Article 176 Performance guarantees and retention money guarantees
1. A performance guarantee shall amount to a maximum of 10 % of the total value of the contract. It shall be fully released after final acceptance of the works, supplies or complex services, within a period subject to the time limits set out in Article 116(1) and to be specified in the contract. It may be released partially or fully upon provisional acceptance of the works, supplies or complex services. 2. A retention money guarantee amounting to a maximum of 10 % of the total value of the contract may be constituted by deductions from interim payments as and when they are made or by deduction from the final payment. The contracting authority shall determine the amount of the retention money guarantee which shall be proportionate to the risks identified in relation to the performance of the contract, taking into account its subject matter and the usual commercial terms applicable in the sector concerned. A retention money guarantee shall not be used in a contract where a performance guarantee has been requested and not released. 3. Subject to approval by the contracting authority, the contractor may request to replace the retention money guarantee by another type of guarantee referred to in Article 155. 4. The contracting authority shall release the retention money guarantee after the expiry of the contractual liability period, within a period subject to the time limits set out in Article 116(1) and to be specified in the contract.
Article 177 The contracting authority
1. Union institutions, executive agencies and Union bodies referred to in Articles 70 and 71 shall be deemed to be contracting authorities in respect of contracts awarded on their own account, except where they purchase from a central purchasing body. Departments of Union institutions shall not be deemed to be contracting authorities where they conclude service-level agreements amongst themselves. Union institutions deemed to be contracting authorities in accordance with the first subparagraph shall, in accordance with Article 60, delegate the necessary powers for the exercise of the function of the contracting authority. 2. Each authorising officer by delegation or subdelegation within each Union institution shall assess whether the thresholds referred to in Article 178(1) have been reached.
Article 178 Thresholds applicable and standstill period
1. To award public and concession contracts, the contracting authority shall respect the thresholds laid down in Article 4, points (a) and (b), of Directive 2014/24/EU when selecting a procedure referred to in Article 167(1) of this Regulation, and respectively the threshold laid down in Article 8(1) of Directive 2014/23/EU for concessions. By way of derogation from the first subparagraph of this Article, for contracts awarded by, or exclusively in the interest of, Union delegations in third countries, the applicable threshold for public supply and service contracts shall be EUR 300 000, instead of the threshold for public supply and service contracts laid down in Article 4, point (b), of Directive 2014/24/EU. Article 152(5), Article 178(1), Article 179(3) as well as points 11.1(m), 14 and 18.1 of Annex I, which refer to procurement by Union delegations in third countries, shall also apply to European Parliament offices in third countries. 2. Subject to the exceptions and conditions specified in Annex I to this Regulation, in the case of contracts the value of which exceeds the thresholds referred to in paragraph 1, the contracting authority shall not sign the contract or framework contract with the successful tenderer until a standstill period has elapsed. 3. The standstill period shall have a duration of 10 days when using electronic means of communication and 15 days when using other means.
Article 179 Rules on access to procurement
1. Participation in procurement procedures shall be open on equal terms to all natural and legal persons within the scope of the Treaties and to all natural and legal persons established in a third country which has a special agreement with the Union in the field of procurement under the conditions laid down in such an agreement. It shall also be open to international organisations. 2. For the purpose of Article 163(4), the JRC shall be considered as a legal person established in a Member State. 3. Without prejudice to paragraphs 1 and 2, for contracts awarded by, or exclusively in the interest of, Union delegations in third countries, participation in procurement procedures shall also be open on equal terms to all natural and legal persons established in the third country where the Union delegation concerned is established. In addition, it may be decided under exceptional circumstances duly justified by the authorising officer responsible to allow third-country nationals or entities, to tender for contracts. 4. Participation in procurement procedures and performance of the contracts awarded shall be subject to conditions laid down in Regulation (EU) 2022/1031 and in implementing acts (IPI measures) adopted under that Regulation.
Article 180 Procurement rules of the World Trade Organisation
Where the plurilateral Agreement on Government Procurement concluded within the World Trade Organisation applies, the procurement procedure shall also be open to economic operators established in the states which have ratified that agreement, under the conditions laid down therein.
Article 181 External action procurement
1. The general provisions on procurement set out in Chapter 1 of this Title shall apply to contracts covered by this Chapter subject to the special provisions relating to the arrangements for awarding external contracts laid down in Chapter 3 of Annex I. Articles 177 to 180 shall not apply to the procurement covered by this Chapter. Subject to the exceptions and conditions specified in Annex I, the contracting authority shall not sign the contract or framework contract with the successful tenderer until a standstill period has elapsed. The standstill period shall have a duration of 10 days when using electronic means of communication and 15 days when using other means. Article 166, Article 167(1), points (a) and (b), and the second subparagraph of this paragraph shall only apply to procedures with a value equal to or greater than: (a) EUR 300 000 for service and supply contracts; (b) EUR 5 000 000 for works contracts. 2. This Chapter shall apply to: (a) procurement where the Commission does not award contracts on its own account; (b) procurement by persons or entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), where provided for in the contribution agreements or financing agreements referred to in Article 157. 3. The procurement procedures shall be laid down in the financing agreements provided for in Article 161. 4. This Chapter shall not apply to actions under sector-specific basic acts relating to humanitarian crisis management aid, civil protection operations and humanitarian aid operations.
Article 182 Rules on access to procurement in the field of external actions
1. Participation in procurement procedures shall be open on equal terms to all persons within the scope of the Treaties and to any other natural or legal person in accordance with the specific provisions in the basic instruments governing the cooperation sector concerned. It shall also be open to international organisations. 2. It may be decided, under exceptional circumstances duly justified by the authorising officer responsible, to allow third-country nationals, other than those referred to in paragraph 1 of this Article, to tender for contracts. 3. Where an agreement on widening the market for procurement of goods or services to which the Union is party applies, the procurement procedures for contracts financed by the budget shall also be open to natural and legal persons established in a third country other than those referred to in paragraphs 1 and 2, under the conditions laid down in that agreement.
Article 183 Scope and form of grants
1. This Title applies to grants awarded under direct management. 2. Grants may be awarded in order to finance any of the following: (a) an action intended to help achieve a Union policy objective (action grants); (b) the functioning of a body which has an objective forming part of, and supporting, a Union policy (operating grants). Operating grants shall take the form of a financial contribution to the work programme of the body referred to in the first subparagraph, point (b). 3. Grants may take any of the forms provided for in Article 125(1). Where the grant takes the form of financing not linked to costs pursuant to Article 125(1), first subparagraph, point (a): (a) the provisions related to eligibility and verification of costs laid down in this Title, in particular Articles 185, 187 and 188, Article 189(2), (3) and (4), Article 193, Article 194(3), the provisions relating to an estimated budget or estimated eligible costs laid down in Article 199(1), point (e), and the provisions laid down in Article 206(4), shall not apply; (b) as regards Article 184, only the procedure and the requirements referred to in paragraphs 2 and 3, paragraph 4, first subparagraph, points (a) and (d), and second subparagraph, point (a), and paragraph 5, of that Article shall apply. 4. Each Union institution may award public contracts or grants for communication activities. Grants may be awarded where the use of procurement is not appropriate due to the nature of activities. 5. The JRC may receive funding charged to appropriations other than research and technological development appropriations in respect of its participation in grant award procedures financed in whole or in part from the budget. In such cases, Article 201(4), as far as financial capacity is concerned, and Article 199(1), points (a) to (d), shall not apply.
Article 184 Lump sums, unit costs and flat-rate financing
1. Where the grant takes the form of lump sums, unit costs or flat-rate financing as referred to in Article 125(1), first subparagraph, point (c), (d) or (e), of this Title shall apply, with the exception of the provisions or parts of the provisions related to the verification of eligible costs actually incurred. 2. Where possible and appropriate, lump sums, unit costs or flat rates shall be determined in such a way as to allow their payment upon achievement of concrete outputs and/or results. 3. Unless otherwise provided in the basic act, the use of lump sums, unit costs or flat-rate financing shall be authorised by a decision of the authorising officer responsible, who shall act in accordance with the internal rules of the Union institution concerned. 4. The authorisation decision shall contain at least the following: (a) justification concerning the appropriateness of such forms of financing with regard to the nature of the supported actions or work programmes, as well as to the risks of irregularities and fraud and costs of control; (b) identification of the costs or categories of costs covered by lump sums, unit costs or flat-rate financing, which shall be considered eligible in accordance with Article 189(3), points (c), (e) and (f), and Article 189(4), and which shall exclude ineligible costs under the applicable Union rules; (c) description of the methods for determining lump sums, unit costs or flat-rate financing. Those methods shall be based on one of the following: (i) statistical data, similar objective means or an expert judgement provided by internally available experts or procured in accordance with the applicable rules; or (ii) beneficiary-by-beneficiary approach, by reference to certified or auditable historical data of the beneficiary or to its usual cost accounting practices; (d) where possible, the essential conditions triggering the payment, including, where applicable, the achievement of outputs and/or results; (e) where lump sums, unit costs and flat rates are not output based and/or result based, a justification on why an output based and/or result based approach is not possible or appropriate. The methods referred to in the first subparagraph, point (c), shall ensure: (a) the respect for the principle of sound financial management, in particular the appropriateness of the respective amounts with regard to the required outputs and/or results taking into account foreseeable revenue to be generated by the actions or work programmes; (b) reasonable compliance with the principles of co-financing and no double funding. 5. The authorisation decision shall apply for the duration of the programme or programmes unless otherwise provided in that decision. The authorisation decision may cover the use of lump sums, unit costs or flat rates applicable to more than one specific funding programme where the nature of the activities or of the expenditure allow for a common approach. In such cases, the authorising decision may be adopted by the following: (a) the authorising officers responsible where all activities concerned fall under their responsibility; (b) the Commission where this is appropriate in view of the nature of the activities or of the expenditure or in view of the number of authorising officers concerned. 6. The authorising officer responsible may authorise or impose, in the form of flat-rates, funding of the beneficiary’s indirect costs up to a maximum of 7 % of total eligible direct costs for the action. A higher flat rate may be authorised by a reasoned Commission decision. The authorising officer responsible shall report in the annual activity report referred to in Article 74(9) on any such decision taken, the flat rate authorised and the reasons leading to that decision. 7. SME owners and other natural persons who do not receive a salary may declare eligible personnel costs for the work carried out by themselves under an action or work programme, on the basis of unit costs authorised in accordance with paragraphs 1 to 6. 8. Beneficiaries may declare personnel costs for the work carried out by volunteers under an action or work programme, on the basis of unit costs authorised in accordance with paragraphs 1 to 6.
Article 185 Single lump sums
1. A lump sum as referred to in Article 125(1), first subparagraph, point (d), may cover the entire eligible costs of an action or a work programme (single lump sum). 2. In accordance with Article 184(4), single lump sums may be determined on the basis of the estimated budget of the action or work programme. Such estimated budget shall comply with the principles of economy, efficiency and effectiveness. The compliance with those principles shall be verified ex ante at the time of evaluation of the grant application. 3. When authorising single lump sums the authorising officer responsible shall comply with Article 184.
Article 186 Checks and controls on beneficiaries related to lump sums, unit costs and flat rates
1. The authorising officer responsible shall check, at the latest before the payment of the balance: (a) the fulfilment of the conditions triggering the payment of lump sums, unit costs or flat-rates, including, where required, the achievement of outputs and/or results; (b) that the lump sums, unit costs or flat rates were indicated in the estimated overall budget of the action or work programme; (c) that the conditions referred to in point (a) were fulfilled during the duration of the action or the work programme. In addition, the fulfilment of those conditions may be subject to ex post controls. The amounts of lump sums, unit costs or flat-rate financing determined ex ante by application of the method authorised by the authorising officer responsible or the Commission in accordance with Article 184 shall not be challenged by ex post controls. This is without prejudice to the right of the authorising officer responsible to check that the conditions triggering the payment as referred to in the first subparagraph of this paragraph are fulfilled, and to reduce the grant in accordance with Article 132(4) where those conditions are not fulfilled or in the event of irregularity, fraud or a breach of other obligations. Where lump sums, unit costs or flat rates are established on the basis of the usual cost accounting practices of the beneficiary Article 188(2) shall apply. 2. The frequency and scope of checks and controls may depend, inter alia, upon the nature of the action or the beneficiary, including past irregularities or fraud attributable to that beneficiary. 3. The conditions triggering the payment of lump sums, unit costs or flat-rates shall not require reporting on the costs actually incurred by the beneficiary. 4. Payment of the grant on the basis of lump sums, unit costs or flat-rate financing shall not affect the right of access to the statutory records of the beneficiaries for the purposes referred to in Articles 129 and 187.
Article 187 Periodic assessment of lump sums, unit costs or flat-rates
The method for determining lump sums, unit costs or flat rates, the underlying data and the resulting amounts, as well as the adequateness of those amounts with regard to the output and/or results delivered, shall be assessed periodically and, where appropriate, adjusted in accordance with Article 184. The frequency and scope of assessments shall depend on the evolution and the nature of the costs, in particular taking into account substantial changes in market prices and other relevant circumstances.
Article 188 Usual cost accounting practices of the beneficiary
1. Where recourse to the usual cost accounting practices of the beneficiary is authorised, the authorising officer responsible may assess compliance of those practices with the conditions set out in Article 184(4). That assessment may be carried out ex ante or by using an appropriate strategy for ex post controls. 2. If the compliance of the beneficiary’s usual cost accounting practices with the conditions set out in Article 184(4) has been established ex ante , the amounts of lump sums, unit costs or flat-rate financing determined by application of those practices shall not be challenged by ex post controls. This shall not affect the right of the authorising officer responsible to reduce the grant in accordance with Article 132(4). 3. The authorising officer responsible may consider that the usual cost accounting practices of the beneficiary comply with the conditions set out in Article 184(4) if they are accepted by national authorities under comparable funding schemes.
Article 189 Eligible costs
1. Grants shall not exceed an overall ceiling expressed in terms of an absolute value (maximum grant amount) which shall be established on the basis of: (a) the overall amount of financing not linked to costs in the case referred to in Article 125(1), first subparagraph, point (a); (b) estimated eligible costs, where possible, in the case referred to in Article 125(1), first subparagraph, point (b); (c) the overall amount of the estimated eligible costs clearly defined in advance in the form of lump sums, unit costs or flat rates as referred to in Article 125(1), first subparagraph, points (c), (d) and (e). Without prejudice to the basic act, grants may in addition be expressed as a percentage of the estimated eligible costs, where the grant takes the form specified in the first subparagraph, point (b), or as a percentage of the lump sums, unit costs or flat rate financing referred to in the first subparagraph, point (c). Where the grant takes the form specified in the first subparagraph, point (b), of this paragraph and where, due to specificities of an action, the grant can only be expressed in terms of an absolute value, the verification of the eligible costs shall be done in accordance with Article 158(4) and, where applicable, Article 158(6). 2. Without prejudice to the maximum co-financing rate specified in the basic act: (a) the grant shall not exceed the eligible costs; (b) where the grant takes the form specified in paragraph 1, first subparagraph, point (b), and where the estimated eligible costs include costs for volunteers’ work referred to in Article 184(8), the grant shall not exceed the estimated eligible costs other than the costs for volunteers’ work. 3. Eligible costs actually incurred by the beneficiary, as referred to in Article 125(1), first subparagraph, point (b), shall meet all of the following criteria: (a) they are incurred during the duration of the action or of the work programme, with the exception of costs relating to final reports and audit certificates; (b) they are indicated in the estimated overall budget of the action or work programme; (c) they are necessary for the implementation of the action or of the work programme which is the subject of the grant; (d) they are identifiable and verifiable, in particular being recorded in the accounting records of the beneficiary and determined according to the applicable accounting standards of the country where the beneficiary is established and according to the usual cost accounting practices of the beneficiary; (e) they comply with the requirements of applicable tax and social legislation; (f) they are reasonable, justified, and comply with the principle of sound financial management, in particular regarding economy and efficiency. 4. Calls for proposals shall specify the categories of costs considered as eligible for Union funding. Unless provided otherwise in the basic act and in addition to paragraph 3 of this Article, the following categories of costs shall be eligible where the authorising officer responsible has declared them as such under the call for proposals: (a) costs relating to a pre-financing guarantee lodged by the beneficiary, where that guarantee is required by the authorising officer responsible pursuant to Article 156(1); (b) costs relating to certificates on the financial statements and operational verification reports, where such certificates or reports are required by the authorising officer responsible; (c) VAT, where it is not recoverable under the applicable national VAT legislation and is paid by a beneficiary other than a non-taxable person within the meaning of Article 13(1), first subparagraph, of Council Directive 2006/112/EC ( 62 ) ; (d) depreciation costs, provided they are actually incurred by the beneficiary; (e) salary costs of the personnel of national administrations to the extent that they relate to the cost of activities which the relevant public authority would not carry out if the project concerned were not undertaken. For the purposes of the second subparagraph, point (c): (a) VAT shall be considered as not recoverable if according to national law it is attributable to any of the following activities: (i) exempt activities without right of deduction; (ii) activities which fall outside the scope of VAT; (iii) activities, as referred to in point (i) or (ii), in respect of which VAT is not deductible but refunded by means of specific refund schemes or compensation funds not referred to in Directive 2006/112/EC, even if that scheme or fund is established by national VAT legislation; (b) VAT relating to the activities listed in Article 13(2) of Directive 2006/112/EC shall be regarded as paid by a beneficiary other than a non-taxable person within the meaning of Article 13(1), first subparagraph, of that Directive, regardless of whether those activities are regarded by the Member State concerned as activities engaged in by bodies governed by public law acting as public authorities.
Article 190 Affiliated entities and sole beneficiary
1. For the purpose of this Title, the following entities shall be considered as entities affiliated to the beneficiary: (a) entities forming the sole beneficiary in accordance with paragraph 2; (b) entities that satisfy the eligibility criteria and that do not fall within one of the situations referred to in Articles 138(1) and 143(1) and that have a link with the beneficiary, in particular a legal or capital link, which is neither limited to the action nor established for the sole purpose of its implementation. Section 2 of Chapter 2 of Title V shall apply also to affiliated entities. 2. Where several entities satisfy the criteria for being awarded a grant and together form one entity, that entity may be treated as the sole beneficiary, including where the entity is specifically established for the purpose of implementing the action to be financed by the grant. 3. Unless otherwise provided in the call for proposals, entities affiliated to a beneficiary may participate in the implementation of the action, provided that both of the following conditions are fulfilled: (a) the entities concerned are identified in the grant agreement; (b) the entities concerned abide by the rules applicable to the beneficiary under the grant agreement with regard to: (i) eligibility of costs or conditions triggering the payment; (ii) rights of checks and audits by the Commission, OLAF and the Court of Auditors. Costs incurred by such entities may be accepted as eligible costs actually incurred or may be covered by lump sums, unit costs and flat-rate financing.
Article 191 General principles applicable to grants
Grants shall be subject to the principles of: (a) equal treatment; (b) transparency; (c) co-financing; (d) non-cumulative award and no double financing; (e) non-retroactivity; (f) no-profit.
Article 192 Transparency
1. Grants shall be awarded following a publication of calls for proposals, except in the cases referred to in Article 198. 2. All grants awarded in the course of a financial year shall be published in accordance with Article 38(1) to (4). 3. Following the publication referred to in paragraphs 1 and 2, when requested by the European Parliament and by the Council, the Commission shall forward a report to them on: (a) the number of applicants in the preceding financial year; (b) the number and percentage of successful applications per call for proposals; (c) the average duration of the procedure from the date of closure of the call for proposals to the award of a grant; (d) the number and amount of grants for which an ex post publication did not take place in the preceding financial year in accordance with Article 38(4); (e) any grant awarded to financial institutions, including the EIB or the EIF in accordance with Article 198, first paragraph, point (g).
Article 193 Co-financing
1. Grants shall involve co-financing. As a result, the resources necessary to carry out the action or the work programme shall not be provided entirely by the grant. Co-financing may be provided in the form of the beneficiary’s own resources, income generated by the action or work programme or financial or in-kind contributions from third parties. 2. In-kind contributions from third parties in the form of volunteers’ work valued in accordance with Article 184(8) shall be presented as eligible costs in the estimated budget. They shall be presented separately from other eligible costs. Volunteers’ work may comprise up to 50 % of the overall co-financing. For the purposes of calculating that percentage, in-kind contributions and other co-financing shall be based on the estimates provided by the applicant. Other in-kind contributions from third parties shall be presented separately from the contributions to the eligible costs in the estimated budget. Their approximate value shall be indicated in the estimated budget and shall not be subject to subsequent changes. 3. By way of derogation from paragraph 1, an external action may be financed in full by the grant where this is essential for it to be carried out. In such a case, justification shall be provided in the award decision. 4. This Article shall not apply to interest rate rebates and guarantee fee subsidies.
Article 194 Principle of non-cumulative award and prohibition of double funding
1. Each action may give rise to the award of only one grant from the budget to any one beneficiary, except where otherwise authorised in the relevant basic acts. A beneficiary may be awarded only one operating grant from the budget per financial year. An action may be financed jointly from separate budget lines by different authorising officers responsible. 2. The applicant shall immediately inform the authorising officers of any multiple applications and multiple grants relating to the same action or to the same work programme. 3. In no circumstances shall the same costs be financed twice by the budget. 4. In relation to the following types of support, paragraphs 1 and 2 shall not apply and, where appropriate, the Commission may decide not to verify whether the same cost was financed twice: (a) study, research, training or education support paid to natural persons; (b) direct support paid to natural persons most in need, such as unemployed persons and refugees.
Article 195 No-profit principle
1. Grants shall not have the purpose or effect of producing a profit within the framework of the action or the work programme of the beneficiary (no-profit principle). 2. For the purposes of paragraph 1, a profit shall be defined as a surplus, calculated at the payment of the balance, of receipts over the eligible costs of the action or work programme, where receipts are limited to the Union grant and the revenue generated by that action or work programme. In the case of an operating grant, amounts dedicated to the building up of reserves shall not be taken into account for verifying compliance with the no-profit principle. 3. Paragraph 1 shall not apply to: (a) actions the objective of which is the reinforcement of the financial capacity of a beneficiary, or actions which generate income to ensure their continuity after the period of Union financing provided for in the grant agreement; (b) study, research, training or education support paid to natural persons or other direct support paid to natural persons most in need, such as unemployed persons and refugees; (c) actions implemented by non-profit organisations; (d) grants in the form referred to in Article 125(1), first subparagraph, point (a); (e) low value grants. 4. Where a profit is made, the Commission shall be entitled to recover the percentage of the profit corresponding to the Union contribution to the eligible costs incurred by the beneficiary in carrying out the action or work programme.
Article 196 Principle of non-retroactivity
1. Unless otherwise provided in this Article grants shall not be awarded retroactively. 2. A grant may be awarded for an action which has already begun provided that the applicant can demonstrate the need for starting the action prior to signature of the grant agreement. In such cases, costs incurred prior to the date of submission of the grant application shall not be eligible, except: (a) in duly justified exceptional cases as provided for in the basic act; or (b) in the event of extreme urgency for measures referred to in Article 198, first paragraph, point (a) or (b), whereby an early intervention by the Union would be of major importance. In the case referred to in the second subparagraph, point (b), the costs incurred by a beneficiary before the date of submission of the application shall be eligible for Union financing under the following conditions: (a) the reasons for such derogation have been properly substantiated by the authorising officer responsible; (b) the grant agreement explicitly sets the eligibility date earlier than the date for submission of applications. The authorising officer by delegation shall report on each of the cases referred to in this paragraph under the heading ‘Derogations from the principle of non-retroactivity pursuant to Article 196 of the Financial Regulation’ in the annual activity report referred to in Article 74(9). 3. Grants shall not be awarded retroactively for actions already completed. 4. In the case of operating grants, the grant agreement shall be signed within four months of the start of the beneficiary’s financial year. Costs incurred before the grant application was submitted or before the start of the beneficiary’s financial year shall not be eligible for financing. The first instalment shall be paid to the beneficiary within 30 calendar days of the signature of the grant agreement.
Article 197 Content and publication of calls for proposals
1. Calls for proposals shall specify: (a) the objectives pursued; (b) the eligibility, exclusion, selection and award criteria and the relevant supporting documents; (c) the arrangements for Union financing, specifying all types of Union contributions, in particular the forms of grant; (d) the arrangements and final date for the submission of proposals; (e) the planned date by which all applicants are to be informed of the outcome of the evaluation of their application and the indicative date for the signature of grant agreements. 2. The dates referred to in paragraph 1, point (e), shall be fixed on the basis of the following periods: (a) for informing all applicants of the outcome of the evaluation of their application, a maximum of six months from the final date for submission of complete proposals; (b) for signing grant agreements with applicants, a maximum of three months from the date of informing applicants that they have been successful. Those periods may be adjusted in order to take into account any time needed to comply with specific procedures that may be required by the basic act in accordance with Regulation (EU) No 182/2011 and may be exceeded in exceptional, duly justified cases, in particular for complex actions, where there is a large number of proposals or delays attributable to the applicants. The authorising officer by delegation shall report in his or her annual activity report on the average time taken to inform applicants and to sign grant agreements. In the event of the periods referred to in the first subparagraph being exceeded, the authorising officer by delegation shall give reasons and, where not duly justified in accordance with the second subparagraph, shall propose remedial action. 3. Calls for proposals shall be published on the website of Union institutions and by any other appropriate means, including the Official Journal of the European Union , where it is necessary to provide additional publicity among potential beneficiaries. Calls for proposals may be published subject to the adoption of the financing decision referred to in Article 110, including during the year preceding budget implementation. Any modification of the content of the calls for proposals shall be published under the same conditions.
Article 198 Exceptions to calls for proposals
Grants may be awarded without a call for proposals only in the following cases: (a) for the purposes of humanitarian aid, emergency support operations, civil protection operations or crisis management aid; (b) in other exceptional and duly substantiated emergencies; (c) to bodies with a de jure or de facto monopoly or to bodies designated by Member States, under their responsibility, where those Member States are in a de jure or de facto monopoly situation; (d) to bodies identified by a basic act, within the meaning of Article 58, as beneficiaries or to bodies designated by Member States, under their responsibility, where those Member States are identified by a basic act as beneficiaries; (e) in the case of research and technological development, to bodies identified in the work programme referred to in Article 110, where the basic act expressly provides for that possibility, and on condition that the project does not fall under the scope of a call for proposals; (f) for activities with specific characteristics that require a particular type of body on account of its technical competence, its high degree of specialisation or its administrative powers, on condition that the activities concerned do not fall within the scope of a call for proposals; (g) to the EIB or the EIF for actions of technical assistance. In such cases, Article 199(1), points (a) to (d), shall not apply. Where the particular type of body referred to in the first paragraph, point (f), is a Member State, the grant may also be awarded without a call for proposals to the body designated by the Member State, under its responsibility, for the purpose of implementing the action. The cases referred to in the first paragraph, points (c) and (f), shall be duly substantiated in the award decision.
Article 199 Content of grant applications
1. The grant application shall contain the following: (a) information on the legal status of the applicant, including whether it is a non-governmental organisation; (b) a declaration on the applicant’s honour in accordance with Article 139(1) and on compliance with the eligibility and selection criteria; such declaration shall not be required in the case of an application for a very low value grant; (c) information necessary to demonstrate the applicant’s financial and operational capacity to carry out the proposed action or work programme and, if decided by the authorising officer responsible on the basis of a risk assessment, supporting documents confirming that information, such as the profit and loss account and the balance sheet for up to the three last financial years for which the accounts were closed; Such information and supporting documents shall not be requested from applicants to which the verification of the financial or operational capacity does not apply in accordance with Article 201(5) or (6). In addition, supporting documents shall not be requested for low value grants; (d) where the application concerns a grant for an action for which the amount exceeds EUR 750 000 or an operating grant which exceeds EUR 100 000, an audit report produced by an approved external auditor, where it is available, and always in cases where a statutory audit is required by Union or national law, certifying the accounts for up to the last three available financial years. In all other cases, the applicant shall provide a self-declaration signed by its authorised representative certifying the validity of its accounts for up to the last three available financial years; The first subparagraph of this point shall apply only to the first application made by a beneficiary to an authorising officer responsible in any one financial year. In the case of agreements between the Commission and a number of beneficiaries, the thresholds set in the first subparagraph of this point shall apply to each beneficiary. In the case of partnerships referred to in Article 131(4), the audit report referred to in the first subparagraph of this point, covering the last two financial years available, must be produced before signature of the financial framework partnership agreement. The authorising officer responsible may, depending on a risk assessment, waive the obligation referred to in the first subparagraph of this point for education and training establishments and, in the case of agreements with a number of beneficiaries, beneficiaries who have accepted joint and several liabilities or who do not bear any financial responsibility. The first subparagraph of this point shall not apply to persons and entities eligible under indirect management to the extent that they comply with the conditions specified in Article 62(1), first subparagraph, point (b), and in Article 157; (e) a description of the action or work programme and an estimated budget, which: (i) shall have revenue and expenditure in balance; and (ii) shall indicate the estimated eligible costs of the action or work programme. Points (i) and (ii) shall not apply to multi-donor actions. By way of derogation from point (i), in duly justified cases, the estimated budget may include provisions for contingencies or possible variations in exchange rates; (f) indication of the sources and amounts of Union funding received or applied for in respect of the same action or part of the action or for the functioning of the applicant during the same financial year as well as any other funding received or applied for the same action. 2. The application may be divided in several parts that may be submitted at different stages in accordance with Article 203(2).
Article 200 Eligibility criteria
1. The eligibility criteria shall determine the conditions for participating in a call for proposals. 2. Any of the following applicants shall be eligible for participating in a call for proposals: (a) legal persons; (b) natural persons, in so far as this is required by the nature or characteristics of the action or the objective pursued by the applicant; (c) entities which do not have legal personality under the applicable national law, provided that their representatives have the capacity to undertake legal obligations on behalf of the entities and that the entities offer guarantees for the protection of the financial interests of the Union equivalent to those offered by legal persons. In particular the applicant shall have a financial and operational capacity equivalent to that of a legal person. The representatives of the applicant shall prove that those conditions are satisfied. 3. The call for proposals may lay down additional eligibility criteria which shall be established with due regard for the objectives of the action and shall comply with the principles of transparency and non-discrimination. 4. For the purposes of Article 183(5) and of this Article, the JRC shall be considered as a legal person established in a Member State.
Article 201 Selection criteria
1. The selection criteria shall be such as to make it possible to assess the applicant’s ability to complete the proposed action or work programme. 2. The applicant shall have stable and sufficient sources of funding to maintain his or her activity throughout the period for which the grant is awarded and to participate in its funding (financial capacity). 3. The applicant shall have the professional competencies and qualifications required to complete the proposed action or work programme unless specifically provided otherwise in the basic act (operational capacity). 4. Financial and operational capacity shall be verified in particular on the basis of an analysis of any information or supporting documents referred to in Article 199. If no supporting documents were requested in the call for proposals and if the authorising officer responsible has reasonable grounds to question the financial or operational capacity of an applicant, he or she shall request the applicant to provide any appropriate documents. In the case of partnerships the verification shall be performed in accordance with Article 131(6). 5. The verification of financial capacity shall not apply to: (a) natural persons in receipt of education support; (b) natural persons most in need, such as unemployed persons and refugees, and in receipt of direct support; (c) public bodies, including Member State organisations; (d) international organisations; (e) persons or entities applying for interest rate rebates and guarantee fee subsidies where the objective of those rebates and subsidies is to reinforce the financial capacity of a beneficiary or to generate an income; (f) persons or entities applying for very low value grants. Where an application is submitted by multiple applicants, the authorising officer responsible may, following a risk assessment, decide to check the financial capacity of only the lead applicant. 6. The authorising officer responsible may, depending on a risk assessment, waive the obligation to verify the operational capacity of public bodies, Member State organisations or international organisations.
Article 202 Award criteria
The award criteria shall be such as to make it possible to: (a) assess the quality of the proposals submitted in the light of the objectives and priorities set and of the expected results; (b) award grants to the actions or to the work programmes which maximise the overall effectiveness of the Union funding; (c) evaluate the grant applications.
Article 203 Evaluation procedure
1. Proposals shall be evaluated, on the basis of the pre-announced selection and award criteria, with a view to determining which proposals may be financed. 2. The authorising officer responsible shall, where appropriate, divide the process into several procedural stages. The rules governing the process shall be announced in the call for proposals. The applicants whose proposals are rejected at any stage shall be informed in accordance with paragraph 7. The same documents and information shall not be required more than once during the same procedure. 3. The evaluation committee referred to in Article 153 or, where appropriate, the authorising officer responsible may ask an applicant to provide additional information or to clarify the supporting documents submitted in accordance with Article 154. The authorising officer shall keep appropriate records of contacts with applicants during the procedure. 4. Upon completion of its work, the members of the evaluation committee shall sign a record of all the proposals examined, containing an assessment of their quality and identifying those which may receive funding. Where necessary that record shall rank the proposals examined, provide recommendations on the maximum amount to award and possible non-substantial adjustments to the grant application. The record shall be kept for future reference. 5. The authorising officer responsible may invite an applicant to adjust its proposal in the light of the recommendations of the evaluation committee. The authorising officer responsible shall keep appropriate records of contacts with applicants during the procedure. 6. The authorising officer responsible shall, on the basis of the evaluation, take his or her decision giving at least: (a) the subject and the overall amount of the decision; (b) the names of the successful applicants, the title of the actions, the amounts accepted and the reasons for that choice, including where it is inconsistent with the opinion of the evaluation committee; (c) the names of any applicants rejected and the reasons for that rejection. 7. The authorising officer responsible shall inform applicants in writing of the decision on their application. If the grant requested is not awarded, the Union institution concerned shall give the reasons for the rejection of the application. Rejected applicants shall be informed as soon as possible of the outcome of the evaluation of their application and in any case within 15 calendar days after information has been sent to the successful applicants. 8. For grants awarded pursuant to Article 198, the authorising officer responsible may: (a) decide not to apply paragraphs 2 and 4 of this Article and Article 153; (b) merge the content of the evaluation report and the award decision into a single document and sign it.
Article 204 Grant agreement
1. Grants shall be covered by a written agreement. 2. The grant agreement shall at least include the following: (a) the subject; (b) the beneficiary; (c) the duration, namely: (i) the date of its entry into force; (ii) the starting date and the duration of the action or the financial year of the funding; (d) a description of the action or, for an operating grant, of the work programme together with a description of the results expected; (e) the maximum amount of Union funding expressed in euro, the estimated budget of the action or work programme and the form of the grant; (f) the rules regarding reporting and payments and the procurement rules provided for in Article 208; (g) the acceptance by the beneficiary of the obligations referred to in Article 129; (h) provisions governing the visibility of the Union financial support, except in duly justified cases where public display is not possible or appropriate; (i) the applicable law which shall be Union law, complemented, where necessary, by national law as specified in the grant agreement. Derogation may be made in the grant agreements concluded with international organisations; (j) the competent court or arbitration tribunal to hear disputes. 3. Pecuniary obligations of entities or persons other than States arising from the implementation of a grant agreement shall be enforceable in accordance with Article 100(2). 4. Amendments to grant agreements shall not have the purpose or the effect of making such changes that would call into question the grant award decision or be contrary to the principle of equal treatment of applicants.
Article 205 Amount of the grant and extension of audit findings
1. The amount of the grant shall not become final until after the authorising officer responsible has approved the final reports and, where applicable, the accounts, without prejudice to subsequent audits, checks and investigations by the Union institution concerned, OLAF or the Court of Auditors. Article 132(4) shall apply also after the amount of the grant has become final. 2. Where controls or audits demonstrate systemic or recurrent irregularities, fraud or a breach of obligations attributable to the beneficiary and having a material impact on a number of grants awarded to that beneficiary under similar conditions, the authorising officer responsible may suspend the implementation of the grant agreement or payments under all the grants concerned or, where appropriate, terminate the grant agreements concerned with that beneficiary, having regard to the seriousness of the findings. The authorising officer responsible may, in addition, reduce the grants, reject ineligible costs and recover amounts unduly paid in respect of all the grants affected by the systemic or recurrent irregularities, fraud or breach of obligations referred to in the first subparagraph that may be subject to audits, checks and investigations in accordance with the grant agreements affected. 3. The authorising officer responsible shall determine the amounts to be reduced or recovered, wherever possible and practicable, on the basis of costs unduly declared as eligible for each grant concerned, following acceptance of the revised reports and financial statements submitted by the beneficiary. 4. Where it is not possible or practicable to quantify precisely the amount of ineligible costs for each grant concerned, the amounts to be reduced or recovered may be determined by extrapolating the reduction or recovery rate applied to the grants for which the systemic or recurrent irregularities, fraud or breach of obligations have been demonstrated, or, where ineligible costs cannot serve as a basis for determining the amounts to be reduced or recovered, by applying a flat rate, having regard to the principle of proportionality. The beneficiary shall be given the opportunity to propose a duly substantiated alternative method or rate before the reduction or recovery is made.
Article 206 Supporting documents for payment requests
1. The authorising officer responsible shall specify the supporting documents required to accompany payment requests. 2. For each grant, pre-financing may be split into several instalments in accordance with sound financial management. The request for a further pre-financing instalment shall be accompanied by a beneficiary’s statement on the consumption of previous pre-financing. The instalment shall be paid in full if at least 70 % of the total amount of any earlier pre-financing has been consumed. Otherwise, the instalment shall be reduced by the amounts still to be consumed until that threshold is reached. 3. The beneficiary shall, without prejudice to the obligation to provide supporting documents, certify on its honour that information contained in payment requests is full, reliable and true. The beneficiary shall also certify that the costs incurred are eligible in accordance with the grant agreement and that payment requests are substantiated by adequate supporting documents that may be checked. 4. A certificate on the financial statements of the action or the work programme and underlying accounts may be demanded by the authorising officer responsible in support of interim payments or payments of balances of any amount. Such a certificate shall be requested on the basis of a risk assessment taking into account, in particular, the amount of the grant, the amount of the payment, the nature of the beneficiary and the nature of the supported activities. The certificate shall be produced by an approved external auditor or, in the case of public bodies, by a competent and independent public officer. The certificate shall certify, in accordance with a methodology approved by the authorising officer responsible and on the basis of agreed-upon procedures compliant with international standards, that the costs declared by the beneficiary in the financial statements on which the payment request is based are real, accurately recorded and eligible in accordance with the grant agreement. In specific and duly justified cases, the authorising officer responsible may request the certificate in the form of an opinion or other format in accordance with international standards. 5. An operational verification report, produced by an independent third party approved by the authorising officer responsible, may be requested by the authorising officer responsible in support of any payment, on the basis of a risk assessment. The operational verification report shall state that the operational verification was done in accordance with a methodology approved by the authorising officer responsible and whether the action or work programme was actually implemented in accordance with the conditions set out in the grant agreement.
Article 207 Financial support to third parties
Where implementation of an action or a work programme requires the provision of financial support to third parties, the beneficiary may provide such financial support if the conditions for such provision are defined in the grant agreement between the beneficiary and the Commission, with no margin for discretion by the beneficiary. No margin for discretion shall be considered to exist if the grant agreement specifies the following: (a) the maximum amount of financial support that can be paid to a third party which shall not exceed EUR 60 000 and the criteria for determining the exact amount; (b) the different types of activities that may receive such financial support, on the basis of a fixed list; (c) the definition of the persons or categories of persons which may receive such financial support and the criteria for providing it. The threshold referred to in the second paragraph, point (a), may be exceeded in the case of humanitarian aid, emergency support operations, civil protection operations, crisis management aid or where achieving the objectives of the actions would otherwise be impossible or overly difficult. The authorising officer responsible shall provide information on the cases referred to in the third paragraph of this Article in the annual activity report referred to in Article 74(9).
Article 208 Implementation contracts
1. Without prejudice to Directives 2014/24/EU and 2014/25/EU, where the implementation of the action or work programme requires the award of a contract, the beneficiary may award the contract in accordance with its usual purchasing practices provided that the contract is awarded to the tender offering best value for money or, as appropriate, to the tender offering the lowest price, while avoiding any conflict of interests. 2. Where implementation of the action or work programme requires the award of a contract with a value of more than EUR 60 000, the authorising officer responsible may, if duly justified, require the beneficiary to abide by special rules in addition to those referred to in paragraph 1. Those special rules shall be based on rules contained in this Regulation and shall be proportionate to the value of the contracts concerned, the relative size of the Union contribution in relation to the total cost of the action and the risk. Such special rules shall be included in the grant agreement.
Article 209 General rules
1. Prizes shall be awarded in accordance with the principles of transparency and equal treatment and shall promote the achievement of policy objectives of the Union. 2. Prizes shall not be awarded directly without a contest. Contests for prizes with a unit value of EUR 1 000 000 or more may only be published where those prizes are mentioned in the financing decision referred to in Article 110 and after information on such prizes has been submitted to the European Parliament and to the Council. 3. The amount of the prize shall not be linked to costs incurred by the winner. 4. Where implementation of an action or work programme requires prizes to be awarded to third parties by a beneficiary, that beneficiary may award such prizes provided that the eligibility and award criteria, the amount or type of the prizes and the payment or delivery arrangements are defined in the grant agreement between the beneficiary and the Commission, with no margin for discretion.
Article 210 Rules of contest, award and publication
1. Rules of contests shall: (a) specify the eligibility criteria; (b) specify the arrangements and the final date for the registration of applicants, if required, and for the submission of applications; (c) specify the exclusion criteria as set out in Article 138 and the grounds for rejection set out in Article 143; (d) provide for the sole liability of the applicant in the event of a claim relating to the activities carried out in the framework of the contest; (e) provide for acceptance by the winners of the obligations referred to in Article 128 and of the publicity obligations as specified in the rules of the contest; (f) specify the award criteria, which shall be such as to make possible to assess the quality of the applications with regard to the objectives pursued and the expected results and to determine objectively whether applications are successful; (g) specify the amount or type of the prize or prizes; (h) specify the arrangements for the payment or delivery of prizes to the winners after their award. For the purposes of the first subparagraph, point (a), beneficiaries shall be eligible, unless stated otherwise in the rules of contest. Article 197(3) shall apply mutatis mutandis to the publication of contests. 2. Rules of contests may set the conditions for cancelling the contest, in particular where its objectives cannot be fulfilled. 3. Prizes shall be awarded by the authorising officer responsible following an evaluation by the evaluation committee referred to in Article 153. Article 203(4) and (6) shall apply mutatis mutandis to the award decision. 4. Applicants shall be informed as soon as possible of the outcome of the evaluation of their application and in any case within 15 calendar days after the award decision has been taken by the authorising officer. The decision to award the prize shall be notified to the winning applicant and shall serve as the legal commitment. 5. All prizes awarded in the course of a financial year shall be published in accordance with Article 38(1) to (4). When requested by the European Parliament and by the Council following the publication, the Commission shall forward them a report on: (a) the number of applicants in the past year; (b) the number of applicants and the percentage of successful applications per contest; (c) a list of the experts having taken part in evaluation committees in the past year, together with a reference to the procedure for their selection.
Article 211 Scope and implementation
1. Where it proves to be the most appropriate way to achieve policy objectives of the Union, the Union may establish financial instruments or provide budgetary guarantees or financial assistance backed by the budget by means of a basic act defining their scope and period of implementation. 2. Member States may contribute to the Union’s financial instruments, budgetary guarantees or financial assistance. If authorised by the basic act, third parties may also contribute. 3. Where financial instruments or budgetary guarantees are implemented under direct management, the Commission shall ensure compliance mutatis mutandis with Article 158(2) with respect to financial intermediaries and final recipients. 4. Where financial instruments are implemented under shared management with Member States, sector-specific rules shall apply. 5. Where financial instruments or budgetary guarantees are implemented under indirect management, the Commission shall conclude agreements with entities pursuant to Article 62(1), first subparagraph, points (c)(ii), (iii), (v) and (vi). Where the systems, rules and procedures of those entities have been assessed pursuant to Article 157(3) and (4), they may fully rely on those systems, rules and procedures. Those entities may, when implementing financial instruments and budgetary guarantees under indirect management, conclude agreements with financial intermediaries which shall be selected in accordance with procedures equivalent to those applied by the Commission. Those entities shall transpose the requirements pursuant to Article 158(2) in those agreements. The Commission shall remain responsible for ensuring that the implementation framework for financial instruments and budgetary guarantees complies with the principle of sound financial management and supports the attainment of defined and time-bound policy objectives, measurable in terms of outputs and/or results. The Commission shall be accountable for the implementation of financial instruments and budgetary guarantees without prejudice to the entrusted entities’ legal and contractual responsibility in accordance with the applicable law and Article 129. Where third countries contribute to financial instruments or budgetary guarantees pursuant to paragraph 2, the basic act may allow for the designation of eligible implementing entities or counterparts from the countries concerned. 6. The Court of Auditors shall have full access to any information related to the financial instruments, budgetary guarantees and financial assistance, including by means of on-the-spot checks. The Court of Auditors shall be the external auditor responsible for the projects and programmes supported by a financial instrument, a budgetary guarantee or a financial assistance.
Article 212 Principles and conditions applicable to financial instruments and budgetary guarantees
1. Financial instruments and budgetary guarantees shall be used in accordance with the principles of sound financial management, transparency, proportionality, non-discrimination, equal treatment and subsidiarity, and in accordance with their objectives. 2. Financial instruments and budgetary guarantees shall: (a) address market failures or sub-optimal investment situations and provide support, in a proportionate manner, only to final recipients that are deemed economically viable according to internationally accepted standards at the time of the Union financial support; (b) achieve additionality by preventing the replacement of potential support and investment from other public or private sources; (c) not distort competition in the internal market and be consistent with State aid rules; (d) achieve a leverage and a multiplier effect, with a target range of values based on an ex ante evaluation for the corresponding financial instrument or budgetary guarantee, by mobilising a global investment exceeding the size of the Union contribution or guarantee, including, where appropriate, the maximisation of private investment; (e) be implemented in a way to ensure that there is a common interest of the implementing entities or counterparts involved in the implementation in achieving the policy objectives defined in the relevant basic act, with provisions on for example co-investment, risk sharing requirements or financial incentives, while preventing a conflict of interests with other activities of the entities or counterparts; (f) provide for remuneration of the Union that is consistent with the sharing of risk among financial participants and the policy objectives of the financial instrument or budgetary guarantee; (g) where remuneration of the implementing entities or the counterparts involved in the implementation is due, provide that such remuneration is performance-based and comprises: (i) administrative fees to remunerate the entity or counterpart for the work carried out in the implementation of a financial instrument or budgetary guarantee, which shall, to the extent possible, be based on the operations carried out or the amounts disbursed; and (ii) where appropriate, policy related incentives to promote the achievement of the policy objectives or incentivise the financial performance of the financial instrument or budgetary guarantee. Exceptional expenses may be reimbursed in duly justified cases; (h) be based on ex ante evaluations, individually or as part of a programme, in line with Article 34, containing explanations concerning the choice of the type of financial operation taking into account the policy objectives pursued and the associated financial risks and savings for the budget. The evaluations referred to in the first subparagraph, point (h), shall be reviewed and updated to take into account the effect of major socioeconomic changes on the rationale of the financial instrument or budgetary guarantee. 3. Without prejudice to sector-specific rules for shared management, revenue, including dividends, capital gains, guarantee fees and interest on loans and on amounts on fiduciary accounts paid back to the Commission or on fiduciary accounts opened for financial instruments or budgetary guarantees and attributable to the support from the budget under a financial instrument or a budgetary guarantee, shall be entered in the budget after deduction of management costs and fees. Annual repayments, including capital repayments, guarantees released, and repayments of the principal of loans, paid back to the Commission or to fiduciary accounts opened for financial instruments or budgetary guarantees and attributable to the support from the budget under a financial instrument or a budgetary guarantee, shall constitute internal assigned revenue in accordance with Article 21(3), point (f), and shall be used for the same financial instrument or budgetary guarantee, without prejudice to Article 218(4), for a period not exceeding the period for the budgetary commitment plus two years, unless otherwise specified in a basic act. The Commission shall take into account such internal assigned revenue when proposing the amount for future allocations for financial instruments or budgetary guarantees. Notwithstanding the second subparagraph, the outstanding amount of assigned revenue authorised under a basic act that is to be repealed or terminates may also be assigned to another financial instrument pursuing similar objectives, where this is provided in the basic act establishing that financial instrument. 4. The authorising officer responsible for a financial instrument, a budgetary guarantee or a financial assistance shall produce a financial statement covering the period 1 January to 31 December, in accordance with Article 249 and in compliance with the accounting rules referred to in Article 80 and the International Public Sector Accounting Standards (IPSAS). For financial instruments and budgetary guarantees implemented under indirect management, the authorising officer responsible shall ensure that unaudited financial statements covering the period 1 January to 31 December prepared in compliance with the accounting rules referred to in Article 80 and with IPSAS, as well as any information necessary to produce financial statements in accordance with Article 82(2), be provided by the entities pursuant to Article 62(1), first subparagraph, points (c)(ii), (iii), (v) and (vi), by 15 February of the following financial year and that audited financial statements be provided by those entities by 15 April of the following financial year. 5. Where financial instruments or budgetary guarantees are combined within a single agreement with ancillary support from the budget, including grants, this Title shall apply to the whole measure. The reporting shall be carried out in accordance with Article 41(4) and (5) and shall clearly identify which parts of the measure are financial instruments or budgetary guarantees.
Article 213 Financial liability of the Union
1. The financial liability and aggregate net payments from the budget shall not exceed at any time: (a) for financial instruments: the amount of the relevant budgetary commitment made for it; (b) for budgetary guarantees: the amount of the budgetary guarantee authorised by the basic act; (c) for financial assistance: the maximum amount of funds that the Commission is empowered to borrow for funding the financial assistance as authorised by the basic act, and the relevant interest. 2. Budgetary guarantees and financial assistance may generate a contingent liability for the Union which shall only exceed the financial assets provided to cover the financial liability of the Union if provided for in a basic act establishing a budgetary guarantee or financial assistance and under the conditions set out therein. 3. For the purposes of the annual assessment provided for in Article 256, the contingent liabilities arising from budgetary guarantees or financial assistance borne by the budget shall be deemed sustainable, if their forecast multiannual evolution is compatible with the limits set by the regulation laying down the multiannual financial framework provided for in Article 312(2) TFEU and the ceiling on annual payment appropriations set out in Article 3(1) of Decision (EU, Euratom) 2020/2053.
Article 214 Provisioning of financial liabilities
1. For budgetary guarantees and financial assistance to third countries, a basic act shall set out a provisioning rate as a percentage of the amount of the financial liability authorised. That amount shall exclude the contributions referred to in Article 211(2). The basic act shall provide for the review of the provisioning rate at least every three years. 2. The setting of a provisioning rate shall be guided by a qualitative and quantitative assessment by the Commission of the financial risks arising from a budgetary guarantee or a financial assistance to a third country in accordance with the principle of prudence, whereby assets and profits shall not be overestimated and liabilities and losses shall not be underestimated. Unless otherwise specified in the basic act establishing the budgetary guarantee or financial assistance to a third country, the provisioning rate shall be based on the global provisioning needed in advance to cover the net expected losses and, in addition, an adequate safety buffer. Without prejudice to the powers of the European Parliament and of the Council, the global provisioning shall be constituted over the period of time foreseen in the relevant financial statement as referred to in Article 35. 3. For a financial instrument provision shall be made, where appropriate, to respond to future payments related to a budgetary commitment of that financial instrument. 4. The following resources shall contribute to the provisioning: (a) contributions from the budget, while fully respecting the regulation laying down the multiannual financial framework and after examination of the possibilities for redeployments; (b) returns on investments of the resources held in the common provisioning fund; (c) amounts recovered from defaulting debtors in accordance with the recovery procedure laid down in the guarantee or the loan agreement; (d) revenue and any other payments received by the Union in accordance with the guarantee or the loan agreement; (e) where applicable, contributions in cash by Member States and third parties pursuant to Article 211(2). Only the resources referred to in the first subparagraph, points (a) to (d), of this paragraph shall be taken into account for calculating the provisioning resulting from the provisioning rate referred to in paragraph 1. 5. Provisions shall be used for the payment of: (a) calls on the budgetary guarantee; (b) payment obligations related to a budgetary commitment for a financial instrument; (c) financial obligations arising from the borrowing of funds pursuant to Article 223(1); (d) where applicable, other expenses associated to the implementation of financial instruments, budgetary guarantees and financial assistance to third countries. 6. Where the provisions for a budgetary guarantee exceed the amount of provisioning resulting from the provisioning rate referred to in paragraph 1 of this Article, resources referred to in paragraph 4, first subparagraph, points (b), (c) and (d), of this Article related to that guarantee shall be used within the limits of the eligible period provided for in the basic act, however, not beyond the constitution phase of the provisioning, and without prejudice to Article 216(4), to restore the budgetary guarantee up to its initial amount. 7. The Commission shall immediately inform the European Parliament and the Council and may propose adequate replenishment measures or an increase of the provisioning rate where: (a) as a result of calls on a budgetary guarantee, the level of provisions for that budgetary guarantee falls below 50 % of the provisioning rate referred to in paragraph 1, and again where it falls below 30 % of that provisioning rate, or where it could fall below any of those percentages within a year according to a risk assessment by the Commission; (b) a country benefitting from financial assistance by the Union fails to pay on a maturity.
Article 215 Common provisioning fund
1. The provisions made to cover the financial liabilities arising from financial instruments, budgetary guarantees or financial assistance shall be held in a common provisioning fund. The financial management of the assets of the common provisioning fund shall be entrusted to the Commission 2. Global profits or losses from the investment of the resources held in the common provisioning fund shall be allocated proportionately among the respective financial instruments, budgetary guarantees or financial assistance. The financial manager of the resources of the common provisioning fund shall keep a minimum amount of resources of the fund in cash or cash equivalents in accordance with prudential rules and the forecasts for payments provided by the authorising officers of the financial instruments, budgetary guarantees or financial assistance. The financial manager of the resources of the common provisioning fund may enter into repurchase agreements, with the resources of the common provisioning fund as collateral, to make payments out of the fund where this procedure is reasonably expected to be more beneficial for the budget than the divestment of resources within the timeframe of the payment request. The duration or roll-over period of repurchase agreements related to a payment shall be limited to the minimum necessary to minimise a loss for the budget. 3. Pursuant to Article 77(1), first subparagraph, point (d), and Article 86(1) and (2), the accounting officer shall set up the procedures to be applied to the revenue and expenditure operations and, in agreement with the financial manager of the resources of the common provisioning fund, to the assets and liabilities related to the common provisioning fund. 4. In the exceptional cases where the Commission has made a transfer as referred to in Article 30(1), first subparagraph, point (g), the Commission shall immediately inform the European Parliament and the Council thereof, and shall urgently propose the measures necessary to restore the budgetary item of the guarantee from which the transfer was made, while fully respecting the ceilings provided for in the regulation laying down the multiannual financial framework.
Article 216 Effective provisioning rate
1. The provisioning of budgetary guarantees and financial assistance to third countries in the common provisioning fund shall be based on an effective provisioning rate. That rate shall provide a level of protection against the financial liabilities of the Union equivalent to the level that would be provided by the respective provisioning rates if the resources where held and managed separately. 2. The effective provisioning rate applicable shall be a percentage of each initial provisioning rate determined in accordance with Article 214(2), second subparagraph. It shall apply only to the amount of resources in the common provisioning fund foreseen for the payment of guarantee calls over a one year period. It shall provide for a ratio, in the form of a percentage, between the amount of cash and cash equivalents in the common provisioning fund required to honour guarantee calls and the total amount of cash and cash equivalents that would be required in each guarantee fund to honour guarantee calls, if the resources were held and managed separately, where both amounts represent an equivalent liquidity risk. That ratio shall not fall below 95 %. The calculation of the effective provisioning rate shall take into account: (a) the forecast of inflows and outflows in the common provisioning fund, having regard to the initial phase of constitution of global provisioning in accordance with Article 214(2), second subparagraph; (b) the risk correlation among the budgetary guarantees and the financial assistance to third countries; (c) the market conditions. The Commission shall by 1 July 2020 adopt delegated acts in accordance with Article 275 to supplement this Regulation with detailed conditions for the calculation of the effective provisioning rate, including a methodology for that calculation. The Commission is empowered to adopt delegated acts in accordance with Article 275 to amend the minimum ratio referred to in the first subparagraph of this paragraph in the light of the experience gained with the operation of the common provisioning fund while maintaining a prudent approach in line with the principle of sound financial management. The minimum ratio shall not be set at a level lower than 85 %. 3. The effective provisioning rate shall be calculated annually by the financial manager of the resources of the common provisioning fund and shall be the reference for the Commission’s calculation of the contributions from the budget pursuant to Article 214(4), point (a), and, subsequently, paragraph 4, point (b), of this Article. 4. Following the calculation of the annual effective provisioning rate in accordance with paragraphs 1 and 2 of this Article, the following operations in the context of the budgetary procedure shall be made and presented in the working document referred to in Article 41(5), point (h): (a) any surplus of provisions for a budgetary guarantee or a financial assistance to a third country shall be returned to the budget; (b) any replenishment of the fund shall be carried out in annual tranches during a maximum period of three years, without prejudice to Article 214(6). 5. After having consulted the accounting officer, the Commission shall establish the guidelines applicable to the management of the resources in the common provisioning fund in accordance with appropriate prudential rules and excluding derivative operations for speculative purposes. Those guidelines shall be attached to the agreement with the financial manager of the resources of the common provisioning fund. An independent evaluation of the adequacy of the guidelines shall be carried out every three years and transmitted to the European Parliament and to the Council.
Article 217 Annual reporting
1. In addition to the reporting obligation laid down in Article 256, the Commission shall report annually to the European Parliament and to the Council on the common provisioning fund. 2. The report referred to in paragraph 1 shall include information about the financial management, the performance and the risk of the common provisioning fund at the end of the preceding calendar year as well as the financial flows in the common provisioning fund during the preceding calendar year, the significant transactions and any relevant information on the financial risk exposure of the Union.
Article 218 Rules and implementation
1. Notwithstanding Article 211(1), financial instruments may be established, in duly justified cases, without being authorised by means of a basic act, provided that such instruments are included in the draft budget in accordance with Article 41(4), first subparagraph, point (e). 2. The Commission shall ensure a harmonised and simplified management of financial instruments, in particular in the area of accounting, reporting, monitoring and financial risk management. 3. Where the Union participates in a financial instrument as a minority stakeholder, the Commission shall ensure compliance with this Title in accordance with the principle of proportionality, on the basis of the size and value of the participation of the Union in the instrument. However, irrespective of the size and value of the Union participation in the instrument, the Commission shall ensure compliance with Articles 129 and 158, Article 212(2) and (4), Article 41(4) and, insofar as the exclusion situations referred to in Article 138(1), point (d), are concerned, Section 2 of Chapter 2 of Title V. 4. Where the European Parliament or the Council consider that a financial instrument has not achieved its objectives effectively, they may request that the Commission submit a proposal for a revised basic act with a view to winding down the instrument. In the event of the winding down of the financial instrument, any new amount paid back to that instrument pursuant to Article 212(3) shall be considered as general revenue and returned to the budget. 5. The purpose of the financial instruments or a grouping of financial instruments on a facility level and, where applicable, their specific legal form and place of registration shall be published on the Commission website. 6. Entities entrusted with the implementation of financial instruments may open fiduciary accounts within the meaning of Article 85(3) on behalf of the Union. Those entities shall send the corresponding account statements to the Commission’s responsible service. Payments to fiduciary accounts shall be made by the Commission on the basis of payment requests that are duly substantiated with disbursement forecasts, taking into account the balances available on the fiduciary accounts and the need to avoid excessive balances on such accounts.
Article 219 Financial instruments directly implemented by the Commission
1. Financial instruments may be directly implemented pursuant to Article 62(1), first subparagraph, point (a), through any of the following: (a) a dedicated investment vehicle in which the Commission participates together with other public or private investors with a view to increasing the leverage effect of the Union contribution; (b) loans, guarantees, equity participations and other risk-sharing instruments other than investments in dedicated investment vehicles, provided directly to final recipients or through financial intermediaries. 2. Dedicated investment vehicles referred to in paragraph 1, point (a), shall be established pursuant to the laws of a Member State. In the field of external actions, they may also be established pursuant to the laws of a country other than a Member State. The managers of such vehicles shall be obliged by law or contractually to act with the diligence of a professional manager and in good faith. 3. The managers of dedicated investment vehicles referred to in paragraph 1, point (a), and financial intermediaries or final recipients of financial instruments shall be selected with due account to the nature of the financial instrument to be implemented, the experience and the financial and operational capacity of the entities concerned, and the economic viability of projects of final recipients. The selection shall be transparent, justified on objective grounds and shall not give rise to a conflict of interests.
Article 220 Combination with funds implemented under shared management
1. Separate records shall be kept in case of combination of funds implemented under shared management with support from financial instruments established under this Section. 2. Funds implemented under shared management shall be placed in separate accounts and used in accordance with the objectives of the respective funds to actions and final recipients consistent with the programme or programmes from which combinations are made. 3. As regards combinations of funds implemented under shared management with support from financial instruments established under this Section, sector-specific rules shall apply.
Article 221 Rules for budgetary guarantees
1. The basic act shall define: (a) the amount of the budgetary guarantee that shall not be exceeded at any time, without prejudice to Article 211(2); (b) the types of operations covered by the budgetary guarantee. 2. Contributions from Member States to budgetary guarantees pursuant to Article 211(2) may be provided in the form of guarantees or cash. Contributions from third parties to budgetary guarantees pursuant to Article 211(2) may be provided in the form of cash. The budgetary guarantee shall be increased by the contributions referred to in the first and second subparagraph. Payments for guarantee calls shall be made, where necessary, by the contributing Member States or third parties on a pari passu basis. The Commission shall sign an agreement with the contributors that shall contain, in particular, provisions concerning the payment conditions.
Article 222 Implementation of budgetary guarantees
1. Budgetary guarantees shall be irrevocable, unconditional and on demand for the types of operations covered. 2. Budgetary guarantees shall be implemented pursuant to Article 62(1), first subparagraph, point (c), or, in exceptional cases, pursuant to Article 62(1), first subparagraph, point (a). 3. A budgetary guarantee shall only cover financing and investment operations which comply with Article 212(2), first subparagraph, points (a) to (d). 4. Counterparts shall contribute with their own resources to the operations covered by the budgetary guarantee. 5. The Commission shall conclude a guarantee agreement with the counterpart. The granting of the budgetary guarantee is subject to the entry into force of the guarantee agreement. 6. Counterparts shall provide the Commission annually with: (a) a risk assessment and grading information concerning the operations covered by the budgetary guarantee as well as expected defaults; (b) information on the outstanding financial obligation arising for the Union from the budgetary guarantee, broken down by individual operations; (c) the total profits or losses deriving from the operations covered by the budgetary guarantee.
Article 223 Rules and implementation
1. Financial assistance by the Union to Member States or third countries shall be in accordance with pre-defined conditions and take the form of a loan or a credit line or any other instrument deemed appropriate to ensure the effectiveness of the support. To that end, the Commission shall be empowered, in the relevant basic act, to borrow the necessary funds on behalf of the Union on the capital markets or from financial institutions. 2. The financial assistance shall be carried out in euro, except in duly justified cases. 3. The financial assistance shall be directly implemented by the Commission. 4. The Commission shall conclude an agreement with the beneficiary country that shall contain provisions: (a) ensuring that the beneficiary country regularly checks that the financing provided has been properly used in accordance with the pre-defined conditions, takes appropriate measures to prevent irregularities and fraud, and, if necessary, takes legal action to recover any funds provided under the financial assistance that have been misappropriated; (b) ensuring the protection of the financial interests of the Union; (c) expressly authorising the Commission, OLAF and the Court of Auditors, to exert their rights as foreseen by Article 129; (d) ensuring that the Union is entitled to early repayment of the loan where it has been established that, in relation to the management of the financial assistance, the beneficiary country has engaged in any act of fraud or corruption or any other illegal activity detrimental to the financial interests of the Union; (e) ensuring that all costs incurred by the Union that relate to a financial assistance shall be borne by the beneficiary country. 5. The Commission shall release the loans, where possible in instalments, subject to the fulfilment of the conditions attached to the financial assistance. Where those conditions are not fulfilled, the Commission shall temporarily suspend or cancel the disbursement of the financial assistance.
Article 224 Diversified funding strategy
1. The Commission shall implement a diversified funding strategy comprising borrowings authorised under Article 5(1) of Decision (EU, Euratom) 2020/2053 and, except in duly justified cases, borrowing and debt management operations to fund programmes of financial assistance. The diversified funding strategy shall be implemented through all necessary transactions aiming at a regular capital market presence, shall be based on pooling of funding instruments and shall make use of a common liquidity pool. 2. The Commission shall establish the necessary arrangements for the implementation of the diversified funding strategy. The Commission shall regularly and comprehensively inform the European Parliament and the Council about all aspects of its borrowing and debt management strategy.
Article 225 General provisions
Direct financial contributions from the budget may be awarded to European political parties as defined in Article 2, point (3), of Regulation (EU, Euratom) No 1141/2014 (European political parties) in view of their contribution to forming European political awareness and to expressing the political will of the citizens of the Union in accordance with that Regulation.
Article 226 Principles
1. Contributions shall be used to reimburse only the percentage set out in Article 17(4) of Regulation (EU, Euratom) No 1141/2014 of the operating costs of European political parties directly linked to objectives of those parties, as specified in Article 17(5) and Article 21 of that Regulation. 2. Contributions may be used to reimburse expenditure relating to contracts concluded by European political parties, provided that there were no conflicts of interests when they were awarded. 3. Contributions shall not be used to directly or indirectly grant any personal advantage, in cash or in kind, to any individual member or member of staff of a European political party. Contributions shall not be used to directly or indirectly finance activities of third parties, in particular national political parties or political foundations at European or national level, whether in the form of grants, donations, loans or any other similar agreements. For the purposes of this paragraph, associated entities of European political parties shall not be regarded as third parties, where such entities are part of the administrative organisation of European political parties as set out in the statutes of the latter. Contributions shall not be used for any of the purposes excluded by Article 22 of Regulation (EU, Euratom) No 1141/2014. 4. Contributions shall be subject to the principles of transparency and equal treatment, in accordance with the criteria laid down in Regulation (EU, Euratom) No 1141/2014. 5. Contributions shall be awarded by the European Parliament on an annual basis and shall be published in accordance with Article 38(1) to (4) of this Regulation and with Article 32(1) of Regulation (EU, Euratom) No 1141/2014. 6. European political parties receiving a contribution shall not directly or indirectly receive other funding from the budget. In particular, donations from the budgets of political groups in the European Parliament shall be prohibited. In no circumstances shall the same expenditure be financed twice by the budget. Contributions shall be without prejudice to the ability of the European political parties to build up reserves with amounts from their own resources in accordance with Regulation (EU, Euratom) No 1141/2014. 7. If a European political foundation as defined in Article 2, point (4), of Regulation (EU, Euratom) No 1141/2014 realises a surplus of income over expenditure at the end of a financial year in which it received an operating grant, the part of that surplus corresponding to up to 25 % of the total income for that year may be carried over to the following year provided that it is used before the end of the first quarter of that following year.
Article 227 Budgetary aspects
Contributions, as well as appropriations set aside for independent external audit bodies or experts referred to in Article 23 of Regulation (EU, Euratom) No 1141/2014, shall be paid from the section of the budget relating to the European Parliament.
Article 228 Call for contributions
1. Contributions shall be awarded through a call for contributions published each year, at least on the website of the European Parliament. 2. A European political party may be awarded only one contribution per year. 3. A European political party may receive a contribution only if it applies for funding on the terms and conditions laid down in the call for contributions. 4. The call for contributions shall determine the conditions under which the applicant may receive a contribution in accordance with Regulation (EU, Euratom) No 1141/2014, as well as the exclusion criteria. 5. The call for contributions shall determine, at least, the nature of the expenditure that may be reimbursed by the contribution. 6. The call for contributions shall require an estimated budget.
Article 229 Award procedure
1. Applications for contributions shall be duly submitted within the time limit, in writing, including, where appropriate, in a secure electronic format. 2. Contributions shall not be awarded to applicants who, at the time of the award procedure, are in one or more of the situations referred to in Articles 138(1) and 143(1) and those who are registered as excluded in the database referred to in Article 144. 3. Applicants shall be required to certify that they are not in one of the situations referred to in paragraph 2. 4. The authorising officer responsible may be assisted by a committee to evaluate the applications for contributions. The authorising officer responsible shall specify the rules regarding the composition, appointment and functioning of such committee, and the rules to prevent any conflict of interests. 5. Applications that comply with the eligibility and exclusion criteria shall be selected on the basis of the award criteria set out in Article 19 of Regulation (EU, Euratom) No 1141/2014. 6. The decision of the authorising officer responsible on the applications shall state at least: (a) the subject and the overall amount of the contributions; (b) the name of the selected applicants and the amounts accepted for each of them; (c) the names of any applicants rejected and the reasons for that rejection. 7. The authorising officer responsible shall inform applicants in writing of the decision on their applications. If the application for funding is rejected or the amounts requested are not awarded in part or in full, the authorising officer responsible shall give the reasons for either the rejection of the application or the non-award of the amounts requested, with reference in particular to the eligibility and award criteria referred to in paragraph 5 of this Article and Article 228(4). If the application is rejected, the authorising officer responsible shall inform the applicant of the available means of administrative and/or judicial redress as provided for in Article 134(2). 8. Contributions shall be covered by a written agreement.
Article 230 Form of contributions
1. Contributions may take any of the following forms: (a) reimbursement of a percentage of the reimbursable expenditure actually incurred; (b) reimbursement on the basis of unit costs; (c) lump sums; (d) flat-rate financing; (e) a combination of the forms referred to in points (a) to (d). 2. Only expenditure which meets the criteria established in the calls for contributions and which has not been incurred prior to the date of submission of the application may be reimbursed. 3. The agreement referred to in Article 229(8) shall include provisions that allow verifying that the conditions for the award of lump sums, flat-rate financing or unit costs have been complied with. 4. The contributions shall be paid out in full through one single pre-financing payment, unless, in duly justified cases, the authorising officer responsible decides otherwise.
Article 231 Guarantees
The authorising officer responsible may, if he or she deems it appropriate and proportionate, on a case-by-case basis and subject to a risk analysis, require a European political party to lodge a guarantee in advance in order to limit the financial risks connected with the pre-financing payment only when, in the light of the risk analysis, the European political party is at imminent risk of being in one of the exclusion situations referred to in Article 138(1), points (a) and (d), of this Regulation or when a decision of the Authority for European political parties and European political foundations established under Article 6 of Regulation (EU, Euratom) No 1141/2014 (the ‘Authority’) has been communicated to the European Parliament and to the Council in accordance with Article 10(4) of that Regulation. Article 156 shall apply mutatis mutandis to guarantees which may be required in the cases foreseen in the first paragraph of this Article to pre-financing payments made to European political parties.
Article 232 Use of contributions
1. Contributions shall be spent in accordance with Article 226. 2. Any part of the contribution not used within the financial year covered by that contribution (year n) shall be spent on any reimbursable expenditure incurred by 31 December of year n+1. Any remaining part of the contribution that is not spent within that time limit shall be recovered in accordance with Chapter 6 of Title IV. 3. European political parties shall respect the maximum co-financing rate laid down in Article 17(4) of Regulation (EU, Euratom) No 1141/2014. Remaining amounts of the contributions from the previous year shall not be used to finance the part which European political parties are to provide from their own resources. Contributions by third parties to joint events shall not be considered to be part of the own resources of a European political party. 4. European political parties shall use the part of the contribution that has not been used within the financial year covered by that contribution before using contributions awarded after that year. 5. Any interest yielded by the pre-financing payments shall be considered as part of the contribution.
Article 233 Report on the use of the contributions
1. A European political party shall, in accordance with Article 23 of Regulation (EU, Euratom) No 1141/2014, submit its annual report on the use of the contribution and its annual financial statements for approval to the authorising officer responsible. 2. The annual activity report referred to in Article 74(9) shall be drafted by the authorising officer responsible on the basis of the annual report and the annual financial statements referred to in paragraph 1 of this Article. Other supporting documents may be used for the purposes of drafting that report.
Article 234 Amount of the contribution
1. The amount of the contribution shall not become final until the annual report and the annual financial statements referred to in Article 233(1) have been approved by the authorising officer responsible. Approval of the annual report and the annual financial statements shall be without prejudice to subsequent checks by the Authority. 2. Any unspent amount of pre-financing shall not become final until it has been used by the European political party to pay reimbursable expenditure which meets the criteria defined in the call for contributions. 3. Where the European political party fails to comply with its obligations related to the use of contributions, the contributions shall be suspended, reduced or terminated after the European political party has been given the opportunity to present its observations. 4. The authorising officer responsible shall verify before making a payment that the European political party is still registered in the Register referred to in Article 7 of Regulation (EU, Euratom) No 1141/2014 and has not been the subject of any of the penalties provided for in Article 27 of that Regulation between the date of its application and the end of the financial year covered by the contribution. 5. Where the European political party is no longer registered in the Register referred to in Article 7 of Regulation (EU, Euratom) No 1141/2014 or has been the subject of any of the penalties provided for in Article 27 of that Regulation, the authorising officer responsible may suspend, reduce or terminate the contribution and recover amounts unduly paid under the agreement referred to in Article 229(8) of this Regulation, in proportion to the seriousness of the errors, irregularities, fraud or other breach of obligations related to the use of contribution, after the European political party has been given the opportunity to present its observations.
Article 235 Control and penalties
1. Each agreement referred to in Article 229(8) shall provide expressly for the European Parliament to exercise its powers of control on documents and on the premises, as well as for OLAF and the Court of Auditors to exercise their respective competences and powers, referred to in Article 129, over all European political parties that have received Union funding, their contractors and subcontractors. 2. Administrative and financial penalties which are effective, proportionate and dissuasive may be imposed by the authorising officer responsible, in accordance with Articles 138 and 139 of this Regulation and with Article 27 of Regulation (EU, Euratom) No 1141/2014.
Article 236 Record keeping
1. European political parties shall keep all records and supporting documents pertaining to the contribution for five years following the last payment related to the contribution. 2. Records related to audits, appeals, litigation, the settlement of claims arising out of the use of the contribution or to OLAF investigations, if notified to the recipient, shall be retained until the end of such audits, appeals, litigation, settlement of claims or investigations.
Article 237 Selection of external audit bodies or experts
The independent external audit bodies or experts referred to in Article 23 of Regulation (EU, Euratom) No 1141/2014 shall be selected through a procurement procedure. The term of their contract shall be no longer than five years. After two consecutive terms, they shall be deemed to have conflicting interests which may negatively affect the performance of the audit.
Article 238 Union trust funds for external actions
1. For emergency and post-emergency actions necessary to react to a crisis, or for thematic actions, the Commission may establish Union trust funds for external actions (Union trust funds) under an agreement concluded with other donors. Union trust funds shall only be established where agreements with other donors have secured contributions from other sources than the budget. The Commission shall consult the European Parliament and the Council on its intention to establish a Union trust fund for emergency and post-emergency actions. The establishment of a Union trust fund for thematic actions shall be subject to the approval of the European Parliament and of the Council. For the purposes of the third and fourth subparagraphs of this paragraph, the Commission shall make available to the European Parliament and to the Council its draft decisions concerning the establishment of a Union trust fund. Such draft decisions shall include a description of the objectives of the Union trust fund, the justification for its establishment in accordance with paragraph 3, an indication of its duration and the preliminary agreements with other donors. The draft decisions shall also include a draft constitutive agreement to be concluded with other donors. 2. The Commission shall submit its draft decisions concerning the financing of a Union trust fund to the competent committee where provided for in the basic act under which the Union contribution to the Union trust fund is provided. The competent committee shall not be invited to pronounce itself on the aspects which have already been submitted to the European Parliament and to the Council for consultation or for approval under the third, fourth and fifth subparagraphs of paragraph 1 respectively. 3. Union trust funds shall only be established and implemented subject to the following conditions: (a) there is added value of the Union intervention: the objectives of Union trust funds, in particular by reason of their scale or potential effects, may be better achieved at Union level than at national level and the use of the existing financing instruments would not be sufficient to achieve policy objectives of the Union; (b) Union trust funds bring clear political visibility for the Union and managerial advantages as well as better control by the Union of risks and disbursements of the Union and other donors’ contributions; (c) Union trust funds do not duplicate other existing funding channels or similar instruments without providing any additionality; (d) the objectives of Union trust funds are aligned with the objectives of the Union instrument or budgetary item from which they are funded. 4. A board chaired by the Commission shall be established for each Union trust fund to ensure a fair representation of the donors and to decide upon the use of the funds. The board shall include a representative of each non-contributing Member State as an observer. The rules for the composition of the board and its internal rules shall be laid down in the constitutive agreement of the Union trust fund. Those rules shall include the requirement that a vote in favour by the Commission is needed for the final adoption of the decision on the use of the funds. 5. Union trust funds shall be established for a limited duration as determined in their constitutive agreement. That duration may be extended by a decision of the Commission subject to the procedure set out in paragraph 1 upon request of the board of the Union trust fund concerned and upon presentation by the Commission of a report justifying the extension, confirming, in particular, that the conditions set out in paragraph 3 are complied with. The European Parliament and/or the Council may request the Commission to discontinue appropriations for a Union trust fund or to revise the constitutive agreement with a view to the liquidation of a Union trust fund, where appropriate in particular on the basis of the information submitted in the working document referred to in Article 41(6). In such an event, any remaining funds shall be returned on a pro rata basis to the budget as general revenue and to the contributing Member States and other donors.
Article 239 Implementation of Union trust funds for external actions
1. Union trust funds shall be implemented in accordance with the principles of sound financial management, transparency, proportionality, non-discrimination and equal treatment, and in accordance with the specific objectives defined in each constitutive agreement and in full respect of the rights of scrutiny and control of the Union contribution of the European Parliament and of the Council. 2. Actions financed under Union trust funds may be implemented directly by the Commission pursuant to Article 62(1), first subparagraph, point (a), and indirectly with the entities implementing Union funds pursuant to Article 62(1), first subparagraph, points (c)(i), (ii), (iii), (v), and (vi). 3. Funds shall be committed and paid by financial actors of the Commission, within the meaning of Chapter 4 of Title IV. The accounting officer of the Commission shall serve as the accounting officer of the Union trust funds. He or she shall be responsible for laying down accounting procedures and chart of accounts common to all Union trust funds. The Commission’s internal auditor, OLAF and the Court of Auditors shall exercise the same powers over Union trust funds as they do in respect of other actions carried out by the Commission. 4. The contributions of the Union and of other donors shall not be integrated in the budget and shall be lodged in a specific bank account. The specific bank account of the Union trust fund shall be opened and closed by the accounting officer. All transactions made on the specific bank account during the year shall be properly accounted for in the accounts of the Union trust fund. Union contributions shall be transferred to the specific bank account on the basis of payment requests that are duly substantiated with disbursement forecasts, taking into account the balance available on the account and the resulting need for additional payments. Disbursement forecasts shall be provided on an annual, or where appropriate on a semi-annual, basis. The contributions of other donors shall be taken into account when cashed in the specific bank account of the Union trust fund and for the amount in euro resulting from the conversion at their reception on the specific bank account. Interests accumulated on the specific bank account of the Union trust fund shall be invested in the Union trust fund except where otherwise provided in the constitutive agreement of the Union trust fund. 5. The Commission shall be authorised to use a maximum of 5 % of the amounts pooled into the Union trust fund to cover its management costs from the years in which the contributions referred to in paragraph 4 have started to be used. Notwithstanding the first sentence and in order to avoid the double charging of costs, management costs arising from the Union contribution to the Union trust fund shall only be covered by that contribution to the extent that those costs have not already been covered by other budget lines. For the duration of the Union trust fund, such management fees shall be assimilated to assigned revenue within the meaning of Article 21(2), point (a)(ii). In addition to the annual report referred to in Article 258, financial reporting on the operations carried out by each Union trust fund shall be established twice every year by the authorising officer. The Commission shall also report monthly on the state of implementation of each Union trust fund. The Union trust funds shall be subject to an independent external audit every year.
Article 240 Union contributions to global initiatives
1. With a view to appropriately coordinating actions with multiple partners to address global challenges, the Union may make contributions in the form of financing not linked to costs to multi-donor, pooled funded global initiatives when these support the achievement of Union policy objectives and where other budget implementation instruments would not be sufficient to achieve such objectives. Where possible and appropriate, the Commission shall join any governance board or equivalent steering committee. 2. Prior to any decision to contribute to a global initiative and as early as possible, the Commission shall inform the European Parliament and the Council about the amount of the contribution to the global initiative under the relevant basic act, explaining the reasons and appropriateness of the contribution, including how the contribution would provide visibility for the Union through the Union funding. 3. Union contributions to global initiatives shall be subject to the following conditions, taking into account the nature of the Union financing: (a) the Union contribution is a minority contribution to the initiative, taking into account the global amount contributed to the initiative at the time of the contribution; (b) the Union contribution is treated on equal footing with donors of a similar magnitude and, where one or several Member States also contribute to the initiative, the Union contribution benefits from a level of protection no less favourable than the contribution(s) of that or those Member States; (c) there is adequate reporting on the results achieved by the initiative, including through relevant output and impact indicators; (d) the initiative operates under rules ensuring sound financial management, transparency, non-discrimination and equal treatment in the use of Union funds in accordance with the principle of proportionality; (e) there are appropriate internal and external systems to prevent and combat irregularities and fraud as well as to report on their functioning at regular intervals, and there are appropriate rules for the recovery of funds by the initiative, including the use of such funds for the same initiative. In the event of suspected cases of serious irregularities such as fraud, corruption or conflict of interests, the authorising officer responsible, the EPPO in respect of those Member States participating in enhanced cooperation pursuant to Regulation (EU) 2017/1939, OLAF, audit authorities of the Commission and the Court of Auditors shall, under the rules of the initiative, be provided with relevant information and carry out joint audit, control, or investigative missions with the relevant body under the initiative, in line with Article 129. 4. A justification of the conditions set out in paragraph 3, first subparagraph, shall be included in the financing decision to contribute to the initiative. 5. The procedure laid down in Article 157(6) shall apply mutatis mutandis to the Union contribution to the global initiative.
Article 241 Use of budget support
1. Where provided for in the relevant basic acts, the Commission may provide budget support to a third country where the following conditions are met: (a) the third country’s management of public finances is sufficiently transparent, reliable and effective; (b) the third country has put in place sufficiently credible and relevant sectoral or national policies; (c) the third country has put in place stability-oriented macroeconomic policies; (d) the third country has put in place sufficient and timely access to comprehensive and sound budgetary information. 2. The payment of the Union contribution shall be based on the fulfilment of the conditions referred to in paragraph 1, including the improvement of the management of public finances. In addition, some payments may also be conditional on the achievement of milestones, measured by objective performance indicators, reflecting results and reform progress over time in the respective sector. 3. In third countries, the Commission shall support the respect for the rule of law, the development of parliamentary control and audit and anti-corruption capacities and the increase of transparency and public access to information. 4. The corresponding financing agreements concluded with the third country shall contain: (a) an obligation for the third country to provide the Commission with reliable and timely information which allows the Commission to evaluate the fulfilment of the conditions referred to in paragraph 2; (b) a right for the Commission to suspend the financing agreement if the third country breaches an obligation relating to respect for human rights, democratic principles and the rule of law and in serious cases of corruption; (c) appropriate provisions pursuant to which the third country is to commit to immediately reimburse all or part of the relevant operation funding, in the event that it is established that the payment of the relevant Union funds has been vitiated by serious irregularities attributable to that country. In order to process the reimbursement referred to in the first subparagraph, point (c), of this paragraph, Article 101(1), second subparagraph, may be applied.
Article 242 Remunerated external experts
1. Union institutions may select and remunerate external experts to assist them in the evaluation of grant applications, projects and tenders, and to provide opinions and advice in specific cases. 2. A call for expression of interest shall be published on the website of the Union institution concerned. The call for expression of interest shall include a description of the tasks, their duration and the fixed conditions of remuneration. 3. Any interested natural person may submit an application at any time during the period of validity of the call for expression of interest, with the exception of the last three months of that period. 4. A list of experts shall be drawn up following the call for expression of interest. It shall be valid for no more than 5 years from its publication or for the duration of a multiannual programme related to the tasks. The validity of the list may be longer than the duration of the multiannual financial programme when a rotation of the experts is ensured. 5. The value of the contract shall be below the thresholds referred to in Article 178(1). This value may be exceeded only exceptionally and in duly justified cases, in order to allow Union institutions to compete on equal footing with other actors in the market. 6. Remunerated external experts shall be remunerated on the basis of a fixed amount announced in advance and shall be chosen on the basis of their professional capacity. The selection shall be done on the basis of selection criteria respecting the principles of non-discrimination, equal treatment and absence of conflict of interests. 7. For the purpose of Section 2 of Chapter 2 of Title V, such experts shall be treated as recipients.
Article 243 Non-remunerated experts
Union institutions may reimburse travel and subsistence expenses incurred by, or where appropriate pay any other indemnities to, persons invited or mandated by them.
Article 244 Non-financial donations
1. Union institutions and Union bodies may provide non-financial donations in the form of services, supplies or works. 2. Non-financial donations shall be awarded in accordance with the principles of transparency and equal treatment and where applicable, with the requirements set out in sector-specific rules. They shall promote the achievement of policy objectives of the Union. 3. The authorising officer responsible shall provide information on non-financial donations in the annual activity report referred to in Article 74(9). 4. In the case of non-perishable supplies financed from administrative appropriations and in compliance with the accounting rules and standards referred to in Article 80, Union institutions and bodies may not provide non-financial donations before the supply has been partially depreciated.
Article 245 Membership fees and other payments of subscriptions
The Union may pay contributions as subscriptions to bodies of which it is a member or an observer.
Article 246 Expenditure on the members and staff of Union institutions
Unions institutions may pay expenditure on the members and staff of Union institutions, including contributions to associations of current and former members of the European Parliament, and contributions to the European schools.
Article 247 Structure of the accounts
The annual accounts of the Union shall be prepared for each financial year which shall run from 1 January to 31 December. Those accounts shall comprise the following: (a) the consolidated financial statements, which present, in accordance with the accounting rules referred to in Article 80, the consolidation of the financial information contained in the financial statements of Union institutions, of Union bodies referred to in Article 70 and of other bodies meeting the accounting consolidation criteria; (b) the aggregated budget implementation reports which present the information contained in the budget implementation reports of Union institutions.
Article 248 Supporting documents
Each entry in the accounts shall be based on appropriate supporting documents in accordance with Article 75.
Article 249 Financial statements
1. The financial statements shall be presented in millions of euro and in accordance with the accounting rules referred to in Article 80 and shall be comprised of: (a) the balance sheet which presents all assets and liabilities and the financial situation prevailing on 31 December of the preceding financial year; (b) the statement of financial performance, which presents the economic result for the preceding financial year; (c) the cash-flow statement showing amounts collected and disbursed during the financial year and the final treasury position; (d) the statement of changes in net assets presenting an overview of the movements during the financial year in reserves and accumulated results. 2. The notes to the financial statements shall supplement and comment on the information presented in the statements referred to in paragraph 1 and shall supply all the additional information prescribed by the accounting rules referred to in Article 80 and the internationally accepted accounting practice where such information is relevant to the activities of the Union. The notes shall contain at least the following information: (a) accounting principles, rules and methods; (b) explanatory notes supplying additional information not contained in the body of the financial statements, which is necessary for a fair presentation of the accounts. 3. The accounting officer shall, after the close of the financial year and up to the date of transmission of the general accounts, make any adjustments which, without involving disbursement or collection in respect of that year, are necessary for a true and fair view of those accounts.
Article 250 Budget implementation reports
1. The budget implementation reports shall be presented in millions of euro and shall be comparable year by year. They shall consist of: (a) reports which aggregate all budgetary operations for the financial year in terms of revenue and expenditure; (b) the budget result, which is calculated on the basis of the annual budgetary balance referred to in Decision (EU, Euratom) 2020/2053; (c) explanatory notes, which shall supplement and comment on the information given in the reports. 2. The structure of the budget implementation reports shall be the same as that of the budget itself. 3. The budget implementation reports shall contain: (a) information on revenue, in particular changes in the revenue estimates, the revenue outturn and entitlements established; (b) information showing changes in the total commitment and payment appropriations available; (c) information showing the use made of the total commitment and payment appropriations available; (d) information showing commitments outstanding, those carried over from the preceding financial year and those made during the financial year. 4. As regards information on revenue, a statement shall be attached to the budget implementation report showing, for each Member State, the breakdown of amounts of own resources still to be recovered at the end of the financial year and covered by a recovery order.
Article 251 Provisional accounts
1. The accounting officers of the Union institutions other than the Commission and the bodies referred to in Article 247 shall, by 1 March of the following financial year, send their provisional accounts to the accounting officer of the Commission and to the Court of Auditors. 2. The accounting officers of the Union institutions other than the Commission and the bodies referred to in Article 247 shall, by 1 March of the following financial year, send the required accounting information for consolidation purposes to the accounting officer of the Commission, in the manner and format laid down by the latter. 3. The accounting officer of the Commission shall consolidate the provisional accounts referred to in paragraph 2 with the provisional accounts of the Commission and shall, by 31 March of the following financial year, send the provisional accounts of the Commission and the consolidated provisional accounts of the Union to the Court of Auditors by electronic means.
Article 252 Approval of the final consolidated accounts
1. The Court of Auditors shall, by 1 May, make its observations on the provisional accounts of the Union institutions other than the Commission, and of each of the bodies referred to in Article 247, and, by 15 May, make its observations on the provisional accounts of the Commission and the consolidated provisional accounts of the Union. 2. The accounting officers of the Union institutions other than the Commission and of the bodies referred to in Article 247 shall, by 15 May, send the required accounting information to the accounting officer of the Commission, in the manner and format laid down by the latter, with a view to drawing up the final consolidated accounts. The Union institutions other than the Commission, and each of the bodies referred to in Article 247, shall, by 1 June, send their final accounts to the European Parliament, to the Council, to the Court of Auditors and to the accounting officer of the Commission. 3. The accounting officer of each Union institution and of each body referred to in Article 247 shall send to the Court of Auditors, with a copy to the accounting officer of the Commission, at the same date as the transmission of his or her final accounts, a representation letter covering those final accounts. The final accounts shall be accompanied by a note drawn up by the accounting officer, in which the latter declares that the final accounts were prepared in accordance with this Title and with the applicable accounting principles, rules and methods set out in the notes to the financial statements. 4. The accounting officer of the Commission shall draw up the final consolidated accounts on the basis of the information presented pursuant to paragraph 2 of this Article by the Union institutions other than the Commission, and by the bodies referred to in Article 247. The final consolidated accounts shall be accompanied by a note drawn up by the accounting officer of the Commission, in which the latter declares that the final consolidated accounts were prepared in accordance with this Title and with the applicable accounting principles, rules and methods set out in the notes to the financial statements. 5. After approving the final consolidated accounts and its own final accounts, the Commission shall, by 30 June, send them by electronic means to the European Parliament, to the Council and to the Court of Auditors. By the same date, the accounting officer of the Commission shall transmit a representation letter covering the final consolidated accounts to the Court of Auditors. The Court of Auditors shall adopt its opinion on the reliability of the annual accounts of the Union and the accounts of each of the institutions and bodies referred to in Article 247 by 31 July. 6. The final consolidated accounts shall be published by 15 November in the Official Journal of the European Union together with the statement of assurance given by the Court of Auditors in accordance with Article 287 TFEU and Article 106a of the Euratom Treaty.
Article 253 Integrated financial and accountability reporting
1. By 31 July of the following financial year the Commission shall communicate to the European Parliament and to the Council an integrated set of financial and accountability reports which includes: (a) the final consolidated accounts as referred to in Article 252; (b) the annual management and performance report providing for a clear and concise summary of the internal control and financial management achievements referred to in the annual activity reports of each authorising officer by delegation and including information on key governance arrangements in the Commission as well as: (i) an estimation of the level of error in Union expenditure based on a consistent methodology and an estimate of future corrections; (ii) information on the preventive and corrective actions covering the budget, which shall present the financial impact of the actions taken to protect the budget from expenditure in breach of law; (iii) information on the implementation of the Commission’s anti-fraud strategy; (c) a long-term forecast of future inflows and outflows covering the next five years, based on the applicable multiannual financial frameworks and Decision (EU, Euratom) 2020/2053; (d) the annual internal audit report as referred to in Article 118(8); (e) the evaluation on the Union’s finances based on the results achieved, as referred to in Article 318 TFEU, assessing in particular the progress towards the achievement of policy objectives taking into account the performance indicators referred to in Article 33 of this Regulation; (f) the report on the follow-up to the discharge as referred to in Article 268(2). 2. The integrated financial and accountability reporting referred to in paragraph 1 shall present each report in a separate and clearly identifiable manner. Each individual report shall be made available to the European Parliament, to the Council and to the Court of Auditors by 30 June, with the exception of the final consolidated accounts.
Article 254 Monthly reporting on budget implementation
In addition to the annual statements and reports provided for in Articles 249 and 250, the accounting officer of the Commission shall send once a month to the European Parliament and to the Council figures, aggregated at chapter level at least, as well as separately broken down by chapter, article and item, on budget implementation, both for revenue and for expenditure covering all available appropriations. Those figures shall also provide details of the use of appropriations carried over. The figures shall be made available within 10 working days of the end of each month via the Commission’s website.
Article 255 Annual report on budgetary and financial management
1. Each Union institution and each body referred to in Article 247 shall prepare a report on budgetary and financial management for the financial year. They shall make the report available to the European Parliament, to the Council and to the Court of Auditors, by 31 March of the following financial year. 2. The report referred to in paragraph 1 shall provide summary information on the transfers of appropriations among the various budgetary items.
Article 256 Annual report on contingent liabilities arising from budgetary guarantees and financial assistance and the sustainability of those contingent liabilities
The Commission shall report annually to the European Parliament and to the Council on contingent liabilities arising from budgetary guarantees and financial assistance and, pursuant to Article 213(3), on the assessment of the sustainability of these contingent liabilities borne by the budget. That information shall be made available to the Court of Auditors at the same time.
Article 257 Status report on accounting issues
By 15 September of each financial year, the accounting officer of the Commission shall send to the European Parliament and to the Council a report containing information on current risks noted, general trends observed, new accounting issues encountered and progress on accounting matters, including where identified by the Court of Auditors, as well as information on recoveries.
Article 258 Reporting on Union trust funds for external actions
In accordance with Article 41(6), the Commission shall report annually to the European Parliament and to the Council on the activities supported by Union trust funds referred to in Article 238, on their implementation and performance, as well as on their accounts. The Board of the Union trust fund concerned shall approve the annual report of the Union trust fund drawn up by the authorising officer. It shall also approve the final accounts drawn up by the accounting officer. The final accounts shall be presented by the Board to the European Parliament and Council in the context of the discharge procedure for the Commission.
Article 259 Publication of information on recipients
The Commission shall publish information on recipients in accordance with Article 38.
Article 260 External audit by the Court of Auditors
The European Parliament, the Council and the Commission shall inform the Court of Auditors, as soon as possible, of all decisions and rules adopted pursuant to Articles 12, 16, 21, 29, 30, 32 and 43.
Article 261 Rules and procedure on the audit
1. The examination by the Court of Auditors of whether all revenue has been received and all expenditure incurred in a lawful and proper manner shall have regard to the Treaties, the budget, this Regulation, the delegated acts adopted pursuant to this Regulation and all other relevant acts adopted pursuant to the Treaties. That examination may take account of the multiannual character of programmes and related supervisory and control systems. 2. In the performance of its task, the Court of Auditors shall be entitled to consult, in the manner provided for in Article 263, all documents and information relating to the financial management by departments or bodies with regard to operations financed or co-financed by the Union. It shall have the power to hear any official responsible for a revenue or expenditure operation and to use any of the auditing procedures appropriate to those departments or bodies. The audit in Member States shall be carried out in liaison with the national audit institutions or, where they do not have the necessary powers, with the competent national departments. The Court of Auditors and the national audit institutions of Member States shall cooperate in a spirit of trust while maintaining their independence. In order to obtain all the necessary information for the performance of the task entrusted to it by the Treaties or by acts adopted pursuant to them, the Court of Auditors may be present, at its request, during the audit operations carried out within the framework of budget implementation by, or on behalf of, any Union institution. At the request of the Court of Auditors, each Union institution shall authorise financial institutions holding Union deposits to enable the Court of Auditors to ensure that external data tally with the accounts. 3. In order to perform its task, the Court of Auditors shall notify Union institutions and the authorities to which this Regulation applies of the names of the members of its staff who are empowered to audit them.
Article 262 Checks on securities and cash
The Court of Auditors shall ensure that all securities and cash on deposit or in hand are checked against vouchers signed by the depositories or against official memoranda of cash and securities held. It may carry out such checks itself.
Article 263 Court of Auditors’ right of access
1. Union institutions, the bodies administering revenue or expenditure on the Union’s behalf and recipients shall afford the Court of Auditors all the facilities and give it all the information which it considers necessary for the performance of its task. They shall, at the request of the Court of Auditors, place at its disposal all documents concerning the award and performance of contracts financed by the budget and all accounts of cash or materials, all accounting records or supporting documents, and also administrative documents relating thereto, all documents relating to revenue and expenditure, all inventories, all organisation charts of departments, which the Court of Auditors considers necessary for auditing the annual accounts and budget implementation reports on the basis of records or on-the-spot auditing and, for the same purposes, all documents and data created or stored electronically. The Court of Auditors’ right of access shall include access to the IT system used for the management of revenue or expenditure subject to its audit, where such access is relevant for the audit. The internal audit bodies and other services of the national administrations concerned shall afford the Court of Auditors all the facilities which it considers necessary for the performance of its task. 2. The officials whose operations are checked by the Court of Auditors shall: (a) show their records of cash in hand, any other cash, securities and materials of all kinds, and also the supporting documents in respect of their stewardship of the funds with which they are entrusted, and also any books, registers and other documents relating thereto; (b) present the correspondence and any other documents required for the full implementation of the audit referred to in Article 261. The information supplied under the first subparagraph, point (b), may be requested only by the Court of Auditors. 3. The Court of Auditors shall be empowered to audit the documents in respect of the revenue and expenditure of the Union which are held by the departments of Union institutions and, in particular, by the departments responsible for decisions in respect of such revenue and expenditure, the bodies administering revenue or expenditure on the Union’s behalf and the natural or legal persons receiving payments from the budget. 4. The task of establishing that the revenue has been received and the expenditure incurred in a lawful and proper manner and that the financial management has been sound shall extend to the use, by bodies outside Union institutions, of Union funds received by way of contributions. 5. Union financing paid to recipients outside Union institutions shall be subject to the agreement in writing by those recipients or, failing agreement on their part, by contractors or subcontractors, to an audit by the Court of Auditors into the use made of the financing granted. 6. The Commission shall, at the request of the Court of Auditors, provide it with any information on borrowing and lending operations. 7. Use of integrated computer systems shall not have the effect of reducing access by the Court of Auditors to supporting documents. Whenever technically possible, electronic access to data and documents necessary for the audit shall be given to the Court of Auditors in its own premises and in compliance with relevant security rules.
Article 264 Annual report of the Court of Auditors
1. The Court of Auditors shall transmit to the Commission and the other Union institutions concerned, by 30 June, any observations which are, in its opinion, such that they should appear in its annual report. Those observations shall remain confidential and shall be subject to an adversarial procedure. Each Union institution shall address its reply to the Court of Auditors by 15 October. The replies of Union institutions other than the Commission shall be sent to the Commission at the same time. 2. The annual report of the Court of Auditors shall contain an assessment of the soundness of financial management. 3. The annual report of the Court of Auditors shall contain a section for each Union institution and for the common provisioning fund. The Court of Auditors may add any summary report or general observations which it sees fit to make. 4. The Court of Auditors shall transmit to the authorities responsible for giving discharge and to the other Union institutions, by 15 November, its annual report accompanied by the replies of Union institutions and shall ensure publication thereof in the Official Journal of the European Union .
Article 265 Special reports of the Court of Auditors
1. The Court of Auditors shall transmit to the Union institution or the body concerned any observations which are, in its opinion, such that they should appear in a special report. Those observations shall remain confidential and shall be subject to an adversarial procedure. The Union institution or the body concerned shall inform the Court of Auditors, in general, within six weeks of transmission of those observations, of any replies it wishes to make in relation to those observations. That period shall be suspended in duly justified cases, in particular where, during the adversarial procedure, it is necessary for the Union institution or body concerned to obtain feedback from Member States in order to finalise its reply. The replies of the Union institution or the body concerned shall directly and exclusively address the observations of the Court of Auditors. Upon request of the Court of Auditors or of the Union institution or body concerned, the replies may be examined by the European Parliament and by the Council after publication of the report. The Court of Auditors shall ensure that special reports are drawn up and adopted within an appropriate period of time, which shall, in general, not exceed 13 months. The special reports, together with the replies of the Union institutions or bodies concerned, shall be transmitted without delay to the European Parliament and to the Council, each of which shall decide, where appropriate in conjunction with the Commission, what action is to be taken in response. The Court of Auditors shall take all necessary steps to ensure that the replies to its observations from each Union institution or body concerned as well as the timeline for the drawing up of the special report are published together with the special report. 2. The opinions referred to in Article 287(4), second subparagraph, TFEU which do not relate to proposals or drafts covered by the legislative consultation procedure may be published by the Court of Auditors in the Official Journal of the European Union . The Court of Auditors shall take its decision on publication after consulting the Union institution which requested the opinion or which is concerned by it. Opinions published shall be accompanied by any remarks by the Union institutions concerned.
Article 266 Timetable of the discharge procedure
1. The European Parliament, upon a recommendation from the Council acting by qualified majority, shall, before 15 May of year n+2, give a discharge to the Commission in respect of the implementation of the budget for year n. 2. Where the deadline provided for in paragraph 1 cannot be complied with, the European Parliament or the Council shall inform the Commission of the reasons therefor. 3. If the European Parliament postpones the decision giving a discharge, the Commission shall make every effort to take measures, as soon as possible, to remove or facilitate removal of the obstacles to that decision.
Article 267 The discharge procedure
1. The discharge decision shall cover the accounts of all the Union’s revenue and expenditure, the resulting balance and the assets and liabilities of the Union shown in the balance sheet. 2. With a view to giving the discharge, the European Parliament shall, after the Council has done so, examine the accounts, financial statements and the evaluation report referred to in Article 318 TFEU. It shall also examine the annual report made by the Court of Auditors together with the replies of the Union institutions under audit, and any relevant special reports by the Court of Auditors in respect of the financial year concerned and the Court of Auditors’ statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions. 3. The Commission shall submit to the European Parliament, at the latter’s request, any information required for the smooth application of the discharge procedure for the financial year concerned, in accordance with Article 319 TFEU.
Article 268 Follow-up measures
1. In accordance with Article 319 TFEU and Article 106a of the Euratom Treaty, Union institutions and Union bodies referred to in Articles 70 and 71 of this Regulation shall take all appropriate steps to act on the observations accompanying the European Parliament’s discharge decision and on the comments accompanying the recommendation for discharge adopted by the Council. 2. At the request of the European Parliament or of the Council, Union institutions and Union bodies referred to in Articles 70 and 71 shall report on the measures taken in the light of those observations and comments, and, in particular, on the instructions they have given to any of their departments which are responsible for budget implementation. Member States shall cooperate with the Commission by informing it of the measures they have taken to act on those observations so that the Commission may take them into account when drawing up its own report. The reports from Union institutions and Union bodies referred to in Articles 70 and 71 shall also be transmitted to the Court of Auditors.
Article 269 Specific provisions regarding the EEAS
The EEAS shall be subject to the procedures provided for in Article 319 TFEU and in Articles 266, 267 and 268 of this Regulation. The EEAS shall fully cooperate with Union institutions involved in the discharge procedure and provide, as appropriate, any additional necessary information, including through attendance at meetings of the relevant bodies.
Article 270 General provisions
1. Administrative appropriations shall be non-differentiated appropriations. 2. This Title applies to the administrative appropriations referred to in in Article 47(4) and to those of Union institutions other than the Commission. Budgetary commitments corresponding to administrative appropriations of a type common to several titles and which are managed globally may be recorded globally in the budgetary accounting following the summary classification by type as set out in Article 47(4). The corresponding expenditure shall be booked to the budget lines of each title according to the same distribution as for appropriations. 3. Administrative expenditure arising from contracts covering periods that extend beyond the financial year, either in accordance with local practice or relating to the supply of equipment, shall be charged to the budget for the financial year in which it is effected. 4. Advances may be paid, in accordance with the conditions laid down in the Staff Regulations and in the specific provisions concerning members of Union institutions, to staff and to members of Union institutions.
Article 271 Payments made in advance
Expenditure referred to in Article 11(2) which is to be paid in advance pursuant to legal or contractual provisions may give rise to payments from 1 December onwards to be charged to the appropriations for the following financial year. In that case, the limit set out in Article 11(2), point (a), shall not apply.
Article 272 Specific provisions regarding building projects
1. Each Union institution shall provide the European Parliament and the Council, by 1 June each year, with a working document on its building policy, which shall incorporate the following information: (a) for each building, the expenditure and surface area covered by the appropriations of the corresponding budget lines. The expenditure shall include the costs of the fitting-out of buildings but not the other charges; (b) the expected evolution of the global programming of surface area, taking account of trends in teleworking, and locations for the coming years with a description of the building projects in planning phase which are already identified and an assessment of the evolution of the real estate market surrounding the location of the project that leads to additional cost; (c) the final terms and costs, as well as relevant information regarding project implementation of new building projects previously submitted to the European Parliament and to the Council under the procedure set out in paragraphs 2 and 3 and not included in the preceding year’s working documents. The Commission shall provide this information as part of the working documents attached to the draft budget, as set out in Article 41(3). 2. For any building project likely to have significant financial implications for the budget, the Union institution concerned shall inform the European Parliament and the Council as early as possible, and in any case before any prospecting of the local market takes place, in the case of building contracts, or before invitations to tender are issued, in the case of building works, about the building surface area required, and the reasons for which it is required, and the provisional planning. 3. For any building project likely to have significant financial implications for the budget, the Union institution concerned shall present the building project, in particular its detailed estimated costs, specifying in particular those relating to any works required to improve energy efficiency, and its financing including any possible use of internal assigned revenue referred to in Article 21(3), point (e), as well as a list of draft contracts intended to be used, to the European Parliament and to the Council and shall request their approval before contracts are concluded. At the request of the Union institution concerned, documents submitted relating to the building project shall be treated confidentially. Except in cases of force majeure as referred to in paragraph 4, the European Parliament and the Council shall deliberate upon the building project within four weeks of its receipt by both institutions. The building project shall be deemed approved at the expiry of this four-week period, unless the European Parliament or the Council take a decision contrary to the proposal within that period of time. If the European Parliament and/or the Council raise concerns within that four-week period, that period shall be extended once by two weeks. If the European Parliament or the Council take a decision contrary to the building project, the Union institution concerned shall withdraw its proposal and may submit a new one. 4. In cases of force majeure , for which due reasons shall be given, the information provided for in paragraph 2 may be submitted jointly with the building project. The European Parliament and the Council shall deliberate upon the building project within two weeks of its receipt by both institutions. The building project shall be deemed to be approved at the expiry of this two-week period, unless the European Parliament and/or the Council take a decision contrary to the proposal within this period of time. 5. The following shall be considered as building projects likely to have significant financial implications for the budget: (a) any acquisition of land; (b) the acquisition, sale, structural renovation, construction of buildings or any project combining those elements to be implemented in the same timeframe, exceeding EUR 3 000 000; (c) the acquisition, structural renovation, construction of buildings or any project combining those elements to be implemented in the same timeframe, exceeding EUR 2 000 000 in the event that the price represents more than 110 % of the local price of comparable properties as evaluated by an independent expert; (d) the sale of land or buildings in the event that the price represents less than 90 % of the local price of comparable properties as evaluated by an independent expert; (e) any new building contract, including usufructs, long-term leases and renewals of existing building contracts under less favourable conditions, not covered by point (b) with an annual charge of at least EUR 750 000; (f) the extension or renewal of existing building contracts, including usufruct and long-term leases, under the same or more favourable conditions, with an annual charge of at least EUR 3 000 000. This paragraph shall also apply to building projects which have an interinstitutional nature, as well as to Union delegations. The thresholds referred to in the first subparagraph, points (b) to (f), shall include the costs of fitting-out of the building. For rental and usufruct contracts, those thresholds shall take into account the costs of the fitting-out of the building but not the other charges. 6. Without prejudice to Article 17, and in duly justified cases, a building acquisition or structural renovation project may be financed through a loan, subject to prior approval by the European Parliament and by the Council. Loans shall be contracted and repaid in accordance with the principle of sound financial management and with due regard to the financial interests of the Union. When the Union institution proposes to finance the acquisition or the structural renovation through a loan, the financing plan to be submitted, together with the request for prior approval by the Union institution concerned, shall specify in particular, the maximum level of financing, the financing period, the type of financing, the financing conditions and savings compared to other types of contractual arrangements. Documents submitted relating to structural renovation projects shall contain elements showing estimated savings related to the energy consumption, operating costs or improved environmental performance. The European Parliament and the Council shall deliberate upon the request for prior approval within four weeks, extendable once by two weeks, of its receipt by both institutions. The acquisition or structural renovation financed through a loan shall be deemed to be rejected if the European Parliament and the Council do not expressly approve it within the deadline.
Article 273 Early information procedure and prior approval procedure
1. The early information procedure set out in Article 272(2) and the prior approval procedure set out in Article 272(3) and (4) shall not apply to acquisition of land free of charge or for a symbolic amount. 2. The early information procedure set out in Article 272(2) and the prior approval procedure set out in Article 272(3) and (4) shall also apply to residential buildings if the acquisition, structural renovation, construction of buildings or any project combining those elements in the same timeframe is exceeding EUR 2 000 000 and the price is above 110 % of the local price or rent index of comparable properties. The European Parliament and the Council may request from the Union institution in charge any information related to residential buildings. 3. In exceptional or urgent political circumstances the early information referred to in Article 272(2) concerning building projects relating to Union delegations or offices in third countries may be submitted jointly with the building project pursuant to Article 272(3). In such cases, the early information and prior approval procedures shall be conducted at the earliest possible opportunity. For residential building projects in third countries, the early information and prior approval procedures shall be conducted jointly. 4. The prior approval procedure set out in Article 272(3) and (4) shall not apply to preparatory contracts or studies necessary to evaluate the detailed cost and financing of the building project.
Article 274 Information requests by the European Parliament and by the Council
The European Parliament and the Council shall be entitled to obtain any information or explanations regarding budgetary matters within their fields of competence.
Article 275 Exercise of the delegation
1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article. 2. The power to adopt delegated acts referred to in Articles 70(1), Article 71, third paragraph, Article 164 and Article 216(2), second and third subparagraphs, shall be conferred on the Commission for a period ending on 31 December 2020. The Commission shall draw up a report in respect of the delegation of power not later than 31 December 2018. The delegation of power shall be tacitly extended for the periods of duration of the subsequent multiannual financial frameworks, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period of duration of the corresponding multiannual financial framework. 3. The delegation of power referred to in Article 70(1), Article 71, third paragraph, Article 164 and Article 216(2), second and third subparagraphs. may be revoked at any time by the European Parliament or by the Council. A decision to revoke 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. Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. 5. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council. 6. A delegated act adopted pursuant to Article 70(1), Article 71, third paragraph, Article 164 and Article 216(2), second and third subparagraphs. shall enter into force only if no objection has been expressed either by the European Parliament or by the Council within a period of two months of notification of that act to the European Parliament and to 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 two months at the initiative of the European Parliament or of the Council.
Article 276 Committee procedure
1. The Commission shall be assisted by a committee. 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.
Article 277 Transitional provisions
1. Without prejudice to sector-specific rules and voluntary application, and subject to paragraph 2 of this Article, the obligations set out in Articles 36(8), 130, 137(2), 138(2), and 144(5) concerning the application of the early detection and exclusion system to shared management and direct management in cases where the budget is implemented pursuant to Article 62(1), first subparagraph, point (a), with Member States, shall apply only to programmes adopted or financed as from 1 January 2028. 2. Without prejudice to sector-specific rules and voluntary application, the early detection and exclusion system shall not apply to Regulation (EU) 2021/241. 3. Legal commitments for grants implementing the budget under the Multiannual Financial Framework 2014-2020 may continue to take the form of grant decisions. The provisions of Title VIII applicable to grant agreements shall apply mutatis mutandis to grant decisions. 4. Regulations (EU, Euratom) No 966/2012, (EU, Euratom) 2018/1046 and Delegated Regulation (EU) No 1268/2012 shall continue to apply to legal commitments entered into before the entry into force of this Regulation. The existing pillar assessments, contribution agreement templates and financial framework partnership agreements may continue to apply and shall be reviewed as appropriate. 5. The obligation set out in Article 36(2), point (d), and (6) concerning the provision of access to data on the recipients of funds and their beneficial owners shall apply only to programmes adopted under and financed from post-2027 multiannual financial frameworks. 6. Article 38(4), third subparagraph, and (6) shall apply only to programmes adopted under and financed from post-2027 multiannual financial frameworks. 7. The deadlines set out in Article 252(1), (2) and (5) of this Regulation shall apply as from the accounts for the financial year 2026. The deadlines set out in Article 246 of Regulation (EU, Euratom) 2018/1046 shall continue to apply until then. 8. The derogations to the obligation to provide a declaration on honour in the case of applications for very low value grants, as set out in Article 139(1), sixth subparagraph, and in Article 199(1), point (b), second subparagraph, shall apply to grant award procedures financed under post-2027 multiannual financial frameworks.
Article 278 Review
This Regulation shall be reviewed whenever it proves necessary to do so and in any case at the latest two years before the end of each multiannual financial framework. Such review shall cover, inter alia, the implementation of Titles VIII and X and the deadlines set out in Article 265.
Article 279 Repeal
Regulation (EU, Euratom) 2018/1046 is repealed. References to the repealed Regulation shall be construed as references to this Regulation and shall be read in accordance with the correlation table in Annex II.
Article 280 Entry into force and application
This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Union . It shall apply from 30 September 2024. Article 48(2), point (b), shall apply until 31 December 2027.