CELEX: 52013PC0246
Language: en
Date: 2013-04-22
Title: Amended 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 Council Regulation (EC) No 1083/2006

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		52013PC0246
		
			Amended 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 Council Regulation (EC) No 1083/2006 /* COM/2013/0246 final - 2011/0276 (COD) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
1.           CONTEXT OF THE PROPOSAL
The Commission presented its proposals for
a regulation laying down common provisions on the ERDF, the ESF, the CF, the
EAFRD and the EMFF and general provisions on cohesion policy funds on 6 October
2011 (COM(2011) 615 final). 
The initial
Commission's proposal for the EMFF Regulation aligned the management and
control system for the EMFF with the arrangements proposed for the EAFRD. This
was proposed mainly for the reason that the authorities managing the EAFRD and
EMFF are often the same and would benefit from harmonised arrangements for
these two funds. 
During the
examination of the EMFF proposal in the Fisheries Working Group in the Council,
a number of Member States have expressed reservations as regards the shift to
the system proposed by the Commission for management and control and for
financial management. In the previous (2000-2006) and the current (2007-2013)
programming periods the delivery system of the EMFF was aligned with
arrangements set up under cohesion policy and Member States consider that the
highest degree of continuity should be ensured. They have expressed a view that
continuing with such arrangements would enable to make the best use of the
expertise gained by national authorities currently involved in the management
of EU funds for fisheries.
Although a
majority of Member States have indicated that they prefer alignment of the EMFF
with the delivery system for cohesion policy, they have also highlighted the
need to take into account the principle of proportionality (CPR Article 4(5)).
The fisheries operational programmes, in most of the cases, are smaller than
those under cohesion policy and also have specific features to ensure that the
EMFF contributes to the reform of the Common Fisheries Policy. 
In order to facilitate the already on-going
negotiations in the Council and the European Parliament the Commission proposes
a simultaneous amendment of the Commission proposals for the Common Provisions
Regulation and of the EMFF Regulation to ensure simple and streamlined
integration of the EMFF into an already existing set of rules for cohesion
policy. 
A close alignment of EMFF delivery systems
with those proposed for cohesion policy in the manner proposed will contribute
to harmonisation and consistency of rules across these different Funds (ERDF,
ESF, CF and EMFF). It enables harnessing the experience attained in previous
programming periods and facilitates a smooth transition from one programming
period to the next. 
2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS
The Commission proposal amending the Common
Provisions Regulation and the EMFF Regulation has been preceded by throrough
discussions on the delivery arrangements of the EMFF in the Fisheries Working
Party of the Council and bilateral contacts with the Member States. 
An Impact Assessment has been carried out
for the original legislative proposals.
3.           LEGAL ELEMENTS OF THE PROPOSAL
The proposal involves a parallel amendment
of the Commission proposals for the Common Provisions Regulation and of the
EMFF Regulation:
·                        
the EMFF is integrated in the relevant
provisions in the Common Provisions Regulation which were initially specific to
cohesion policy, creating a new Part Four of the Common Provisions Regulation
which applies to cohesion policy and to the EMFF;
·                        
Respective provisions (which correspond to the
delivery arrangements of the EAFRD or overlap with the articles of the Common
Provisions Regulations in its amended form) are deleted from the EMFF
Regulation and appropriate references to the CPR are introduced in the EMFF
Regulation, where necessary.
Recitals and definitions are aligned with
the changes to the articles and amendment of the structure of the regulations.
The terminology used in the new Part Four is adjusted to accommodate the
specificities of the EMFF and in certain instances it is clarified that the
Fund-specific rules under the EMFF may set out complementary rules.
4.           BUDGETARY IMPLICATIONS
The amended proposal will have no budgetary
implications. The availability of new data and macro-economic forecasts as well
as the accession of the Republic of Croatia results however in changes of the
cohesion envelope.
These modifications are without prejudice
to the on-going negotiations on the MFF Regulation and to the Financial Regulation.
5.           SUMMARY OF AMENDMENTS
As regards the Common Provisions
Regulation, the amendment concerns recitals 3, 75, 78, 80, 84 and 87. It also
introduces changes in Article 1 and Article 3 to clearly set out the applicability
of each Part of the Common Provisions Regulation as regards each of the Funds
(ERDF, ESF, CF, EMFF and EAFRD). It has required limited adjustment of
definitions set out under paragraphs (5), (7), (25) and (26) of Article 2 in
order to replace references to Part Three with references to Part Four.
It includes amendments to Articles 55 (7), 64
(6), 74 (1), 112 (3), 113 (5), 114 (3) (b) and (g), 117 (4), 120, 121 (1), 124,
126 (4), 128, 130 (1), 131 (1), 133(1), 134 (1), 135, 136, 137 and 140 (1). 
As regards the EMFF Regulation, the
amendment concerns recitals 86, 89, 101, 103, 104 and deletion of recitals 91,
93, 94 and 97. It includes amendments to Articles 3, 12, 14, 20, 24, 25, 28,
33, 37, 38, 39, 45, 46, 54, 56, 61, 62, 63, 64, 67, 75, 78, 92, 94, 95, 102,
103, 105, 108, 117, 118, 119, 120, 122, 126, 128, 129, 131, 132, 133, 134, 135,
1369, 137, 138, 139, 140, 141, 142,143, 144, 145, 146, 147, 148, 149, 150,151,
152, 153, 154 and deletion of Articles 96, 97, 98, 99, 100, 101, 104, 106, 107,
109, 110, 111, 112, 113, 114, 115, 116, 121, 123, 124, 125, 127 and 130.
For clarity reasons, this amending proposal
is presented in a consolidated form, including all the amendments to the Common
Provisions Regulation adopted by the Commission so far, i.e. COM(2012) 496
of 11 September 2012 and COM(2013) 146 of 12 March 2013. However, only the
modifications proposed through this amending proposal are presented in a
highlighted format.
2011/0276 (COD)
Amended 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 Council 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[1], 
Having regard to the opinion of the
Committee of the Regions[2],
Having regard to the opinion of the Court
of Auditors[3],
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 as well as provisions which are
common to the ERDF, the ESF, the CF and the EMFF, but do not apply to the EAFRD.
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 (hereinafter referred to as the 'Financial Regulation')[4]. 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 should
be set out in Funds-specific rules and may be limited to only some of the
thematic objectives defined in this Regulation. 
(14)     In order to maximise the
contribution of the CSF Funds and to provide clear strategic direction to the
programming process at the level of Member States and the regions, a Common
Strategic Framework should be established. 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 set out the means to achieve coherence and
consistency with the economic policies of Member States and the Union, coordination
mechanisms among the CSF Funds and with other relevant Union policies and
instruments, horizontal principles and cross-cutting policy objectives, the arrangements
to address territorial challenges, indicative actions of high European
added value and corresponding principles for delivery, and priorities for cooperation.
(16)     On the basis of the Common
Strategic Framework, 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)[5].
(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 the 'Investment for growth and jobs' goal 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.
(57 bis) Given the urgent priority
to address youth unemployment in the Union's most affected regions, a Youth
Employment Initiative should be created and funded from a specific allocation
and from targeted investment from the European Social Fund. The Youth Employment
Initiative should aim to support young people not in employment, education or
training residing in the eligible regions. The Youth Employment Initiative
should be implemented as a part of the Investment for growth and jobs goal.
(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[6]. 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 resources
allocated to communication actions under this Regulation shall also contribute
to cover the corporate communication of the political priorities of the
European Union as far as they 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 the EMFF 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 CF and EMFF 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 CF and
the EMFF. 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, the and
the CF and the EMFF) 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, or for the EMFF, EUR 50 000, in order to take into account
the small size of operations supported under this Fund. 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 the elements of the Common
Strategic Framework related to indicative actions of high European added value and
corresponding principles for delivery, and priorities for cooperation,
additional rules on the allocation of the performance reserve, the definition
of the area and population covered by the local development strategies,
detailed rules on financial instruments (ex ante assessment, combination
of support, eligibility, types of activities not supported), the rules on
certain types of financial instruments set up at national, regional,
transnational or cross-border level, rules concerning funding agreements,
transfer and management of assets, the arrangements for management and control,
the rules on payment requests, and establishment of a system of capitalisation
of annual instalments, the definition of the flat rate for revenue generating
operations, the definition of the flat rate applied to indirect costs for
grants based on existing methods and corresponding rates applicable in Union
policies, the responsibilities of Member States concerning the procedure for
reporting irregularities and recovery of sums unduly paid, the modalities of
exchange of information of operations, the arrangements for the adequate audit
trail, the conditions of national audits, the accreditation criteria for
managing authorities and certifying authorities, the identification of commonly
accepted data carriers, and the criteria for establishing the level of
financial correction to be applied. The Commission should also be empowered to amend,
by means of delegated acts, Annexes I and VI, both of which contain
non-essential elements to this Regulation, 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 on the allocation of the
performance reserve, decisions suspending payments linked to Member States' economic
policies, and, in the case of decommitment, decisions to amend decisions
adopting programmes; and as regards the Funds, decisions identifying the
regions and Member States fulfilling the Investment for growth and jobs
criteria, decisions setting out the annual breakdown of commitment
appropriations to the Member States, decisions setting out the amount to be
transferred from each Member State's CF allocation to the Connecting Europe
Facility, decisions setting out the amount to be transferred from each Member
State's Structural Funds allocation for food for deprived people, decisions adopting and
amending operational programmes, decisions on major projects, decisions on
joint action plans, 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, the uniform conditions concerning the monitoring and provision of
monitoring information for financial instruments, the methodology for the
calculation of net revenue for revenue-generating projects, the electronic data
exchange system between the Member State and the Commission, the model of
operational programme for the Funds, the nomenclature for the categories of
intervention, the format for information on major projects and methodology to
be used in carrying out the cost-benefit analysis on major projects, the model
for the joint action plan, the model of the annual and final implementation
reports, certain technical characteristics of information and publicity
measures and related instructions, rules on the exchange of information between
beneficiaries and managing authorities, certifying authorities, audit
authorities and intermediate bodies, the model of the management declaration, the
models for the audit strategy, opinion and annual control report and
methodology for the sampling method, the rules concerning use of data collected
during audits, and the 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[7]. 
(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[8]. 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.
The common rules are set out in Part Two.
Part Three of this This Regulation also lays down the general rules governing the ERDF, the
ESF (together referred to as the 'Structural Funds') and the CF concerning. 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. 
Part Four of this
Regulation lays down general rules applicable to the Funds and the EMFF on
management and control, financial management, accounts and financial
corrections.
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[9]
(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[10] (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[11]
(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[12]
(the 'CF Regulation'); 
(4)                   
Regulation (EU) No […]/2012 of the
European Parliament and of the Council on European territorial cooperation[13] (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 1698/2005[14] (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[15] (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), Council Recommendation of 13 July 2010 on broad guidelines
for the economic policies of the Member States and the Union[16] and Council Decision of
21 October 2010 on guidelines for the employment policies of the Member
States[17],
and any revision of such targets and shared objectives.
(2)                   
'Common Strategic Framework' means the elements that
provide clear strategic direction to the programming process and facilitate
sectoral and territorial coordination of Union intervention under the CSF Funds
and with other relevant Union policies and instruments in line with the
objectives and targets of the Union strategy for smart, sustainable and
inclusive growth; 
(3)                   
'action' means a type of operation to be
supported by the CSF Funds to achieve the objectives of a progamme;
(4)                   
'indicative action of high European added value'
means an action which can be expected to make a significant contribution to the
achievement of the targets and objectives of the Union strategy for smart,
sustainable and inclusive growth and which shall act as a reference point in
the preparation of programmes;
(5)                   
'Fund-specific rules' means the provisions laid
down in or established on the basis of Part Three or Part
Four of this Regulation or a specific or generic regulation governing
one or more of the CSF Fund(s) referred to or listed in the fourth
third sub-paragraph of Article 1;
(6)                   
‘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;
(7)                   
‘programme’ means ‘operational programme’
referred to in Part Three or Part Four of this
Regulation and in the EMFF Regulation, and ‘rural development programme’
referred to in the EAFRD Regulation;
(8)                   
‘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; 
(9)                   
'operation' means a project, contract, action or
group of projects selected by the managing authorities of the programmes
concerned, or under their 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;
(10)               
'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; 
(11)               
'final recipient' means a legal or natural
person that receives financial support from a financial instrument;
(12)               
'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[18], 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[19]
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[20]; 
(13)               
'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; 
(14)               
‘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; 
(15)               
'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[21]
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[22],
regardless of whether the relevant national implementing provisions consider
the EGTC a public law body or a private law body;
(16)               
'document' means a paper or an electronic medium
bearing information relevant in the framework of this Regulation;
(17)               
'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;
(18)               
‘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;
(19)               
‘rolling closure’ means closure of operations as
a result of the annual clearance of account exercise and before the general
closure of the programme;
(20)               
'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; 
(21)               
'category of regions' means the categorisation
of regions as 'less developed regions', 'transition regions' or 'more developed
regions' according to Article 82(2);
(22)               
'request for payment' means a payment
application or declaration of expenditure submitted by the Member State to the
Commission;
(23)               
'EIB' means the European Investment Bank, the
European Investment Fund or any subsidiary of the European Investment Bank;
(24)               
'SME' means a micro, small or medium sized
enterprise in the meaning of Commission Recommendation 2003/361/EC, or
subsequent amendments thereof;
(25)               
'accounting year, means, for the purposes of
Part Three and Part Four, 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 30 June 2023;
(26)               
'financial year, means, for the purposes of Part
Three and Part Four, 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 and
Part Four.
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 the Financial Regulation, 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 27 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 142 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 Article
11 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 provide clear strategic direction to the programming process and
facilitate sectoral and territorial coordination of Union intervention under
the CSF Funds and with other relevant Union policies and instruments in line
with the objectives and targets of the Union strategy for smart, sustainable
and inclusive growth. 
Article 11
Content
The Common Strategic Framework shall
establish:
(a)        means to achieve 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;
(b)        coordination mechanisms among
the CSF Funds, and with other relevant Union policies and instruments,
including external instruments for cooperation;
(c)        horizontal principles and cross-cutting
policy objectives for the implementation of the CSF Funds;
(d)        arrangements to address territorial
challenges and the steps to be taken to encourage an integrated approach that
reflects the role of urban, rural, coastal and fisheries areas, as well as the
specific challenges for areas with particular territorial
features referred to in Articles 174 and 349 of the Treaty;
(e)        for each thematic objective, the
indicative actions of high European added value to be supported by each CSF Fund
and the corresponding principles for delivery; 
(f)         priorities for cooperation for
the CSF Funds, where appropriate, taking account of macro-regional and sea
basin strategies.
Article 12 
Adoption and review
The elements of the Common Strategic
Framework related to coherence and consistency with the economic policies of
Member States and the Union, the coordination mechanisms among the CSF Funds
and with other relevant Union policies and instruments, the horizontal
principles and cross-cutting policy objectives and the arrangements to address
territorial challenges are laid down in Annex I. 
The Commission shall be empowered to adopt
delegated acts in accordance with Article 142 laying down the specific elements
of the Common Strategic Framework related to the establishment of indicative
actions of high European added value and corresponding principles for delivery
for each thematic objective and of priorities for cooperation.
Where there are major changes in the Union
strategy for smart, sustainable and inclusive growth, the Commission shall
review the Common Strategic Framework and, where
appropriate, adopt by means of delegated acts in accordance with Article 142, amendments
to Annex I. 
Within 6 months of adoption of a revision
to the 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, 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 8 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, to the Youth Employment Initiative, 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 II.
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[23];
(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[24];
(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[25];
(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 priorities 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 and in the Fund-specific
rules. 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[26]
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[27].
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 the corporate communication of the political priorities of the European Union as far as they 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. 
The Fund-specific rules for
the EMFF may derogate from the first subparagraph. 
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.
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 and
paragraphs 2 and 3 shall not apply to operations supported by 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 in compliance with the
terms and conditions laid down by the Commission by means of implementing acts.
Those implementing acts shall be adopted in accordance with the examination
procedure referred to in Article 143(3).

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 and the EMFF,
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 reserve, 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 61(2) 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).
The Fund-specific rules for
the EMFF may lay down additional basis for interruption of payments where a
Member State has failed to comply with its obligations under the Common
Fisheries Policy.
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. 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 
Resources for economic, social and territorial cohesion
1.           The resources for
economic, social and territorial cohesion available for budgetary commitment
for the period 2014 to 2020 shall be EUR [x] at 2011 prices, in accordance with
the annual breakdown shown in Annex III, of which EUR [x] represents the global
resources allocated to the ERDF, the ESF and the CF and EUR [3 000 000 000]
constitutes a specific allocation for the Youth Employment Initiative. For the
purposes of programming and subsequent inclusion in the general budget of the
Union, the amount of the resources for economic, social and territorial
cohesion 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 for the Funds by Member State, in accordance with the
criteria and methodology set out in Annex IIIbis and the annual breakdown of
the resources from the specific allocation for the Youth Employment Initiative
by Member State together with the list of eligible regions, in accordance with
the criteria and methodology set out in Annex IIIter 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 96,50 % of the global
resources (i.e., a total of EUR 327 115 655 850) and shall
be allocated as follows:
(a)         
48,25 % (i.e., a total of EUR 163 560 715 122)
for less developed regions; 
(b)         
10,76 % (i.e., a total of EUR 36 471 144 190)
for transition regions;
(c)         
16,35 % (i.e., a total of EUR 55 419 403 116)
for more developed regions; 
(d)         
20,87 % (i.e., a total of EUR 70 739 863
599) for Member States supported by the Cohesion Fund;
(e)         
0,27% (i.e., a total of EUR 924 529 823)
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.
3bis.       Resources for the Youth
Employment Initiative shall amount to EUR [3 000 000 000] from the specific
allocation for the Youth Employment Initiative and at least EUR [3 000 000 000]
from ESF targeted investment.
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[28] 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 20.
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 3,50 % of the global resources
available for budgetary commitment from the Funds for the period 2014 to 2020
(i.e., a total of EUR 11 878 104 182).
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[29]
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'[30] 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[31].
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 IV.
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 IV, 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 IV.
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 under Article
121(2) and the Council recommendations adopted under Article 148(4) of the
Treaty, and taking into account the Integrated Guidelines and national and
regional specificities;
(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 V, 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.
The first subparagraph shall not apply to the Youth
Employment Initiative.
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. 
Article 103 
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 VI. 
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 VI.
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 VI 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 VI 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.

PART FOUR
GENERAL PROVISIONS APPLICABLE TO THE FUNDS AND THE EMFF

TITLE IVI
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).
The first, second and third
subparagraphs shall not apply to the EMFF.

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 and the EMFF, 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 or, from the EMFF exceeds EUR
100 000 000, 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 or,
in the case of the EMFF, a measure identified in the priority
or priorities 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 or, in the case of the EMFF, the measures 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 or from the EMFF exceeds EUR
100 000 000, 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 or the EMFF 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 or the EMFF 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 or the EMFF 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 and the EMFF for the entire
programming period to the operational programme;
(b)     in 2015: 1 % of the amount of
support from the Funds and the EMFF for the entire
programming period to the operational programme;
(c)     in 2016: 1 % of the amount of
support from the Funds and the EMFF 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 and
from the EMFF 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 and from the EMFF 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
101Fund-specific rules. 
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 drawn up in
accordance with Article 121 has not been submitted in accordance with Article
126.
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 130(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 and EMFF;
(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 and to the
EMFF 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 and the EMFF, 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 supported by the Funds or the last annual
implementation report for the operational programme supported by the EMFF;
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 priorities 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(3).
The Fund-specific rules for
the EMFF may lay down additional bases for suspension of payments where a
Member State has failed to comply with its obligations under the Common
Fisheries Policy.
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 or the EMFF
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 or the
EMFF 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.
5.           The Fund-specific rules for the EMFF
may lay down additional requirements for financial corrections by the Member
States linked to non-compliance with rules applicable under the Common
Fisheries Policy.
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 or the EMFF, 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 for the Funds or the last annual implementation
report for the EMFF, establishes a serious failure to achieve the
targets set out in the performance framework, it may apply financial
corrections in respect of the priorities 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. 
7.           The
Fund-specific rules for the EMFF may lay down additional rules of procedure for
financial correction in the case of non-compliance with rules applicable under
the Common Fisheries Policy.
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[32].
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 IIIVIII
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 for the Funds or EUR 50 000 for the EMFF 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 FIVEFOUR
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 Annexes I and VI 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 Articles 5(3), 12, 20(4), 29(6), 32(1), 33(3), 33(4), 33(7),
34(3), 35(5), 36(4), 54(1), 58, 112(2), 114(8), 114(9), 116(1), 117(1), 132(4),
136(6) and 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 or (…) [number of members]
(a … majority of) [majority to be specified: simple, two-thirds, etc.] 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 Regulation (EC) No 1083/2006 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
Common Strategic Framework elements related to the coherence and
consistency with the economic policies of Member States and the Union,
coordination mechanisms among the CSF Funds and with other relevant Union
policies and instruments, horizontal principles and cross-cutting policy
objectives and arrangements to address territorial challenges
1.           Introduction
In order to maximise the contribution of
the CSF Funds to smart, sustainable and inclusive growth, thereby reducing
disparities, it is necessary to ensure that policy commitments made in the
context of the Europe 2020 strategy are underpinned by investment through the
CSF Funds and other Union instruments. Member States shall thus identify how
their programmes can contribute to the policy objectives and headline targets
of the Europe 2020 strategy and the flagship initiatives. 
2.           Coherence and Consistency with the
Union's Economic Governance 
1.           Member States shall give
particular attention to prioritising growth-friendly expenditure, including
spending on education, research, innovation and energy efficiency and
expenditure to facilitate the access of SMEs to finance and to ensure
environmental sustainability, the management of natural resources and climate
action, and to ensuring the effectiveness of such spending. They shall also
take account of maintaining or reinforcing the coverage and effectiveness of
employment services and active labour market policies, with a focus on youth
unemployment. 
2.           In preparing their
Partnership Contracts, Member States shall programme the CSF Funds taking into
account the most recent relevant country-specific recommendations issued by the
Council on the basis of Article 121(2) and Article 148(4) of the Treaty on the
Functioning of the European Union in accordance with their respective roles and
obligations. Member States shall also take into account relevant Council
recommendations based on the Stability and Growth Pact and the economic adjustment
programmes. Each Member State shall set out in the Partnership Contract, in
accordance with Article 14(a)(i) of this Regulation, how different Union and
national funding streams contribute to addressing the challenges identified by
the relevant country-specific recommendations concerned and the objectives set
out in their National Reform Programmes in close consultation with the
responsible regional and local authorities.
3.           Coordination Mechanisms Among the CSF
Funds 
3.1         Introduction
1.           Member States shall ensure
that the interventions supported through the CSF Funds are complementary and
are implemented in a coordinated manner that leads to a reduction of
administrative cost and burden on the ground.
3.2         Coordination and
complementarity
1.           Member States and managing
authorities responsible for the implementation of the CSF Funds shall work
closely together in the preparation, implementation, monitoring and evaluation
of the Partnership Contract and programmes. In particular, they shall ensure
that the following actions are carried out:
(a)         
identify areas of intervention where the CSF
Funds can be combined in a complementary manner to achieve the thematic
objectives set out in this Regulation;
(b)         
promote the involvement of managing authorities
responsible for other CSF Funds or other managing authorities and relevant
ministries in the development of support schemes to ensure coordination and
avoid overlaps;
(c)         
establish, where appropriate, joint monitoring
committees for programmes implementing the CSF Funds, and the development of
other joint management and control arrangements to facilitate coordination
between authorities responsible for the implementation of the CSF Funds;
(d)         
make use of joint eGovernance solutions aimed at
applicants and beneficiaries, and "one-stop shops" for advice on the
opportunities of support available through each of the CSF Funds;
(e)         
establish mechanisms to coordinate cooperation
activities financed by the ERDF and the ESF with investments supported by the
'Investment for Growth and Jobs goal' programmes.
3.3         Encouraging integrated
approaches
1.           Member States shall, where
appropriate, combine the CSF Funds into integrated packages at local, regional
or national level, which are tailor-made to address specific needs in order to support
the achievement of the national Europe 2020 targets, and make use of Integrated
Territorial Investments, Integrated Operations and Joint Action Plans. 
2.           Member States shall
promote the development of local and sub-regional approaches, in particular via
community-led local development by delegating decision-making and implementation
to a local partnership of public, private and civil society actors.
Community-led local development shall be implemented in the context of a
strategic approach to ensure that the ‘bottom-up’ definition of local needs
takes account of priorities set at a higher level. Member States shall
therefore define the approach to community-led local development across the CSF
Funds and shall indicate in the Partnership Contracts the main challenges to be
tackled in this way, the main objectives and priorities for community-led local
development, the types of territories to be covered, which specific role will
be attributed to local action groups in the delivery of strategies and the role
envisaged for the different CSF Funds in implementing local development
strategies in different types of territories such as rural, urban and coastal
areas and the corresponding co-ordination mechanisms.
4.           Coordination of CSF Funds with Other Union
Policies and Instruments 
The Union programmes set out in this section
do not constitute an exhaustive list. 
4.1         Introduction
1.           Member States shall
undertake an analysis of the impact of Union policies at national and regional
level, and on social, economic and territorial cohesion with a view to
fostering effective coordination and to identifying and promoting the most
suitable means of using European funds to support local, regional and national
investment.
2.           Member States shall ensure
consistency at programming and implementation stages between interventions
supported by the CSF Funds and the objectives of other Union policies. To this
end, they shall seek to take into account the following aspects:
(a)         
identify and exploit complementarities between
different Union instruments at national and regional level, both in the
planning phase and during implementation; 
(b)         
optimise existing structures and where necessary,
establish new ones that facilitate the strategic identification of priorities
for the different instruments and structures for coordination at national
level, avoid duplication of effort and identify areas where additional
financial support is needed;
(c)         
make full use of the potential to combine
support from different instruments to support individual operations and work
closely with those responsible for implementing other national instruments to
deliver coherent and streamlined funding opportunities for beneficiaries.
4.2         Coordination with the
Common Agricultural Policy and the Common Fisheries Policy
1.           The EAFRD is an integral
part of the Common Agricultural Policy and complements the measures under the
European Agricultural Guarantee Fund which provide direct support to farmers
and support market measures. Member States shall therefore manage these interventions
together to maximise synergies and the added value of EU support. 
2.           The EMFF aims
at achieving the objectives of the reformed Common Fisheries Policy and of
the Integrated Maritime Policy. Member States shall therefore make use of the
EMFF to support efforts to improve data collection and strengthen control,
and ensure that synergies are also sought in support of the priorities of
Integrated Maritime Policy, such as marine knowledge, maritime spatial
planning, integrated coastal zone management, integrated maritime surveillance,
the protection of the marine environment and of biodiversity, and the adaptation
to the adverse effects of climate change on coastal areas.
4.3         Horizon 2020[33] and other
centrally managed EU programmes in the areas of research and innovation
1.           Member States and the
Commission shall pay attention to strengthening coordination and complementarities
between the CSF Funds and Horizon 2020, the Programme for the Competitiveness
of Enterprises and small and medium-sized enterprises (COSME)[34], and other relevant centrally
managed Union funding programmes while also establishing a clear division of
areas of intervention between them.
2.           In particular, Member
States shall develop national and/or regional research and innovation (R&I)
strategies for ‘smart specialisation’ in line with the National Reform Programme.
These strategies shall be developed through involving national or regional
managing authorities and stakeholders such as universities and other higher
education institutions, industry and social partners in an entrepreneurial
discovery process. The authorities directly concerned by Horizon 2020 shall be
closely associated to this process. Under these strategies (inter alia):
(a)         
"Upstream actions" to prepare regional
R&I players to participate in Horizon 2020 ("staircase to
excellence") shall be developed through capacity building. Communication
and cooperation between Horizon 2020 national contact points and managing
authorities of the CSF Funds shall be strengthened. 
(b)         
"Downstream actions" shall provide the
means to exploit and diffuse R&I results, stemming from Horizon 2020 and
preceding programmes, into the market with particular attention on creating an
innovation-friendly business environment for SMEs and in line with the
priorities identified for the territories in the relevant smart specialisation
strategy. 
3.           Member States shall make
full use of the provisions in this regulation allowing for combining the CSF Funds
with those under Horizon 2020 in the relevant programmes used to implement
parts of the strategies. Joint support shall be provided to national and
regional authorities for the design and implementation of such strategies, to
identify opportunities for joint financing of R&I infrastructures of
European interest, the promotion of international collaboration, methodological
support through peer reviews, exchange of good practice, and training across
regions.
4.           Member States shall
consider the following additional measures aimed at unlocking their potential
for excellence in research and innovation, in a manner that is complementary to
and creates synergies with Horizon 2020, in particular through joint funding: 
(a)         
linking emerging centres of excellence and
innovative regions in less developed Member States to leading counterparts
elsewhere in Europe;
(b)         
building links with innovative clusters and
recognising excellence in less developed regions;
(c)         
establishing "ERA Chairs" to attract
outstanding academics, in particular to less developed regions; 
(d)         
supporting access to international networks for
researchers and innovators who are less involved in the ERA or from less
developed regions; 
(e)         
contributing as appropriate to the European
Innovation Partnerships;
(f)           
preparing national institutions and/or clusters
of excellence for participation in the Knowledge and Innovation Communities
(KICs) of the European Institute of Innovation and Technology (EIT); and
(g)         
hosting high-quality international researcher
mobility programmes with co-funding from the "Marie Sklodowska-Curie
Actions".
4.4         New Entrants Reserve (NER)
300 demonstration funding[35]
Member States shall ensure, where
appropriate, that financing from the CSF Funds is coordinated with support from
the NER 300 Programme, which uses the revenues from auctioning 300 million
allowances reserved under the new entrants reserve of the European Emissions
Trading Scheme to co-finance a wide range of large-scale demonstration projects
of carbon capture and storage (CCS) as well as of innovative renewables
technologies across the EU.
4.5         LIFE[36] and the
environmental acquis
1.           Member States shall, where
possible, seek to exploit synergies with Union policy instruments (both funding
and non-funding instruments) serving climate change mitigation and adaptation,
environmental protection and resource efficiency.
2.           Member States shall, where
appropriate, ensure complementarity and coordination with LIFE, in particular
with Integrated Projects in the areas of nature, water, waste, air, climate
change mitigation and climate change adaptation. This coordination shall be
achieved in particular by promoting the funding of activities through the CSF
Funds that complement Integrated Projects under the LIFE Programme as well as
by promoting the use of solutions, methods and approaches validated under the
LIFE Programme. 
3.           The relevant sectoral
plans, programmes or strategies (including the Prioritised Action Framework,
the River Basin Management Plan, the Waste Management Plan, the national
mitigation plan or adaptation strategy), as referred to in the LIFE Regulation,
shall serve as the coordination framework for support from the different Funds.
4.6         ERASMUS for All[37]
1.           Member States shall seek
to use CSF Funds to mainstream tools and methods developed and tested successfully
under "Erasmus for All".
2.           Member States shall ensure
effective coordination between CSF Funds and ‘Erasmus for All’ at national
level through a clear distinction in the types of investment and target groups
supported. Member States shall seek complementarity with regards to the funding
of mobility actions, while exploring possible synergies. 
3.           Coordination shall be
achieved by putting in place appropriate cooperation mechanisms between
managing authorities and the national agencies established under the ‘Erasmus
for All’ programme.
4.7         Programme for Social
Change and Innovation (PSCI)[38]
1.           Member States shall, where
appropriate, seek effective coordination between the Programme for Social
Change and Innovation and the support provided by the CSF Funds under the
employment and social inclusion thematic objectives. 
2.           Member States shall, where
appropriate, seek to scale-up the most successful measures developed under the
progress axis of the PSCI, notably on social innovation and social policy
experimentation with the support of the ESF. 
3.           In order to promote
workers' geographical mobility and boost employment opportunities, Member
States shall ensure complementarity of actions to enhance transnational labour
mobility supported by the ESF, including cross-border partnerships, with
support provided under the EURES axis of the PSCI. 
4.           Member States shall seek
complementarity and coordination between CSF Funds' support for
self-employment, entrepreneurship, business creation and social enterprises and
the PSCI support under the microfinance and social entrepreneurship axis aimed
at increasing the access to microfinance for people furthest away from the
labour market and for micro-enterprises as well as supporting the development
of social enterprises. 
4.8         Connecting Europe facility
(CEF)[39]
1.           The CEF is the dedicated
Union fund for the implementation of the Union policies for Trans-European
Transport Networks of infrastructure (TENs) in the field of transport,
telecommunications and energy. To maximise European added value in these areas,
Member States and the Commission shall ensure that ERDF and Cohesion Fund
interventions are planned in close cooperation with the support provided from
the CEF, so as to avoid duplication of efforts and ensure that optimal links of
different types of infrastructure at local, regional and national levels, and
across the Union are provided for. Maximum leverage of the different funding
instruments shall be ensured for projects with a European and Single Market
dimension, and in particular those projects implementing the priority
transport, energy and digital infrastructure networks as identified in the
respective TEN policy frameworks. 
2.           In the field of transport,
plans shall be based on real and projected transport demand and identify
missing links and bottlenecks, taking into account the development of Union
cross border links, and developing links across regions within a Member State.
Investment in regional connectivity to the comprehensive trans-European
transport network (TEN-T) and to the core TEN-T network shall ensure that urban
and rural areas benefit from the opportunities created by major networks.
3.           Prioritisation of investments
which have an impact beyond a certain Member State, particularly along the core
TEN-T network corridors, shall be coordinated with TEN-T planning and core
network corridors implementation plans, so that investments by the ERDF and the
Cohesion Fund in transport infrastructure are fully in line with the TEN-T
Guidelines.
4.           Member States shall take
into account the Commission’s White Paper on Transport[40] which
sets out a vision for a competitive and resource-efficient transport system,
highlighting that a significant reduction in greenhouse gases is required in
the transport sector. For the CSF Funds, this means focusing on sustainable
forms of transport and sustainable urban mobility as well as investing in areas
that offer the greatest European added value. Once identified, investments
shall be prioritised according to their contribution to mobility,
sustainability, to reducing greenhouse gas emissions, and to the Single
European Transport Area.
5.           The CSF Funds shall
deliver the local and regional infrastructures and their linkages to the
priority Union networks in the energy and telecommunication areas.
6.           Member States and the
Commission shall put in place appropriate coordination and technical support
mechanisms to ensure the complementarity and effective planning of ICT measures
to make full use of the different Union instruments (CSF Funds CEF, Trans-European
networks, Horizon 2020) for the financing of broadband networks and the digital
service infrastructures. The selection of the most appropriate financing
instrument shall take into account the revenue generating potential of the
operation and its level of risk in order to make the most effective use of
public funds. If an operation has been submitted for CEF funding but has not
been selected, its evaluation under the CEF shall be taken into account by the
Member State in the context of selection for support by the CSF Funds. 
4.9         IPA, ENI and EDF[41]
1.           Member States and the
Commission shall seek to increase coordination between external instruments and
the CSF Funds to improve effectiveness in achieving multiple Union policy
objectives. Coordination and complementarities with the European Development
Fund, the Pre Accession Instrument and the European Neighbourhood Instrument is
particularly important. 
2.           To support deeper
territorial integration, Member States shall seek to capitalise on synergies
between territorial cooperation activities under cohesion policy and the
European Neighbourhood Instruments, in particular with regard to cross border
cooperation activities. Member States shall also, where appropriate, ensure
that existing activities are associated with newly created European Groupings
of Territorial Cooperation, having special regard to coordination and exchange
of best practices.
5.           Coordination with Cooperation Activities
1.           Member States shall seek
complementarity between cooperation activities and other actions supported by
the CSF Funds.
2.           Member States shall ensure
that cooperation activities make an effective contribution to the objectives of
the Europe 2020 strategy and that cooperation is organised in support of wider
policy goals. To achieve this Member States shall ensure complementarity and
coordination with other Union-funded programmes or instruments.
3.           To reinforce the
effectiveness of cohesion policy Member States shall seek coordination and
complementarity between the European Territorial Cooperation and the "Investment
for Growth and Jobs goal" programmes, in particular to ensure coherent
planning and facilitate the implementation of large-scale investment.
4.           Member States shall, where
appropriate, ensure that the objectives of macro-regional and sea-basin
strategies form part of the overall strategic planning in cohesion policy
programmes in the regions and Member States concerned. Member States shall also
ensure that where macro-regional and sea basin strategies have been put in
place, all the CSF Funds, where appropriate, support their implementation. To
ensure efficient implementation there shall also be coordination with other Union-funded
instruments as well as other relevant instruments. 
5.           Member States shall, where
appropriate, make use of the possibility to carry out interregional and
transnational actions with beneficiaries located in at least one other Member
State within the framework of the operational programmes under the "Investment
for Growth and Jobs goal", including the implementation of relevant
research and innovation measures emanating from their smart specialisation
strategies.
6.           Horizontal Principles and Cross-cutting
Policy Objectives
A. Horizontal principles
6.1         Partnership and
multi-level governance 
In accordance with Article 5, the principle
of partnership and multi-level governance shall be respected by Member States
in order to facilitate achieving social, economic and territorial cohesion and
delivery of the Union's priorities of smart, sustainable and inclusive growth.
This requires coordinated action carried out in accordance with the principles
of subsidiarity and proportionality, and in partnership. It also shall take the
form of operational and institutionalised cooperation, in particular with
regard to the drawing-up and implementation of the Union's policies. Member
States shall therefore make full use of the partnerships established in the
framework of the CSF Funds. 
6.2         Sustainable development 
1.           To ensure the full
mainstreaming of sustainable development into the CSF Funds, and respecting the
principle of sustainable development as laid down in Article 3 of the Treaty on
European Union, the obligation to integrate environmental protection
requirements according to Article 11 and the polluter pays principle as set out
in Article 192 of the Treaty on the Functioning of the European Union, managing
authorities shall undertake actions throughout the programme lifecycle, to avoid
or reduce environmentally harmful effects of interventions and ensure results
in net social, environmental and climate benefits by the following actions:
(a)         
directing investments towards the most
resource-efficient and sustainable options,
(b)         
avoiding investments that may have a significant
negative environmental or climate impact, and supporting actions to mitigate
any remaining impacts,
(c)         
taking a long-term perspective when ‘life-cycle’
costs of alternative options for investment are compared, 
(d)         
increasing the use of green public procurement.
2.           Member States shall ensure
that investments made with the support of the CSF Funds consider climate change
mitigation potential, as well as be resilient to the impact of climate change
and natural disasters such as increased risks of flooding, heat waves and
extreme weather events.
3.           Member States shall track
biodiversity related expenditure using the methodology based on the categories
of intervention or measures adopted by the Commission.
4.           Investments also need to
be consistent with the water hierarchy, with a focus on demand management
options with alternative supply options only to be considered when the
potential for water savings and efficiency has been exhausted. Public
intervention in the waste management sector shall complement efforts by the
private sector, in particular producer responsibility. Actions should support
innovative approaches that promote a closed-loop economy and need to be
consistent with the waste hierarchy.
6.3         Promotion of equality
between men and women and non-discrimination 
1.           In accordance with Article
7, Member States shall pursue the objective of equality between men and women
and must take appropriate steps to prevent any discrimination and to ensure
accessibility during the preparation, implementation, monitoring and evaluation
of operations in the programmes co-financed by the CSF Funds. When pursuing the
objectives of Article 7, Member States shall describe in detail actions to be
taken, in particular with regard to selection of operations, setting of
objectives for interventions, and arrangements for monitoring and reporting.
Member States shall also carry out gender analyses where appropriate.
2.           Member States shall ensure
the participation of the relevant bodies responsible for promoting gender
equality, non-discrimination and accessibility in the partnership, and ensure
adequate structures in accordance with national practices to advise on gender
equality, non-discrimination and accessibility in order to provide the
necessary expertise in the preparation, monitoring and evaluation of the CSF
Funds. The composition of the monitoring committees shall be gender balanced
and include a gender expertise/responsibility function.
3.           Managing authorities shall
regularly undertake specific evaluations or self-assessment exercises, in
coordination with the monitoring committees, focusing on the application of the
gender mainstreaming principle. 
4.           Member States shall
address, in an appropriate manner, the needs of disadvantaged groups in order
to allow them to better integrate into the labour market, and to fully
participate in society. 
B. Cross-cutting policy objectives
6.4         Accessibility
1.           Managing authorities shall
ensure that all products, goods, services and infrastructures that are open or
provided to the public and are co-financed by the CSF Funds are accessible to
all citizens including those with disabilities. In particular, accessibility to
the physical environment, transport, information and communication technologies
in order to achieve inclusion for disadvantaged groups, including persons with
disabilities has to be ensured. Managing authorities shall undertake actions
throughout the programme lifecycle to identify and remove existing accessibility
barriers or prevent new ones. 
6.5         Addressing demographic
change
1.           The challenges resulting
from demographic change shall be taken into account at all levels. Member
States shall therefore make use of the CSF Funds to develop tailor-made
strategies, where appropriate, to tackle demographic problems and to create
growth linked to an ageing society.
2.           Member States shall use
the CSF Funds to take action to facilitate inclusion of all age groups. They
shall in particular enhance job opportunities for the elderly and young people.
Investments in health infrastructures shall serve the goal of a long and
healthy working life for all of the Union’s citizens. 
3.           In the regions most
affected by demographic change, Member States shall identify measures to:
(a)         
support demographic renewal through better
conditions for families and an improved balance between working and family
life; 
(b)         
boost employment, raise productivity and
economic performance through investing in education, ICT and research;
(c)         
focus on the adequacy and quality of education
and social support structures; and
(d)         
ensure cost-effective provision of health care
and long-term care including investment in e-health, e-care and infrastructure.
6.6         Climate change mitigation
and adaptation
Climate change mitigation and adaptation
and risk prevention shall be integrated in the preparation, programming, implementation,
monitoring and evaluation of all funds.
The visibility of contributions towards the
goal of a spending of at least 20% of the Union budget on climate change
mitigation shall be ensured. 
7. Arrangements to Address Territorial Challenges 
7.1.        Member States and regions
shall undertake the following steps for the purpose of preparation of their
Partnership Contracts and programmes:
(a)         
An analysis of the Member State’s or region’s
development potential and capacity, particularly in relation to the key
challenges identified in Europe 2020, the National Reform Programmes and the
relevant country-specific recommendations. The responsible authorities shall undertake
a detailed analysis of national, regional and local characteristics;
(b)         
An assessment of the major challenges to be
addressed by the region or Member State, the identification of the bottlenecks
and missing links, innovation gaps, including the lack of planning and
implementation capacity that inhibit the long-term potential for growth and
jobs. This shall form the basis for the identification of the possible fields
and activities for policy prioritisation, intervention and concentration;
(c)         
An assessment of the cross-sectoral,
cross-jurisdictional or cross-border coordination challenges, particularly in
the context of macro-regional and sea-basin strategies;
(d)         
Identification of steps to achieve improved
coordination across different territorial levels and sources of funding to
deliver an integrated approach linking Europe 2020 with regional and local
actors.
7.2.        In order to take into
account the objective of territorial cohesion, the Member States and regions
shall ensure that the overall approach to promoting smart, sustainable and
inclusive growth:
(a)         
reflects the role of cities, rural areas
fisheries and coastal areas, areas facing specific geographical or demographic
problems; 
(b)         
takes account of the specific challenges of the
outermost regions, the northernmost regions with a very low population density
and of island, cross-border or mountain regions; 
(c)         
addresses urban-rural linkages, in terms of
access to affordable, quality infrastructures and services, and problems in
regions with a high concentration of socially marginalised communities.
ANNEX II

Method for establishing the performance framework
1.           The performance framework
shall consist of milestones established for each priority 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, 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 III
Annual
breakdown of commitment appropriations for 2014 to 2020
[…]
ANNEX IIIter
Methodology concerning the
specific allocation for the Youth Employment Initiative referred to in Article
83
I. The annual breakdown of the specific
allocation for the Youth Employment Initiative is determined in accordance with
the following steps:
1. The number of young unemployed persons between the ages of 15-24
shall be identified in the NUTS 2 level regions that have youth unemployment
rates of more than 25% in 2012 (hereinafter the "eligible regions").
2. The allocation corresponding to each eligible region is
calculated on the basis of the ratio between the number of young unemployed
persons in the eligible region and the total number of young unemployed persons
referred to in point 1 in all eligible regions.
3. The allocation for each Member State is the sum of the
allocations for each of its eligible regions. '
II. The specific allocation for the Youth
Employment Initiative shall not be taken into account for the purpose of
applying the capping rules set out in Annex IIIbis in relation to the
allocation of the global resources.
ANNEX IV
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"[42],
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 V

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[43]. || –                         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[44]; –               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[45], 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[46] 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[47]. || –                         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 [48]. 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[49]. 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[50]. 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[51]. || –                         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)[52].   || –                         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[53] || –                         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 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[54]. || –                      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[55].   
 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[56], 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: –               a realistic and mature project pipeline (including a 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. 
 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 labour mobility: Active labour market policies are designed and delivered in coherence with the Employment guidelines[57];   || –                         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[58] and in coherence with the Employment guidelines and the Broad Guidelines for the economic policies of the Member States and of the Union[59], regarding the enabling conditions for job creation. || –                         A comprehensive strategy in place which 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[60]: - 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[61]: –               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 the shift to 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[62] || –                         Actions to deliver on active and healthy ageing challenges[63]: –               relevant stakeholders are involved in the design and implementation of active ageing policies; –               a Member State has measures in place to promote active ageing and 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) [64]. || –                         Effective instruments are in place to support social partners and public authorities to develop proactive approaches towards change and restructuring. 
   || 8.6. Sustainable integration into the labour market of young people aged 15-24 not in employment, education or training: The existence of a comprehensive strategic policy framework for achieving the objectives of the Youth Employment Package and in particular for establishing a Youth Guarantee scheme in accordance with the Council recommendation of [xxx] || –     A comprehensive strategic policy framework for achieving the objectives of the Youth Employment Package and in particular for establishing a Youth Guarantee scheme in accordance with the Council recommendation of [xxx] is in place that: –        is based on evidence that measures the results for young people aged 15-24 not in employment, education or training: - provides for a system for collecting and analysing data and information on the Youth Guarantee scheme at relevant levels which provides a sufficient evidence-base to develop targeted policies and monitors developments, with counterfactual evaluations whenever possible –        identifies the relevant public authority in charge of establishing and managing the Youth Guarantee scheme and coordinating partnerships across all levels and sectors; –        involves all stakeholders that are relevant for addressing youth unemployment; –        is based on early intervention and activation; –        comprises supportive measures for labour market integration, including measures enhancing skills and labour market related measures. 
 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[65]. || –                         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 20 September 2011 on the modernisation of Europe's higher education systems[66]. || –                         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[67]. || –                         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[68] and the Employment guidelines.                               - A national Roma inclusion strategy is in place in accordance with the EU Framework for national Roma integration strategies[69]                                               - 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 States' administrative efficiency including public administration reform[70]   || –                         A strategy for reinforcing a Member State's administrative efficiency is in place and in the process of being implemented[71]. 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[72] and Directive 2000/43/EC of 29 June 2000 implementing the principle of equal treatment between persons irrespective of racial or ethnic origin[73] || –                         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. [74]   || –                         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[75] and with Directive (2001/42/EC) of 27 June 2001 on the assessment of the effects of certain plans and programmes on the environment[76].   || –                         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 VI
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[77]

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[78]

¨ 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".[79]
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[80]
¨ Centralised direct management by the Commission 
¨ Centralised indirect management with the delegation of implementation tasks to:
·      ¨  executive
agencies
·      ¨  bodies set
up by the Communities[81]
·      ¨  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[82]. 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. ([83]) || from EFTA[84] countries || from candidate countries[85] || 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[86] || 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 ||   
 New ERDF and ESF budget lines || Commitments || (1) || 37.004,476 || 37.564,774 || 38.023,079 || 38.379,867 || 38.722,325 || 39.021,277 || 39.303,920 || 268.019,718 
 Payments || (2) || 5.662,072 || 11.297,046 || 21.863,675 || 28.576,824 || 31.789,232 || 36.702,873 || 34.774,287 || 170.666,010 
 New CF Budget line before transfer to new Connecting Europe Facility budget line || Commitments || (1a) || 9.482,581 || 9.751,240 || 9.968,903 || 10.138,977 || 10.308,621 || 10.456,512 || 10.595,853 || 70.702,687 
 Payments || (2a) || 1.499,397 || 2.821,047 || 5.410,638 || 7.352,290 || 8.652,800 || 9.699,964 || 8.801,732 || 44.237,869 
 Transfer to the new Connecting Europe facility budget line || Commitments || (1b) || 1397,5 || 1401,8 || 1403,8 || 1414,8 || 1440,9 || 1451,3 || 1489,9 || 10 000,0 
 Payments || (2b) || 4,8 || 903,8 || 1003,8 || 1103,2 || 1129,9 || 1177,6 || 1303,6 || 6 626,7 
 Appropriations of an administrative nature financed from the envelope for specific programmes[87] || 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, EMPL and MOVE || Commitments || =1+1a +3 || 46.525,822 || 47.354,779 || 48.030,747 || 48.557,608 || 49.069,711 || 49.516,554 || 49.938,537 || 338.993,760 
 Payments || =2+2a +3 || 7.200,235 || 14.156,859 || 27.313,078 || 35.967,879 || 40.480,798 || 46.441,602 || 43.614,784 || 215.175,234 
  TOTAL operational appropriations || Commitments || (4) || 46.487,058 || 47.316,014 || 47.991,982 || 48.518,843 || 49.030,946 || 49.477,789 || 49.899,772 || 338722,405 
 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 || 46.525,822 || 47.354,779 || 48.030,747 || 48.557,608 || 49.069,711 || 49.516,554 || 49.938,537 || 338.993,760 
 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[88] || 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 || 46.635,210 || 47.464,166 || 48.140,134 || 48.666,995 || 49.179,098 || 49.625,941 || 50.047,924 || 339.759,469 
 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[89] || 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[90]… ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   ||   
 - 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 [91] || 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[92] of the multiannual financial framework [93] ||   ||   ||   ||   ||   ||   ||   ||   
 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 [94] || 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[95] 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)[96] 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 [97] || - at Headquarters[98] || 56 || 56 || 56 || 56 || 56 || 56 || 56 
 - in delegations ||   ||   ||   ||   ||   ||   ||   
 13 01 04 03 [99] || - at Headquarters[100] || 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)[101] || 
  (CA, INT, SNE from the "global envelope") ||   ||   ||   ||   ||   ||   ||   
  (CA, INT, JED, LA and SNE in the delegations) ||   ||   ||   ||   ||   ||   ||   
 04 01 04 01 [102] || - at Headquarters[103] || 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[104].
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[105] 
 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]               OJ C , , p. .
[2]               OJ C , , p. .
[3]               OJ C , , p. .
[4]               OJ L 248, 16.9.2002, p. 1. 
[5]               OJ L 154, 21.6.2003, p. 1.
[6]               OJ L 209, 2.8.1997, p. 1.
[7]               OJ L 55, 28.2.2011, p.13.
[8]               OJ L 210, 31.7.2006, p. 25.
[9]               
[10]             
[11]             
[12]             OJ L , , p. .
[13]             
[14]             
[15]             
[16]             OJ L 191, 23.7.2010, p.28.
[17]             OJ L 308, 24.11.2010, p.46.
[18]             OJ L 379, 28.12.2006, p. 5.
[19]             OJ L 337, 21.12.2007, p. 35.
[20]             OJ L 193, 25.7.2007, p. 6.
[21]             OJ L 134, 30.4.2004, p. 114.
[22]             OJ L 210, 31.7.2006, p. 19.
[23]             OJ
L 53, 23.2.2002, p. 1.
[24]             OJ L 118, 12.5.2010, p.1.
[25]             OJ L 53, 23.2.2002, p. 1.
[26]             Ref. EU2020 headline targets. 
[27]             OJ L 197, 21.7.2001, p. 30
[28]             OJ…
[29]             OJ L 209, 2.8.1997, p.1.
[30]             As defined by the European System of
Accounts (ESA) and transmitted by all 27 Member States in their Stability
and Convergence Programmes.
[31]             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.
[32]             OJ L 83,
27.3.1999, p. 1. 
[33]             COM(2011)
809 final.
[34]             COM(2011)234
final.
[35]             OJ
L 290, 6.11.2010, p. 39–48 2010/670/EU: Commission Decision of 3 November 2010
laying down criteria and measures for the financing of commercial demonstration
projects that aim at the environmentally safe capture and geological storage of
CO2 as well as demonstration projects of innovative renewable energy
technologies under the scheme for greenhouse gas emission allowance trading
within the Community established by Directive 2003/87/EC of the European
Parliament and of the Council (2010/670/EU) OJ L 275, 25.10.2003, p. 32-46.
[36]             COM(2011)
874 final.
[37]             COM(2011)
788 final.
[38]             COM(2011)609
final.
[39]             COM(2011)
665 final.
[40]             Roadmap to a Single European Transport Area – Towards a competitive and
resource efficient transport system” COM 2011) 144 final.
[41]             COM(2011)
838 final; COM(2011) 839 final; COM(2011) 837 final.
[42]             As endorsed by
the ECOFIN Council on 7 September 2010.
[43]             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).
[44]             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)
[45]             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). 
[46]             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).
[47]             OJ L
48, 23.2.2011, p. 1.
[48]             OJ L 153, 18.6.2010, p. 13
[49]             OJ L 140, 5.6.2009, p. 136.
[50]             OJ L 114, 27.4.2006, p. 64.
[51]             OJ L 52, 21.2.2004, p.50.
[52]             OJ L 140, 5.6.2009, p. 16.
[53]             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.
[54]             OJ L 327, 22.12.2000, p. 1.
[55]             OJ L 327, 22.12.2000, p. 1.
[56]             OJ L 312, 22.11.2008, p. 3.
[57]             Council
decision (2010/707/EU) of 21 October 2010, OJ L 308, 24.11.2010, p.46.
[58]             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).
[59]             Council Recommendation (2010/410/EU) of 13
July 2010, OJ L 191, 23.07.2010, p. 28.
[60]             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 country specific Council Recommendation. 
[61]             Deadlines for delivery on all elements
here contained in this section may expire during the programme implementation
period.
[62]             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 country specific Council Recommendation. 
[63]             Deadlines for the achievement of delivery
on all the elements contained in this section may expire during the programme
implementation period.
[64]             Communication from the Commission to the European
Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions – A shared commitment for employment – COM(2009)257
Final.
[65]             OJ C 191, 1.7.2011, p. 1. 
[66]             COM (2011)567 final.
[67]             Council conclusions of 12 May 2009 on a
strategic framework for European cooperation in education and training
("ET 2020") (OJ C 119, 28.5.2009, p.2)
[68]             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).
[69]             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.
[70]             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 country specific Council Recommendation.
[71]             Deadlines for the achievement of all the
elements contained in this section may expire during the programme
implementation period.
[72]             OJ L 303, 2.12.2000, p.16
[73]             OJ L 180, 19.07.2000, p. 22
[74]             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.
[75]             OJ L 175, 5.7.1985, p. 40.
[76]             OJ L 197,
21.7.2001, p. 30.
[77]             ABM: Activity-Based Management – ABB:
Activity-Based Budgeting.
[78]             As referred to in Article 49(6)(a) or (b)
of the Financial Regulation.
[79]             COM(2010) 700, 19.10.2010.
[80]             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
[81]             As referred to in Article 185 of the
Financial Regulation.
[82]             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
[83]             Diff. = Differentiated appropriations /
Non-Diff. = Non-differentiated appropriations
[84]             EFTA: European Free Trade Association. 
[85]             Candidate countries and, where applicable,
potential candidate countries from the Western Balkans.
[86]             Year N is the year in which implementation
of the proposal/initiative starts.
[87]             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.
[88]             Year N is the year in which implementation
of the proposal/initiative starts.
[89]             Outputs
are products and services to be supplied (e.g.: number of student exchanges
financed, number of km of roads built, etc.).
[90]             As
described in Section 1.4.2. "Specific objective(s)…".
[91]             Year N is the year in which implementation
of the proposal/initiative starts.
[92]             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.
[93]             External staff financed from former BA
lines, based on the 2011 Final Allocation for Human Resources, including
external staff at Headquarters and in Delegations
[94]             Year N is the year in which implementation
of the proposal/initiative starts.
[95]             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.
[96]             CA= Contract Agent; INT= agency staff
("Intérimaire"); JED= "Jeune Expert en
Délégation" (Young Experts in Delegations); LA= Local Agent; SNE=
Seconded National Expert; 
[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]             Under the ceiling for external personnel
from operational appropriations (former "BA" lines).
[100]            Essentially for Structural Funds, European
Agricultural Fund for Rural Development (EAFRD) and European Fisheries Fund
(EFF).
[101]            CA= Contract Agent; INT= agency staff
("Intérimaire"); JED= "Jeune Expert en
Délégation" (Young Experts in Delegations); LA= Local Agent; SNE=
Seconded National Expert; 
[102]            Under the ceiling for external personnel
from operational appropriations (former "BA" lines).
[103]            Essentially for Structural Funds, European
Agricultural Fund for Rural Development (EAFRD) and European Fisheries Fund
(EFF).
[104]            See points 19 and 24 of the
Interinstitutional Agreement.
[105]            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.