CELEX: 52011PC0615
Language: en
Date: 2011-10-06
Title: Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund covered by the Common Strategic Framework and laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1083/2006

|
			
		
		
		52011PC0615
		
			Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund covered by the Common Strategic Framework and laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1083/2006 /* COM/2011/0615 final - 2011/0276 (COD) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM

1.                      
CONTEXT OF THE PROPOSAL

On 29 June 2011, the Commission adopted a
proposal for the next multi-annual financial framework for the period 2014-2020:
A Budget for Europe 2020[1]. Simplification of policy delivery, focus on results and increased
use of conditionality are among the major hallmarks of the next set of
programmes. 
Simplification has been defined as a key
objective in the EU Budget Review Communication[2], the Smart Regulation agenda[3] and the aforesaid communication on the next multi-annual financial
framework. Experience suggests that in the current programming period, the
diversity and fragmentation of rules governing spending programmes are often
perceived as unnecessarily complicated and difficult to implement and control. This
imposes a heavy administrative burden on beneficiaries as well as on the
Commission and Member States, which can have the unintended effect of
discouraging participation, increasing error rates and delaying implementation.
This means that the potential benefits of EU programmes are not fully realised.

The European Regional Development Fund
(ERDF), the European Social Fund (ESF), the Cohesion Fund (CF), the European
Agricultural Fund for Rural Development (EAFRD) and the future European
Maritime and Fisheries Fund (EMFF) (hereinafter referred to as the 'CSF Funds')
pursue complementary policy objectives and their management is shared between
the Member States and the Commission. It is therefore important to maximise the
effectiveness of all structural instruments in terms of delivering objectives
and targets set in programmes and optimise synergies and efficiency of the
different instruments. This will be achieved through sound policy, regulatory
and institutional framework conditions for the funds, an increased focus on
results and monitoring progress towards objectives and targets agreed in
programmes as well as the harmonisation, to the extent possible, of
implementation rules and control requirements.
Against this background, this Regulation delivers
a common set of basic rules. It is divided into two parts. 
The first part sets out a series of common
provisions governing all structural instruments covered by the Common Strategic
Framework. These provisions concern the general principles of support such as
partnership, multi-level governance, equality between men and women,
sustainability and compliance with applicable EU and national law. The proposal
also contains the common elements of strategic planning and programming,
including a list of joint thematic objectives derived from the Europe 2020 Strategy,
provisions on the Common Strategic Framework at Union level and on Partnership
Contracts to be concluded with each Member State. It sets out a common approach
to reinforce the performance orientation of the cohesion policy, the rural
development policy and the maritime and fisheries policy and therefore includes
provisions concerning conditionalities and performance review, but also the
arrangements for monitoring, reporting and evaluation. Common provisions
concerning the implementation of CSF Funds are also set out with regard to
eligibility rules, and special arrangements are defined for financial
instruments and community led local development. Some management and control
arrangements are also common for all CSF Funds. 
The second part includes specific
provisions set out for the ERDF, the ESF and the CF. These include provisions
related to the mission and goals of cohesion policy, the financial framework,
specific programming and reporting arrangements, major projects and joint
action plans. The second part sets out the requirements on management and
control systems under cohesion policy and elaborates the specific arrangements
for control and financial management.
At the same time, the Commission will
ensure that synergies already obtained through simplification and harmonisation
of the first pillar (EAGF – European Agricultural Guarantee Fund) and the
second pillar (EAFRD) of the Common Agriculture Policy are preserved. The
strong link between the EAGF and the EAFRD will therefore be maintained and the
structures already in place in the Member States will be sustained.

2.                      
RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES
AND IMPACT ASSESSMENTS
2.1.                
Consultations and expert advice

The Regulation draws on extensive
consultations with stakeholders, including Member States, regions, social and
economic partners, academic experts and international institutions in the
context of the preparation of the proposal for each structural fund for the
2014-2020 financial framework. The results of the ex post evaluations
carried out on the 2000-2006 programmes; and a broad range of studies and
expert advice were used as input. 
For the next cohesion policy framework,
expert advice was provided by the High Level Group reflecting on future
Cohesion Policy, with 10 meetings held between 2009 and 2011, an informal
platform established to support the work of the Commission in developing the
future directions of cohesion policy as well as a Task
Force on Conditionality, which met three times in early 2011. A public
consultation on the conclusions of the Fifth Cohesion Report was held between
12 November 2010 and 31 January 2011. A total of 444 contributions were
received. A summary of the results was published on 13 May 2011[4]. 
On the future of rural development, a
public consultation was held between 23 November 2010 and 25 January 2011 and
an advisory committee with stakeholders was organised on 12 January 2011.[5] Altogether, 517 contributions were received by the Commission. Of the
contributions from organisations, 44% came from the farming and processing
sector and 40% from national, regional and local authorities, environmental
organisations, think-tanks and research institutes as well as, development
organisations, the trade sector, and consumer organisations. Other
organisations (12%) participating in the consultation included health
protection organisations, water management bodies and civil society
representations.
On reform of the common fisheries policy, a
Green Paper was adopted in April 2009[6], followed by a public consultation. In addition to the public
consultation, approximately 200 meetings with Member States, the Advisory
Committee on Fisheries and Aquaculture (ACFA) and the Regional Advisory
Councils (RACs), the fishing industry, the processing and marketing sector,
trade unions, NGOs, and the research community were organized. In particular:
(i) two meetings with the Member States, during which future funding was
discussed, took place in Gent (12-14 September 2010) and Noordwijk (9-11 March
2011); (ii) a dedicated seminar on the future European Fisheries Fund with the
participation of stakeholders from industry, trade unions and Member States was
organised on 13 April 2010, in Brussels; (iii) a conference on the future of
local development in fisheries areas took place in Brussels (12-13 April 2011).

A number of common conclusions can be drawn
from the results of the different public consultations which confirmed the
following:
–     
A majority of stakeholders called for continued
financial support of these policies;
–     
EU support should focus on a number of
priorities and the different policies should be aligned with the Europe 2020 Strategy;
–     
For cohesion policy in particular, stakeholders
called for a more results-oriented approach and there was strong support for a
more transparent and simplified set of financial management procedures;
A majority of stakeholders called for a more
integrated approach or joined-up strategies with other EU policies and
financial instruments.

2.2.                
Impact assessment 

This proposal draws on three Impact
Assessments: one carried out for the ERDF, the CF and the ESF together; and one
each for the EAFRD and for the EMFF. These impact assessments analysed issues
including EU added value, performance and delivery of the policies, as well as
simplification and harmonisation of rules. The options assessed in the impact
assessments related to (i) improving the capacity of the policies to deliver
European added value, (ii) increasing the performance of the policies and (iii)
simplification – reducing administrative costs and minimising the risk error.

2.2.1.          
Delivering European added value

To be able to deliver greater European
added value, the structural programmes need to both: a) concentrate their
support on EU priorities and b) coordinate with other EU policies and financial
instruments. The Europe 2020 Strategy provides a clear set of common
objectives, including headline targets and flagship initiatives, as a clear
framework for identification of funding priorities. There is broad consensus
among stakeholders on the role of the different policies (cohesion policy,
rural development policy and maritime and fisheries policy) in contributing to
the achievement of the Europe 2020 Strategy[7]. 
As for concentration on EU priorities, the
options assessed included a flexible approach to concentration by earmarking
provisions; a more visible and comprehensive link with the Europe 2020 headline
targets and the Integrated Guidelines, ensuring a critical mass for the ESF
and, thirdly, concentration on EU priorities in less developed Member States
only. The preferred option is to establish a strong link to Europe 2020 targets
which would contribute most to reaching the headline targets.
As for coordination with other EU policies
and financial instruments, the options examined included a loose alignment
based on non-binding Community Strategic Guidelines, a more comprehensive
alignment with the Europe 2020 objectives through the Common Strategic
Framework and Partnership Contract, and no alignment with other EU policies and
financial instruments beyond formal compliance. Strategic planning arrangements
which include the Common Strategic Framework at Union level and Partnership
Contracts at national level are considered to ensure effective coordination
between Union policies and instruments. 

2.2.2.          
Increasing the performance of the policy

The effectiveness of the different
structural instruments depends on sound policy, regulatory and institutional
frameworks. In many sectors, a combination of strategic
and regulatory conditions and public investment is needed to address
bottlenecks to growth effectively. The options examined
in this context related to: a) the status quo (macro-fiscal conditionality
under the CF, compliance with procedures and with EU sectoral legislation and
strategic frameworks, albeit unsystematically applied, no provisions related to
performance; b) ex ante conditionalities to be fulfilled prior to the
adoption of the programmes; c) ex post conditionalities including the
performance framework and performance reserve; d) strengthened macro-fiscal
conditionality; and e) combined option. The preferred option was the combined
option since this option would allow addressing the preconditions necessary for
the effective use of the CSF Funds and would provide incentives to attain
predefined objectives and targets and align the implementation of programmes
with the Union's economic governance. 

2.2.3.          
Simplification - reducing administrative costs
and minimising the risk error

Sound, effective
and efficient management of the structural instruments requires appropriate,
effective and transparent systems involving all the different administrations
concerned. These systems need to ensure the selection of high quality
operations and the effective implementation of these operations to achieve the
objectives of the policy. The management and control systems must also ensure
the prevention and detection of irregularities, including fraud, and thus
reasonable assurance on the regularity of expenditure. At the same time the
delivery system should be as simple and streamlined as possible to ensure
efficient implementation and the reduction of administrative burden for
beneficiaries
The options examined for cohesion policy
included different reimbursement options (based on real costs and simplified
cost options), eGovernance and assurance. The main differences between the
options relate to the level of Commission involvement in the assessment of
management and control systems, to the availability of reimbursement options
linked to results, and to the mechanisms for promoting eGovernance in the day
to day management of EU funds. A proportional approach entailing risk based
control arrangements, the availability of a wide range of reimbursement
options, and advanced eGovernance at the level of Member States and regions is
the preferred option since it could lead to a significant potential reduction
in the cost of controls and a decline in workload and would also comply better with
the subsidiarity principle.

3.                      
LEGAL ELEMENTS OF THE PROPOSAL

EU action is justified both on the grounds
of the objectives laid out in Article 174 of the Treaty on the Functioning of
the European Union (TFEU) and the subsidiarity principle. The right to
act is enshrined in Article 175 of the TFEU which explicitly calls on the Union
to implement this policy by means of Structural Funds, in conjunction with Article
177, which defines the role of the CF. The aims of the ESF, ERDF and the CF are
defined in Articles 162, 176 and 177 of the TFEU respectively. The actions
related to agriculture and fisheries are justified by Articles 38 and 39 of the
TFEU.
Article 174 of the TFEU states that
particular attention shall be paid to rural areas, areas affected by industrial
transition, and regions which suffer from severe and permanent natural or
demographic handicaps such as the northernmost regions with very low population
density and island, cross-border and mountain regions.
Article 349 of the TFEU states that specific
measures shall be adopted to take account of the structural social and economic
situation of the outermost regions, which is compounded by certain specific
features which severely restrain their development. 

4.                      
BUDGETARY IMPLICATIONS

The Commission's proposal for a multi-annual financial
framework foresees an amount of EUR 376 billion for economic, social and
territorial cohesion for the period 2014-2020. 
 Proposed budget 2014-2020 || EUR billion 
 Less developed regions Transition regions More developed regions Territorial cooperation Cohesion Fund Extra allocation for outermost and sparsely populated regions || 162,6 38,9 53,1 11,7 68,7 0,926 
 Connecting Europe Facility for transport, energy and ICT || 40 (with an additional EUR 10 billion ring fenced inside the Cohesion Fund) 
*All figures in
constant 2011 prices
The Commission's proposal has also
established, with the aim of enhancing the contribution of the CSF Funds in
delivering on the headline targets of the Europe 2020 Strategy, minimum shares
for the ESF for each category of regions. The application of the shares result
in a minimum overall share for the ESF of 25% of the budget allocated to cohesion
policy, i.e. EUR 84 billion. It is however important to note that the
indicated minimum ESF allocation includes the budget for a forthcoming
Commission proposal regarding food support for the most deprived persons.
The Commission's proposal for the financing
of the EAFRD and the EMFF will be included in the Fund-specific regulations for
each Fund.

5.                      
SUMMARY OF THE CONTENT OF THE REGULATION
5.1.                
Common provisions governing all CSF Funds 
5.1.1.          
General principles

The general principles governing the
support of all CSF Funds will include partnership and multi-level governance,
compliance with applicable EU and national law, promotion of equality between men
and women and sustainable development. 
Within this context, for the ESF, the
Commission will continue to be assisted by the Committee foreseen in Article
163 of the Treaty and composed of one government representative, one
representative of the workers' organisations and one representative of the
employers' organisations from each Member State. 

5.1.2.          
Strategic approach

In order to maximise the impact of the
policy in delivering European priorities, the Commission proposes to reinforce
the strategic programming process. This involves defining a list of thematic
objectives in the Regulation in line with the Europe 2020 Strategy: 
(1)          strengthening research,
technological development and innovation;
(2)          enhancing access to and use and
quality of information and communication technologies;
(3)          enhancing the competitiveness of
small and medium-sized enterprises, the agricultural sector (for the EAFRD) and
fisheries and aquaculture sector (for the EMFF);
(4)          supporting the shift towards a
low-carbon economy in all sectors;
(5)          promoting climate change
adaptation, risk prevention and management;
(6)          protecting the environment and
promoting resource efficiency;
(7)          promoting sustainable transport
and removing bottlenecks in key network infrastructures;
(8)          promoting employment and
supporting labour mobility;
(9)          promoting social inclusion and
combating poverty;
(10)        investing in education, skills and
lifelong learning;
(11)        enhancing institutional capacity
and an efficient public administration.
The Common Strategic Framework will
translate the objectives and targets of the Union priorities of smart,
sustainable and inclusive growth into key actions for the ERDF, the CF, the ESF,
the EAFRD and the EMFF which will ensure an integrated use of the CSF Funds to
deliver common objectives. 
Partnership Contracts between the
Commission and each Member State will set out the commitments of partners at
national and regional level and the Commission. They will be linked to the
objectives of the Europe 2020 Strategy and the National Reform Programmes. They
will set out an integrated approach for territorial development supported by
all the CSF Funds and include objectives based on agreed indicators, strategic
investments and a number of conditionalities. They will contain commitments to
give yearly account of progress in the annual reports on cohesion policy, on
rural development policy and in other public reporting. 

5.1.3.          
Conditionalities and performance 

To reinforce performance, new
conditionality provisions will be introduced to ensure that EU funding creates
strong incentives for Member States to deliver Europe 2020 objectives and
targets. Conditionality will take the form of both ‘ex ante’ conditions
that must be in place before funds are disbursed and 'ex post'
conditions that will make the release of additional funds contingent on
performance. 
The rationale for strengthening 'ex ante'
conditionality for these funds is to ensure that the conditions necessary for
their effective support are in place. Past experience suggests that the effectiveness
of investments financed by the funds have in some instances been undermined by
bottlenecks in policy, regulatory and institutional frameworks. The concept of
conditionality is not a new concept within the framework of cohesion policy.
Over successive programming periods, a number of mechanisms have been
introduced to maximise the effectiveness of the interventions. Some are linked
to management and control disciplines while others to strategic and regulatory
frameworks as well as administrative capacity. The experiences with the
application of conditionalities however indicate variations across programmes.
A more transparent and systematic application is therefore justified.
'Ex post'
conditionality will strengthen the focus on performance and the attainment of
the Europe 2020 objectives. It will be based on the achievement of milestones
related to targets for outputs and results linked to Europe 2020 objectives set
for programmes in the partnership contract. 5% of the budget of the relevant funds
will be set aside and allocated, during a mid-term performance review, to the
Member States whose programmes have met their milestones. In addition to the
performance reserve, failure to achieve milestones may lead to the suspension
of funds, and a serious underachievement in meeting targets for a programme may
give rise to a cancellation of funds.
To ensure that the effectiveness of the
funds is not undermined by unsound macro-fiscal policies, the Commission
proposes to reinforce the rules governing the Funds on macro-fiscal
conditionality and align them with the new Stability and Growth Pact enforcement
measures to be adopted as part of the Sixth Economic Governance Package.
At the same time, a higher co-financing
rate (by 10 percentage points) can be applied when a Member State is receiving
financial assistance in accordance with Articles 136 and 143 of the TFEU, thus
reducing the effort required from national budgets at a time of fiscal
consolidation, while keeping the same overall level of EU funding.

5.1.4.          
Common management arrangements

The proposal envisages a management and
control system which is similar across shared management instruments and is
based on common principles. A system of national accreditation is put in place
to emphasize the commitment of Member States to sound financial management. The
arrangements underpinning the assurance of the Commission with regard to the
regularity of expenditure have been harmonised and new common elements such as
a management declaration of assurance and annual clearance of accounts have
been introduced to reinforce assurance. 

5.1.5.          
Community-led local development 

Member States will have the possibility to
use common processes for preparation, negotiation, management and
implementation, and will be encouraged to do so in particular where the need
for improved coordination of human capital and infrastructure investments is
greatest.
The CSF Funds
need to address multiple development needs at sub-regional and local level. To
facilitate the implementation of multi-dimensional and cross-sectoral
interventions, the Commission proposes to strengthen community-led initiatives,
facilitate the implementation of integrated local development strategies and
formation of local action groups, based on the experience of the LEADER approach.

5.1.6.          
Financial instruments

In addition to grant funding, it is
proposed that support for enterprises and projects expected to generate
substantial financial returns will be delivered primarily through innovative
financial instruments.
While financial instruments will remain
similar to those employed in 2007-2013, several elements of simplification
should be emphasized. First, the Commission will offer ready made solutions
through access to financial instruments set up at EU level and models for
national and regional funds based on standard terms and conditions laid down by
the Commission. Second, the proposal represents a clear framework for the
implementation of these instruments, and addresses the ambiguities which arose
in the context the 2007-2013 legislative framework, increasing legal certainty
for all parties. Third, financial instruments can in the future be used for all
types of investment and beneficiary representing a significant extension of the
possibilities to use these innovative instruments. 

5.1.7.          
Monitoring and evaluation

Common provisions for all CSF funds in the
area of monitoring and evaluation include the role and composition of the
monitoring committee, annual implementation reports, annual review meetings,
progress reports on the implementation of the Partnership Contract, ex ante
and ex post evaluations. 

5.1.8.          
Simplified and streamlined eligibility rules 

In the current period, many beneficiaries
using funds from different Union funding instruments are faced with different
eligibility rules which increases the complexity of management and thus also
the risk of errors. Emphasis has therefore been placed on measures to ensure
that administrative costs are proportionate and that the administrative burden
associated with the management of EU funds by beneficiaries is reduced. The aim
is to harmonise, to the extent possible, these basic rules for instruments
implemented under shared management, in order to reduce the multiplicity of
rules applied on the ground. Simplified costs options such as flat rates and
lump sums provide the means for Member States to introduce performance-oriented
management at the level of individual operations.
Common provisions on the delivery include
common rules on eligible expenditure, the different forms of financial support,
simplified costs, and durability of operations. The proposal also envisages common
principles for the management and control systems
In the context of the CAP, the current
rules on administrative costs and the control systems will be maintained and
sustained. 

5.2.                
General provisions applicable to the ERDF, the ESF
and the CF

Part Three of
the Regulation defines the mission and goals of cohesion policy, the
geographical coverage of support, financial resources and principles of
assistance, programming, major projects, joint action plans, territorial
development, monitoring and evaluation, information and communication,
eligibility of expenditure and management and control systems.

5.2.1.          
Geographical coverage of support

This includes a distinction in relation to
less developed, transition and more developed regions. 
Less developed regions: In accordance with the TFEU, supporting the less developed regions
will remain an important priority for cohesion policy. The catching up process
of economically and socially lagging regions will require long-term sustained
efforts in a world of increasing uncertainty. This category concerns those
regions whose GDP per capita is less than 75 % of the average GDP of the EU-27.
Transition regions: A new category of region – 'transition regions' – will be
introduced to replace the current phasing-out and phasing-in system. This
category will include all regions with a GDP per capita between 75% and 90% of
the EU-27 average.
More developed regions: While interventions in the less developed regions will remain the
priority for cohesion policy, there are important challenges that concern all
Member States such as global competition in the knowledge-based economy, the
shift towards the low carbon economy and social polarisation exacerbated by the
current economic climate. This category concerns those regions whose GDP per
capita is above 90% of the average GDP of the EU-27.
All regions whose
GDP per capita for the 2007-2013 period was less than 75% of the average of the
EU-25 for the reference period but whose GDP per capita
has grown to more than 75% of the EU-27 average will receive two thirds of
their 2007-13 allocation.
Minimum shares for the ESF will be
established for each category of regions (25% for convergence regions, 40% for
transition, and 52% for competiveness regions).
The CF will support Member States whose GNI
per inhabitant is less than 90% of the EU-27 average in making investments in
TEN-T transport networks and the environment. Part of the Cohesion Fund
allocation (EUR 10 billion) will be ring-fenced to finance core transport
networks under the Connecting Europe Facility
Experience with the current financial
framework shows that many Member States have difficulties in absorbing large
volumes of EU funds over a limited period of time. Furthermore, the fiscal
situation in some Member States has made it more difficult to release funds to
provide national co-financing. In order to address the issue of absorption of
funding the Commission is proposing a number of steps:
–                        
to fix at 2,5% of GDP the capping rates for
cohesion allocations;
–                        
capping co-financing rates at the level of each
priority axis within the operational programmes at 85% in less developed
regions (or in certain cases, 80% and 75%) and outermost regions, 60% in transition
regions and 50% in more developed regions;
–                        
to include certain conditions in the partnership
contracts regarding the improvement of administrative capacity.

5.2.2.          
Reinforced strategic programming geared towards
results

The Commission proposes a more results-oriented
programming process to ensure that cohesion policy programmes have a clear
intervention logic, are oriented towards results, and include the appropriate
provisions for an integrated approach to development and the effective
implementation of the Funds. In particular, the Commission proposes to
introduce the Joint Action Plans, which are operations comprising a group of
projects as part of an operational programme, with specific objectives, result
indicators and outputs agreed between the Member State and the Commission. They
offer a simplified management and control system geared towards performance.

5.2.3.          
Streamlining financial management and control

Management and control system need to find
a balance between the costs of management and control and the risks involved.
The Commission's role in the ex ante
review of national management and control systems will be proportionate, as an
obligatory review by the Commission is replaced by a risk based approach. Small
programmes will be exempt from a Commission review. The risk-based approach
reduces administrative costs associated with small programmes and solid
administrations. It also reinforces assurance, as Commission resources can be
used more efficiently and targeted to areas of higher risks. 
Electronic data management can be a major
source of reductions in administrative burden and at the same time increase the
controllability of projects and expenditure. It is therefore proposed to
require all Member States to set up systems by the end of 2014 to enable beneficiaries
to submit all information by way of electronic data exchange. 
One of the complexities associated with the
financial management system in the 2007-2013 programming period is the general
rule that all supporting documents for individual operations have to be
retained until three years after the programme has been closed. The proposal
therefore foresees a mandatory annual closure of completed operations or
expenditure in the framework of the annual clearance of accounts. This aims to
reduce the burden associated with a long retention period of documents for
individual beneficiaries and the risks associated with the loss of the audit
trail.
2011/0276 (COD)
Proposal for a
REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL
laying down common provisions on the
European Regional Development Fund, the European Social Fund, the Cohesion
Fund, the European Agricultural Fund for Rural Development and the European
Maritime and Fisheries Fund covered by the Common Strategic Framework and
laying down general provisions on the European Regional Development Fund, the
European Social Fund and the Cohesion Fund and repealing Regulation (EC) No
1083/2006
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 Committee[8], 
Having regard to the opinion of the
Committee of the Regions[9],
Having regard to the opinion of the Court
of Auditors[10],
Acting in accordance with the ordinary
legislative procedure,
Whereas:
(1)              
Article 174 of the Treaty provides that, in
order to strengthen its economic, social and territorial cohesion, the Union
shall aim at reducing disparities between the levels of development of the
various regions and the backwardness of the least favoured regions or islands,
particular rural areas, areas affected by industrial transition, and regions
which suffer from severe and permanent natural or demographic handicaps.
Article 175 of the Treaty requires that the Union would support the achievement
of these objectives by action it takes through the European Agricultural
Guidance and Guarantee Fund, Guidance Section, the European Social Fund, the European
Regional Development Fund, the European Investment Bank and other instruments.
(2)              
In line with the conclusions of the European
Council of 17 June 2010, whereby the Union strategy for smart, sustainable and
inclusive growth was adopted, the Union and Member States should implement the
delivery of smart, sustainable and inclusive growth, while promoting harmonious
development of the Union and reducing regional disparities.
(3)              
In order to improve coordination and harmonise
implementation of the Funds providing support under the cohesion policy, namely
the European Regional Development Fund (ERDF), the European Social Fund (ESF)
and the Cohesion Fund (CF), with the Funds for rural development, namely the
European Agricultural Fund for Rural Development (EAFRD), and for the maritime
and fisheries sector, namely the European Maritime and Fisheries Fund (EMFF),
common provisions should be established for all these Funds (the 'CSF Funds').
In addition this Regulation contains provisions which are common for the ERDF, the
ESF and the CF, but do not apply to the EAFRD and the EMFF. Due to the
particularities that exist for each CSF Fund, specific rules applicable to each
CSF Fund and to the European territorial cooperation goal under the ERDF should
be specified in separate regulations.
(4)              
As regards the Common Agricultural Policy (CAP),
significant synergies have already been obtained by harmonising and aligning
management and control rules for the first pillar (EAGF - European Agricultural
Guarantee Fund) and the second pillar (EAFRD) of the CAP. The strong link
between the EAGF and the EAFRD should therefore be maintained and the
structures already in place in the Member States be sustained.
(5)              
The outermost regions should benefit from
specific measures and additional funding to offset the handicaps resulting from
the factors referred to in Article 349 of the Treaty.
(6)              
To ensure correct and consistent interpretation
of provisions and to contribute to the legal certainty of Member States and
beneficiaries, it is necessary to define certain
terms that are used in the Regulation. 
(7)              
It is set out that this Regulation consists of
three parts, of which the first contains recitals and definitions, the second
contains rules applicable to all CSF funds and the third includes provisions
applicable only to the ERDF, the ESF and the CF (the 'Funds'). 
(8)              
Under Article 317 of the Treaty, and in the
context of shared management, the conditions allowing the Commission to
exercise its responsibilities for implementation of the general budget of the
European Union should be specified and the responsibilities of cooperation by
the Member States clarified. Those conditions should enable the Commission to
obtain assurance that Member States are using the CSF Funds in a legal and
regular manner and in accordance with the principle of sound financial
management within the meaning of Council Regulation (EC, Euratom) No 1605/2002
of 25 June 2002 on the Financial Regulation
applicable to the general budget of the European
Communities[11]. Member States and the bodies designated by them for that purpose
should be responsible for implementing programmes at the appropriate
territorial level, in accordance with the institutional, legal and financial
framework of the Member State. These provisions also ensure that attention is
drawn to the need to ensure complementarity and consistency of Union
intervention, the proportionality of administrative arrangements and a reduction
of the administrative burden of beneficiaries of the CSF Funds.
(9)              
For the Partnership Contract and each programme
respectively, a Member State should organise a
partnership with the representatives of competent regional, local, urban
and other public authorities, economic and social partners, and bodies
representing civil society, including environmental partners, non-governmental
organisations, and bodies responsible for promoting equality and
non-discrimination. The purpose of such a partnership is to respect the
principle of multi-level governance, ensure the ownership of planned
interventions by stakeholders and build on the experience and know-how of
relevant actors. The Commission should be empowered to adopt delegated acts
providing for a code of conduct in order to ensure that partners are involved
in the preparation, implementation, monitoring and evaluation of Partnership
Contracts and programmes in a consistent manner
(10)          
The activities of the CSF Funds and the
operations which they support should comply with applicable Union and national
law which is directly or indirectly linked to the implementation of the
operation.
(11)          
In the context of its effort to increase
economic, territorial and social cohesion, the Union should, at all stages of
implementation of the CSF Funds, aim at eliminating inequalities and promoting
equality between men and women, as well as combating discrimination based on
sex, racial or ethnic origin, religion or belief, disability, age or sexual
orientation.
(12)          
The objectives of the CSF Funds should be
pursued in the framework of sustainable development and the Union's promotion
of the aim of protecting and improving the environment as set out in Article 11
and 19 of the Treaty, taking into account the polluter pays principle. The Member
States should provide information on the support for climate change objectives in
line with the ambition to devote at least 20% of the Union budget to this end, using
a methodology adopted by the Commission by implementing act. 
(13)          
In order to achieve the targets and objectives
of the Union strategy for smart, sustainable and inclusive growth, the CSF
Funds should focus their support on a limited number of common thematic
objectives. The precise scope of each of the CSF Funds shall be set out in
Funds-specific rules and may be limited to only some of the thematic objectives
defined in this Regulation. 
(14)          
The Commission should adopt by delegated act a
Common Strategic Framework which translates the objectives of the Union into
key actions for the CSF Funds, in order to provide clearer strategic direction
to the programming process at the level of Member States and regions. The
Common Strategic Framework should facilitate sectoral and territorial
coordination of Union intervention under the CSF Funds and with other relevant
Union policies and instruments. 
(15)          
The Common Strategic Framework should therefore
establish the key areas of support, territorial challenges to be addressed,
policy objectives, priority areas for cooperation activities, coordination
mechanisms and mechanisms for coherence and consistency with the economic
policies of Member States and the Union. 
(16)          
On the basis of the Common Strategic Framework
adopted by the Commission, each Member State should prepare, in cooperation
with its partners and in dialogue with the Commission, a Partnership Contract.
The Partnership Contract should translate the elements set out in the Common
Strategic Framework into the national context and set out firm commitments to
the achievement of Union objectives through the programming of the CSF Funds. 
(17)          
Member States should concentrate support to
ensure a significant contribution to the achievement of Union objectives in
line with their specific national and regional development needs. Ex ante
conditionalities should be defined to ensure that the necessary framework
conditions for the effective use of Union support are in place. The fulfilment
of those ex ante conditionalities should be assessed by the Commission
in the framework of its assessment of the Partnership Contract and programmes. In
cases where there is a failure to fulfil an ex ante conditionality, the
Commission should have the power to suspend payments to the programme.
(18)          
A performance framework should be defined for
each programme with a view to monitoring progress towards the objectives and
targets set for each programme over the course of the programming period. The
Commission should undertake a performance review in cooperation with the Member
States in 2017 and 2019. A performance reserve should
be foreseen and allocated in 2019 where milestones set in the performance
framework have been attained. Due to their diversity and multi-country
character, there should be no performance reserve for 'European Territorial
Cooperation' programmes. In cases where the shortfall in the achievement of milestones
or targets is significant, the Commission should be able to suspend payments to
the programme or, at the end of the programming period, apply financial
corrections, in order to ensure that the Union budget is not used in a wasteful
or inefficient way. 
(19)          
Establishing a closer link between cohesion
policy and the economic governance of the Union will ensure that the
effectiveness of expenditure under the CSF Funds is underpinned by sound
economic policies and that the CSF Funds can, if necessary, be redirected to
addressing the economic problems a country is facing. This process has to be
gradual, starting with amendments to the Partnership Contract and to the
programmes in support of Council recommendations to address macroeconomic
imbalances and social and economic difficulties. Where, despite the enhanced
use of CSF funds, a Member State fails to take effective action in the context
of the economic governance process, the Commission should have the right to
suspend all or part of the payments and commitments. Decisions on suspensions
should be proportionate and effective, taking into account the impact of the
individual programmes for addressing the economic and social situation in the
relevant Member State and previous amendments to the Partnership Contract. When
deciding on suspensions, the Commission should also respect equality of
treatment between Member States, taking into account in particular the impact
of the suspension on the economy of the Member State concerned. The suspensions
should be lifted and funds be made available again to the Member State
concerned as soon as the Member State takes the necessary action.
(20)          
In order to ensure focus on the
achievement of the Union strategy for smart, sustainable and inclusive growth,
common elements should be defined for all programmes. In order to ensure the
consistency of programming arrangements for the CSF Funds, the procedures for
adoption and amendment of programmes should be aligned. Programming should
ensure consistency with the Common Strategic Framework and Partnership
Contract, coordination of the CSF Funds between themselves and with the other
existing financial instruments and the European Investment Bank.
(21)          
Territorial cohesion has
been added to the goals of economic and social cohesion by the Treaty, and it
is necessary to address the role of cities, functional geographies and
sub-regional areas facing specific geographical or demographic problems. To
this end, to better mobilise potential at a local level, it is necessary to
strengthen and facilitate community-led local development by laying down common
rules and close coordination for all CSF Funds. Responsibility for the
implementation of local development strategies should be given to local action
groups representing the interests of the community, as an essential principle.
(22)          
Financial instruments are increasingly important
due to their leverage effect on CSF Funds, their capacity to combine different
forms of public and private resources to support public policy objectives, and
because revolving forms of finance make such support more sustainable over the
longer term.
(23)          
Financial instruments supported by the CSF Funds
should be used to address specific market needs in a cost effective way, in
accordance with the objectives of the programmes, and should not crowd out
private financing. The decision to finance support measures through financial
instruments should be determined therefore on the basis of an ex ante
analysis. 
(24)          
Financial instruments should be designed and implemented
so as to promote substantial participation by private sector investors and
financial institutions on an appropriate risk-sharing basis. To be sufficiently
attractive to private sector, financial instruments need to be designed and
implemented in a flexible manner. Managing authorities should therefore decide
on the most appropriate forms to implement financial instruments to address the
specific needs of the target regions, in accordance with the objectives of the relevant
programme.
(25)          
Managing authorities should have the possibility
to contribute resources from programmes to financial instruments set up at
Union level, or to instruments set up at regional level. Managing authorities
should also have the possibility to implement financial instruments directly,
through specific funds or through funds of funds.
(26)          
The amount of the resources paid at any time
from the CSF Funds to financial instruments should correspond to the amount
necessary to implement planned investments and payments to final recipients,
including management costs and fees, determined on the basis of business plans
and cash-flow forecasts for a pre-defined period which should not exceed two
years.
(27)          
It is necessary to lay down specific rules
regarding the amounts to be accepted as eligible expenditure at closure, to
ensure that the amounts, including the management costs and fees, paid from the
CSF Funds to financial instruments are effectively used for investments and
payments to final recipients. It is also necessary to lay down specific rules
regarding the reuse of resources attributable to the support from the CSF
Funds, including the use of legacy resources after the closure of the
programmes.
(28)          
Member States should monitor
programmes in order to review implementation and progress towards achieving the
programme's objectives. To this end, monitoring committees should be set up and
their composition and functions defined for CSF Funds. Joint Monitoring
Committees could be set up to facilitate coordination between the CSF Funds In
order to ensure effectiveness, monitoring committees should be able to issue
recommendations to managing authorities regarding implementation of the
programme and should monitor actions taken as a result of its recommendations.
(29)          
Alignment of the monitoring
and reporting arrangements of the CSF Funds is necessary to simplify management
arrangements at all levels. It is important to ensure proportionate reporting
requirements but also the availability of comprehensive information on progress
made at key review points. Therefore it is necessary that reporting
requirements reflect information needs in given years and are aligned with the
timing of the performance reviews. 
(30)          
With a view to monitoring
progress of programmes, an annual review meeting should take place between the
Member State and the Commission. The Member State and the Commission should
however be able to agree not to organize the meeting in order to avoid
unnecessary administrative burden.
(31)          
In order for the Commission to monitor progress
towards achieving Union objectives, Member States should submit progress
reports on the implementation of their Partnership Contracts. On the basis of
such reports, the Commission should prepare a strategy report on progress in
2017 and 2019.
(32)          
It is necessary to evaluate the effectiveness,
efficiency and impact of assistance from the CSF Funds in order to improve the
quality of implementation and design of programmes, and to determine the impact
of programmes in relation to the targets for the Union strategy for smart
sustainable and inclusive growth and in relation to GDP and unemployment, where
relevant. The responsibilities of Member States and the Commission in this
regard should be specified. 
(33)          
In order to improve the quality and design of each
programme, and verify that objectives and targets can be reached, an ex ante
evaluation of each programme should be carried out.
(34)          
An evaluation plan should be drawn up by the
authority responsible for the preparation of the programme. During the
programming period managing authorities should carry out evaluations to assess
the effectiveness and impact of a programme. The monitoring committee and the
Commission should be informed about the results of evaluations to facilitate
management decisions.
(35)          
Ex post
evaluations should be carried out in order to assess the effectiveness and
efficiency of the CSF Funds and their impact on the overall goals of the CSF
Funds and the Union strategy for smart, sustainable and inclusive growth.
(36)          
It is useful to specify the
types of action that may be undertaken at the initiative of the Commission and
of the Member States as technical assistance with support from the CSF Funds. 
(37)          
In order to ensure an effective use of Union
resources, and avoid the over- financing of revenue generating operations, it is necessary to set out the rules for calculating the
contribution from the CSF Funds to a revenue-generating operation. 
(38)          
The starting and closing
dates for the eligibility of expenditure should be defined so as to provide for
a uniform and equitable rule applying to the implementation of the CSF Funds
across the Union. In order to facilitate the execution of programmes, it is
appropriate to establish that the starting date for the eligibility of
expenditure may be prior to 1 January 2014 if the Member State concerned
submits a programme before that date. With a view to ensuring an effective use
of EU Funds and reducing the risk to the EU budget, it is necessary to put in
place restrictions on support for completed operations- 
(39)          
In accordance with the
principle of subsidiarity and subject to exceptions provided for in
Regulation(s) (EU) No […] [ERDF, ESF, CF, ETC, EAFRD, EMFF Regulations], Member
States should adopt national rules on the eligibility of expenditure.
(40)          
With a view to simplifying
the use of the CSF Funds and reducing the risk of errors, while providing for
differentiation where needed to reflect the specificities of policy, it is
appropriate to define the forms of support, harmonized conditions of
reimbursement of grants and flat rate financing, specific eligibility rules for
grants and specific conditions on the eligibility of operations depending on
location. 
(41)          
To ensure the effectiveness,
fairness and sustainable impact of the intervention of the CSF Funds, there
should be provisions guaranteeing that investments in businesses and
infrastructures are long-lasting and prevent the CSF Funds from being used to
undue advantage. Experience has shown that a period of five years is an
appropriate minimum period to be applied, except where State aid rules foresee
a different period. It is appropriate to exclude actions supported by the ESF
and those not entailing productive investment or investment in infrastructure
from the general requirement of durability, unless such requirements are
derived from applicable State aid rules, and to exclude contributions to or
from financial instruments.
(42)          
Member States should adopt
adequate measures to guarantee the proper set up and functioning of their
management and control systems to give assurance on the legal and regular use
of the CSF Funds. The obligations of Member States as regards the management
and control systems of programmes, and in relation to the prevention, detection
and correction of irregularities and infringements of Union law should therefore
be specified. 
(43)          
In accordance with the principles of shared
management, Member States should have the primary responsibility, through their
management and control systems, for the implementation and control of the operations
in programmes. In order to strengthen the
effectiveness of the control over the selection and implementation of
operations and the functioning of the management and control system, the
functions of the managing authority should be specified.
(44)          
In order to provide assurance ex ante on
the set up and design of the main systems of management and control, Member
States should designate an accrediting body that is responsible for the
accreditation and withdrawal of accreditation of managing and control bodies.
(45)          
The powers and responsibilities of the Commission to verify the effective functioning of the
management and control systems, and to require Member State action, should be
laid down. The Commission should also have the power to carry out audits
focused on issues relating to sound financial management in order to draw
conclusions on the performance of Funds.
(46)          
Union budget commitments should be effected
annually. In order to ensure effective programme
management, it is necessary to lay down common rules for interim payment
requests, the payment of the annual balance, where appropriate, and the final
balance, without prejudice to specific rules that are required for each of the
CSF Funds.
(47)          
The pre-financing payment at
the start of programmes ensures that the Member State has the means to provide
support to beneficiaries in the implementation of the programme from programme
adoption. Therefore, provisions should be made for initial pre-financing
amounts from the CSF Funds. Initial pre-financing should be totally cleared at
closure of the programme. 
(48)          
In order to safeguard the
Union's financial interests, there should be measures limited in time that
allow the authorising officer by delegation to interrupt payments where there
is evidence to suggest a significant deficiency in the functioning of the
management and control system, evidence of irregularities linked to a payment
application, or a failure to submit documents for the purpose of clearance of
accounts.
(49)          
In order to ensure that expenditure co-financed
by the Union budget in any given financial year is used in accordance with the
applicable rules, an appropriate framework should be created for the annual
clearance of accounts. Under this framework, the accredited bodies should
submit to the Commission, in respect of each programme, a management
declaration of assurance accompanied by the certified annual accounts, a
summary report of controls and an independent audit opinion and control report.

(50)          
In order to safeguard the Union budget, it may
be necessary for the Commission to make financial corrections. To ensure legal
certainty for the Member States, it is important to define the circumstances
under which breaches of applicable Union or national law can lead to financial
corrections by the Commission. In order to ensure that
financial corrections which the Commission may impose on Member States are
related to the protection of the EU's financial interests, they should be
confined to cases where the breach of Union or national law concerns directly
or indirectly the eligibility, regularity, management or control of operations
and the corresponding expenditure. To ensure
proportionality it is important that the Commission considers the nature and
the gravity of the breach in deciding the amount of financial correction. 
(51)          
In order to encourage
financial discipline, it is appropriate to define the arrangements for
decommitment of any part of the budget commitment in a programme, in particular
where an amount may be excluded from decommitment, notably when delays in
implementation result from circumstances which are independent of the party
concerned, abnormal or unforeseeable and whose consequences cannot be avoided
despite the diligence shown. 
(52)          
Additional general provisions are necessary in
relation to the specific functioning of the Funds. In particular, in order to
increase their added value, and to enhance their contribution to the priorities
of the Union strategy for smart, sustainable and inclusive growth, the
functioning of these Funds should be simplified and concentrated on the goals
of 'Investment for growth and jobs' and 'European territorial cooperation'. 
(53)          
Additional provisions for the specific
functioning of the EAFRD and the EMFF are set out in the relevant
sector-specific legislation. 
(54)          
In order to promote the Treaty objectives of
economic, social and territorial cohesion, the 'Investment for growth and jobs'
goal should support all regions. To provide balanced and gradual support and
reflect the level of economic and social development, resources under that goal
should be allocated from the ERDF and the ESF among the less developed regions,
the transition regions and the more developed regions according to their gross
domestic product (GDP) per capita in relation to the EU average. In order to ensure the long-term sustainability of investment from
the Structural Funds, regions whose GDP per capita for the 2007-2013 period was
less than 75% of the average of the EU-25 for the reference period but whose
GDP per capita has grown to more than 75% of the EU-27 average should receive
at least two thirds of their 2007-2013 allocation. Member
States whose per capita gross national income (GNI) is less than 90 % of that
of the Union average should benefit under the 'Investment for growth and jobs'
goal from the CF. 
(55)          
Objective criteria should be
fixed for designating eligible regions and areas for support from the Funds. To
this end, the identification of the regions and areas at Union level should be
based on the common system of classification of the regions established by
Regulation (EC) No 1059/2003 of the European Parliament and the Council of 26
May 2003 on the establishment of a common classification of territorial units
for statistics (NUTS)[12].
(56)          
In order to set out an
appropriate financial framework, the Commission should establish, by means of
implementing acts, the indicative annual breakdown of available commitment
appropriations using an objective and transparent method with a view to
targeting the regions whose development is lagging behind, including those
receiving transitional support.
(57)          
It is necessary to fix the limits of those
resources for investment for growth and jobs and to adopt objective criteria
for their allocation to regions and Member States. In order to encourage the
necessary acceleration of development of infrastructure in transport and energy
as well as information and communication technologies across the Union, a
Connecting Europe Facility should be created. The allocation of the annual appropriations from the Funds and the amounts
transferred from the Cohesion Fund to the Connecting Europe Facility to a Member
State should be limited to a ceiling that would be fixed taking into account
the capacity of that particular Member State to absorb these appropriations. In
addition, in line with the headline target on poverty reduction, it is
necessary to reorient the scheme for food support for the most deprived persons
to promote social inclusion and the harmonious development of the Union. A
mechanism is envisaged which transfers resources to this instrument and ensures
that these will be constituted from ESF allocations through an implicit
corresponding decrease of the minimum percentage of the Structural Funds to be
allocated to the ESF in each country.
(58)          
In order to strengthen the focus on results and achievement of the Europe 2020
objectives and targets, five per cent of the
resources for the 'Investment for growth and jobs' goal should be set aside as
a performance reserve for each Fund, and category of region in each Member
State. 
(59)          
As regards the Funds and with a view to ensuring
an appropriate allocation to each category of regions, resources should not be
transferred between less developed, transition and more developed regions
except in duly justified circumstances linked to the delivery of one or more
thematic objectives and for no more than 2 % of the total appropriation for
that category of region.
(60)          
In order to ensure a genuine economic impact,
support from the Funds should not replace public expenditure or equivalent
structural expenditure by Member States under the terms of this Regulation. In
addition, so that the support from the Funds takes into account a broader
economic context, the level of public expenditure should be determined with
reference to the general macroeconomic conditions in which the financing takes
place based on the indicators provided in the Stability and Convergence
Programmes submitted annually by Member States in accordance with Regulation
(EC) No. 1466/1997 of 7 July 1997 on the strengthening of the surveillance of
budgetary positions and the surveillance and coordination of economic policies[13]. Verification by
the Commission of the principle of additionality should concentrate on the
Member States in which less developed and transition regions cover at least 15%
of the population because of the scale of the financial resources allocated to
them.
(61)          
It is necessary to lay down additional
provisions concerning the programming, management, monitoring and control of
operational programmes supported by the Funds. Operational programmes should
set out priority axes corresponding to thematic objectives, elaborate a
consistent intervention logic to tackle the development needs identified, and
set out the framework for performance assessment. They should also contain
other elements necessary to underpin the effective and efficient implementation
of these Funds. 
(62)          
With a view to improving
complementarities and simplifying implementation, it should be possible to
combine support from the CF and the ERDF with support from the ESF in joint
operational programmes under the growth and jobs goal.
(63)          
Major projects represent a
substantial share of Union spending and are frequently of strategic importance
with respect to the achievement of the Union strategy for smart, sustainable
and inclusive growth. Therefore it is justified that operations of substantial size
continue to be subject to approval by the Commission under this regulation. To
ensure clarity, it is appropriate to define the content of a major project for
this purpose. The Commission should also have the possibility to refuse support
for a major project where the granting of such support is not justified. 
(64)          
In order to give Member
States the option of implementing part of an operational programme using a
result-based approach, it is useful to provide for a
joint action plan comprising a set of actions to be carried out by a
beneficiary to contribute to the objectives of the operational programme. In
order to simplify and reinforce the result orientation of the Funds the
management of the joint action plan should be exclusively based on jointly
agreed milestones, outputs and results as defined in the Commission decision
adopting the joint action plan. Control and audit of a joint action plan should
also be limited to the achievement of these milestones, outputs and results.
Consequently, it is necessary to lay down rules on its preparation, content,
adoption, financial management and control of joint action plans.
(65)          
            Where an urban
or territorial development strategy requires an integrated approach because it
involves investments under more than one priority axis of one or several
operational programmes, action supported by the Funds should be carried out as
an integrated territorial investment within an operational programme.
(66)          
It is necessary to adopt specific rules in
relation to the functions of the monitoring committee and the annual reports on
implementation of operational programmes supported by the Funds. Additional provisions for the specific functioning of the EAFRD are
set out in the relevant sector specific legislation.
(67)          
To ensure the availability
of essential and up to date information on programme implementation, it is
necessary that Member States provide the Commission with the key data on a regular
basis. In order to avoid an additional burden on Member States, this should be
limited to data collected continuously, and the transmission should be
performed by way of electronic data exchange.
(68)          
In accordance with Article 175 of the Treaty,
the Commission submits Cohesion Reports to the European Parliament, the
Council, the Economic and Social Committee and the Committee of the Regions
every three years on the progress made towards achieving the Union's economic,
social and territorial cohesion. It is necessary to lay down the content of
this report. 
(69)          
It is considered appropriate that the
Commission, in cooperation with the Member States, carries out the ex post
evaluation for the Funds to obtain information at the appropriate level on the
results and impact of interventions financed. Specific provisions are also
needed to establish a procedure for the approval of the evaluation plans for
the Funds. 
(70)          
It is important to bring the achievements of the
Union's Funds to the attention of the general public. Citizens have the right
to know how the Union's financial resources are invested. The responsibility to
ensure that the appropriate information is communicated to the public should
lie with both the managing authorities and the beneficiaries. To ensure more efficiency in communication to the public at large
and stronger synergies between the communication activities undertaken at the
initiative of the Commission, the budget allocated to communication actions
under this Regulation shall also contribute to cover corporate communication of
the political priorities of the European Union provided that these are related
to the general objectives of this Regulation.
(71)          
For the purpose of ensuring a wide dissemination
of information about the achievements of the Funds and the role of the Union
therein and to inform potential beneficiaries about funding opportunities,
detailed rules about information and communication measures, as well as certain
technical characteristics of such measures, should be defined in this
Regulation.
(72)          
With a view to strengthening accessibility and
transparency of information about funding opportunities and project
beneficiaries, in each Member State a single website or website portal
providing information on all the operational programmes, including the lists of
operations supported under each operational programme, should be made
available. 
(73)          
It is necessary to determine the elements for
modulating the co-financing rate from the Funds to operational programmes, in
particular, to increase the multiplier effect of Union resources. It is also necessary
to establish the maximum rates of co-financing by category of region in order to
ensure respect of the principle of co-financing through an appropriate level of
national support.
(74)          
It is necessary for Member
States to designate a managing authority, a certifying authority and a
functionally independent auditing authority for each operational programme. To provide
flexibility for Member States in the set up of control systems, it is
appropriate to provide the option for the functions of the certifying authority
to be carried out by the managing authority. The Member State should also be
allowed to designate intermediate bodies to carry out certain tasks of the
managing authority or the certifying authority. The Member State should in that
case lay down clearly their respective responsibilities and functions.
(75)          
The managing authority bears
the main responsibility for the effective and efficient implementation of the
Funds and thus fulfils a substantial number of functions related to programme
management and monitoring, financial management and controls as well as project
selection. Its responsibilities and functions should be set out. 
(76)          
The certifying authority should draw up and
submit to the Commission payment applications. It should draw up the annual
accounts, certifying the completeness, accuracy and veracity of the annual
accounts and that the expenditure entered in the accounts complies with
applicable Union and national rules. Its
responsibilities and functions should be set out.
(77)          
The audit authority should ensure that audits
are carried out on the management and control systems, on an appropriate sample
of operations and on the annual accounts.
Its responsibilities and functions should be set out.
(78)          
In order to take account of the specific
organisation of the management and control systems for the ERDF, ESF and Cohesion
Funds and the need to ensure a proportionate approach, specific provisions are
required for the accreditation and withdrawal of accreditation of the managing
authority and the certifying authority. 
(79)          
Without prejudice to the
Commission's powers as regards financial control, cooperation between the
Member States and the Commission in this field should be increased and criteria
should be established which allow the Commission to determine, in the context
of its strategy of control of national systems, the level of assurance it
should obtain from national audit bodies.
(80)          
In addition to common rules
on financial management, additional provisions are necessary for the ERDF, ESF
and the Cohesion Fund. In particular, with a view to ensuring reasonable
assurance for the Commission prior to the annual clearance of accounts,
applications for interim payments should be reimbursed at a rate of 90 % of the
amount resulting from applying the co-financing rate for each priority axis as
laid down in the decision adopting the operational programme to the eligible
expenditure for the priority axis. The outstanding amounts due should be paid
to the Member States upon annual clearance of accounts, provided that
reasonable assurance has been attained in regard to the eligibility of
expenditure for the year covered by the clearance procedure.
(81)          
To ensure that beneficiaries
receive the support as soon as possible and to reinforce the assurance for the
Commission it is appropriate to require that payment applications include only
expenditure for which the support has been paid to beneficiaries. Pre-financing
each year should be foreseen to ensure that Member State have sufficient means
to operate under such arrangements. Such pre-financing should be cleared each
year with the clearance of accounts.
(82)          
To ensure the appropriate
application of the general rules on decommitment, the rules established for the
Funds should detail how the deadlines for decommitment are established and how
the respective amounts are calculated. 
(83)          
It is necessary to specify
the detailed procedure for the annual clearance of accounts applicable to the
Funds to ensure a clear basis and legal certainty for these arrangements. It is
important to envisage a limited possibility for the Member State to define a
provision in its annual accounts for an amount, which is subject to an ongoing
procedure with the audit authority. 
(84)          
The process of annual
clearance of accounts should be accompanied by an annual closure of completed
operations (for the ERDF and the CF) or expenditure (for the ESF). In order to
reduce the costs associated with the final closure of operational programmes, to
reduce the administrative burden for beneficiaries and to provide legal
certainty, annual closure should be obligatory thereby limiting the period
during which the supporting documents need to be maintained and during which
operations can be audited and financial corrections imposed. 
(85)          
In order to safeguard
the Union's financial interests and provide the means to ensure effective
programme implementation, there should be measures allowing for the suspension
by the Commission of payments at the level of priority axis or operational
programme.
(86)          
It is appropriate to lay
down the specific arrangements and procedures for financial corrections by
Member States and by the Commission in respect of the Funds to provide legal
certainty for Member States. 
(87)          
The frequency of audits on
operations should be proportionate to the extent of the Union's support from
the Funds. In particular, the number of audits s carried out should be reduced
where the total eligible expenditure for an operation does not exceed EUR 100
000. Nevertheless, it should be possible to carry out audits at any time where
there is evidence of an irregularity or fraud, or, following closure of a completed
operation, as part of an audit sample. In order that the level of auditing by
the Commission is proportionate to the risk, the Commission should be able to
reduce its audit work in relation to operational programmes where there are no
significant deficiencies or where the audit authority can be relied on.
(88)          
In order to supplement and amend certain
non-essential elements of this Regulation, the power to adopt acts in accordance with Article 290 of the Treaty should be
delegated to the Commission in respect of a code of conduct on the objectives
and criteria to support the implementation of partnership, the adoption of a
Common Strategic Framework, additional rules on the allocation of the growth
and competitiveness reserve, the definition of the area and population covered
by the local development strategies, detailed rules on financial instruments (ex
ante assessment, eligibility of expenses, types of activities not
supported, combination of support, transfer and management of assets, payment
requests, and capitalisation of annual instalments), the definition of the flat
rate for revenue generating operations, the responsibilities of Member
States concerning the procedure for reporting irregularities and recovery of
sums unduly paid, the model of management declaration of assurance on the
functioning of the management and control system, the conditions of national
audits, the accreditation criteria for managing authorities and certifying
authorities, the identification of commonly accepted data carriers, the level
of financial correction to be applied, the amendment of annexes and the
specific measures necessary for the facilitation of transition from Regulation
(EC) No 1083/2006. The Commission should also be empowered to amend Annexes I
and IV in order to address future adaptation needs. It is of particular
importance that the Commission carry out appropriate consultations during its
preparatory work, including at expert level. 
(89)          
The Commission, when
preparing and drawing up delegated acts, should ensure a simultaneous, timely
and appropriate transmission of relevant documents to the European Parliament
and Council.
(90)          
The Commission should be empowered to adopt, by
means of implementing acts, as regards all CSF Funds, decisions approving the Partnership
Contracts, decisions allocating the performance reserve and decisions
suspending payments linked to Member States' economic policies; and as regards
the Funds, decisions adopting operational programmes decisions approving major
projects, decisions suspending payments and decisions on financial corrections.
(91)          
In order to ensure uniform conditions for the
implementation of this Regulation, the implementing
powers relating to the methodology concerning climate change objectives,
standard terms and conditions for monitoring of financial instruments,
methodology for the calculation of net revenue for revenue-generating projects,
identification of the regions and Member States fulfilling the Investment for
growth and jobs criteria, model of operational programme for the Funds, format
for information on major projects and methodology to be used in carrying out
the cost-benefit analysis on major projects, standard format for the joint
action plan, model of the annual and final implementation reports, technical
characteristics of information and publicity measures, exchange of information
by Member States and on-the-spot verifications, model of the management
declaration, models for the audit strategy, opinion and annual control report, the
use of data collected during audits, model for payment applications should be exercised in accordance with Regulation
(EU) No 182/2011 of the European Parliament and of the Council of 16 February
2011 laying down the rules and general principles concerning mechanisms for
control by Member States of the Commission's exercise of implementing powers[14]. 
(92)          
This Regulation replaces 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 1260/1999[15]. That Regulation should be therefore repealed.
(93)          
Since the objective of this
Regulation, namely to reduce disparities between levels of development of the
various regions and the backwardness of the least favoured
regions or islands, particular rural areas, areas affected by industrial
transition, and regions which suffer from severe and permanent natural or
demographic handicaps, cannot be sufficiently achieved by Member States but can
be better achieved at Union level, the Union may
adopt measures, in accordance with the principle of subsidiarity as set out in
Article 5 of the Treaty on European Union. In accordance with the principle of
proportionality, 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
PART ONE
SUBJECT-MATTER AND DEFINITIONS
Article 1 
Subject-matter
This Regulation lays down the common rules
applicable to the European Regional Development Fund (ERDF), the European
Social Fund (ESF), the Cohesion Fund (CF), the European Agricultural Fund for
Rural Development (EAFRD) and the European Maritime and Fisheries Fund (EMFF),
which are operating under the Common Strategic Framework (the 'CSF Funds'). It
also defines the provisions necessary to ensure the effectiveness of the CSF
Funds and their coordination with one another and with other Union instruments.
This Regulation also lays down the general
rules governing the ERDF, the ESF (together referred to as the 'Structural
Funds') and the CF. The Regulation defines the tasks, priority objectives and
organisation of the Structural Funds and the CF (the 'Funds'), the criteria for
Member States and regions to be eligible for support from the CSF Funds, the financial
resources available and the criteria for their allocation. 
The rules set out in this Regulation apply without prejudice to the provisions laid down in
Regulation (EU) No […]/2012 of the European Parliament and of the
Council on the financing, management and monitoring of the common agriculture
policy[16] (hereinafter referred as
the 'CAP' Regulation) and to the specific provisions laid down in the following
Regulations:
(1)                   
Regulation (EU) No […]/2012 of the
European Parliament and of the Council on the European Regional Development
Fund and repealing Regulation (EC) No 1080/2006[17]
(the 'ERDF Regulation'); 
(2)              
Regulation (EU) No […]/2012 of the
European Parliament and of the Council on the European Social Fund and
repealing Regulation (EC) No 1081/2006[18] (the 'ESF
Regulation');
(3)              
Regulation (EU) No […]/2012 of the
European Parliament and of the Council establishing a Cohesion Fund and
repealing Regulation (EC) No 1084/2006[19] (the 'CF
Regulation'); 
(4)              
Regulation (EU) No […]/2012 of the
European Parliament and of the Council on European territorial cooperation[20]
(the 'ETC Regulation');
(5)              
Regulation (EU) No […]/2012 of the
European Parliament and of the Council on the European Agricultural Fund for
Rural Development and repealing Regulation (EC) No 11698/2005[21]
(the 'EAFRD Regulation'); and
(6)              
Regulation (EU) No […]/2012 of the
European Parliament and of the Council on the European Maritime and Fisheries
Fund and repealing Regulation (EC) No 1198/2006[22]
(the 'EMFF Regulation').
Article 2 
Definitions
For the purposes of this Regulation, the
definitions on financial instruments as laid down in the Financial Regulation
shall apply to financial instruments supported by the CSF Funds, except where
otherwise provided in this Regulation.
In addition, the following definitions
shall apply:
(1)                   
'Union strategy for smart, sustainable and
inclusive growth' means the targets and shared objectives guiding the
action of Member States and the Union set out in the Communication of the
Commission: Europe 2020: A strategy for smart, sustainable and inclusive
growth, and contained in the Conclusions adopted by the European Council of 17
June 2010 as Annex I (New European Strategy for Jobs and Growth, EU
Headline Targets) and Council Decision of 21 October 2010 on guidelines
for the employment policies of the Member States, and any revision of such
targets and shared objectives.
(2)              
'Common Strategic Framework' means the document
translating the objectives and targets of the Union strategy for smart,
sustainable and inclusive growth into key actions for the CSF Funds,
establishing for each thematic objective the key actions to be supported by
each CSF Fund and the mechanisms for ensuring the coherence and consistency of
the programming of the CSF Funds with the economic and employment policies of
the Member States and of the Union;
(3)              
'Fund-specific rules' means the provisions laid
down in or established on the basis of Part Three of this Regulation or a
specific or generic regulation governing one or more of the CSF Fund(s)
referred to or listed in the third sub-paragraph of Article 1;
(4)              
‘programming’ means the process of organisation,
decision-making and allocation of financial resources in several stages
intended to implement, on a multi-annual basis, the joint action by the Union
and the Member States to achieve Union strategy for smart, sustainable and
inclusive growth;
(5)              
‘programme’ means ‘operational programme’
referred to in Part Three of this Regulation and in the EMFF Regulation, and
‘rural development programme’ referred to in the EAFRD Regulation;
(6)              
‘priority’ means the ‘priority axis’ referred to
in Part Three of this Regulation and the ‘Union priority’ referred to in the
EMFF Regulation and in the EAFRD Regulation; 
(7)              
'operation' means a project, contract, action or
group of projects selected by the managing authority of the programme
concerned, or under its responsibility, contributing to the objectives of the priority or priorities to
which it relates; in the context of financial instruments, the operation is
constituted by the financial contributions from a programme to financial
instruments and the subsequent financial support provided by these financial
instruments;
(8)              
'beneficiary' means a public or private body
responsible for initiating or initiating and implementing operations; in the
context of State aid, the term 'beneficiary' means the body which receives the
aid; in the context of financial instruments, the term 'beneficiary' means the
body that implements the financial instrument; 
(9)              
'final recipient' means a legal or natural
person that receives financial support from a financial instrument;
(10)          
'State aid' means aid falling under
Article 107(1) of the Treaty which shall be deemed for the purposes of
this Regulation also to include de minimis aid within the meaning of
Commission Regulation (EC) No 1998/2006 of 15 December
2006 on the application of Articles 87 and 88 of the Treaty to de minimis
aid[23], Commission Regulation (EC) No 1535/2007 of 20 December 2007
on the application of Articles 87 and 88 of the EC Treaty to de minimis
aid in the sector of agricultural production[24] and
Commission Regulation (EC) No 875/2007 of 24 July 2007 on the application
of Articles 87 and 88 of the EC Treaty to de minimis aid in the
fisheries sector and amending Regulation (EC) No 1860/2004[25]; 
(11)          
'completed operation' means an operation that
has been physically completed or fully implemented and in respect of which all
related payments have been made by beneficiaries and the corresponding public
contribution has been paid to the beneficiaries; 
(12)          
‘public support' means any financial support to
the financing of an operation the origin of which is the budget of national,
regional or local public authorities, the budget of the Union related to the
CSF Funds, the budget of public law bodies or the budget of associations of
public authorities or public law bodies; 
(13)          
'public law body' means any body governed by
public law in the meaning of Article 1(9) of Directive 2004/18/EC of the
European Parliament and of the Council[26] and any
European grouping of territorial cooperation (EGTC) established in accordance
with Regulation (EC) No 1082/2006 of the European Parliament and of the
Council[27], regardless of whether
the relevant national implementing provisions consider the EGTC a public law
body or a private law body;
(14)          
'document' means a paper or an electronic medium
bearing information relevant in the framework of this Regulation;
(15)          
'intermediate body' means any public or private
body which acts under the responsibility of a managing or certifying authority,
or which carries out duties on behalf of such an authority vis-à-vis
beneficiaries' implementing operations;
(16)          
‘local development strategy’ means a coherent
set of operations to meet local objectives and needs, which contributes to
meeting the Union strategy for smart, sustainable and inclusive growth and
which is implemented in partnership at the appropriate level;
(17)          
‘rolling closure’ means closure of operations as
a result of the annual clearance of account exercise and before the general
closure of the programme;
(18)          
'Partnership Contract' means the document prepared
by the Member State with the involvement of partners in line with the
multi-level governance approach, which sets out the Member State's strategy,
priorities and arrangements for using the CSF Funds in an effective and
efficient way to pursue the Union strategy for smart, sustainable and inclusive
growth, and which is approved by the Commission following assessment and
dialogue with the Member State; 
(19)          
'category of regions' means the categorisation
of regions as 'less developed regions', 'transition regions' or 'more developed
regions' according to Article 82(2);
(20)          
'request for payment' means a payment
application or declaration of expenditure submitted by the Member State to the
Commission;
(21)          
'EIB' means the European Investment Bank, the
European Investment Fund or any subsidiary of the European Investment Bank;
(22)          
'SME' means a micro, small or medium sized
enterprise in the meaning of Commission Recommendation 2003/361/EC, or
subsequent amendments thereof;
(23)          
'accounting year, means, for the purposes of
Part Three, the period from 1 July to 30 June, except for the first accounting
year, in respect of which it means the period from the start date for
eligibility of expenditure until 30 June 2015. The final accounting year shall
be from 1 July 2022 to l June 2023;
(24)          
'financial year, means, for the purposes of Part
Three, the period from 1 January to 31 December.
PART TWO
COMMON PROVISIONS APPLICABLE TO CSF FUNDS
TITLE I
Principles of Union support for the CSF Funds
Article 3
Scope
The rules set out in this Part shall apply
without prejudice to the provisions laid down in Part Three.
Article 4
General principles
1.           The CSF Funds shall
provide support, through multi-annual programmes, which complements national,
regional and local intervention, to deliver the Union strategy for smart,
sustainable and inclusive growth, taking account of the Integrated Guidelines,
the country-specific recommendations under Article 121(2) of the Treaty and the
relevant Council recommendations adopted under 148(4) of the Treaty.
2.           The Commission and the
Member States shall ensure that support from the CSF Funds is consistent with
the policies and priorities of the Union and complementary to other instruments
of the Union.
3.           Support from the CSF Funds
shall be implemented in close cooperation between the Commission and the Member
States. 
4            Member States and the
bodies designated by them for that purpose shall be responsible for
implementing programmes and carrying out their tasks under this Regulation and
the Fund-specific rules at the appropriate territorial level, in accordance
with the institutional, legal and financial framework of the Member State and
subject to compliance with this Regulation and the Fund-specific rules.
5.           Arrangements for the
implementation and use of the CSF Funds, and in particular the financial and
administrative resources required for the implementation of the CSF Funds, in
relation to the reporting, evaluation, management and control shall take into
account the principle of proportionality having regard to the level of support
allocated.
6.           In accordance with their
respective responsibilities, the Commission and the Member States shall ensure
coordination among the CSF Funds, and with other Union policies and
instruments, including those in the framework of the Union's external action. 
7.           The part of the Union
budget allocated to the CSF Funds shall be implemented within the framework of
shared management between the Member States and the Commission, in accordance
with Article 53(b) of Council Regulation (EC, Euratom) No 1605/2002 of 25
June 2002 on the Financial Regulation applicable to the general budget of the
European Communities (hereinafter referred to as the 'Financial Regulation')[28],
with the exception of the amount of the CF transferred to the Connecting Europe
Facility referred to in Article 84(4) and innovative actions at the initiative
of the Commission under Article 9 of the ERDF Regulation, and technical
assistance at the initiative of the Commission. 
8.           The Commission and the
Member States shall apply the principle of sound financial management in
accordance with Article 73 of the Financial Regulation. 
9.           The Commission and the
Member States shall ensure the effectiveness of the CSF Funds, in particular
through monitoring, reporting and evaluation. 
10.         The Commission and the
Member States shall carry out their respective roles in relation to the CSF
Funds with the aim of reducing the administrative burden for beneficiaries.
Article 5 
Partnership and
multi-level governance
1.           For the Partnership
Contract and each programme respectively, a Member State shall organise a partnership with the following partners:
(a)         
competent regional, local, urban and other
public authorities;
(b)         
economic and social partners; and
(c)         
bodies representing civil society, including
environmental partners, non-governmental organisations, and bodies responsible
for promoting equality and non-discrimination.
2.           In accordance with the
multi-level governance approach, the partners shall be involved by Member
States in the preparation of Partnership Contracts and progress reports and in
the preparation, implementation, monitoring and evaluation of programmes. The
partners shall participate in the monitoring committees for programmes.
3.           The Commission shall be
empowered to adopt delegated acts in accordance with Article 140 to provide for
a European code of conduct that lays down objectives and criteria to support
the implementation of partnership and to facilitate the sharing of information,
experience, results and good practices among Member States. 
4.           At least once a year, for
each CSF Fund, the Commission shall consult the organisations which represent
the partners at Union level on the implementation of support from the CSF
Funds. 
Article 6 
Compliance with Union and
national law
Operations financed by the CSF Funds shall
comply with applicable Union and national law. 
Article 7
Promotion of equality
between men and women and non-discrimination
The Member
States and the Commission shall ensure that equality
between men and women and the integration of gender
perspective is promoted in the preparation and implementation of
programmes.
The Member
States and the Commission shall take appropriate steps
to prevent any discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation during the preparation and implementation of programmes.

Article 8 
Sustainable development
The objectives of the CSF Funds shall be
pursued in the framework of sustainable development and the Union's promotion
of the aim of protecting and improving the environment, as set out in Articles
11 and 19 of the Treaty, taking into account the polluter pays principle. 
The Member States and the Commission shall
ensure that environmental protection requirements, resource efficiency, climate
change mitigation and adaptation, disaster resilience and risk prevention and
management are promoted in the preparation and implementation of Partnership
Contracts and programmes. Member States shall provide information on the
support for climate change objectives using the methodology adopted by the
Commission. The Commission shall adopt this methodology by means of an
implementing act. The implementing act shall be adopted in accordance with the
examination procedure referred to in Article 143(3).
TITLE II 
STRATEGIC APPROACH
CHAPTER I
Thematic objectives for the CSF Funds and Common Strategic Framework 
Article 9
Thematic objectives
Each CSF Fund shall support the following
thematic objectives in accordance with its mission in order to contribute to
the Union strategy for smart, sustainable and inclusive growth: 
(1)                   
strengthening research, technological
development and innovation;
(2)              
enhancing access to, and use and quality of,
information and communication technologies;
(3)              
enhancing the competitiveness of small and
medium-sized enterprises, the agricultural sector (for the EAFRD) and the
fisheries and aquaculture sector (for the EMFF);
(4)              
supporting the shift towards a low-carbon
economy in all sectors;
(5)              
promoting climate change adaptation, risk prevention
and management;
(6)              
protecting the environment and promoting
resource efficiency;
(7)              
promoting sustainable transport and removing
bottlenecks in key network infrastructures;
(8)              
promoting employment and supporting labour
mobility;
(9)              
promoting social inclusion and combating
poverty;
(10)          
investing in education, skills and lifelong
learning;
(11)          
enhancing institutional capacity and an
efficient public administration.
Thematic objectives shall be translated
into priorities specific to each CSF Fund and set out in the Fund-specific
rules. 
Article 10 
Common
Strategic Framework
In order to promote the harmonious,
balanced and sustainable development of the Union, a Common Strategic Framework
shall translate the objectives and targets of the Union strategy for smart,
sustainable and inclusive growth into key actions for the CSF Funds. 
Article 11
Content
The Common Strategic Framework shall
establish:
(a)                   
for each thematic objective, the key actions to
be supported by each CSF Fund; 
(b)                   
the key territorial challenges for urban, rural,
coastal and fisheries areas, as well as for areas with particular territorial
features referred to in Articles 174 and 349 of the Treaty, to be addressed by
the CSF Funds;
(c)                   
horizontal principles and policy objectives for
the implementation of the CSF Funds;
(d)                   
priority areas for cooperation activities for
each of the CSF Funds, where appropriate, taking account of macro-regional and
sea basin strategies;
(e)                   
coordination mechanisms among the CSF Funds, and
with other relevant Union policies and instruments, including external
instruments for cooperation;
(f)                     
mechanisms for ensuring the coherence and
consistency of the programming of the CSF Funds with the country-specific
recommendations under Article 121(2) of the Treaty and the relevant Council
recommendations adopted under 148(4) of the Treaty.
Article 12 
Adoption and review
The Commission shall be empowered to adopt
a delegated act in accordance with Article 142 on the Common Strategic
Framework within 3 months of the adoption of this Regulation. 
Where there are major changes in the Union
strategy for smart, sustainable and inclusive growth, the Commission shall
review and, where appropriate, adopt, by delegated act in accordance with
Article 142, a revised Common Strategic Framework. 
Within 6 months of adoption of a revised
Common Strategic Framework, Member States shall propose amendments, where
necessary, to their Partnership Contract and programmes to ensure their
consistency with the revised Common Strategic Framework.

CHAPTER II
Partnership Contract
Article 13 
Preparation of the
Partnership Contract
1.                      
Each Member State shall prepare a Partnership
Contract for the period from 1 January 2014 to 31 December 2020. 
2.                      
The Partnership Contract shall be drawn up by
Member States in cooperation with the partners referred to in Article 5. The
Partnership Contract shall be prepared in dialogue with the Commission. 
3.                      
The Partnership Contract shall cover all support
from the CSF Funds in the Member State concerned.
4.                      
Each Member State shall transmit its Partnership
Contract to the Commission within 3 months of the adoption of the Common
Strategic Framework.
Article 14
Content of the Partnership
Contract 
              The Partnership Contract
shall set out:
(a)         
arrangements to ensure alignment with the Union
strategy for smart, sustainable and inclusive growth, including:
(i)      an analysis of disparities and
development needs with reference to the thematic objectives and key actions
defined in the Common Strategic Framework and the targets set in the
country-specific recommendations under Article 121(2) of the Treaty and the
relevant Council recommendations adopted under Article 148(4) of the Treaty;
(ii)      a summary analysis of the ex ante
evaluations of the programmes justifying the selection of the thematic
objectives and the indicative allocations of the CSF Funds;
(iii)     for each thematic objective, a
summary of the main results expected for each of the CSF Funds;
(iv)     the indicative allocation of support
by the Union by thematic objective at national level for each of the CSF Funds,
as well as the total indicative amount of support foreseen for climate change objectives;
(v)     the main priority areas for
cooperation, taking account, where appropriate, of macro-regional and sea basin
strategies;
(vi)     horizontal principles and policy
objectives for the implementation of the CSF Funds;
(vii)    the list of the programmes under the
ERDF, the ESF and the CF, except those under the European territorial cooperation
goal, and of the programmes of the EAFRD and the EMFF, with the respective
indicative allocations by CSF Fund and by year;
(b)         
an integrated approach to territorial
development supported by the CSF Funds setting out:
(i)      the mechanisms at national and
regional level that ensure coordination between the CSF Funds and other Union
and national funding instruments and with the EIB;
(ii)      the arrangements to ensure an
integrated approach to the use of the CSF Funds for the territorial development
of urban, rural, coastal and fisheries areas and areas with particular
territorial features, in particular the implementation arrangements for
Articles 28, 29 and 99 accompanied, where appropriate, by a list of the cities
to participate in the urban development platform referred to in Article 7 of
the ERDF Regulation;
(c)         
an integrated approach to address the specific
needs of geographical areas most affected by poverty or of target groups at
highest risk of discrimination or exclusion, with special regard to
marginalised communities, where appropriate, including the indicative financial
allocation for the relevant CSF Funds;
(d)         
arrangements to ensure effective implementation,
including:
(i)      a consolidated table of milestones
and targets established in programmes for the performance framework referred to
in Article 19(1), together with the methodology and mechanism to ensure
consistency across programmes and CSF Funds; 
(ii)      a summary of the assessment of the
fulfilment of ex ante conditionalities and of the actions to be taken at
national and regional level, and the timetable for their implementation, where ex ante
conditionalities are not fulfilled;
(iii)     the information required for ex
ante verification of compliance with the rules on additionality as they are
defined in Part Three of this Regulation;
(iv)     the actions taken to involve the
partners and their role in the preparation of the Partnership Contract and the
progress report as defined in Article 46 of this Regulation;
(e)         
arrangements to ensure efficient implementation
of the CSF Funds, including:
(i)      an assessment of whether there is a
need to reinforce the administrative capacity of the authorities and, where
appropriate, beneficiaries, and actions to be taken for this purpose;
(ii)      a summary of the actions planned and
corresponding targets in the programmes to achieve a reduction in the
administrative burden for beneficiaries;
(iii)     an assessment of the existing
systems for electronic data exchange, and the actions planned to permit all
exchanges of information between beneficiaries and authorities responsible for
management and control of programmes to be carried out solely by electronic
data exchange.
Article 15 
Adoption and amendment of
the Partnership Contract
1.           The Commission shall
assess the consistency of the Partnership Contract with this Regulation, with
the Common Strategic Framework, and the country-specific recommendations under
Article 121(2) of the Treaty and the Council recommendations adopted under
148(4) of the Treaty, taking account of the ex ante evaluations of
the programmes, and shall make observations within three months of the date of
submission of the Partnership Contract. The Member State shall provide all
necessary additional information and, where appropriate, shall revise the
Partnership Contract. 
2.           The Commission shall adopt
a decision, by means of implementing acts, approving the Partnership Contract
no later than six months after its submission by the Member State, provided
that any observations made by the Commission have been satisfactorily taken
into account. The Partnership Contract shall not enter into force before 1
January 2014.
3.           Where a Member State
proposes an amendment to the Partnership Contract, the Commission shall carry
out an assessment in accordance with paragraph 1 and, where appropriate, shall
adopt a decision, by means of implementing acts, approving the amendment.
CHAPTER III
Thematic concentration, ex ante conditionalities and performance review
Article 16
Thematic concentration 
Member States shall concentrate support, in
accordance with the Fund-specific rules, on actions bringing the greatest added
value in relation to the Union strategy for smart, sustainable and inclusive
growth, addressing the challenges identified in the country-specific
recommendations under Article 121(2) of the Treaty and the relevant Council
recommendations adopted under 148(4) of the Treaty, and taking into account
national and regional needs. 
Article 17
Ex ante
conditionalities
1.                      
Ex ante
conditionalities shall be defined for each CSF Fund in the Fund-specific rules.

2.                      
Member States shall assess whether the
applicable ex ante conditionalities are fulfilled.
3.                      
Where ex ante conditionalities are not
fulfilled at the date of transmission of the Partnership Contract, Member
States shall set out in the Partnership Contract a summary of the actions to be
taken at national or regional level and the timetable for their implementation,
to ensure their fulfilment not later than two years after the adoption of the
Partnership Contract or by 31 December 2016, whichever is earlier .
4.                      
Member States shall set out the detailed actions
relating to the fulfilment of ex ante conditionalities, including
the timetable for their implementation, in the relevant programmes.
5.                      
The Commission shall assess the information
provided on the fulfilment of ex ante conditionalities in the
framework of its assessment of the Partnership Contract and programmes. It may
decide, when adopting a programme, to suspend all or part of interim payments
to the programme pending the satisfactory completion of actions to fulfil an ex
ante conditionality. The failure to complete actions to fulfil an ex
ante conditionality by the deadline set out in the programme shall
constitute a basis for suspending payments by the Commission. 
6.                      
Paragraphs 1 to 5 shall not apply to programmes
under the European territorial cooperation goal.
Article 18 
Performance reserve
5% of the resources allocated to each CSF
Fund and Member State, with the exception of resources allocated to the
European territorial cooperation goal and to Title V of the EMFF Regulation,
shall constitute a performance reserve to be allocated in accordance with
Article 20. 
Article 19
Performance review
1.           The Commission, in
cooperation with the Member States, shall undertake a review of the performance
of the programmes in each Member State in 2017 and 2019, with reference to the
performance framework set out in the respective Partnership Contract and
programmes. The method for establishing the performance framework is set out in
Annex I.
2.           The review shall examine
the achievement of the milestones of the programmes at the level of priorities,
on the basis of the information and the assessments presented in the progress
reports submitted by the Member States in the years 2017 and 2019.
Article 20
Allocation of performance
reserve
1.           Where the review of
performance undertaken in 2017 reveals that a priority within a programme has
not attained its milestones set for the year 2016, the Commission shall make
recommendations to the Member State concerned.
2.           On the basis of the review
undertaken in 2019, the Commission shall adopt a decision, by means of
implementing acts, to determine for each CSF Fund and Member State the
programmes and priorities which have attained their milestones. The Member
State shall propose the attribution of the performance reserve for the
programmes and priorities set out in that Commission decision. The Commission
shall approve the amendment of the programmes concerned in accordance with
Article 26. Where a Member State fails to submit the information in accordance
with Article 46(2) and (3), the performance reserve for the programmes or the
priorities concerned shall not be allocated. 
3.           Where there is evidence
resulting from a performance review that a priority has failed to achieve the
milestones set out in the performance framework, the Commission may suspend all
or part of an interim payment of a priority of a programme in accordance with
the procedure laid down in Fund-specific rules.
4.           Where the Commission,
based on the examination of the final implementation report of the programme,
establishes a serious failure to achieve the targets set out in the performance
framework, it may apply financial corrections in respect of the priorities
concerned in accordance with Fund-specific rules. The Commission shall be
empowered to adopt delegated acts in accordance with Article 142 to establish
criteria and the methodology for determining the level of financial correction
to be applied. . 
5.           Paragraph 2 shall not
apply to programmes under the European territorial cooperation goal and to
Title V of the EMFF Regulation.
CHAPTER IV
Macroeconomic conditionalities
Article 21
Conditionality linked to
the coordination of Member States' economic policies
1.           The Commission may request
a Member State to review and propose amendments to its Partnership Contract and
the relevant programmes, where this is necessary:
(a)         
to support the implementation of a Council
recommendation, addressed to the Member State concerned and adopted in
accordance with Articles 121(2) and/or 148(4) of the Treaty, or to support the
implementation of measures addressed to the Member State concerned and adopted
in accordance with Article 136(1) of the Treaty; 
(b)         
to support the implementation of a Council
recommendation addressed to the Member State concerned and adopted in
accordance with Article 126(7) of the Treaty; 
(c)         
to support the implementation of a Council
recommendation addressed to the Member State concerned and adopted in
accordance with Article 7(2) of Regulation (EU) No …/2011 [on the prevention
and correction of macroeconomic imbalances], provided that these amendments are
deemed necessary to help correct the macroeconomic imbalances; or
(d)         
to maximise the growth and competitiveness
impact of the available CSF Funds pursuant to paragraph 4, if a Member State
meets one of the following conditions:
(i)      Union financial assistance is made
available to it under Council Regulation (EU) No 407/2010;
(ii)      medium-term financial assistance is
made available to it in accordance with Council Regulation (EC) No 332/2002[29];
(iii)     financial assistance in the form of
an ESM loan is made available to it in accordance with the Treaty establishing
the European Stability Mechanism.
2.           The Member State shall
submit a proposal for amending the Partnership Contract and the relevant
programmes within one month. If necessary, the Commission shall make
observations within one month from the submission of the amendments, in which
case the Member State shall re-submit its proposal within one month.
3.           Where the Commission has
not made observations or where its observations have been satisfactorily taken
into account, the Commission shall adopt a decision approving the amendments to
the Partnership Contract and the relevant programmes without undue delay.
4.           By derogation to paragraph
1, where financial assistance is made available to a Member State in accordance
with paragraph 1(d) and is linked to an adjustment programme, the Commission
may without any proposal from the Member State amend the Partnership Contract
and the programmes with a view to maximising the growth and competitiveness impact
of the available CSF Funds. To ensure effective implementation of the
Partnership Contract and the relevant programmes, the Commission shall become
involved in their management as detailed in the adjustment programme or the
Memorandum of Understanding signed with the Member State concerned.
5.           Where the Member State
fails to respond to the Commission's request referred to in paragraph 1 or does
not reply satisfactorily within one month to the observations of the Commission
referred to in paragraph 2, the Commission may, within three months following
its observations, adopt a decision, by means of implementing acts, suspending
part or all of the payments for the programmes concerned.
6.           The Commission shall
suspend, by means of implementing acts, part or all of the payments and
commitments for the programmes concerned where: 
(a)         
the Council decides that the Member State does
not comply with the specific measures set out by the Council in accordance with
Article 136(1) of the Treaty; 
(b)         
the Council decides in accordance with Article
126(8) or Article 126(11) of the Treaty that the Member State concerned has not
taken effective action to correct its excessive deficit; 
(c)         
the Council concludes in accordance with Article
8(3) of Regulation (EU) No […]/2011 [on the prevention
and correction of macroeconomic imbalances] that, on
two successive instances, the Member State has not submitted a sufficient
corrective action plan or the Council adopts a decision
declaring non-compliance in accordance with Article 10(4) of that Regulation; 
(d)         
the Commission concludes that the Member State
has not taken measures to implement the adjustment programme referred to in
Council Regulation (EU) No 407/2010 or Council Regulation (EC) No 332/2002 and
as a consequence decides not to authorise the disbursement of the financial
assistance granted to this Member State; or
(e)         
the Board of Directors of the European stability
mechanism concludes that the conditionality attached to an ESM financial
assistance in the form of an ESM loan to the concerned Member State was not met
and as a consequence decides not to disburse the stability support granted to
it.
7.           When deciding to suspend
part or all of the payments or commitments in accordance with paragraphs 5 and
6 respectively, the Commission shall ensure that the suspension is
proportionate and effective, taking into account the economic and social circumstances
of the Member State concerned, and respects equality of treatment between
Member States, in particular with regard to the impact of the suspension on the
economy of the Member State concerned.
8.           The Commission shall
without delay lift the suspension of payments and commitments where the Member
State has proposed amendments to the Partnership Contract and the relevant
programmes as requested by the Commission, which the Commission has approved
and, where applicable:
(a)         
the Council has decided that the Member State
complies with the specific measures set out by the Council in accordance with
Article 136(1) of the Treaty;
(b)         
the excessive deficit procedure is held in
abeyance in accordance with Article 9 of Regulation (EC)
No 1467/97 or the Council has decided in accordance
with Article 126(12) of the Treaty to abrogate the decision on the existence of
an excessive deficit; 
(c)         
the Council has endorsed the corrective action
plan submitted by the concerned Member State in accordance with Article 8(2) of
Regulation (EU) No […] [EIP Regulation] or the excessive imbalance procedure is
placed in a position of abeyance in accordance with Article 10(5) of that Regulation
or the Council has closed the excessive imbalance procedure in accordance with
Article 11 of that Regulation; 
(d)         
the Commission has concluded that the Member
State has taken measures to implement the adjustment programme referred to in
Council Regulation (EU) No 407/2010 or Council Regulation (EC) No 332/2002 and
as a consequence has authorised the disbursement of the financial assistance
granted to this Member State; or
(e)         
the Board of Directors of the European stability
mechanism has concluded that the conditionality attached to a financial
assistance in the form of an ESM loan to the concerned Member State is met and
as a consequence has decided to disburse the stability support granted to it.
At the same time, the Council shall decide, on
a proposal from the Commission, to re-budget the suspended commitments in
accordance with Article 8 of Council Regulation (EU) No […] laying down the
multiannual financial framework for the years 2014 to 2020.
Article 22
Increase in payments for
Member State with temporary budgetary difficulties 
1.           On the request of a Member
State, interim payments and payments of the final balance may be increased by
10 percentage points above the co-financing rate applicable to each priority
for the ERDF, ESF and CF or to each measure for the EAFRD and the EMFF. The
increased rate, which may not exceed 100%, shall apply to requests for payment
relating to the accounting period in which the Member State has submitted its
request and in subsequent accounting periods during which the Member State
meets one of the following conditions:
(a)         
where the Member State concerned has adopted the
euro, it receives macro-financial assistance from the Union under Council
Regulation (EU) No 407/2010[30];
(b)         
where the Member State concerned has not adopted
the euro, it receives medium-term financial assistance in accordance with
Council Regulation (EC) No 332/2002[31];
(c)         
financial assistance is made available to it in
accordance with the Treaty establishing the European Stability Mechanism signed
on 11 July 2011.
The first sub-paragraph shall not apply to
programmes under the ETC Regulation.
2.           Notwithstanding paragraph
1, Union support through interim payments and payments of the final balance
shall not be higher than the public support and the maximum amount of support
from the CSF Funds for each priority for the ERDF, ESF and CF, or for each
measure for the EAFRD and the EMFF, as laid down in the decision of the
Commission approving the programme.
TITLE III 
PROGRAMMING
CHAPTER I
General provisions on the CSF Funds
Article 23
Preparation of programmes
1.           The CSF Funds shall be
implemented through programmes in accordance with the Partnership Contract.
Each programme shall cover the period from 1 January 2014 to 31 December 2020.
2.           Programmes shall be drawn
up by Member States or any authority designated by them, in cooperation with
the partners. 
3.           Programmes shall be
submitted by the Member States at the same time as the Partnership Contract,
with the exception of European territorial cooperation programmes, which shall
be submitted within six months of the approval of the Common Strategic
Framework. All programmes shall be accompanied by the ex ante evaluation
as set out in Article 48.           
Article 24
Content of programmes 
1.           Each programme shall set
out a strategy for the programme's contribution to the Union strategy for smart,
sustainable and inclusive growth consistent with the Common Strategic Framework
and Partnership Contract. Each programme shall include the arrangements to
ensure effective, efficient and coordinated implementation of the CSF Funds and
actions to achieve a reduction of administrative burden for beneficiaries.
2.           Each programme shall
define priorities setting out specific objectives, financial appropriations of
support from the CSF Funds and corresponding national co-financing. 
3.           Each priority shall set
out indicators to assess progress of programme implementation towards
achievement of objectives as the basis for monitoring, evaluation and review of
performance. These shall include:
(a)         
financial indicators relating to expenditure
allocated;
(b)         
output indicators relating to the operations
supported;
(c)         
result indicators relating to the priority.
For each CSF Fund, the Fund-specific rules
shall set out common indicators and may provide for programme-specific
indicators.
4.           Each programme, except
those which cover exclusively technical assistance, shall include a description
of the actions to take into account the principles set out in Articles 7 and 8.
5.           Each programme, except
those where technical assistance is undertaken under a specific programme,
shall set out the indicative amount of support to be used for climate change
objectives.
6.           Member States shall draft
the programme in accordance with the Fund-specific rules. 
Article 25
The procedure for adoption of programmes
1.           The Commission shall
assess the consistency of programmes with this Regulation, the Fund-specific
rules, their effective contribution to the thematic objectives and the Union
priorities specific to each CSF Fund, the Common Strategic Framework, the
Partnership Contract, the country-specific recommendations under Article 121(2)
of the Treaty and the Council recommendations adopted under 148(4) of the
Treaty, taking account of the ex ante evaluation. The assessment shall
address, in particular, the adequacy of the programme strategy, the
corresponding objectives, indicators, targets and the allocation of budgetary
resources. 
2.           The Commission shall make
observations within three months of the date of submission of the programme.
The Member State shall provide to the Commission all necessary additional
information and, where appropriate, revise the proposed programme.
3.           In accordance with the
Fund-specific rules, the Commission shall approve each programme no later than
six months following its formal submission by the Member State(s), provided
that any observations made by the Commission have been satisfactorily taken
into account, but not before 1 January 2014 or before adoption by the
Commission of a decision approving the Partnership Contract.
Article 26
Amendment of programmes
1.           Requests for amendment of
programmes submitted by a Member State shall be duly substantiated and shall in
particular set out the expected impact of the changes to the programme on
achieving the Union strategy for smart, sustainable and inclusive growth and
the specific objectives defined in the programme, taking account of the Common
Strategic Framework and the Partnership Contract. They shall be accompanied by
the revised programme and, where appropriate, a revised Partnership Contract.
In the case of amendment of programmes under
the European territorial cooperation goal, the relevant Partnership Contract
shall not be amended.
2.           The Commission shall
assess the information provided in accordance with paragraph 1, taking account
of the justification provided by the Member State. The Commission may make
observations and the Member State shall provide to the Commission all necessary
additional information. In accordance with Fund-specific rules, the Commission
shall approve requests for amendment of a programme no later than five months
after their formal submission by the Member State provided that any
observations made by the Commission have been satisfactorily taken into
account. The Commission shall, where necessary, amend at the same time the
decision approving the Partnership Contract in accordance with Article 15(3).
Article 27
Participation of the
European Investment Bank
1.           The EIB may, at the
request of Member States, participate in the preparation of the Partnership
Contract, as well as in activities relating to the preparation of operations,
in particular major projects, financial instruments and public-private
partnerships.
2.           The Commission may consult
the EIB before the adoption of the Partnership Contract or the programmes.
3.           The Commission may request
the EIB to examine the technical quality and economic and financial viability
of major projects and to assist it as regards the financial instruments to be
implemented or developed.
4.           The Commission, in
implementing the provisions of this Regulation, may award grants or service
contracts to the EIB covering initiatives implemented on a multi-annual basis.
The commitment of the Union budget contributions in respect of these grants or
service contracts shall be effected annually.
CHAPTER II
Community-led local development 
Article 28
Community-led local development 
1.           Community-led local development, which is designated as LEADER local
development in relation to the EAFRD, shall be:
(a)         
focused on specific sub-regional territories; 
(b)         
community-led, by local action groups composed
of representatives of public and private local socio-economic interests, where
at the decision-making level neither the public sector nor any single interest
group shall represent more than 49 % of the voting rights;
(c)         
carried out through integrated and
multi-sectoral area-based local development strategies; 
(d)         
designed taking into consideration local needs
and potential, and include innovative features in the local context, networking
and, where appropriate, cooperation.
2.           Support
from the CSF Funds to local development shall be consistent and coordinated
between the CSF Funds. This shall be ensured inter alia through coordinated
capacity-building, selection, approval and funding of local development
strategies and local development groups.
3.           Where the selection
committee for the local development strategies set up under Article 29(3)
determines that the implementation of the local development strategy selected
requires support from more than one Fund, a lead Fund may be designated.
4.           Where a lead Fund is
designated, the running costs, animation and networking activities for the
local development strategy shall be financed from the lead Fund only. 
5.           Local development
supported by the CSF Funds shall be carried out under one or more priority of
the programme.
Article 29
Local development
strategies
1.           A local development
strategy shall contain at least the following elements:
(a)         
the definition of the area and population
covered by the strategy; 
(b)         
an analysis of the development needs and
potential of the area, including an analysis of strengths, weaknesses,
opportunities and threats;
(c)         
a description of the strategy and its
objectives, a description of the integrated and innovative character of the
strategy and a hierarchy of objectives, including clear and measurable targets
for outputs or results. The strategy shall be coherent with the relevant
programmes of all the CSF Funds involved;
(d)         
a description of the process of community
involvement in the development of the strategy;
(e)         
an action plan demonstrating how objectives are
translated into actions;
(f)           
a description of the management and monitoring
arrangements of the strategy, demonstrating the capacity of the local action
group to implement the strategy and a description of specific arrangements for
evaluation;
(g)         
the financial plan of the strategy, including
the planned allocation of each of the CSF Funds.
2.           Member States shall define
criteria for the selection of local development strategies. The Fund-specific
rules may set out selection criteria.
3.           Local development
strategies shall be selected by a committee set up for this purpose by the
relevant managing authorities of the programmes.
4.           The selection and approval
of all local development strategies shall be completed by 31 December 2015 at
the latest.
5.           The decision to approve a
local development strategy by the managing authority shall set out the
allocations of each CSF Fund. It shall also set out the roles of the
authorities responsible for the implementation of the relevant programmes for
all implementation tasks relating to the strategy. 
6.           The Commission shall be
empowered to adopt delegated acts in accordance with Article 142 concerning the
definition of the area and population covered by the strategy referred in
paragraph 1(a).
Article 30
Local action groups
1.           Local action groups shall design and implement the local development
strategies. 
Member States shall define the respective roles
of the local action group and the authorities responsible for the
implementation of the relevant programmes, for all implementation tasks
relating to the strategy.
2.           The managing authority
shall ensure that the local action groups either select one partner within the
group as a lead partner in administrative and financial matters, or come
together in a legally constituted common structure.
3.           The tasks of local action
groups shall include the following:
(a)         
building the capacity of local actors to develop
and implement operations;
(b)         
drawing up a non-discriminatory and transparent
selection procedure and criteria for the selection of operations, which avoid
conflicts of interest, that shall ensure that at least 50% of the votes in
selection decisions are from the non public sector partners, providing for the
possibility of appeal against selection decisions and allowing selection by
written procedure;
(c)         
ensuring coherence with the local development
strategy when selecting operations, by prioritising them according to their
contribution to meeting the strategies' objectives and targets;
(d)         
preparing and publishing calls for proposals or
an ongoing project submission procedure, including definition of selection
criteria; 
(e)         
receiving applications for support and assessing
them;
(f)           
selecting operations and fixing the amount of
support and, where relevant, presenting the proposals to the responsible body
for final verification of eligibility before approval;
(g)         
monitoring the implementation of the local
development strategy and the operations supported and carrying out specific
evaluation activities linked to the local development strategy.
Article 31
Support from the CSF Funds for local development
Support for local development shall
include:
(a)                   
the costs of preparatory support; 
(b)              
implementation of operations under the local development
strategy;
(c)               
preparation and implementation of cooperation
activities of the local action group;
(d)              
running costs and animation of the local
development strategy up to the limit of 25 % of the total public expenditure
incurred within the local development strategy.
TITLE IV
FINANCIAL INSTRUMENTS
Article 32
Financial instruments
1.           The CSF Funds may be used
to support financial instruments under a programme, including when organised
through funds of funds, in order to contribute to the achievement of specific
objectives set out under a priority, based on an ex ante assessment
which has identified market failures or sub-optimal investment situations, and
investment needs.
Financial instruments may be combined with
grants, interest rate subsidies and guarantee fee subsidies. In this case,
separate records must be maintained for each form of financing.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 142 laying down detailed rules
concerning the ex ante assessment of financial instruments, the
combination of support provided to final recipients through grants, interest
rate subsidies, guarantee fee subsidies and financial instruments, additional
specific rules on eligibility of expenditure and rules specifying the types of activities
which shall not be supported through financial instruments.
2.           Final recipients supported
by financial instruments may also receive grants or other assistance from a
programme or from another instrument supported by the budget of the Union. In this
case, separate records must be maintained for each source of financing.
3.           Contributions in kind are
not eligible expenditure in respect of financial instruments, except for
contributions of land or real estate in respect of investments with the objective
of supporting urban development or urban regeneration, where the land or real
estate forms part of the investment. Such contributions of land or real estate
shall be eligible provided that the conditions in Article 59 are met.
Article 33
Implementation of
financial instruments
1.           In implementing Article
32, managing authorities may provide a financial contribution to the following
financial instruments:
(a)         
financial instruments set up at Union level,
managed directly or indirectly by the Commission;
(b)         
financial instruments set up at national,
regional, transnational or cross-border level, managed by or under the
responsibility of the managing authority.
2.           Title VIII of the
Financial Regulation shall apply to financial instruments referred to in
paragraph 1(a). Contributions from the CSF Funds to financial instruments under
paragraph 1(a) shall be placed in separate accounts and used, in accordance
with the objectives of the respective CSF Funds, to support actions and final
recipients consistent with the programme or programmes from which such
contributions are made. 
3.           For financial instruments
under paragraph 1(b), the managing authority may provide a financial
contribution to the following financial instruments:
(a)         
financial instruments complying with the standard
terms and conditions laid down by the Commission, by means of implementing acts
in accordance with the examination procedure referred to in Article 143(3);
(b)         
already existing or newly created financial
instruments which are specifically designed to achieve the intended purpose and
which respect the applicable Union and national rules.
The Commission shall adopt delegated acts in
accordance with Article 142 laying down the specific rules regarding certain
types of financial instruments referred to in point (b), as well as the
products that may be delivered through such instruments.
4.           When supporting financial
instruments referred to in paragraph 1(b) the managing authority may:
(a)         
invest in the capital of existing or newly
created legal entities, including those financed from other CSF Funds,
dedicated to implementing financial instruments consistent with the objectives
of the respective CSF Funds, which will undertake implementations tasks; the
support to such investments shall be limited to the amounts necessary to
implement new financial instruments consistent with the objectives of this
Regulation; or 
(b)         
entrust implementation tasks to: 
(i)      the European Investment Bank; 
(ii)      international financial institutions
in which a Member State is a shareholder, or financial institutions established
in a Member State aiming at the achievement of public interest under the
control of a public authority, selected in accordance with applicable Union and
national rules; 
(iii)     a body governed by public or private
law selected in accordance with applicable Union and national rules. 
(c)         
undertake implementation tasks directly, in the
case of financial instruments consisting solely of loans or guarantees.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 142 laying down rules concerning
funding agreements, the role and responsibility of the entities to which the
implementation tasks are entrusted, as well as management costs and fees.
5.           The entities referred to
in paragraph 4(b)(i) and (ii), when implementing financial instruments through
funds of funds, may further entrust part of the implementation to financial
intermediaries provided that these entities ensure under their responsibility
that the financial intermediaries satisfy the criteria laid down in Articles 57
and 131 (1), (1a) and (3) of the Financial Regulation. Financial intermediaries
shall be selected on the basis of open, transparent, proportionate and
non-discriminatory procedures, avoiding conflicts of interests.
6.           The entities referred to
in paragraph 4(b) to which implementation tasks have been entrusted shall open
fiduciary accounts in their name and on behalf of the managing authority. The
assets held on such fiduciary accounts shall be managed in accordance with the
principle of sound financial management following appropriate prudential rules
and shall have appropriate liquidity.
7.           The Commission shall be
empowered to adopt delegated acts in accordance with Article 142 laying down
detailed rules concerning specific requirements regarding the transfer and
management of assets managed by the entities to which implementation tasks are
entrusted, as well as conversion of assets between euro and national
currencies.
Article 34
Implementation of certain
financial instruments
1.           The bodies accredited in
accordance with Article 64 shall not carry out on-the-spot verifications of
operations comprising financial instruments implemented under Article 33(1)(a).
They shall receive regular control reports from the bodies entrusted with the
implementation of these financial instruments.
2.           The bodies responsible for
the audit of programmes shall not carry out audits of operations comprising
financial instruments implemented under Article 33(1)(a) and of management and
control systems relating to these instruments. They shall receive regular
control reports from the auditors designated in the agreements setting up of
these financial instruments.
3.           The Commission shall be
empowered to adopt delegated acts in accordance with Article 142 concerning the
arrangements for management and control of financial instruments implemented
under Articles 33(1)(a) and 33(4)(b)(i), (ii) and (iii).
Article 35
Requests for payment
including expenditure for financial instruments
1.           As regards financial
instruments referred to in Article 33(1)(a), the request for payment shall
include and separately disclose the total amount of support paid to the
financial instrument.
2.           As regards financial
instruments referred to in Article 33(1)(b) implemented in accordance with
Article 33(4)(a) and (b), the total eligible expenditure presented in the
request for payment shall include and separately disclose the total amount of
support paid or expected to be paid to the financial instrument for investments
in final recipients to be made over a pre-defined period of maximum two years,
including management costs or fees. 
3.           The amount determined in
accordance with paragraph 2 shall be adjusted in subsequent requests for
payment, to take account of the difference between the amount of support
previously paid to the financial instrument concerned, and the amounts
effectively invested in final recipients, plus management costs and fees paid.
These amounts shall be separately disclosed in the payment request. 
4.           As regards financial
instruments referred to in Article 33(1)(b) implemented in accordance with
Article 33(4)(c), the request for payment shall include the total amount of the
payments effected by the managing authority for investments in final
recipients. These amounts shall be separately disclosed in the payment request.

5.           The Commission shall be
empowered to adopt, by means of delegated acts in accordance with Article 142,
the specific rules concerning payments and withdrawal of payments to financial
instruments and possible consequences in respect of requests of payments. 
Article 36
Eligible expenditure at
closure
1.           At closure of a programme,
the eligible expenditure of the financial instrument shall be the total amount
effectively paid or, in the case of guarantee funds committed, by the financial
instrument within the eligibility period indicated in Article 55(2),
corresponding to:
(a)         
payments to final recipients;
(b)         
resources committed for guarantee contracts,
whether outstanding or already come to maturity, in order to honour possible
guarantee calls for losses, calculated according to a prudent ex ante
risk assessment, covering a multiple amount of underlying new loans or other
risk-bearing instruments for new investments in final recipients; 
(c)         
capitalised interest rate subsidies or guarantee
fee subsidies, due to be paid for a period not exceeding 10 years after the
eligibility period laid down in Article 55(2), used in combination with
financial instruments, paid into an escrow account specifically set up for that
purpose, for effective disbursement after the eligibility period laid down in
Article 55(2), but in respect of loans or other risk-bearing instruments
disbursed for investments in final recipients within the eligibility period
laid down in Article 55(2); 
(d)         
reimbursement of management costs incurred or
payment of management fees of the financial instrument.
2.           In the case of
equity-based instruments and micro-credit, capitalised management costs or fees
due to be paid for a period not exceeding 5 years after the eligibility period
laid down in Article 55(2), in respect of investments in final recipients which
occurred within that eligibility period and which cannot be covered by Articles
37 and 38, may be considered as eligible expenditure when paid into an escrow account
specifically set up for that purpose. 
3.           The eligible expenditure
determined in accordance with paragraphs 1 and 2 shall not exceed the sum of
the:
(i)      total amount of the support from the
CSF Funds paid to the financial instrument; and 
(ii)     corresponding national co-financing. 
4.           The Commission shall be
empowered to adopt delegated acts in accordance with Article 142 concerning the
establishment of a system of capitalisation of annual instalments for interest
rate subsidies and guarantee fee subsidies. 
Article 37
Interest and other gains
generated by support from the CSF Funds to financial instruments
1.           Support from the CSF Funds
paid to financial instruments shall be placed in interest-bearing accounts
domiciled within financial institutions in Member States or invested on a
temporary basis according to the principle of sound financial management. 
2.           Interest and other gains
attributable to support from the CSF Funds paid to financial instruments shall
be used for the same purposes as the initial support from the CSF Funds within
the same financial instrument.
3.           The managing authority
shall ensure that adequate records of the use of interest and other gains are
maintained. 
Article 38
Re-use of resources
attributable to the support from the CSF Funds until closure of the programme 
1.           Capital resources paid
back to financial instruments from investments or from the release of resources
committed for guarantee contracts, which are attributable to the support from
the CSF Funds, shall be re-used for further investments through the same or
other financial instruments, in accordance with the aims of the programme or
programmes. 
2.           Gains and other earnings
or yields, including interest, guarantee fees, dividends, capital gains or any
other income receipts generated by investments, attributable to the support
from the CSF Funds to the financial instrument, shall be used for the following
purposes, where applicable, up to the amounts necessary:
(a)         
reimbursement of management costs incurred and
payment of management fees of the financial instrument;
(b)         
preferential remuneration of investors operating
under the market economy investor principle, who provide counterpart resources
to the support from the CSF Funds to the financial instrument or who co-invest
at the level of final recipients;
(c)         
further investments through the same or other
financial instruments, in accordance with the aims of the programme or
programmes. 
3.           The managing authority
shall ensure that adequate records of the use of the resources and gains
referred to in paragraphs 1 and 2 are maintained.
Article 39
Use of legacy resources
after closure of the programme
Member States shall adopt the necessary
measures to ensure that the capital resources and gains and other earnings or
yields attributable to the support from the CSF Funds to financial instruments
are used in accordance with the aims of the programme for a period of at least
10 years after the closure of the programme.
Article 40
Report on Implementation
of Financial Instruments
1.           The managing authority
shall send to the Commission a specific report covering the operations
comprising financial instruments as an annex to the annual implementation
report. 
2.           The report referred to in
paragraph 1 shall include, for each financial instrument, the following
information:
(a)         
identification of the programme and of the
priority from which support from the CSF Funds is provided;
(b)         
description of the financial instrument and
implementation arrangements;
(c)         
identification of the bodies to whom
implementation tasks have been entrusted;
(d)         
total amount of support by programme and
priority or measure to the financial instrument included in requests for
payment submitted to the Commission;
(e)         
total amount of support paid or committed in
guarantee contracts by the financial instrument to the final recipients by
programme and priority or measure included in requests for payment submitted to
the Commission; 
(f)           
revenues of, and repayments to, the financial
instrument;
(g)         
multiplier effect of investments made by the
financial instrument and value of investments and participations;
(h)         
contribution of the financial instrument to the
achievement of the indicators of the programme and of the priority concerned.
3.           The Commission shall
adopt, by means of implementing act, in accordance with the examination
procedure referred to in Article 143(3), the uniform conditions concerning the
monitoring and provision of monitoring information to the Commission, including
in respect of financial instruments referred to in Article 33(1)(a).

TITLE V
MONITORING AND EVALUATION
CHAPTER I
Monitoring
Section
I
Monitoring of programmes
Article 41
Monitoring committee
1.           Within three months of the
date of notification to the Member State of the decision adopting a programme,
the Member State shall set up a committee to monitor implementation of the
programme, in agreement with the managing authority. 
A Member State may set up a single monitoring
committee for programmes co-financed by the CSF Funds. 
2.           Each monitoring committee
shall draw up and adopt its rules of procedure.
Article 42
Composition of the
monitoring committee
1.           The monitoring committee
shall be composed of representatives of the managing authority and intermediate
bodies and of representatives of the partners. Each member of the monitoring
committee shall have a voting right.
The monitoring committee of a programme under
the European territorial cooperation goal shall also include representatives of
any third country participating in that programme.
2.           The Commission shall
participate in the work of the monitoring committee in an advisory capacity. 
3.           If the EIB contributes to
a programme, it may participate in the work of the monitoring committee in an
advisory capacity.
4.           The monitoring committee
shall be chaired by a representative of the Member State or of the managing
authority.
Article 43
Functions of the
monitoring committee
1.           The monitoring committee
shall meet at least once a year and shall review implementation of the
programme and progress towards achieving its objectives. In doing so, it shall
have regard to the financial data, common and programme-specific indicators,
including changes in result indicators and progress towards quantified target
values, and the milestones defined in the performance framework. 
2.           The monitoring committee
shall examine in detail all issues that affect the performance of the
programme.
3.           The monitoring committee
shall be consulted and issue an opinion on any amendment of the programme
proposed by the managing authority. 
4.           The monitoring committee
may issue recommendations to the managing authority regarding implementation of
the programme and its evaluation. It shall monitor actions taken as a result of
its recommendations. 
Article 44
Implementation reports 
1.           From 2016 until and
including 2022, the Member State shall submit to the Commission an annual
report on implementation of the programme in the previous financial year. 
The Member State shall submit a final report on
implementation of the programme by 30 September 2023 for the ERDF, ESF and
Cohesion Fund and an annual implementation report for the EAFRD and EMFF.
2.           Annual implementation
reports shall set out information on implementation of the programme and its
priorities by reference to the financial data, common and programme-specific
indicators and quantified target values, including changes in result
indicators, and the milestones defined in the performance framework. The data
transmitted shall relate to values for indicators for fully implemented
operations and also for selected operations. They shall also set out actions
taken to fulfil the ex ante conditionalities and any issues which affect
the performance of the programme, and the corrective measures taken.
3.           The annual implementation
report submitted in 2017 shall set out and assess the information set out in
paragraph 2 and progress towards achieving the objectives of the programme,
including the contribution of the CSF Funds to changes in result indicators,
when evidence is available from evaluations. It shall also assess the
implementation of actions to take into account the principles set out in
Articles 6, 7 and 8 and report on support used for climate change targets.
4.           The annual implementation
report submitted in 2019 and the final implementation report for the CSF Funds
shall, in addition to the information and assessment set out in paragraphs 2
and 3, include information on and assess progress towards achieving the
objectives of the programme and its contribution to achieving the Union
strategy for smart, sustainable and inclusive growth. 
5.           The annual implementation
reports referred to in paragraphs 1 to 4 shall be admissible where they contain
all the information required in those paragraphs. The Commission shall inform
the Member State within 15 working days from the date of receipt of the annual
implementation report if it is not admissible, failing which it shall be deemed
admissible.
6.           The Commission shall
examine the annual implementation report and inform the Member State of its
observations within two months of the receipt of the annual implementation
report and within 5 months of receipt of the final report. Where the Commission
does not provide observations within these deadlines, the reports shall be
deemed to be accepted.
7.           The Commission may issue
recommendations to address any issues which affect the implementation of the
programme. Where such recommendations are made, the managing authority shall
inform the Commission within three months of the corrective measures taken.
8.           A citizen's summary of the
contents of the annual and the final implementation reports shall be made
public.
Article 45
Annual review meeting
1.           An annual review meeting
shall be organised every year from 2016 until and including 2022 between the
Commission and each Member State to examine the performance of each programme,
taking account of the annual implementation report and the Commission's
observations and recommendations, where applicable. 
2.           The annual review meeting
may cover more than one programme. In 2017 and 2019, the annual review meeting
shall cover all programmes in the Member State and shall also take account of
the progress reports submitted by the Member State in accordance with Article
46 in those years.
3.           The Member State and the
Commission may agree not to organise an annual review meeting for a programme
in years other than 2017 and 2019. 
4.           The annual review meeting
shall be chaired by the Commission. 
5.           The Member State shall
ensure that appropriate follow-up is given to any comments of the Commission
following the meeting.
Section II
Strategic progress
Article 46
Progress report
1.                      
By 30 June 2017 and by 30 June 2019, the Member
State shall submit to the Commission a progress report on implementation of the
Partnership Contract as at 31 December 2016 and 31 December 2018 respectively. 
2.                      
The progress report shall set out information on
and assess:
(a)         
changes in the development needs in the Member
State since the adoption of the Partnership Contract;
(b)         
progress towards achievement of the Union
strategy for smart, sustainable and inclusive growth, in particular in respect
of the milestones set out for each programme in the performance framework and
the support used for climate change objectives;
(c)         
whether the actions taken to fulfil ex ante
conditionalities not fulfilled at the date of adoption of the Partnership
Contract have been implemented in accordance with the timetable established;
(d)         
implementation of mechanisms to ensure
coordination between the CSF Funds and other Union and national funding
instruments and with the EIB;
(e)         
progress towards achievement of priority areas
established for cooperation;
(f)           
actions taken to reinforce the capacity of the
Member State authorities and, where appropriate, beneficiaries to administer
and use the CSF Funds;
(g)         
actions planned and corresponding targets in the
programmes to achieve a reduction in the administrative burden for
beneficiaries;
(h)         
the role of the partners referred in Article 5
in the implementation of the Partnership Contract.
3.                      
Where the Commission determines, within three
months of the date of submission of the progress report that the information
submitted is incomplete or unclear, it may request additional information from
the Member State. The Member State shall provide to the Commission the
information requested within three months and, where appropriate, shall revise
the progress report accordingly. 
4.                      
In 2017 and 2019, the Commission shall prepare a
strategic report summarising the progress reports of the Member States, which
it shall submit to the European Parliament, the Council, the European Economic
and Social Committee and the Committee of the Regions.
5.                      
In 2018 and 2020, the Commission shall include
in its Annual Progress Report to the spring meeting of the European Council a
section summarising the strategic report, in particular with regard to progress
made towards Union strategy for smart, sustainable and inclusive growth. 

CHAPTER II
Evaluation
Article 47
 General Provisions
1.           Evaluations shall be
carried out to improve the quality of the design and implementation of programmes,
as well as to assess their effectiveness, efficiency and impact. Impact of
programmes shall be evaluated in accordance with the mission of the respective
CSF Funds in relation to the targets for the Union strategy for smart,
sustainable and inclusive growth[32] as well as in relation
to Gross Domestic Product (GDP) and unemployment, where appropriate. 
2.           Member States shall
provide the resources necessary for carrying out evaluations, and shall ensure
that procedures are in place to produce and collect the data necessary for
evaluations, including data related to common and where appropriate
programme-specific indicators.
3.           Evaluations shall be
carried out by experts that are functionally independent of the authorities
responsible for programme implementation. The Commission shall provide guidance
on how to carry out evaluations. 
4.           All evaluations shall be
made public in their entirety. 
Article 48 
Ex ante
evaluation
1.                      
Member States shall carry out ex ante
evaluations to improve the quality of the design of each programme.
2.                      
Ex ante evaluations shall be carried out under
the responsibility of the authority responsible for the preparation of the
programmes. They shall be submitted to the Commission at the same time as the
programme, together with an executive summary. The Fund-specific rules may
establish thresholds under which the ex ante evaluation may be combined
with the evaluation for another programme.
3.                      
Ex ante
evaluations shall appraise:
(a)         
the contribution to the Union strategy for smart,
sustainable and inclusive growth, having regard to the selected thematic
objectives and priorities, taking into account national and regional needs;
(b)         
the internal coherence of the proposed programme
or activity and its relation with other relevant instruments;
(c)         
the consistency of the allocation of budgetary
resources with the objectives of the programme;
(d)         
the consistency of the selected thematic
objectives, the priorities and corresponding objectives of the programmes with
the Common Strategic Framework, the Partnership Contract and the
country-specific recommendations under Article 121(2) of the Treaty and the
Council recommendations adopted under Article 148(4) of the Treaty;
(e)         
the relevance and clarity of the proposed
programme indicators;
(f)           
how the expected outputs will contribute to
results;
(g)         
whether the quantified target values for
indicators are realistic, having regard to the support from the CSF Funds
envisaged;
(h)         
the rationale for the form of support proposed;
(i)           
the adequacy of human resources and
administrative capacity for management of the programme;
(j)           
the suitability of the procedures for monitoring
the programme and for collecting the data necessary to carry out evaluations;
(k)         
the suitability of the milestones selected for
the performance framework;
(l)           
the adequacy of planned measures to promote
equal opportunities between men and women and to prevent discrimination;
(m)       
the adequacy of planned measures to promote
sustainable development.
4.           The ex ante
evaluation shall incorporate, where appropriate, the requirements for Strategic
Environmental Assessment set out in implementation of Directive 2001/42/EC of
the European Parliament and of the Council of 27 June
2001 on the assessment of the effects of certain plans
and programmes on the environment[33].
Article 49
Evaluation during the
programming period
1.           An evaluation plan shall
be drawn up by the managing authority for each programme and submitted in
accordance with the Fund-specific rules.
2.           Member States shall ensure
that appropriate evaluation capacity is available. 
3.           During the programming
period, managing authorities shall carry out evaluations including evaluations
to assess effectiveness, efficiency and impact, for each programme on the basis
of the evaluation plan. At least once during the programming period, an evaluation
shall assess how support from the CSF Funds has contributed to the objectives
for each priority. All evaluations shall be examined by the monitoring
committee and sent to the Commission. 
4.           The Commission may carry
out, at its own initiative, evaluations of programmes. 
Article 50
Ex post evaluation 
The ex post evaluations shall be
carried out by the Commission or by the Member States, in close cooperation. Ex
post evaluations shall examine the effectiveness and efficiency of the CSF
Funds and their contribution to the Union strategy for smart, sustainable and
inclusive growth in accordance with specific requirements established in the
Fund-specific rules. Ex post evaluations shall be completed by 31
December 2023.

TITLE VI 
TECHNICAL ASSISTANCE
Article 51
Technical assistance at
the initiative of the Commission
1.           At
the initiative of, or on behalf of the Commission, the
CSF Funds may support the preparatory, monitoring, administrative and technical
assistance, evaluation, audit and control measures necessary for implementing
this Regulation.
Those measures may include but not limited to:
(a)         
assistance for project preparation and
appraisal, including with the EIB; 
(b)         
support for institutional strengthening and
administrative capacity-building for the effective management of the CSF Funds;
(c)         
studies linked to the Commission's reporting on
the CSF Funds and the cohesion report;
(d)         
measures related to the analysis, management,
monitoring, information exchange and implementation of the CSF Funds, as well
as measures relating to the implementation of control systems and technical and
administrative assistance;
(e)         
evaluations, expert reports, statistics and
studies, including those of a general nature, concerning the current and future
operation of the CSF Funds, which may be carried out where appropriate by the
EIB;
(f)           
actions to disseminate information, support
networking, carry out communication activities, raise awareness and promote
cooperation and exchange of experience, including with third countries. To
bring about greater efficiency in communication to the public at large and
stronger synergies between the communication activities undertaken at the
initiative of the Commission, the resources allocated to communication actions
under this Regulation shall also contribute to covering the corporate
communication of the political priorities of the
European Union provided that these are related to the general objectives of
this Regulation;
(g)         
the installation, operation and interconnection
of computerised systems for management, monitoring, audit, control and
evaluation;
(h)         
actions to improve evaluation methods and the
exchange of information on evaluation practices;
(i)           
actions related to audit;
(j)           
the strengthening of national and regional
capacity regarding investment planning, needs assessment, preparation, design
and implementation of financial instruments, joint action plans and major
projects, including joint initiatives with the EIB.
Article 52
Technical assistance of
the Member States
1.           At the initiative of a
Member State, the CSF Funds may support actions for preparation, management,
monitoring, evaluation, information and communication, networking, complaint
resolution, and control and audit. The CSF Funds may be used by the Member
State to support actions for the reduction of administrative burden for
beneficiaries, including electronic data exchange systems, and actions to
reinforce the capacity of Member State authorities and beneficiaries to
administer and use the CSF Funds. These actions may concern preceding and subsequent
programming periods. 
2.           The Fund-specific rules
may add or exclude actions which may be financed by the technical assistance of
each CSF Fund. 

TITLE VII
FINANCIAL SUPPORT FROM THE CSF FUNDS
CHAPTER I
Support from the CSF Funds
Article 53
Determination of
co-financing rates
1.           The Commission decision
adopting a programme shall fix the co-financing rate or rates and the maximum
amount of support from the CSF Funds according to the Fund-specific rules.
2            Technical assistance
measures implemented at the initiative of, or on behalf of, the Commission may
be financed at the rate of 100%. 
Article 54
Revenue-generating
operations 
1.           Net revenue generated
after completion of an operation over a specific reference period shall be
determined in advance by one of the following methods:
(a)     application of a flat rate revenue
percentage for the type of operation concerned;
(b)     calculation of the current value of
the net revenue of the operation, taking into account the application of the
polluter-pays principle and, if appropriate, considerations of equity linked to
the relative prosperity of the Member State concerned.
The eligible expenditure of the operation to be
co-financed shall not exceed the current value of the investment cost of the
operation less the current value of the net revenue, determined according to
one of these methods.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 142 concerning the definition of the
flat rate referred to in point (a) above. 
The Commission shall adopt the methodology
under point (b) by means of implementing acts in accordance with the
examination procedure referred to in Article 143(3)
2.           Where it is objectively
not possible to determine the revenue in advance according to the methods set
out in paragraph 1, the net revenue generated within three years of the
completion of an operation or by 30 September 2023, whichever is earlier, shall
be deducted from the expenditure declared to the Commission.
3.           Paragraphs 1 and 2 shall
apply only to operations whose total cost exceeds EUR 1 000 000.
4.           This Article shall not
apply to the ESF
5.           Paragraphs 1 and 2 shall
not apply to operations subject to the rules on State aid or to support to or
from financial instruments.

CHAPTER II
Eligibility of expenditure and durability 
Article 55 
Eligibility
1.                      
The eligibility of expenditure shall be
determined on the basis of national rules, except where specific rules are laid
down in or on the basis of this Regulation or the Fund-specific rules. 
2.                      
Expenditure shall be eligible for a contribution
from the CSF Funds if it has been incurred and paid by a beneficiary between
the date of submission of the programme to the Commission or from
1 January 2014, whichever is earlier, and 31 December 2022. In
addition, expenditure shall only be eligible for a contribution from the EAFRD
and the EMFF if the relevant aid is actually paid by the paying agency between
1 January 2014 and 31 December 2022.
3.                      
In the case of costs reimbursed on the basis of
Article 57(1)(b) and (c), the actions constituting the basis for reimbursement
shall be carried out between 1 January 2014 and 31 December 2022. 
4.                      
Operations shall not be selected for support by
the CSF Funds where they have been physically completed or fully implemented
before the application for funding under the programme is submitted by the
beneficiary to the managing authority, irrespective of whether all related
payments have been made by the beneficiary. 
5.                      
This Article shall be without prejudice to the
rules on eligibility of technical assistance at the initiative of the
Commission set out in Article 51.
6.                      
Net revenue directly generated by an operation
during its implementation which has not been taken into account at the time of
approval of the operation, shall be deducted from the eligible expenditure of
the operation in the final payment claim submitted by the beneficiary. This
rule shall not apply to financial instruments and prizes. 
7.                      
In the case of amendment of a programme,
expenditure becoming eligible because of the amendment to the programme shall
only be eligible from the date of submission to the Commission of the request
for amendment. 
8.                      
An operation may receive support from one or
more CSF Funds and from other Union instruments, provided that the expenditure
item included in a request for payment for reimbursement by one of the CSF
Funds does not receive support from another Fund or Union instrument, or
support from the same Fund under another programme.
Article 56
Forms of support 
The CSF Funds shall be used to provide
support in the form of grants, prizes, repayable assistance and financial
instruments, or a combination thereof. 
In the case of
repayable assistance, the support repaid to the body that provided it, or to
another competent authority of the Member State, shall be kept in a separate
account and reused for the same purpose or in accordance with the objectives of
the programme.
Article 57 
Forms of grants
1.           Grants may take any of the
following forms:
(a)         
reimbursement of eligible costs actually
incurred and paid, together with, where applicable, in-kind contributions and
depreciation;
(b)         
standard scales of unit costs;
(c)         
lump sums not exceeding EUR 100 000 of
public contribution;
(d)         
flat-rate financing, determined by the
application of a percentage to one or several defined categories of costs.
2.           The options referred to in
paragraph 1 may be combined only where each covers different categories of
costs or where they are used for different projects forming a part of an
operation or for successive phases of an operation.
3.           Where an operation or a
project forming a part of an operation is implemented exclusively through the
procurement of works, goods or services, only paragraph 1(a) shall apply. Where
the procurement within an operation or project forming part of an operation is
limited to certain categories of costs, all the options referred to in
paragraph 1 may be applied.
4.           The amounts referred to in
paragraph 1(b), (c) and (d) shall be established on the basis of:
(a)         
a fair, equitable and verifiable calculation
method based on:
(i)      statistical data or other objective
information; or
(ii)      the verified historical data of
individual beneficiaries or the application of their usual cost accounting
practices;
(b)         
methods and corresponding scales of unit costs,
lump sums and flat rates applicable in Union policies for a similar type of
operation and beneficiary;
(c)         
methods and corresponding scales of unit costs,
lump sums and flat rates applied under schemes for grants funded entirely by
the Member State for a similar type of operation and beneficiary; 
(d)         
rates established by this Regulation or the
Fund-specific rules.
5.           The document setting out
the conditions for support for each operation shall set out the method to be
applied for determining the costs of the operation and the conditions for
payment of the grant. 
Article
58 
Flat
rate financing for indirect costs for grants
Where the implementation of an operation
gives rise to indirect costs, they may be calculated as a flat rate in one of
the following ways: 
(a)                   
a flat rate of up to 20 % of eligible
direct costs, where the rate is calculated on the basis of a fair, equitable
and verifiable calculation method or a method applied under schemes for grants
funded entirely by the Member State for a similar type of operation and beneficiary;
(b)                   
a flat rate of up to 15 % of eligible
direct staff costs;
(c)                   
a flat rate applied to eligible direct costs
based on existing methods and corresponding rates, applicable in Union policies
for a similar type of operation and beneficiary.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 142 concerning the definition of the
flat rate and the related methods referred to in point (c) above. 
Article 59
Specific eligibility rules
for grants
1.                      
Contributions in kind in the form of provision
of works, goods, services, land and real estate for which no cash payment
supported by invoices or documents of equivalent probative value has been made,
may be eligible provided that the eligibility rules of the CSF Funds and the
programme allow for it and that all the following conditions are fulfilled:
(a)         
the public support paid to the operation which
includes contributions in kind shall not exceed the total eligible expenditure,
excluding contributions in kind, at the end of the operation;
(b)         
the value attributed to contributions in kind
does not exceed the costs generally accepted on the market in question;
(c)         
the value and the delivery of the contribution
can be independently assessed and verified;
(d)         
 in the case of provision of land or real
estate, the value is certified by an independent qualified expert or duly
authorised official body and does not exceed the limit laid down in paragraph
3(b);
(e)         
in the case of contributions in kind in the form
of unpaid work, the value of that work is determined taking into account the
verified time spent and the rate of remuneration for equivalent work.
2.                      
Depreciation costs may be considered as eligible
under the following conditions: 
(a)         
the eligibility rules of the programme allow for
it;
(b)         
the amount of the expenditure is duly justified
by supporting documents having equivalent probative value to invoices where
reimbursed in the form referred to in Article 57(1)(a);
(c)         
the costs relate exclusively to the period of
support for the operation; 
(d)         
public grants have not contributed towards the
acquisition of the depreciated assets.
3.                      
The following costs shall not be eligible for a
contribution from the CSF Funds:
(a)         
interest on debt;
(b)         
the purchase of land not built on and land built
on in the amount exceeding 10% of the total eligible expenditure for the
operation concerned. In exceptional and duly justified cases, a higher
percentage may be permitted for operations concerning environmental
conservation;
(c)         
value added tax. However, VAT amounts shall be
eligible where they are not recoverable under national VAT legislation and are
paid by a beneficiary other than non-taxable person as defined in the first
subparagraph of Article 13(1) of Directive 2006/112/EC, provided that such VAT
amounts are not incurred in relation to the provision of infrastructure.
Article 60 
Eligibility of operations
depending on location 
1.           Operations supported by
the CSF Funds, subject to the derogations referred to in paragraphs 2 and 3,
and the Fund-specific rules, shall be located in the area covered by the
programme under which they are supported (the 'programme area').
2.           The managing authority may
accept that an operation is implemented outside the programme area but within
the Union, provided that all the following conditions are satisfied:
(a)         
the operation is for the benefit of the
programme area;
(b)         
the total amount allocated under the programme
to operations located outside the programme area does not exceed 10 % of the
support from the ERDF, Cohesion Fund and EMFF at the level of the priority, or
3% of the support from the EAFRD at the level of the programme;
(c)         
the monitoring committee has given its agreement
to the operation or types of operations concerned;
(d)         
the obligations of the authorities for the
programme in relation to management, control and audit concerning the operation
are fulfilled by the authorities responsible for the programme under which that
operation is supported or they enter into agreements with authorities in the
area in which the operation is implemented provided that the conditions set out
in paragraph 2 (a) and the obligations in relation to management, control and
audit concerning the operation are fulfilled.
3.           For operations concerning
promotional activities, expenditure may be incurred outside the Union provided
that the conditions set out in paragraph 2 (a) and the obligations in relation
to management, control and audit concerning the operation are fulfilled.
4.                      
Paragraphs 1 to 3 shall not apply to programmes
under the European territorial cooperation goal or to the ESF.
Article 61
Durability of operations
1.           An operation comprising
investment in infrastructure or productive investment shall repay the
contribution from the CSF Funds if within five years from the final payment to
the beneficiary or within the period of time set out in the State aid rules,
where applicable, it is subject to:
(a)         
a cessation or relocation of a productive
activity;
(b)         
a change in ownership of an item of
infrastructure which gives to a firm or a public body an undue advantage; or
(c)         
a substantial change affecting its nature, objectives
or implementation conditions which would result in undermining its original
objectives.
Sums unduly paid in respect of the operation
shall be recovered by the Member State.
2.           Operations supported by
the ESF and operations supported by the other CSF Funds that are not investment
in infrastructure or productive investments shall repay the contribution from
the Fund only where they are subject to an obligation for maintenance of
investment under the applicable State aid rules and where they undergo a
cessation or relocation of a productive activity within the period laid down in
those rules.
3.           Paragraphs 1 and 2 shall
not apply to contributions to or by financial instruments or to any operation
which undergoes cessation of a productive activity due to a non-fraudulent
bankruptcy. 
4.           Paragraphs 1 and 2 shall
not apply to natural persons who are beneficiary of investment support and,
after the completion of the investment operation, become eligible for and
receive support under the EGF (Regulation [/2012] setting a European
Globalisation Fund) where the investment concerned is directly linked to the
type of activity identified as eligible for EGF support.

TITLE VIII
MANAGEMENT AND CONTROL
CHAPTER I
Management and control systems
Article 62
General principles of
management and control systems
Management and control systems shall provide for:
(a)                   
a description of the functions of each body
concerned in management and control, and the allocation of functions within
each body;
(b)              
compliance with the principle of separation of
functions between and within such bodies;
(c)               
procedures for ensuring the correctness and
regularity of expenditure declared;
(d)              
computerised systems for accounting, for the
storage and transmission of financial data and data on indicators, for monitoring
and for reporting;
(e)               
systems for reporting and monitoring where the
responsible body entrusts execution of tasks to another body;
(f)                
arrangements for auditing the functioning of the
management and control systems;
(g)               
systems and procedures to ensure an adequate
audit trail;
(h)               
the prevention, detection and correction of
irregularities, including fraud, and the recovery of amounts unduly paid,
together with any interest;
Article 63
Responsibilities of Member
States
1.           Member States shall fulfil
the management, control and audit obligations and assume the resulting
responsibilities laid down in the rules on shared management set out in the
Financial Regulation and the Fund-specific rules. In accordance with the
principle of shared management, Member States shall be responsible for the
management and control of programmes. 
2.           Member States shall ensure
that their management and control systems for programmes are set up in
accordance with the provisions of the Fund-specific rules and that the systems
function effectively. 
3.           Member States shall
establish and implement a procedure for the independent examination and
resolution of complaints concerning the selection or implementation of
operations co-financed by the CSF Funds. Member States shall report the results
of such examinations to the Commission upon request.
4.           All official exchanges of
information between the Member State and the Commission shall be carried out
using an electronic data exchange system established by the Commission.

CHAPTER II
Accreditation of management and control bodies
Article 64
Accreditation
and coordination
1.           In accordance with Article
56(3) of the Financial Regulation, each body responsible for the management and
control of expenditure under the CSF Funds shall be accredited by formal
decision of an accrediting authority at ministerial level.
2.           The accreditation shall be
granted subject to the body complying with the accreditation criteria on
internal environment, control activities, information and communication, and
monitoring laid down in the Fund-specific rules..
3.           The accreditation shall be
based on an opinion of an independent audit body that assesses the body’s
compliance with the accreditation criteria. The independent audit body shall
carry out its work in accordance with internationally accepted audit standards.

4.           The accrediting authority
shall supervise the accredited body and withdraw its accreditation by formal
decision if one or more of the accreditation criteria are no longer met, unless
the body takes the necessary remedial actions within a period of probation to
be determined by the accrediting authority according to the severity of the
problem. The accrediting authority shall notify the Commission immediately of
the setting of any probation period for an accredited body and of any
withdrawal decision. 
5.           The Member State may
designate a coordinating body whose responsibility is to liaise with and
provide information to the Commission, promote the harmonised application of
Union rules, establish a synthesis report providing an overview at national
level of all management declarations and the audit opinions and coordinate the
implementation of remedial actions as regards any deficiencies of a common
nature.. .
6.           Without prejudice to the
rules laid down in the Fund-specific rules, the bodies to be accredited under
paragraph 1 shall be:
(a)         
for the ERDF, ESF and the Cohesion Fund, the
managing authorities and, where appropriate, the certifying authorities;
(b)         
for the EAFRD and the EMFF, the paying agencies.

CHAPTER III
Commission powers and responsibilities
Article 65
Commission powers and
responsibilities
1.           The Commission shall satisfy itself on the basis of available
information, including the accreditation procedure, annual management
declaration, annual control reports, annual audit opinion, annual
implementation report and audits carried out by national and Union bodies, that
the Member States have set up management and control systems that comply with
this Regulation and the Fund-specific rules and that these systems function
effectively during the implementation of programmes.
2.           Without prejudice to
audits carried out by Member States, Commission officials or authorised
Commission representatives may carry out on-the-spot audits or checks upon
giving adequate prior notice. The scope of such audits or checks may include,
in particular, verification of the effective functioning of management and
control systems in a programme or a part thereof, operations and assessment of
the sound financial management of operations or programmes. Officials or
authorised representatives of the Member State may take part in such audits. 
Commission officials or authorised Commission
representatives, duly empowered to carry out on-the-spot audits, shall have
access to all records, documents and metadata, irrespective of the medium in
which they are stored, relating to operations supported by the CSF Funds or to
management and control systems. Member States shall provide copies of such
records, documents and metadata to the Commission upon request.
The powers set out in this paragraph shall not
affect the application of national provisions which reserve certain acts for
agents specifically designated by national legislation. Commission officials
and authorised representatives shall not take part, inter alia, in home visits
or the formal questioning of persons within the framework of national
legislation. However, they shall have access to the information thus obtained.
3.           The Commission may require
a Member State to take the actions necessary to ensure the effective
functioning of their management and control systems or the correctness of
expenditure in accordance with the Fund-specific rules.
4.           The Commission may require
a Member State to examine a complaint submitted to the Commission concerning
the selection or implementation of operations co-financed by the CSF Funds or
the functioning of the management and control system. 

TITLE IX
FINANCIAL MANAGEMENT, CLEARANCE OF ACCOUNTS AND FINANCIAL CORRECTIONS,
DECOMMITMENT
CHAPTER I
Financial management
Article 66
Budget commitments
The budget commitments of the Union in
respect of each programme shall be made in annual instalments for each Fund
during the period between 1 January 2014 and 31 December 2020. The decision of
the Commission adopting a programme shall constitute the financing decision
within the meaning of Article 75(2) of the Financial Regulation and once
notified to the Member State concerned, a legal commitment within the meaning
of that Regulation. 
For each programme, the budget commitment
for the first instalment shall follow the adoption of the programme by the
Commission. 
The budget commitments for subsequent
instalments shall be made by the Commission before 1 May of each year, on the
basis of the decision referred to in the second subparagraph, except where
Article 13 of the Financial Regulation applies. 
As regards the performance and the growth
and competitiveness reserves, budget commitments shall follow the Commission
decision approving the amendment of the programme. 
Article 67 
 Common rules for payments
1.           Payments by the Commission
of the contribution from the CSF Funds to each programme shall be made in
accordance with budget appropriations and subject to available funding. Each
payment shall be posted to the earliest open budget commitment of the Fund
concerned. 
2.           Payments shall take the
form of pre-financing, interim payments and payment of the annual balance,
where applicable, and of the final balance. 
3.           For forms of support under
Article 57(1)(b), (c) and (d), the amounts paid to the beneficiary shall be
regarded as eligible expenditure. 
Article 68
Common rules for
calculating interim payments, payment of the annual balance, where applicable,
and payment of final
balance
The Fund-specific rules shall lay down
rules for the calculation of the amount reimbursed as interim payments, payment
of the annual balance, where applicable, and of the final balance. This amount
shall be a function of the specific co-financing rate applicable to the
eligible expenditure. 
Article 69
Requests for payment 
1.           The specific procedure and
information to be submitted for requests for payment shall be laid down in the
Fund-specific rules.
2.           The request for payment to
be submitted to the Commission shall provide all the information necessary for
the Commission to produce accounts in accordance with Article […] of the
Financial Regulation.
Article 70
Accumulation of
pre-financing and interim payments
1.           The cumulative total of
pre-financing and interim payments and, where applicable, the annual balance by
the Commission shall not exceed 95 % of the contribution from the CSF
Funds to the programme.
2.           When the ceiling of
95 % is reached, the Member States shall continue transmitting requests
for payment to the Commission.
Article 71
Use of the euro
Amounts set out in programmes submitted by
Member States, forecasts of expenditure, statements of expenditure, requests
for payment, annual accounts and expenditure mentioned in the annual and final
implementation reports shall be denominated in euro. 
Article 72
Payment of initial
pre-financing
1.           Following the Commission
decision adopting the programme, an initial pre-financing amount for the whole
programming period shall be paid by the Commission. The initial pre-financing
amount shall be paid in instalments according to budgetary needs. The
instalments shall be defined in the Fund-specific rules.
2.           Pre-financing shall be
used only for making payments to beneficiaries in the implementation of the
programme. It shall be made available without delay to the responsible body for
this purpose.
Article 73
Clearance of initial
pre-financing
The amount paid as initial pre-financing
shall be totally cleared from the Commission accounts at the latest when the
programme is closed.
Article 74 
Interruption of the
payment deadline
1.           The payment deadline for
an interim payment claim may be interrupted by the authorising officer by
delegation within the meaning of the Financial Regulation for a maximum period
of nine months if:
(a)         
following information provided by a national or
Union audit body, there is evidence to suggest a significant deficiency in the
functioning of the management and control system;
(b)         
the authorising officer by delegation has to
carry out additional verifications following information coming to his
attention alerting him that expenditure in a request for payment is linked to
an irregularity having serious financial consequences;
(c)         
there is a failure to submit one of the
documents required under Article 75(1).
2.           The authorising officer by
delegation may limit the interruption to the part of the expenditure covered by
the payment claim affected by the elements referred to in paragraph 1. The
authorising officer by delegation shall inform the Member State and the
managing authority immediately of the reason for interruption and shall ask
them to remedy the situation. The interruption shall be ended by the
authorising officer by delegation as soon as the necessary measures have been
taken.
CHAPTER II
Clearance of accounts and financial corrections 
Article 75
Submission of information
1.           By 1 February of the year
following the end of the accounting period, the Member State shall submit to
the Commission the following documents and information in accordance with
Article 56 of the Financial Regulation:
(a)         
the certified annual accounts of the relevant
bodies accredited pursuant to Article 64;
(b)         
the management declaration of assurance as to
the completeness, accuracy and veracity of the annual accounts, the proper
functioning of the internal control systems, as well as to the legality and
regularity of the underlying transactions and the respect of the principle of
sound financial management;
(c)         
a summary report of all available audits and
controls carried out, including an analysis of systemic or recurrent
weaknesses, as well as corrective actions taken or planned;
(d)         
an audit opinion by the designated independent
audit body on the management declaration of assurance covering the
completeness, accuracy and veracity of the annual accounts, the proper functioning
of the internal control systems, as well as on the legality and regularity of
the underlying transactions and the respect of the principle of sound financial
management, accompanied by a control report setting out the findings of the
audits carried out relating to the accounting year covered by the opinion.
2.           Upon request by the
Commission, the Member State shall provide further information to the
Commission. If a Member State does not provide the requested information by the
deadline for its submission set by the Commission, the Commission may take its
decision on the clearance of the accounts on the basis of the information in
its possession.
3.           By [15 February] of the
year following the end of the accounting period, the Member State shall submit
to the Commission a synthesis report in accordance with the last subparagraph
of Article 56(5) of the Financial Regulation.
Article 76
Clearance of accounts
1.           By 30 April of the year
following the end of the accounting period, the Commission shall decide, in
accordance with the Fund-specific rules, on the clearance of the accounts of
the relevant bodies accredited pursuant to Article 64 for each programme. The
clearance decision shall cover the completeness, accuracy and veracity of the
annual accounts submitted and shall be without prejudice to any subsequent
financial corrections.
2.           The procedures for annual
clearance shall be laid down in the Fund-specific rules.
Article 77
Financial corrections by
the Commission 
1.           The Commission shall make
financial corrections by cancelling all or part of the Union contribution to a
programme and effecting recovery from the Member State in order to exclude from
Union financing expenditure which is in breach of applicable Union and national
law, including in relation to deficiencies in the management and control
systems of Member States which have been detected by the Commission or the European
Court of Auditors.
2.           A breach of applicable
Union or national law shall lead to a financial correction only where one of
the following conditions is met:
(a)         
the breach has or could have affected the
selection of an operation by the responsible body for support by the CSF Funds;
(b)         
there is a risk that the breach has or could
have affected the amount of expenditure declared for reimbursement by the Union
budget.
3.           When deciding on the
amount of a financial correction under paragraph 1, the Commission shall take
account of the nature and gravity of the breach of applicable Union or national
law and its financial implications for the Union budget. 
4.           The criteria and the
procedures for applying financial corrections shall be laid down in the
Fund-specific rules. 

Chapter III
Decommitment
Article 78
Principles 
1.           All programmes shall be
submitted to a decommitment procedure established on the basis that amounts
linked to a commitment which are not covered by pre-financing or a request for
payment within a defined period shall be decommitted. 
2.           The commitment related to
the last year of the period will be decommitted according to the rules to be
followed for the closure of the programmes.
3.           The Fund-specific rules
shall specify the precise application of the decommitment rule for each CSF
Fund.
4.           That part of commitments
still open shall be decommitted if any of the documents required for the
closure has not been submitted to the Commission by the deadlines established
in the Fund-specific rules.
Article 79
Exception to the
decommitment 
1.           The amount concerned by
decommitment shall be reduced by the amounts that the responsible body has not
been able to declare to the Commission because of:
(a)     operations suspended by a legal
proceeding or by an administrative appeal having suspensory effect; or
(b)     reasons of force majeure
seriously affecting implementation of all or part of the programme. The
national authorities claiming force majeure shall demonstrate the direct
consequences of the force majeure on the implementation of all or part
of the programme
The reduction may be requested once if the
suspension or force majeure lasted up to one year, or several times
corresponding to the duration of the force majeure or the number of
years between the date of the legal or administrative decision suspending the
implementation of the operation and the date of the final legal or administrative
decision. 
2.           By 31 January, the Member
State shall send to the Commission information on the exceptions referred to in
paragraph 1 for the amount to be declared by the end of preceding year. 
Article 80
Procedure 
1.           The Commission shall
inform the Member State and the managing authority in good time whenever there
is a risk of application of decommitment under Article 78.
2.           On the basis of the
information it has on 31 January, the Commission shall inform the Member State
and the managing authority of the amount of the decommitment resulting from the
information in its possession.
3.           The Member State shall
have two months to agree to the amount to be decommitted or to submit its
observations.
4.           By 30 June, the Member
State shall submit to the Commission a revised financing plan reflecting for
the financial year concerned the reduced amount of support over one or several
priorities of the programme. Failing such submission, the Commission shall
revise the financing plan by reducing the contribution from the CSF Funds for
the financial year concerned. This reduction shall be allocated to each
priority proportionately.
5.           The Commission shall amend
the decision adopting the programme, by means of implementing acts, not later
than 30 September.
PART THREE
GENERAL PROVISIONS APPLICABLE TO THE ERDF, THE ESF AND THE CF
TITLE I
OBJECTIVES AND THE FINANCIAL FRAMEWORK

CHAPTER I
Mission, goals and geographical coverage of support
Article 81 
Mission and goals
1.           The Funds shall contribute
to developing and pursuing the actions of the Union leading to strengthening of
its economic, social and territorial cohesion in accordance with Article 174 of
the Treaty. 
The actions supported by the Funds shall contribute to
the Union strategy for smart, sustainable and inclusive
growth.
2.           To this end, the following
goals shall be pursued:
(a)     'Investment for growth and jobs' in
Member States and regions, to be supported by all the Funds; and
(b)     'European territorial cooperation', to
be supported by the ERDF.
Article 82 
Investment for growth and
jobs 
1.           The Structural Funds shall
support the Investment for growth and jobs goal in all regions corresponding to
level 2 of the common classification of territorial units for statistics (hereinafter referred to as
'NUTS level 2') established by Regulation (EC) No 1059/2003. 
2.           Resources for the
Investment for growth and jobs goal shall be allocated among the following
three categories of NUTS level 2 regions: 
(a)         
less developed regions, whose GDP per capita is less than 75 % of the
average GDP of the EU-27; 
(b)         
transition
regions, whose GDP per capita is between 75% and 90% of
the average GDP of the EU-27; 
(c)         
more developed regions, whose GDP per capita is
above 90 % of the average GDP of the EU-27.
The three categories of regions are determined
on the basis of how their GDP per capita, measured in purchasing power parities
and calculated on the basis of Union figures for the period 2006 to 2008,
relates to the average GDP of the EU-27 for the same reference period.
3.           The Cohesion Fund shall
support those Member States whose gross national income (GNI) per capita,
measured in purchasing power parities and calculated on the basis of Union
figures for the period 2007 to 2009, is less than 90 % of the average GNI
per capita of the EU-27 for the same reference period. 
The Member States eligible for funding from the
Cohesion Fund in 2013, but whose nominal GNI per capita exceeds 90% of the
average GNI per capita of the EU-27 as calculated under the first sub-paragraph
shall receive support from the Cohesion Fund on a transitional and specific
basis. 
4.           Immediately following the
entry into force of this Regulation, the Commission shall adopt a decision by
implementing act setting out the list of regions fulfilling the criteria of the
three categories of regions referred to in paragraph 2 and of Member
States fulfilling the criteria of paragraph 3. Those implementing acts
shall be adopted in accordance with the examination procedure referred to in
Article 143(3). This list shall be valid from 1 January 2014 to
31 December 2020.
5.           In 2017, the Commission
shall review the eligibility of Member States for the Cohesion Fund on the
basis of Union GNI figures for the period 2013 to 2015 for the EU-27. Those
Member States whose nominal GNI per capita exceeds 90% of the average GNI per
capita of the EU-27, shall receive support from the Cohesion Fund on a
transitional and specific basis.

CHAPTER II 
Financial framework 
Article 83 
Global resources 
1.           The global resources
available for budgetary commitment from the Funds for the period 2014 to 2020
shall be EUR 336 020 492 848 at 2011 prices, in accordance with the annual
breakdown shown in Annex II. For the purposes of programming and subsequent
inclusion in the general budget of the Union, the amount of global resources
shall be indexed at 2 % per year.
2.           The Commission shall adopt
a decision, by means of implementing acts, setting out the annual breakdown of
the global resources by Member State, without prejudice to paragraph 3 of this
Article and Article 84(7). 
3.           0,35 % of the
global resources shall be allocated to technical assistance at the initiative
of the Commission.
Article 84
Resources for Investment
for growth and jobs and for European territorial cooperation
1.           Resources for the Investment
for growth and jobs goal shall amount to 96,52 % of the global resources (i.e.,
a total of EUR 324 320 492 844) and shall be allocated as
follows:
(a)         
50,13 % (i.e., a total of EUR 162 589 839 384)
for less developed regions; 
(b)         
12,01 % (i.e., a total of EUR 38 951 564 661)
for transition regions;
(c)         
16,39 % (i.e., a total of EUR 53 142 922 017)
for more developed regions; 
(d)         
21,19 % (i.e., a total of EUR 68 710 486 782)
for Member States supported by the Cohesion Fund;
(e)         
0,29 % (i.e., a total of EUR 925 680 000) as
additional funding for the outermost regions identified in Article 349 of the
Treaty and the NUTS level 2 regions fulfilling the criteria laid down in
Article 2 of Protocol No 6 to the Treaty of Accession of Austria, Finland and
Sweden. 
All regions whose GDP
per capita for the 2007-2013 period was less than 75% of the average of the
EU-25 for the reference period but whose GDP per capita
is above 75% of the GDP average of the EU-27 shall receive an allocation under
the Structural Funds equal to at least two thirds of their 2007-2013
allocation.
2.           The following criteria
shall be used for the breakdown by Member State:
(a)         
eligible population, regional prosperity,
national prosperity and unemployment rate for less developed regions and
transition regions;
(b)         
eligible population, regional prosperity,
unemployment rate, employment rate, educational level and population density
for more developed regions; 
(c)         
population, national prosperity and surface area
for the Cohesion Fund.
3.           At least 25 % of the
Structural Funds resources for less developed regions, 40% for transition
regions and 52% for more developed regions in each Member State shall be
allocated to the ESF. For the purposes of this provision, the support to a
Member State through the [Food for deprived people instrument] shall be
considered as part of the share of Structural Funds allocated to the ESF.
4.           The support from the
Cohesion Fund for transport infrastructure under the Connecting Europe Facility
shall be EUR 10 000 000 000.
The Commission shall adopt a decision by
implementing act setting out the amount to be transferred from each Member
State's Cohesion Fund allocation for the whole period. The Cohesion Fund
allocation of each Member State shall be reduced accordingly.
The annual appropriations corresponding to the
support from the Cohesion Fund mentioned in the first subparagraph shall be
entered in the relevant budget lines of the Connecting Europe Facility as from the
2014 budgetary exercise.
Support from the Cohesion Fund under the
Connecting Europe Facility shall be implemented in accordance with Article [13]
of Regulation (EU) […]/2012 on establishing the Connecting Europe Facility[34]
in respect of projects listed in Annex 1 to that Regulation, giving greatest
possible priority to projects respecting the national allocations under the
Cohesion Fund.
5.           The support from the
Structural Funds for [food for deprived people] under the Investment for Growth
and Jobs shall be EUR 2 500 000 000.
The Commission shall adopt a decision by
implementing act setting out the amount to be transferred from each Member
State's Structural Funds allocation for the whole period in each Member State.
The Structural Funds allocation of each Member State shall be reduced
accordingly.
The annual appropriations corresponding to the
support from the Structural Funds mentioned in the first subparagraph shall be
entered in the relevant budget lines of the [food for deprived people
instrument] with the 2014 budgetary exercise.
6.           5% of the resources for
the Investment for growth and jobs goal shall constitute the performance
reserve to be allocated in accordance with Article 19.
7.           0,2% of the ERDF resources
for the Investment for growth and jobs goal shall be allocated to innovative
actions at the initiative of the Commission in the area of sustainable urban
development.
8.           Resources for the European
territorial cooperation goal shall amount to 3,48 % of the global resources
available for budgetary commitment from the Funds for the period 2014 to 2020
(i.e., a total of EUR 11 700 000 004).
Article 85
Non-transferability of
resources 
1.                      
The total
appropriations allocated to each Member State in respect of less developed regions, transition
regions and more developed regions shall
not be transferable between each of those categories of regions. 
2.                      
By way of derogation from paragraph 1, the
Commission may accept, in duly justified circumstances which are linked to the
implementation of one or more thematic objectives, a proposal by a Member State
in its first submission of the Partnership Contract to transfer up to 2% of the
total appropriation for a category of regions to other categories of regions.
Article 86
Additionality 
1.           For the purposes of this
Article the following definitions apply:
(1)         
'public or equivalent structural expenditure'
means the Gross Fixed Capital Formation of the General Government reported in
the Stability and Convergence Programmes prepared by Member States according to
Council Regulation (EC) No 1466/97[35] to present their medium
term budgetary strategy; 
(2)         
'fixed assets' means all tangible or intangible
assets produced as outputs from processes of production that are themselves
used repeatedly, or continuously, in processes of production for more than one
year;
(3)         
 gross fixed capital formation'[36]
means all the resident producers' acquisitions, less disposals, of fixed assets
during a given period and certain additions to the value of non-produced assets
realised by the productive activity of producer or institutional units;
(4)         
 'general government' means the totality of
institutional units which, in addition to fulfilling their political
responsibilities and their role of economic regulation, produce principally
non-market services (possibly goods) for individual or collective consumption
and redistribute income and wealth[37].
2.           Support from the Funds for the Investment for growth and jobs goal shall
not replace public or equivalent structural expenditure by a Member
State.
3.           Member States shall
maintain for the period 2014-2020 a level of public or equivalent structural
expenditure at least equal to the reference level set in the Partnership
Contract.
The reference level on average per year of
public or equivalent structural expenditure for the years 2014-2020 shall be
set in the Partnership Contract, on the basis of an ex ante verification
by the Commission of the information submitted in the Partnership Contract,
having regard to the average level of public or equivalent structural
expenditure per year in the period 2007-2013.
The Commission and the Member States shall take
into account the general macroeconomic conditions and specific or exceptional
circumstances, such as privatisations or an exceptional level of public or
equivalent structural expenditure by a Member State in the period 2007-2013.
They shall also take into account changes in the national allocations from the
Structural Funds as compared to the years 2007-2013.
4.           Verification of whether
the level of public or equivalent structural expenditure under the Investment for growth and jobs goal has
been maintained for the period shall only take place in those Member States in
which less developed and transition regions cover at least 15 % of the total
population.
In those Member States in which less developed
and transition regions cover at least 70 % of the population, the verification
shall take place at national level.
In those Member States in which less developed
and transition regions cover more than 15 % and less than 70 % of the
population, the verification shall take place at national and regional level.
For that purpose, those Member States shall provide to the Commission
information about the expenditure in the less developed and transition regions
at each stage of the verification process. 
5.           The verification of
whether the level of public or equivalent structural expenditure under the Investment for growth and jobs goal has
been maintained shall take place at the time of submission of the Partnership
Contract (ex ante verification), in 2018 (mid-term verification), and in
2022 (ex post verification).
The detailed rules relating to the verification
of additionality are set out in point 2 of Annex III.
6.           If it is established by
the Commission in the ex post verification that a Member State has not
maintained the reference level of public or equivalent
structural expenditure under the Investment
for growth and jobs goal set out in the Partnership Contract as set out
in Annex III, the Commission may carry out a financial correction. In deciding
whether or not to carry out a financial correction, the Commission will take
into account whether the economic situation of the Member State has
significantly changed since the mid-term verification and whether the change
was taken into account at that time. The detailed rules relating to financial
correction rates are set out in point 3 of Annex III.
7.           Paragraphs 1 to 6 shall
not apply to operational programmes under the European territorial cooperation
goal.
TITLE II 
PROGRAMMING
CHAPTER I
General provisions on the Funds
Article 87
Content and adoption of
operational programmes under the Investment for growth and jobs goal
1.           An operational programme
shall consist of priority axes. A priority axis shall concern one Fund for a
category of region and shall correspond, without prejudice to Article 52, to a
thematic objective and comprise one or more investment priorities of that
thematic objective, in accordance with the Fund-specific rules. For the ESF, a
priority axis may combine investment priorities from different thematic
objectives set out in Article 9(8), (9), (10) and (11) in order to facilitate
their contribution to other priority axes, in duly justified circumstances.
2.           An operational programme
shall set out:
(a)         
a strategy for the operational programme's
contribution to the Union strategy for smart, sustainable and inclusive growth,
including: 
(i)      an identification of needs addressing
the challenges identified in the country-specific recommendations and the broad
guidelines of the economic policies of the Member States and of the Union under
Article 121(2) and the Council recommendations which the Member States shall
take into account in their employment policies adopted under Article 148(4) of
the Treaty, and taking into account national and regional needs;
(ii)      a justification of the choice of
thematic objectives and corresponding investment priorities, having regard to
the Partnership Contract and the results of the ex ante evaluation;
(b)         
for each priority axis: 
(i)      the investment priorities and
corresponding specific objectives;
(ii)      the common and specific output and
result indicators, with where appropriate a baseline value and a quantified
target value, in accordance with the Fund-specific rules;
(iii)     a description of actions to be
supported including the identification of the main target groups, specific
territories targeted and types of beneficiaries where appropriate and the
planned use of financial instruments;
(iv)     the corresponding categories of
intervention based on a nomenclature adopted by the Commission by means of
implementing acts in accordance with the examination procedure referred to
Article 143(3),and an indicative breakdown of the programmed resources;
(c)         
the contribution to the integrated approach for
territorial development set out in the Partnership Contract, including:
(i)      the mechanisms that ensure
coordination between the Funds, the EAFRD, the EMFF and other Union and
national funding instruments, and with the EIB;
(ii)      where appropriate, a planned
integrated approach to the territorial development of urban, rural, coastal and
fisheries areas and areas with particular territorial features, in particular
the implementation arrangements for Articles 28 and 29;
(iii)     the list of cities where integrated
actions for sustainable urban development will be implemented, the indicative
annual allocation of the ERDF support for these actions, including the
resources delegated to cities for management under Article 7(2) of Regulation (EU)
No [ERDF] and the indicative annual allocation of ESF support for integrated
actions;
(iv)     the identification of the areas in
which community-led local development will be implemented;
(v)     the
arrangements for interregional and transnational actions with beneficiaries
located in at least one other Member State;
(vi)     where
appropriate, the contribution of the planned interventions towards macro
regional strategies and sea basin strategies;
(d)         
the contribution to the integrated approach set
out in the Partnership Contract to address the specific needs of geographical
areas most affected by poverty or target groups at highest risk of
discrimination or exclusion, with special regard to marginalised communities,
and the indicative financial allocation;
(e)         
arrangements to ensure the effective
implementation of the Funds, including:
(i)      a performance framework in accordance
with Article 19(1);
(ii)      for each ex ante
conditionality, established in accordance with Annex IV, that is not fulfilled
at the date of submission of the Partnership Contract and operational
programme, a description of the actions to fulfil the ex ante conditionality
and a timetable for such actions;
(iii)     the actions taken to involve the
partners in the preparation of the operational programme, and the role of the
partners in the implementation, monitoring and evaluation of the operational
programme;
(f)           
arrangements to ensure the efficient
implementation of the Funds, including:
(i)      the planned use of technical
assistance including actions to reinforce the administrative capacity of
authorities and beneficiaries with the relevant information referred to in
paragraph 2 (b) for the priority axis concerned;
(ii)      an assessment of the administrative
burden for beneficiaries and the actions planned to achieve a reduction
accompanied by targets;
(iii)     a list of major projects for which
the estimated start date for the execution of the main works is before 1
January 2018; 
(g)         
a financing plan containing two tables:
(i)      a table specifying for each year, in
accordance with Articles 53, 110 and 111,
the amount of the total financial
appropriation envisaged for the support from each of the Funds;
(ii)      a table specifying, for the whole
programming period, for the operational
programme and for each priority axis, the amount of the total financial
appropriation of the support from the Funds and the national co-financing.
Where the national co-financing is made up
of public and private co-financing,
the table shall give the indicative breakdown between the public and the private components. It shall show, for information purposes, the
envisaged participation from the EIB;
(h)         
the implementing
provisions for the operational programme containing:
(i)      identification of the accrediting
body, the managing authority, the certifying authority, where applicable, and
the audit authority;
(ii)      identification
of the body to which payments will be made by the
Commission.
3.           Each operational
programme, except those where technical assistance is undertaken under a
specific operational programme, shall include:
(i)      a description of specific actions to
take into account environmental protection requirements, resource efficiency,
climate change mitigation and adaptation, disaster resilience and risk
prevention and management, in the selection of operations;
(ii)     a description of the specific actions
to promote equal opportunities and prevent any discrimination based on sex,
racial or ethnic origin, religion or belief, disability, age or sexual
orientation during the preparation, design and implementation of the
operational programme and in particular in relation to access to funding,
taking account of the needs of the various target
groups at risk of such discrimination and in particular the requirements of
ensuring accessibility for disabled persons; 
(iii)     a description of its contribution to
the promotion of equality between men and women and, where appropriate, the
arrangements to ensure the integration of gender perspective at operational
programme and operation level.
Member States shall submit an opinion of the
national equality bodies on the measures set out in points (ii) and (iii) with
the proposal for an operational programme under the Investment for growth and
jobs goal. 
4.           Member States shall draft
the operational programme according to the model adopted by the Commission.
The Commission shall adopt that model by means
of implementing acts. Those implementing acts shall be adopted in accordance
with the advisory procedure referred to in Article 143(2).
5.           The Commission shall adopt
a decision approving the operational programme by means of implementing acts.
Article 88
Joint support from the
Funds
1.           The Funds may jointly
provide support for operational programmes under the Investment for growth and
jobs goal. 
2.           The ERDF and the ESF may finance, in a complementary manner and
subject to a limit of 5 % of Union
funding for each priority axis of an operational
programme, a part of an operation for which the costs are eligible for support
from the other Fund on the basis of eligibility rules applied to that Fund,
provided that they are necessary for
the satisfactory implementation of the operation and are directly linked to it.

3.           Paragraphs 1 and 2 shall
not apply to programmes under the European territorial cooperation goal.
Article 89

Geographical
scope of operational programmes under the
Investment for growth and jobs goal
Unless otherwise agreed between the Commission
and the Member State, operational programmes for the ERDF and the ESF shall be
drawn up at the appropriate geographical level and at least at NUTS level 2, in
accordance with the institutional system specific to the Member State. 
Operational programmes with support from
the Cohesion Fund shall be drawn up at national level.
CHAPTER II
Major projects
Article 90
Content
As part of an operational programme or
operational programmes, the ERDF and the Cohesion Fund may support an operation
comprising a series of works, activities or services intended in itself to
accomplish an indivisible task of a precise economic or technical nature which
has clearly identified goals and whose total cost exceeds EUR 50 000 000
(a 'major project'). Financial instruments shall not be considered major
projects. 
Article 91
Information to be
submitted to the Commission
1.                      
The Member State or the managing authority shall
submit the following information on major projects to the Commission as soon as
preparatory work has been completed:
(a)         
information on the body to be responsible for
implementation of the major project, and its capacity
(b)         
a description of and information on the
investment and its location;
(c)         
total cost and total eligible cost, taking
account of the requirements set out in Article 54; 
(d)         
information on the feasibility studies carried
out, including the options analysis, the results, and independent quality
review;
(e)         
a cost-benefit analysis, including an economic
and a financial analysis, and a risk assessment; 
(f)           
an analysis of the environmental impact, taking
into account climate change adaptation and mitigation needs, and disaster
resilience;
(g)         
the consistency with the relevant priority axes
of the operational programme or programmes concerned, and its expected
contribution to achieving the specific objectives of those priority axes;
(h)         
the financing plan showing the total planned
financial resources and the planned support from the Funds, the EIB, and all
other sources of financing, together with physical and financial indicators for
monitoring progress, taking account of the identified risks;
(i)           
the timetable for implementing the major project
and, where the implementation period is expected to be longer than the
programming period, the phases for which support from the Funds is requested
during the 2014 to 2020 programming period.
The Commission shall provide indicative
guidance on the methodology to be used in carrying out the cost-benefit
analysis referred to in point (e) above in accordance with the advisory
procedure referred to in Article 143(2).
The format for the information on major
projects to be submitted shall be set up in accordance with the model adopted
by the Commission, by means of implementing acts. Those
implementing acts shall be adopted in accordance with the advisory procedure
referred to in Article 143(2).
2.           Major projects submitted
to the Commission for approval shall be contained in the list of major projects
in an operational programme. The list shall be reviewed by the Member State or
the managing authority two years following the adoption of an operational
programme and may at the request of the Member State be adjusted in accordance
with the procedure set out in Article 26(2), in particular to include major
projects with an expected completion date by the end of 2022.
Article 92
Decision on a major
project
1.           The Commission shall
appraise the major project on the basis of the information referred to in
Article 91 in order to determine whether the proposed support from the Funds is
justified.
2.           The Commission shall adopt
a decision, by means of implementing act, no later than three months after the
date of submission of the information approving a major project in accordance
with Article 91. That decision shall define the physical object, the amount to
which the co-financing rate for the priority axis applies, physical and
financial indicators for monitoring progress, and the expected contribution of
the major project to the objectives of the relevant priority axis or axes. An
approval decision shall be conditional on the first works contract being
concluded within two years of the date of the decision.
3.           Where the Commission
refuses to allow support from the Funds to be given to a major project, it
shall notify the Member State of its reasons within the period laid down in
paragraph 2.
4.           Expenditure relating to
major projects shall not be included in payment applications before adoption of
an approval decision by the Commission.

CHAPTER III
Joint action plan
Article 93
Scope
1.           A joint action plan is an
operation defined and managed in relation to the outputs and results which it
will achieve. It comprises a group of projects, not consisting in the provision
of infrastructure, carried out under the responsibility of the beneficiary, as
part of an operational programme or programmes. The outputs and results of a
joint action plan shall be agreed between the Member State and the Commission
and shall contribute to specific objectives of the operational programmes and
form the basis of support from the Funds. Results shall refer to direct effects
of the joint action plan. The beneficiary shall be a public law body. Joint
action plans shall not be considered as major projects. 
2.           The public support
allocated to a joint action plan shall be a minimum of EUR 10 000 000
or 20 % of the public support of the operational programme or programmes,
whichever is lower.
Article 94
Preparation of joint
action plans 
1.           The Member State, the
managing authority or any designated public law body may submit a proposal for
a joint action plan at the same time as or subsequent to the submission of the
operational programmes concerned. It shall contain all the elements referred to
in Article 95.
2.           A joint action plan shall
cover part of the period between 1 January 2014 and 31 December 2022. The
outputs and results of a joint action plan shall give rise to reimbursement
only if attained after the date of the decision of approval of the joint action
plan and before the end of the implementation period defined. 
Article 95
Content of joint action
plans 
The joint action plan shall contain:
(1)                   
an analysis of the development needs and
objectives justifying the joint action plan, taking into account the objectives
of the operational programmes and, where applicable, the country-specific
recommendations and the broad guidelines of the economic policies of the Member
States and of the Union under Article 121(2) and the Council recommendations
which the Member States shall take into account in their employment policies
under Article 148(4) of the Treaty;
(2)              
the framework describing the relationship
between the general and specific objectives of the joint action plan, the
milestones and the targets for outputs and results, and the projects or types
of projects envisaged;
(3)              
the common and specific indicators used to
monitor outputs and results, where relevant, by priority axis; 
(4)              
information on the geographic coverage and
target groups of the joint action plan;
(5)              
the expected implementation period of the joint
action plan;
(6)              
an analysis of the effects of the joint action
plan on the promotion of equality between men and women and the prevention of
discrimination;
(7)              
an analysis of the effects of the joint action
plan on the promotion of sustainable development, where appropriate;
(8)              
the implementing provisions for the joint action
plan, including the following:
(a)         
the designation of the beneficiary responsible
for the implementation of the joint action plan, providing guarantees of its
competence in the domain concerned as well as its administrative and financial management
capacity;
(b)         
the arrangements for steering the joint action
plan, in accordance with Article 97;
(c)         
the arrangements for monitoring and evaluating
the joint action plan including arrangements ensuring the quality, collection
and storage of data on the achievement of milestones, outputs and results;
(d)         
the arrangements ensuring the dissemination of
information and communication on the joint action plan and on the Funds;
(9)              
the financial arrangements of the joint action
plan, including the following:
(a)         
the costs of achieving milestones, outputs and
result targets with reference to point (2), based on the methods set out in
Article 57(4) and in Article 14 of the ESF Regulation; 
(b)         
an indicative schedule of payments to the
beneficiary linked to the milestones and targets;
(c)         
the financing plan by operational programme and
priority axis, including the total eligible amount and the public support. 
The format for the joint action plan shall
be set up in accordance with the model adopted by the Commission, by means of
implementing acts. Those implementing acts shall be adopted in accordance with
the advisory procedure referred to in Article 143(2).
Article 96
Decision on the joint
action plan 
1.           The
Commission shall appraise the joint action plan on the basis of the information
referred to in Article 95 in order to determine whether support from the Funds
is justified.
Where the Commission, within three months
following the submission of a joint action plan proposal, considers that it
does not meet the appraisal requirements, it shall make observations to the
Member State. The Member State shall provide to the Commission all necessary
additional information requested and, where appropriate, revise the joint
action plan accordingly.
2.           Provided that any
observations have been satisfactorily taken into account, the Commission shall
adopt a decision approving the joint action plan no later than 6 months after
its submission by the Member State but not before the adoption of the
operational programmes concerned. 
3.           The decision referred to
in paragraph 2 shall indicate the beneficiary and the objectives of the joint
action plan, the milestones and targets for outputs and
results, the costs of achieving these milestones, outputs and result targets,
and the financing plan by operational programme and priority axis, including
the total eligible amount and the public contribution, the implementation
period of the joint action plan and, where relevant, the geographical coverage
and target groups of the joint action plan. 
4.           Where the Commission
refuses to allow support from the Funds to be given to a joint action plan, it
shall notify the Member State of its reasons within the period laid down in
paragraph 2.
Article 97
Steering Committee and
amendment of the joint action plan
1.           The Member State or the
managing authority shall set up a steering committee for the joint action plan,
distinct from the monitoring committee of the operational programmes. The
steering committee shall meet at least twice a year.
Its composition shall be decided by the Member
State in agreement with the managing authority, respecting the principle of
partnership.
The Commission may participate in the work of
the steering committee in an advisory capacity. 
2.           The steering committee
shall carry out the following activities:
(a)         
review progress towards achieving the
milestones, outputs and results of the joint action plan;
(b)         
consider and approve any proposal to amend the
joint action plan in order to take account of any issues affecting its
performance.
3.           Requests for amendment of
joint action plans submitted by a Member State shall be duly substantiated. The
Commission shall assess whether the request for amendment is justified, taking
account of the information provided by the Member State. The Commission may
make observations and the Member State shall provide to the Commission all
necessary additional information. The Commission shall adopt a decision on a
request for amendment no later than three months after its formal submission by
the Member State, provided that any observations made by the Commission have
been satisfactorily taken into account. The amendment
shall enter into force from the date of the decision, unless otherwise set out
in the decision.
Article 98 
Financial
management and control of the joint action plan
1.           Payments to the
beneficiary of a joint action plan shall be treated as lump sums or standard
scales of unit costs. The ceiling for lump sums set out in Article 57(1)(c)
shall not apply. 
2.           The financial management,
control and audit of the joint action plan shall aim exclusively at verifying
that the conditions for payments defined in the decision approving the joint
action plan have been fulfilled. 
3.           The beneficiary and bodies
acting under its responsibility may apply their accounting practices for the
costs of implementing operations. These accounting practices and the costs
actually incurred by the beneficiary shall not be subject to audit by the audit
authority or the Commission. 

CHAPTER IV
Territorial development 
Article 99
Integrated territorial
investment 
1.           Where an urban development
strategy or other territorial strategy or pact as defined in Article 12(1) of
Regulation…[ESF] requires an integrated approach involving investments under
more than one priority axis of one or more operational programmes, the action
shall be carried out as an integrated territorial investment (an 'ITI'). 
2.           The relevant operational
programmes shall identify the ITIs planned and shall set out the indicative
financial allocation from each priority axis to each ITI.
3.           The Member State or the
managing authority may designate one or more intermediate bodies, including
local authorities, regional development bodies or non-governmental
organisations, to carry out the management and implementation of an ITI.
4.           The Member State or the
relevant managing authorities shall ensure that the monitoring system for the
operational programme provides for the identification of operations and outputs
of a priority axis contributing to an ITI.

TITLE III
MONITORING,EVALUATION, INFORMATION AND COMMUNICATION
CHAPTER I
Monitoring and evaluation
Article 100
Functions of the
monitoring committee
1.           The monitoring committee
shall examine in particular:
(a)         
any issues that affect the performance of the
operational programme;
(b)         
progress in implementation of the evaluation
plan and the follow-up given to findings of evaluations;
(c)         
implementation of the communication strategy;
(d)         
implementation of major projects;
(e)         
implementation of joint action plans;
(f)           
actions to promote equality between men and
women, equal opportunities, and non-discrimination, including accessibility for
disabled persons;
(g)         
actions to promote sustainable development;
(h)         
actions in the operational programme relating to
the fulfilment of ex ante conditionalities;
(i)           
financial instruments.
2.           The monitoring committee
shall examine and approve:
(a)         
the methodology and criteria for selection of
operations;
(b)         
the annual and final implementation reports;
(c)         
the evaluation plan for the operational
programme and any amendment of the plan;
(d)         
the communication strategy for the operational
programme and any amendment of the strategy;
(e)         
any proposal by the managing authority for any
amendment to the operational programme.
Article 101
Implementation reports for
the Investment for growth and jobs goal
1.           By 30 April 2016 and by 30
April of each subsequent year until and including 2022 the Member State shall
submit to the Commission an annual report in accordance with Article 44(1). The
report submitted in 2016 shall cover the financial years 2014 and 2015, as well
as the period between the starting date for eligibility of expenditure and 31
December 2013.
2.           Annual implementation
reports shall set out information on:
(a)         
implementation of the operational programme in
accordance with Article 44(2);
(b)         
progress in preparation and implementation of
major projects and joint action plans.
3.           The annual implementation
reports submitted in 2017 and 2019 shall set out and assess the information
required under Articles 44(3) and (4) respectively, the information set out in
paragraph 2, together with:
(a)         
progress in implementation of the integrated
approach to territorial development, including sustainable urban development,
and community-led local development under the operational programme;
(b)         
progress in implementation of actions to reinforce
the capacity of Member State authorities and beneficiaries to administer and
use the Funds; 
(c)         
progress in implementation of any interregional
and transnational actions;
(d)         
progress in implementation of the evaluation
plan and the follow-up given to the findings of evaluations;
(e)         
the specific actions taken to promote equality
between men and women and to prevent discrimination, including accessibility
for disabled persons, and the arrangements implemented to ensure the
integration of the gender perspective in the operational programme and
operations; 
(f)           
actions taken to promote sustainable development
in accordance with Article 8;
(g)         
the results of the information and publicity
measures of the Funds carried out under the communication strategy; 
(h)         
progress in the implementation of actions in the
field of social innovation, where appropriate; 
(i)           
progress in the implementation of measures to
address the specific needs of geographical areas most affected by poverty or of
target groups at highest risk of discrimination or exclusion, with special
regard to marginalised communities including, where appropriate, the financial
resources used;
(j)           
the involvement of the partners in the
implementation, monitoring and evaluation of the operational programme.
4.           The annual and final
implementation reports shall be drawn up following models adopted by the
Commission by means of implementing acts. These implementing acts shall be
adopted in accordance with the advisory procedure referred to in Article 143(2).
Article 102
Transmission of financial
data
1.                      
By 31 January, 30 April, 31 July and 31 October,
the managing authority shall transmit electronically to the Commission for
monitoring purposes, for each operational programme and by priority axis:
(a)         
the total and public eligible cost of the
operations and the number of operations selected for support;
(b)         
the total and public eligible cost of contracts
or other legal commitments entered into by beneficiaries in implementation of
operations selected for support;
(c)         
the total eligible expenditure declared by
beneficiaries to the managing authority.
2.                      
In addition, the transmission on 31 January
shall contain the above data broken down by category of intervention. This
transmission shall be considered to fulfil the requirement for the submission
of financial data referred to in Article 44(2). 
3.                      
A forecast of the amount for which Member States
expect to submit payment applications for the current financial year and the
subsequent financial year shall accompany the transmissions to be made by 31
January and 31 July.
4.                      
The cut-off date for the data submitted under
this Article shall be the end of the month preceding the month of submission. 
Article103 
Cohesion
Report 
The report of the Commission referred to in
Article 175 of the Treaty shall include:
(a)                   
a record of progress made on economic, social
and territorial cohesion, including the socio-economic situation and
development of the regions, as well as the integration of the Union's
priorities;
(b)              
a record of the role of the Funds, the EIB and
the other instruments, as well as the effect of other Union and national
policies, in the progress made.
Article 104
Evaluation 
1.                      
An evaluation plan shall be drawn up by the
managing authority for each operational programme. The evaluation plan shall be
submitted to the first meeting of the monitoring committee. Where a single
monitoring committee covers more than one operational programme, an evaluation
plan may cover all the operational programmes concerned.
2.                      
By 31 December 2020, managing authorities shall
submit to the Commission, for each programme, a report summarising the findings
of evaluations carried out during the programming period, including an
assessment of the main outputs and results of the programme.
3.                      
The Commission shall carry
out ex post evaluations in close cooperation with the Member States and
managing authorities. 

CHAPTER II
Information and Communication
Article 105
Information and publicity 
1.           Member States and managing
authorities shall be responsible for:
(a)         
ensuring the establishment of a single website
or a single website portal providing information on, and access to, all
operational programmes in that Member State;
(b)         
informing potential beneficiaries about funding
opportunities under operational programmes;
(c)         
publicising to Union citizens the role and achievements
of cohesion policy and of the Funds through information and communication
actions on the results and impact of Partnership Contracts, operational
programmes and operations.
2.           Member States shall in
order to ensure transparency in the support of the Funds maintain a list of
operations by operational programme and by Fund in CSV or XML format which
shall be accessible through the single website or the single website portal
providing a list and summary of all operational programmes in that Member State.
The list of operations shall be updated at
least every three months. 
The minimum information to be set out in the
list of operations is laid down in Annex V. 
3.           Detailed rules concerning
the information and publicity measures for the public and information measures
for applicants and for beneficiaries are laid down in Annex V.
4.           Technical characteristics
of information and publicity measures for the operation and instructions for
creating the emblem and a definition of the standard colours shall be adopted
by the Commission by means of implementing acts in accordance with the
examination procedure referred to Article 143(3).
Article 106
Communication strategy
1.           The managing authority
shall draw up a communication strategy for each operational programme. A common
communication strategy may be drawn up for several operational programmes. 
The communication strategy shall include the
elements set out in Annex V and annual updates with details of the planned
information and publicity activities to be carried out. 
2.           The communication strategy
shall be discussed and approved by the first monitoring committee following the
adoption of the operational programme. 
Any revision of the communication
strategy shall be discussed in, and approved by, the monitoring committee.
3.           The
managing authority shall inform the monitoring committee for each operational
programme at least once a year of progress in the implementation of the
communication strategy and its assessment of the results.
Article 107
Information and
communication officers and their networks
1.                      
Each Member State shall designate an information
and communication officer to coordinate information and communication actions
in relation to one or several Funds and shall inform the Commission
accordingly.
2.                      
The information and communication officer shall
coordinate and chair meetings of a national network of Funds' communicators,
including relevant European territorial cooperation programmes, the creation
and maintenance of the website or website portal referred to in Annex V and the
obligation to provide an overview about communication measures undertaken at
national level.
3.                      
Each managing authority shall designate one
person to be responsible for information and communication at operational
programme level and shall inform the Commission of those designated.
4.                      
Union networks comprising the members designated
by the Member States and the managing authorities shall be set up by the
Commission to ensure exchange on the results of the implementation of the
communication strategies, the exchange of experience in implementing the
information and communication measures, and the exchange of good practices.

TITLE IV 
TECHNICAL ASSISTANCE
Article 108
Technical assistance at
the initiative of the Commission
The Funds may support technical assistance
up to a ceiling of 0,35 % of their respective annual allocation.
Article 109
Technical assistance of
the Member States
1.           Each of the Funds may
finance technical assistance operations eligible under any of the other Funds.
The amount of the Funds allocated to technical assistance shall be limited to
4% of the total amount of the Funds allocated to operational programmes under
each category of region of the Investment for growth and jobs goal.
2.           Technical assistance shall
take the form of a mono-fund priority axis within an operational programme or
of a specific operational programme. 
3.           The allocation for
technical assistance from a Fund shall not exceed 10% of the total allocation
of that Fund to operational programmes in a Member State under each category of
region of the Investment for growth and jobs goal. 

TITLE V
FINANCIAL SUPPORT FROM THE FUNDS
Article 110
Determination of
co-financing rates
1.           The Commission decision
adopting an operational programme shall fix the co-financing rate and the
maximum amount of support from Funds for each priority axis.
2            For each priority axis,
the Commission decision shall set out whether the co-financing rate for the
priority axis will be applied to:
(a)     total eligible expenditure, including
public and private expenditure; or
(b)     public eligible expenditure.
3.           The co-financing rate at
the level of each priority axis of operational programmes under the Investment
for growth and jobs goal shall be no higher than:
(a)         
85 % for the Cohesion Fund;
(b)         
85 % for the less developed regions of Member
States whose average GDP per capita for the period 2007 to 2009 was below 85 %
of the EU-27 average during the same period and for the outermost regions;
(c)         
80% for the less developed regions of Member
States other than those referred to in point (b) eligible for the transitional
regime of the Cohesion Fund on 1 January 2014;
(d)         
75% for the less developed regions of Member
States other than those referred to in points (b) and (c), and for all regions whose GDP per capita for the 2007-2013 period was less than
75% of the average of the EU-25 for the reference period but whose GDP per capita is above 75% of the GDP average of the EU-27;
(e)         
60 % for the transition regions other than those
referred to in point (d);
(f)           
50 % for the more developed regions other than
those referred to in point (d).
The co-financing rate at the level of each
priority axis of operational programmes under the European territorial
cooperation goal shall be no higher than 75%.
4.           The co-financing rate of
the additional allocation in accordance with Article 84(1)(e) shall be no
higher than 50%. 
The same co-financing rate shall apply to the
additional allocation under Article 4(2) of Regulation (EU) No […]/2012
[ETC Regulation].
5.           The maximum co-financing
rate under paragraph 3 at the level of a priority axis shall be increased by
ten percentage points, where the whole of a priority axis is delivered through
financial instruments, or through community-led local development.
6.           The contribution from the
Funds for each priority axis shall not be less than 20 % of the eligible public
expenditure.
7.           A separate priority axis
with a co-financing rate of up to 100% may be established within an operational
programme to support operations implemented through financial instruments set
up at Union level and managed directly or indirectly by the Commission. Where a
separate priority is established for this purpose, the support under this axis
may not be implemented by any other means.
Article 111 
Modulation of the co-financing
rates 
The co-financing
rate from the Funds to a priority axis may be modulated to take account of:
(1)                   
the importance of the priority axis for the
delivery of the Union strategy for smart, sustainable and inclusive growth,
having regard to the specific gaps to be addressed;
(2)              
protection and improvement of the environment,
principally through the application of the precautionary principle, the
principle of preventive action and the polluter pays principle;
(3)              
the rate of mobilisation of private financing;
(4)              
the coverage of areas with severe and permanent
natural or demographic handicaps defined as follows:
(a)         
island Member States eligible under the Cohesion
Fund, and other islands except those on which the capital of a Member State is
situated or which have a fixed link to the mainland;
(b)         
mountainous areas as defined by the national
legislation of the Member State;
(c)         
sparsely (less than 50 inhabitants per square
kilometre) and very sparsely (less than 8 inhabitants per square kilometre)
populated areas.

TITLE VI
MANAGEMENT AND CONTROL
CHAPTER I
Management and control systems
Article 112
Responsibilities of Member
States
1.           Member States shall ensure
that management and control systems for operational programmes are set up in
accordance with Articles 62 and 63. 
2.           Member States shall
prevent, detect and correct irregularities and shall recover amounts unduly
paid, together with any interest on late payments. They shall notify these
irregularities to the Commission and shall keep the Commission informed of the
progress of related administrative and legal proceedings.
When amounts unduly paid to a beneficiary
cannot be recovered and this is as a result of fault or negligence on the part
of a Member State, the Member State shall be responsible for reimbursing the amounts
concerned to the general budget of the Union.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 142 laying down detailed rules
concerning the obligations of the Member States specified in this paragraph. 
3.           Member States shall ensure
that no later than 31 December 2014, all exchanges of information between
beneficiaries and managing authorities, certifying authorities, audit
authorities and intermediate bodies can be carried out solely by means of
electronic data exchange systems.
The systems shall facilitate interoperability
with national and Union frameworks and allow for the beneficiaries to submit
all information referred to in the first sub-paragraph only once.
The Commission shall adopt, by means of
implementing acts, detailed rules concerning the exchanges of information under
this paragraph. Those implementing acts shall be adopted in accordance with the
examination procedure referred to in Article 143(3).

CHAPTER II
Management and control authorities
Article 113
Designation of authorities
1.           The
Member State shall designate, for each operational
programme, a national, regional or local
public authority or body as managing
authority. The same public authority or body may be
designated as a managing authority for more than one operational
programme.
2.           The Member State shall
designate, for each operational programme, a national, regional or local public
authority or body as a certifying authority, without prejudice to paragraph 3. The same certifying authority may be designated
for more than one operational programme.
3.           The Member State may
designate for an operational programme a managing authority which carries out
in addition the functions of the certifying authority.
4.           The Member State shall
designate, for each operational programme, a national, regional or local public
authority or body, functionally independent from the managing authority and the
certifying authority, as audit authority. The
same audit authority may be designated for more than one operational
programme.
5.           For
the Investment for growth and jobs goal, provided that the principle of
separation of functions is respected, the managing authority, the certifying
authority, where applicable, and the audit authority may be part of the same
public authority or body. However, for those operational programmes for which
the total amount of support from the Funds exceeds
EUR 250 000 000, the audit authority may not be part of the same
public authority or body as the managing authority.
6.           The Member State may
designate one or more intermediate bodies to carry out certain tasks of the
managing or the certifying authority under the responsibility of that
authority. The relevant arrangements between the managing authority or
certifying authority and the intermediate bodies shall be formally recorded in
writing.
7.           The Member State or the
managing authority may entrust the management of part of an operational
programme to an intermediate body by way of an agreement in writing between the
intermediate body and the Member State or managing authority (a 'global
grant'). The intermediate body shall provide guarantees of its solvency and
competence in the domain concerned, as well as its administrative and financial
management. 
8.           The
Member State shall lay down in writing rules governing its relations with the
managing authorities, certifying authorities and audit authorities, the
relations between such authorities, and the relations of such authorities with
the Commission.
Article 114
Functions of the managing
authority 
1.           The
managing authority shall be responsible for managing the
operational programme in accordance with the principle of sound financial
management. 
2.           As regards the programme
management of the operational programme, the managing authority shall:
(a)         
support the work of the monitoring committee and
provide it with the information it requires to carry out its tasks, in
particular data relating to the progress of the operational programme in
achieving its objectives, financial data and data relating to indicators and
milestones;
(b)                     
draw up and, after approval by the monitoring committee, submit to the Commission annual and final
implementation reports;
(c)                      
make available to intermediate bodies and
beneficiaries information that is relevant to the execution of their tasks and
the implementation of operations respectively;
(d)         
establish a system to record and store in
computerised form data on each operation necessary for monitoring, evaluation,
financial management, verification and audit, including data on individual
participants in operations, where applicable;
(e)         
ensure that the data referred to in point (d) is
collected, entered and stored in the system, and that data on indicators is
broken down by gender where required by Annex I of the ESF Regulation.
3.           As regards the selection
of operations, the managing authority shall:
(a)         
draw up and, once approved, apply appropriate
selection procedures and criteria that:
(i)      are non-discriminatory and
transparent;
(ii)      take into account the general
principles set out in Articles 7 and 8; 
(b)         
ensure that a
selected operation falls within the scope of the Fund
or Funds concerned and within a category of intervention identified in the
priority axis or axes of the operational programme;
(c)         
provide to the
beneficiary a document setting out the conditions for support for each
operation including the specific requirements
concerning the products or services to be delivered under the operation, the
financing plan, and the time-limit for execution;
(d)         
satisfy itself that the beneficiary has the
administrative, financial and operational capacity to fulfil the conditions
defined in point (c) before approval of the operation;
(e)         
satisfy itself that, where the operation has
started before the submission of an application for funding to the managing authority,
Union and national rules relevant for the operation have been complied with;
(f)           
ensure that an applicant does not receive
support from the Funds where it has been, or should have been, subject to a
procedure of recovery in accordance with Article 61 following the relocation of
a productive activity within the Union;
(g)         
determine the categories of intervention to
which the expenditure of an operation shall be attributed.
4.           As regards the financial
management and control of the operational programme, the managing authority
shall:
(a)         
verify that the co-financed products and
services have been delivered and that expenditure declared by the beneficiaries
has been paid by them and that it complies with applicable Union and national
law, the operational programme and the conditions for support of the operation;
(b)         
ensure that
beneficiaries involved in the implementation of
operations reimbursed on the basis of eligible costs actually incurred maintain
either a separate accounting system or an
adequate accounting code for all transactions relating to an operation;
(c)         
put in place effective and proportionate
anti-fraud measures taking into account the risks identified;
(d)         
set up procedures to ensure that all documents regarding expenditure and audits required to
ensure an adequate audit trail are
held in accordance with the requirements of Article 62(g);
(e)         
draw up the management declaration of assurance
on the functioning of the management and control system, the legality and
regularity of underlying transactions and the respect of the principle of sound
financial management, together with a report setting out the results of
management controls carried out, any weaknesses identified in the management
and control system and any corrective action taken.
5.           Verifications pursuant to paragraph
4(a) shall include the following procedures:
(a)         
administrative verifications in respect of each
application for reimbursement by beneficiaries;
(b)         
on-the-spot verifications of operations.
The frequency and coverage of the on-the-spot
verifications shall be proportionate to the amount of public support to an
operation and the level of risk identified by these verifications and audits by
the audit authority for the management and control system as a whole.
6.           On-the-spot verifications of individual operations
pursuant to paragraph (5)(b) may be carried out on a sample basis.
7.           Where the managing
authority is also a beneficiary under the operational programme, arrangements
for the verifications referred to in paragraph 4(a) shall ensure adequate
separation of functions.
8.           The Commission shall adopt
delegated acts, in accordance with Article 142, laying down the modalities of
the exchange of information in paragraph 2(d).
9.           The Commission shall adopt
delegated acts, in accordance with Article 142, laying down rules concerning
arrangements for the audit trail referred to in paragraph 4(d). 
10.         The Commission shall adopt,
by means of implementing acts, the model for the management declaration
referred to in paragraph 4(e). Those implementing acts shall be adopted in
accordance with the advisory procedure referred to in Article 143(2).
Article 115
Functions of the
certifying authority
The certifying authority of an operational
programme shall be responsible in particular for:
(a)                   
drawing up and submitting to the Commission
payment applications and certifying that these result from reliable accounting
systems, are based on verifiable supporting documents and have been subject to
verifications by the managing authority;
(b)                   
drawing up the annual accounts;
(c)                   
certifying the completeness, accuracy and
veracity of the annual accounts and that the expenditure entered in the
accounts complies with applicable Union and national rules and has been
incurred in respect of operations selected for funding in accordance with the
criteria applicable to the operational programme and complying with Union and
national rules;
(d)                   
ensuring that there is a system which records
and stores, in computerised form, accounting records for each operation, and which supports all the data required for
drawing up payment applications and annual accounts, including records of amounts recoverable,
amounts recovered and amounts withdrawn following cancellation of all or part
of the contribution for an operation or operational programme;
(e)                   
ensuring for the purposes of drawing up and
submission of payment applications that it has received adequate information
from the managing authority on the procedures and verifications carried out in
relation to expenditure; 
(f)                     
taking account when drawing up and submitting
payment applications the results of all audits carried out by or under the
responsibility of the audit authority; 
(g)                   
maintaining accounting records in a computerised
form of expenditure declared to the Commission and the corresponding public
contribution paid to beneficiaries;
(h)                   
keeping an account of amounts recoverable and of
amounts withdrawn following cancellation of all or part of the contribution for
an operation. Amounts recovered shall be repaid to the general budget of the
Union prior to the closure of the operational programme by deducting them from
the next statement of expenditure.
Article 116
Functions of the audit
authority
1.           The audit authority shall ensure that audits are carried out on the
management and control systems, on an appropriate sample of operations and on
the annual accounts.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 142 to set out the conditions which
those audits shall fulfil.
2.           Where audits are carried out by a body other than the audit
authority, the audit authority shall ensure that any such body has the necessary functional independence.
3.           The
audit authority shall ensure that audit work takes account of internationally
accepted audit standards.
4.           The
audit authority shall, within six months of adoption of an operational
programme, prepare an audit strategy for performance of
audits. The audit strategy shall set out the audit methodology, the sampling
method for audits on operations and the planning of audits in relation to the
current accounting year and the two subsequent accounting years. The audit
strategy shall be updated annually from 2016 until and including 2022. Where a
common management and control system applies to more than one operational
programme, a single audit strategy may be prepared for the operational
programmes concerned. The audit authority shall submit the audit strategy to
the Commission upon request.
5.           The
audit authority shall draw up:
(i)      an audit opinion on the annual accounts for the preceding accounting
year, whose scope shall cover the completeness, accuracy and veracity of the
annual accounts, the functioning of the management and control system and the
legality and regularity of the underlying transactions;
(ii)     an annual control report setting out
the findings of the audits carried out during the preceding accounting year.
The report under point (ii) shall set out any
deficiencies found in the management and control system and any corrective
measures taken or proposed to be taken.
Where a common management and control system
applies to more than one operational programme, the information required under
point (ii) may be grouped in a single report.
6.           The Commission shall
adopt, by means of implementing acts, models for the audit strategy, the audit
opinion and the annual control report, as well as the methodology for the
sampling method referred to in paragraph 4. These implementing acts shall be
adopted in accordance with the examination procedure referred to in Article 143(3).
7.           Implementing
rules concerning the use of data collected during audits carried out by Commission officials or
authorised Commission representatives shall be adopted by the Commission in accordance with
the examination procedure referred to in Article 143(3).
CHAPTER III
Accreditation
Article 117
Accreditation and withdrawal of accreditation of the
managing authority and the certifying authority
1.           The accrediting body shall
adopt a formal decision to accredit those managing authorities and certifying
authorities that comply with the accreditation criteria that have been
established by the Commission by means of delegated acts in accordance with
Article 142.
2.           The formal decision
referred to in paragraph 1 shall be based on a report and an opinion of an
independent audit body that assesses the management and control system,
including the role of intermediate bodies therein, and its compliance with
Articles 62, 63, 114 and 115. The accrediting body shall take into account
whether the management and control systems for the operational programme are
similar to those in place for the previous programming period, as well as any
evidence of their effective functioning. 
3.           The Member State shall
submit the formal decision referred to in paragraph 1 to the Commission within
six months of the adoption of the decision adopting the operational programme.
4.           Where the total amount of
support from the Funds to an operational programme exceeds
EUR 250 000 000 the Commission may request, within two months of
receipt of the formal decision referred to in paragraph 1, the report and the
opinion of the independent audit body and the description of the management and
control system. 
The Commission may make observations within two
months of receipt of these documents. 
In deciding whether to request those documents,
the Commission shall take into account whether the management and control
systems for the operational programme are similar to those in place for the
previous programming period, whether the managing authority also carries out
the functions of the certifying authority, and any evidence of their effective
functioning. 
Article 118
Cooperation with audit
authorities
1.           The Commission shall
cooperate with audit authorities to coordinate their audit plans and methods and shall immediately exchange the results
of audits carried out on management and control systems. 
2.           To
facilitate this cooperation in cases where a Member State designates more than one audit authority,
the Member State may designate a coordination body.
3.           The Commission, the audit
authorities and any coordination body shall meet on a regular basis and at least once a year, unless otherwise agreed,
to examine the annual control report, the opinion and the audit strategy, and
to exchange views on issues relating to
improvement of the management and control systems.

TITLE VII
FINANCIAL MANAGEMENT, CLEARANCE OF ACCOUNTS AND FINANCIAL CORRECTIONS
CHAPTER I
Financial management
Article 119 
 Common rules for payments
The Member State shall ensure that at the
latest by the closure of the operational programme, the amount of public
support paid to beneficiaries is at least equal to the contribution from the
Funds paid by the Commission to the Member State.
Article 120
Common rules for
calculating interim payments and payment of the annual and final balance
1.           The Commission shall
reimburse as interim payments 90% of the amount resulting from applying the
co-financing rate for each priority axis laid down in the decision adopting the
operational programme to the eligible expenditure for the priority axis
included in the payment application. It shall determine the annual balance in
accordance with Article 130(1).
2.           The contribution from the
Funds to a priority axis through the interim payments and payment of the annual
and the final balance shall not be higher than:
(a)         
the public support indicated in the payment
application for the priority axis; and
(b)         
the contribution from the Funds for the priority
axis laid down in the decision of the Commission approving the operational
programme.
3.           Notwithstanding Article
22, the Union support through the interim payments and payments of the final
balance shall not be higher than the public support and the maximum amount of
support from the Funds for each priority axis as laid down in the decision of
the Commission approving the operational programme.
Article 121
Payment applications 
1.           Payment applications shall
include, for each priority axis:
(a)         
the total amount of eligible expenditure paid by
beneficiaries in implementing operations, as entered into the accounts of the
certifying authority; 
(b)         
the total amount of public support incurred in
implementing operations, as entered into the accounts of the certifying
authority;
(c)         
the corresponding eligible public support which
has been paid to the beneficiary, as entered into the accounts of the
certifying authority. 
2.           Expenditure included in a
payment application shall be supported by receipted invoices or accounting
documents of equivalent probative value, except for forms of support under
Articles 57 (1) (b) (c) and (d), 58, 59 (1) and 93 and under Article 14 of the
Regulation (EU) No […]/2012 of the European Parliament and of the Council of
the European Social Funds and repealing Regulation (EC) No 1081/2006 [ESF]. For
such forms of support, the amounts included in a payment application shall be
the costs reimbursed to the beneficiary by the managing authority. 
3.           The Commission shall
adopt, by means of implementing acts, the model for payment applications. These
implementing acts shall be adopted in accordance with the advisory procedure
referred to in Article 143(2).
Article 122
Payment to beneficiaries
Managing authorities shall ensure that the
beneficiaries receive the total amount of the public support as quickly as
possible and in full and in any event before the inclusion of the corresponding
expenditure in the payment application. No amount shall be deducted or withheld
and no specific charge or other charge with equivalent effect shall be levied
that would reduce these amounts for the beneficiaries.
Article 123
Use of the euro
1.           Member States which have
not adopted the euro as their currency on the date of an application for
payment shall convert the amounts of expenditure incurred in national currency
into euro. This amount shall be converted into euro using the monthly
accounting exchange rate of the Commission in the month during which the
expenditure was registered in the accounts of the managing authority of the
operational programme concerned. This rate shall be published electronically by
the Commission each month. 
2.           When the euro becomes the
currency of a Member State, the conversion procedure set out in paragraph 1
shall continue to apply to all expenditure recorded in the accounts by the
managing authority before the date of entry into force of the fixed conversion
rate between the national currency and the euro. 
Article 124
Payment of pre-financing
1.           The initial pre-financing
amount shall be paid in instalments as follows:
(a)     in 2014: 2 % of the amount of
support from the Funds for the entire programming period to the operational
programme;
(b)     in 2015: 1 % of the amount of
support from the Funds for the entire programming period to the operational
programme;
(c)     in 2016: 1 % of the amount of
support from the Funds for the entire programming period to the operational
programme.
If an operational programme is adopted in 2015
or later, the earlier instalments shall be paid in the year of adoption.
2.           An annual pre-financing
amount shall be paid before 1 July in the years 2016 to 2022. In 2016, it shall
be 2 % of the amount of the support from the Funds for the whole
programming period to the operational programme. In the years 2017 to 2022, it
shall be 2,5% of the amount of the support from the Funds for the whole
programming period to the operational programme.
Article 125
Clearance of pre-financing
The amount paid as annual pre-financing
shall be cleared from the Commission accounts in accordance with Article 130.
Article 126
Deadlines for presentation
of interim payment applications and for their payment
1.           The certifying authority
shall submit on a regular basis an application for interim payment covering
amounts entered in its accounts as public support paid to beneficiaries in the
accounting year ending 30 June.
2.           The certifying authority
shall submit the final application for interim payment by 31 July following the
end of the previous accounting year and, in any event, before the first
application for interim payment for the next accounting year.
3.           The first application for
interim payment shall not be made before the formal act accrediting the
managing authority has been received by the Commission.
4.           Interim payments shall not
be made for an operational programme where the annual implementation report has
not been sent to the Commission in accordance with Article 101. 
5.           Subject to available
funding, the Commission shall make the interim payment no later than 60 days
after the date on which a payment application is registered with the
Commission. 
Article
127
Decommitment
1.           The Commission shall
decommit any part of the amount calculated in accordance with the second
subparagraph in an operational programme that has not been used for payment of
the initial and annual pre-financing, interim payments and annual balance by 31
December of the second financial year following the year of budget commitment
under the operational programme or for which a payment application has not been
sent in accordance with Article 126(1).
For the purposes of the decommitment, the
Commission shall calculate the amount by adding one sixth of the annual budget
commitment related to the 2014 total annual contribution to each of the 2015 to
2020 budget commitments.
2.           By way of derogation from
the first subparagraph of paragraph 1, the deadlines for decommitment shall not
apply to the annual budget commitment related to the 2014 total annual
contribution.
3.           If the first annual budget
commitment is related to the 2015 total annual contribution, by way of
derogation from paragraph 1, the deadlines for decommitment shall not
apply to the annual budget commitment related to the total annual contribution
of 2015. In such cases, the Commission shall calculate the amount under the
first sub-paragraph of paragraph 1 by adding one fifth of the annual budget
commitment related to the 2015 total amount contribution to each of the 2016 to
2020 budget commitments.
4.           That part of commitments
still open on 31 December 2022 shall be decommitted if any of the documents
required under Article 107(1) has not been submitted to the Commission by 30
September 2023.
CHAPTER II
Clearance of accounts and closure 
Section I 
Clearance of accounts 
Article 128
Content of the annual
accounts
1.           The certified annual
accounts for each operational programme shall cover the accounting year and
shall include at the level of each priority axis:
(a)         
the total amount of eligible expenditure entered
into the accounts of the certifying authority as having been paid by
beneficiaries in implementing operations and the corresponding eligible public
support which has been paid and the total amount of public support incurred in
implementing operations;
(b)         
the amounts withdrawn and recovered during the
accounting year, the amounts to be recovered as at the end of the accounting
year, the recoveries effected pursuant to Article 61, and the irrecoverable
amounts;
(c)         
for each priority axis, the list of operations
completed during the accounting year that were supported by ERDF and Cohesion
Fund;
(d)         
for each priority axis, a reconciliation between
the expenditure stated pursuant to point (a) and the expenditure declared in
respect of the same accounting year in payment applications, accompanied by an
explanation of any differences.
2.           The certifying authority
may specify by priority axis in the accounts a provision, which shall not exceed
5 % of the total expenditure in payment applications presented for a given
accounting year, where the assessment of the legality and regularity of the
expenditure is subject to an ongoing procedure with the audit authority. The
amount covered shall be excluded from the total amount of eligible expenditure
referred to in paragraph 1(a). These amounts shall be definitively included in,
or excluded from, the annual accounts of the following year. 
Article 129
Submission of information
For each year from 2016 until and including
2022, the Member State shall submit the documents referred to in Article 75(1).

Article 130
Annual clearance of
accounts
1.           For the purposes of
calculating the amount chargeable to the Funds for an accounting year, the
Commission shall take into account:
(a)     the total amount of expenditure
entered into the accounts referred to in Article 128(1)(a), to which shall be
applied the co-financing rate for each priority axis;
(b)     the total amount of payments made by
the Commission during that accounting year, consisting of:
(i)      the amount of interim payments paid
by the Commission in accordance with Article 120(1) and Article 22; and 
(ii)      the amount of the annual
pre-financing paid under Article 124(2).
2.           The annual balance which,
as a result of the clearance of accounts, is recoverable from the Member State
shall be subject to a recovery order of the Commission. The annual balance
payable to the Member State shall be added to the next interim payment made by
the Commission following the clearance of accounts.
3.           If, for reasons
attributable to a Member State, the Commission is not in a position to clear
the accounts by 30 April of the year following the end of an accounting year,
the Commission shall notify the Member State of the actions that must be
undertaken by the managing authority or audit authority, or of the additional
enquiries the Commission proposes to undertake pursuant to Article 65(2) and
(3).
4.           Payment of the annual
balance by the Commission shall be based on the expenditure declared in the
accounts, net of any provision made in respect of expenditure declared to the
Commission which is subject to a contradictory procedure with the audit
authority.
Article 131
Rolling Closure
1.           For the ERDF and the
Cohesion Fund, the annual accounts for each operational programme shall include
at the level of each priority axis the list of operations completed during the
accounting year. The expenditure relating to these operations included in the
accounts subject to the clearance decision shall be considered as closed.
2.           For the ESF, the
expenditure included in the accounts that are subject to a clearance decision
shall be considered as closed.
Article 132
Availability of documents
1.           Without prejudice to the
rules governing State aid, the managing authority shall ensure that all
supporting documents on operations are made available to the Commission and the
European Court of Auditors upon request for a period of three years. This three
year period shall run from 31 December of the year of the clearance of accounts
decision pursuant to Article 130 or, at the latest, from the date of payment of
the final balance.
This three year period shall be interrupted
either in the case of legal or administrative proceedings or by a duly
justified request of the Commission.
2.           The documents shall be
kept either in the form of the originals, or certified true copies of the
originals, or on commonly accepted data carriers including electronic versions
of original documents or documents existing in electronic version only.
3.           The documents shall be
kept in a form which permits identification of data subjects for no longer than
is necessary for the purposes for which the data were collected or for which
they are further processed.
4.           The Commission shall be
empowered to adopt delegated acts in accordance with Article 142 to set out
which data carriers can be considered as commonly accepted.
5.           The procedure for
certification of conformity of documents held on commonly accepted data
carriers with the original document shall be laid down by the national
authorities and shall ensure that the versions held comply with national legal
requirements and can be relied on for audit purposes.
6.           Where documents exist in
electronic version only, the computer systems used must meet accepted security
standards that ensure that the documents held comply with national legal
requirements and can be relied on for audit purposes.

Section II 
Closure of operational programmes 
Article 133
 Submission of closure
documents and payment of the final balance
1.           Member States shall submit
the following documents by 30 September 2023:
(a)         
an application for payment of the final balance;
(b)         
a final implementation report for the
operational programme; and
(c)         
the documents referred to in Article 75(1) for
the final accounting year, from 1 July 2022 to 30 June 2023. 
2.           The final balance shall be
paid no later than three months after the date of clearance of accounts of the
final accounting year or one month after the date of acceptance of the final
implementation report, whichever date is later.
Section III
suspension of payments
Article 134
 Suspension of payments
1.           All or part of the interim
payments at the level of priority axes or operational programmes may be
suspended by the Commission where: 
(a)         
there is a serious deficiency in the management
and control system of the operational programme for which corrective measures
have not been taken; 
(b)         
expenditure in a statement of expenditure is
linked to an irregularity having serious financial consequences which has not
been corrected; 
(c)         
the Member State has failed to take the
necessary action to remedy the situation giving rise to an interruption under
Article 74;
(d)         
there is a serious deficiency in the quality and
reliability of the monitoring system or of the data on common and specific
indicators;
(e)         
 the Member State has failed to undertake
actions set out in the operational programme relating to fulfilment of an ex
ante conditionalities;
(f)           
there is evidence resulting from a performance
review that a priority axis has failed to achieve the milestones set out in the
performance framework;
(g)         
the Member State fails to respond or does not
reply satisfactorily under Article 20(5);
(h)         
one of the cases set out in Article 21(6)(a) to
(e) applies.
2.           The Commission may decide,
by means of implementing acts, to suspend all or part of interim payments,
after having given the Member State the opportunity to present its
observations.
3.           The Commission shall end
suspension of all or part of interim payments where the Member State has taken
the necessary measures to enable the suspension to be lifted. 

CHAPTER III
Financial corrections
Section I
Financial corrections by Member States
Article 135
 Financial corrections by Member States
1.           The
Member States shall in the first instance be responsible
for investigating irregularities and for making the financial corrections
required and pursuing recoveries. In the
case of a systemic irregularity, the Member State shall extend its
investigation to cover all operations potentially affected.
2.           The
Member State shall make the financial corrections required in connection with individual or
systemic irregularities
detected in operations or operational programmes. Financial corrections shall consist of
cancelling all or part of the public contribution to an
operation or operational programme. The Member State shall take into account
the nature and gravity of the irregularities
and the financial loss to the Funds and shall apply a proportionate
correction. Financial corrections shall be recorded in the annual accounts by
the managing authority for the accounting year in which the cancellation is
decided.    
3.           The
contribution from the Funds cancelled in accordance with paragraph 2 may be reused by the Member State within the operational programme concerned,
subject to paragraph 4.
4.           The contribution cancelled
in accordance with paragraph 2 may not be reused for any operation that was the subject of the correction or, where a
financial correction is made for a systemic irregularity, for any operation affected by the systemic irregularity.
Section II
Financial corrections by the Commission
Article 136
 Criteria for financial corrections
1.           The Commission shall make
financial corrections by means of implementing acts by cancelling all or part of
the Union contribution to an operational programme in accordance with Article
77 where, after carrying out the necessary examination, it concludes that:
(a)     there is a serious deficiency in the
management and control system of the operational programme which has put at
risk the Union contribution already paid to the operational programme;
(b)     the Member State has not complied with
its obligations under Article 135 prior to the opening of the correction
procedure under this paragraph;
(c)     expenditure contained in a payment
application is irregular and has not been corrected by the Member State prior
to the opening of the correction procedure under this paragraph.
The Commission shall base its financial
corrections on individual cases of irregularity identified and shall take
account of whether an irregularity is systemic. When it is not possible to
quantify precisely the amount of irregular expenditure charged to the Funds,
the Commission shall apply a flat rate or extrapolated financial correction.
2.           The Commission shall, when
deciding the amount of a correction under paragraph 1, take account of the
nature and gravity of the irregularity and the extent and financial
implications of the deficiencies in management and control systems found in the
operational programme.
3.           Where the Commission bases
its position on reports of auditors other than those of its own services, it
shall draw its own conclusions regarding the financial consequences after
examining the measures taken by the Member State concerned under
Article 135(2), the notifications sent under Article 112(3), and any
replies from the Member State.
4.           Where the Commission,
based on the examination of the final implementation report of the operational
programme, establishes a serious failure to achieve the targets set out in the
performance framework, it may apply financial corrections in respect of the
priority axes concerned by means of implementing acts.
5.           When a Member State does
not comply with its obligations as referred to in Article 86, the Commission
may, in relation to the degree of non-compliance with these obligations, make a
financial correction by cancelling all or part of the Structural Funds
contribution to the Member State concerned.
6.           The Commission shall be
empowered to adopt delegated acts in accordance with Article 142 establishing
the criteria for establishing the level of financial correction to be applied.
Article 137
Procedure
1.           Before taking a decision
on a financial correction, the Commission shall launch the procedure by informing
the Member State of the provisional
conclusions of its examination and requesting the Member State to submit its comments within two
months.
2.           Where
the Commission proposes a financial correction on the basis
of extrapolation or a flat rate, the Member State shall be given the opportunity to demonstrate, through an examination of the documentation concerned, that the
actual extent of irregularity is less than the Commission's assessment. In agreement with the Commission, the Member State
may limit the scope of this examination to an appropriate proportion or sample of the documentation concerned. Except in
duly justified cases, the time allowed for this examination shall not exceed a further period of two months after the
two-month period referred to in paragraph 1.
3.           The
Commission shall take account of any evidence supplied by the Member State within the time
limits set out in paragraphs 1 and 2.
4.           Where
the Member State does not accept the provisional conclusions
of the Commission, the Member State shall be invited
to a hearing by the Commission, in order to ensure that all relevant
information and observations are available as a basis for conclusions by the
Commission on the application of the financial correction.
5.           In
order to apply financial corrections the Commission shall take a decision, by means of implementing acts, within six months of the date of the hearing, or of the date of receipt of
additional information where the Member State agrees to submit such additional
information following the hearing. The Commission shall take account of all
information and observations submitted during the course of the
procedure. If no hearing takes place, the six month period shall begin to run two months after the date of the letter of
invitation to the hearing sent by the Commission.
6.           Where irregularities
affecting annual accounts sent to the Commission are detected by the Commission
or by the European Court of Auditors, the resulting financial correction shall
reduce support from the Funds to the operational programme. 
Article 138
Obligations of Member
States
A financial correction by the Commission
shall not prejudice the Member State's obligation to pursue recoveries under
Article 135(2) of this Regulation and to recover State aid in the meaning
of Article 107(1) of the Treaty and under Article 14 of Council
Regulation (EC) No 659/1999[38].
Article 139
Repayment
1.           Any repayment due to be
made to the general budget of the Union shall be effected before the due date
indicated in the order for recovery drawn up in accordance with Article 73
of the Financial Regulation. The due date shall be the last day of the second
month following the issuing of the order.
2.           Any delay in effecting
repayment shall give rise to interest on account of late payment, starting on
the due date and ending on the date of actual payment. The rate of such
interest shall be one-and-a-half percentage points above the rate applied by
the European Central Bank in its main refinancing operations on the first
working day of the month in which the due date falls.

TITLE VIII
Proportional control of operational
programmes 
            Article 140
Proportional control of
operational programmes
1.           Operations for which the
total eligible expenditure does not exceed EUR 100 000 shall not be
subject to more than one audit by either the audit authority or the Commission
prior to the closure of all the expenditure concerned under Article 131. Other
operations shall not be subject to more than one audit per accounting year by
the audit authority and the Commission prior to the closure of all the
expenditure concerned under Article 131. These provisions are without prejudice
to paragraph 4. 
2.           For operational programmes
for which the most recent
audit opinion indicates that there are no significant
deficiencies, the Commission may agree with
the audit authority in the subsequent meeting referred to in Article 118(3)
that the level of audit work required may be reduced so that it is
proportionate to the risk established. In such cases, the Commission will
not carry out its own on-the-spot audits unless there is evidence suggesting deficiencies in the management
and control system affecting expenditure declared to the Commission in
an accounting year for which the accounts have been the subject of a clearance
decision.
3.           For operational programmes
for which the Commission concludes that it can rely on the opinion of the audit
authority, it may agree with the audit authority to limit its own on the spot
audits to audit the work of the audit authority unless there is evidence of
deficiencies in the work of the audit authority work for an accounting year for
which the accounts have been subject to a clearance decision. 
4.           Without prejudice to
paragraph 1, the audit authority and the Commission may carry out audits of
operations in case a risk assessment establishes a specific risk of
irregularity or fraud, in case of evidence of serious deficiencies in the
management and control system of the operational programme concerned, and,
during the 3 years following closure of all the expenditure of an operation
under Article 131, as part of an audit sample. The Commission may at any time
carry out audits of operations for the purpose of assessing the work of an
audit authority by re-performance of its audit activity.

PART FOUR
DELEGATIONS OF POWER, IMPLEMENTING,
TRANSITIONAL AND FINAL PROVISIONS
CHAPTER I
Delegations of power and implementing
provisions
Article 141
Amendment of the Annexes
The Commission may adopt, by means of
delegated acts in accordance with Article 142, amendments to the Annexes I and
V to this Regulation within the scope of the relevant provisions of this
Regulation.
Article 142
Exercise of the delegation
1.           The
powers to adopt delegated acts are conferred on the Commission subject to the
conditions laid down in this Article. 
2.           The delegations of power referred to in this Regulation shall
be conferred for an indeterminate period of time from the date of entry
into force of this Regulation.
3.           The delegations of power
referred to in Article 141 may be revoked at any time by the European
Parliament or by the Council.
A decision of revocation shall put an end to
the delegation of the power specified in that decision. It shall take effect
the day following the publication of the decision in the Official Journal of
the European Union or at a later date specified therein. It shall not
affect the validity of any delegated acts already in force.
4.           As soon as it adopts a
delegated act, the Commission shall notify it simultaneously to the European
Parliament and to the Council.
5.           The delegated acts shall
enter into force only if no objection has been expressed either by the European
Parliament or the Council within a period of 2 months of notification of that
act to the European Parliament and the Council or if, before
the expiry of that period, the European Parliament and
the Council have both informed the Commission that they will not object. That
period shall be extended by 2 months at the initiative of the European
Parliament or the Council. 
If, on expiry of that period, neither the
European Parliament nor the Council has objected to the delegated act, it shall
be published in the Official Journal of the European Union and shall
enter into force at the date stated therein.
The delegated act may be published in the Official
Journal of the European Union and enter into force before the expiry of
that period if the European Parliament and the Council have both informed the
Commission of their intention not to raise objections.
If the European Parliament or the Council
objects to a delegated act, the act shall not enter into force. The institution
that objects to the delegated act shall state the reasons for its objections.
Article 143 
Committee Procedure
1.           The Commission shall be
assisted by a Coordination Committee of the Funds. That committee shall be a
committee within the meaning of Regulation (EU) No 182/2011.
2.           Where reference is made to
this paragraph, Article 4 of Regulation (EU) No 182/2011 shall apply.
3.           Where reference is made to
this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.
Where the opinion of the committee under
paragraphs 2 and 3 is to be obtained by written procedure, that procedure shall
be terminated without result when, within the time-limit for delivery of the opinion,
the chair of the committee so decides committee members so request.
Where the committee delivers no opinion, the
Commission shall not adopt the draft implementing act and the third
subparagraph of Article 5(4) of Regulation (EU) No 182/2011 shall apply.
CHAPTER II
Transitional and final provisions

Article 144
Review
The European Parliament and the Council shall review this Regulation
by 31 December 20XX in accordance with Article 177 of the Treaty. 

Article 145
Transitional provisions
1.           This Regulation shall not
affect the continuation or modification, including the total or partial
cancellation, of the projects concerned, until their closure, or of assistance
approved by the Commission on the basis of that Regulation or any other
legislation applying to that assistance on 31 December 2013.
2.           Applications made under
Council Regulation (EC) No 1083/2006 shall remain valid.
Article 146
Repeal
1.           Council
Regulation (EC) No 1083/2006 is hereby repealed with effect from 1 January
2014.
2.           References to the repealed
Regulation shall be construed as references to this Regulation.
Article 147
Entry into force
This Regulation shall enter into force on
the day following that of its publication in the Official Journal of the
European Union.
This Regulation shall be binding in its
entirety and directly applicable in all Member States.
Done at Brussels,
For the European Parliament                       For
the Council
The
President                                                 The President
ANNEX I
Method
for establishing the performance framework
1.           The performance framework
shall consist of milestones established for each priority, where appropriate,
for the years 2016 and 2018 and targets established for 2022. The milestones
and targets shall be presented in accordance with the format set out in table
1. 
Table 1: Standard format for the
performance framework
 Priority || Indicator and measurement unit, where appropriate || Milestone for 2016 || Milestone for 2018 || Target for 2022 
   ||   ||   ||   ||   
   ||   ||   ||   ||   
   ||   ||   ||   ||   
   ||   ||   ||   ||   
2.           Milestones are
intermediate targets for the achievement of the specific objective of a
priority, where appropriate, expressing the intended progress towards the
targets set for the end of the period. Milestones established for 2016 shall
include financial indicators and output indicators. Milestones established for
2018 shall include financial indicators, output indicators and where
appropriate, result indicators. Milestones may also be established for key
implementation steps. 
3.           Milestones shall be: 
–              
relevant, capturing essential information on the
progress of a priority;
–              
transparent, with objectively verifiable targets
and the source data identified and publicly available;
–              
verifiable, without imposing a disproportionate
administrative burden; 
–              
consistent across operational programmes, where
appropriate.

ANNEX II
Annual
breakdown of commitment appropriations for 2014 to 2020
[…]
ANNEX III
Additionality

1.                      
Public or equivalent structural expenditure

The figure on Gross Fixed Capital Formation
in column X-1, expressed as a share of GDP, according to Table 2 of Annex 2 of
the "Guidelines on the format and content of Stability and Convergence
Programmes"[39], will be used to
determine public or equivalent structural expenditure.

2.                      
Verification

Verifications of additionality in
accordance with Article 86(3) are subject to the following rules:
2.1       Ex-ante verification
(a)                   
When a Member State submits a Partnership
Contract, it shall provide information on the planned profile of expenditure in
the format of Table 1 below. In those Member States in which less developed and
intermediate regions cover more than 15% and less than 70% of the population,
information about the expenditure in [less developed and intermediate regions]
shall be provided in the same format. 
                Table 1
 Expenditure of the General Government as a share of GDP || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 
 P51 || X || X || X || X || X || X || X 
(b)              
Member State shall provide to the Commission
information on the main macroeconomic indicators and forecasts underlying the
level of public or equivalent structural expenditure.
(c)               
Once there is agreement by the Commission and
the Member State, Table 1 above will be included in the Partnership Contract of
the Member State concerned as the reference level of the public or equivalent
structural expenditure to be maintained in the years 2014-2020.
2.2       Mid-term verification
(a)                   
At the time of the mid-term verification, a
Member State shall be deemed to have maintained the level of public or
equivalent structural expenditure if the annual average of expenditure in the
years 2014-2017 is equal to or higher than the reference level of expenditure
set in the Partnership Contract. 
(b)              
Following the mid-term verification, the
Commission may revise, in consultation with a Member State, the reference level
of public or equivalent structural expenditure in the Partnership Contract if
the economic situation of the Member State has significantly changed since
adoption of the Partnership Contract and the change was not taken into account
when setting the reference level in the Partnership Contract. 
2.3       Ex post verification
At the time of the ex post verification,
a Member State shall be deemed to have maintained the level of public or
equivalent structural expenditure if the annual average of expenditure in the
years 2014-2020 is equal to or higher than the reference level of expenditure
set in the Partnership Contract. 

3.                      
Financial correction rates following ex post
verification

Where the Commission decides to carry out a
financial correction in accordance with Article 86(4), the rate of financial correction shall be
obtained by subtracting 3% from the difference between the reference level in
the Partnership Contract and the level achieved, expressed as a percentage of
the reference level, and then dividing the result by 10. The financial
correction shall be determined by applying that rate of financial correction to
the Funds' contribution to the Member State concerned for the less developed
and transition regions for the full programming period.
If the difference between the reference
level in the Partnership Contract and the level achieved, expressed as a
percentage of the reference level in the Partnership Contract, is 3 % or less,
no financial correction shall be made.
The financial correction shall not exceed 5
% of the Funds' allocation to the Member State concerned for the less developed and transition regions for the full
programming period.
ANNEX IV

Ex ante conditionalities
Thematic ex
ante conditionalities
 Thematic objectives || Ex ante conditionality || Criteria for fulfilment 
 1. Strengthening research, technological development and innovation (R&D target) (referred to in Article 9(1) ) || 1.1. Research and innovation: The existence of a national or regional research and innovation strategy for smart specialisation in line with the National Reform Program, to leverage private research and innovation expenditure, which complies with the features of well-performing national or regional research and innovation systems[40]. || –                         A national or regional research and innovation strategy for smart specialisation is in place that: –               is based on a SWOT analysis to concentrate resources on a limited set of research and innovation priorities; –               outlines measures to stimulate private RTD investment; –               contains a monitoring and review system. –                         A Member State has adopted a framework outlining available budgetary resources for research and innovation; –                         A Member State has adopted a multi-annual plan for budgeting and prioritization of investments linked to EU priorities (European Strategy Forum on Research Infrastructures -ESFRI). 
 2. Enhancing access to and use and quality of information and communication technologies (Broadband target) (referred to in Article 9(2) )   || 2.1. Digital growth: The existence within the national or regional innovation strategy for smart specialisation of an explicit chapter for digital growth to stimulate demand for affordable, good quality and interoperable ICT-enabled private and public services and increase uptake by citizens, including vulnerable groups, businesses and public administrations including cross border initiatives. || –                         A chapter for digital growth within the national or regional innovation strategy for smart specialisation is in place that contains: –               budgeting and prioritisation of actions through a SWOT analysis carried out in alignment with the Scoreboard of the Digital Agenda for Europe[41]; –               an analyses of balancing support for demand and supply of information and communication technologies (ICT) should have been conducted; –               measurable targets for outcomes of interventions in the field of digital literacy, skills, e-inclusion, e-accessibility, and e-health which are aligned with existing relevant sectoral national or regional strategies. –               assessment of needs to reinforce ICT capacity-building. 
 2.2. Next Generation Access (NGA) Infrastructure: The existence of national NGA Plans which take account of regional actions in order to reach the EU high-speed Internet access targets[42], focusing on areas where the market fails to provide an open infrastructure at an affordable cost and to an adequate quality in line with the EU competition and state aid rules, and provide accessible services to vulnerable groups. || –                         A national NGA Plan is in place that contains: –               a plan of infrastructure investments through demand aggregation and a mapping of infrastructure and services, regularly updated; –               sustainable investment models that enhance competition and provide access to open, affordable, quality and future proof infrastructure and services; –               measures to stimulate private investment. 
 3. Enhancing the competitiveness of small and medium-sized enterprises (SMEs)   (referred to in Article 9(3)) || 3.1. Specific actions have been carried out for the effective implementation of the Small Business Act (SBA) and its Review of 23 February 2011[43] including the "Think Small First" principle.     || –                         The specific actions include: –               a monitoring mechanism to ensure the implementation of the SBA including a body in charge of coordinating SME issues across different administrative levels (“SME Envoy”); –               measures to reduce the time to set-up business to 3 working days and the cost to €100; –               measures to reduce the time needed to get licenses and permits to take up and perform the specific activity of an enterprise to 3 months; –               a mechanism for systematic assessment of the impact of legislation on SMEs using an "SME test" while taking into account differences in the size of enterprises, where relevant. 
 3.2. Transposition into national law of Directive (2011/7/EU) of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions[44]. || –                         Transposition of that Directive in accordance with Article 12 of the Directive (by 16 March 2013). 
 4. Supporting the shift towards a low-carbon economy in all sectors   (referred to in Article 9(4))     || 4.1. Energy efficiency: Transposition into national law of Directive (2010/31/EU) of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings in accordance with Article 28 of the Directive [45]. Compliance with Article 6(1) of Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020[46]. Transposition into national law of Directive 2006/32/EC of the European Parliament and of the Council of 5 April 2006 on energy end-use efficiency and energy services[47]. Transposition into national law of Directive 2004/8/EC of the European Parliament and of the Council of 11 February 2004 on the promotion of cogeneration based on a useful demand in the internal energy market and amending Directive 92/42/EEC[48]. || –                         Implementation of minimum requirements related to the energy performance of buildings required in line with Article 3, Article 4 and Article 5 of Directive 2010/31/EU –                         Adoption of measures necessary to establish a system of certification of the energy performance of buildings in accordance with Article 11 of Directive 2010/31/EU; –                         Realisation of the required rate of renovation of public buildings; –                         Final customers are provided with individual meters; –                         Efficiency in heating and cooling is promoted according to Directive 2004/8/EC. 
 4.2. Renewable energy: Transposition into national law of Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives (2001/77/EC) and (2003/30/EC)[49].   || –                         A Member State has put in place transparent support schemes, priority in grid access and in dispatching, standard rules relating to the bearing and sharing of costs of technical adaptations which have been made public; –                         A Member State has adopted a national renewable energy action plan in accordance with Article 4 of Directive 2009/28/EC. 
 5. Promoting climate change adaptation and risk prevention (Climate change target) (referred to in Article 9(5)   || 5.1. Risk prevention and risk management: The existence of national or regional risk assessments for disaster management. taking into account climate change adaptation[50] || –                         A national or regional risk assessment shall be in place that includes: –               A description of the process, methodology, methods and non-sensitive data used for national risk assessment; –               A description of single-risk and multi-risk scenarios; –               Taking into account, where appropriate, national climate change adaptation strategies. 
 6. Protecting the environment and promoting the sustainable use of resources (referred to in Article 9(6) )   || 6.1. Water sector: The existence of a a) water pricing policy which ensures provides adequate incentives for users to use water resources efficiently and b) an adequate contribution of the different water uses to the recovery of the costs of water services, in accordance with Article 9 of Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy[51]. || –                         A Member State has ensured contribution of the different water uses to the recovery of the costs of water services by sector in accordance with Article 9 of Directive 2000/60/EC. –                         The adoption of a river basin management plan for the river basin district where investments will take place in accordance with Article 13 of Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy[52]. 1.          
 6.2. Waste sector: Implementation of Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives[53], in particular the development of waste management plans in accordance with the Directive and with the waste hierarchy.. || –                         A Member State has reported to the Commission on progress towards targets of Article 11 of Directive 2008/98/EC, reasons for failure, and intended actions to meet the targets; –                         A Member State has ensured that its competent authorities establish, in accordance with Articles 1, 4, 13 and 16 of Directive 2008/98/EC, one or more waste management plans as required by Article 28 of the Directive; –                         No later by 12 December 2013, a Member State has established, in accordance with Articles 1 and 4 of Directive 2008/98/EC, waste prevention programmes, as required by Article 29 of the Directive; –                         A Member State has taken necessary measures to achieve 2020 target on re-use and recycling in accordance with Article 11 of Directive 2008/98/EC. 
 7. Promoting sustainable transport and removing bottlenecks in key network infrastructures (referred to in Article 9(7) )   || 7.1. Road: The existence of a comprehensive national transport plan which contains an appropriate prioritisation of investments in the core Trans European Network of Transport Infrastructure (TEN-T) network, in the comprehensive network (investments other than the core TEN-T) and in secondary connectivity (including public transport at regional and local level).   || –                         A comprehensive transport plan is in place that contains: –               prioritisation of investments in the core TEN-T network, the comprehensive network and secondary connectivity. The prioritisation should take into account the contribution of investments to mobility, sustainability, the reduction of greenhouse gas emissions and contribution to the Single European transport area; –               a realistic and mature project pipeline (including timetable, budgetary framework); –               a strategic environmental assessment fulfilling the legal requirements for the transport plan; –               measures to strengthen capacity of intermediary bodies and beneficiaries to deliver the project pipeline. 
 7.2. Railway: The existence within the comprehensive national transport plan of an explicit chapter on railway development which contains an appropriate prioritisation of investments in the core Trans European Network of Transport Infrastructure (TEN-T) network, in the comprehensive network (investments other than the core TEN-T) and in secondary connectivity of the railway system according to their contributions to mobility, sustainability, national and European wide network effects. The investments cover mobile assets and interoperability and capacity building. || –                         A chapter on railway development within the comprehensive transport plan is in place that contains: 2.      a realistic and mature project pipeline (including a timetable, budgetary framework); 3.      a strategic environmental assessment fulfilling the legal requirements for the transport plan; 4.       measures to strengthen capacity of intermediary bodies and beneficiaries to deliver the project pipeline. 
 8. Promoting employment and supporting labour mobility (Employment target) (referred to in Article 9(8) )   || 8.1. Access to employment for job-seekers and inactive people, including local employment initiatives and support for g labour mobility Active labour market policies are designed and delivered in coherence with the Employment guidelines and the Broad Guidelines for the economic policies of the Member States and of the Union[54] regarding the enabling conditions for job creation.;   || –                         Employment services have the capacity to and do deliver: –               personalised services and active and preventive labour market measures at an early stage, which are open for all jobseekers; –               anticipating and counselling on long-term employment opportunities created by structural shifts in the labour market such as the shift to a low carbon economy; –               transparent and systematic information on new job vacancies. –                         Employment services have set up networks with employers and education institutes. 
 8.2. Self-employment, entrepreneurship and business creation: the existence of a comprehensive strategy for inclusive start-up support in accordance with the Small Business Act[55] and in coherence with the Employment guidelines and the Broad Guidelines for the economic policies of the Member States and of the Union[56], regarding the enabling conditions for job creation. || –                         A comprehensive strategy in place which will includes: –               measures to reduce the time to set up businesses to three working days and the cost to EUR 100; –               measures to reduce the time needed to get licenses and permits to take up and perform the specific activity of an enterprise business to three months; –               actions linking suitable business development services and financial services (access to capital), including the outreach to disadvantaged groups and areas. 
 8.3. Modernisation and strengthening of labour market institutions , including actions to enhance transnational labour mobility[57]: - Labour market institutions are modernised and strengthened in accordance with the Employment Guidelines; - Reforms of labour market institutions will be preceded by a clear strategy and ex ante assessment including the gender dimension || –                         Actions to reform employment services, aiming at providing them the capacity to deliver[58]: –               personalised services and active and preventive labour market measures at an early stage, which are open for all jobseekers; –               counselling on long-term employment opportunities created by structural shifts in the labour market such as shift the low carbon economy; –               transparent and systematic information on new job opening accessible at Union level. –                         Reform of employment services will include the creation of networks with employers and education institutes. 
 8.4. Active and healthy ageing: Active ageing policies are designed and delivered in accordance with the Employment Guidelines[59] || –                         Actions to deliver on active and healthy ageing challenges[60]: –                         Relevant stakeholders are involved in the design and implementation of active ageing policies; –                         A Member State has measures in place to promote active ageing to reduce early retirement. 
   || 8.5. Adaptation of workers, enterprises and entrepreneurs to change: The existence of policies aimed at favouring anticipation and good management of change and restructuring at all relevant levels (national, regional, local and sectoral) [61]. || –                         Effective instruments are in place to support social partners and public authorities to develop proactive approaches towards change and restructuring. 
 9. Investing in skills, education and lifelong learning (Education target) (referred to in Article 9(10) || 9.1. Early school leaving: The existence of a comprehensive strategy to reduce early school leaving (ESL) in accordance with Council Recommendation of 28 June 2011 on policies to reduce early school leaving[62]. || –                         A system for collecting and analysing data and information on ESL at national, regional and local level is in place that: –               provides a sufficient evidence-base to develop targeted policies; –               is used systematically to monitor developments at the respective level. –                         A strategy on ESL is in place that: –               is based on evidence; –               is comprehensive (e.g. covering all educational sectors including early childhood development) and adequately addresses prevention, intervention and compensation measures; –               sets out objectives that are consistent with the Council Recommendation on policies to reduce early school leaving; –               cuts across-sectors, and involves and coordinates all policy sectors and stakeholders that are relevant to address ESL. 
 9.2. Higher education: The existence of national or regional strategies for increasing tertiary education attainment, quality and efficiency in accordance with the Communication of the Commission of 10 May 2006 on delivering on the modernisation agenda for universities: education, research and innovation[63]. || –                         A national or regional strategy for tertiary education is in place that includes: –               measures to increase participation and attainment that: –               improve guidance provided to prospective students; –               increase higher education participation among low income groups and other under-represented groups. –               increase participation by adult learners; –               (where necessary) reduce drop-out rates/improve completion rates; –               measures to increase quality that: –               encourage innovative content and programme design; –               promotes high standards of quality in teaching; –               measures to increase employability and entrepreneurship that: –               encourage the development of "transversal skills", including entrepreneurship in all higher education programmes; –               reduce gender differences in terms of academic and vocational choices and encouraging students to choose careers in sectors were they are under represented in order to reduce the gender segregation of the labour market. –               ensure informed teaching using knowledge from research and developments in business practices. 
 9.3. Lifelong learning: The existence of a national and/or regional policy framework for lifelong learning in line with Union level policy guidance[64]. || –                         A national or regional policy framework for lifelong learning is in place that contains: –               measures to support lifelong learning (LLL) implementation and skills upgrading and providing for the involvement of, and partnership with stakeholders, including social partners and civil society associations; –               measures for the effective provision of skills development for young people in vocational training, adults, women returning in the labour market, low skilled and older workers, and other disadvantaged groups; –               measures to widen access to LLL including through the effective implementation of transparency tools (European Qualifications Framework, National Qualifications Framework, European Credit system for Vocational Education and Training, European Quality Assurance in Vocational Education and Training) and the development and integration of lifelong learning services (education and training, guidance, validation); –               measures to improve the relevance of education and training and to adapt it to the needs of identified target groups. 
 10. Promoting social inclusion and combating poverty (poverty target) (referred to in Article 9(9) )   || 10.1. Active inclusion Integration of marginalised communities such as the Roma : - The existence and the implementation of a national strategy for poverty reduction in accordance with Commission Recommendation of 3 October 2008 on the active inclusion of the people excluded from the labour market[65] and the Employment guidelines.                               - A national Roma inclusion strategy is in place in accordance with the EU Framework for national Roma integration strategies[66]                                               - The provision of support for relevant stakeholders in accessing the Funds. || –                         A national strategy for poverty reduction is in place that: –               is based on evidence. This requires a system for collecting and analysing data and information which provides sufficient evidence to develop policies for poverty reduction. This system is used to monitor developments; –               is in accordance with the national poverty and social exclusion target (as defined in the National Reform Programme), which includes the extension of employment opportunities for disadvantaged groups; –               contains a mapping of the territorial concentration beyond the regional/on NUTS 3 level of marginalised and disadvantaged groups including the Roma; –               demonstrates that social partners and relevant stakeholders are involved in the design of active inclusion; –               includes measures for the shift from residential to community based care; –               indicates clearly measures to prevent and combat segregation in all fields.   –                         A national Roma inclusion strategy is in place that: –               sets achievable national goals for Roma integration to bridge the gap with the general population. These targets should address, as a minimum, the four EU Roma integration goals relating to access to education, employment, healthcare and housing; –               is coherent with the National Reform Programme; –               identifies where relevant those disadvantaged micro-regions or segregated neighbourhoods, where communities are most deprived, using already available socio-economic and territorial indicators (i.e. very low educational level, long-term unemployment, etc). –               allocates a sufficient funding from national budgets, which will be complemented, where appropriate, by international and EU funding. –               includes strong monitoring methods to evaluate the impact of Roma integration actions and a review mechanism for the adaptation of the strategy. –               is designed, implemented and monitored in close cooperation and continuous dialogue with Roma civil society, regional and local authorities. –               contains a national contact point for the national Roma integration strategy with the authority to coordinate the development and implementation of the strategy. –                         Relevant stakeholders are provided support for submitting project applications and for implementing and managing the selected projects 
 10.2. Health: The existence of a national or regional strategy for health ensuring access to quality health services and economic sustainability. || –                         A national or regional strategy for health is in place that: –               Contains coordinated measures to improve access to quality health services; –               contains measures to stimulate efficiency in the health sector, including through deployment of effective innovative: technologies, service delivery models and infrastructure; –               contains a monitoring and review system. –                         A Member State or region has adopted a framework outlining available budgetary resources for health care. 
 11. Enhancing institutional capacity and efficient public administration (referred to in Article 9(11) )   || Member States administrative efficiency: - The existence of a strategy for reinforcing the Member Status's administrative efficiency including public administration reform[67]   || –                         A strategy for reinforcing a Member States' administrative efficiency is in place and in the process of being implemented[68] the strategy includes: –               an analysis and strategic planning of legal, organisational and/or procedural reform actions; –               the development of quality management systems; –               integrated actions for simplification and rationalisation of administrative procedures; –               the development and implementation of human resources strategies and policies covering the recruitment plans and career paths of staff, competence building and resourcing; –               the development of skills at all levels; –               the development of procedures and tools for monitoring and evaluation. 
General ex-ante conditionalities
 Area || Ex-ante conditionality || Criteria for fulfilment 
 1. Anti-discrimination   || The existence of a mechanism which ensures effective implementation and application of Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation[69] and Directive 2000/43/EC of 29 June 2000 implementing the principle of equal treatment between persons irrespective of racial or ethnic origin[70] || –                         Effective implementation and application of the EU Directive 2000/78/EC and Directive 2000/43/EC on non-discrimination is ensured through: –               institutional arrangements for the implementation, application and supervision of the EU directives on non-discrimination; –               a strategy for training and dissemination of information for staff involved in the implementation of the funds; –               Measures to strengthen administrative capacity for implementation and application of the EU directives on non-discrimination. 
 2. Gender equality     || The existence of a strategy for the promotion of gender equality and a mechanism which ensures its effective implementation. || –                         Effective implementation and application of an explicit strategy for the promotion of gender equality is ensured through: –               a system for collecting and analyzing data and indicators broken down by sex and to develop evidences-based gender policies; –               a plan and ex-ante criteria for the integration of gender equality objectives through gender standards and guidelines; –               Implementation mechanisms including involvement of a gender body and the relevant expertise to draft monitor and evaluate the interventions. 
 3. Disability || The existence of a mechanism which ensures effective implementation and application of the UN Convention on the rights of persons with disabilities. [71]   || –                         Effective implementation and application of the UN Convention on the rights of persons with disabilities is ensured through: –               Implementation of measures in line with Article 9 of the UN Convention to prevent, identify and eliminate obstacles and barriers to accessibility of persons with disabilities; –               institutional arrangements for the implementation and supervision of the UN Convention in line with Article 33 of the Convention; –               a plan for training and dissemination of information for staff involved in the implementation of the funds; –               measures to strengthen administrative capacity for implementation and application of the UN Convention including appropriate arrangements for monitoring compliance with accessibility requirements. 
 4.. Public procurement || The existence of a mechanism which ensures effective implementation and application of Directives 2004/18/EC and 2004/17/EC and their adequate supervision and surveillance.   || –                         Effective implementation and application of Directives 2004/18/EC and 2004/17/EC is ensured through: –               complete transposition of Directives 2004/18/EC and 2004/17/EC; –               institutional arrangements for the implementation, application and supervision of EU public procurement law; –               measures which ensure adequate supervision and surveillance of transparent contract award procedures and adequate information thereon; –               a strategy for training and dissemination of information for staff involved in the implementation of the funds; –               Measures to strengthen administrative capacity for implementation and application of EU public procurement law. 
 5. State aid || The existence of a mechanism which ensures effective implementation and application of EU State aid law   || –                         Effective implementation and application of EU State aid law is ensured through: –               institutional arrangements for the implementation, application and supervision of EU State aid law; –               a strategy for training and dissemination of information for staff involved in the implementation of the funds; –               measures to strengthen administrative capacity for implementation and application of EU State aid rules. 
 6. Environmental legislation relating to Environmental Impact Assessment (EIA)and, Strategic Environmental Assessment (SEA) || The existence of a mechanism which ensures the effective implementation and application of Union environmental legislation related to EIA and SEA in accordance with Directive (85/337/EEC) of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment[72] and with Directive (2001/42/EC) of 27 June 2001 on the assessment of the effects of certain plans and programmes on the environment[73].   || –                         Effective implementation and application of Union environmental legislation is ensured through: –               complete and correct transposition of EIA and SEA directives; –               institutional arrangements for the implementation, application and supervision of EIA and SEA Directives; –               a strategy for training and dissemination of information for staff involved in the implementation of EIA and SEA Directives; –               measures to ensure sufficient administrative capacity. 
 7. Statistical systems and result indicators   || The existence of a statistical system necessary to undertake evaluations to assess the effectiveness and impact of the programmes.     The existence of an effective system of result indicators necessary to monitor progress towards results and to undertake impact evaluation.   || –                         A multi-annual plan for timely collection and aggregation of data is in place that includes: –               the identification of sources and mechanisms to ensure statistical validation; –               arrangements for publication and public availability. –               an effective system of results indicators including: –               the selection of result indicators for each programme providing information on those aspects of the well-being and progress of people that motivate policy actions financed by the programme; –               the establishment of targets for these indicators; –               the respect for each indicator of the following requisites: robustness and statistical validation, clarity of normative interpretation, responsiveness to policy, timely collection and public availability of data; –               adequate procedures in place to ensure that all operations financed by the programme adopt an effective system of indicators. 
ANNEX V
Information
and communication on support from the Funds

1.                      
List of operations 

The list of operations referred to Article
105(2) shall contain, in at least one of the official languages of the Member
State, the following data fields: 
–                        
Beneficiary name (only legal entities; no
natural persons shall be named);
–                        
Operation name; 
–                        
Operation summary; 
–                        
Operation start date;
–                        
Operation end date (expected date for physical
completion or full implementation of the operation);
–                        
Total eligible expenditure allocated to the
operation;
–                        
EU co-financing rate (as per priority axis);
–                        
Operation postcode;
–                        
Country;
–                        
Name of category of intervention for the operation;

–                        
Date of last update of the list of operations.
The headings of the data fields and the
names of the operations shall be also provided in at least one other official
language of the European Union.

2.                      
Information and publicity measures for the public

The Member State, the managing authority
and the beneficiaries shall take the steps necessary to provide information and
publicity to the public on operations supported by an operational programme in
accordance with this Regulation.

2.1.                
Responsibilities of the Member State and the
managing authority

1.           The Member State and the
managing authority shall ensure that the information and publicity measures are
implemented in accordance with the communication strategy and that these
measures aim at the widest possible media coverage using various forms and
methods of communication at the appropriate level. 
2.           The Member State or the
managing authority shall be responsible for organising at least the following
information and publicity measures:
(a)         
a major information activity publicising the
launch of the operational programme;
(b)         
at least one major information activity a year
which promotes the funding opportunities and the strategies pursued and
presents the achievements of the operational programme, including, where relevant,
major projects, joint action plans and other project examples; 
(c)         
displaying the flag of the European Union in
front of, or at a place visible to the public, at the premises of each managing
authority;
(d)         
publishing electronically the list of operations
in accordance with section 1;
(e)         
giving examples of operations, by operational
programme, on the single website or on the operational programme's website that
is accessible through the single website portal; the examples should be in a
widely spoken official language of the European Union other than the official
language or languages of the Member State concerned;
(f)           
updating information about the operational programme's implementation,
including its main achievements, on the single website
or on the operational programme's website that is accessible through the single
website portal. 
3.           The managing authority
shall involve in information and publicity measures, in accordance with
national laws and practices, the following bodies:
(a)         
the partners referred to in Article 5;
(b)         
information centres on Europe, as well as
Commission representation offices in the Member States;
(c)         
educational and research institutions.
These bodies shall widely disseminate the
information described in Article 105(1)(a) and (b).

2.2.                
Responsibilities of the beneficiaries

1.           All information and
communication measures provided by the beneficiary shall acknowledge support
from the Funds to the operation by displaying:
(a)         
the EU emblem in accordance with the technical
characteristics laid down in the implementing act adopted by the Commission
under Article 105(4), together with a reference to the European Union;
(b)         
a reference to the Fund or Funds supporting the
operation. 
2.           During implementation of
an operation, the beneficiary shall inform the public about the support
obtained from the Funds by:
(a)         
providing on the beneficiary's website, where
such a website exists, a short description of the operation, including its aims
and results, and highlighting the financial support from the European Union; 
(b)         
placing at least one poster with information
about the project (minimum size A3), including the financial support from the
European Union, at a location readily visible to the public, such as the
entrance area of a building.
3.           For operations supported
by the ESF, and in appropriate cases for operations supported by the ERDF or
Cohesion Fund, the beneficiary shall ensure that those taking part in an
operation have been informed of this funding. 
Any document, including any attendance or other
certificate, concerning such an operation shall include a statement to the
effect that the operational programme was supported by the Fund or Funds.
4.           During implementation of
an ERDF or Cohesion Fund operation, the beneficiary shall put up, at a location
readily visible to the public, a temporary billboard of a significant size for
each operation consisting in the financing of infrastructure or construction
operations for which the total public support to the operation exceeds EUR 500
000.
5.           No later than three months
after completion of an operation, the beneficiary shall put up a permanent
plaque or billboard of significant size at a location readily visible to the
public for each operation that fulfils the following criteria:
(a)         
the total public support to the operation
exceeds EUR 500 000;
(b)         
the operation consists in the purchase of a
physical object or in the financing of infrastructure or of construction
operations.
The plaque or billboard shall state the type,
name and purpose of the operation and shall be prepared in accordance with the
technical characteristics adopted by the Commission in accordance with Article
105(4).

3.                      
Information measures for potential beneficiaries and
beneficiaries 
3.1.                
Information measures for potential beneficiaries

1.           The managing authority
shall ensure, in accordance with the communication strategy, that the
operational programme's strategy, objectives and funding opportunities offered
by joint support from the European Union and the Member State, are disseminated
widely to potential beneficiaries and all interested parties, with details of
the financial support from the Funds concerned.
2.           The managing authority
shall ensure that potential beneficiaries are informed on at least the
following:
(a)         
the conditions of eligibility of expenditure to
be met in order to qualify for support under an operational programme; 
(b)         
a description of the procedures for examining
applications for funding and of the time periods involved;
(c)         
the criteria for selecting the operations to be
supported;
(d)         
the contacts at national, regional or local
level that are able to provide information on the operational programmes;
(e)         
that applications should propose communication
activities, proportional to the size of the operation, in order to inform the
public about the operation's aims and the EU support to the operation.

3.2.                
Information measures for beneficiaries 

1.           The managing authority
shall inform beneficiaries that acceptance of funding constitutes an acceptance
of their inclusion in the list of operations published in accordance with
Article 105(2).
2.           The managing authority
shall provide information and publicity kits, including templates in electronic
format, to help beneficiaries to meet their obligations set out in section 2.2.

4.                      
Elements of the communication strategy

The
communication strategy drawn up by the managing authority shall include at
least the following elements:
(a)                   
a description of the approach taken, including
the main information and publicity measures to be taken by the Member State or
the managing authority aimed at potential beneficiaries, beneficiaries,
multipliers and the wider public, having regard to the aims described in Article
105;
(b)              
a description of materials that will be made
available in formats accessible for people with disabilities;
(c)               
a description of how beneficiaries will be supported
in their communication activities;
(d)              
the indicative budget for implementation of the
strategy;
(e)               
a description of the administrative bodies,
including the staff resources, responsible for implementing the information and
publicity measures;
(f)                
the arrangements for the information and
publicity measures referred to in section 2, including the website or website
portal at which such data may be found;
(g)                   
an indication of how the information and
publicity measures shall be assessed in terms of visibility and awareness of
policy, operational programmes and operations, and of the role played by the
Funds and the European Union;
(h)               
where appropriate, a description of the use of
the main results of the previous operational programme;
(i)                 
an annual update setting out the information and
communication activities to be carried out.
LEGISLATIVE FINANCIAL
STATEMENT
1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE 
              1.1.    Title of the proposal/initiative 
              1.2.    Policy
area(s) concerned in the ABM/ABB structure
              1.3.    Nature
of the proposal/initiative 
              1.4.    Objective(s)

              1.5.    Grounds
for the proposal/initiative 
              1.6.    Duration
and financial impact 
              1.7.    Management
method(s) envisaged 
2.           MANAGEMENT MEASURES 
              2.1.    Monitoring
and reporting rules 
              2.2.    Management
and control system 
              2.3.    Measures
to prevent fraud and irregularities 
3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE 
              3.1.    Heading(s)
of the multiannual financial framework and expenditure budget line(s) affected 
              3.2.    Estimated
impact on expenditure 
              3.2.1. Summary of estimated impact on expenditure 
              3.2.2. Estimated
impact on operational appropriations 
              3.2.3. Estimated
impact on appropriations of an administrative nature
              3.2.4. Compatibility
with the current multiannual financial framework
              3.2.5. Third-party
participation in financing 
              3.3.    Estimated impact on revenue
LEGISLATIVE FINANCIAL STATEMENT

1.                      
FRAMEWORK OF THE PROPOSAL/INITIATIVE 
1.1.                
Title of the proposal/initiative 

Proposal for a Regulation of the European Parliament and of the
Council laying down certain common provisions on the European Regional
Development Fund, the European Social Fund, the Cohesion Fund, the European
Agricultural and Rural Development Fund and the European Maritime and Fisheries
Fund covered by the Common Strategic Framework and laying down general
provisions on the European Regional Development Fund, the European Social Fund
and the Cohesion Fund and repealing Regulation (EC) No 1083/2006

1.2.                
Policy area(s) concerned in the ABM/ABB
structure[74] 

13.Regional policy, ABB activities 13 03 (European Regional Development
Fund and other regional operations); 13 04 Cohesion Fund
4. Employment and social affairs, ABB activity 04 02 (European
Social Fund)

1.3.                
Nature of the proposal/initiative 

■ The proposal/initiative relates to a new action 
¨ The proposal/initiative
relates to a new action following a pilot project/preparatory action[75]

¨ The
proposal/initiative relates to the extension of an existing action 
¨ The
proposal/initiative relates to an action redirected towards a new action 

1.4.                
Objectives
1.4.1.          
The Commission's multiannual strategic
objective(s) targeted by the proposal/initiative 

The objective of Cohesion Policy is to reduce disparities between
the levels of development of the various regions, in particular for rural
areas, areas affected by industrial transition, and regions which suffer from
severe and permanent natural or demographic handicaps and to contribute to
achieving the targets set out in the Europe 2020 strategy of smart, sustainable
and inclusive growth, and in particular towards the achievement of quantitative
headline targets identified in that strategy.

1.4.2.          
Specific objective(s) and ABM/ABB activity(ies)
concerned 

The ERDF aims to strengthen economic, social and territorial
cohesion in the European Union by co-financing investments in Member States,
while the ESF promotes employment, education and social inclusion. 
The Cohesion Fund helps Member States to make investments in
transport networks and the environment. 
The specific objectives of intervention by the Funds are as follows:
-        strengthening research, technological development and
innovation
-         enhancing
accessibility to and use and quality of information and communication
technologies
-        enhancing the competitiveness of small and medium-sized
enterprises and the agricultural sector (for EAFRD) and fisheries and
aquaculture sector (for the EMFF) 
-        supporting the shift towards a low-carbon economy in all
sectors;
-        promoting climate change adaptation and risk prevention and
management;
-        protecting the environment and promoting resource
efficiency;
-        promoting sustainable transport and removing bottlenecks in
key network infrastructures 
-        promoting employment and supporting labour mobility 
-        promoting social inclusion and combating poverty 
-        investing in education, skills and lifelong learning 
-        enhancing institutional capacity and an efficient public
administration
ABM/ABB activities concerned:
13 03: European Regional Development Fund and other regional
interventions
13 04: Cohesion Fund
04 02: European Social Fund

1.4.3.          
Expected result(s) and impact

Specify the effects
which the proposal/initiative should have on the beneficiaries/groups targeted.
Cohesion Policy makes a significant contribution to spreading growth
and prosperity across the Union delivering European policy objectives, while
reducing economic, social and territorial disparities.

1.4.4.          
Indicators of results and impact 

Specify the
indicators for monitoring implementation of the proposal/initiative.
The Commission proposes a common set of output indicators which can
be aggregated at the EU level. The common output indicators are contained in
Annexes to the Fund-specific regulations. Result indicators will be compulsory
for all programmes and all priorities. The impacts of the programmes will be
evaluated against the objectives and targets of the Europe 2020 strategy, and
GDP and unemployment indicators where appropriate.

1.5.                
Grounds for the proposal/initiative 
1.5.1.          
Requirement(s) to be met in the short or long
term

The Union shall promote economic, social and territorial cohesion
and solidarity among Member States. The proposal sets the frame for cohesion
policy in the next funding period 2014-2020. 

1.5.2.          
Added value of EU involvement

EU action is justified both on the grounds of the objectives laid
out in Article 174 of the Treaty and on the subsidiarity principle. The
right to act is constituted by Article 3 of the Treaty on European Union, which
states that "[the Union] shall promote economic, social and territorial
cohesion and solidarity among Member States", as well as by Article 175 of
the TFEU which explicitly requests the Union to implement this policy by means
of Structural Funds, and Article 177 which defines the role of the Cohesion
Fund. The aims of European Social Fund (ESF), European Regional Development
Fund (ERDF) and Cohesion Fund (CF) are defined in Articles 162, 176 and 177.
More details on the added value of EU involvement can be found in the related
Impact Assessment.
As the EU Budget Review has highlighted, the
"EU budget should be used to finance EU public goods, actions that Member
States and regions cannot finance themselves, or where it can secure better
results".[76] The legal proposal will
respect the principle of subsidiarity as the tasks of the Funds are set out in
the Treaty and the policy is implemented in accordance with the principle of
shared management and respecting the institutional competencies of Member
States and regions. 

1.5.3.          
Lessons learned from similar experiences in the
past

A summary can be found in the Impact Assessment accompanying the
proposal. 

1.5.4.          
Coherence and possible synergy with other
relevant instruments

A Common Strategic Framework will be established. This will
translate the objectives and priorities of Europe 2020 into investment
priorities for the ERDF, CF, ESF, EAFRD and the EMFF which will ensure an integrated
use of the funds to deliver common objectives. The common strategic framework
will also set out coordination mechanisms with other relevant Union policies
and instruments. 

1.6.                
Duration and financial impact 

¨ Proposal/initiative of limited
duration 
–     
¨  Proposal/initiative in effect from 01/01/2014 to 31/12/2020 
–     
¨  Financial impact from 2014 to 2023 
¨ Proposal/initiative of unlimited
duration
·      Implementation with a start-up period from YYYY to YYYY,
·      followed by full-scale operation.

1.7.                
Management mode(s) envisaged[77]

¨ Centralised direct management by the Commission 
¨ Centralised indirect management with the delegation of implementation tasks to:
·      ¨  executive
agencies
·      ¨  bodies set
up by the Communities[78]
·      ¨  national
public-sector bodies/bodies with public-service mission
–     
¨  persons entrusted with the implementation of specific actions
pursuant to Title V of the Treaty on European Union and identified in the
relevant basic act within the meaning of Article 49 of the Financial Regulation

■ Shared management with
the Member States 
¨ Decentralised management with third countries 
¨ Joint management with international organisations (to be specified)
If more than one
management mode is indicated, please provide details in the
"Comments" section.
Comments 
.
.

2.                      
MANAGEMENT MEASURES 
2.1.                
Monitoring and reporting rules 

Specify frequency
and conditions.
The monitoring system will be based on a system of shared
management. Monitoring Committees set up for each operational programme and
annual implementation reports for each operational programme will be at the
heart of the approach. Monitoring Committees will meet at least once per year.
Annual review meetings between the Commission and Member States complement the
system. 
In addition to the implementation reports for each operational
programme progress reports in 2017 and 2019 will focus on strategic issues at
Member State level. Based on this, the Commission will prepare strategic
reports in 2017 and 2019.
The monitoring and reporting system will be based on output and
result indicators. The proposals set out a set of common indicators that will
be used for the aggregation of information at an EU level. At key points of the
implementation period (2017 and 2019), additional analytical requirements on the
progress of programmes are part of the annual implementation reports. The
monitoring and reporting system fully uses the potential of electronic data
transfers.
Evaluation arrangements shall be put in place to evaluate the
effectiveness, efficiency and the impact of the policy, especially with regard
to the EU2020 headline targets and other relevant impact indicators. 

2.2.                
Management and control system 
2.2.1.          
Risk(s) identified 

Since 2007 the European Court of Auditors ('the Court') has reported
in its annual report an estimated error rate for Cohesion Policy as a whole for
each budget year (2006-2009) based on an independent, annual, random sample of
transactions. 
The Court's estimated level of error for Cohesion Policy has been
high compared to other policy groups of the EU budget in these years, and has
varied around 5%-10% of expenditure for the current programming period. However
the error rate provided by the Court applies to interim payments submitted by
Member States which are reimbursed by the Commission before all controls
foreseen for 2007-2013 programmes have been carried out at national and
Community level. 
Under current rules, interim payments are certified by the
Certifying Authority to the Commission after management desk checks on all
expenditure claimed by beneficiaries have been carried out, but frequently
before on the spot in-depth management checks or subsequent audit activities.
Therefore the multiannual financing arrangements mean that controls are carried
out before but also after the audit work is done by the European Court of
Auditors, and the residual error after all controls have been completed can be
significantly lower that the error rate detected by the Court. On the basis of
past experience, the residual error at the end of the programming once all
controls have been completed is estimated to be in the range of 2-5%.
A number of measures have been foreseen in the proposals to reduce
the error rate linked to the interim payments made by Commission (the error
rate reported by the European Court of Auditors):
1) Interim payments by the Commission will be capped at 90% of
the amount due to Member States, as at this point only part of the national
controls have been carried out. The remaining balance will be paid
following the annual clearance of accounts once audit evidence and reasonable
assurance has been provided by the managing authority and the audit authority.
Any irregularities detected by the Commission or the European Court of Auditors
after the transmission of annual certified accounts by the managing/certifying
authority will lead to a net correction. This will provide greater incentives
to Member States to ensure the regularity of expenditure certified to the
Commission compared to the present approach which allows for more extensive
recycling of recovered funds throughout the lifetime of programmes.
2) Introduction of an annual clearance of accounts and of an
annual closure of completed operations or expenditure, which will create
additional incentives for national and regional authorities to undertake
quality controls in a timely manner in view of the annual certification of
accounts to the Commission. This constitutes a reinforcement of present
financial management arrangements and offers better assurance that irregular
expenditure is excluded from the accounts on annual basis rather than at the
end of the programming period. 
It is expected that the measures outlined above (the new
reimbursement system, annual clearance and closure and definitive net
corrections by the Commission) will reduce the error rate below 5%, and that
the final residual error rate at closure of programmes will be closer to the 2%
materiality threshold applied by the European Court of Auditors. 
This estimation is nevertheless subject to the capacity of the Commission
and Member States to address the principal risks outlined below.
An analysis of errors reported by the Court and the Commission in
the last five years shows that the principal errors found are concentrated
in a limited number of programmes in some Member States. The error rates
based on statistical samples reported by audit authorities also demonstrate
substantial variation between different programmes and thus support this
analysis. The proposal to focus audit activities and resources to high risk
programmes, and to allow proportionate control measures for programmes with
effective control systems, would address the principal risks in a more
effective manner and lead to a more efficient use of existing audit resources
both at national and Commission level. The possibility to benefit from
proportionate arrangements in relation to the situation of each programme can
in itself introduce incentives for more effective control measures. 
The analysis of errors that have remained undetected by the national
management and control systems and thus have been identified by the Court in
its 2006-2009 audits also shows a concentration of risks in the following
categories:
For ERDF and the Cohesion Fund, public
procurement errors have contributed approximately to 41% of the cumulative
quantifiable errors found. Errors related to eligibility accounted for
39% and included various types of errors such as errors in project
selection, funding of ineligible categories of costs, costs falling outside the
eligibility period or eligible area, miscalculation of co-financing rates,
financing of ineligible VAT etc. Weaknesses in the audit trail accounted
for 11% of quantifiable errors (with the proportion decreasing over time due to
reinforced management controls), and errors linked to the complex issue of revenue
generating projects (revenues not deducted or calculated incorrectly and
thus the co-financing rate was too high) accounted for 6% of quantifiable
errors reported over the period. 
For the ESF, eligibility issues have
contributed approximately to 58% of the cumulative quantifiable errors found
and encompassed in particular non-eligible participants, non-eligible
direct and indirect costs, payments after or before the eligibility
period, ineligible expenditure declared on a flat-rate basis, ineligible costs
of scholarship and public allowances, revenues not deducted when calculating
eligible expenditure or calculated incorrectly, services paid but not delivered
and ineligible VAT. Accuracy issues, that represented 7% of quantifiable
errors reported, concerned incorrect allocation of direct and indirect
costs, unduly justified overhead allocation method, mistakes in
calculation of expenses, non-respect of the real cost principle,
over-declaration of costs, incorrect calculation of co-financing rates and
finally multiple declaration of staff costs. Audit trail issues contributed
to 35% of errors and referred to the absence of essential supporting documents,
in particular at the level of beneficiaries.
Although the Commission is undertaking a number of actions with the
Member States to reduce these errors, it is anticipated that, pending adoption
of the current proposal and their proper implementation in the Member States,
these errors could remain potential risk areas in the next programming period
2014-2020.
Errors related to public procurement in particular are a major
source of errors that may be estimated to an error rate of approximately 2%-4%
each year on average for the current programming period. Proposals put forward
under Cohesion Policy will ensure more effective controls, however to achieve a
substantial reduction in the error rate under Cohesion Policy, it is important
that these actions are complemented by a clarification and simplification of
public procurement rules. In the absence of streamlined public procurement
procedures, and if public administrations and beneficiaries in the Member
States are unable to improve the implementation of these rules, Cohesion Policy
would continue to be systematically affected by this part of the current error
rate. The current revision of the Directive on public procurement should
therefore provide an opportunity to contribute to a reduction of errors in
Cohesion Policy along the lines indicated above.

2.2.2.          
Control method(s) envisaged 

The proposed architecture of the management and control systems
represents an evolution of the set-up in place in 2007-2013 and preserves most
of the functions carried out in the current period including administrative and
on-the spot verifications, audits of management and control systems and audits
of operations. It also maintains the role of the Commission, along with the
possibility for interruptions, suspensions and financial corrections by the
Commission.
In order to reinforce accountability, programme authorities would be
accredited by a national accrediting body in charge of their ongoing
supervision. The proposal offers the flexibility to keep the current
architecture of three key authorities by programme in cases where the current
system has been proven to be effective. However it also offers the possibility
to merge the managing and certifying authority and thus decrease the number of
involved authorities in the Member States. A smaller number of bodies in place
would reduce the administrative burden and enhance the possibility for building
stronger administrative capacity, but also permit a clearer distribution of
responsibilities.
The costs of tasks related to control (at national and regional
level, excluding the costs of the Commission) are estimated around 2% of the
total funding administered in the period 2007-2013[79].
These costs are related to the following areas of control: 1% is derived from
national coordination and programme preparation, 82% relate to programme
management, 4% to certification and 13% to audit. 
The following proposals will increase the costs of control:
-the creation and functioning of an accrediting body (the costs of
which may be offset by the merger of the managing and certifying authorities,
if this option is selected by the Member State);
- the submission of certified annual accounts and an annual
management declaration, which implies having carried out all necessary controls
within the accounting year (which may require additional administrative
effort);
- the need for additional audit activity by the audit authorities to
audit the management declaration or the need to finish its audits and express
an audit opinion in a shorter period of time compared to the current
obligations. 
There are however also proposals which will reduce the costs of
control: 
- the option to merge the managing and certifying authorities, which
could allow the Member State to save a substantial part of the 4% of the
current costs relating to certification due to better administrative efficiency,
reduced need for coordination and reduction of the scope of audits;
-the use of simplified costs and Joint Action Plans, which reduces
administrative costs and burdens at all levels, for both administrations and
beneficiaries;
-proportionate control arrangements for management verifications and
for audits;
-annual closure, which will reduce the cost of retention of
documents for control purposes for public administrations and beneficiaries.
Therefore overall it is expected that proposals will lead to a redistribution
of control costs (remaining around 2% of the total funding managed), rather
than an increase or a reduction. It is however
anticipated that this redistribution of costs (across functions and due to the
proportionate control arrangements, also across Member States and programmes)
will enable more effective mitigation of risks and thus will lead to an error
rate below 5%. 
In addition to changes in the financial management and control
arrangement which contribute to the effective detection and early exclusion of
errors from the accounts, the proposal foresees simplification in several areas
that contributes to the prevention of errors. As
indicated above, measures proposed in these areas would address 55% of the
error rates reported for the current period. 
These measures include: 
- A more extensive use of simplified costs which reduces errors
related to financial management, eligibility rules and audit trail, and
reorients both implementation and control towards the performance of
operations.
- A greater thematic concentration of funding, which can entail a
reduction of errors stemming from the wide variety of interventions and thus a
variety of eligibility rules applied.
- Clarified rules for the selection of projects.
- A simpler, flat rate based, approach to revenue-generating
operations which will reduce the risk of errors in determining and deducting
the revenue generated by operations.
- Harmonisation, clarification and simplification of eligibility
rules with other EU financial support instruments which will reduce mistakes
made by beneficiaries who use assistance from different sources.
- A mandatory setup of electronic data management and electronic
data exchange between the administration and beneficiaries which has the
potential to curtail the error rate arising from inadequate document retention
and simplifying the administrative burden on beneficiaries.
- Annual closure of operations or expenditure, which decreases audit
trail errors by shortening the time period for document retention and avoids
the substantial build-up of administrative workload linked to the one-off
closure at the end of the programming period.
Most of the simplifications listed above also contribute to the
reduction of administrative burden for beneficiaries and thus represent a simultaneous
reduction of risks of error and of administrative burden. 

2.3.                
Measures to prevent fraud and irregularities 

Specify existing or
envisaged prevention and protection measures.
The Structural Funds services together with OLAF have put in place a
Joint Fraud Prevention Strategy which foresees a series of actions to be
carried out by the Commission and the Member States to prevent fraud in
structural actions under shared management.
Both DGs are currently developing a fraud risk scoring model which
will be used by the concerned managing authorities on 116 ESF and 60 ERDF
programmes.
The recent Commission Communication on an anti-fraud strategy
(COM(2011)376 final of 24.6.2011) welcomes the existing strategy as a best
practice initiative and envisages complementary actions to it, the most
important being that the Commission proposal for 2014-2020 regulations request
Member States to put in place fraud prevention measures which are effective and
proportionate to the identified fraud risks.
The current Commission proposal includes an explicit requirement to
put in place such measures under Article 86(4)(c). This should reinforce fraud
awareness in Member States among all bodies involved in the management and
control of funds and thus reduce the risk of fraud.

3.                      
ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
3.1.                
Heading(s) of the multiannual financial
framework and expenditure budget line(s) affected 

·      Existing expenditure budget lines 
In order of
multiannual financial framework headings and budget lines.
 Heading of multiannual financial framework   || Budget line || Type of expenditure || Contribution 
 Number || Diff. ([80]) || from EFTA[81] countries || from candidate countries[82] || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation 
 1 Smart and Inclusive Growth New Headings for 2014-2020 || 04021700 ESF Convergence 04021900 ESF Compétitivité Régionale 13031600 FEDER Convergence 13031800 FEDER Compétitivité Régionale 13031900 FEDER Coopération territoriale européenne 13040200 Fonds de cohésion || Diff || NO || NO || NO || NO 
·      New budget lines requested : No
In order of multiannual financial framework
headings and budget lines.
 Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution 
 Number [Heading……………………………………..] || Diff./non-diff. || from EFTA countries || from candidate countries || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation 
 […] || [XX.YY.YY.YY] […] || […] || YES/NO || YES/NO || YES/NO || YES/NO 

3.2.                
Estimated impact on expenditure 
3.2.1.          
Summary of estimated impact on expenditure 

EUR million (to 3 decimal places)
 Heading of multiannual financial framework: || Number 1 || Smart and Inclusive growth 
 DG: REGIO and EMPL ||   ||   || Year N[83] || Year N+1 || Year N+2 || Year N+3 || Year N+4 || Year N+5 || Year N+6 || TOTAL 
  Operational appropriations (2011 prices) || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 ||   
 Number of budget line new ERDF and ESF Budget Lines || Commitments || (1) ||  36.942,785 ||  37.375,939 ||  37.758,354 ||  38.153,836 ||  38.562,407 ||  38.948,791 ||  39.333,716 || 267.075,828 
 Payments || (2) || To be calculated by DG BUDG[84] || To be calculated by DG BUDG || To be calculated by DG BUDG || To be calculated by DG BUDG || To be calculated by DG BUDG || To be calculated by DG BUDG || To be calculated by DG BUDG ||   
 Number of budget line new CF Budget Line || Commitments || (1a) ||  9.572,122 ||  9.614,264 ||  9.631,037 ||  9.702,463 ||  9.883,112 ||  10.053,301 ||  10.217,011 || 68.673,310 
 Payments || (2a) || To be calculated by DG BUDG || To be calculated by DG BUDG || To be calculated by DG BUDG || To be calculated by DG BUDG || To be calculated by DG BUDG || To be calculated by DG BUDG || To be calculated by DG BUDG ||   
 Appropriations of an administrative nature financed from the envelope for specific programmes[85] || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 
 13.01.04.01 – External Staff ERDF ||   || (3) || 3,060 || 3,060 || 3,060 || 3,060 || 3,060 || 3,060 || 3060 || 21,420 
 13.01.04.03 – External Staff CF ||   ||   || 1,340 || 1,340 || 1,340 || 1,340 || 1,340 || 1,340 || 1,340 || 9,380 
 04.01.04.01 - External Staff ESF ||   ||   || 5,000 || 5,000 || 5,000 || 5,000 || 5,000 || 5,000 || 5,000 || 35,000 
 Total external staff on former BA lines ||   ||   || 9,400 || 9,400 || 9,400 || 9,400 || 9,400 || 9,400 || 9,400 || 65,800 
 OTHER ADMIN APPROPRIATIONS FROM REGIO ||   ||   || 13,365 || 13,365 || 13,365 || 13,365 || 13,365 || 13,365 || 13,365 || 93,555   
 OTHER ADMIN APPROPRIATIONS FROM EMPL ||   ||   || 16,000 || 16,000 || 16,000 || 16,000 || 16,000 || 16,000 || 16,000 || 112,000 
 TOTAL appropriations for DG REGIO and EMPL || Commitments || =1+1a +3 ||  46.553,672 ||  47.028,968 ||  47.428,155 ||  47.895,064 ||  48.484,284 ||  49.040,857 ||  49.589,492 || 336.020,493 
 Payments || =2+2a +3 ||   ||   ||   ||   ||   ||   ||   ||   
  TOTAL operational appropriations || Commitments || (4) || 46.514,907   || 46,990,203 || 47.389,390   || 47.856,299   || 48.445,519   || 49.002,092   || 49.550,727   || 335.749,138 
 Payments || (5) ||   ||   ||   ||   ||   ||   ||   ||   
  TOTAL appropriations of an administrative nature financed from the envelope for specific programmes || (6) || 38,765 || 38,765 || 38,765 || 38,765 || 38,765 || 38,765 || 38,765 || 271,355 
 TOTAL appropriations under HEADING 1 of the multiannual financial framework || Commitments || =4+ 6 || 46.553,672   || 47.028,968   || 47.428,155   || 47.895,064   || 48.484,284   || 49.040,857   || 49.589,492   || 336.020,493   
 Payments || =5+ 6 ||   ||   ||   ||   ||   ||   ||   ||   
If more than one heading is affected by the proposal /
initiative: N/A
  TOTAL operational appropriations || Commitments || (4) ||   ||   ||   ||   ||   ||   ||   ||   
 Payments || (5) ||   ||   ||   ||   ||   ||   ||   ||   
  TOTAL appropriations of an administrative nature financed from the envelope for specific programmes || (6) ||   ||   ||   ||   ||   ||   ||   ||   
 TOTAL appropriations under HEADINGS 1 to 4 of the multiannual financial framework (Reference amount) || Commitments || =4+ 6 ||   ||   ||   ||   ||   ||   ||   ||   
 Payments || =5+ 6 ||   ||   ||   ||   ||   ||   ||   ||   
 Heading of multiannual financial framework: || 5 || " Administrative expenditure " 
EUR million (to 3 decimal places)
   ||   ||   || Year N || Year N+1 || Year N+2 || Year N+3 || Year N+4 || Year N+5 || Year N+6 || TOTAL 
 DG: REGIO || 
  Human resources || 80,187 || 80,187 || 80,187 || 80,187 || 80,187 || 80,187 || 80,187 || 561,309 
  Other administrative expenditure || 3,800 || 3,800 || 3,800 || 3,800 || 3,800 || 3,800 || 3,800 || 26,600 
 TOTAL DG REGIO || Appropriations || 83,987 || 83,987 || 83,987 || 83,987 || 83,987 || 83,987 || 83,987 || 587,909 
 739109 ||   ||   || Year N || Year N+1 || Year N+2 || Year N+3 || Year N+4 || Year N+5 || Year N+6 || TOTAL 
 DG: EMPL || 
  Human resources || 25,400 || 25,400 || 25,400 || 25,400 || 25,400 || 25,400 || 25,400 || 177,800 
  Other administrative expenditure ||   ||   ||   ||   ||   ||   ||   ||   
 TOTAL DG EMPL || Appropriations || 25,400 || 25,400 || 25,400 || 25,400 || 25,400 || 25,400 || 25,400 || 177,800 
 TOTAL appropriations under HEADING 5 of the multiannual financial framework || (Total commitments = Total payments) || 109,387 || 109,387 || 109,387 || 109,387 || 109,387 || 109,387 || 109,387 || 765,709 
EUR million (to 3 decimal places)
   ||   ||   || Year N[86] || Year N+1 || Year N+2 || Year N+3 || … enter as many years as necessary to show the duration of the impact (see point 1.6) || TOTAL 
 TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments ||  46.663,059 ||  47.138,355 ||  47.537,542 ||  48.004,451 ||  48.593,671 ||  49.150,244 ||  49.698,879 || 336.786,202 
 Payments ||   ||   ||   ||   ||   ||   ||   ||   

3.2.2.          
Estimated impact on operational appropriations 

·      ¨  The
proposal/initiative does not require the use of operational appropriations
·      ¨  The
proposal requires the use of operational appropriations, as explained below.
Cohesion policy is run by shared management. While strategic priorities are set
at the EU level, actual day-to-day management is vested in managing authorities
at national, regional and local level. While common output indicators are
proposed by the Commission, the actual output targets are proposed by these
managing authorities as part of their operational programmes, and agreed by the
Commission. It is therefore difficult to indicate targets for outputs until the
programmes are drafted, negotiated and agreed in 2013/14.
Commitment appropriations in EUR million (to 3 decimal
places)
 Indicate objectives and outputs   ò ||   ||   || Year N || Year N+1 || Year N+2 || Year N+3 || … enter as many years as necessary to show the duration of the impact (see point 1.6) || TOTAL 
 OUTPUTS 
 Type of output[87] || Average cost of the output || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Total number of outputs || Total cost 
 SPECIFIC OBJECTIVE No 1[88]… ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 - Output ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 - Output ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 - Output ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 Sub-total for specific objective N°1 ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 SPECIFIC OBJECTIVE No 2… ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 - Output ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 Sub-total for specific objective N°2 ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 TOTAL COST ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
.

3.2.3.          
Estimated impact on appropriations of an
administrative nature
3.2.3.1.    
Summary 

·      ¨  The
proposal/initiative does not require the use of administrative appropriations 
·      ¨  The
proposal requires the use of administrative appropriations, as explained below:
DG REGIO
EUR million (to 3
decimal places) 
   || Year N [89] || Year N+1 || Year N+2 || Year N+3 || Year N+4 || Year N+5 || Year N+6 || TOTAL 
 HEADING 5 of the multiannual financial framework ||   ||   ||   ||   ||   ||   ||   ||   
 Human resources REGIO || 80,187 || 80,187 || 80,187 || 80,187 || 80,187 || 80,187 || 80,187 || 561.309   
 Other administrative expenditure || 3,800 || 3,800 || 3,800 || 3,800 || 3,800 || 3,800 || 3,800 || 26,600 
 Subtotal HEADING 5 of the multiannual financial framework || 83,741 || 83,741 || 83,741 || 83,741 || 83,741 || 83,741 || 83,741 || 586,187   
 Outside HEADING 5[90] of the multiannual financial framework [91] ||   ||   ||   ||   ||   ||   ||   ||   
 Human resources REGIO || 4,4 || 4,4 || 4,4 || 4,4 || 4,4 || 4,4 || 4,4 || 30,8 
 Other expenditure of an administrative nature || 13,365 || 13,365 || 13,365 || 13,365 || 13,365 || 13,365 || 13,365 || 93,555 
 Subtotal outside HEADING 5 of the multiannual financial framework || 17,765   || 17,765   || 17,765   || 17,765   || 17,765   || 17,765   || 17,765   || 124,355   
 TOTAL || 101,506   || 101,506   || 101,506   || 101,506   || 101,506   || 101,506   || 101,506   || 710,542   
DG EMPL 
EUR million (to 3
decimal places)
   || Year N [92] || Year N+1 || Year N+2 || Year N+3 || Year N+4 || Year N+5 || Year N+6 || TOTAL 
 HEADING 5 of the multiannual financial framework ||   ||   ||   ||   ||   ||   ||   ||   
 Human resources || 25,400 || 25,400 || 25,400 || 25,400 || 25,400 || 25,400 || 25,400 || 177,800 
 Other administrative expenditure ||   ||   ||   ||   ||   ||   ||   ||   
 Subtotal HEADING 5 of the multiannual financial framework || 25,400 || 25,400 || 25,400 || 25,400 || 25,400 || 25,400 || 25,400 || 177,800 
 Outside HEADING 5[93] of the multiannual financial framework ||   ||   ||   ||   ||   ||   ||   ||   
 Human resources || 5,000 || 5,000 || 5,000 || 5,000 || 5,000 || 5,000 || 5,000 || 35,000 
 Other expenditure of an administrative nature || 16,000 || 16,000 || 16,000 || 16,000 || 16,000 || 16,000 || 16,000 || 112,000 
 Subtotal outside HEADING 5 of the multiannual financial framework || 21,000 || 21,000 || 21,000 || 21,000 || 21,000 || 21,000 || 21,000 || 147,000 
 TOTAL || 46,400 || 46,400 || 46,400 || 46,400 || 46,400 || 46,400 || 46,400 || 324,800 
 TOTAL || 148,933 || 148,933 || 148,933 || 148,933 || 148,933 || 148,933 || 148,933 || 1.042,531 

3.2.3.2.    
 Estimated requirements of human resources 

·      ¨  The
proposal/initiative does not require the use of human resources
·      ¨  The
proposal/initiative requires the use of human resources, as explained below:
Figures used for the year n are the ones for 2011.
DG REGIO: 
Estimate to be expressed in full amounts
(or at most to one decimal place)
   || Year N || Year N+1 || Year N+2 || Year N+3 || Year N+4 || Year N+5 || Year N+6 
  Establishment plan posts (officials and temporary agents) REGIO || 
 13 01 01 01 (Headquarters and Commission’s Representation Offices) || 606 || 606 || 606 || 606 || 606 || 606 || 606 
 13 01 01 02 (Delegations) ||   ||   ||   ||   ||   ||   ||   
 13 01 05 01 (Indirect research) ||   ||   ||   ||   ||   ||   ||   
 10 01 05 01 (Direct research) ||   ||   ||   ||   ||   ||   ||   
  External personnel (in Full Time Equivalent unit: FTE)[94] REGIO || 
 13 01 02 01 (CA, INT, SNE from the "global envelope") || 48 || 48 || 48 || 48 || 48 || 48 || 48 
 13 02 02 (CA, INT, JED, LA and SNE in the delegations) ||   ||   ||   ||   ||   ||   ||   
 13 01 04 01 [95] || - at Headquarters[96] || 56 || 56 || 56 || 56 || 56 || 56 || 56 
 - in delegations ||   ||   ||   ||   ||   ||   ||   
 13 01 04 03 [97] || - at Headquarters[98] || 25 || 25 || 25 || 25 || 25 || 25 || 25 
 - in delegations ||   ||   ||   ||   ||   ||   ||   
 XX 01 05 02 (CA, INT, SNE - Indirect research) ||   ||   ||   ||   ||   ||   ||   
 10 01 05 02 (CA, INT, SNE - Direct research) ||   ||   ||   ||   ||   ||   ||   
 Other ||   ||   ||   ||   ||   ||   ||   
 TOTAL || 735 || 735 || 735 || 735 || 735 || 735 || 735 
XX is the
policy area or budget title concerned.
The human resources required
will be met by staff from the DG who are already assigned to management of the action
and/or have been redeployed within the DG, together if necessary with any
additional allocation which may be granted to the managing DG under the annual
allocation procedure and in the light of budgetary constraints.
Description of
tasks to be carried out:
 Officials and temporary agents || To contribute to the analysis, negotiation, modification and/or preparation for approval proposals for programmes and/or projects in Member State XXX. To contribute to manage, monitor and evaluate the implementation of programmes/projects approved. To ensure compliance with the rules governing programme XXX.   
 External personnel || Idem and /or administrative support 
DG EMPL 
Estimate to be
expressed in full time equivalent units without decimals
   || Year N || Year N+1 || Year N+2 || Year N+3 || Year N+4 || Year N+5 || Year N+6 
  Establishment plan posts (officials and temporary agents) || 
 04 01 01 (Headquarters and Commission’s Representation Offices) (200 posts, unit cost 127.000 €) || 200 || 200 || 200 || 200 || 200 || 200 || 200 
  (Delegations) ||   ||   ||   ||   ||   ||   ||   
 (Indirect research) ||   ||   ||   ||   ||   ||   ||   
  (Direct research) ||   ||   ||   ||   ||   ||   ||   
  External personnel (in Full Time Equivalent unit: FTE)[99] || 
  (CA, INT, SNE from the "global envelope") ||   ||   ||   ||   ||   ||   ||   
  (CA, INT, JED, LA and SNE in the delegations) ||   ||   ||   ||   ||   ||   ||   
 04 01 04 01 [100] || - at Headquarters[101] || 93 || 93 || 93 || 93 || 93 || 93 || 93 
 - in delegations ||   ||   ||   ||   ||   ||   ||   
 XX 01 05 02 (CA, INT, SNE - Indirect research) ||   ||   ||   ||   ||   ||   ||   
 xx 01 05 02 (CA, INT, SNE - Direct research) ||   ||   ||   ||   ||   ||   ||   
 Other xx 01 04 02) ||   ||   ||   ||   ||   ||   ||   
 TOTAL || 293 || 293 || 293 || 293 || 293 || 293 || 293 
XX is the
policy area or budget title concerned.
The human resources required
will be met by staff from the DG who are already assigned to management of the action
and/or have been redeployed within the DG, together if necessary with any
additional allocation which may be granted to the managing DG under the annual
allocation procedure and in the light of budgetary constraints.

3.2.4.          
Compatibility with the current multiannual
financial framework 

·      ¨  Proposal/initiative
is compatible the next multiannual financial framework.
·      ¨  Proposal/initiative
will entail reprogramming of the relevant heading in the multiannual financial
framework.
Explain what reprogramming is required,
specifying the budget lines concerned and the corresponding amounts.
[…]
·      ¨  Proposal/initiative
requires application of the flexibility instrument or revision of the
multiannual financial framework[102].
Explain what is required, specifying the
headings and budget lines concerned and the corresponding amounts.
[…]

3.2.5.          
Third-party contributions 

·      The proposal/initiative does not provide for co-financing by third
parties 
·      ¨ The proposal
provides that European funding needs to be co-financed. The exact amount cannot
be quantified. The regulation establishes maximum co-financing rates
differentiated in line with the level of regional development (cf. Art. 73 of
proposed regulation):
Appropriations in EUR million (to 3 decimal places)
   || Year N || Year N+1 || Year N+2 || Year N+3 || Year N+4 || Year N+5 || Year N+6 || Total 
 Specify the co-financing body || MS || MS || MS || MS || MS || MS || MS ||   
 TOTAL appropriations cofinanced || tbd || tbd || tbd || tbd || tbd || tbd || Tbc ||   

3.3.                
Estimated impact on revenue 

·      ¨  Proposal/initiative
has no financial impact on revenue.
·      ¨  Proposal/initiative
has the following financial impact:
–                   
¨         on own resources 
–                   
¨         on miscellaneous revenue 
EUR million (to 3 decimal places)
 Budget revenue line: || Appropriations available for the ongoing budget year || Impact of the proposal/initiative[103] 
 Year N || Year N+1 || Year N+2 || Year N+3 || … insert as many columns as necessary in order to reflect the duration of the impact (see point 1.6) 
 Article …………. ||   ||   ||   ||   ||   ||   ||   ||   
For miscellaneous
assigned revenue, specify the budget expenditure line(s) affected.
[…]
Specify the method for
calculating the impact on revenue.
[…]
[1]               COM(2011)500 final.
[2]               COM(2010)700 final.
[3]               COM(2010)543 final.
[4]               "Results of the public
consultation on the conclusions of the fifth report on economic, social and
territorial cohesion Brussels", Commission Staff Working Paper, SEC(2011)
590 final, 13.5.2011.
[5]               http://ec.europa.eu/agriculture/events/cap-towards-2020_en.htm
[6]               COM(2009)163 final.
[7]               Council conclusions on the
Fifth Report on economic, social and territorial cohesion, 3068th General
Affairs Council meeting, Brussels, 21 February 2011. 
[8]               OJ C , , p. .
[9]               OJ C , , p. .
[10]             OJ C , ,
p. .
[11]             OJ L 248, 16.9.2002, p. 1.
[12]             OJ L 154, 21.6.2003, p. 1.
[13]             OJ L 209, 2.8.1997, p. 1.
[14]             OJ L 55, 28.2.2011, p.13.
[15]             OJ L 210, 31.7.2006, p. 25.
[16]             
[17]             
[18]             
[19]             OJ L , , p. .
[20]             
[21]             
[22]             
[23]             OJ L 379, 28.12.2006, p. 5.
[24]             OJ L 337, 21.12.2007, p. 35.
[25]             OJ L 193, 25.7.2007, p. 6.
[26]             OJ L 134, 30.4.2004, p. 114.
[27]             OJ L 210, 31.7.2006, p. 19.
[28]             OJ L 25, 30.1.2003, p. 43.
[29]             OJ L 53, 23.2.2002, p. 1.
[30]             OJ L 118, 12.5.2010, p.1.
[31]             OJ L 53, 23.2.2002, p. 1.
[32]             Ref. EU2020 headline targets. 
[33]             OJ L 197, 21.7.2001, p. 30
[34]             OJ…
[35]             OJ L 209, 2.8.1997, p.1.
[36]             As defined by the European
System of Accounts (ESA) and transmitted by all 27 Member States in their
Stability and Convergence Programmes.
[37]             Explanation: The general
government sector consists mainly of central, state and local government units
together with social security funds imposed and controlled by those units. In
addition, it includes non-profit institutions engaged in non-market production
that are controlled and mainly financed by government units or social security
funds.
[38]             OJ L
83, 27.3.1999, p. 1. 
[39]             As endorsed
by the ECOFIN Council on 7 September 2010.
[40]             Communication from the
Commission to the European Parliament, the Council, the European Economic and
Social Committee and the Committee of the Regions: Europe 2020 Flagship
Initiative Innovation Union (COM(2010) 546 final of 6.10.2010). Commitments
24/25 and Annex I "Self assessment tool: Features of well performing
national and regional research and innovations systems". Conclusions of
the Competitiveness Council: Conclusions on Innovation Union for Europe (doc. 17165/10 of 26.11.2010).
[41]             Communication from the Commission to the
European Parliament, the Council, the European Economic and Social Committee
and the Committee of the Regions: A Digital Agenda for Europe (COM(2010) 245
final/2 of 26.8.2010); Commission
Staff Working Paper: Digital Agenda Scoreboard (SEC(2011) 708 of 31.5.2011). Conclusions of the Transport,
Telecommunications and Energy Council on the Digital Agenda for Europe (doc.
10130/10 of 26 May 2010)
[42]             Communication from the
Commission to the European Parliament, the Council, the European Economic and
Social Committee and the Committee of the Regions: A Digital Agenda for Europe
(COM(2010) 245 final/2 of 26.8.2010); Commission Staff Working Paper: Digital Agenda Scoreboard (SEC(2011) 708 of 31.5.2011). 
[43]             Communication from the Commission to the European Parliament, the Council, the
European Economic and Social Committee and the Committee of the Regions: Think Small First - A Small Business Act for
Europe (COM(2008) 394 of 23.6.2008); Conclusions of the Competitiveness Council:
Think Small First – A Small Business Act for Europe (doc. 16788/08, 1.12.2008);
Communication from the
Commission to the European Parliament, the Council, the Economic and Social
Committee and the Committee of the Regions: Review of the "Small Business
Act" for Europe (COM(2008)
78 final, 23.2.2011); Conclusions
of the Competitiveness Council: Conclusions on the Review of the "Small
Business Act" for Europe (doc.
10975/11 of 30.5.2011).
[44]             OJ
L 48, 23.2.2011, p. 1.
[45]             OJ L 153, 18.6.2010, p. 13
[46]             OJ L 140, 5.6.2009, p. 136.
[47]             OJ L 114, 27.4.2006, p. 64.
[48]             OJ L 52, 21.2.2004, p.50.
[49]             OJ L 140, 5.6.2009, p. 16.
[50]             Conclusions of the Justice and
Home Affairs Council; 11-12 April 2011, Conclusion on further developing risk
assessments for disaster management in the European Union.
[51]             OJ L 327, 22.12.2000, p. 1.
[52]             OJ L 327, 22.12.2000, p. 1.
[53]             OJ L 312, 22.11.2008, p. 3.
[54]             Council Recommendation (2010/410/EU) of 13 July 2010,
OJ L 191, 23.07.2010, p. 28.
[55]             Communication from the Commission to the European Parliament, the Council, the
European Economic and Social Committee and the Committee of the Regions: Think Small First - A Small Business Act for
Europe (COM(2008) 394 of 23.6.2008); Conclusions of the Competitiveness
Council: Think Small First – A Small Business Act for Europe (doc. 16788/08,
1.12.2008); Communication from
the Commission to the European Parliament, the Council, the Economic and Social
Committee and the Committee of the Regions: Review of the "Small Business
Act" for Europe (COM(2008)
78 final, 23.2.2011); Conclusions
of the Competitiveness Council: Conclusions on the Review of the "Small
Business Act" for Europe (doc.
10975/11 of 30.5.2011).
[56]             Council Recommendation (2010/410/EU) of 13 July 2010,
OJ L 191, 23.07.2010, p. 28.
[57]             If a country specific Council
Recommendation is in place, directly linked to this conditionality provision,
then the assessment of its fulfilment will take account of the assessment of
progress made on the fulfilment of the country specific Council Recommendation.

[58]             Deadlines for delivery on all
elements here contained may be during the programme implementation period.
[59]             If a Country Specific Council
Recommendation is in place, directly linked to this conditionality provision,
then the assessment of its fulfilment will take account of the assessment of
progress made on the fulfilment of the country specific Council Recommendation.

[60]             Deadlines for the achievement
of delivery on all the elements contained in that section may be set during the
programme implementation period.
[61]             Communication from the
Commission to the European Parliament, the Council, the European Economic and
Social Committee and the Committtee of the Regions – A shared commitment for
employment – COM(2009)257 Final.
[62]             OJ C 191, 1.7.2011, p. 1. 
[63]             COM (2006) 208 final [(To be
replaced by the forthcoming Communication by the end of September 2011)]
[64]             Council conclusions of 12 May
2009 on a strategic framework for European cooperation in education and
training ("ET 2020") (2009/C 119/02)
[65]             Commission Recommendation of 3
October 2008 on the active inclusion of the people excluded from the labour
market (OJ L 307, 18.11.2008, p. 11).
[66]             Communication from the
Commission to the European Parliament, the Council, the European Economic and
Social Committee and the Committee of the Regions: An EU framework for National
Roma Integration Strategies up to 2020. COM(2011) 173.
[67]             If a Country Specific Council
Recommendation is in place, directly linked to this conditionality provision,
then the assessment of its fulfilment will take account of the assessment of
progress made on the fulfilment of the Country Specific Council Recommendation.
[68]             Deadlines for the achievement
of all the elements contained in this section may expire during the programme
implementation period.
[69]             OJ L 303, 2.12.2000, p.16
[70]             OJ L 180, 19.07.2000, p. 22
[71]             OJ, L 23, 27.01.2010, p. 35
publication of the Council Decision of 26 November 2009 concerning the
conclusion, by the European Community, of the United Nations Convention on the
Rights of Persons with Disabilities.
[72]             OJ L 175, 5.7.1985, p. 40.
[73]             OJ L 197, 21.7.2001, p. 30.
[74]             ABM: Activity-Based Management –
ABB: Activity-Based Budgeting.
[75]             As referred to in Article
49(6)(a) or (b) of the Financial Regulation.
[76]             COM(2010) 700, 19.10.2010.
[77]             Details of management modes and
references to the Financial Regulation may be found on the BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html
[78]             As referred to in Article 185
of the Financial Regulation.
[79]             Study "Regional
governance in the context of globalisation: reviewing governance mechanisms
& administrative costs. Administrative workload and costs for Member
State public authorities of the implementation of ERDF and Cohesion Fund",
2010
[80]             Diff. = Differentiated
appropriations / Non-Diff. = Non-differentiated appropriations
[81]             EFTA: European Free Trade
Association. 
[82]             Candidate countries and, where
applicable, potential candidate countries from the Western Balkans.
[83]             Year N is the year in which
implementation of the proposal/initiative starts.
[84]             This will depend on the
percentage of the prefinancing, on the speed of implementation of regional
policy in MS and on the available payment appropriations
[85]             Technical and/or administrative
assistance and expenditure in support of the implementation of EU programmes
and/or actions (former "BA" lines), indirect research, direct
research.
[86]             Year N is the year in which
implementation of the proposal/initiative starts.
[87]             Outputs are products and services to be supplied (e.g.:
number of student exchanges financed, number of km of roads built, etc.).
[88]             As described in Section 1.4.2. "Specific
objective(s)…".
[89]             Year N is the year in which
implementation of the proposal/initiative starts.
[90]             Technical and/or administrative
assistance and expenditure in support of the implementation of EU programmes
and/or actions (former "BA" lines), indirect research, direct
research.
[91]             External staff financed from
former BA lines, based on the 2011 Final Allocation for Human Resources,
including external staff at Headquarters and in Delegations
[92]             Year N is the year in which
implementation of the proposal/initiative starts.
[93]             Technical and/or administrative
assistance and expenditure in support of the implementation of EU programmes
and/or actions (former "BA" lines), indirect research, direct
research.
[94]             CA= Contract Agent; INT= agency
staff ("Intérimaire"); JED= "Jeune Expert en
Délégation" (Young Experts in Delegations); LA= Local Agent; SNE=
Seconded National Expert; 
[95]             Under the ceiling for external
personnel from operational appropriations (former "BA" lines).
[96]             Essentially for Structural
Funds, European Agricultural Fund for Rural Development (EAFRD) and European
Fisheries Fund (EFF).
[97]             Under the ceiling for external
personnel from operational appropriations (former "BA" lines).
[98]             Essentially for Structural
Funds, European Agricultural Fund for Rural Development (EAFRD) and European
Fisheries Fund (EFF).
[99]             CA= Contract Agent; INT= agency
staff ("Intérimaire"); JED= "Jeune Expert en
Délégation" (Young Experts in Delegations); LA= Local Agent; SNE=
Seconded National Expert; 
[100]            Under the ceiling for external
personnel from operational appropriations (former "BA" lines).
[101]            Essentially for Structural Funds,
European Agricultural Fund for Rural Development (EAFRD) and European Fisheries
Fund (EFF).
[102]            See points 19 and 24 of the
Interinstitutional Agreement.
[103]            As regards traditional own
resources (customs duties, sugar levies), the amounts indicated must be net
amounts, i.e. gross amounts after deduction of 25% for collection costs.