Article 93 Treatment of financial irregularities on the part of a member of staff
1. Without prejudice to the powers of OLAF and to the administrative autonomy of Union institutions, Union bodies, European offices or bodies or persons entrusted with the implementation of specific actions in the CFSP pursuant to Title V of the TEU in respect of members of their staff and with due regard to the protection of whistle-blowers, any infringement of this Regulation, or of a provision relating to financial management or the checking of operations, resulting from an act or omission of a member of staff shall be referred for an opinion to the panel referred to in Article 145, by any of the following: (a) the appointing authority in charge of disciplinary matters; (b) the authorising officer responsible, including Heads of Union delegations and their deputies in their absence acting as authorising officers by subdelegation in accordance with Article 60(2). Where the panel is directly informed of a matter by a member of staff, it shall transmit the file to the appointing authority of the Union institution, Union body, European office or body or person concerned and shall inform the member of staff accordingly. The appointing authority may request the panel’s opinion on the case. 2. A request for an opinion of the panel pursuant to the paragraph 1, first subparagraph, shall be accompanied by a description of the facts and the act or omission which the panel is asked to assess, as well as by relevant supporting documents, including reports of any investigation which has taken place. Wherever possible, the information shall be produced in anonymised form. Before submitting a request or any additional information to the panel, the appointing authority or the authorising officer, as appropriate, shall give the member of staff involved the opportunity to submit its observations, after having notified to him or her the supporting documents referred to in the first subparagraph, insofar as that notification does not seriously undermine the pursuit of further investigations. 3. In the cases referred in paragraph 1 of this Article, the panel referred to in Article 145 shall be competent to assess whether, on the basis of the elements submitted to it pursuant to paragraph 2 of this Article and any additional information received, a financial irregularity has occurred. On the basis of the opinion of the panel, the Union institution, Union body, European office or body or person concerned shall decide on the appropriate follow-up actions in accordance with the Staff Regulations. If the panel detects systemic problems, it shall make a recommendation to the authorising officer and to the authorising officer by delegation, unless the latter is the member of staff involved, as well as to the internal auditor. 4. Where the panel gives the opinion referred to in paragraph 1 of this Article, it shall be composed of the members referred to in Article 145(2), first subparagraph, points (a) and (b) as well as the following additional members, which shall be appointed taking into account the need for avoiding any conflicts of interests: (a) a representative of the appointing authority in charge of disciplinary matters of the Union institution, Union body, European office or body or person concerned when the case is referred in accordance with paragraph 1, first subparagraph, point (a), or a representative of the authorising officer responsible when the case is referred in accordance with paragraph 1, first subparagraph, point (b); (b) a member appointed by the staff committee of the Union institution, Union body, European office or body or person concerned; (c) a member of the legal service of the Union institution employing the member of staff concerned. Where the panel gives the opinion referred to in paragraph 1, it shall be addressed to the appointing authority of the Union institution, Union body, European office or body or person concerned. 5. The panel shall have no investigative powers. The Union institution, Union body, European office or body or person concerned shall cooperate with the panel with a view to ensuring that it has all the information necessary for giving its opinion. 6. Where the panel considers that the case is a matter for OLAF, it shall in accordance with paragraph 1 transmit the file to the relevant appointing authority without delay and inform OLAF immediately. 7. The Member States shall fully support the Union in the enforcement of any liability, under Article 22 of the Staff Regulations, of temporary staff to whom Article 2, point (e), of the Conditions of Employment of Other Servants of the European Union applies.
Article 94 Rules applicable to accounting officers
An accounting officer shall be liable to disciplinary action and payment of compensation, as laid down in, and in accordance with, the procedures in the Staff Regulations. An accounting officer may, in particular, become liable as a result of any of the following forms of misconduct on his or her part: (a) losing or damaging funds, assets or documents in his or her keeping; (b) wrongly altering bank accounts or postal giro accounts; (c) recovering or paying amounts which are not in conformity with the corresponding recovery or payment orders; (d) failing to collect revenue due.
Article 95 Rules applicable to imprest administrators
An imprest administrator may in particular become liable as a result of any of the following forms of misconduct on his or her part: (a) losing or damaging funds, assets or documents in his or her keeping; (b) not providing proper supporting documents for the payments he or she has made; (c) making payments to persons other than those entitled to such payments; (d) failing to collect revenue due.
Article 96 Own resources
1. An estimate of revenue constituted by own resources, as referred to in Decision (EU, Euratom) 2020/2053 shall be entered in the budget in euro. The corresponding own resources shall be made available in accordance with Regulations (EU, Euratom) No 609/2014 and (EU, Euratom) 2021/770. 2. The authorising officer shall draw up a schedule indicating when the own resources defined in Decision (EU, Euratom) 2020/2053 will be made available to the Commission. Own resources shall be established and recovered in accordance with the rules adopted pursuant to that Decision. For accounting purposes, the authorising officer shall issue a recovery order for credits and debits to the account for own resources referred to in Regulations (EU, Euratom) No 609/2014 and (EU, Euratom) 2021/770.
Article 97 Estimate of amounts receivable
1. When the authorising officer responsible has sufficient and reliable information in respect of any measure or situation which may give rise to an amount being owed to the Union, the authorising officer responsible shall make an estimate of the amount receivable. 2. The estimate of the amount receivable shall be adjusted by the authorising officer responsible as soon as he or she is aware of an event modifying the measure or the situation which gave rise to the estimate being made. When establishing the recovery order on a measure or situation that had previously given rise to an estimate of amounts receivable, that estimate shall be adjusted accordingly by the authorising officer responsible. If the recovery order is drawn up for the same amount as the original estimate of amounts receivable, that estimate shall be reduced to zero. 3. By way of derogation from paragraph 1, no estimate of the amount receivable shall be made before Member States make available to the Commission the amounts of own resources defined in Decision (EU, Euratom) 2020/2053, which are paid at fixed intervals by Member States. The authorising officer responsible shall issue a recovery order in respect of those amounts.
Article 98 Establishment of amounts receivable
1. In order to establish an amount receivable, the authorising officer responsible shall: (a) verify that the debt exists; (b) determine or verify the reality and the amount of the debt; and (c) verify the conditions according to which the debt is due. The establishment of an amount receivable shall constitute recognition of the right of the Union in respect of a debtor and establishment of entitlement to demand that the debtor pay the debt. 2. Any amount receivable that is identified as being certain, of a fixed amount and due shall be established by a recovery order by which the authorising officer responsible instructs the accounting officer to recover the amount. It shall be followed by a debit note sent to the debtor, except for the cases where a waiver procedure is carried out immediately in accordance with paragraph 4, second subparagraph. Both the recovery order and the debit note shall be drawn up by the authorising officer responsible. The authorising officer shall send the debit note immediately after establishing the amount receivable and at the latest within a period of five years from the time when the Union institution was, in normal circumstances, in a position to claim its debt. Such period shall not apply where the authorising officer responsible establishes that, despite the efforts which the Union institution has made, the delay in acting was caused by the debtor’s conduct. 3. To establish an amount receivable the authorising officer responsible shall ensure that: (a) the amount receivable is certain, meaning that it is not subject to any condition; (b) the amount receivable is fixed, expressed precisely in cash terms; (c) the amount receivable is due and is not subject to any payment time; (d) the particulars of the debtor are correct; (e) the amount is booked to the correct budgetary item; (f) the supporting documents are in order; and (g) the principle of sound financial management is complied with, in particular with regard to the criteria referred to in Article 101(2), first subparagraph, point (a) or (b). 4. The debit note shall be to inform the debtor that: (a) the Union has established the amount receivable; (b) if payment of the debt is made within the deadline, as specified in the debit note, no default interest will be due; (c) failing payment of the debt within the deadline referred to in point (b) of this subparagraph the debt shall bear interest at the rate referred to in Article 99, without any prejudice to any specific regulations applicable; (d) failing payment of the debt by the deadline referred to in point (b) the Union institution will effect recovery either by offsetting or by enforcement of any guarantee lodged in advance; (e) the accounting officer may in exceptional circumstances effect recovery by offsetting before the deadline referred to in point (b), where it is necessary to protect the financial interests of the Union when he or she has justified grounds to believe that the amount due to the Union would be lost, after the debtor has been informed of the reasons and date of the recovery by offsetting; (f) if, after taking all the steps set out in points (a) to (e) of this subparagraph, the amount has not been recovered in full, the Union institution will effect recovery by enforcement of a decision secured either in accordance with Article 100(2) or by legal action. Where following the verification of the particulars of the debtor or on the basis of other relevant information available at the time, it is clear that the debt falls under the cases referred to in Article 101(2), first subparagraph, point (a) or (b), or that the debit note has not been sent in accordance with paragraph 2 of this Article, the authorising officer shall, after having established the amount receivable, decide to directly waive recovery in accordance with Article 101 without sending a debit note, in agreement with the accounting officer. In all other cases, the authorising officer shall print out the debit note and send it to the debtor. The accounting officer shall be informed of the dispatch of the debit note through the financial information system. 5. Amounts wrongly paid shall be recovered.
Article 99 Default interest
1. Without prejudice to any specific provisions deriving from the application of specific regulations, any amount receivable not repaid on the deadline referred to in Article 98(4), first subparagraph, point (b), shall bear interest in accordance with paragraphs 2 and 3 of this Article. 2. Except in the case referred to in paragraph 4 of this Article, the interest rate for amounts receivable not repaid on the deadline referred to in Article 98(4), first subparagraph, point (b), shall be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union , in force on the first calendar day of the month in which the deadline falls, increased by: (a) eight percentage points where the obligating event is a supply contract or a service contract; (b) three and a half percentage points in all other cases. 3. Interest shall be calculated from the calendar day following the deadline referred to in Article 98(4), first subparagraph, point (b), up to the calendar day on which the debt is repaid in full. The recovery order corresponding to the amount of the default interest shall be issued when that interest is actually received. 4. In the case of fines, other penalties or sanctions, the interest rate for amounts receivable not paid or covered by a financial guarantee acceptable to the accounting officer of the Commission within the deadline set in the decision of the Union institution imposing a fine, other penalty or sanction shall be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union , in force on the first calendar day of the month in which the decision imposing a fine, other penalty or sanction has been adopted, increased by three and a half percentage points. Where the Court of Justice of the European Union, in the exercise of its competence under Article 261 TFEU, increases the amount of a fine or other penalty, interest on the amount of the increase shall run from the date of the judgment of the Court. 5. In cases where the overall interest rate would be negative it shall be set at zero percent.
Article 100 Authorisation of recovery
1. The authorising officer responsible shall, by issuing a recovery order, instruct the accounting officer to recover an amount receivable which that authorising officer responsible has established (the ‘authorisation of recovery’). 2. A Union institution may formally establish an amount as being receivable from persons other than Member States by means of a decision which shall be enforceable within the meaning of Article 299 TFEU. If the efficient and timely protection of the financial interests of the Union so requires, other Union institutions may, in exceptional circumstances, request the Commission to adopt such an enforceable decision for their benefit with respect to claims arising in relation to staff or in relation to members or former members of a Union institution, provided that those institutions have agreed with the Commission on the practical modalities for the application of this Article. Such exceptional circumstances shall be deemed to exist when there is no prospect of recovery of the debt by the Union institution concerned by means of a voluntary payment or by means of offsetting as provided for in Article 101(1) and the conditions for waiving the recovery under Article 101(2) and (3) are not met. In all cases, the enforceable decision shall specify that the amounts claimed shall be entered in the section of the budget relating to the Union institution concerned, which shall act as authorising officer. The revenue shall be entered as general revenue except if it constitutes assigned revenue as provided for in Article 21(3). The requesting Union institution shall inform the Commission of any event likely to alter the recovery and shall intervene in support of the Commission in the event of an appeal against the enforceable decision.
Article 101 Rules on recovery
1. The accounting officer shall act on recovery orders for amounts receivable duly established by the authorising officer responsible. The accounting officer shall exercise due diligence to ensure that the Union receives its revenue and shall ensure that the Union’s rights are safeguarded. Partial reimbursement by a debtor who is subject to several recovery orders shall first be posted on the oldest entitlement unless otherwise specified by the debtor. Any partial payments shall first cover the interest. The accounting officer shall recover amounts due to the budget by offsetting them in accordance with Article 102. 2. The authorising officer responsible may waive recovery of all or part of an established amount receivable only in the following cases: (a) where the foreseeable cost of recovery would exceed the amount to be recovered and the waiver would not harm the image of the Union; (b) where the amount receivable cannot be recovered in view of its age, of delay in the dispatch of the debit note in the terms defined in Article 98(2), of the insolvency of the debtor, or of any other insolvency proceedings; (c) where recovery is inconsistent with the principle of proportionality. Where the authorising officer responsible plans to waive or partially waive recovery of an established amount receivable, he or she shall ensure that the waiver is in order and is in accordance with the principles of sound financial management and proportionality. The decision to waive recovery shall be substantiated. The authorising officer may delegate the power to take that decision. 3. In the case referred to in paragraph 2, first subparagraph, point (c), the authorising officer responsible shall act in accordance with predetermined procedures established within his or her Union institution and shall apply the following criteria which are compulsory and applicable in all circumstances: (a) the facts, having regard to the gravity of the irregularity giving rise to the establishment of the amount receivable (fraud, repeated offence, intent, diligence, good faith, manifest error); (b) the impact that waiving recovery would have on the operation of the Union and its financial interests (amount involved, risk of setting a precedent, undermining of the authority of the law). 4. Depending on the circumstances of the case, the authorising officer responsible shall, where appropriate, take the following additional criteria into account: (a) any distortion of competition that would be caused by the waiving of recovery; (b) the economic and social damage that would be caused were the debt to be recovered in full. 5. Each Union institution shall send to the European Parliament and to the Council each year a report on the waivers granted by it pursuant to paragraphs 2, 3 and 4 of this Article. Information on waivers below EUR 60 000 shall be provided as a total amount. In the case of the Commission, that report shall be annexed to the summary of the annual activity reports referred to in Article 74(9). 6. The authorising officer responsible may cancel an established amount receivable in full or in part. The partial cancellation of an established amount receivable does not imply the waiver of the remaining established Union entitlement. In the event of a mistake, the authorising officer responsible shall cancel totally or partially the established amount receivable and include adequate reasons. Each Union institution shall in its internal rules lay down the conditions and procedure for delegating the power to cancel an established amount receivable. 7. Member States shall have primary responsibility for carrying out controls and audits and for recovering amounts unduly spent, as provided for in sector-specific rules. To the extent that Member States detect and correct irregularities on their own account, they shall be exempt from financial corrections by the Commission concerning those irregularities. 8. The Commission shall make financial corrections on Member States in order to exclude expenditure incurred in breach of applicable law from Union financing. The Commission shall base its financial corrections on the identification of amounts unduly spent, and the financial implications for the budget. Where such amounts cannot be identified precisely, the Commission may apply extrapolated or flat-rate corrections in accordance with sector-specific rules. The Commission shall, when deciding on the amount of a financial correction, take account of the nature and gravity of the breach of applicable law and the financial implications for the budget, including deficiencies in management and control systems. The criteria for establishing financial corrections and the procedure to be followed may be laid down in sector-specific rules. 9. The methodology for applying extrapolated or flat-rate corrections shall be laid down in accordance with sector-specific rules with a view to enabling the Commission to protect the financial interests of the Union.
Article 102 Recovery by offsetting
1. Where the debtor has a claim on the Union, or on an executive agency when it implements the budget, that is certain within the meaning of Article 98(3), point (a), of a fixed amount and due relating to a sum established by a payment order, the accounting officer shall, after expiry of the deadline referred to in Article 98(4), first subparagraph, point (b), recover established amounts receivable by offsetting. In exceptional circumstances, where it is necessary to safeguard the financial interests of the Union and where the accounting officer has justified grounds to believe that the amount due to the Union would be lost, the accounting officer may recover by offsetting before the expiry of the deadline referred to in Article 98(4), first subparagraph, point (b). The accounting officer may also recover by offsetting before the expiry of the deadline referred to in Article 98(4), first subparagraph, point (b), when the debtor agrees. 2. Before proceeding with any recovery in accordance with paragraph 1 of this Article, the accounting officer shall consult the authorising officer responsible and inform the debtors concerned, including of the means of redress in accordance with Article 134. Where the debtor is a national authority or one of its administrative entities, the accounting officer shall also inform the Member State concerned of his or her intention to resort to recovery by offsetting at least 10 working days in advance of proceeding with it. However, in agreement with the Member State or administrative entity concerned, the accounting officer may proceed with the recovery by offsetting before that deadline has passed. 3. The offsetting referred to in paragraph 1 shall have the same effect as a payment and discharge the Union for the amount of the debt and, where appropriate, of the interest due. 4. The opening of insolvency proceedings shall not affect the right of the accounting officer to proceed with a recovery by offsetting as referred to in paragraph 1.
Article 103 Recovery procedure failing voluntary payment
1. Without prejudice to Article 102, if the full amount has not been recovered by the deadline referred to in Article 98(4), first subparagraph, point (b), the accounting officer shall inform the authorising officer responsible and shall without delay launch the procedure for effecting recovery by any means offered by the law, including, where appropriate, by enforcement of any guarantee lodged in advance. 2. Without prejudice to Article 102, where the recovery method referred to in paragraph 1 of this Article cannot be used and the debtor has failed to pay in response to a letter of formal notice sent by the accounting officer, the accounting officer shall effect recovery by enforcement of a decision secured either in accordance with Article 100(2) or by legal action.
Article 104 Additional time for payment
The accounting officer may, in collaboration with the authorising officer responsible, allow additional time for payment only at the written request of the debtor, with due indication of the reasons, and provided that the following conditions are fulfilled: (a) the debtor undertakes to pay interest at the rate specified in Article 99 for the entire additional period allowed, starting from the deadline referred to in Article 98(4), first subparagraph, point (b); (b) in order to safeguard the rights of the Union, the debtor lodges a financial guarantee covering the debt outstanding in both the principal sum and the interest, which is accepted by the accounting officer of the Union institution. The guarantee referred to in the first paragraph, point (b), may be replaced by a joint and several guarantee by a third party approved by the accounting officer of the Union institution. In exceptional circumstances, following a request by the debtor, the accounting officer may waive the requirement of a guarantee referred to in the first paragraph, point (b), when, on the basis of his or her assessment, the debtor is willing and able to make the payment in the additional time period but is not able to lodge such guarantee and is in a situation of financial distress.
Article 105 Limitation period
1. Without prejudice to the provisions of specific regulations and the application of Decision (EU, Euratom) 2020/2053, entitlements of the Union in respect of third parties and entitlements of third parties in respect of the Union shall be subject to a limitation period of five years. 2. The limitation period for entitlements of the Union in respect of third parties shall begin to run on the expiry of the deadline referred to in Article 98(4), first subparagraph, point (b). The limitation period for entitlements of third parties in respect of the Union shall begin to run on the date on which the payment of the third party’s entitlement is due according to the corresponding legal commitment. 3. The limitation period for entitlements of the Union in respect of third parties shall be interrupted by any act of a Union institution or a Member State acting at the request of a Union institution, notified to the third party and aiming at recovering the debt. The limitation period for entitlements of third parties in respect of the Union shall be interrupted by any act notified to the Union by its creditors or on behalf of its creditors aiming at recovering the debt. 4. A new limitation period of five years shall begin to run on the day following the interruptions referred to in paragraph 3. 5. Any legal action relating to an entitlement as referred to in paragraph 2, including actions brought before a court which later declares itself not to have jurisdiction, shall interrupt the limitation period. A new limitation period of five years shall not begin to run until a judgment having the force of res judicata is given or there is an extrajudicial settlement between the same parties on the same action. 6. Where the accounting officer allows the debtor additional time for payment in accordance with Article 104, this shall be considered as an interruption of the limitation period. A new limitation period of five years shall begin to run on the day following the expiry of the extended time for payment. 7. Entitlements of the Union shall not be recovered after the expiry of the limitation period, as provided for in paragraphs 2 to 6.
Article 106 National treatment for entitlements of the Union
In the event of insolvency proceedings, entitlements of the Union shall be given the same preferential treatment as entitlements of the same nature due to public bodies in Member States where the recovery proceedings are being conducted.
Article 107 Fines, other penalties, sanctions and accrued interest imposed by Union institutions
1. Amounts received by way of fines, other penalties and sanctions, and any accrued interest or other income generated by them, shall not be entered in the budget as long as the decisions imposing them are or could still become subject to an appeal before the Court of Justice of the European Union. 2. The amounts referred to in paragraph 1 shall be entered in the budget as soon as possible following the exhaustion of all legal remedies. Under duly justified exceptional circumstances or where the exhaustion of all legal remedies occurs after 1 September of the current financial year, the amounts may be entered in the budget in the following financial year. For the purposes of applying Article 48(2), point (b), the necessary amounts referred to in paragraph 1 of this Article may be entered in the budget by the end of the following financial year. Amounts that are to be returned to the entity that paid them, following a judgment of the Court of Justice of the European Union, shall not be entered in the budget. 3. Paragraph 1 shall not apply to decisions on clearance of accounts or financial corrections.
Article 108 Recovery of fines, other penalties or sanctions imposed by Union institutions
1. Where an action is brought before the Court of Justice of the European Union against a decision of a Union institution imposing a fine, other penalty or sanction under the TFEU or the Euratom Treaty and until such time as all legal remedies have been exhausted, the debtor shall either provisionally pay the amounts concerned on the bank account designated by the accounting officer of the Commission or lodge a financial guarantee acceptable to the accounting officer of the Commission. The guarantee shall be independent of the obligation to pay a fine, other penalty or sanction and shall be enforceable on demand. It shall cover the claim as to principal and interest that the debtor shall pay in the case referred to in paragraph 3, point (b), at the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union , in force on the first calendar day of the month in which the decision imposing a fine, other penalty or sanction has been adopted, increased by one and a half percentage points, as from the deadline set in the decision of the Union institution imposing a fine, other penalty or sanction. 2. The Commission may invest the provisionally collected amounts in financial assets, prioritising the aim of security and liquidity of the monies in accordance with the principle of sound financial management. 3. After the exhaustion of all legal remedies and where the fine, other penalty or sanction has been confirmed by the Court of Justice of the European Union, or where the decision imposing such a fine, other penalty or sanction may no longer become subject to an appeal before the Court of Justice of the European Union, one of the following measures shall be taken: (a) the provisionally collected amounts and the return on them shall be entered in the budget in accordance with Article 107(2); (b) where a financial guarantee has been lodged, it shall be enforced and the corresponding amounts entered in the budget. Where the amount of the fine, other penalty or sanction has been increased by the Court of Justice of the European Union, the first subparagraph, points (a) and (b), of this paragraph shall apply up to the amounts of the original decision of the Union institution or, if applicable, to the amount laid down in a former judgment by the Court of Justice of the European Union in the same proceedings. The accounting officer of the Commission shall collect the amount corresponding to the increase and the interest due as specified in Article 99(4), which shall be entered in the budget. 4. Where the fine, other penalty or sanction has been cancelled or its amount has been reduced, one of the following measures shall be taken: (a) the provisionally collected amounts or, in the event of a reduction, the relevant part thereof shall be repaid to the third party concerned; (b) where a financial guarantee has been lodged, it shall be released accordingly. The amount or the relevant part thereof referred to in the first subparagraph, point (a), shall be increased by interest at the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union in force on the first calendar day of the month in which the decision imposing a fine, other penalty or sanction was adopted, increased by one and a half percentage points. Repayments under the first subparagraph, point (a), of this paragraph shall be made within 60 days of the cancellation or reduction of the fine, other penalty or sanction, except where the necessary supporting documents have not been timely produced to identify the third party concerned or its bank account. Upon the expiry of that time limit, the creditor shall be entitled to interest in accordance with the conditions laid down in Article 116(5).
Article 109 Compensatory interests
Without prejudice to Articles 99(2) and 116(5), and for cases other than fines, other penalties and sanctions as referred to in Articles 107 and 108, when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union or as a result of an amicable settlement, the interest rate shall be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month. The interest rate shall not be negative. The interest shall run from the date of payment of the amount to be reimbursed until the date at which the reimbursement is due. In cases where the overall interest rate would be negative it shall be set at zero percent.
Article 110 Financing decisions
1. A budgetary commitment shall be preceded by a financing decision adopted by the Union institution or by the authority to which powers have been delegated by the Union institution. The financing decisions shall be annual or multiannual. The first subparagraph of this paragraph shall not apply in the case of appropriations for the operations of each Union institution under its administrative autonomy that can be implemented without a basic act in accordance with Article 58(2), point (e), of administrative support expenditure and of contributions to the Union bodies referred to in Articles 70 and 71. 2. The financing decision shall at the same time constitute the annual or multiannual work programme and shall be adopted, as appropriate, as soon as possible after the adoption of the draft budget and in principle no later than 31 March of the year of implementation. Where the relevant basic act provides for specific modalities for the adoption of a financing decision or a work programme or both, those modalities shall be applied to the part of the financing decision constituting the work programme, in compliance with the requirements of that basic act. The part which constitutes the work programme shall be published on the website of the Union institution concerned immediately after its adoption and prior to its implementation. The financing decision shall indicate the total amount it covers and shall contain a description of the actions to be financed. It shall specify: (a) the basic act and the budget line; (b) the objectives pursued and the expected results; (c) the methods of implementation; (d) any additional information required by the basic act for the work programme. 3. In addition to the elements referred to in paragraph 2, the financing decision shall set out the following: (a) for grants: the type of applicants targeted by the call for proposals or direct award and the global budgetary envelope reserved for the grants; (b) for procurement: the global budgetary envelope reserved for procurements; (c) for contributions to Union trust funds referred to in Article 238: the appropriations reserved for the trust fund for the year together with the amounts planned over its duration, from the budget as well as from other donors; (d) for prizes: the type of participants targeted by the contest, the global budgetary envelope reserved for the contest and a specific reference to prizes with a unit value of EUR 1 000 000 or more; (e) for financial instruments: the amount allocated to the financial instrument; (f) in the event of indirect management: the person or entity implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), or the criteria to be used to select the person or entity; (g) for contributions to blending facilities or platforms: the amount allocated to the blending facility or platform and the list of entities participating in the blending facility or platform; (h) for budgetary guarantees: the amount of annual provisioning and, where applicable, the amount of the budgetary guarantee to be released. 4. The authorising officer by delegation may add any additional information considered appropriate either in the respective financing decision constituting the work programme or in any other document published on the website of the Union institution. A multiannual financing decision shall be consistent with the financial programming referred to in Article 41(2) and shall specify that the implementation of the decision is subject to the availability of budget appropriations for the respective financial years after the adoption of the budget or as provided for in the system of provisional twelfths. 5. Without prejudice to any specific provision of a basic act, any substantial change in a financing decision already adopted shall follow the same procedure as the initial decision.
Article 111 Expenditure operations
1. Every item of expenditure shall be committed, validated, authorised and paid. At the end of the periods referred to in Article 114, the unused balance of budgetary commitments shall be decommitted. When executing operations, the authorising officer responsible shall ensure that the expenditure is in compliance with the Treaties, the budget, this Regulation, and other acts adopted pursuant to the Treaties as well as with the principle of sound financial management. 2. Budgetary commitments shall be made and legal commitments entered into by the same authorising officer, except in duly justified cases. In particular, in the field of crisis management aid and humanitarian aid operations, legal commitments may be entered into by Heads of Union delegations, or in their absence by their deputies, on the instruction of the authorising officer responsible of the Commission who remains fully responsible, however, for the underlying transaction. The personnel employed by the Commission in the field of crisis management aid and humanitarian aid operations may sign legal commitments linked to payments executed from imprest accounts of a value not exceeding EUR 2 500. The authorising officer responsible shall make a budgetary commitment before entering into a legal commitment with third parties, provisioning of financial liabilities referred to in Article 214, or transferring funds to a Union trust fund referred to in Article 238. The second subparagraph of this paragraph shall not apply: (a) to legal commitments concluded following a declaration of a crisis situation in the framework of a business continuity plan, in accordance with the procedures adopted by the Commission or by any other Union institution under its administrative autonomy; (b) in the case of humanitarian aid operations, civil protection operations and crisis management aid, if efficient delivery of the Union’s intervention requires that the Union enter into a legal commitment with third parties immediately and if prior booking of the individual budgetary commitment is not possible; (c) to non-financial donations. In the cases referred to in the third subparagraph, point (b), the budgetary commitment shall be booked without delay after entering into a legal commitment with third parties. 3. The authorising officer responsible shall validate expenditure by accepting that an item of expenditure is charged to the budget, after having checked the supporting documents attesting the creditor’s entitlement as per the conditions set in the legal commitment when there is a legal commitment. For that purpose, the authorising officer responsible shall: (a) verify the existence of the creditor’s entitlement; (b) determine or verify the reality and the amount of the claim through the endorsement ‘certified correct’; (c) verify the conditions according to which payment is due. Notwithstanding the first subparagraph, the validation of expenditure shall also apply to interim or final reports not associated with a payment request in which case the impact on the accounting system is limited to the general accounts. 4. The validation decision shall be expressed through electronically secured signature in accordance with Article 149 by the authorising officer, or by a technically competent member of staff duly empowered by a formal decision of the authorising officer, or, exceptionally, for paper workflow take the form of a stamp incorporating that signature. With the endorsement ‘certified correct’ the authorising officer responsible, or a technically competent member of staff duly empowered by the authorising officer responsible, shall certify: (a) for pre-financing: that the conditions required in the legal commitment for the payment of the pre-financing are met; (b) for interim and balance payments in contracts: that the services provided for in the contract have been properly provided, the supplies properly delivered or that the work has been properly carried out; (c) for interim and balance payments in grants: that the action or work programme carried out by the beneficiary is in all respects in compliance with the grant agreement, including, where applicable that the costs declared by the beneficiary are eligible. In the case referred to in the second subparagraph, point (c), cost estimates shall not be deemed to comply with the eligibility conditions set out in Article 189(3). The same principle shall also apply to interim and final reports not associated to a payment request. 5. In order to authorise the expenditure, the authorising officer responsible shall, after having verified that the appropriations are available, issue a payment order to instruct the accounting officer to pay the amount of expenditure which was previously validated. Where periodic payments are made with regard to services rendered, including rental services, or goods delivered, the authorising officer may, subject to that officer’s risk analysis, order the application of a direct debit system from an imprest account. The application of such a system may also be ordered if it is specifically authorised by the accounting officer in accordance with Article 86(3).
Article 112 Types of budgetary commitments
1. Budgetary commitments shall fall into one of the following categories: (a) individual: when the recipient and the amount of the expenditure are known or the budgetary commitment is made for provisioning of financial liabilities referred to in Article 214; (b) global: when at least one of the elements necessary to identify the individual commitment is still not known; (c) provisional: to cover routine management expenditure for the EAGF as referred to in Article 11(2), and routine administrative expenditure where either the amount or the final payees are not definitively known. Notwithstanding the first subparagraph, point (c), routine administrative expenditure relating to Union delegations and Union representations may be covered by provisional budgetary commitments also when the amount and final payee are known. 2. Budgetary commitments for actions extending over more than one financial year may be broken down over several years into annual instalments only where the basic act so provides or where they relate to administrative expenditure. 3. A global budgetary commitment shall be made on the basis of a financing decision. The global budgetary commitment shall be made at the latest before the decision on the recipients and amounts is taken and, where implementation of the appropriations concerned involves the adoption of a work programme, at the earliest after that programme has been adopted. 4. A global budgetary commitment shall be implemented by the conclusion of a financing agreement providing for the subsequent entering into one or more legal commitments, by entering into one or more legal commitments, or by provisioning of financial liabilities referred to in Article 214. Financing agreements in the field of direct financial assistance to third countries, including budget support, which constitute legal commitments may give rise to payments without entering into other legal commitments. Where the global budgetary commitment is implemented by the conclusion of a financing agreement, paragraph 3, second subparagraph, shall not apply. 5. Each individual legal commitment entered into following a global budgetary commitment shall, prior to signature, be registered by the authorising officer responsible in the central budgetary accounts and booked to the global budgetary commitment. 6. Provisional budgetary commitments shall be implemented by entering into one or more legal commitments giving rise to an entitlement to subsequent payments. However, in cases relating to expenditure on staff management, expenditure on members or former members of a Union institution or expenditure on communication engaged in by Union institutions for the coverage of Union events, or in the cases referred to in point 14.5 of Annex I, they may be implemented directly by payments without entering into prior legal commitments.
Article 113 Commitments for EAGF appropriations
1. For each financial year, the EAGF appropriations shall include non-differentiated appropriations for expenditure related to measures referred to in Article 5(2) of Regulation (EU) 2021/2116. Expenditure related to the measures referred to in Article 5(3) and Article 7 of that Regulation, with the exception of measures financed under non-operational technical assistance and contributions to executive agencies, shall be covered by differentiated appropriations. 2. The Commission decisions fixing the amount of reimbursement of expenditure related to the EAGF incurred by Member States may constitute global provisional budgetary commitments, which shall not exceed the total appropriations entered in the budget for the EAGF. 3. Global provisional budgetary commitments for the EAGF which have been made for a financial year and which have not given rise to a commitment on specific budget lines by 1 February of the following financial year shall be decommitted in respect of the financial year concerned. 4. Where a global provisional budgetary commitment referred to in paragraph 2 is constituted, expenditure effected by the authorities and bodies referred to in the rules relating to the EAGF shall, within two months of receipt of the statements sent by Member States, be the subject of a commitment by chapter, article and item. Such commitments may be made after the expiry of that two-month period where a procedure for a transfer of appropriations concerning the relevant budget lines is necessary. Except where payment has not yet been made by Member States or where eligibility is in doubt, the amounts shall be charged as payments within the same two-month period. The commitments referred to in the first subparagraph of this paragraph shall be deducted from the global provisional budgetary commitment referred to in paragraph 2. 5. Paragraphs 2 and 3 shall apply subject to the examination and acceptance of the accounts.
Article 114 Time limits for commitments
1. Without prejudice to Articles 111(2) and 270(3), legal commitments relating to individual or provisional budgetary commitments shall be entered into by 31 December of year n, year n being the one in which the budgetary commitment was made. 2. Global budgetary commitments shall cover the total cost of the corresponding legal commitments entered into, or the amounts of the provisioning of financial liabilities referred to in Article 214 made, up to 31 December of year n+1. Where the global budgetary commitment gives rise to the award of a prize referred to in Title IX, the legal commitment referred to in Article 210(4) shall be entered into by 31 December of year n+3. In external actions, where the global budgetary commitment gives rise to a financing agreement concluded with a third country, the financing agreement shall be concluded by 31 December of year n+1. In that case, the global budgetary commitment shall cover the total costs of legal commitments implementing the financing agreement entered into within a period of three years following the date of conclusion of the financing agreement. However, in the following cases, the global budgetary commitment shall cover the total costs of legal commitments entered into until the end of the period of implementation of the financing agreement: (a) multi-donor actions; (b) blending operations; (c) legal commitments relating to communication and visibility activities, audit and evaluation; (d) the following exceptional circumstances: (i) modifications made to legal commitments which have already been entered into; (ii) legal commitments that are to be entered into after early termination of an existing legal commitment; (iii) changes of the implementing entity. 3. Paragraph 2, third subparagraph, shall not apply to multiannual programmes that are implemented through split commitments under: (a) Regulation (EU) 2021/947; (b) Regulation (EU) 2021/1529; (c) Regulation (EU) 2021/1059 of the European Parliament and of the Council ( 47 ) with regard to external cooperation programmes; (d) Decision (EU) 2021/1764; (e) Regulation (Euratom) 2021/948. In the cases referred to in the first subparagraph, the appropriations shall be automatically decommitted by the Commission in accordance with sector-specific rules. 4. The individual and provisional budgetary commitments for actions extending over more than one financial year shall, except in the case of staff expenditure, have a final date for implementation set, in accordance with the conditions in the legal commitments to which they refer, and taking into account the principle of sound financial management. 5. Any parts of budgetary commitments which have not been implemented by payments six months after the final date for implementation shall be decommitted. 6. The amount of a budgetary commitment for which no payment within the meaning of Article 115 has been made within two years of the entering into the legal commitment shall be decommitted, except where that amount relates to a case under litigation before judicial courts or arbitral bodies, where the legal commitment takes the form of a financing agreement with a third country or where there are special provisions laid down in sector-specific rules.
Article 115 Types of payments
1. Payment of expenditure shall be made by the accounting officer within the limits of the funds available. 2. Payment shall be made on production of proof that the relevant action is in accordance with the contract, the agreement or the basic act and shall cover one or more of the following operations: (a) payment of the entire amount due; (b) payment of the amount due in any of the following ways: (i) pre-financing providing a float, which may be divided into a number of payments in accordance with the principle of sound financial management; such pre-financing amount shall be paid either on the basis of the contract, the agreement or the basic act, or on the basis of supporting documents which make it possible to check that the terms of the contract or agreement in question are complied with; (ii) one or more interim payments as a counterpart of a partial execution of the action or partial performance of the contract or agreement, which may clear pre-financing in whole or in part, without prejudice to the basic act; (iii) one payment of the balance of the amounts due where the action is completely executed, or the contract or agreement is completely performed; (c) payment of a provision into the common provisioning fund established pursuant to Article 215. The payment of the balance shall clear all preceding expenditure. A recovery order shall be issued to recover unused amounts. 3. A distinction shall be made in budgetary accounting between the different types of payment referred to in paragraph 2 at the time each payment is made. 4. The accounting rules referred to in Article 80 shall include the rules for clearing the pre-financing in the accounts and for the acknowledgment of the eligibility of costs. 5. Pre-financing payments shall be cleared regularly by the authorising officer responsible, according to the economic nature of the project and, at the latest, at the end of the project. The clearing shall be performed on the basis of information on costs incurred or confirmation of the conditions for payment being fulfilled in accordance with Article 125 as validated by the authorising officer in accordance with Article 111(3). For grant agreements, contracts or contribution agreements above EUR 5 000 000, the authorising officer shall obtain at each year-end at least the information needed to calculate a reasonable estimate of the costs. That information shall not be used for clearing the pre-financing, but may be used by the authorising officer and the accounting officer to comply with Article 82(2). For the purposes of the second subparagraph, appropriate provisions shall be included in the legal commitments entered into.
Article 116 Time limits for payments
1. Payments shall be made within: (a) 90 calendar days for contribution agreements, contracts and grant agreements involving technical services or actions which are particularly complex to evaluate and for which payment depends on the approval of a report or a certificate; (b) 60 calendar days for all other contribution agreements, contracts and grant agreements for which payment depends on the approval of a report or a certificate; (c) 30 calendar days for all other contribution agreements, contracts and grant agreements. 2. The time allowed for making payments shall be understood to include validation, authorisation and the payment of expenditure. It shall begin to run from the date on which a payment request is received. 3. A payment request shall be registered by the authorised department of the authorising officer responsible as soon as possible and is deemed to be received on the date it is registered. The date of payment is deemed to be the date on which the Union institution’s account is debited. A payment request shall include the following essential elements: (a) the creditor’s identification; (b) the amount; (c) the currency; (d) the date. An electronic invoice in public procurement shall include the following essential elements: (a) process and invoice identifiers; (b) the invoice period; (c) contractor’s information; (d) contracting authority’s information; (e) contractor’s tax representative information; (f) contract reference; (g) delivery details; (h) payment instructions; (i) allowance or charge information; (j) invoice line item information; (k) invoice totals; (l) VAT breakdown (when applicable); (m) currency. Where at least one essential element is missing, the payment request shall be rejected. The creditor shall be informed in writing of a rejection and the reasons for it as soon as possible and in any case within 30 calendar days from the date on which the payment request was received. 4. The authorising officer responsible may suspend the time limit for payment where: (a) the amount of the payment request is not due; or (b) the appropriate supporting documents have not been produced. If information comes to the notice of the authorising officer responsible which puts in doubt the eligibility of expenditure in a payment request, he or she may suspend the time limit for payment for the purpose of verifying, including by means of on-the-spot-checks, that the expenditure is eligible. The remaining time allowed for payment shall begin to run from the date on which the requested information or revised documents are received or the necessary further verification, including on-the-spot checks, is carried out. The creditors concerned shall be informed in writing of the reasons for a suspension. 5. Except in the case of Member States, the EIB and the EIF, on the expiry of the time limits laid down in paragraph 1, the creditor shall be entitled to interest in accordance with the following conditions: (a) the interest rates shall be those referred to in Article 99(2); (b) the interest shall be payable for the period elapsing from the calendar day following expiry of the time limit for payment laid down in paragraph 1 up to the day of payment. However, in the event that the interest calculated in accordance with the first subparagraph is lower than or equal to EUR 200, it shall be paid to the creditor only on a request submitted within two months of receiving late payment. 6. Each Union institution shall submit to the European Parliament and Council a report on the compliance with and the suspension of the time limits laid down in paragraphs 1 to 4 of this Article. The report of the Commission shall be annexed to the summary of the annual activity reports referred to in Article 74(9).
Article 117 Appointment of the internal auditor
1. Each Union institution shall establish an internal audit function which shall be performed in compliance with the relevant international standards. The internal auditor appointed by the Union institution concerned shall be accountable to the latter for verifying the proper operation of budget implementation systems and procedures. The internal auditor shall not be the authorising officer or the accounting officer. 2. For the purposes of the internal auditing of the EEAS, Heads of Union delegations, acting as authorising officers by subdelegation in accordance with Article 60(2), shall be subject to the verifying powers of the internal auditor of the Commission for the financial management subdelegated to them. The internal auditor of the Commission shall also act as the internal auditor of the EEAS in respect of the implementation of the section of the budget relating to the EEAS. 3. Each Union institution shall appoint its internal auditor in accordance with arrangements adapted to its specific features and requirements. Each Union institution shall inform the European Parliament and the Council of the appointment of its internal auditor. 4. Each Union institution shall determine, in accordance with its specific features and its requirements, the scope of the mission of its internal auditor and shall lay down in detail the objectives and procedures for the exercise of the internal audit function with due respect for international internal audit standards. 5. Each Union institution may appoint as internal auditor, by virtue of their particular competence, an official or other servant covered by the Staff Regulations selected from nationals of Member States. 6. If two or more Union institutions appoint the same internal auditor they shall make the necessary arrangements for the internal auditor to be declared liable for his or her actions as laid down in Article 121. 7. Each Union institution shall inform the European Parliament and Council when the duties of its internal auditor are terminated.
Article 118 Powers and duties of the internal auditor
1. The internal auditor shall advise his or her Union institution on dealing with risks, by issuing independent opinions on the quality of management and control systems and by issuing recommendations for improving the conditions of implementation of operations and promoting sound financial management. The internal auditor shall in particular be responsible for: (a) assessing the suitability and effectiveness of internal management systems and the performance of departments in implementing policies, programmes and actions by reference to the risks associated with them; (b) assessing the efficiency and effectiveness of the internal control and audit systems applicable to each budget implementation operation. 2. The internal auditor shall perform his or her duties in relation to all the activities and departments of the Union institution concerned. He or she shall enjoy full and unlimited access to all information required to perform his or her duties, if necessary also on-the-spot access, including in Member States and in third countries. The internal auditor shall take note of the annual report of the authorising officers and any other pieces of information identified. 3. The internal auditor shall report to the Union institution concerned on his or her findings and recommendations. The Union institution concerned shall ensure that action is taken with regard to recommendations resulting from audits. Each Union institution shall consider whether the recommendations made in the reports of its internal auditor are suitable for an exchange of best practices with other Union institutions. 4. The internal auditor shall submit to the Union institution concerned an annual internal audit report indicating the number and type of internal audits carried out, the principal recommendations made and the action taken with regard to those recommendations. That annual internal audit report shall mention any systemic problems detected by the panel set up pursuant to Article 145 where it gives the opinion referred to in Article 93. 5. The internal auditor shall, during the elaboration of the report, particularly focus on the overall compliance with the principles of sound financial management and performance, and shall ensure that appropriate measures have been taken in order to steadily improve and enhance their application. 6. Each year, the Commission shall, in the context of the discharge procedure and in accordance with Article 319 TFEU, forward on request its annual internal audit report with due regard to confidentiality requirements. 7. Each Union institution shall make available the contact details of its internal auditor to any natural or legal person involved in expenditure operations, for the purposes of confidentially contacting the internal auditor. 8. Each year each Union institution shall draft a report containing a summary of the number and type of internal audits carried out, a synthesis of the recommendations made and the action taken on those recommendations and forward it to the European Parliament and to the Council as provided for in Article 253. 9. The reports and findings of the internal auditor, as well as the report of the Union institution concerned, shall be accessible to the public only after validation by the internal auditor of the action taken for their implementation. 10. Each Union institution shall provide its internal auditor with the resources required for the proper performance of the internal audit function and a mission charter detailing the tasks, rights and obligations of its internal auditor.
Article 119 Work programme of the internal auditor
1. The internal auditor shall adopt the work programme and shall submit it to the Union institution concerned. 2. Each Union institution may ask its internal auditor to carry out audits not included in the work programme referred to in paragraph 1.
Article 120 Independence of the internal auditor
1. The internal auditor shall enjoy complete independence in the conduct of the audits. Special rules applicable to the internal auditor shall be laid down by the Union institution concerned and shall be such as to guarantee that the internal auditor is totally independent in the performance of his or her duties, and to establish the internal auditor’s responsibility. 2. The internal auditor shall not be given any instructions nor be restricted in any way as regards the performance of the functions which, by virtue of his or her appointment, are assigned to him or her under this Regulation. 3. If the internal auditor is a member of staff, he or she shall exercise exclusive audit functions in full independence and shall assume responsibility as laid down in the Staff Regulations.
Article 121 Liability of the internal auditor
Each Union institution alone, proceeding in accordance with this Article, may act to have its internal auditor, as a member of staff, declared liable for his or her actions. Each Union institution shall take a reasoned decision to open an investigation. That decision shall be communicated to the interested party. The Union institution concerned may put in charge of the investigation, under its direct responsibility, one or more officials of a grade equal to or higher than that of the member of staff concerned. In the course of the investigation, the views of the interested party shall be heard. The investigation report shall be communicated to the interested party, who shall then be heard by the Union institution concerned on the subject of that report. On the basis of the report and the hearing, the Union institution concerned shall adopt either a reasoned decision terminating the proceedings or a reasoned decision in accordance with Articles 22 and 86 of and Annex IX to the Staff Regulations. Decisions imposing disciplinary measures or financial penalties shall be notified to the interested party and communicated, for information purposes, to other Union institutions and the Court of Auditors. The interested party may bring an action in respect of such decisions before the Court of Justice of the European Union, as provided for in the Staff Regulations.
Article 122 Action before the Court of Justice of the European Union
Without prejudice to the remedies allowed by the Staff Regulations, the internal auditor may bring an action directly before the Court of Justice of the European Union in respect of any act relating to the performance of his or her duties as internal auditor. He or she shall lodge such an action within three months running from the calendar day on which the act in question came to his or her knowledge Such actions shall be investigated and heard in accordance with Article 91(5) of the Staff Regulations.
Article 123 Internal audit progress committees
1. Each Union institution shall establish an internal audit progress committee tasked with ensuring the independence of the internal auditor, monitoring the quality of the internal audit work and ensuring that internal and external audit recommendations are properly taken into account and followed up by its services. 2. The composition of the internal audit progress committee shall be decided by each Union institution taking into account its organisational autonomy and the importance of independent expert advice.
Article 124 Scope
With the exception of Article 140, references in this Title to legal commitments shall be construed as references to legal commitments, framework contracts and financial framework partnership agreements.
Article 125 Forms of Union contribution
1. Union contributions under direct, shared and indirect management shall help achieve a Union policy objective and the results specified and may take any of the following forms: (a) financing not linked to the costs of the relevant operations based on: (i) the fulfilment of conditions set out in sector-specific rules or Commission decisions; or (ii) the achievement of results measured by reference to previously set milestones or through performance indicators; (b) reimbursement of eligible costs actually incurred; (c) unit costs, which cover all or certain specific categories of eligible costs which are clearly identified in advance by reference to an amount per unit; (d) lump sums, which cover in global terms all or certain specific categories of eligible costs which are clearly identified in advance; (e) flat-rate financing, which covers specific categories of eligible costs, which are clearly identified in advance, by applying a percentage; (f) a combination of the forms referred to in points (a) to (e). Union contributions under the first subparagraph, point (a), of this paragraph shall, in direct and indirect management, be established in accordance with Article 184, sector-specific rules or a Commission decision and, in shared management, in accordance with sector-specific rules. Union contributions under the first subparagraph, points (c), (d) and (e), of this paragraph shall, in direct and indirect management, be established in accordance with Article 184 or sector-specific rules and, in shared management, in accordance with sector-specific rules. 2. When determining the appropriate form of a contribution, the potential recipients’ interests and accounting methods shall be taken into account to the greatest extent possible. 3. The authorising officer responsible shall report on financing not linked to costs pursuant to paragraph 1, first subparagraph, points (a) and (f), of this Article in the annual activity report referred to in Article 74(9).
Article 126 Cross-reliance on assessments
The Commission may rely in full or in part on assessments made by itself or other entities, including donors, insofar as such assessments were made on the compliance with conditions equivalent to those set out in this Regulation for the applicable method of implementation. To that end, the Commission shall promote the recognition of internationally accepted standards or international best practices.
Article 127 Cross-reliance on audits
Without prejudice to existing possibilities for carrying out further audits, where an audit based on internationally accepted audit standards providing reasonable assurance has been conducted by an independent auditor on the financial statements and reports setting out the use of a Union contribution, that audit shall form the basis of the overall assurance, as further specified, where appropriate, in sector-specific rules, provided that there is sufficient evidence of the independence and competence of the auditor. To that end, the report of the independent auditor and the related audit documentation shall be made available on request to the European Parliament, the Commission, the Court of Auditors and the audit authorities of Member States.
Article 128 Use of already available information
In order to avoid asking persons and entities receiving Union funds for the same information more than once, information already available at Union institutions, managing authorities or other bodies and entities implementing the budget shall be used to the extent possible.
Article 129 Cooperation for protection of the financial interests of the Union
1. Any person or entity receiving Union funds shall fully cooperate in the protection of the financial interests of the Union and shall, as a condition for receiving the funds, grant the necessary rights and access required for the authorising officer responsible, for the EPPO in respect of those Member States participating in enhanced cooperation pursuant to Regulation (EU) 2017/1939, for OLAF, for the Court of Auditors, and, where appropriate, for the relevant national authorities, to comprehensively exert their respective competences. In the case of OLAF, such rights shall include the right to carry out investigations, including on-the-spot checks and inspections, in accordance with Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council ( 48 ) . 2. Any person or entity receiving Union funds under direct and indirect management shall agree in writing to grant the necessary rights as referred to in paragraph 1 and shall ensure that any third parties involved in the implementation of Union funds grant equivalent rights.
Article 130 Partial applicability of the exclusion system to shared management
The exclusion system shall be applicable in the context of Union funds disbursed pursuant to Article 62(1), first subparagraph, point (b), with regards to any person or entity applying for or receiving these Union funds, under the conditions set out in Article 138(2) and Article 277.
Article 131 Financial framework partnerships
1. The Commission may establish financial framework partnership agreements for a long-term cooperation with persons and entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), or with beneficiaries. Without prejudice to paragraph 4, point (c), of this Article, financial framework partnership agreements shall be reviewed at least once during the term of every multiannual financial framework. Contribution agreements or grant agreements may be signed under such agreements. 2. The purpose of a financial framework partnership agreement shall be to facilitate the achievement of policy objectives of the Union by stabilising the contractual terms of the cooperation. The financial framework partnership agreement shall specify the forms of financial cooperation and shall include an obligation to set out, in the specific agreements signed under the financial framework partnership agreement, arrangements for monitoring the achievement of specific objectives. Those agreements shall also, on the basis of the results of an ex ante assessment, indicate whether the Commission may rely on the systems and the procedures of the persons or entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), or of beneficiaries, including audit procedures. 3. With a view to optimising costs and benefits of audits and facilitate coordination, audit or verification agreements may be concluded with persons and entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), or with beneficiaries. Such agreements shall be without prejudice to Articles 127 and 129. 4. In the case of financial framework partnerships implemented through specific grants: (a) the financial framework partnership agreement shall, in addition to paragraph 2, specify: (i) the nature of the actions or work programmes foreseen; (ii) the procedure for awarding specific grants, in compliance with the principles and procedural rules in Title VIII; (b) the financial framework partnership agreement and the specific grant agreement taken as a whole shall comply with the requirements of Article 204; (c) the duration of the financial framework partnership shall not exceed four years save in duly justified cases which are clearly indicated in the annual activity report referred to in Article 74(9); (d) the financial framework partnership shall be implemented in compliance with the principles of transparency and equal treatment of applicants; (e) the financial framework partnership shall be treated as a grant with regard to programming, ex ante publication and award; (f) specific grants based on the financial framework partnership shall be subject to the ex post publication procedures set out in Article 38. 5. A financial framework partnership agreement implemented through specific grants may provide for the reliance on the systems and the procedures of the beneficiary in accordance with paragraph 2 of this Article, where those systems and procedures have been assessed in accordance with Article 157(2), (3) and (4). In such a case, Article 199(1), first subparagraph, point (d), shall not apply. Where the procedures of the beneficiary for providing financing to third parties referred to in Article 157(4), first subparagraph, point (d), were positively assessed by the Commission, Articles 207 and 208 shall not apply. 6. In the case of financial framework partnership agreement implemented through specific grants the verification of the financial and operational capacity referred to in Article 201 shall be performed before signature of the financial framework partnership agreement. The Commission may rely on an equivalent verification of the financial and operational capacity carried out by other donors. 7. In the case of financial framework partnerships implemented through contribution agreements, the financial framework partnership agreement and the contribution agreement taken as a whole shall comply with Article 129 and Article 158(7).
Article 132 Suspension, termination and reduction
1. Where an award procedure has been subject to irregularities or fraud, the authorising officer responsible shall suspend the procedure and may take any necessary measures, including the cancellation of the procedure. The authorising officer responsible shall inform OLAF immediately of suspected cases of irregularities or fraud. 2. Where, after the award, the award procedure proves to have been subject to irregularities or fraud, the authorising officer responsible shall, except in duly justified cases, take one or more of the following actions: (a) refuse to enter into the legal commitment or cancel the award of a prize; (b) suspend payments or delivery; (c) suspend the implementation of the legal commitment; (d) where appropriate, terminate the legal commitment in whole or with regard to one or more recipients. 3. The authorising officer responsible may suspend payments or delivery or the implementation of the legal commitment where: (a) the implementation of the legal commitment proves to have been subject to irregularities, fraud or breach of obligations; (b) it is necessary to verify whether presumed irregularities, fraud or breach of obligations have actually occurred; (c) irregularities, fraud or breach of obligations call into question the reliability or effectiveness of the internal control systems of a person or entity implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), or the legality and regularity of the underlying transactions. Where the presumed irregularities, fraud or breach of obligations referred to in the first subparagraph, point (b), are not confirmed, the implementation or payments or delivery shall resume as soon as possible. The authorising officer responsible may terminate the legal commitment in whole or with regard to one or more recipients in the cases referred to in the first subparagraph, points (a) and (c). 4. In addition to measures referred to in paragraph 2 or 3, the authorising officer responsible may reduce the grant, the prize, the contribution under the contribution agreement, the non-financial donation or the price due under a contract in proportion to the seriousness of the irregularities, fraud or of the breach of obligations, including where the activities concerned were not implemented or were implemented poorly, partially or late. In the case of financing referred to in Article 125(1), first subparagraph, point (a), the authorising officer responsible may reduce the contribution proportionally if the results have been achieved poorly, partially or late or the conditions have not been fulfilled. 5. Paragraph 2, points (b), (c) and (d), and paragraph 3 shall not apply to applicants in a contest for prizes.
Article 133 Record-keeping and updating of postal and electronic addresses by recipients
1. Recipients shall keep records and supporting documents, including statistical records and other records pertaining to the funding, as well as records and documents in an electronic format, for five years following the payment of the balance or, in the absence of such payment, the transaction. This period shall be three years where the funding is of an amount lower than or equal to EUR 60 000. 2. Records and documents pertaining to audits, appeals, litigation, the pursuit of claims relating to legal commitments or pertaining to OLAF investigations shall be retained until such audits, appeals, litigation, pursuit of claims or investigations have been closed. For records and documents pertaining to OLAF investigations, the obligation to retain shall apply once those investigations have been notified to the recipient. 3. Records and documents shall be kept either in the form of the originals, or certified true copies of the originals, or on commonly accepted data carriers including electronic versions of original documents or documents existing in electronic version only. Where electronic versions exist, no originals shall be required where such documents meet the applicable legal requirements in order to be considered as equivalent to originals and to be relied on for audit purposes. 4. Recipients shall inform the authorising officer of any change in their postal and electronic addresses. This obligation shall continue to apply in the period of five years following the payment of the balance or, in the absence of such payment, the transaction. This period shall be three years where the funding is of an amount lower than or equal to EUR 60 000.
Article 134 Adversarial procedure and means of redress
1. Before adopting any measure adversely affecting the rights of a participant or a recipient the authorising officer responsible shall ensure that the participant or the recipient has been given the opportunity to submit observations. The first subparagraph of this paragraph shall not apply to award procedures, unless the participant was rejected based on Article 143(1), first subparagraph, point (b) or (c). 2. Where a measure of an authorising officer adversely affects the rights of a participant or a recipient, the act establishing that measure shall contain an indication of the available means of administrative and judicial redress for challenging it.
Article 135 Interest rate rebates and guarantee fee subsidies
1. Interest rate rebates and guarantee fee subsidies shall be provided in accordance with Title X where they are combined in a single measure with financial instruments. 2. Where interest rate rebates and guarantee fee subsidies are not combined in a single measure with financial instruments they may be provided in accordance with Title VI or VIII.
Article 136 Protection of security and public order
1. Conditions for participation in Union award procedures shall comply with any international obligations or market access commitments of the Union in international agreements and shall not unduly restrict competition. 2. Where necessary and duly justified, the Commission shall indicate, in the financing decision referred to in Article 110, that specific award procedures affect security or public order, in particular concerning strategic assets and interests of the Union or its Member States, including the protection of the integrity of digital infrastructure, communication and information systems, and related supply chains. Where no financing decision is required in accordance with Article 110(1), second subparagraph, this shall be set out by the authorising officer responsible in the documents related to the award procedure. 3. For the protection of security or public order, the authorising officer responsible may set specific conditions applicable to the award procedures and the legal commitments as referred to in Article 124. Any conditions shall be subject to paragraphs 1 and 2 of this Article, and shall be strictly limited to what is necessary to protect security or public order of the Union and/or its Member States. The specific conditions may apply to participation in award procedures and to the full life cycle of the resulting legal commitment and may concern: (a) the entity, in particular the criteria for access to the procedure or eligibility based on the country of establishment of the participants, including the contractor or beneficiary and the affiliated entities and any subcontractors, as well as with respect to direct or indirect control of any of those participants by public or private entities of a third country; (b) the activity, in particular with respect to the country of origin of the equipment, goods, supplies or services, as well as with respect to the place of performance, which may be limited to Member States; (c) additional security requirements for the entities and activities, in particular conditions based on a security risk assessment of the equipment, goods, supplies or services, manufacturer, contractor, beneficiary, the affiliated entities or any subcontractors.
Article 137 Protection of the financial interests of the Union by means of detection of risks, exclusion and imposition of financial penalties
1. In order to protect the financial interests of the Union, the Commission shall set up and operate an early detection and exclusion system. The purpose of such a system shall be to facilitate: (a) the early detection of persons or entities referred to in paragraph 2, which pose a risk to the financial interests of the Union; (b) the exclusion of persons or entities referred to in paragraph 2, which are in one of the exclusion situations referred to in Article 138(1); (c) the imposition of a financial penalty on a recipient pursuant to Article 140. 2. In direct and indirect management, the early detection and exclusion system shall apply to: (a) participants and recipients; (b) entities on whose capacity the candidate or tenderer intends to rely or subcontractors of a contractor; (c) any person or entity receiving Union funds where the budget is implemented pursuant to Article 62(1), first subparagraph, point (c), and to Article 157(4) on the basis of information notified in accordance with Article 158(7); (d) guarantors; (e) participants or recipients on which entities implementing the budget in accordance with Article 63 have provided information, as transmitted by Member States in accordance with sector-specific rules, in accordance with Article 144(2), point (d); (f) sponsors as referred to in Article 26; (g) beneficial owners and any affiliate of the excluded entity as referred to in Article 138(6); (h) natural persons as referred to in Article 138(5), first subparagraph, points (a) to (c); (i) any person or entity receiving funds through any forms, including non-repayable financial support or loans or both, where the budget is implemented pursuant to Article 62(1), first subparagraph, point (a), with Member States, in which case Article 138(2) shall apply. For the purpose of the first subparagraph, point (i), persons or entities receiving funds shall include final recipients of funds, contractors, sub-contractors and the beneficial owners. This is without prejudice to Article 157(7) and the rules laid down in contribution agreements, financing agreements and guarantee agreements, in the case of persons or entities receiving Union funds where the budget is implemented pursuant to Article 62(1), first subparagraph, point (c). In the case of shared management, the exclusion system shall apply to: (a) any person or entity applying for funding under a programme in shared management, selected for such funding, or receiving such funding; (b) entities on whose capacity the person or entity referred to in point (a) intends to rely, or subcontractors of such person or entity; (c) beneficial owners and any affiliate of the entity excluded as referred to in Article 138(6). 3. The decision to register information concerning an early detection of the risks referred to in paragraph 1, second subparagraph, point (a), of this Article, to exclude persons or entities referred to in paragraph 2 and/or to impose a financial penalty on a recipient shall be taken by the authorising officer responsible. Information related to such decisions shall be registered in the database referred to in Article 144(1). Where such decisions are taken on the basis of Article 138(5), the information registered in the database shall include the information concerning the persons referred to in that paragraph. 4. The decision to exclude persons or entities referred to in paragraph 2 of this Article or to impose financial penalties on a recipient shall be based on a final judgment or, in the exclusion situations referred to in Article 138(1), on a final administrative decision, or on a preliminary classification in law by the panel referred to in Article 135 in the situations referred to in Article 138(3) in order to ensure a centralised assessment of those situations. In the cases referred to in Article 143(1), the authorising officer responsible shall reject a participant from a given award procedure. Without prejudice to Article 138(7), the authorising officer responsible may take a decision to exclude a participant or recipient and/or to impose a financial penalty on a recipient and a decision to publish the related information, on the basis of a preliminary classification as referred to in Article 138(3), only after having obtained a recommendation of the panel referred to in Article 142.
Article 138 Exclusion criteria and decisions on exclusions
1. The authorising officer responsible shall exclude a person or entity referred to in Article 137(2) from participating in award procedures governed by this Regulation or from implementing Union funds where that person or entity is in one or more of the following exclusion situations: (a) the person or entity is bankrupt, subject to insolvency or winding-up procedures, its assets are being administered by a liquidator or by a court, it is in an arrangement with creditors, its business activities are suspended, or it is in any analogous situation arising from a similar procedure provided for under Union or national law; (b) it has been established by a final judgment or a final administrative decision that the person or entity is in breach of its obligations relating to the payment of taxes or social security contributions in accordance with the applicable law; (c) it has been established by a final judgment or a final administrative decision that the person or entity is guilty of grave professional misconduct by having violated applicable laws or regulations or ethical standards of the profession to which the person or entity belongs, or by having engaged in any wrongful conduct which has an impact on its professional credibility where such conduct denotes wrongful intent or gross negligence, including, in particular, any of the following: (i) fraudulently or negligently misrepresenting information required for the verification of the absence of grounds for exclusion or the fulfilment of eligibility or selection criteria or in the implementation of the legal commitment; (ii) entering into agreement with other persons or entities with the aim of distorting competition; (iii) violating intellectual property rights; (iv) unduly influencing or attempting to unduly influence the decision-making process to obtain Union funds by taking advantage, through misrepresentation, of a conflict of interests involving any financial actors or other persons referred to in Article 61(1); (v) attempting to obtain confidential information that may confer upon it undue advantages in the award procedure; (vi) incitement to discrimination, hatred or violence against a group of persons or a member of a group or similar activities that are contrary to the values on which the Union is founded enshrined in Article 2 TEU, where such misconduct has an impact on the person or entity’s integrity which negatively affects or concretely risks affecting the performance of the legal commitment; (d) it has been established by a final judgment that the person or entity is guilty of any of the following: (i) fraud, within the meaning of Article 3 of Directive (EU) 2017/1371 of the European Parliament and of the Council ( 49 ) and Article 1 of the Convention on the protection of the European Communities’ financial interests, drawn up by the Council Act of 26 July 1995 ( 50 ) ; (ii) corruption, as defined in Article 4(2) of Directive (EU) 2017/1371 or active corruption within the meaning of Article 3 of the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union, drawn up by the Council Act of 26 May 1997 ( 51 ) , or conduct referred to in Article 2(1) of Council Framework Decision 2003/568/JHA ( 52 ) , or corruption as defined in other applicable laws; (iii) conduct related to a criminal organisation as referred to in Article 2 of Council Framework Decision 2008/841/JHA ( 53 ) ; (iv) money laundering or terrorist financing within the meaning of Article 1(3), (4) and (5) of Directive (EU) 2015/849 of the European Parliament and of the Council ( 54 ) ; (v) terrorist offences or offences related to terrorist activities, as defined in Articles 3 to 12 of Directive (EU) 2017/541 of the European Parliament and of the Council ( 55 ) , or inciting, aiding, abetting or attempting to commit such offences, as referred to in Article 14 of that Directive; (vi) child labour or other offences concerning trafficking in human beings as referred to in Article 2 of Directive 2011/36/EU of the European Parliament and of the Council ( 56 ) ; (e) the person or entity has shown significant deficiencies in complying with main obligations in the implementation of a legal commitment financed by the budget which has: (i) led to the early termination of a legal commitment; (ii) led to the application of liquidated damages or other contractual penalties; or (iii) been discovered by an authorising officer, OLAF, the Court of Auditors, or the EPPO following checks, audits or investigations; (f) it has been established by a final judgment or final administrative decision that the person or entity has committed an irregularity within the meaning of Article 1(2) of Council Regulation (EC, Euratom) No 2988/95 ( 57 ) ; (g) it has been established by a final judgment or final administrative decision that the person or entity has created an entity in a different jurisdiction with the intent to circumvent fiscal, social or any other legal obligations, including those related to working rights, employment and labour conditions, in the jurisdiction of its registered office, central administration or principal place of business; (h) it has been established by a final judgment or final administrative decision that an entity has been created with the intent referred to in point (g); (i) the entity or person has intentionally and without proper justification resisted an investigation, check or audit carried out by an authorising officer or its representative or auditor, OLAF, the EPPO, or the Court of Auditors. It shall be considered that the person or entity resists an investigation, check or audit when it carries out actions with the goal or effect of preventing, hindering or delaying the conduct of any of the activities needed to perform the investigation, check or audit. Such actions shall include, in particular, refusing to grant the necessary access to its premises or any other areas used for business purposes, concealing or refusing to disclose information or providing false information. 2. The authorising officer responsible shall exclude a person or entity referred to in Article 137(2), first subparagraph, point (i), and fourth subparagraph, points (a), (b) and (c), where that person or entity is in one or more of the exclusion situations referred to in paragraph 1, points (c)(iv) or (d), of this Article. In the absence of a final judgment or a final administrative decision, the decision shall be taken on the basis of a preliminary classification in law of a conduct as referred to in those points, having regard to the established facts and findings under paragraph 3, fourth subparagraph, points (a) and (d), of this Article contained in the recommendation of the panel referred to in Article 145. Before making the preliminary classification in law, the panel referred to in Article 145 shall give the Member State the opportunity to submit observations with regard to the procedure in paragraph 3 of this Article. Without prejudice to Article 63(2), the Member State shall ensure that payments applications related to a person or entity that is in an exclusion situation, established in accordance with paragraph 1 of this Article, are not submitted to the Commission for reimbursement. 3. In the absence of a final judgment or, where applicable, a final administrative decision in the cases referred to in paragraph 1, points (c), (d), (f), (g) and (h), of this Article, or in the case referred to in paragraph 1, points (e) and (i), of this Article, the authorising officer responsible shall exclude a person or entity referred to in Article 137(2) on the basis of a preliminary classification in law of a conduct as referred to in those points, having regard to established facts or other findings contained in the recommendation of the panel referred to in Article 145. The preliminary classification referred to in the first subparagraph of this paragraph does not prejudge the assessment of the conduct of the person or entity referred to in Article 137(2) concerned by the competent authorities of Member States under national law. The authorising officer responsible shall review his or her decision to exclude the person or entity referred to in Article 137(2) and/or to impose a financial penalty on a recipient without delay following the notification of a final judgment or a final administrative decision. In cases where the final judgment or the final administrative decision does not set the duration of the exclusion, the authorising officer responsible shall set that duration on the basis of established facts and findings and having regard to the recommendation of the panel referred to in Article 145. Where such final judgment or final administrative decision holds that the person or entity referred to in Article 137(2) is not guilty of the conduct subject to a preliminary classification in law, on the basis of which that person or entity has been excluded, the authorising officer responsible shall, without delay, bring an end to that exclusion and/or reimburse, as appropriate, any financial penalty imposed. The facts and findings referred to in the first subparagraph shall include, in particular: (a) facts established in the context of audits or investigations carried out by the EPPO in respect of those Member States participating in enhanced cooperation pursuant to Regulation (EU) 2017/1939, the Court of Auditors, OLAF or the internal auditor, or any other check, audit or control performed under the responsibility of the authorising officer; (b) non-final administrative decisions which may include disciplinary measures taken by the competent supervisory body responsible for the verification of the application of standards of professional ethics; (c) facts referred to in decisions of persons and entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (c); (d) information transmitted in accordance with Article 144(2), point (d), in particular facts and findings established in the context of a final judgment or final administrative decision at national level as to the presence of the exclusion situations referred to in paragraph 1, point (c)(iv) or (d), of this Article, by entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (b); (e) decisions of the Commission relating to the infringement of Union competition law or of a national competent authority relating to the infringement of Union or national competition law. 4. Any decision of the authorising officer responsible taken under Articles 137 to 144 or, where applicable, any recommendation of the panel referred to in Article 145, shall be made in compliance with the principle of proportionality, in particular taking into account: (a) the seriousness of the situation, including the impact on the financial interests and image of the Union; (b) the time which has elapsed since the relevant conduct; (c) the duration of the conduct and its recurrence; (d) whether the conduct was intentional or the degree of negligence shown; (e) in the cases referred to in paragraph 1, point (b), whether a limited amount is at stake; (f) any other mitigating circumstances, such as: (i) the degree of collaboration of the person or entity referred to in Article 137(2) concerned with the relevant competent authority and the contribution of that person or entity to the investigation as recognised by the authorising officer responsible; or (ii) the disclosure of the exclusion situation by means of a declaration as referred to in Article 139(1); or (iii) the measures taken by the Member State against the person or entity pursuant to Article 63(2). 5. The authorising officer responsible shall exclude a person or entity referred to in Article 137(2) where: (a) a natural or legal person who is a member of the administrative, management or supervisory body of the person or entity referred to in Article 137(2), or who has powers of representation, decision or control with regard to that person or entity, is in one or more of the situations referred to in paragraph 1, points (c) to (i), of this Article; (b) a natural or legal person that assumes unlimited liability for the debts of the person or entity referred to in Article 137(2) is in one or more of the situations referred to in paragraph 1, point (a) or (b), of this Article; (c) a natural person who is essential for the award or for the implementation of the legal commitment is in one or more of the situations referred to in paragraph 1, points (c) to (i), of this Article. The authorising officer responsible shall ensure that the natural person that is in one or more of the situations referred to in the first subparagraph is excluded. 6. When a person or entity referred to in Article 137(2), first subparagraph, points (a) to (f) and (h) and (i), is excluded, the authorising officer responsible may also exclude or impose a financial penalty on the beneficial owner or any affiliate of the excluded entity. Any decision of the authorising officer responsible or, where applicable, any recommendation of the panel referred to in Article 145, shall take into consideration whether: (a) the excluded entity has a functional independence from its affiliate and from the beneficial owner; (b) the misconduct of the excluded entity is not due to a failure to supervise or to maintain adequate controls; (c) the excluded entity has taken a commercial decision without the influence of any affiliate or of the beneficial owner. 7. In the cases referred to in paragraph 3 of this Article, the authorising officer responsible may exclude a person or entity referred to in Article 137(2) provisionally without the prior recommendation of the panel referred to in Article 145, where their participation in an award procedure or their selection for implementing Union funds would constitute a serious and imminent threat to the financial interests of the Union. In such cases, the authorising officer responsible shall immediately refer the case to the panel referred to in Article 145 and shall take a final decision no later than 14 days after having received the recommendation of the panel. 8. At the request of the authorising officer, and where the nature or the circumstances of the case so require, a referral for a recommendation of the panel referred in Article 145 may be treated by means of expedited procedure, without prejudice to the right to be heard of the person or entity concerned. 9. The authorising officer responsible, having regard, where applicable, to the recommendation of the panel referred to in Article 145, shall not exclude a person or entity referred to in Article 137(2) from participating in an award procedure or from being selected for implementing Union funds where: (a) the person or entity has taken remedial measures as specified in paragraph 10 of this Article, to an extent that is sufficient to demonstrate its reliability. This point shall not apply in the case referred to in paragraph 1, point (d), of this Article; (b) it is indispensable to ensure the continuity of service, for a limited duration and pending the adoption of remedial measures specified in paragraph 7 of this Article; (c) such an exclusion would be disproportionate on the basis of the criteria referred to in paragraph 3 of this Article. In addition, paragraph 1, point (a), of this Article shall not apply in the case of the purchase of supplies on particularly advantageous terms from either a supplier which is definitively winding up its business activities or the liquidators in an insolvency procedure, an arrangement with creditors, or a similar procedure under Union or national law. In the cases of non-exclusion referred to in the first and second subparagraphs of this paragraph, the authorising officer responsible shall specify the reasons for not excluding the person or entity referred to in Article 137(2) and inform the panel referred to in Article 145 of those reasons. 10. The remedial measures referred to in paragraph 9, first subparagraph, point (a), shall include, in particular: (a) measures to identify the origin of the situations giving rise to exclusion and concrete technical, organisational and personnel measures within the relevant business or activity area of the person or entity referred to in Article 137(2), appropriate to correct the conduct and prevent its further occurrence; (b) proof that the person or entity referred to in Article 137(2) has undertaken measures to compensate or redress the damage or harm caused to the financial interests of the Union by the underlying facts giving rise to the exclusion situation; (c) proof that the person or entity referred to in Article 137(2) has paid or secured the payment of any fine imposed by the competent authority or of any taxes or social security contributions referred to in paragraph 1, point (b), of this Article. Without prejudice to the assessment of the authorising officer responsible or of the panel referred to in Article 145, the person or entity shall submit remedial measures that have been assessed by an external independent auditor or have been considered sufficient by a decision of a national or Union authority. 11. The authorising officer responsible, having regard, where applicable, to the revised recommendation of the panel referred to in Article 145, shall, without delay, revise its decision to exclude a person or entity referred to in Article 137(2) ex officio or on request from that person or entity, where the latter has taken remedial measures sufficient to demonstrate its reliability or has provided new elements demonstrating that the exclusion situation referred to in paragraph 1 of this Article no longer exists. 12. In the case referred to in Article 137(2), point (b), the authorising officer responsible shall require that the candidate or tenderer replaces an entity or a subcontractor on whose capacity it intends to rely, which is in an exclusion situation referred to in paragraph 1 of this Article.
Article 139 Declaration and evidence of absence of an exclusion situation
1. A participant shall declare whether it is in one of the situations referred to in Articles 138(1) and 143(1), and, where applicable, whether it has taken any remedial measures referred to in Article 138(9), first subparagraph, point (a). A participant shall also declare whether the following persons or entities are in one of the exclusion situations referred to in Article 138(1), points (c) to (h): (a) natural or legal persons that are members of the administrative, management or supervisory body of the participant or that have powers of representation, decision or control with regard to that participant; (b) beneficial owners, as defined in Article 3, point (6), of Directive (EU) 2015/849, of the participant. The participant or the recipient shall without delay inform the authorising officer responsible of any changes in the situations as declared. Where appropriate, the candidate or tenderer shall provide the same declarations referred to in the first and second subparagraphs signed by a subcontractor or by any other entity on whose capacity it intends to rely, as the case may be. The authorising officer responsible shall not request the declarations referred to in the first and second subparagraph when such declarations have already been submitted for the purposes of another award procedure, provided that the situation has not changed, and that the time that has elapsed since the issuing date of the declarations does not exceed one year. The authorising officer responsible may waive the requirements under the first and second subparagraphs for very low value grants and very low value contracts, the value of which does not exceed the amounts referred to in Article 2, point (75), and point 14.4 of Annex I. 2. Whenever requested by the authorising officer responsible and where this is necessary to ensure the proper conduct of the procedure, the participant, the subcontractor or the entity on whose capacity a candidate or tenderer intends to rely shall provide: (a) appropriate evidence that it is not in one of the exclusion situations referred to in Article 138(1); (b) information on natural or legal persons that are members of the administrative, management or supervisory body of the participant or that have powers of representation, decision or control with regard to that participant, including persons and entities within the ownership and control structure and beneficial owners, and appropriate evidence that none of those persons are in one of the exclusion situations referred to in Article 138(1), points (c) to (f). (c) appropriate evidence that natural or legal persons that assume unlimited liability for the debts of that participant are not in an exclusion situation referred to in Article 138(1), point (a) or (b). 3. Where applicable and in accordance with national law, the authorising officer responsible may accept as appropriate evidence that a participant or an entity referred to in paragraph 2 is not in one of the exclusion situations referred to in Article 138(1), points (a), (c), (d), (f), (g) and (h), a recent extract from the judicial record or, failing that, an equivalent document recently issued by a judicial or administrative authority in its country of establishment showing that those requirements are satisfied. The authorising officer responsible may accept as appropriate evidence that a participant or an entity referred to in paragraph 2 is not in one of the exclusion situations referred to in Article 138(1), points (a) and (b), a recent certificate issued by the competent authority of the country of establishment. Where such types of certificates are not issued in the country of establishment, the participant may provide a sworn statement made before a judicial authority or notary or, failing that, a solemn statement made before an administrative authority or a qualified professional body in its country of establishment. 4. The authorising officer responsible shall waive the obligation of a participant or an entity referred to in paragraph 2 to submit the documentary evidence referred to in paragraphs 2 and 3: (a) if he or she can access such evidence on a national database free of charge; (b) if such evidence has already been submitted for the purposes of another procedure and provided that any submitted documents are still valid and that the time that has elapsed since the issuing date of the documents does not exceed one year; (c) if he or she recognises that there is a material impossibility to provide such evidence. 5. Paragraphs 1 to 4 of this Article shall not apply to persons and entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), or to Union bodies referred to in Articles 70 and 71. For financial instruments and budgetary guarantees and in the absence of rules and procedures fully equivalent to those referred to in Article 157(4), first subparagraph, point (d), final recipients and intermediaries shall provide the person or entity implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), with a signed declaration on honour confirming that they are not in one of the situations referred to in Article 138(1), points (a) to (d), (g) and (h), or Article 143(1), first subparagraph, points (b) and (c), or in a situation deemed equivalent following the assessment carried out in accordance with Article 157(4). Where, exceptionally, financial instruments are implemented pursuant to Article 62(1), first subparagraph, point (a), final recipients shall provide financial intermediaries with a signed declaration on honour confirming that they are not in one of the situations referred to in Article 138(1), points (a) to (d), (g) and (h), or Article 143(1), first subparagraph, points (b) and (c).
Article 140 Financial penalties
1. In order to ensure a deterrent effect, the authorising officer responsible may, having regard, where applicable, to the recommendation of the panel referred to in Article 145, impose a financial penalty on a recipient with whom a legal commitment has been entered into and who is in an exclusion situation as referred to in Article 138(1), point (c), (d), (e), (f), (g), (h) or (i). Regarding the exclusion situations referred to in Article 138(1), points (c) to (i), the financial penalty may be imposed as an alternative to a decision to exclude a recipient, where such an exclusion would be disproportionate on the basis of the criteria referred to in Article 138(4). Regarding the exclusion situations referred to in Article 138(1), points (c), (d) and (e), the financial penalty may be imposed in addition to an exclusion where this is necessary to protect the financial interests of the Union, due to the systemic and recurrent conduct engaged in by the recipient with the intention to unduly obtain Union funds. Notwithstanding the first, second and third subparagraphs of this paragraph, a financial penalty shall not be imposed on a recipient who in accordance with Article 139 has disclosed that it is in an exclusion situation. 2. The amount of the financial penalty shall not exceed 10 % of the total value of the legal commitment. In the event of a grant agreement signed with a number of beneficiaries the financial penalty shall not exceed 10 % of the grant amount the beneficiary concerned is entitled to in accordance with the grant agreement.
Article 141 Duration of exclusion and limitation period
1. The duration of exclusion shall not exceed any of the following: (a) the duration, if any, set by the final judgment or the final administrative decision of a Member State; (b) in the absence of a final judgment or a final administrative decision: (i) five years for the cases referred to in Article 138(1), points (d) and (i); (ii) three years for the cases referred to in Article 138(1), points (c) and (e) to (h). A person or entity referred to in Article 137(2) shall be excluded as long as it is in one of the exclusion situations referred to in Article 138(1), points (a) and (b). 2. The limitation period for excluding and/or imposing financial penalties on a person or entity referred to Article 137(2) shall be five years calculated from any of the following: (a) the date of the conduct giving rise to exclusion or, in the case of continued or repeated acts, the date on which the conduct ceases, in the cases referred to in Article 138(1), points (b) to (e), (g), (h) and (i); (b) the date of the final judgment of a national jurisdiction or of the final administrative decision in the cases referred to in Article 138(1), points (b), (c), (d), (g), (h) and (i). The limitation period shall be interrupted by an act of a national authority, of the Commission, of OLAF, of the EPPO in respect of those Member States participating in enhanced cooperation pursuant to Regulation (EU) 2017/1939, of the panel referred to in Article 145 of this Regulation or of any entity involved in budget implementation, if such an act is notified to the person or entity referred to in Article 137(2) of this Regulation and is relating to investigations or judicial proceedings. A new limitation period shall begin to run on the day following the interruption. For the purpose of Article 138(1), point (f), of this Regulation, the limitation period to exclude a person or entity referred to in Article 137(2) of this Regulation and/or impose financial penalties on a recipient provided for in Article 3 of Regulation (EC, Euratom) No 2988/95 shall apply. Where the conduct of a person or entity referred to in Article 137(2) of this Regulation concerned qualifies under several of the grounds listed in Article 138(1) of this Regulation, the limitation period applicable to the most serious of those grounds shall apply.
Article 142 Publication of exclusion and financial penalties
1. In order to, where necessary, reinforce the deterrent effect of the exclusion and/or financial penalty, the Commission shall, subject to a decision of the authorising officer responsible, publish on its website the following information related to the exclusion and, where applicable, the financial penalty in the cases referred to in Article 138(1), points (c) to (i): (a) the name of the person or entity referred to in Article 137(2) concerned; (b) the exclusion situation; (c) the duration of the exclusion and/or the amount of the financial penalty. Where the decision on the exclusion and/or financial penalty has been taken on the basis of a preliminary classification as referred to in Article 138(2), the publication shall indicate that there is no final judgment or, where applicable, final administrative decision. In such cases, information about any appeals, their status and their outcome, as well as any revised decision of the authorising officer responsible shall be published without delay. Where a financial penalty has been imposed, the publication shall also indicate whether that penalty has been paid. The decision to publish the information shall be taken by the authorising officer responsible either following the relevant final judgment or, where applicable, final administrative decision, or following the recommendation of the panel referred to in Article 145, as the case may be. That decision shall take effect three months after its notification to the person or entity concerned, as referred to in Article 137(2). The information published shall be removed as soon as the exclusion has come to an end. In the case of a financial penalty, the publication shall be removed six months after payment of that penalty. Where personal data are concerned, the authorising officer responsible shall in accordance with Regulation (EU) 2018/1725 inform the person or entity concerned, as referred to in Article 137(2) of this Regulation, of their rights under the applicable data protection rules and of the procedures available for exercising those rights. 2. The information referred to in paragraph 1 of this Article shall not be published in any of the following circumstances: (a) where it is necessary to preserve the confidentiality of an investigation or of national judicial proceedings; (b) where publication would cause disproportionate damage to the person or entity referred to in Article 137(2) concerned or would otherwise be disproportionate on the basis of the proportionality criteria set out in Article 138(4) and having regard to the amount of the financial penalty; (c) where a natural person is concerned, unless the publication of personal data is justified by exceptional circumstances, inter alia, by the seriousness of the conduct or its impact on the financial interests of the Union. In such cases, the decision to publish the information shall duly take into consideration the right to privacy and other rights provided for in Regulation (EU) 2018/1725.
Article 143 Rejection from an award procedure
1. The authorising officer responsible shall reject from an award procedure a participant who: (a) is in an exclusion situation established in accordance with Article 138; (b) has misrepresented the information required as a condition for participating in the procedure or has failed to supply that information; (c) was previously involved in the preparation of documents used in the award procedure where this entails a breach of the principle of equality of treatment, including distortion of competition, that cannot be remedied otherwise; (d) has professional conflicting interests which may negatively affect the performance of the contract in accordance with point 20.6 of Annex I; (e) is the addressee of a decision prohibiting the award of the contract for having received foreign subsidies distorting the internal market, adopted by the Commission in accordance with paragraph 3 of this Article. The authorising officer responsible shall communicate to the other participants in the award procedure the relevant information exchanged in the context of or resulting from the involvement of the participant in the preparation of the award procedure as referred to in the first subparagraph, point (c). Prior to any such rejection the participant shall be given the opportunity to prove that its involvement in preparing the award procedure does not breach the principle of equality of treatment. 2. Article 134(1) shall apply unless the rejection has been justified in accordance with paragraph 1, first subparagraph, point (a), of this Article by a decision concerning exclusion taken with regard to the participant, following an examination of its observations. 3. For the purpose of paragraph 1, point (e), of this Article, Regulation (EU) 2022/2560 and in particular the provisions of its Chapters 1, 2 and 4, including Article 30 thereof, shall apply mutatis mutandis to the preliminary review by the Commission and to the in-depth investigation of any foreign financial contributions obtained in a procurement procedure under this Regulation. For the purpose of the prior notification to the contracting authority, participants in a procurement procedure under this Regulation shall notify any relevant foreign financial contribution to the authorising officer responsible, under the same conditions as set out in Articles 28 and 29 of Regulation (EU) 2022/2560 and in the provisions of the implementing acts adopted on the basis of Article 47(1) of that Regulation. In addition, relevant delegated acts adopted on the basis of Article 49 of Regulation (EU) 2022/2560 shall also be applicable to procurement procedures under this Regulation. The relevant provisions of Regulation (EU) 2022/2560, as well as those of the delegated acts adopted on the basis of Article 49 of that Regulation and of the implementing acts adopted on the basis of Article 47(1) of that Regulation shall be implemented in accordance with this Regulation. In the context of the first subparagraph of this paragraph, the Commission shall be empowered to adopt implementing acts in the form of a decision: (a) to make the commitments offered by a participant binding upon that participant within the meaning of Article 11(3) of Regulation (EU) 2022/2560, in the context of this Regulation; (b) to raise no objection within the meaning of Article 11(4) of Regulation (EU) 2022/2560, in the context of this Regulation; (c) to prohibit the award of the contract to a participant for having received foreign subsidies distorting the internal market within the meaning of Article 31(2) of Regulation (EU) 2022/2560, in the context of this Regulation. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 276(2). For the purposes of the measures to be taken under this paragraph, where Regulation (EU) 2022/2560 refers to procurement procedures within the meaning of Directives 2014/23/EU, 2014/24/EU and 2014/25/EU of the European Parliament and of the Council ( 58 ) , these shall be understood as procurement procedures within the meaning of this Regulation. The authorising officer responsible shall notify the rejection from an award procedure by a letter addressed to the participant concerned, following the prohibition decision referred to in the second subparagraph, point (c).
Article 144 The early detection and exclusion system
1. Information exchanged within the early detection and exclusion system referred to in Article 137 shall be centralised in a database set up by the Commission (the ‘database’) and shall be managed in accordance with the right to privacy and other rights provided for in Regulation (EU) 2018/1725. Information on cases of early detection, exclusion and/or financial penalties shall be entered in the database by the authorising officer responsible after notifying the person or entity concerned, as referred to in Article 137(2). Such notification may be deferred in exceptional circumstances, where there are compelling legitimate grounds to preserve the confidentiality of an investigation or of national judicial proceedings, until such compelling legitimate grounds to preserve the confidentiality cease to exist. In accordance with Regulation (EU) 2018/1725, the Commission shall upon request inform the person or entity subject to the early detection and exclusion system, as referred to in Article 137(2), of the data stored in the database relating to that person or entity. The information contained in the database shall be updated, where appropriate, following a rectification, an erasure or any modification of data. It shall only be published in accordance with Article 142. 2. The early detection and exclusion system shall be based on facts and findings as referred to in Article 138(3), fourth subparagraph, and on the transmission of information to the Commission, in particular, by: (a) the EPPO in respect of those Member States participating in enhanced cooperation pursuant to Regulation (EU) 2017/1939, or OLAF in accordance with Regulation (EU, Euratom) No 883/2013 where an investigation completed or in progress shows that it might be appropriate to take precautionary measures or actions to protect the financial interests of the Union, with due regard to the respect for procedural and fundamental rights, and to the protection of whistle-blowers; (b) an authorising officer of the Commission, of a European office set up by the Commission or of an executive agency; (c) a Union institution, a European office, an agency other than those referred to in point (b) of this paragraph, or a body or a person entrusted with implementation of CFSP actions; (d) entities implementing the budget under Article 62(1), first subparagraph, point (b), and persons and entities implementing funds, pursuant to budget implementation under Article 62(1), first subparagraph, point (a), with Member States, in cases of facts and findings established only in the context of final judgments or final administrative decisions with reference to the grounds set out in Article 138(1), points (c)(iv) and (d), as well as detected fraud and/or irregularity and their follow up, where the transmission of information is required by sector-specific rules; (e) persons or entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), in cases of detected fraud and/or irregularity and their follow up. 3. Except where information is to be submitted in accordance with sector-specific rules, the information to be transmitted pursuant to paragraph 2 of this Article shall include: (a) the identification of the entity or person concerned; (b) a summary of the risks detected or the facts in question; (c) information that could assist the authorising officer in carrying out the verification referred to in paragraph 4 of this Article or in taking a decision on exclusion as referred to in Article 138(1) or (3), or a decision to impose a financial penalty as referred to in Article 140; (d) where applicable, information on any special measures necessary to ensure the confidentiality of the information transmitted, including measures for the safeguarding of evidence to protect the investigation or the national judicial proceedings. 4. The Commission shall without delay transmit the information referred to in paragraph 3 to its authorising officers and those of its executive agencies, all other Union institutions, Union bodies, European offices and agencies through the database referred to in paragraph 1 in order to allow them to carry out the necessary verification in respect of their ongoing award procedures and existing legal commitments. In carrying out that verification, the authorising officer responsible shall exercise his or her powers as set out in Article 74 and shall not go beyond what is foreseen in the terms and conditions of the award procedure and legal commitments. The retention period for the information related to the early detection transmitted in accordance with paragraph 3 of this Article shall not exceed one year. If, during that period, the authorising officer responsible requests the panel to issue a recommendation in a case concerning exclusion or financial penalties, the retention period may be extended until such time as the authorising officer responsible has taken a decision. 5. All persons and entities involved in budget implementation in accordance with Article 62 shall be granted access by the Commission to the information on decisions on exclusion pursuant to Article 138 to enable them to verify whether there is an exclusion in the early detection and exclusion system, when awarding contracts or selecting beneficiaries to implement Union funds. Except where the implementation of the budget is entrusted to persons or entities under Article 62(1), first subparagraph, point (c), according to the conditions referred to in Article 157(4), all persons and entities involved in budget implementation shall enforce such decisions with regard to the person or entity applying for or selected to implement Union funds. 6. As part of the annual report of the Commission to the European Parliament and to the Council pursuant to Article 325(5) TFEU, the Commission shall provide aggregate information on the decisions taken by the authorising officers under Articles 137 to 144 of this Regulation. That report shall also provide further information on any decisions taken by the authorising officers pursuant to Article 138(9), first subparagraph, point (b), of this Regulation and Article 142(2) of this Regulation and on any decisions by the authorising officers to deviate from the recommendation of the panel pursuant to Article 145(6), third subparagraph, of this Regulation. The information referred to in the first subparagraph of this paragraph shall be provided with due regard to confidentiality requirements and shall, in particular, not allow for the identification of the person or entity concerned, as referred to in Article 137(2).
Article 145 Panel
1. A panel shall be convened at the request of an authorising officer of any Union institution, Union body, European office or body or person entrusted with the implementation of specific actions in the CFSP pursuant to Title V of the TEU. 2. The panel shall be composed of: (a) a standing high-level independent chair appointed by the Commission; (b) a standing high-level independent vice-chair appointed by the Commission, who shall deputise for the chair; (c) two permanent representatives of the Commission as the owner of the early detection and exclusion system, who shall express a joint position; and (d) one representative of the requesting authorising officer. The composition of the panel shall ensure the appropriate legal and technical expertise. The panel shall be assisted by a permanent secretariat, provided by the Commission, which shall ensure the continuous administration of the panel. 3. The Chair shall be chosen from among former members of the Court of Justice of the European Union, the Court of Auditors or former officials who have had at least the rank of Director-General in a Union institution other than the Commission. He or she shall be selected on the basis of his or her personal and professional qualities, extensive experience in legal and financial matters and proven competence, independence and integrity. The term of office shall be five years and shall not be renewable. The Chair shall be appointed as special adviser within the meaning of Article 5 of the Conditions of Employment of Other Servants of the European Union. The Chair shall preside all sessions of the panel. He or she shall be independent in the performance of his or her duties. He or she shall not have a conflict of interests between his or her duties as Chair and any other official duties. 4. The rules of procedure of the panel shall be adopted by the Commission. 5. The panel shall uphold the right of the person or entity concerned, as referred to in Article 137(2), to submit observations on the facts or findings referred to in Article 138(3) and on the preliminary classification in law before adopting its recommendations. The right to submit observations may be deferred in exceptional circumstances where there are compelling legitimate grounds to preserve the confidentiality of an investigation or of national judicial proceedings, until such legitimate grounds cease to exist. 6. The recommendation of the panel to exclude and/or impose a financial penalty shall, where applicable, contain the following elements: (a) the facts or findings referred to in Article 138(3) and their preliminary classification in law; (b) an assessment of the need to impose a financial penalty and its amount; (c) an assessment of the need to exclude the person or entity referred to in Article 137(2) and, in that case, the suggested duration of such an exclusion; (d) an assessment of the need to publish the information related to the person or entity referred to in Article 137(2) who is excluded and/or subject to a financial penalty; (e) an assessment of remedial measures taken by the person or entity referred to Article 137(2), if any. Where the authorising officer responsible envisages taking a more severe decision than what has been recommended by the panel, he or she shall ensure that such a decision is taken with due respect for the right to be heard and for the rules of personal data protection. Where the authorising officer responsible decides to deviate from the recommendation of the panel, he or she shall justify such decision to the panel. 7. The panel shall revise its recommendation during the exclusion period on request from the authorising officer responsible in the cases referred to in Article 138(11) or following the notification of a final judgment or a final administrative decision establishing the grounds for exclusion where such a judgment or decision does not set the duration of the exclusion, as referred to in Article 138(3), second subparagraph. 8. The panel shall notify the requesting authorising officer without delay of its revised recommendation, following which the authorising officer shall review his or her decision. 9. The Court of Justice of the European Union shall have unlimited jurisdiction to review a decision whereby the authorising officer excludes a person or entity referred to in Article 137(2) and/or imposes a financial penalty on a recipient, including annulling the exclusion, reducing or increasing its duration and/or annulling, reducing or increasing the financial penalty imposed. Article 22(1) of Regulation (EC) No 58/2003 shall not apply when the decision of the authorising officer to exclude or impose a financial penalty is taken on the basis of a recommendation of the panel.
Article 146 Communication in the context of early detection and exclusion procedures
1. All communication, in particular notification of decisions, letters, documents or information related to early detection and exclusion procedures shall be made in writing on paper or in electronic format. 2. Notifications for communications which create legal effects or trigger time limits shall be made on paper by registered post with acknowledgement of receipt or by courier service with proof of delivery, through a secure electronic exchange system pursuant to Article 151, or by e-mail or other electronic means. 3. Communications shall: (a) when made on paper, be considered to have been notified when they have been delivered to the most recent postal address provided by the recipient party. Notifications by registered post with acknowledgement of receipt or by courier service with proof of delivery shall be considered to have been received either on the delivery date registered by the postal service or by courier service or after the time limit for collection at the post office, or, in the absence of such time limit, three weeks after the attempted delivery, provided that the notification has been sent a second time and announced electronically to the most recent e-mail address provided by the recipient party; (b) when made through a secure electronic exchange system referred to in Article 151, be considered to have been notified on the date and time they are accessed, as indicated by the time logs in the system or, in the case of communications that have not been accessed, 10 days after sending; (c) when made by e-mail or other electronic means, be deemed to be notified on the day of dispatch of the e-mail, provided that it is sent to the most recent e-mail address provided by the recipient party and the sending party has not received a non-delivery report. Where the addressee can demonstrate that he or she has been prevented by circumstances outside his or her control from accessing a communication, the legal effects of the communication shall start running from the moment on which the addressee can demonstrate that he or she has gained access to its content.
Article 147 Transmission of information for the purpose of the early detection and exclusion system
1. Information requested from the entities referred to in Article 144(2), point (d), shall be transmitted to the Commission in accordance with Article 36(8) and sector-specific rules. 2. Without prejudice to Article 138(2), second subparagraph, use of the data received through the Irregularity Management System shall take into consideration the status of the national procedure that existed at the time when the information was submitted. Such use shall be preceded by a consultation of the Member State that has submitted the relevant data through the Irregularity Management System.
Article 148 Exception applicable to the Joint Research Centre
Articles 137 to 147 shall not apply to the JRC.
Article 149 Electronic management of operations
1. Where revenue and expenditure operations or document exchanges are managed by means of computer systems, documents may be signed by a computerised or electronic procedure providing authentication of the signatory. Such computer systems shall include a full and up-to-date description of the system defining the content of all data fields, describing how each individual operation is treated and explaining in detail how the computer system guarantees the existence of a complete audit trail for each operation. Electronic information may be subject to digital controls and audits as referred to in Article 36(11). 2. Subject to the prior agreement of the Union institutions and Member States concerned, any transmission of documents between them may be done by electronic means.
Article 150 e-Government
1. Union institutions, the executive agencies and the Union bodies referred to in Articles 70 and 71 shall establish and apply uniform standards for the electronic exchange of information with participants. In particular, they shall, to the greatest possible extent, design and implement solutions for the submission, storage and processing of data submitted in award procedures, and to that end, put in place a single ‘electronic data interchange area’ for participants. The Commission shall report regularly to the European Parliament and to the Council on the progress made in that regard. 2. Under shared management, all official exchanges of information between Member States and the Commission shall be carried out by means indicated in sector-specific rules. Those rules shall provide for interoperability of data gathered or received, and transmitted in the management of the budget.
Article 151 Electronic exchange systems
1. All exchanges with recipients and participants, including the entering into legal commitments and any amendments thereto, may be done through electronic exchange systems. 2. Electronic exchange systems shall satisfy the following conditions: (a) only authorised persons may have access to the system and to documents transmitted through it; (b) only authorised persons may electronically sign or transmit a document through the system; (c) authorised persons are identified through the system by established means; (d) the time and date of the electronic transaction are determined precisely; (e) the integrity of documents is preserved; (f) the availability of documents is preserved; (g) where appropriate, the confidentiality of documents is preserved; (h) the protection of personal data in accordance with Regulation (EU) 2018/1725 is ensured. 3. The electronic exchange system may also be used by the authorising officer responsible, or, where applicable, by the panel referred to in Article 145, to communicate with participants, recipients or other persons or entities referred to in Article 137(2) with regard to: (a) their inclusion in the early detection and exclusion system database in the cases referred to in Article 137(1), point (a); (b) the content of adversarial letters and other information or requests issued by the panel referred to in Article 145, in order to safeguard the rights referred to in Article 145(5), and in the exercise of the competences under this Regulation; (c) the content of decisions and other information or requests by the authorising officer responsible, in the exercise of the competencies under Articles 137 to 147. 4. Data sent or received through such a system shall enjoy legal presumption of the integrity of the data and the accuracy of the date and time of sending or receiving the data indicated by the system. A document sent or notified through such a system shall be considered as equivalent to a paper document, shall be admissible as evidence in legal proceedings, shall be deemed original and shall enjoy legal presumption of its authenticity and integrity, provided that the document does not contain any dynamic features capable of automatically changing it. The electronic signatures referred to in paragraph 2, point (b), shall have a legal effect equivalent to handwritten signatures.
Article 152 Submission of application documents
1. The arrangements for the submission of application documents shall be determined by the authorising officer responsible who may choose an exclusive method of submission. The means of communication chosen shall be such as to ensure that there is genuine competition and that the following conditions are satisfied: (a) each submission contains all the information required for its evaluation; (b) the integrity of data is preserved; (c) the confidentiality of application documents is preserved; (d) the protection of personal data in accordance with Regulation (EU) 2018/1725 is ensured. 2. The Commission shall ensure by appropriate means and in accordance with Article 150(1) that participants may submit the application documents and any supporting evidence in an electronic format. Any electronic communication system used to support communications and information exchanges shall be non-discriminatory, generally available and interoperable with information and communication technology products in general use and shall not restrict participants’ access to the award procedure. The Commission shall report regularly to the European Parliament and to the Council on the progress of the application of this paragraph. 3. Devices for the electronic receipt of application documents shall guarantee, through technical means and appropriate procedures, that: (a) the participant can be authenticated with certainty; (b) the exact time and date of the receipt of application documents can be determined precisely; (c) only authorised persons have access to the data transmitted and may set or change the dates for opening the application documents; (d) during the different stages of the award procedure only authorised persons have access to all data submitted and may give access to the data as needed for the procedure; (e) it is reasonably ensured that any attempt to infringe any of the conditions set out in points (a) to (d) can be detected. The first subparagraph shall not apply to contracts below the thresholds referred to in Article 178(1). 4. Where the authorising officer responsible authorises submission of application documents by electronic means, the electronic documents submitted by means of such systems shall be deemed to be the originals. 5. Where submission is by letter, participants may choose to submit application documents: (a) either by post or by courier service, in which case the evidence of submission shall be constituted by the postmark or the date of the deposit slip; (b) by hand-delivery to the premises of the authorising officer responsible by the participant in person or by an agent, in which case the evidence of submission shall be constituted by the acknowledgement of receipt. For contracts awarded by, or exclusively in the interest of, Union delegations in third countries, the contracting authority may restrict the submission by letter to only one of the means indicated above. Where the contracting authority makes use of this provision, it shall document the reasons for that restriction. 6. By submitting application documents, participants accept to receive notification of the outcome of the procedure by electronic means. 7. Participants or recipients or any other persons or entities referred to in Article 137(2) accept to receive notifications in the terms of the specific legal commitment or concession contract, including any notification concerning the application of any of the measures referred to in Article 137(1). Where persons or entities referred to in Article 137(2), point (b), are concerned, the applicant shall be responsible for communicating to the contracting authority the address of the entity concerned. Unless exchanges are made through the electronic exchange system referred to in Article 151, where the person or entity has been notified by electronic means to the address indicated in the application, and failing the express acknowledgement of receipt of the electronic notification, it shall be presumed that the person or entity has been put in a position to take cognizance of the content of the exchange and therefore it shall be considered as notified. 8. Paragraphs 1 to 7 of this Article shall not apply to the selection of persons or entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), unless the selection is made further to a call for expression of interest.
Article 153 Evaluation committee
1. Application documents shall be evaluated by an evaluation committee. 2. The evaluation committee shall be appointed by the authorising officer responsible. The evaluation committee shall be made up of at least three persons. 3. The members of the evaluation committee evaluating grant applications, applications for non-financial donations or tenders shall represent at least two organisational entities of Union institutions or Union bodies referred to in Articles 68, 69, 70 and 71 with no hierarchical link between them, at least one of which does not come under the authorising officer responsible. Where representations and local units outside the Union, such as a Union delegation, office or branch office in a third country, and Union bodies referred to in Articles 68, 69, 70 and 71 have no separate entities, the requirement of organisational entities with no hierarchical link between them shall not apply. External experts may assist the evaluation committee pursuant to a decision of the authorising officer responsible. Members of the evaluation committee may be external experts where that possibility is provided for in the basic act. 4. The members of the evaluation committee evaluating applications in a contest for prizes may be persons referred to in paragraph 3, first subparagraph, or external experts. 5. The members of the evaluation committee and the external experts shall comply with Article 61.
Article 154 Clarification and correction of application documents
The authorising officer responsible may correct obvious clerical errors in application documents after confirmation of the intended correction by the participant. Where a participant fails to submit evidence or to make statements, the evaluation committee or, where appropriate, the authorising officer responsible shall, except in duly justified cases, ask the participant to provide the missing information or to clarify supporting documents. Such information, clarification or confirmation shall not substantially change application documents.
Article 155 Guarantees
1. With the exception of contracts and grants the value of which does not exceed EUR 60 000, the authorising officer responsible may, if proportionate and subject to the authorising officer’s risk analysis, require a guarantee to be lodged: (a) by contractors or beneficiaries in order to limit the financial risks connected with a payment of pre-financing (guarantee on pre-financing); (b) by contractors to ensure compliance with substantial contractual obligations in the case of works, supplies or complex services (performance guarantee); (c) by contractors to ensure full performance of the contract during the contract liability period (retention money guarantee). The JRC shall be exempted from lodging guarantees. As an alternative to requesting a guarantee on pre-financing, for grants, the authorising officer responsible may decide to split the payment into several instalments. 2. The authorising officer responsible shall decide whether the guarantee is to be denominated in euro or in the currency of the contract or of the grant agreement. 3. The guarantee shall be issued by a bank or by an authorised financial institution accepted by the authorising officer responsible. At the request of the contractor or the beneficiary and provided it is accepted by the authorising officer responsible: (a) the guarantees referred to paragraph 1, first subparagraph, points (a), (b) and (c), may be replaced by a joint and several guarantee of the contractor or the beneficiary and a third party; (b) the guarantee referred to in paragraph 1, first subparagraph, point (a), may be replaced by an irrevocable and unconditional joint guarantee of the beneficiaries who are parties to the same grant agreement. 4. The guarantee shall have the effect of making the bank or financial institution or the third party provide irrevocable collateral security, or stand as first-call guarantor of the contractor’s or beneficiary’s obligations. 5. Where, in the course of implementation of the contract or the grant agreement, the authorising officer responsible discovers that a guarantor is not or is no longer authorised to issue guarantees in accordance with the applicable national law, he or she shall require that the contractor or the beneficiary replaces the guarantee issued by such a guarantor.
Article 156 Guarantee on pre-financing
1. A guarantee on pre-financing shall be for an amount not exceeding the amount of the pre-financing and shall be valid for a period sufficiently long to allow it to be activated. 2. The guarantee on pre-financing shall be released as and when the pre-financing is deducted from interim payments or payments of the balance to the contractor or the beneficiary in accordance with the terms of the contract or the conditions of the grant agreement.
Article 157 Indirect management
1. The selection of the persons and entities to be entrusted with the implementation of Union funds or budgetary guarantees pursuant to Article 62(1), first subparagraph, point (c), shall be transparent, justified by the nature of the action and shall not give rise to a conflict of interests. For entities referred to in Article 62(1), first subparagraph, points (c)(ii), (v), (vi) and (vii), the selection shall also take due account of their financial and operational capacity. Where the person or entity is identified in a basic act, the financial statement provided for in Article 35 shall include a justification for the choice of that particular person or entity. In cases of implementation by a network, requiring the designation of at least one body or entity per Member State or per country concerned, the body or entity shall be designated by the Member State or the country concerned in accordance with the basic act. In all other cases, the Commission shall designate such bodies or entities in agreement with Member States or countries concerned. Where the selection is made further to a call for expression of interest, it shall be undertaken in compliance with the principles of equal treatment and non-discrimination, without prejudice to the requirements laid down in this paragraph. 2. Persons and entities entrusted with the implementation of Union funds or budgetary guarantees pursuant to Article 62(1), first subparagraph, point (c), shall respect the principles of sound financial management, transparency, non-discrimination and visibility of Union action. Where the Commission establishes financial framework partnership agreements in accordance with Article 131 those principles shall be further described in such agreements. 3. Prior to signing contribution agreements, financing agreements or guarantee agreements, the Commission shall ensure a level of protection of the financial interests of the Union equivalent to the one that is provided for when the Commission implements the budget in accordance with Article 62(1), first subparagraph, point (a). The Commission shall do so by carrying out an assessment of the systems, rules and procedures of the persons or entities implementing Union funds, if it intends to rely on such systems, rules and procedures for the implementation of the action, or by taking appropriate supervisory measures in accordance with paragraph 5 of this Article. 4. The Commission shall, in accordance with the principle of proportionality, assess that persons and entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (c): (a) set up and ensure the functioning of an effective and efficient internal control system based on international best practices, including adequate management of the risks and allowing in particular to prevent, detect and correct irregularities and fraud; the internal control system setup may, where appropriate, rely on digital controls; (b) use an accounting system that provides accurate, complete and reliable information in a timely manner; (c) are subject to an independent external audit, performed in accordance with internationally accepted auditing standards by an audit service functionally independent of the person or entity concerned; (d) apply appropriate rules and procedures for providing financing to third parties, including transparent, non-discriminatory, efficient and effective review procedures, rules for recovering funds unduly paid and rules for excluding from access to funding; (e) make public adequate information on their recipients equivalent to that provided for under Article 38; (f) ensure protection of personal data equivalent to that referred to in Article 5. In addition, in agreement with the persons or entities concerned, the Commission may assess other rules and procedures such as the administrative cost accounting practices of the persons or entities. On the basis on the results of that assessment, the Commission may decide to rely on those rules and procedures. Persons or entities which have been assessed in accordance with the first and second subparagraphs shall inform the Commission without undue delay if any substantive changes are made to their systems, rules or procedures which may impact the reliability of the Commission’s assessment. 5. Where the persons or entities concerned comply only in part with paragraph 4, the Commission shall take appropriate supervisory measures ensuring the protection of the financial interests of the Union. Those measures shall be specified in the relevant agreements. Information about any such measures shall be made available to the European Parliament and to the Council at their request. 6. In multi-donor actions, where the Union contribution reimburses expenditure, the procedure set out in Article 158(4) shall consist in verifying that an amount corresponding to that paid by the Commission for the action concerned has been used by the person or entity in accordance with the conditions laid down in the relevant grant, contribution or financing agreement. 7. The Commission shall not require an ex ante assessment as referred to in paragraphs 3 and 4 of this Article: (a) for Union bodies referred to in Articles 70 and 71 and for bodies or persons referred to in Article 62(1), first subparagraph, point (c)(viii), which have adopted financial rules with prior consent of the Commission; (b) for those procedures specifically required by the Commission, including its own and those specified in basic acts or where rules and procedures are aligned with those required by the Commission. The Commission may decide not to require an ex ante assessment as referred to in paragraphs 3 and 4: (a) for third countries or the bodies they designate, in so far as the Commission retains financial management responsibilities that guarantee a sufficient protection of the financial interests of the Union; (b) for Member States organisations entrusted with the implementation of Union funds in accordance with Article 62(1), first subparagraph, point (b), for which the Commission has confirmed that the programme’s management and control system is functioning. 8. Where the systems, rules or procedures of the persons or entities referred to in Article 62(1), first subparagraph, point (c), are assessed as appropriate, Union contributions to those persons or entities may be implemented in accordance with this Title. Where such persons or entities participate in a call for proposals they shall comply with the rules of the call for proposals contained in Title VIII. In such a case, the authorising officer may decide to sign a contribution agreement or a financing agreement instead of a grant agreement.
Article 158 Implementation of Union funds and budgetary guarantees
1. Persons and entities implementing Union funds or budgetary guarantees shall provide the Commission with: (a) a report on the implementation of Union funds or budgetary guarantees, including the fulfilment of the conditions or the achievement of results referred to in Article 125(1), first subparagraph, point (a); (b) where the contribution reimburses expenditure, their accounts drawn up for the expenditure incurred; (c) a management declaration covering the information referred to in point (a) and, where appropriate, point (b) confirming that: (i) the information is properly presented, complete and accurate; (ii) the Union funds were used for their intended purpose, as defined in the contribution agreements, financing agreements or guarantee agreements, or where applicable, in the relevant sector-specific rules; (iii) the control systems put in place give the necessary guarantees concerning the legality and regularity of the underlying transactions; (d) a summary of the final audit reports and of controls carried out, including an analysis of the nature and extent of errors and weaknesses identified in systems, as well as corrective action taken or planned. Where cross-reliance on audits as referred to in Article 127 takes place, the summary referred to in the first subparagraph, point (d), of this paragraph shall include all relevant audit documentation to be relied upon. For actions terminating before the end of the financial year concerned, the final report may replace the management declaration referred to in the first subparagraph, point (c), provided it is submitted before 15 February of the following financial year. The documents referred to in the first subparagraph shall be accompanied by an opinion of an independent audit body, drawn up in accordance with internationally accepted audit standards. That opinion shall establish whether the control systems put in place function properly and are cost-effective, and whether the underlying transactions are legal and regular. The opinion shall also state whether the audit work puts in doubt the assertions made in the management declaration referred to in the first subparagraph, point (c). Where such an opinion is absent, the authorising officer may seek an equivalent level of assurance through other independent means. The documents referred to in the first subparagraph shall be provided to the Commission no later than 15 February of the following financial year. The opinion referred to in the third subparagraph shall be provided to the Commission no later than 15 March of that year. The obligations set out in this paragraph shall be without prejudice to agreements concluded with the EIB, the EIF, Member State organisations, international organisations and third countries. With regard to the management declaration, such agreements shall include at least the obligation of those entities to provide the Commission annually with a statement that, during the financial year concerned, the Union funds were used and accounted for in compliance with Article 157(3) and (4) and with the obligations laid down in such agreements. Such statement may be incorporated in the final report if the action implemented is limited to 18 months. 2. When implementing Union funds, a person or entity referred to in Article 62(1), first subparagraph, point (c) shall: (a) not support actions that contribute to money laundering, terrorism financing, tax avoidance, tax fraud or tax evasion according to applicable Union law and international and Union standards; (b) when implementing financial instruments and budgetary guarantees in accordance with Title X, not enter into new or renewed operations with entities incorporated or established in jurisdictions listed under the relevant Union policy on non-cooperative jurisdictions or that are identified as high-risk third countries pursuant to Article 9(2) of Directive (EU) 2015/849. Entities may derogate from the first subparagraph, point (b), only if the action is physically implemented in one of those jurisdictions, and does not present any indication that the relevant operation falls under any of the categories listed in the first subparagraph, point (a). Entities implementing financial instruments and budgetary guarantees in accordance with Title X shall ensure that: (a) third parties to which they directly provide support from the budget comply with the first subparagraph, points (a) and (b), of this paragraph; (b) for other third parties, rules, procedures and remedial measures assessed as appropriate in line with Article 157(4), and in particular the first subparagraph, point (a), thereof, are in place in order to ensure that those third parties benefit from support from the budget subject to respecting Union or equivalent international standards on money laundering, terrorism financing, tax avoidance, tax fraud or tax evasion. When concluding agreements with financial intermediaries, entities implementing financial instruments and budgetary guarantees in accordance with Title X shall request the financial intermediaries to report on the observance of the requirements laid down in this paragraph. 3. When implementing financial instruments and budgetary guarantees in accordance with Title X, persons and entities shall apply the principles and standards set out in Union law on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, in particular Regulation (EU) 2015/847 of the European Parliament and of the Council ( 59 ) and Directive (EU) 2015/849. They shall make funding under this Regulation contingent upon the disclosure of beneficial ownership information in accordance with Directive (EU) 2015/849 and publish country-by-country reporting data within the meaning of Article 89(1) of Directive 2013/36/EU of the European Parliament and of the Council ( 60 ) . 4. The Commission shall verify that the Union funds or budgetary guarantees have been used in accordance with the conditions laid down in the relevant agreements. Where the costs of the person or entity are reimbursed based on a simplified cost option in accordance with Article 125(1), first subparagraph, points (c), (d) and (e), Article 184(1) to (5) and Articles 185 to 188 shall apply mutatis mutandis . Where Union funds or budgetary guarantees have been used in breach of the obligations laid down in the relevant agreements, Article 132 shall apply. 5. Article 36(6), first subparagraph, shall apply to persons or entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), with regard to the direct recipients of such funds and in respect of the beneficial owners of those recipients to the extent that data on beneficial owners is collected in accordance with the rules and procedures of those persons or entities. 6. The requirements of Article 38(6) shall apply to persons or entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), where the financial support directly provided by persons or entities to third parties amounts to more than EUR 500 000. 7. Contribution agreements, financing agreements and guarantee agreements shall clearly define the responsibilities and obligations of the person or entity implementing Union funds, including the obligations set out in Article 129 and the conditions for payment of the contribution. Such agreements shall also, where applicable, define the mutually agreed remuneration which shall be commensurate with the conditions under which the actions are implemented, taking due account of situations of crisis and fragility, and, where appropriate, be performance-based. Those agreements shall also include rules on reporting to the Commission on how the tasks are performed, the results expected, including indicators on measuring performance, and the obligation for persons or entities implementing Union funds or budgetary guarantees to notify the Commission without delay of cases of established fraud and irregularities and their follow-up as well as any information relating to suspected cases of fraud, corruption or any other illegal activity affecting the financial interests of the Union. 8. All contribution agreements, financing agreements and guarantee agreements shall be made available to the European Parliament and to the Council at their request. 9. This Article shall not apply to the Union contribution to Union bodies which are subject to a separate discharge procedure under Articles 70 and 71, with the exception of possible ad-hoc contribution agreements.
Article 159 Indirect management with international organisations
1. The Commission may, in accordance with Article 62(1), first subparagraph, point (c)(ii), implement the budget indirectly with international public-sector organisations set up by international agreements (international organisations) and with specialised agencies set up by such organisations. Those agreements shall be transmitted to the Commission as part of the assessment carried out by the Commission in accordance with Article 157(3). 2. The following organisations shall be assimilated to international organisations: (a) the International Committee of the Red Cross; (b) the International Federation of National Red Cross and Red Crescent Societies. 3. The Commission may adopt a duly justified decision assimilating a non-profit organisation to an international organisation provided that it satisfies the following conditions: (a) it has legal personality and autonomous governance bodies; (b) it has been established to perform specific tasks of general international interest; (c) at least six Member States are members of that non-profit organisation; (d) it operates on the basis of a permanent structure and in accordance with systems, rules and procedures which can be assessed in accordance with Article 157(3). Such non-profit organisations shall be provided with adequate financial guarantees taking due account of the Union contribution they are entrusted with. 4. Where international organisations implement funds under indirect management, verification agreements concluded with them shall apply.
Article 160 Indirect management with Member State organisations
1. The Commission may, in accordance with Article 62(1), first subparagraph, points (c)(v) and (vi), implement the budget indirectly with Member State organisations. 2. Where the Commission implements the budget indirectly with Member States organisations, it shall rely on the systems, rules and procedures of those organisations which have been assessed in accordance with Article 157(2), (3) and (4). 3. Financial framework partnership agreements concluded with Member State organisations in accordance with Article 131 shall further specify the extent and the modalities of the cross-reliance on systems, rules and procedures of Member State organisations and may include specific provisions on the cross-reliance on assessments and audits as referred to in Articles 126 and 127.
Article 161 Indirect management with third countries
1. The Commission may implement the budget indirectly with a third country or the bodies designated by that country, as referred to in Article 62(1), first subparagraph, point (c)(i), by concluding a financing agreement describing the Union’s intervention in the third country and laying down the method of implementation for each part of the action. 2. For the part of the action implemented indirectly with the third country or the bodies it has designated, the financing agreement shall, in addition to the elements referred to in Article 158(7), clearly define the roles and responsibilities of the third country and of the Commission in the implementation of the funds. The financing agreement shall also determine the rules and procedures to be applied by the third country when implementing Union funds.
Article 162 Blending operations
1. Blending operations shall be managed either by the Commission or by persons or entities implementing Union funds pursuant to Article 62(1), first subparagraph, point (c). 2. Where financial instruments and budgetary guarantees are implemented within a blending facility or platform Title X applies. 3. For financial instruments and budgetary guarantees implemented within blending facilities or platforms, Article 212(2), first subparagraph, point (h), shall be deemed to be complied with if an ex ante evaluation is carried out prior to the establishment of the relevant blending facility or platform. 4. Annual reports pursuant to Article 41(4) and (5) shall be drawn up at the level of the blending facility or platform taking into account all financial instruments and budgetary guarantees grouped under the facility or platform and clearly identifying the different types of financial support within it.
Article 163 Principles applicable to contracts and scope
1. All contracts financed in whole or in part by the budget shall respect the principles of transparency, proportionality, equal treatment and non-discrimination. 2. All contracts shall be put out to competition on the broadest possible basis, except when use is made of the procedure referred to in Article 167(1), point (d). The estimated value of a contract shall not be determined with a view to circumventing the applicable rules, nor shall a contract be split up for that purpose. The contracting authority shall divide a contract into lots, whenever appropriate, with due regard to broad competition. 3. Contracting authorities shall not use framework contracts improperly or in such a way that their purpose or effect is to prevent, restrict or distort competition. 4. The JRC may receive funding charged to appropriations other than research and technological development appropriations in respect of its participation in procurement procedures financed in whole or in part from the budget. 5. The rules on procurement laid down in this Regulation, with the exception of the principles of transparency and equal treatment, shall not apply to: (a) the activities of the JRC on behalf of third parties; (b) financial services in connection with the issue, sale, purchase or transfer of securities or other financial instruments within the meaning of Directive 2014/65/EU, used by the Commission in the context of its borrowing and lending, asset management and treasury operations, including services provided by central banks, the European Stability Mechanism, the EIB and other international financial institutions, and national entities entrusted with the issuance and management of sovereign debt; (c) document certification and authentication services which must be provided by notaries, where such services are not open to competition on the basis of the applicable national rules. 6. With the exception of procurement in the field of external actions, prior to any of the measures referred to in the second subparagraph carried out in response to a crisis, a declaration of crisis shall be made in line with the relevant internal rules. The authorising officer responsible may only rely on a crisis declaration to: (a) launch a procurement procedure; (b) add contracting authorities pursuant to Article 168(1), fourth subparagraph, Article 168(2), sixth subparagraph, or Article 175(5), second subparagraph; (c) contact tenderers pursuant to Article 172(1), second subparagraph; (d) modify a contract pursuant to Article 175(5), first subparagraph; or (e) request supporting documents before the signature of the contract pursuant to the fourth subparagraph of point 18.1 and the fourth subparagraph of point 18.4 of Annex I, if this is justified by a situation of extreme urgency that is resulting from such crisis.
Article 164 Annex on procurement and delegation of powers
Detailed rules on procurement are laid down in Annex I to this Regulation. To ensure that Union institutions, when awarding contracts on their own account, apply the same standards as those imposed on contracting authorities covered by Directives 2014/23/EU and 2014/24/EU, the Commission is empowered to adopt delegated acts in accordance with Article 275 of this Regulation to amend Annex I to this Regulation, in order to align that Annex to amendments to those Directives and to introduce related technical adjustments.
Article 165 Mixed contracts and common procurement vocabulary
1. A mixed contract covering two or more types of procurement (works, supplies or services) or concessions (works or services) or both, shall be awarded in accordance with the provisions applicable to the type of procurement that characterises the main subject matter of the contract in question. 2. In the case of mixed contracts consisting of supplies and services, the main subject matter shall be determined by a comparison of the values of the respective supplies or services. A contract covering one type of procurement (works, supplies or services) and concessions (works or services) shall be awarded in accordance with the provisions applicable to the public contract concerned. 3. This Title shall not apply to contracts for technical assistance concluded with the EIB or the EIF. 4. Any references to nomenclatures in the context of procurement shall be made using the Common Procurement Vocabulary (CPV) as set out in Regulation (EC) No 2195/2002 of the European Parliament and of the Council ( 61 ) .
Article 166 Publicity measures
1. For procedures with a value equal to or greater than the thresholds referred to in Article 178(1) or Article 181, the contracting authority shall publish in the Official Journal of the European Union : (a) a contract notice to launch a procedure, except in the case of the procedure referred to in Article 167(1), point (d); (b) a contract award notice on the results of the procedure. 2. Procedures with a value below the thresholds referred to in Article 178(1) or Article 181 shall be advertised by appropriate means. 3. Publication of certain information on a contract award may be withheld where its release would impede law enforcement, or otherwise be contrary to the public interest, would harm the legitimate commercial interests of economic operators or might prejudice fair competition between them.
Article 167 Procurement procedures
1. Procurement procedures for awarding concession contracts or public contracts, including framework contracts shall take one of the following forms: (a) open procedure; (b) restricted procedure, including through a dynamic purchasing system; (c) design contest; (d) negotiated procedure, including without prior publication; (e) competitive dialogue; (f) competitive procedure with negotiation; (g) innovation partnership; (h) procedures involving a call for expression of interest. 2. In open procedures any interested economic operator may submit a tender. 3. In restricted procedures, competitive dialogues, competitive procedures with negotiation and innovation partnerships, any economic operator may submit a request to participate by providing the information that is requested by the contracting authority. The contracting authority shall invite all candidates, that satisfy the selection criteria and that are not in any of the situations referred to in Articles 138(1) and 143(1), to submit a tender. Notwithstanding the first subparagraph, the contracting authority may limit the number of candidates to be invited to submit a tender in the procedure on the basis of objective and non-discriminatory selection criteria, which shall be indicated in the contract notice or the call for expression of interest. The number of candidates invited shall be sufficient to ensure genuine competition. 4. In all procedures involving negotiation, the contracting authority shall negotiate with tenderers the initial and any subsequent tenders or parts thereof, except their final tenders, in order to improve their content. The minimum requirements and the criteria specified in the procurement documents shall not be subject to negotiation. A contracting authority may award a contract on the basis of the initial tender without negotiation where it has indicated in the procurement documents that it reserves the possibility to do so. 5. The contracting authority may use: (a) the open or restricted procedure for any purchase; (b) the procedures involving a call for expression of interest for contracts with a value below the thresholds referred to in Article 178(1), to preselect candidates to be invited to submit tenders in response to future restricted invitations to tender, or to collect a list of vendors to be invited to submit requests to participate or submit tenders; (c) the design contest to acquire a plan or design selected by a jury after being put out to competition; (d) the innovation partnership to develop an innovative product, service or innovative works and for the subsequent purchase of the resulting supply, services or works; (e) the competitive procedure with negotiation or the competitive dialogue for concession contracts, for the service contracts referred to in Annex XIV to Directive 2014/24/EU, in cases where only irregular or unacceptable tenders were submitted in response to an open or restricted procedure after the initial procedure has been completed, and for cases where this is justified by the specific circumstances linked, inter alia, to the nature or the complexity of the subject matter of the contract or to the specific type of contract, as further detailed in Annex I to this Regulation; (f) the negotiated procedure for contracts with a value below the thresholds referred to in Article 178(1), or the negotiated procedure without prior publication for specific types of purchases falling outside the scope of Directive 2014/24/EU or in the clearly defined exceptional circumstances set out in Annex I to this Regulation. 6. A dynamic purchasing system shall be open throughout its duration to any economic operator who satisfies the selection criteria. The contracting authority shall follow the rules of the restricted procedure for procurement through a dynamic purchasing system.
Article 168 Interinstitutional procurement, joint procurement and procurement on behalf of Member States
1. Where a contract or a framework contract is of interest to two or more Union institutions, executive agencies or Union bodies referred to in Articles 70 and 71, and whenever there is a possibility for realising efficiency gains, the contracting authorities concerned may carry out the procedure and the management of the subsequent contract or framework contract on an interinstitutional basis under the lead of one of the contracting authorities. The bodies and persons entrusted with the implementation of specific actions in the CFSP pursuant to Title V of the TEU as well as the Office of the Secretary of the Board of Governors of the European Schools may also participate in interinstitutional procedures. The terms of a framework contract shall only apply between those contracting authorities that are identified for that purpose in the procurement documents and those economic operators that are party to the framework contract. By way of derogation from the third subparagraph of this paragraph, in a situation of extreme urgency resulting from a crisis, new contracting authorities may be added by the contracting authority after the launch of the procurement procedure and before contract signature, subject to the conditions set out in Article 163(6) and provided that the modification does not alter the subject matter of the contract or the framework contract. 2. Where a contract or framework contract is necessary for the implementation of a joint action between a Union institution, a Union body referred to in Articles 70 and 71 or an executive agency referred to in Article 69 and one or more contracting authorities from Member States, the procurement procedure may be carried out jointly by the Union institution and the contracting authorities. Where it is necessary to carry out a joint procurement between a Union institution, a Union body referred to in Articles 70 and 71 or an executive agency referred to in Article 69 and one or more contracting authorities from Member States, Member States may acquire, rent or lease fully the capacities jointly procured. Joint procurement may be conducted with EFTA States and Union candidate countries if that possibility has been specifically provided for in a bilateral or multilateral treaty, or with other third countries if such possibility is specifically provided for in the applicable basic act. The procedural provisions applicable to Union institutions shall apply to the joint procurement. Where the share pertaining to or managed by the contracting authority of a Member State in the total estimated value of the contract is equal to or above 50 %, or in other duly justified cases, the Union institution may decide that the procedural rules applicable to the contracting authority of a Member State shall apply to the joint procurement, provided that those rules may be considered as equivalent to those of the Union institution. The Union institution and the contracting authority from a Member State, an EFTA State or a Union candidate country concerned by the joint procurement shall agree in particular upon the detailed practical arrangements for the evaluation of the requests for participation or of the tenders, the award of the contract, the law applicable to the contract and the competent court for hearing disputes. In a situation of extreme urgency resulting from a crisis, new contracting authorities may be added after the launch of the procurement procedure and before contract signature, subject to the conditions set out in Article 163(6) and provided that the modification does not alter the subject matter of the contract or the framework contract. 3. Where appropriate, two or more Member States may mandate a Union institution, a Union body as referred to in Articles 70 and 71 or an executive agency as referred to in Article 69 (mandated contracting authority) to act as a central purchasing body to procure on behalf of those Member States or in their name, under the following conditions: (a) the mandated contracting authority shall assess the utility, necessity and proportionality of the request of those Member States; (b) where the mandated contracting authority intends not to follow the request, it shall inform the Member States concerned and shall give reasons for its refusal; (c) the mandated contracting authority shall conduct the procurement procedure following its own rules; (d) if the mandated contracting authority decides to launch a procurement procedure on behalf of the Member States, it shall inform all Member States of its intention to carry out the procurement and invite the interested Member States to participate; (e) where it agrees to procure on behalf or in the name of the Member States, the mandated contracting authority shall draw up the proposal for a mandate agreement to be signed by the participating Member States. Such agreement shall include in particular, the practical arrangements for the involvement of the participating Member States, the conditions and time frames for possible opt-in and opt-out, and, where appropriate, rules for the allocations of the quantities between the participating Member States. A Union institution, a Union body as referred to in Articles 70 and 71 or an executive agency referred to in Article 69 may act as a wholesaler, by buying, stocking and reselling or donating supplies and services, including rentals, to Member States or partner organisations selected by the Union institution, Union body referred to in Articles 70 and 71 or by an executive agency referred to in Article 69. In this case, the Union institution, Union body referred to in Articles 70 and 71 or executive agency referred to in Article 69 shall conduct the procurement procedure following its own procurement rules.
Article 169 Preparation of a procurement procedure
1. Before launching a procurement procedure, the contracting authority may conduct a preliminary market consultation with a view to preparing the procedure. 2. In the procurement documents, the contracting authority shall identify the subject matter of the procurement by providing a description of its needs and the characteristics required of the works, supplies or services to be bought, and shall specify the applicable exclusion, selection and award criteria. The contracting authority shall also indicate which elements define the minimum requirements to be met by all tenders. Minimum requirements shall include compliance with applicable environmental, social and labour law obligations established by Union law, national law, collective agreements or the applicable international social and environmental conventions listed in Annex X to Directive 2014/24/EU.
Article 170 Award of contracts
1. Contracts shall be awarded on the basis of award criteria provided that the contracting authority has verified the following: (a) the tender complies with the minimum requirements specified in the procurement documents; (b) the candidate or tenderer is not excluded under Article 138 or rejected under Article 143; (c) the candidate or tenderer has access to procurement, and meets the selection criteria specified in the procurement documents, including the absence of professional conflicting interests. 2. The contracting authority shall apply the selection criteria to evaluate the capacity of the candidate or tenderer. Selection criteria shall only relate to the legal and regulatory capacity to pursue the professional activity, the economic and financial capacity, and the technical and professional capacity. The JRC shall be presumed to meet the requirements relating to financial capacity. 3. The contracting authority shall apply the award criteria to evaluate the tender. 4. The contracting authority shall base the award of contracts on the most economically advantageous tender, which shall consist in one of three award methods: lowest price, lowest cost or best price-quality ratio. For the lowest cost method, the contracting authority shall use a cost-effectiveness approach including life-cycle costing. For the best price-quality ratio, the contracting authority shall take into account the price or cost and other quality criteria linked to the subject matter of the contract.
Article 171 Submission, electronic communication and evaluation
1. The contracting authority shall lay down time limits for the receipt of tenders and requests to participate in accordance with point 24 of Annex I and taking into account the complexity of the purchase, leaving an adequate period for economic operators to prepare their tenders. 2. If deemed appropriate and proportionate, the contracting authority may require tenderers to lodge a guarantee to make sure that the tenders submitted are not withdrawn before contract signature. The required guarantee shall represent 1 to 2 % of the total estimated value of the contract. The contracting authority shall release the guarantees: (a) in respect of tenderers or tenders rejected as referred to in point 30.2(b) or (c) of Annex I, after having provided the information on the outcome of the procedure; (b) in respect of tenderers ranked as referred to in point 30.2(e) of Annex I, after the contract is signed. 3. The contracting authority shall open all requests to participate and tenders. However, it shall reject: (a) requests to participate and tenders which do not comply with the time limit for receipt, without opening them; (b) tenders already open when they are received, without examining their content. 4. The contracting authority shall evaluate all requests to participate or tenders not rejected during the opening phase as laid down in paragraph 3 on the basis of the criteria specified in the procurement documents with a view to awarding the contract or to proceeding with an electronic auction. 5. The authorising officer may waive the appointment of an evaluation committee as provided for in Article 153(2) in the following cases: (a) the value of the contract is below the thresholds referred to in Article 178(1); (b) on the basis of a risk analysis for the cases referred to in point 11.1, second subparagraph, points (c), (e), (f)(i), (f)(iii),(h) and (m), of Annex I; (c) on the basis of a risk analysis when reopening competition within a framework contract; (d) for procedures in the field of external actions having a value of less than or equal to EUR 20 000; (e) on the basis of a risk analysis for specific procurements under a dynamic purchasing system. 6. Requests to participate and tenders which do not comply with all the minimum requirements set out in the procurement documents shall be rejected.
Article 172 Contacts during the procurement procedure
1. Before the time limit for receipt of requests to participate or tenders, the contracting authority may communicate additional information about the procurement documents if it discovers an error or omission in the text or upon request from candidates or tenderers. Information provided shall be disclosed to all candidates or tenderers. By way of derogation from the first subparagraph, in a situation of extreme urgency resulting from a crisis, the contracting authority may contact in writing all invited candidates before the time limit for receipt of requests to participate or tenders, with the sole purpose of clarifying their intention to submit a request to participate or a tender, subject to the conditions set out in Article 163(6). 2. After the time limit for receipt of requests to participate or tenders, in every case where contact has been made, and in the duly justified cases where contact has not been made as provided for in Article 154, a record shall be kept in the procurement file.
Article 173 Award decision and information to candidates or tenderers
1. The authorising officer responsible shall decide to whom the contract is to be awarded, in compliance with the selection and award criteria specified in the procurement documents. 2. The contracting authority shall notify all candidates or tenderers, whose request to participate or tender is rejected, of the grounds on which the decision was taken. In addition, successful and unsuccessful tenderers shall be notified of the duration of the standstill period referred to in Articles 178(2) and 181(1), when such standstill period is applicable. For the award of specific contracts under a framework contract with reopening of competition, the contracting authority shall inform the tenderers of the result of the evaluation. 3. The contracting authority shall inform each tenderer who is not rejected and who makes a request in writing, of any of the following: (a) the name of the tenderer, or tenderers in the case of a framework contract, to whom the contract is awarded and, except in the case of a specific contract under a framework contract with reopening of competition, the characteristics and relative advantages of the successful tender and its total financial offer amount; (b) the progress of negotiation and dialogue with tenderers. However, the contracting authority may decide to withhold certain information where its release would impede law enforcement, would be contrary to the public interest or would prejudice the legitimate commercial interests of economic operators or might distort fair competition between them.
Article 174 Cancellation of the procurement procedure
The contracting authority may, before the contract is signed, cancel the procurement procedure totally. In the case of procedures awarded in lots or multiple sourcing procurement the cancellation may be done partially. The candidates or tenderers shall not be entitled to claim any compensation. The decision shall be justified and brought to the attention of the candidates or tenderers as soon as possible.
Article 175 Performance and modifications of the contract
1. Performance of the contract shall not start before it is signed. 2. The contracting authority may modify a contract or framework contract without a procurement procedure only in the cases provided for in paragraph 3 and provided the modification does not alter the subject matter of the contract or framework contract, within the meaning of paragraph 4. 3. A contract, a framework contract or a specific contract under a framework contract may be modified without a new procurement procedure in any of the following cases: (a) for additional works, supplies or services by the original contractor that have become necessary and that were not included in the initial procurement, where the following conditions are fulfilled: (i) a change of contractor cannot be made for technical reasons linked to interchangeability or interoperability requirements with existing equipment, services or installations; (ii) a change of contractor would cause substantial duplication of costs for the contracting authority; (iii) any increase in price, including the net cumulative value of successive modifications, does not exceed 50 % of the initial contract value; (b) where all of the following conditions are fulfilled: (i) the need for modification has been brought about by circumstances which a diligent contracting authority could not foresee; (ii) any increase in price does not exceed 50 % of the initial contract value; (c) where the value of the modification is below the following thresholds: (i) the thresholds referred to in Article 178(1), and in point 39 of Annex I in the field of external actions, applicable at the time of the modification; and (ii) 10 % of the initial contract value for public service and supply contracts and works or services concession contracts and 15 % of the initial contract value for public works contracts; (d) where both of the following conditions are fulfilled: (i) the minimum requirements of the initial procurement procedure are not altered; (ii) any ensuing modification of value complies with the conditions set out in this subparagraph, point (c), unless such modification of value results from the strict application of the procurement documents or contractual provisions. The initial contract value shall not take into account price revisions. The net cumulative value of several successive modifications under the first subparagraph, point (c), shall not exceed any threshold referred to therein. The contracting authority shall apply the ex post publicity measures set out in Article 166. 4. A modification shall be considered to be altering the subject matter of the contract or framework contract, where it renders the contract or framework contract materially different in substance from the one initially concluded. In any event, a modification shall be considered to be altering the subject matter of the contract or framework contract where one or more of the following conditions are met: (a) the modification introduces or supresses significant conditions which, had they been part of the initial procurement procedure, would have allowed for the admission of other tenderers than those initially selected or for the acceptance of a tender other than that originally accepted, or would have attracted additional participants in the procurement procedure, or would not have led to the selection of the successful tenderer; (b) the modification significantly changes the economic balance of the contract or the framework contract in favour of the contractor in a manner which was not provided for in the initial contract or framework contract; (c) the modification significantly extends the scope of the contract or framework contract. 5. By way of derogation from paragraph 3, point (b)(ii), in a situation of extreme urgency resulting from a crisis, the contracting authority may, in agreement with the contractor, modify a contract or a framework contract beyond the threshold of 50 % and up to 100 % of the initial contract value, provided that this is justified as strictly necessary to respond to the evolution of the crisis, subject to the conditions set out in Article 163(6). By way of derogation from paragraph 3, in a situation of extreme urgency resulting from a crisis, the terms of a framework contract may be modified by common agreement to apply to those new contracting authorities added following a modification of the framework contract, including in the case of inter-institutional or joint procurements, subject to the conditions set out in Article 163(6).