Commission Regulation (EC) No 718/2007 of 12 June 2007 implementing Council Regulation (EC) No 1085/2006 establishing an instrument for pre-accession assistance (IPA)

The Commission may make financial corrections, by cancelling all or part of the Community contribution to a programme, in the situations referred to in Article 49(2).

Where individual cases of irregularity are identified, the Commission shall take into account the systemic nature of the irregularity to determine whether a flat-rate or extrapolated financial correction should be applied.

The Commission shall, when deciding the amount of a correction, take into account the nature and gravity of the irregularity and/or the extent and financial implications of the weaknesses or the deficiencies found in the management and control system in the programme concerned.

Before taking a decision on a financial correction, the Commission shall inform the national authorising officer of its provisional conclusions and requesting his comments within two months.

The Commission shall take account of any evidence supplied by the beneficiary country within the time limits mentioned in paragraph 1.

The Commission shall endeavour to take a decision on the financial correction within six months after opening the procedure as set out in paragraph 1.

Any repayment to the general budget of the European Union shall be effected before the due date indicated in the recovery order drawn up in accordance with Article 72 of Regulation (EC, Euratom) No 1605/2002. The due date shall be the last day of the second month following the issuing of the order.

Any delay in repayment shall give rise to interest on account of late payment, starting on the due date and ending on the date of actual payment. The rate of such interest shall be one-and-a-half percentage points above the rate applied by the European Central Bank in its main refinancing operations on the first working day of the month in which the due date falls.

The resources from the Community contribution cancelled according to Article 49 shall be paid to the Community Budget, including interest thereon.

The contribution cancelled or recovered in accordance with Article 50 may not be re-used for the operation or operations that were the subject of the recovery or the adjustment, nor, where the recovery or adjustment is made for a systemic irregularity, for existing operations within the whole or part of the priority axis in which the systemic irregularity occurred.

Payment of the Community contribution by the Commission shall be made within the limits of the funds available.

In accordance with Article 81 of Regulation (EC, Euratom) No 1605/2002, payments shall be made on production of proof that the relevant operation is in accordance with the provisions of the IPA Regulation, this Regulation, the contract or the grant.

The appropriations needed to cover expenditure as indicated in the annual programmes shall be made available through one or more of the following actions: payment of the entire amount due; pre-financing; one or more interim payments; and payment of the balance of the amounts due.

Payments by the Commission shall be made whenever possible in euro to a euro account.

A programme is closed when all the contracts and grants funded by this programme have been closed.

After a final payment application has been received, a contract or grant is considered closed as soon as one of the events referred to in Article 47(1) occurs.

The closure of a contract or grant does not prejudice the Commission's right to undertake a financial correction at a later stage.

Evaluations shall aim to improve the quality, effectiveness and consistency of the assistance from Community funds and the strategy and implementation of the programmes.

Multiannual indicative planning documents, as described in Article 5, shall be subject to ex-ante evaluation, carried out by the Commission.

The Commission may also carry out strategic evaluations.

Programmes shall be subject to ex-ante evaluations, as well as interim and/or ex-post evaluations, as appropriate, in accordance with the specific provisions laid down under each IPA component in Part II of this Regulation and in accordance with Article 21 of Regulation (EC, Euratom) No 2342/2002.

The results of evaluations shall be taken into account in the programming and implementation cycle.

The Commission shall develop evaluation methods, including quality standards and using objective and measurable indicators.

In the case of decentralised management, the beneficiary country shall, within six months after the entry into force of the first financing agreement, set up an IPA monitoring committee, in agreement with the national IPA coordinator and the Commission, to ensure coherence and coordination in the implementation of the IPA components.

The IPA monitoring committee shall satisfy itself as to the overall effectiveness, quality and coherence of the implementation of all programmes and operations towards meeting the objectives set out in the financing agreements as well as in the multi-annual indicative planning documents. For this purpose, it shall base itself on the elements given by the sectoral monitoring committees, as provided for in Article 59(3).

The IPA monitoring committee may make proposals to the Commission, the national IPA coordinator and the national authorising officer for any actions to ensure the coherence and coordination between the programmes and operations implemented under the different components, as well as for any cross-component corrective measures needed to ensure the achievement of the global objectives of the assistance provided, and to enhance its overall efficiency. It may also make proposals to the relevant sectoral monitoring committee(s) for decisions on any corrective measures to ensure the achievements of programme objectives and enhance the efficiency of assistance provided under the programmes or IPA component(s) concerned.

The IPA monitoring committee shall adopt its internal rules of procedure in compliance with a monitoring committee mandate established by the Commission, and within the institutional, legal and financial framework of the beneficiary country concerned.

Unless otherwise provided in the monitoring committee mandate set out by the Commission, the provisions of this paragraph shall apply.

The IPA monitoring committee shall be assisted by sectoral monitoring committees set up under the IPA components within six months after the entry into force of the first financing agreement, in accordance with the specific provisions laid down in Part II. The sectoral monitoring committees shall be attached to programmes or components. They may include representatives of civil society, where appropriate.

Each sectoral monitoring committee shall satisfy itself as to the effectiveness and quality of the implementation of the programmes and operations concerned, in accordance with the specific provisions laid down for each component in Part II, and for the related sectoral and/or financing agreements. It may make proposals to the Commission and the national IPA coordinator, with a copy to the national authorising officer, for decisions on any corrective measures to ensure the achievements of programme objectives and enhance the efficiency of the assistance provided.

The sectoral monitoring committees shall report to the IPA monitoring committee. They shall provide the IPA monitoring committee in particular with information relating to:

The operating structures shall draw up a sectoral annual report and a sectoral final report on the implementation of the programmes for which they are responsible, in compliance with the procedures defined in Part II for each IPA component.

The reports referred to in paragraph 1 shall be sent to the national IPA coordinator, the national authorising officer and to the Commission, after examination by the sectoral monitoring committees.

On the basis of the reports referred to in paragraph 1, the national IPA coordinator shall send to the Commission and the national authorising officer, after examination by the IPA monitoring committee, annual and final reports on the implementation of assistance under the IPA Regulation.

The annual report on implementation referred to in paragraph 3, which shall be sent by 31 August each year and for the first time in 2008, shall synthesise the different sectoral annual reports issued under the different components and shall include information about:

The final report on the implementation as referred to in paragraph 3 shall cover the whole period of implementation and may include the latest annual report mentioned in paragraph 4.

In the case of centralised and joint management, information on programmes and operations shall be provided by the Commission, with the assistance of the national IPA coordinator as appropriate. In the case of decentralised management, and in all cases for programmes or part of programmes under the cross-border cooperation component not implemented through shared management, the beneficiary country and the national IPA coordinator shall provide information on and publicise programmes and operations. In the case of shared management, the Member States, the beneficiary countries and the managing authority as referred to in Article 103, shall provide information on and publicise programmes and operations. The information shall be addressed to the citizens and beneficiaries, with the aim of highlighting the role of the Community and ensuring transparency.

In the case of decentralised management, the operating structures shall be responsible for organising the publication of the list of the final beneficiaries, the names of the operations and the amount of Community funding allocated to operations. They shall ensure that the final beneficiary is informed that the acceptance of funding is also an acceptance of their inclusion in the list of final beneficiaries published. Any personal data included in this list shall be processed in accordance with the requirements of Regulation (EC) No 45/2001 of the European Parliament and the Council ([^E0010]).

In accordance with Article 90 of Regulation (EC, Euratom) No 1650/2002, the Commision shall publish the relevant information on the contracts. The Commission shall publish the results of the tender procedure in the Official Journal of the European Union, on the EuropeAid website and in any other appropriate media, in accordance with the applicable contract procedures for Community external actions.

The Commission and the relevant national, regional or local authorities of the beneficiary countries shall agree on a coherent set of activities to make available, and publicise, in the beneficiary countries, information about assistance under the IPA Regulation.

Implementation of the activities referred to in paragraph 1 shall be the responsibility of the final beneficiaries, and shall be funded from the amount allocated to the relevant programmes or operations.

Assistance under this component may be granted to the beneficiary countries in particular in the following areas:

In addition to the areas covered in paragraph 1, assistance may also be granted under this component to beneficiary countries listed in Annex II to the IPA Regulation, for the following areas:

Assistance under this component may, in particular, be provided through:

For beneficiary countries listed in Annex II to the IPA Regulation, assistance under this component may also be provided through measures and actions of a similar nature as those foreseen under the regional development, human resources development and rural development components, including investment type operations.

Assistance may also be used to cover the costs of the Community's contribution to international missions, initiatives or organisations active in the interest of the beneficiary country, including administrative costs.

Under this component assistance may also be implemented by a contribution to a Union trust fund for external action (trust fund contribution), created under Article 187 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council ([^E0011]), in pursuing the objectives set out in the relevant programmes within the respective programme area.

Expenditure under this component shall be eligible if it has been incurred after the procurements, contracts and grants have been signed, except in the cases explicitly provided for in Regulation (EC, Euratom) No 1605/2002.

In addition to the rules set out in Article 34(3), the following expenditure shall not be eligible:

By way of derogation from Article 34(3), it shall be decided on a case by case basis whether the following expenditure is eligible:

For the purposes of this component, the eligible expenditure as referred to in Article 38(1) shall be based on the public expenditure in the case of decentralised management, and on the total expenditure in the case of centralised and joint management.

In the case of decentralised management, in addition to the general rules set out in Articles 37 and 38, this paragraph shall apply to assistance under this component.

In the event of centralised or joint management, the Commission shall decide the rate of the Community contribution, which may amount to 100 % of the eligible expenditure.

National programmes shall be adopted by the Commission on the basis of proposals from the beneficiary country, which shall take into account the principles and priorities set out in the multiannual indicative planning documents referred to in Article 5. Proposals shall in particular list the priority axes to be covered in the beneficiary country concerned, which may include the areas of assistance laid down in Article 64.

Beneficiary countries’ proposals shall be selected through transparent procedures, including consultation of the relevant stakeholders while proposals are being drafted.

Each year, following discussions between the Commission and the beneficiary country about their proposals, project fiches shall be submitted to the Commission by the beneficiary country. The project fiches shall set out clearly the priority axes, the envisaged operations and their chosen implementing methods. Financing proposals shall be prepared by the Commission in view of the project fiches.

Financing proposals shall be adopted by means of a financing decision, in accordance with Article 8.

A financing agreement as provided for in Article 8 shall be concluded by the Commission and the beneficiary country.

Assistance may be granted to support the participation of beneficiary countries in Community programmes. The participation shall be set down in the national programmes.

The total funds given in Community support for participation in Community programmes shall not exceed the limit set down in the national programme.

The participation of beneficiary countries in Community programmes shall follow the specific terms and conditions set out for each such programme in the memorandum of understanding to be concluded by the Commission and the beneficiary country, in accordance with the agreements establishing the general principles for participation of the beneficiary countries in Community programmes. It shall include provisions on both the total amount of the beneficiary country's contribution and the amount funded by assistance under the IPA regulation.

Assistance may be granted to support the participation of the beneficiary countries in Community agencies. The participation shall be set down in the national programmes.

The beneficiary countries may be invited to participate on an ad hoc basis in the work of various Community agencies. The costs of their participation may be funded by assistance provided under the IPA Regulation in a similar way to that applicable to participation in Community programmes.

The Commission shall draw up regional and horizontal programmes, in full coherence and coordination with national programmes, on the basis of the relevant multi-annual indicative planning documents and in consultation with the relevant stakeholders.

The regional and horizontal programmes shall be designed to promote regional cooperation and to strengthen multi-country exchanges in the beneficiary countries, and to support initiatives encouraging beneficiary countries to cooperate in areas of common interest.

The regional programmes shall cover beneficiary countries in the Western Balkans. The programmes shall in particular target reconciliation, reconstruction and political cooperation in the Region.

Horizontal programmes shall cover some or all beneficiary countries in areas of common interest where assistance can be implemented more effectively and economically through such programmes than through national programmes.

Under the regional and horizontal programmes, assistance may be granted in areas such as project preparation facility, support to civil society, customs, support for small and medium-scale enterprises, municipal finance facilities and municipal infrastructure, statistics, nuclear safety, information and communication.

Assistance under this component shall be granted through centralised, decentralised or joint management, in accordance with Articles 53 of Regulation (EC, Euratom) No 1605/2002.

The objective shall be decentralised management where national programmes are concerned.

Regional and horizontal programmes shall be implemented by the Commission on a centralised basis or by joint management with international organisations as defined by Article 53d of Regulation (EC, Euratom) No 1605/2002.

Where, in the event of decentralised management, in accordance with Article 22(2)(b), the national IPA coordinator exercises his responsibility for the programming of this component at national level, he shall carry out the following tasks:

Programme authorising officers shall designate officials within the national administration as senior programme officers. Under the overall responsibility of the programme authorising officer concerned, senior programme officers shall carry out the following tasks:

Where Community funds have been managed by existing national bodies in the beneficiary countries under Regulation (EEC) No 3906/89 or Regulation (EC) No 2500/2001 prior to the date of entry into force of this Regulation, those bodies (hereinafter referred to as the ‘existing national bodies’) shall manage funds under the transition assistance and institution building component, until the Commission adopts a Decision on conferral of management powers.

In no case the existing national bodies can manage funds under the transition assistance and institution building component without a conferral of management powers under this Regulation for more than one year from the entry into force of this Regulation.

The Commission shall decide whether to confer management powers on the existing national bodies in particular having regard to the list of deviations submitted in accordance with paragraph 4 and the decision taken by the national authorising officer in accordance with paragraph 5.

The national authorising officer shall carry out an assessment of the operating structure, which include the existing national bodies, with regard to the requirements referred to in Article 11. In particular, he shall establish a list of any requirements under this Regulation, as set out in Article 11, which the operating structure does not comply with, based on an opinion of an external auditor functionally independent from all actors in the management and control system.

Where the non-compliance referred to in paragraph 4 is deemed to be compatible with the efficient and effective functioning of the operating structures, the national authorising officer may decide to accredit the bodies concerned under this Regulation.

Where the non-compliance referred to in paragraph 4 is not deemed to be compatible with the efficient and effective functioning of an operating structure, the national authorising officer shall proceed to establish an accreditation for the operating structure concerned, in accordance with the provisions of Article 13.

In the event the Commission decides to confer management powers on the existing national bodies under this Regulation, the Commission Decision may lay down further conditions on the national authorities. In the event of further conditions, the Commission shall set a time limit for compliance by the national authorities for the conferral of management powers to remain effective. The Commission Decision shall also lay down the list of ex ante controls as referred to in Articles 14(3).

Irrespective of the national authorising officer's decision, the Commission may decide to maintain, suspend, or withdraw the conferral of management powers on any of the bodies concerned at any time.

At all stages, the national authorising officer shall ensure that all the information required by the Commission is provided by the beneficiary country.

Twinning projects shall be set up in the form of a grant, whereby the selected Member State administrations agree to provide the requested public sector expertise against the reimbursement of the expenses thus incurred.

A twinning manual including notably a system of fixed rates and prices for the reimbursement of the provided public sector expertise by the selected Member State administrations shall be established by the Commission and updated regularly.

By way of derogation from Article 40(6), when the ceiling of 95 % is reached, the national authorising officer shall only submit a new certified statement of expenditure and information about the amounts recovered when he requests the payment of the final balance.

Pre-financing shall in principle represent 50 % of the Community contribution to the programme concerned. It may be paid in yearly instalments. The rate of 50 % may be raised if the national authorising officer demonstrates that the resulting amount will not cover the pre-financing of the contracts and grants signed at national level.

The amount to be pre-financed shall be calculated as the sum of the estimate of the amount to be contracted by year, and the actual amount for which contractual obligations have been entered into in the previous years. With the exception of that concerning participation in Community programmes and agencies, pre-financing shall only be paid once the first call for tender or call for proposals is launched.

The payments for the participation in Community programmes and agencies may amount to 100 % of the Community contribution relating to this participation.

Programmes under the transition assistance and institution building component shall be subject to ex-ante as well as interim and/or ex-post evaluation, in accordance with Article 57.

Prior to the conferral of management powers on the beneficiary country, all evaluations shall be carried out by the Commission.

In line with Article 22 of the IPA Regulation, the relevant evaluation reports shall be sent to the IPA Committee for discussion.

In the event of decentralised management, in accordance with Article 59, the national IPA coordinator shall establish a sectoral monitoring committee for the transition assistance and institution building component, hereinafter referred to as the ‘TAIB committee’.

The TAIB committee shall meet at least twice a year, at the initiative of the beneficiary country or the Commission. It shall draw up its rules of procedure, in compliance with a sectoral monitoring committee mandate set out by the Commission, and within the institutional, legal and financial framework of the beneficiary country concerned. It shall adopt these rules of procedure in agreement with the national IPA coordinator, the national authorising officer and the IPA monitoring committee.

The TAIB committee shall be chaired by the national IPA coordinator. Its members shall include the national authorising officer, the programme authorising officers and, where appropriate, other representatives of the operating structure, representatives of the Commission, as well as, where appropriate, representatives of international financial institutions and civil society, designated by the beneficiary country in agreement with the Commission.

In accordance with Article 59(2), the TAIB committee shall satisfy itself as to the effectiveness and quality of the programmes and operations concerned by, in particular:

The TAIB committee shall monitor all ongoing programmes under this component. In the case of, inter alia, investment operations, transfer of assets or privatisations, the beneficiary country shall monitor the programmes until their closure and shall notify the TAIB committee of any changes to the results of these programmes that significantly affect their impact, sustainability and ownership.

The TAIB committee may be assisted by sectoral monitoring sub-committees, set up by the beneficiary country to monitor programmes and operations of this component, grouped by monitoring sectors. Sub-committees shall report to the TAIB committee. They shall draw up and adopt their internal rules of procedure, in compliance with a mandate to be set out by the Commission.

In the event of decentralised management, the operating structure shall send the Commission, the national IPA coordinator and the national authorising officer a sectoral annual report by 30 June each year.

A sectoral final report shall be submitted to the Commission, the national IPA coordinator and the national authorising officer at the latest 6 months after the closure of the programme. The sectoral final report shall cover the whole period of implementation and include the last sectoral annual report.

The sectoral reports shall be examined by the TAIB committee prior to their transmission to the Commission, the national IPA coordinator and the national authorising officer.

The sectoral reports shall include the following information:

The cross-border cooperation component shall provide assistance to the following:

The Community assistance under paragraph 1 shall be aimed at strengthening cross-border cooperation through joint local and regional initiatives, combining both external aid and economic and social cohesion objectives. In particular, the cooperation shall pursue one or more of the following broad objectives:

The objectives referred to in paragraph 2 may in particular be pursued by:

The cross-border cooperation component may also support, where appropriate, the participation of eligible regions of the beneficiary countries in transnational and interregional programmes under the European territorial cooperation objective of the Structural Funds and in multilateral sea basin programmes under Regulation (EC) No 1638/2006 of the European Parliament and of the Council ([^E0012]). The rules governing the participation of beneficiary countries in the above programmes shall be established in the relevant programming documents and/or in the relevant financing agreements, as appropriate.

For the purposes of cross-border cooperation as referred to in Article 86(1)(a), the eligible areas for financing shall be as follows:

For the purposes of cross-border cooperation as referred to in Article 86(1)(b), the eligible areas for financing shall be as follows:

For the purposes of participation in the programmes referred to in Article 86(4), the eligible regions of the beneficiary countries shall be established in the relevant programming document, as appropriate.

Expenditure under this component shall be eligible if it has actually been paid between 1 January 2007 and 31 December of the third year following the last budgetary commitment, for operations or part of operations implemented within Member States, and incurred after the signature of the financing agreement for operations or part of operations implemented within beneficiary countries.

In addition to the rules set out in Article 34(3), the following expenditure shall not be eligible:

By way of derogation from Article 34(3), the following expenditure shall be eligible:

In addition to the technical assistance for the cross-border programme referred to Article 94, the following expenditure paid by public authorities in the preparation or implementation of an operation shall be eligible:

Without prejudice to the provisions of paragraphs 1 to 4, further rules on eligibility of expenditure may be laid down by the participating countries in the cross-border programme.

For the purposes of this component, the eligible expenditure as referred to in Article 38(1) shall be based either on the public expenditure or on the total expenditure, as agreed by the participating countries and laid down in the cross-border programme.

The Community contribution for cross-border programmes at the level of priority axis shall not exceed the ceiling of 85 % of the eligible expenditure.

The Community contribution for each priority axis shall not be less than 20 % of the eligible expenditure.

No operation shall benefit from a higher co-financing rate than the one relating to the priority axis concerned.

During the period of eligibility referred to in paragraph 1 of Article 89, in addition to the provisions of Article 34(4):

For State aid to enterprises in the meaning of Article 87 of the Treaty, public aid granted under cross-border programmes shall observe the ceilings on State aid.

Assistance to the cross-border cooperation referred to in Article 86(1) shall in principle be granted within the framework of multi-annual programmes for cross-border cooperation, hereinafter referred to as the ‘cross-border programmes’.

Cross-border programmes shall be drawn up for each border or group of borders by an appropriate grouping at NUTS level 3 regions or, in the absence of NUTS classification, equivalent areas.

Each cross-border programme shall be jointly drawn up by the participating countries, in cooperation with the partners referred to in Article 11 of Regulation (EC) No 1083/2006.

The participating countries shall jointly submit a proposal for a cross-border programme to the Commission, containing all the elements referred to in Article 94.

The Commission shall appraise the proposed cross-border programme to determine whether it contains all the elements referred to in Article 94 and whether it contributes to the goals and priorities of the relevant multi-annual indicative planning document(s) referred to in Article 5.

The Commission shall adopt the cross-border programme by decision.

For cross-border programmes concerning the cooperation referred to in Article 86(1)(a), multi-annual financing agreements shall be concluded between the Commission and each of the beneficiary countries participating in the programme, on the basis of the decision referred to in Article 91(6).

For cross-border programmes concerning the cooperation referred to in Article 86(1)(b), annual or multiannual financing agreements shall be concluded between the Commission and each of the beneficiary countries participating in the programme on the basis of the decision referred to in Article 91(6). Each such financing agreement shall cover the Community contribution for the beneficiary country and the year(s) concerned, as specified in the financing plan referred to in Article 94(2), second subparagraph.

At the initiative of the participating countries or that of the Commission in agreement with the participating countries, cross-border programmes may be re-examined and, if necessary, the remainder of the programme revised, in one or more of the following cases:

The Commission shall adopt the revised cross-border programme by decision and a new financing agreement(s) as mentioned in Article 92 shall be concluded accordingly. Where relevant, the provisions of Article 9(3) of the IPA Regulation shall apply.

Each cross-border programme shall contain the following information:

Furthermore, the cross-border programmes concerning cooperation referred to under Article 86(1)(a), shall contain a single financing plan based on the multi-annual indicative financial framework with no breakdown by participating countries, comprising a table specifying for each year covered by the multi-annual indicative financial framework and for each priority axis, the amount of the Community contribution and its rate, as well as the amount financed by the national counterparts.

Cross-border programmes shall finance joint operations which have been jointly selected by the participating countries through a single call for proposals covering the whole eligible area.

Operations selected for cross-border programmes shall include final beneficiaries from at least two participating countries which shall cooperate in at least one of the following ways for each operation: joint development, joint implementation, joint staffing and joint financing.

For cross-border programmes concerning cooperation referred to under Article 86(1)(a), operations selected shall include final beneficiaries from at least one of the participating Member States and one of the participating beneficiary countries.

The selected operations fulfilling the above-mentioned conditions may be implemented in a single country provided that they deliver a clear cross-border benefit.

Each programme shall establish eligibility rules for the selection of operations which prevent a duplication of efforts among different cross-border programmes, being under the IPA or other Community instruments.

For cross-border programmes concerning the cooperation referred to under Article 86(1)(a), the final beneficiaries of an operation shall appoint a lead beneficiary among themselves prior to the submission of the proposal for the operation. The lead beneficiary shall be established in one of the participating countries and shall assume the following responsibilities:

For cross-border programmes concerning cooperation referred to under Article 86(1)(a) implemented under the transitional arrangements laid down in Article 99:

For cross-border programmes concerning cooperation referred to under Article 86(1)(b), the final beneficiaries of an operation in each participating beneficiary country shall appoint a lead beneficiary among themselves prior to the submission of the proposal for an operation. The lead beneficiaries shall be established in the respective participating beneficiary country and shall assume the responsibilities listed under points (a) to (d) of paragraph 1 for the part of the operation taking place in the respective country.

Each final beneficiary participating in the operation is responsible for irregularities in the expenditure which it has declared.

In duly justified cases, Community funding may finance expenditure incurred in implementing operations or parts of operations up to a limit of 20 % of the amount of the Community contribution to the cross-border programme in NUTS level 3 regions or, in the absence of NUTS classification, equivalent areas, adjacent to the eligible areas for that programme. In exceptional cases as agreed between the Commission and the participating countries, this flexibility may be extended to the NUTS level 2 regions or, in the absence of NUTS classification, equivalent areas in which the eligible areas are located.

The participating countries of each programme shall ensure the legality and regularity of these expenditures.

For cross-border cooperation referred to under Article 86(1)(a), the programmes shall in principle be implemented through shared management with Member States by the authorities referred to in Article 102 bearing responsibility for the implementation of the cross-border programme in the participating Member States and beneficiary countries.

For cross-border cooperation referred to under Article 86(1)(b), the programmes shall be implemented under centralised or decentralised management in accordance with Article 53 of Regulation (EC, Euratom) No 1605/2002, with respectively the Commission or the national authorising officer and the operating structures in each participating country bearing responsibility for the implementation of the programme in the respective country.

For cross-border cooperation referred to under Article 86(1)(a) where the participating countries are not yet ready to implement the entire cross-border programme in shared management with Member States according to the provisions laid down in Section 2 of this Chapter, the programme shall be implemented according to the transitional arrangements laid down in this Article.

The financing plan included in the cross-border programme referred to in the first subparagraph of Article 94(2) shall contain: