States  through  Structural  Funds  to  schemes  based  on  repayable  forms  of 
assistance implemented lawfully in the previous programming period and/or started 
in  the  current  period  but  not  having  the  characteristics  of  financial  engineering 
instruments  are  permitted  and  legitimate  under  the  present  Structural  Fund 
regulations. In this context, it is necessary to also define at the European Union level 
the  treatment  of  assistance  repaid  for  these  types  of  schemes  not  having  the 
characteristics of financial engineering instruments.  

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Moreover,  timely  spending  (within  two  years  of  the  payment  into  the  fund)  and 
reporting obligations on financial engineering under Article 44 shall be introduced to 
allow  the  Member  States  to  quickly  implement  the  instruments  and  to  provide 
appropriate information to the Commission as regards the type of instruments put in 
place  and  as  regards  the  relevant  actions  undertaken  by  such  instruments  on  the 
ground. This, at the same time, will provide the Commission with a useful tool for 
the global assessment of the overall performance of these types of assistance. 

•  Proportionality principle 

The proposal conforms to the proportionality principle: 

The  current  proposal  is  indeed  proportionate  since  it  does  not  go  beyond  the 
minimum  required  rules  in  order  to  provide  legal  security  to  Member  States  that 
schemes based on repayable assistance supported by Structural Funds but not having 
the  characteristics  of  financial  engineering  instruments  are  permitted  in  the  current 
programming period. In order to allow Member States benefit from the clarifications 
during the whole programming period it is necessary to apply it retroactively. 

An  obligation  to  spend  the  financial  contribution  of  the  managing  authorities  for 
establishing  financial  engineering  instruments  within  two  years  of  the  payment  of 
such  contribution  into  the  fund  (if  this  is  not  the  case,  the  subsequent  statement  of 
expenditure will have to be corrected accordingly by deducing the unspent amounts) 
and some reporting obligations are set out for financial engineering instruments only 
(unlike  repayable  assistance  not  having  the  characteristics  of  Article  44,  they  are 
implemented by means of "funds"), and are established in order to provide only the 
necessary minimum flow of information from the Member States to the Commission 
as  regards  the  timely  and  correct  implementation  on  the  ground  of  financial 
engineering  instruments.  In  addition,  the  obligation  to  timely  spend  and  the  further 
reporting obligations are not applied retroactively.  

•  Choice of instruments 

Proposed instrument: regulation. 

Other instruments would not be appropriate for the following reasons: 

The  Commission  has  explored  the  scope  for  manoeuvre  provided  by  the  legal 
framework  to  declare  the  established  practice  of  operations  directly  managed  by 
intermediate  bodies  or  managing  authorities  not  having  the  characteristics  of 
financial  engineering  instruments  as  compatible  with  the  existing  regulation  on 
Structural  Funds.  However,  after  thorough  internal  consultations, it  turned  out,  that 
for  the  sake  of  un-ambiguity  an  amendment  of  the  Council  Regulation  (EC) 
1083/2006  in  this  respect  is  required.  The  objective  of  these  revisions  is  to  further 
facilitate the mobilisation of Union resources for various projects falling outside the 
scope of Article 44 thereby increasing number of projects benefitting from Structural 
Funds  support.  Instruments  set  up  under  the  provisions  of  Article  44  of  this 
regulation could not be established for these non standard  operations, as  Article 44 
limits  itself  to  funds  investing  in  favour  of  SMEs,  urban  renewal  and  energy 
efficiency. 

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Currently, there is no legal obligation to spend within a defined timeframe within the 
duration  of  the  programme  the  financial  contribution  paid  by  managing  authorities 
into  financial  engineering  instruments,  since  the  "netting"  of  such  contribution  (in 
terms of verification of "eligible expenditure") only takes place at the the closure of 
the  operational  programme;  in  addition,  the  monitoring  and  reporting  on  financial 
engineering  instruments  by  Member  States  has  only  recently  been  introduced  on  a 
voluntary  basis.  This  is  not  sufficient  to  allow  the  Commission  to  have  an  overall 
picture of the implementation of these repayable forms of assistance on the ground. 
In  addition,  the  European  Court  of  Auditors  has  recommended  the  Commission  to 
carry out an appropriate check on the effective spending of the resources allocated to 
financial  engineering  instrument  as  well  as  an  appropriate  monitoring  of  the 
implementation of their actions. In view of the above, the current proposal includes 
separate  provisions  on  (i)  timely  spending  of  the  financial  contribution  paid  into 
financial  engineering  instruments  under  Article  44  (if  this  is  not  the  case,  the 
subsequent  statement  of  expenditure  will  have  to  be  corrected  accordingly  by 
deducing  the  unspent  amounts)  and  (ii)  reporting  of  financial  engineering 
instruments under Article 44. 

4. 

BUDGETARY IMPACT 

There is no impact on commitment appropriations since no modification is proposed 
to  the  maximum  amounts  of  Structural  Funds  financing  provided  for  in  the 
Operational Programmes for the programming period 2007-2013. 

The  Commission  believes 
improve 
implementation through increased legal security provided to the Member States. 

the  proposed  measure  may 

that 

the 

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2011/0210 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Council Regulation (EC) No 1083/2006 as regards repayable assistance and 
financial engineering 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 177 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Economic and Social Committee1, 

Having regard to the opinion of the Committee of the Regions2, 

Acting in accordance with the ordinary legislative procedure 

Whereas: 

(1)  Member States have had positive experiences with repayable assistance schemes at the 
level  of  operations  during  the  programming  period  2000-2006  and  have  therefore 
continued such schemes or have started to implement repayable assistance schemes in 
the current programming period 2007-2013. Some Member States have also included 
descriptions of those schemes in their programming documents, which were approved 
by the Commission. 

(2) 

Council  Regulation  (EC)  No  1083/2006  of  11  July  2006  laying  down  general 
provisions  on  the  European  Regional  Development  Fund,  the  European  Social  Fund 
and  the  Cohesion  Fund  and  repealing  Regulation  (EC)  No  1260/19993  sets  out 
financial  engineering  instruments  with  precise  areas  and  scope  of  intervention. 
However,  the  schemes  implemented  by  Member  States  in  the  form  of  reimbursable 
grants and of credit lines managed by managing authorities via intermediate bodies are 
neither appropriately covered by the provisions on financial engineering instruments, 
nor by other provisions of Regulation (EC) No 1083/2006. It is therefore necessary, in 
line with Article 11(1) of Regulation (EC) No 1081/2006 of the European Parliament 
and  of  the  Council  of  5  July  2006  on  the  European  Social  Fund  and  repealing 

1 
2 
3 

OJ L , , p. . 
OJ L , , p. . 
OJ L 210, 31.7.2006, p. 25. 

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Regulation  (EC) No 1784/19994, which  already provides that assistance can take the 
form  of  reimbursable  grants,  to  set  out  in  a  new  Section  of  Regulation  (EC)  No 
1083/2006 that the Structural Funds may co-finance repayable assistance. That Section 
should cover reimbursable grants and credit lines managed by the managing authority 
through intermediate bodies which are public financial institutions.  

Having regard to the fact that the financial resources used through repayable assistance 
are  partially  of  totally  reimbursed  by  the  beneficiaries,  it  is  necessary  to  introduce 
appropriate provisions for the reuse of assistance reimbursed for the same purpose or 
in line with the objectives of the respective programme.  

It  is  necessary  to  clarify  that  the  provisions  on  major  projects,  revenue-generating 
projects and durability of operations should not be applicable as a matter of principle 
to financial engineering instruments, since those rules are rather meant for other types 
of operations. 

Having regard to the need of ensuring appropriate monitoring, by the Member States 
as  well  as  by  the  Commission,  of  the  implementation  of  financial  engineering 
instruments,  inter  alia  in  order  to  allow  the  Member  States  to  provide  appropriate 
information  to  the  Commission  on  the  type  of  instruments  put  in  place  and  on  the 
relevant  actions  undertaken  by  such  instruments  on  the  ground,  it  is  necessary  to 
introduce  a  provision  on  reporting.  This  would  also  allow  the  Commission  to  better 
assess the overall performance of financial engineering instruments. 

In order to ensure that the financial contribution which has been paid by the managing 
authorities  into  financial  engineering  instruments  and  included  in  a  statement  of 
expenditure is effectively spent within a defined timeframe, it is necessary to introduce 
an  obligation  for  financial  engineering  instruments  to  spend  the  contribution  for 
eligible expenditure within two years of the date of the relevant certified statement of 
expenditure.  The  subsequent  statement  of  expenditure  should  be  corrected 
accordingly, by deducing the unspent amounts, if the contribution in question has not 
been spent within the indicated period. 

In  order  to  ensure  compliance  with  Article  61(2)  of  the  Council  Regulation  (EC) 
1605/2002  on  the  Financial  Regulation  applicable  to  the  general  budget  of  the 
European Communities5, it is necessary to require that the statement of expenditure to 
be  submitted  to  the  Commission  shall  provide  all  information  necessary  for  the 
Commission to produce accounts which give a true image of the Union's assets and of 
budgetary implementation  

The  amendment  intended  to  clarify  the  legality  of  the  application  of  an  existing 
practice  with  effect  from  the  beginning  of  the  eligibility  period  as  set  out  by 
Regulation  (EC)  1083/2006  should  have  retroactive  effect  from  the  beginning  of  the 
current programming period 2007-2013.  

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

Regulation (EC) No 1083/2006 should therefore be amended accordingly, 

4 
5 

OJ L 210, 31.7.2006, p. 12. 
OJ L 248, 16.9.2002, p. 1. 

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HAVE ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 1083/2006 is amended as follows: 

(1) 

In Article 2 the following point 8 is added: 

"(8)  "reimbursable  grant":  a  direct  financial  contribution  by  way  of  a  donation 
which can be totally or partially reimbursable without interest." 

(2) 

In Chapter II of Title III, the following Section 3a is inserted: 

"Section 3a 

Repayable assistance 

Article 43a 

Forms of repayable assistance 

As  part  of  an  operational  programme,  the  Structural  Funds  may  co-finance 
1. 
repayable assistance in the form of reimbursable grants, or credit lines managed by 
the  managing  authority  through  intermediate  bodies  which  are  public  financial 
institutions.  

The  statement  of  expenditure  concerning  repayable  assistance  shall  be 

2. 
submitted in accordance with Article 78(1) to (5). 

Article 43b 

Reuse of repayable assistance 

Assistance  repaid  to  the  body  that  provided  the  assistance  or  to  another  competent 
authority of the Member State shall be kept in a separate account and reused for the 
same purpose or in line with the objectives of the operational programme." 

(3) 

The following Article 44a is inserted: 

"Article 44a 

Non-application of certain provisions 

Articles 39, 55 and 57 shall not apply to operations falling under Article 44." 

(4) 

The following Article 67a is inserted: 

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"Article 67a 

Reports on implementation of financial engineering instruments 

By  31  January  and  by  15  September  each  year,  the  managing  authority  shall 
1. 
send  to  the  Commission  a  specific  report  covering  the  operations  consisting  of 
financial engineering instruments for the period until 31 December and until 30 June 
respectively.  

The  reports  referred  to  in  paragraph  1  shall  include,  for  each  financial 

2. 
engineering instrument, the following information: 

(a) 

(b) 

description  of  the  financial  engineering  instrument  and  implementation 
arrangements; 

identification  of  the  entities  which  implement  the  financial  engineering 
instrument, including those acting through holding funds, as well as description 
of their selection process; 

(c) 

dates of payments and amounts of the assistance from the Structural Funds and 
national co-financing paid to the financial engineering instrument; 

(d)  dates  and  corresponding  amounts  included  in  statements  of  expenditure 
submitted  to  the  Commission  and  dates  and  amounts  reimbursed  by  the 
Commission; 

(e) 

amounts of the assistance from the Structural Funds and national co-financing 
paid by the financial engineering instrument." 

(5) 

In Article 78(6), the following sub-paragraph is added: 

"The financial contribution to financial engineering instruments as defined in Article 
44,  which has been  included  in  a  statement of expenditure and  which has not  been 
paid  out  as  eligible  expenditure  in  line  with  the  second  subparagraph  of  this 
paragraph  within  two  years  of  the  date  of  the  certified  statement  of  expenditure 
concerned, shall be deducted from the next certified statement of expenditure."  

(6) 

The following Article 78a is inserted: 

"Article 78a 

Requirement to provide information in the statement of expenditure 

The statement of expenditure to be submitted to the Commission shall provide all the 
information  necessary  for  the  Commission  to  produce  accounts  in  accordance  with 
Article 61(2) of the Regulation (EC) 1605/2002. 

For the purpose of defining the uniform conditions of application of this Article, the 
Commission  shall  be  empowered  to  adopt  implementing  acts  according  to  Article 
291 of the Treaty on the Functioning of the European Union."  

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12 

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Article 2 

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

It shall apply from 1 January 2007. 

However Articles 1(4), 1(5) and 1(6) shall apply with effect from the day of entry into force 
of this Regulation.  

For  the  purpose  of  Article  1(5),  where  the  financial  contribution  was  already  included  in  a 
statement  of  expenditure  prior  to  the  entry  into  force  of  this  Regulation,  the  two  years 
deadline shall start from the day of entry into force of this Regulation.  

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

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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13 

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LEGISLATIVE FINANCIAL STATEMENT 

1. 

NAME OF THE PROPOSAL: 

Proposal  for  a  REGULATION  (EU)  No  …/2011  OF  THE  EUROPEAN 
PARLIAMENT AND OF THE COUNCIL amending Council Regulation (EC) 
No 1083/2006 as regards repyable assistance and financial engineering. 

2. 

ABM / ABB FRAMEWORK 

Policy Area(s) concerned and associated Activity/Activities: 

Regional Policy; ABB activity 13.03 

Employment and Social Affairs; ABB activity 04.02 

3. 

BUDGET LINES 

3.1. 

Budget  lines  (operational  lines  and  related  technical  and  administrative 
assistance lines (ex- B.A lines)): 

The proposed new action will be implemented on the following budget lines: 

•  13.031600 Convergence (ERDF) 

•  13.031700 Peace (ERDF) 

•  13.031800 Regional competitiveness & employment (ERDF) 

•  13.031900 Territorial cooperation (ERDF) 

•  04.0217 Convergence (ESF) 

•  04.0219 Regional competitiveness & employment (ESF) 

3.2. 

Duration of the action and of the financial impact: 

The proposed measure may improve the implementation as it provides legal security  to 
Member States on the use of all forms of repayable assistance.  

In addition, legal obligations for financial engineering instruments to spend the financial 
contribution  paid  by  managing  authorities  in  establishing  or  contributing  to  such  funds 
within  a  timeframe  of  two  years  are  introduced;  moreover  reporting  obligations  are  set 
out  for  financial  engineering  instruments,  and  are  established  in  order  to  provide  the 
minimum necessary flow of information from the Member States to the Commission as 

EN 

14 

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regards  the  implementation  on  the  ground  of  financial  engineering  instruments.  These 
obligations are not applied retroactively. The financial impact for the Union budget is non 
existing as no additional resources are required.  

3.3. 

Budgetary characteristics: 

Budget 
line 

13.031600 

13.031700 

13.031800 

13.031900 

04.0217 

04.0219 

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
from applicant 
countries 

Heading in 
financial 
perspective 

Non-
comp 

Non-
comp 

Non-
comp 

Non-
comp 

Non-
comp 

Non-
comp 

Diff 

NO 

NO 

Diff 

NO 

NO 

Diff 

NO 

NO 

Diff 

NO 

NO 

Diff 

NO 

NO 

Diff 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

No 1b 

No 1b 

No 1b 

No 1b 

No 1b 

No 1b 

4. 

SUMMARY OF RESOURCES 

4.1. 

Financial Resources 

4.1.1. 

Summary of commitment appropriations (CA) and payment appropriations (PA)  

The  following  tables  show  the  estimated  impact  of  the  proposed  measures  in  2011  to 
2013. 

EN 

15 

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Secti
on 
no. 

Expenditure type 

Operational expenditure6  

Commitment 
Appropriations (CA) 

8.1 

Payment  Appropriations 
(PA) 

a 

b 

EUR million (to 3 decimal places) 

Year 
n 

n + 1 

n + 2 

n + 3 

n + 4 

n + 5 
and 
later 

Total 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a.

n.a.

n.a 

n.a 

n.a 

 n.a. 

n.a. 

n.a

n.a.

Administrative expenditure within reference amount7 

Technical 
& 
administrative  assistance 
(NDA) 

8.2.4 

c 

TTOOTTAALL  RREEFFEERREENNCCEE  AAMMOOUUNNTT  

Commitment 
Appropriations 

Payment 
Appropriations 

a+c 

b+c 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a.

n.a.

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a.

n.a.

n.a. 

n.a. 

n.a 

n.a. 

n.a. 

n.a.

0,000

Administrative expenditure not included in reference amount8 

Human 
associated 
(NDA) 

resources 

and 
expenditure 

Administrative  costs,  other 
than  human  resources  and 
not 
associated 
included in reference amount 
(NDA) 

costs, 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a.

n.a.

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a.

n.a.

8.2.5 

d 

8.2.6 

e 

Total indicative financial cost of intervention  

TOTAL  CA 
cost 
Resources 

of 

TOTAL  PA 
cost 
Resources 

of 

including 
Human 

including 
Human 

a+c
+d
+e 

b+c
+d
+e 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a.

n.a.

n.a 

n.a. 

n.a 

n.a. 

n.a. 

n.a.

n.a

6 
7 
8 

Expenditure that does not fall under Chapter xx 01 of the Title xx concerned 
Expenditure within article xx 01 04 of Title xx. 
Expenditure within chapter xx 01 other than articles xx 01 04 or xx 01 05. 

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Co-financing details 

Co-financing body 

…………………… 

TOTAL CA including co-
financing 

f 

a+c
+d+
e+f 

EUR million (to 3 decimal places) 

n + 1 

n + 2 

n + 3 

n + 4 

Year 
n 

n  +  5 
and 
later 

Total 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a.

n.a.

4.1.2.  Compatibility with Financial Programming 

⌧  Proposal is compatible with existing financial programming. 

Proposal will entail reprogramming of the relevant heading in the financial 

(cid:133) 
perspective. 

Proposal may require application of the provisions of the Interinstitutional 

(cid:133) 
Agreement9 (i.e. flexibility instrument or revision of the financial perspective). 

4.1.3.  Financial impact on Revenue 

⌧ 

Proposal has no financial implications on revenue 

(cid:133) 

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

Budget line 

Revenue 

EUR million (to one decimal place) 

Situation following action 

[Yea
r n] 

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

] 

[n+4]  [n+5]

10

Prior to
action 
[Year 
n-1] 

a) Revenue in absolute terms 

n.a.

n.a.

n.a.

n.a. 

n.a. 

n.a.

b) Change in revenue 

 ∆ 

n.a.

n.a.

n.a.

n.a. 

n.a. 

n.a.

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

9 
10 

See points 19 and 24 of the Interinstitutional agreement. 
Additional columns should be added if necessary i.e. if the duration of the action exceeds 6 years 

EN 

17 

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4.2. 

Human Resources FTE (including officials, temporary and external staff) – 
see detail under point 8.2.1. 

Annual requirements 

Year n 

n + 1 

n + 2 

n + 3 

n + 4 

n + 5 
and 
later 

Total  number  of  human 
resources 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

5. 

CHARACTERISTICS AND OBJECTIVES 

5.1. 

Need to be met in the short or long term 

Given that it is linked to real expenditure incurred by beneficiaries, the reimbursement of 
payment  claims  including  repayable  forms  of  assistance  at  the  level  of  operations  will 
prolong the impact of structural funds interventions in assisted areas and sectors. 

5.2. 

Value-added  of  Community  involvement  and  coherence  of  the  proposal 
with other financial instruments and possible synergy 

The continuation of good practice of repayable forms of assistance at projects level will 
create long lasting instruments and enable reuse of Funds. 

5.3. 

Objectives,  expected  results  and  related  indicators  of  the  proposal  in  the 
context of the ABM framework 

Further clarification of rules governing cohesion policy will have positive effects on the 
implementation of programmes on the ground. The use of repayable forms of assistance 
is further encouraged and leads to greater leverage and durability of interventions. 

5.4.  Method of Implementation (indicative) 

Show below the method(s) chosen for the implementation of the action. 

• 

6. 

With Member states 

MONITORING AND EVALUATION 

6.1.  Monitoring system 

Not needed, as it falls under the established monitoring of Structural Funds. 

EN 

18 

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6.2. 

Evaluation 

6.2.1.  Ex-ante evaluation 

Given the fact that this proposal aims at allowing an established and justifiable practice 
and  is  a  correction  of  an  omission  of  the  current  regulation,  no  ex-ante  evaluation  has 
been undertaken. 

6.2.2.  Measures  taken  following  an  intermediate/ex-post  evaluation  (lessons  learned 

from similar experiences in the past) 

N/A 

6.2.3.  Terms and frequency of future evaluation 

N/A 

7. 

ANTI-FRAUD MEASURES  

N.A. 

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19 

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8. 

DETAILS OF RESOURCES 

8.1. 

Objectives of the proposal in terms of their financial cost 

(Headings of Objectives, 
actions and outputs should be 
provided) 

Type of 
output 

Av. 
cost 

Year n 

Year n+1 

Year n+2 

Year n+3 

Year n+4 

Year n+5 and 
later 

TOTAL 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

No. 
outputs 

Total 
cost 

Commitment appropriations in EUR million (to 3 decimal places) 

OPERATIONAL OBJECTIVE 
No.1 Sustain the implementation 
of the operational programmes 

Action 1 – 100% co-financing 
rate 

TOTAL COST 

0,000 

0,000 

0,000 

0,000 

0,000 

0,000 

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20 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8.2. 

Administrative Expenditure 

8.2.1.  Number and type of human resources 

Types of 
post 

Staff to be assigned to management of the action using existing and/or additional 
resources (number of posts/FTEs) 

Year n 

Year n+1 

Year n+2 

Year n+3 

Year n+4 

Year n+5 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

Officials 
or 
temporary 
staff (XX 
01 01) 

A*/AD 

B*, 
C*/AST 

Staff financed by art. 
XX 01 02 

Other  staff  financed 
by art. XX 01 04/05 

TOTAL 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

8.2.2.  Description of tasks deriving from the action 

N/A 

8.2.3. 

Sources of human resources (statutory) 

(When  more  than  one  source  is  stated,  please  indicate  the  number  of  posts  originating 
from each of the sources) 

Posts  currently  allocated  to  the  management  of  the  programme  to  be 

(cid:133) 
replaced or extended 

(cid:133) 

(cid:133) 

Posts pre-allocated within the APS/PDB exercise for year n 

Posts to be requested in the next APS/PDB procedure 

Posts  to  be  redeployed  using  existing  resources  within  the  managing 

(cid:133) 
service (internal redeployment) 

Posts required for year n although not foreseen in the APS/PDB exercise 

(cid:133) 
of the year in question 

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8.2.4.  Other Administrative expenditure included in reference amount (XX 01 04/05 – 

Expenditure on administrative management) 

EUR million (to 3 decimal places) 

Year 
n 

Year 
n+1 

Year 
n+2 

Year 
n+3 

Year 
n+4 

Year 
n+5  

and 
later 

TOTAL 

Budget line 

(number and heading) 

1  Technical and administrative 

assistance (including related staff 
costs) 

Executive agencies 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

Other technical and administrative 
assistance 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

- intra muros  

- extra muros 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

Total Technical and administrative 
assistance 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

8.2.5.  Financial  cost  of  human  resources  and  associated  costs  not  included  in  the 

reference amount 

EUR million (to 3 decimal places) 

Type of human resources 

Year n 

Year n+1  Year n+2  Year n+3  Year n+4 

Year n+5 

and later 

Officials  and  temporary  staff 
(XX 01 01) 

Staff financed by Art XX 01 02 
(auxiliary,  END,  contract  staff, 
etc.) 

(specify budget line) 

Total cost of Human 
Resources and associated 
costs (NOT in reference 
amount) 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

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22 

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Calculation– Officials and Temporary agents 

Reference should be made to Point 8.2.1, if applicable 

n.a. 

Calculation– Staff financed under art. XX 01 02 

Reference should be made to Point 8.2.1, if applicable 

n.a. 

8.2.6.  Other administrative expenditure not included in reference amount 

EUR million (to 3 decimal places) 

Year 
n+1 

Year 
n+2 

Year 
n+3 

Year 
n+4 

Year 
n 

Year 
n+5 

and 
later 

TOTAL 

XX 01 02 11 01 – Missions 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

XX 01 02 11 02 – Meetings & Conferences 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

XX 01 02 11 03 – Committees  

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

XX 01 02 11 04 – Studies & consultations 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

XX 01 02 11 05 - Information systems 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

 2  Total Other Management 

Expenditure (XX 01 02 11) 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

3  Other expenditure of an 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

administrative nature (specify 
including reference to budget line) 

Total Administrative expenditure, other 
than human resources and associated 
costs (NOT included in reference 
amount) 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

Calculation - Other administrative expenditure not included in reference amount 

n.a. 

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