Legalize / European Union / Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 / History

Reform history

Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006

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The rules set out in this Regulation shall apply without prejudice to the provisions laid down in Regulation (EU) No 1306/2013 of the European Parliament and of the Council (1) and to the specific provisions laid down in the following Regulations (the 'Fund-specific Regulations') in accordance with the fifth paragraph of this Article:

(1)Regulation (EU) No 1301/2013 (the 'ERDF Regulation');

(2)Regulation (EU) No 1304/2013 (the 'ESF Regulation');

(3)Regulation (EU) No 1300/2013 (the 'CF Regulation');

(4)Regulation (EU) No 1299/2013 (the 'ETC Regulation');

(5)Regulation (EU) No 1305/2013 (the 'EAFRD Regulation'); and

(6)a future Union legal act establishing the conditions for the financial support for maritime and fisheries policy for the programming period 2014 - 2020 (the 'EMFF Regulation").

(1) Regulation (EU) No 1301/2013 (the 'ERDF Regulation');

(2) Regulation (EU) No 1304/2013 (the 'ESF Regulation');

(3) Regulation (EU) No 1300/2013 (the 'CF Regulation');

(4) Regulation (EU) No 1299/2013 (the 'ETC Regulation');

(5) Regulation (EU) No 1305/2013 (the 'EAFRD Regulation'); and

(6) a future Union legal act establishing the conditions for the financial support for maritime and fisheries policy for the programming period 2014 - 2020 (the 'EMFF Regulation").

Part Two of this Regulation shall apply to all the ESI Funds except when it explicitly allows for derogations. Parts Three and Four of this Regulation shall establish complementary rules to Part Two that apply respectively to the Funds and to the Funds and the EMFF and may explicitly allow for derogations in the Fund-specific Regulations concerned. The Fund-specific Regulations may establish complementary rules to Part Two of this Regulation for the ESI Funds, to Part Three of this Regulation for the Funds and to Part Four of this Regulation for the Funds and the EMFF. The complementary rules in the Fund-specific Regulations shall not be in contradiction with Parts Two, Three or Four of this Regulation. In case of doubt about the application between provisions, Part Two of this Regulation shall prevail over the Fund-specific rules, and Parts Two, Three and Four of this Regulation shall prevail over the Fund-specific Regulations.

@@ -42,87 +42,85 @@

For the purposes of this Regulation, the following definitions apply;

(1)'Union strategy for smart, sustainable and inclusive growth' means the targets and shared objectives guiding the action of Member States and the Union set out in the Conclusions adopted by the European Council of 17 June 2010 as Annex I (New European Strategy for Jobs and Growth, EU Headline Targets), Council Recommendation of 13 July 2010 (2) and in Council Decision 2010/707/EU (3), and any revision of such targets and shared objectives;

(2)'a strategic policy framework' means a document or a set of documents established at national or regional level, which sets out a limited number of coherent priorities established on the basis of evidence and a timeframe for the implementation of those priorities and which may include a monitoring mechanism;

(3)'smart specialisation strategy' means the national or regional innovation strategies which set priorities in order to build competitive advantage by developing and matching research and innovation own strengths to business needs in order to address emerging opportunities and market developments in a coherent manner, while avoiding duplication and fragmentation of efforts; a smart specialisation strategy may take the form of, or be included in, a national or regional research and innovation (R&I) strategic policy framework;

(4)'Fund-specific rules' means the provisions laid down in, or established on the basis of, Part Three or Part Four of this Regulation or a Regulation governing one or more of the ESI Funds listed in the fourth paragraph of Article 1;

(5)'programming' means the process of organisation, decision-making and allocation of financial resources in several stages, with the involvement of partners in accordance with Article 5, intended to implement, on a multi-annual basis, joint action by the Union and the Member States to achieve the objectives of the Union strategy for smart, sustainable and inclusive growth;

(6)'programme' means an 'operational programme' as referred to in Part Three or Part Four of this Regulation and in the EMFF Regulation, and 'rural development programme' as referred to in the EAFRD Regulation;

(7)'programme area' means a geographical area covered by a specific programme or, in the case of a programme covering more than one category of region, the geographical area corresponding to each separate category of region;

(8)'priority' in Parts Two and Four of this Regulation means the 'priority axis' referred to in Part Three of this Regulation for ERDF, ESF and the Cohesion Fund and the 'Union priority' referred to in the EMFF Regulation and in the EAFRD Regulation;

(9)'operation' means a project, contract, action or group of projects selected by the managing authorities of the programmes concerned, or under their responsibility, that contributes to the objectives of a priority or priorities; in the context of financial instruments, an operation is constituted by the financial contributions from a programme to financial instruments and the subsequent financial support provided by those financial instruments;

(10)'beneficiary' means a public or private body or a natural person, responsible for initiating or both initiating and implementing operations, and:

(a)in the context of State aid, the body which receives the aid, except where the aid per undertaking is less than EUR 200 000 , in which case the Member State concerned may decide that the beneficiary is the body granting the aid, without prejudice to Commission Regulations (EU) No 1407/2013 (4), (EU) No 1408/2013 (5) and (EU) No 717/2014 (6); and

(b)in the context of financial instruments under Title IV of Part Two of this Regulation, the body that implements the financial instrument or the fund of funds as appropriate;

(11)'financial instruments' means financial instruments as defined in the Financial Regulation, save where otherwise provided in this Regulation;

(12)'final recipient' means a legal or natural person receiving financial support from a financial instrument;

(13)'State aid' means aid falling under Article 107(1) TFEU which shall be deemed for the purposes of this Regulation also to include de minimis aid within the meaning of Commission Regulation (EC) No 1998/2006 (7), Commission Regulation (EC) No 1535/2007 (8) and Commission Regulation (EC) No 875/2007 (9);

(14)'completed operation' means an operation that has been physically completed or fully implemented and in respect of which all related payments have been made by beneficiaries and the corresponding public contribution has been paid to the beneficiaries;

(15)'public expenditure' means any public contribution to the financing of operations the source of which is the budget of national, regional or local public authorities, the budget of the Union related to the ESI Funds, the budget of public law bodies or the budget of associations of public authorities or of public law bodies and, for the purpose of determining the co-financing rate for ESF programmes or priorities, may include any financial resources collectively contributed by employers and workers;

(16)'public law body' means any body governed by public law within the meaning of point 9 of Article 1 of Directive 2004/18/EC of the European Parliament and of the Council (10) and any European grouping of territorial cooperation (EGTC) established in accordance with Regulation (EC) No 1082/2006 of the European Parliament and of the Council (11), regardless of whether the EGTC is considered to be a public law body or a private law body under the relevant national implementing provisions;

(17)'document' means a paper or an electronic medium bearing information of relevance in the context of this Regulation;

(18)'intermediate body' means any public or private body which acts under the responsibility of a managing or certifying authority, or which carries out duties on behalf of such an authority, in relation to beneficiaries implementing operations;

(19)'community-led local development strategy' means a coherent set of operations the purpose of which is to meet local objectives and needs, and which contributes to achieving the Union strategy for smart, sustainable and inclusive growth, and which is designed and implemented by a local action group;

(20)'Partnership Agreement' means a document prepared by a Member State with the involvement of partners in line with the multi-level governance approach, which sets out that Member State's strategy, priorities and arrangements for using the ESI Funds in an effective and efficient way so as to pursue the Union strategy for smart, sustainable and inclusive growth, and which is approved by the Commission following assessment and dialogue with the Member State concerned;

(21)'category of regions' means the categorisation of regions as 'less developed regions', 'transition regions' or 'more developed regions' in accordance with Article 90(2);

(22)'payment application' means a payment application or declaration of expenditure submitted by the Member State to the Commission;

(23)'EIB' means the European Investment Bank, the European Investment Fund or any subsidiary of the European Investment Bank;

(24)'Public private partnerships' (PPPs) means forms of cooperation between public bodies and the private sector, which aim to improve the delivery of investments in infrastructure projects or other types of operations, delivering public services through risk sharing, pooling of private sector expertise or additional sources of capital;

(25)'PPP operation' means an operation which is implemented or intended to be implemented under a public-private-partnership structure;

(26)'escrow account' means a bank account covered by a written agreement between a managing authority or an intermediate body and the body implementing a financial instrument, or, in the case of a PPP operation, a written agreement between a public body beneficiary and the private partner approved by the managing authority or an intermediate body, set up specifically to hold funds to be paid out after the eligibility period in the case of a financial instrument, or during the eligibility period and/or after the eligibility period in the case of a PPP operation, exclusively for the purposes provided for in point (c) of Article 42(1), Article 42(2), Article 42(3) and Article 64, or a bank account set up on terms providing equivalent guarantees on the payments out of the funds;

(27)'fund of funds' means a fund set up with the objective of contributing support from a programme or programmes to several financial instruments. Where financial instruments are implemented through a fund of funds, the body implementing the fund of funds shall be considered to be the only beneficiary within the meaning of point 10 of this Article;

(28)'SME' means a micro, small or medium sized enterprise as defined in Commission Recommendation 2003/361/EC (12);

(29)'accounting year', means, for the purposes of Part Three and Part Four, the period from 1 July to 30 June, except for the first accounting year of the programming period, in respect of which it means the period from the start date for eligibility of expenditure until 30 June 2015. The final accounting year shall be from 1 July 2023 to 30 June 2024;

(30)'financial year', means, for the purposes of Part Three and Part Four, the period from 1 January to 31 December;

(31)'macroregional strategy' means an integrated framework agreed by the Council and, where appropriate, endorsed by the European Council, which may be supported by the ESI Funds among others, to address common challenges faced by a defined geographical area relating to Member States and third countries located in the same geographical area which thereby benefit from strengthened cooperation contributing to achievement of economic, social and territorial cohesion;

(32)'sea basin strategy' means a structured framework of cooperation in relation to a given geographical area, developed by Union institutions, Member States, their regions and where appropriate third countries sharing a sea basin; a sea basin strategy takes into account the geographic, climatic, economic and political specificities of the sea basin;

(33)'applicable ex ante conditionality' means a concrete and precisely pre-defined critical factor, which is a prerequisite for and has a direct and genuine link to, and direct impact on, the effective and efficient achievement of a specific objective for an investment priority or a Union priority;

(34)'specific objective' means the result to which an investment priority or Union priority contributes in a specific national or regional context through actions or measures undertaken within such a priority;

(35)'relevant country-specific recommendations adopted in accordance with Article 121(2) TFEU' and 'relevant Council recommendations adopted in accordance with Article 148(4) TFEU' mean recommendations relating to structural challenges which it is appropriate to address through multiannual investments that fall directly within the scope of the ESI Funds as set out in the Fund-specific Regulations;

(36)'irregularity' means any breach of Union law, or of national law relating to its application, resulting from an act or omission by an economic operator involved in the implementation of the ESI Funds, which has, or would have, the effect of prejudicing the budget of the Union by charging an unjustified item of expenditure to the budget of the Union.

(37)'economic operator' means any natural or legal person or other entity taking part in the implementation of assistance from the ESI Funds, with the exception of a Member State exercising its prerogatives as a public authority;

(38)'systemic irregularity' means any irregularity, which may be of a recurring nature, with a high probability of occurrence in similar types of operations, which results from a serious deficiency in the effective functioning of a management and control system, including a failure to establish appropriate procedures in accordance with this Regulation and the Fund-specific rules;

(39)'serious deficiency in the effective functioning of a management and control system' means, for the purposes of implementation of the Funds and the EMFF under Part Four, a deficiency for which substantial improvements in the system are required, which exposes the Funds and the EMFF to a significant risk of irregularities, and the existence of which is incompatible with an unqualified audit opinion on the functioning of the management and control system.

(1) 'Union strategy for smart, sustainable and inclusive growth' means the targets and shared objectives guiding the action of Member States and the Union set out in the Conclusions adopted by the European Council of 17 June 2010 as Annex I (New European Strategy for Jobs and Growth, EU Headline Targets), Council Recommendation of 13 July 2010 (2) and in Council Decision 2010/707/EU (3), and any revision of such targets and shared objectives;

(2) 'a strategic policy framework' means a document or a set of documents established at national or regional level, which sets out a limited number of coherent priorities established on the basis of evidence and a timeframe for the implementation of those priorities and which may include a monitoring mechanism;

(3) 'smart specialisation strategy' means the national or regional innovation strategies which set priorities in order to build competitive advantage by developing and matching research and innovation own strengths to business needs in order to address emerging opportunities and market developments in a coherent manner, while avoiding duplication and fragmentation of efforts; a smart specialisation strategy may take the form of, or be included in, a national or regional research and innovation (R&I) strategic policy framework;

(4) 'Fund-specific rules' means the provisions laid down in, or established on the basis of, Part Three or Part Four of this Regulation or a Regulation governing one or more of the ESI Funds listed in the fourth paragraph of Article 1;

(5) 'programming' means the process of organisation, decision-making and allocation of financial resources in several stages, with the involvement of partners in accordance with Article 5, intended to implement, on a multi-annual basis, joint action by the Union and the Member States to achieve the objectives of the Union strategy for smart, sustainable and inclusive growth;

(6) 'programme' means an 'operational programme' as referred to in Part Three or Part Four of this Regulation and in the EMFF Regulation, and 'rural development programme' as referred to in the EAFRD Regulation;

(7) 'programme area' means a geographical area covered by a specific programme or, in the case of a programme covering more than one category of region, the geographical area corresponding to each separate category of region;

(8) 'priority' in Parts Two and Four of this Regulation means the 'priority axis' referred to in Part Three of this Regulation for ERDF, ESF and the Cohesion Fund and the 'Union priority' referred to in the EMFF Regulation and in the EAFRD Regulation;

(9) 'operation' means a project, contract, action or group of projects selected by the managing authorities of the programmes concerned, or under their responsibility, that contributes to the objectives of a priority or priorities; in the context of financial instruments, an operation is constituted by the financial contributions from a programme to financial instruments and the subsequent financial support provided by those financial instruments;

(10) 'beneficiary' means a public or private body or a natural person, responsible for initiating or both initiating and implementing operations, and:

(a) in the context of State aid, the body which receives the aid, except where the aid per undertaking is less than EUR 200 000 , in which case the Member State concerned may decide that the beneficiary is the body granting the aid, without prejudice to Commission Regulations (EU) No 1407/2013 (4), (EU) No 1408/2013 (5) and (EU) No 717/2014 (6); and

(b) in the context of financial instruments under Title IV of Part Two of this Regulation, the body that implements the financial instrument or the fund of funds as appropriate;

(11) 'financial instruments' means financial instruments as defined in the Financial Regulation, save where otherwise provided in this Regulation;

(12) 'final recipient' means a legal or natural person receiving financial support from a financial instrument;

(13) 'State aid' means aid falling under Article 107(1) TFEU which shall be deemed for the purposes of this Regulation also to include de minimis aid within the meaning of Commission Regulation (EC) No 1998/2006 (7), Commission Regulation (EC) No 1535/2007 (8) and Commission Regulation (EC) No 875/2007 (9);

(14) 'completed operation' means an operation that has been physically completed or fully implemented and in respect of which all related payments have been made by beneficiaries and the corresponding public contribution has been paid to the beneficiaries;

(15) 'public expenditure' means any public contribution to the financing of operations the source of which is the budget of national, regional or local public authorities, the budget of the Union related to the ESI Funds, the budget of public law bodies or the budget of associations of public authorities or of public law bodies and, for the purpose of determining the co-financing rate for ESF programmes or priorities, may include any financial resources collectively contributed by employers and workers;

(16) 'public law body' means any body governed by public law within the meaning of point 9 of Article 1 of Directive 2004/18/EC of the European Parliament and of the Council (10) and any European grouping of territorial cooperation (EGTC) established in accordance with Regulation (EC) No 1082/2006 of the European Parliament and of the Council (11), regardless of whether the EGTC is considered to be a public law body or a private law body under the relevant national implementing provisions;

(17) 'document' means a paper or an electronic medium bearing information of relevance in the context of this Regulation;

(18) 'intermediate body' means any public or private body which acts under the responsibility of a managing or certifying authority, or which carries out duties on behalf of such an authority, in relation to beneficiaries implementing operations;

(19) 'community-led local development strategy' means a coherent set of operations the purpose of which is to meet local objectives and needs, and which contributes to achieving the Union strategy for smart, sustainable and inclusive growth, and which is designed and implemented by a local action group;

(20) 'Partnership Agreement' means a document prepared by a Member State with the involvement of partners in line with the multi-level governance approach, which sets out that Member State's strategy, priorities and arrangements for using the ESI Funds in an effective and efficient way so as to pursue the Union strategy for smart, sustainable and inclusive growth, and which is approved by the Commission following assessment and dialogue with the Member State concerned;

(21) 'category of regions' means the categorisation of regions as 'less developed regions', 'transition regions' or 'more developed regions' in accordance with Article 90(2);

(22) 'payment application' means a payment application or declaration of expenditure submitted by the Member State to the Commission;

(23) 'EIB' means the European Investment Bank, the European Investment Fund or any subsidiary of the European Investment Bank;

(24) 'Public private partnerships' (PPPs) means forms of cooperation between public bodies and the private sector, which aim to improve the delivery of investments in infrastructure projects or other types of operations, delivering public services through risk sharing, pooling of private sector expertise or additional sources of capital;

(25) 'PPP operation' means an operation which is implemented or intended to be implemented under a public-private-partnership structure;

(26) 'escrow account' means a bank account covered by a written agreement between a managing authority or an intermediate body and the body implementing a financial instrument, or, in the case of a PPP operation, a written agreement between a public body beneficiary and the private partner approved by the managing authority or an intermediate body, set up specifically to hold funds to be paid out after the eligibility period in the case of a financial instrument, or during the eligibility period and/or after the eligibility period in the case of a PPP operation, exclusively for the purposes provided for in point (c) of Article 42(1), Article 42(2), Article 42(3) and Article 64, or a bank account set up on terms providing equivalent guarantees on the payments out of the funds;

(27) 'fund of funds' means a fund set up with the objective of contributing support from a programme or programmes to several financial instruments. Where financial instruments are implemented through a fund of funds, the body implementing the fund of funds shall be considered to be the only beneficiary within the meaning of point 10 of this Article;

(28) 'SME' means a micro, small or medium sized enterprise as defined in Commission Recommendation 2003/361/EC (12);

(29) 'accounting year', means, for the purposes of Part Three and Part Four, the period from 1 July to 30 June, except for the first accounting year of the programming period, in respect of which it means the period from the start date for eligibility of expenditure until 30 June 2015. The final accounting year shall be from 1 July 2023 to 30 June 2024;

(30) 'financial year', means, for the purposes of Part Three and Part Four, the period from 1 January to 31 December;

(31) 'macroregional strategy' means an integrated framework agreed by the Council and, where appropriate, endorsed by the European Council, which may be supported by the ESI Funds among others, to address common challenges faced by a defined geographical area relating to Member States and third countries located in the same geographical area which thereby benefit from strengthened cooperation contributing to achievement of economic, social and territorial cohesion;

(32) 'sea basin strategy' means a structured framework of cooperation in relation to a given geographical area, developed by Union institutions, Member States, their regions and where appropriate third countries sharing a sea basin; a sea basin strategy takes into account the geographic, climatic, economic and political specificities of the sea basin;

(33) 'applicable ex ante conditionality' means a concrete and precisely pre-defined critical factor, which is a prerequisite for and has a direct and genuine link to, and direct impact on, the effective and efficient achievement of a specific objective for an investment priority or a Union priority;

(34) 'specific objective' means the result to which an investment priority or Union priority contributes in a specific national or regional context through actions or measures undertaken within such a priority;

(35) 'relevant country-specific recommendations adopted in accordance with Article 121(2) TFEU' and 'relevant Council recommendations adopted in accordance with Article 148(4) TFEU' mean recommendations relating to structural challenges which it is appropriate to address through multiannual investments that fall directly within the scope of the ESI Funds as set out in the Fund-specific Regulations;

(36) 'irregularity' means any breach of Union law, or of national law relating to its application, resulting from an act or omission by an economic operator involved in the implementation of the ESI Funds, which has, or would have, the effect of prejudicing the budget of the Union by charging an unjustified item of expenditure to the budget of the Union.

(37) 'economic operator' means any natural or legal person or other entity taking part in the implementation of assistance from the ESI Funds, with the exception of a Member State exercising its prerogatives as a public authority;

(38) 'systemic irregularity' means any irregularity, which may be of a recurring nature, with a high probability of occurrence in similar types of operations, which results from a serious deficiency in the effective functioning of a management and control system, including a failure to establish appropriate procedures in accordance with this Regulation and the Fund-specific rules;

(39) 'serious deficiency in the effective functioning of a management and control system' means, for the purposes of implementation of the Funds and the EMFF under Part Four, a deficiency for which substantial improvements in the system are required, which exposes the Funds and the EMFF to a significant risk of irregularities, and the existence of which is incompatible with an unqualified audit opinion on the functioning of the management and control system.

#### Article 3

@@ -168,29 +166,29 @@

1. For the Partnership Agreement and each programme, each Member State shall in accordance with its institutional and legal framework organise a partnership with the competent regional and local authorities. The partnership shall also include the following partners:

(a)competent urban and other public authorities;

(b)economic and social partners; and

(c)relevant bodies representing civil society, including environmental partners, non-governmental organisations, and bodies responsible for promoting social inclusion, gender equality and non-discrimination.

(a) competent urban and other public authorities;

(b) economic and social partners; and

(c) relevant bodies representing civil society, including environmental partners, non-governmental organisations, and bodies responsible for promoting social inclusion, gender equality and non-discrimination.

2. In accordance with the multi-level governance approach, the partners referred to in paragraph 1 shall be involved by Member States in the preparation of Partnership Agreements and progress reports and throughout the preparation and implementation of programmes, including through participation in the monitoring committees for programmes in accordance with Article 48.

3. The Commission shall be empowered to adopt a delegated act in accordance with Article 149 to provide for a European code of conduct on partnership (the 'code of conduct') in order to support and facilitate Member States in the organisation of partnership in accordance with paragraphs 1 and 2 of this Article. The code of conduct shall set out the framework within which the Member States, in accordance with their institutional and legal framework as well as their national and regional competences, shall pursue the implementation of partnership. The code of conduct, while fully respecting the principles of subsidiarity and proportionality, shall lay down the following elements:

(a)the main principles concerning transparent procedures to be followed for the identification of the relevant partners including, where appropriate, their umbrella organisations in order to facilitate Member States in designating the most representative relevant partners, in accordance with their institutional and legal framework;

(b)the main principles and good practices concerning the involvement of the different categories of relevant partners set out in paragraph 1 in the preparation of the Partnership Agreement and programmes, the information to be provided concerning their involvement, and at the various stages of implementation;

(c)the good practices concerning the formulation of the rules of membership and internal procedures of monitoring committees to be decided, as appropriate, by the Member States or the monitoring committees of programmes in accordance with the relevant provisions of this Regulation and the Fund-specific rules;

(d)the main objectives and good practices in cases where the managing authority involves the relevant partners in the preparation of calls for proposals and in particular good practices for avoiding potential conflicts of interest in cases where there is a possibility of relevant partners also being potential beneficiaries, and for the involvement of the relevant partners in the preparation of progress reports and in relation to monitoring and evaluation of programmes in accordance with the relevant provisions of this Regulation and the Fund-specific rules;

(e)the indicative areas, themes and good practices concerning how the competent authorities of the Member States may use the ESI Funds including technical assistance to strengthen the institutional capacity of relevant partners in accordance with the relevant provisions of this Regulation and the Fund-specific rules;

(f)the role of the Commission in the dissemination of good practices;

(g)the main principles and good practices that are apt to facilitate the Member States' assessment of the implementation of partnership and its added value.

(a) the main principles concerning transparent procedures to be followed for the identification of the relevant partners including, where appropriate, their umbrella organisations in order to facilitate Member States in designating the most representative relevant partners, in accordance with their institutional and legal framework;

(b) the main principles and good practices concerning the involvement of the different categories of relevant partners set out in paragraph 1 in the preparation of the Partnership Agreement and programmes, the information to be provided concerning their involvement, and at the various stages of implementation;

(c) the good practices concerning the formulation of the rules of membership and internal procedures of monitoring committees to be decided, as appropriate, by the Member States or the monitoring committees of programmes in accordance with the relevant provisions of this Regulation and the Fund-specific rules;

(d) the main objectives and good practices in cases where the managing authority involves the relevant partners in the preparation of calls for proposals and in particular good practices for avoiding potential conflicts of interest in cases where there is a possibility of relevant partners also being potential beneficiaries, and for the involvement of the relevant partners in the preparation of progress reports and in relation to monitoring and evaluation of programmes in accordance with the relevant provisions of this Regulation and the Fund-specific rules;

(e) the indicative areas, themes and good practices concerning how the competent authorities of the Member States may use the ESI Funds including technical assistance to strengthen the institutional capacity of relevant partners in accordance with the relevant provisions of this Regulation and the Fund-specific rules;

(f) the role of the Commission in the dissemination of good practices;

(g) the main principles and good practices that are apt to facilitate the Member States' assessment of the implementation of partnership and its added value.

The provisions of the code of conduct shall not in any way contradict the relevant provisions of this Regulation or the Fund-specific rules.

@@ -238,27 +236,27 @@

In order to contribute to the Union strategy for smart, sustainable and inclusive growth as well as the Fund-specific missions pursuant to their Treaty-based objectives, including economic, social and territorial cohesion, each ESI Fund shall support the following thematic objectives:

(1)strengthening research, technological development and innovation;

(2)enhancing access to, and use and quality of, ICT;

(3)enhancing the competitiveness of SMEs, of the agricultural sector (for the EAFRD) and of the fishery and aquaculture sector (for the EMFF);

(4)supporting the shift towards a low-carbon economy in all sectors;

(5)promoting climate change adaptation, risk prevention and management;

(6)preserving and protecting the environment and promoting resource efficiency;

(7)promoting sustainable transport and removing bottlenecks in key network infrastructures;

(8)promoting sustainable and quality employment and supporting labour mobility;

(9)promoting social inclusion, combating poverty and any discrimination;

(10)investing in education, training and vocational training for skills and lifelong learning;

(11)enhancing institutional capacity of public authorities and stakeholders and efficient public administration.

(1) strengthening research, technological development and innovation;

(2) enhancing access to, and use and quality of, ICT;

(3) enhancing the competitiveness of SMEs, of the agricultural sector (for the EAFRD) and of the fishery and aquaculture sector (for the EMFF);

(4) supporting the shift towards a low-carbon economy in all sectors;

(5) promoting climate change adaptation, risk prevention and management;

(6) preserving and protecting the environment and promoting resource efficiency;

(7) promoting sustainable transport and removing bottlenecks in key network infrastructures;

(8) promoting sustainable and quality employment and supporting labour mobility;

(9) promoting social inclusion, combating poverty and any discrimination;

(10) investing in education, training and vocational training for skills and lifelong learning;

(11) enhancing institutional capacity of public authorities and stakeholders and efficient public administration.

Thematic objectives shall be translated into priorities that are specific to each of the ESI Funds and are set out in the Fund-specific rules.

@@ -280,17 +278,17 @@

The CSF shall establish:

(a)mechanisms for ensuring the contribution of the ESI Funds to the Union strategy for smart, sustainable and inclusive growth, and the coherence and consistency of the programming of the ESI Funds in relation to the relevant country-specific recommendations adopted in accordance with Article 121(2) TFEU, the relevant Council recommendations adopted in accordance with 148(4) TFEU, and where appropriate at national level, to the National Reform Programme;

(b)arrangements to promote an integrated use of the ESI Funds;

(c)arrangements for coordination between the ESI Funds and other relevant Union policies and instruments, including external instruments for cooperation;

(d)horizontal principles referred to in Articles 5, 7 and 8 and cross-cutting policy objectives for the implementation of the ESI Funds;

(e)arrangements to address the key territorial challenges for urban, rural, coastal and fisheries areas, the demographic challenges of regions or specific needs of geographical areas which suffer from severe and permanent natural or demographic handicaps as referred to in Article 174 TFEU, and the specific challenges of outermost regions within the meaning of Article 349 TFEU;

(f)priority areas for cooperation activities under the ESI Funds, where appropriate, taking account of macro-regional and sea basin strategies.

(a) mechanisms for ensuring the contribution of the ESI Funds to the Union strategy for smart, sustainable and inclusive growth, and the coherence and consistency of the programming of the ESI Funds in relation to the relevant country-specific recommendations adopted in accordance with Article 121(2) TFEU, the relevant Council recommendations adopted in accordance with 148(4) TFEU, and where appropriate at national level, to the National Reform Programme;

(b) arrangements to promote an integrated use of the ESI Funds;

(c) arrangements for coordination between the ESI Funds and other relevant Union policies and instruments, including external instruments for cooperation;

(d) horizontal principles referred to in Articles 5, 7 and 8 and cross-cutting policy objectives for the implementation of the ESI Funds;

(e) arrangements to address the key territorial challenges for urban, rural, coastal and fisheries areas, the demographic challenges of regions or specific needs of geographical areas which suffer from severe and permanent natural or demographic handicaps as referred to in Article 174 TFEU, and the specific challenges of outermost regions within the meaning of Article 349 TFEU;

(f) priority areas for cooperation activities under the ESI Funds, where appropriate, taking account of macro-regional and sea basin strategies.

#### Article 12

@@ -334,53 +332,36 @@

1. The Partnership Agreement shall set out:

(a)arrangements to ensure alignment with the Union strategy for smart, sustainable and inclusive growth as well as the Fund-specific missions pursuant to their Treaty-based objectives, including economic, social and territorial cohesion, including:

(i)an analysis of disparities, development needs and growth potential with reference to the thematic objectives and the territorial challenges, and taking account of the National Reform Programme, where appropriate, and relevant country-specific recommendations adopted in accordance with Article 121(2) TFEU and relevant Council recommendations adopted in accordance with Article 148(4) TFEU;

(ii)a summary of the ex ante evaluations of the programmes, or key findings of the ex ante evaluation of the Partnership Agreement, where the latter evaluation is undertaken by the Member State at its own initiative;

(iii)selected thematic objectives, and for each of the selected thematic objectives a summary of the main results expected for each of the ESI Funds;

(iv)the indicative allocation of support by the Union by thematic objective at national level for each of the ESI Funds, as well as the total indicative amount of support envisaged for climate change objectives;

(v)the application of the horizontal principles referred to in Articles 5, 7 and 8 and policy objectives for the implementation of the ESI Funds;

(vi)the list of the programmes under the ERDF, the ESF and the Cohesion Fund, except those under the European territorial cooperation goal, and of the programmes of the EAFRD and the EMFF, with the respective indicative allocations by ESI Fund and by year;

(vii)information on the allocation related to the performance reserve, broken down by ESI Fund and, where appropriate, by category of region, and on the amounts excluded for the purpose of calculating the performance reserve in accordance with Article 20;

(b)arrangements to ensure effective implementation of the ESI Funds, including:

(i)arrangements, in line with the institutional framework of the Member States, that ensure coordination between the ESI Funds and other Union and national funding instruments and with the EIB;

(ii)the information required for ex ante verification of compliance with the rules on additionality as they are defined in Part Three;

(iii)a summary of the assessment of the fulfilment of applicable ex ante conditionalities in accordance with Article 19 and Annex XI at national level and, in the event that the applicable ex ante conditionalities are not fulfilled, of the actions to be taken, the bodies responsible and the timetable for implementation of those actions;

(iv)the methodology and mechanisms to ensure consistency in the functioning of the performance framework in accordance with Article 21;

(v)an assessment of whether there is a need to reinforce the administrative capacity of the authorities involved in the management and control of the programmes and, where appropriate, of beneficiaries as well as, where necessary, a summary of actions to be taken for that purpose;

(vi)a summary of the actions planned in the programmes, including an indicative timetable for achievement of a reduction in the administrative burden on beneficiaries;

(c)arrangements for the partnership principle as referred in Article 5;

(d)an indicative list of the partners referred to in Article 5 and a summary of the actions taken to involve them in accordance with Article 5 and of their role in the preparation of the Partnership Agreement and the progress report as referred to in Article 52.

(a) arrangements to ensure alignment with the Union strategy for smart, sustainable and inclusive growth as well as the Fund-specific missions pursuant to their Treaty-based objectives, including economic, social and territorial cohesion, including:

(i) an analysis of disparities, development needs and growth potential with reference to the thematic objectives and the territorial challenges, and taking account of the National Reform Programme, where appropriate, and relevant country-specific recommendations adopted in accordance with Article 121(2) TFEU and relevant Council recommendations adopted in accordance with Article 148(4) TFEU;

(ii) a summary of the ex ante evaluations of the programmes, or key findings of the ex ante evaluation of the Partnership Agreement, where the latter evaluation is undertaken by the Member State at its own initiative;

(iii) selected thematic objectives, and for each of the selected thematic objectives a summary of the main results expected for each of the ESI Funds;

(iv) the indicative allocation of support by the Union by thematic objective at national level for each of the ESI Funds, as well as the total indicative amount of support envisaged for climate change objectives;

(v) the application of the horizontal principles referred to in Articles 5, 7 and 8 and policy objectives for the implementation of the ESI Funds;

(vi) the list of the programmes under the ERDF, the ESF and the Cohesion Fund, except those under the European territorial cooperation goal, and of the programmes of the EAFRD and the EMFF, with the respective indicative allocations by ESI Fund and by year;

(vii) information on the allocation related to the performance reserve, broken down by ESI Fund and, where appropriate, by category of region, and on the amounts excluded for the purpose of calculating the performance reserve in accordance with Article 20;

(b) arrangements to ensure effective implementation of the ESI Funds, including:

(i) arrangements, in line with the institutional framework of the Member States, that ensure coordination between the ESI Funds and other Union and national funding instruments and with the EIB;

(ii) the information required for ex ante verification of compliance with the rules on additionality as they are defined in Part Three;

(iii) a summary of the assessment of the fulfilment of applicable ex ante conditionalities in accordance with Article 19 and Annex XI at national level and, in the event that the applicable ex ante conditionalities are not fulfilled, of the actions to be taken, the bodies responsible and the timetable for implementation of those actions;

(iv) the methodology and mechanisms to ensure consistency in the functioning of the performance framework in accordance with Article 21;

(v) an assessment of whether there is a need to reinforce the administrative capacity of the authorities involved in the management and control of the programmes and, where appropriate, of beneficiaries as well as, where necessary, a summary of actions to be taken for that purpose;

(vi) a summary of the actions planned in the programmes, including an indicative timetable for achievement of a reduction in the administrative burden on beneficiaries;

(d) an indicative list of the partners referred to in Article 5 and a summary of the actions taken to involve them in accordance with Article 5 and of their role in the preparation of the Partnership Agreement and the progress report as referred to in Article 52.

2. The Partnership Agreement shall also indicate:

(a)an integrated approach to territorial development supported by the ESI Funds or a summary of the integrated approaches to territorial development based on the content of the programmes, setting out:

(i)the arrangements to ensure an integrated approach to the use of the ESI Funds for the territorial development of specific subregional areas, in particular the implementation arrangements for Articles 32, 33 and 36 accompanied by the principles for identifying the urban areas where integrated actions for sustainable urban development are to be implemented;

(ii)the main priority areas for cooperation under the ESI Funds, taking account, where appropriate, of macro-regional strategies and sea basin strategies;

(iii)where appropriate, an integrated approach to addressing the specific needs of geographical areas most affected by poverty or of target groups at highest risk of discrimination or social exclusion, with special regard to marginalised communities, persons with disabilities, the long term unemployed and young people not in employment, education or training;

(iv)where appropriate, an integrated approach to address the demographic challenges of regions or specific needs of geographical areas which suffer from severe and permanent natural or demographic handicaps as referred to in Article 174 TFEU;

(b)arrangements to ensure efficient implementation of the ESI Funds, including an assessment of the existing systems for electronic data exchange, and a summary of the actions planned to gradually permit all exchanges of information between beneficiaries, and authorities responsible for management and control of programmes, to be carried out by electronic data exchange.

(a) an integrated approach to territorial development supported by the ESI Funds or a summary of the integrated approaches to territorial development based on the content of the programmes, setting out:

(i) the arrangements to ensure an integrated approach to the use of the ESI Funds for the territorial development of specific subregional areas, in particular the implementation arrangements for Articles 32, 33 and 36 accompanied by the principles for identifying the urban areas where integrated actions for sustainable urban development are to be implemented;

(ii) the main priority areas for cooperation under the ESI Funds, taking account, where appropriate, of macro-regional strategies and sea basin strategies;

(iii) where appropriate, an integrated approach to addressing the specific needs of geographical areas most affected by poverty or of target groups at highest risk of discrimination or social exclusion, with special regard to marginalised communities, persons with disabilities, the long term unemployed and young people not in employment, education or training;

(iv) where appropriate, an integrated approach to address the demographic challenges of regions or specific needs of geographical areas which suffer from severe and permanent natural or demographic handicaps as referred to in Article 174 TFEU;

(b) arrangements to ensure efficient implementation of the ESI Funds, including an assessment of the existing systems for electronic data exchange, and a summary of the actions planned to gradually permit all exchanges of information between beneficiaries, and authorities responsible for management and control of programmes, to be carried out by electronic data exchange.

#### Article 16

@@ -452,19 +433,19 @@

The following resources are excluded for the purpose of calculating the performance reserve:

(a)resources allocated to the YEI as defined in the operational programme in accordance with Article 18 of the ESF Regulation;

(b)resources allocated to technical assistance at the initiative of the Commission;

(c)resources transferred from the first pillar of the CAP to the EAFRD under Articles 7(2) and 14(1) of Regulation (EU) No 1307/2013;

(d)transfers to the EAFRD in application of Articles 10b, 136 and 136b of Council Regulation (EC) No 73/2009 in respect of calendar years 2013 and 2014 respectively;

(e)resources transferred to the CEF from the Cohesion Fund in accordance with Article 92(6) of this Regulation;

(f)resources transferred to the Fund for European Aid for the Most Deprived in accordance with Article 92(7) of this Regulation;

(g)resources allocated for innovative actions for sustainable urban development in accordance with Article 92(8) of this Regulation.

(a) resources allocated to the YEI as defined in the operational programme in accordance with Article 18 of the ESF Regulation;

(b) resources allocated to technical assistance at the initiative of the Commission;

(c) resources transferred from the first pillar of the CAP to the EAFRD under Articles 7(2) and 14(1) of Regulation (EU) No 1307/2013;

(d) transfers to the EAFRD in application of Articles 10b, 136 and 136b of Council Regulation (EC) No 73/2009 in respect of calendar years 2013 and 2014 respectively;

(e) resources transferred to the CEF from the Cohesion Fund in accordance with Article 92(6) of this Regulation;

(f) resources transferred to the Fund for European Aid for the Most Deprived in accordance with Article 92(7) of this Regulation;

(g) resources allocated for innovative actions for sustainable urban development in accordance with Article 92(8) of this Regulation.

#### Article 21

@@ -516,17 +497,14 @@

Such a request may be made for the following purposes:

(a)to support the implementation of a relevant country-specific recommendation adopted in accordance with Article 121(2) TFEU and of a relevant Council recommendation adopted in accordance with Article 148(4) TFEU, addressed to the Member State concerned;

(b)to support the implementation of relevant Council Recommendations addressed to the Member State concerned and adopted in accordance with Articles 7(2) or 8(2) of Regulation (EU) No 1176/2011 (14) of the European Parliament and of the Council provided that these amendments are deemed necessary to help correct the macro-economic imbalances; or

(c)to maximise the growth and competitiveness impact of the available ESI Funds, if a Member State meets one of the following conditions:

(i)Union financial assistance is made available to it under Council Regulation (EU) No 407/2010 (15);

(ii)financial assistance is made available to it in accordance with Council Regulation (EC) No 332/2002 (16);

(iii)financial assistance is made available to it that triggers a macroeconomic adjustment programme in accordance with Regulation (EU) No 472/2013 of the European Parliament and of the Council (17) or that triggers a decision of the Council in accordance with Article 136(1) TFEU.

(a) to support the implementation of a relevant country-specific recommendation adopted in accordance with Article 121(2) TFEU and of a relevant Council recommendation adopted in accordance with Article 148(4) TFEU, addressed to the Member State concerned;

(b) to support the implementation of relevant Council Recommendations addressed to the Member State concerned and adopted in accordance with Articles 7(2) or 8(2) of Regulation (EU) No 1176/2011 (14) of the European Parliament and of the Council provided that these amendments are deemed necessary to help correct the macro-economic imbalances; or

(c) to maximise the growth and competitiveness impact of the available ESI Funds, if a Member State meets one of the following conditions:

(i) Union financial assistance is made available to it under Council Regulation (EU) No 407/2010 (15);

(ii) financial assistance is made available to it in accordance with Council Regulation (EC) No 332/2002 (16);

(iii) financial assistance is made available to it that triggers a macroeconomic adjustment programme in accordance with Regulation (EU) No 472/2013 of the European Parliament and of the Council (17) or that triggers a decision of the Council in accordance with Article 136(1) TFEU.

For the purposes of point (c) of the second subparagraph, each of those conditions shall be deemed to be satisfied where such assistance has been made available to the Member State before or after 21 December 2013 and remains available to it.

@@ -550,15 +528,15 @@

9. The Commission shall make a proposal to the Council to suspend part or all of the commitments or payments for the programmes of a Member State in the following cases:

(a)where the Council decides in accordance with Article 126(8) or Article 126(11) TFEU that a Member State has not taken effective action to correct its excessive deficit;

(b)where the Council adopts two successive recommendations in the same imbalance procedure, in accordance with Article 8(3) of Regulation (EU) No 1176/2011 on the grounds that a Member State has submitted an insufficient corrective action plan;

(c)where the Council adopts two successive decisions in the same imbalance procedure in accordance with Article 10(4) of Regulation (EU) No 1176/2011 establishing non-compliance by a Member State on the grounds that it has not taken the recommended corrective action;

(d)where the Commission concludes that a Member State has not taken measures to implement the adjustment programme referred to in Regulation (EU) No 407/2010 or Regulation (EC) No 332/2002 and as a consequence decides not to authorise the disbursement of the financial assistance granted to that Member State;

(e)where the Council decides that a Member State does not comply with the macro-economic adjustment programme referred to in Article 7 of Regulation (EU) No 472/2013, or with the measures requested by a Council decision adopted in accordance with Article 136(1) TFEU.

(a) where the Council decides in accordance with Article 126(8) or Article 126(11) TFEU that a Member State has not taken effective action to correct its excessive deficit;

(b) where the Council adopts two successive recommendations in the same imbalance procedure, in accordance with Article 8(3) of Regulation (EU) No 1176/2011 on the grounds that a Member State has submitted an insufficient corrective action plan;

(c) where the Council adopts two successive decisions in the same imbalance procedure in accordance with Article 10(4) of Regulation (EU) No 1176/2011 establishing non-compliance by a Member State on the grounds that it has not taken the recommended corrective action;

(d) where the Commission concludes that a Member State has not taken measures to implement the adjustment programme referred to in Regulation (EU) No 407/2010 or Regulation (EC) No 332/2002 and as a consequence decides not to authorise the disbursement of the financial assistance granted to that Member State;

(e) where the Council decides that a Member State does not comply with the macro-economic adjustment programme referred to in Article 7 of Regulation (EU) No 472/2013, or with the measures requested by a Council decision adopted in accordance with Article 136(1) TFEU.

In making its proposal, the Commission shall respect the provisions of paragraph 11 and shall take account of all relevant information in that regard, and it shall give due consideration to any elements arising from and opinions expressed through the structured dialogue under paragraph 15.

@@ -574,29 +552,24 @@

The suspension of commitments shall be subject to the lower of the following ceilings:

(a)A maximum of 50 % of the commitments relating to the next financial year for the ESI Funds in the first case of non-compliance with an excessive deficit procedure as referred to in point (a) of the first subparagraph of paragraph 9 and a maximum 25 % of the commitments relating to the next financial year for the ESI Funds in the first case of non-compliance relating to a corrective action plan under an excessive imbalances procedure as referred to in point (b) of the first subparagraph of paragraph 9 or non-compliance with the recommended corrective action pursuant to an excessive imbalances procedure as referred to in point (c) of the first subparagraph of paragraph 9.

The level of the suspension shall increase gradually up to a maximum of 100 % of the commitments relating to the next financial year for the ESI Funds in the case of an excessive deficit procedure and up to 50 % of the commitments relating to the next financial year for the ESI Funds in the case of an excessive imbalance procedure, in line with the seriousness of the non-compliance;

(b)a maximum of 0,5 % of nominal GDP applying in the first case of non-compliance with an excessive deficit procedure as referred to in point (a) of the first subparagraph of paragraph 9 and a maximum of 0,25 % of nominal GDP applying in the first case of non-compliance relating to a corrective action plan under an excessive imbalances procedure as referred to in point (b) of the first subparagraph of paragraph 9 or non-compliance with recommended corrective action under an excessive imbalances procedure as referred to in point (c) of the first subparagraph of paragraph 9.

If non-compliance relating to corrective actions referred to in points (a), (b) and (c) of the first subparagraph of paragraph 9 persists, the percentage of that GDP cap shall be gradually increased up to:

—a maximum of 1 % of nominal GDP applying in the event of persistent non-compliance with an excessive deficit procedure in accordance with point (a) of the first subparagraph of paragraph 9; and

—a maximum of 0,5 % of nominal GDP applying in the event of persistent non-compliance with an excessive imbalance procedure in accordance with point (b) or (c) of the first subparagraph of paragraph 9, in line with the seriousness of the non-compliance;

(c)a maximum of 50 % of the commitments relating to the next financial year for the ESI Funds or a maximum of 0,5 % of nominal GDP in the first case of non-compliance as referred to in points (d) and (e) of the first subparagraph of paragraph 9.

In determining the level of the suspension and whether to suspend commitments or payments, the stage of the programme cycle shall be taken into account having regard in particular to the period remaining for using the funds following the re-budgeting of suspended commitments.

(a) A maximum of 50 % of the commitments relating to the next financial year for the ESI Funds in the first case of non-compliance with an excessive deficit procedure as referred to in point (a) of the first subparagraph of paragraph 9 and a maximum 25 % of the commitments relating to the next financial year for the ESI Funds in the first case of non-compliance relating to a corrective action plan under an excessive imbalances procedure as referred to in point (b) of the first subparagraph of paragraph 9 or non-compliance with the recommended corrective action pursuant to an excessive imbalances procedure as referred to in point (c) of the first subparagraph of paragraph 9.

(b) a maximum of 0,5 % of nominal GDP applying in the first case of non-compliance with an excessive deficit procedure as referred to in point (a) of the first subparagraph of paragraph 9 and a maximum of 0,25 % of nominal GDP applying in the first case of non-compliance relating to a corrective action plan under an excessive imbalances procedure as referred to in point (b) of the first subparagraph of paragraph 9 or non-compliance with recommended corrective action under an excessive imbalances procedure as referred to in point (c) of the first subparagraph of paragraph 9.

— a maximum of 1 % of nominal GDP applying in the event of persistent non-compliance with an excessive deficit procedure in accordance with point (a) of the first subparagraph of paragraph 9; and

— a maximum of 0,5 % of nominal GDP applying in the event of persistent non-compliance with an excessive imbalance procedure in accordance with point (b) or (c) of the first subparagraph of paragraph 9, in line with the seriousness of the non-compliance;

(c) a maximum of 50 % of the commitments relating to the next financial year for the ESI Funds or a maximum of 0,5 % of nominal GDP in the first case of non-compliance as referred to in points (d) and (e) of the first subparagraph of paragraph 9.

12. Without prejudice to de-commitment rules set out in Articles 86 to 88 the Commission shall lift the suspension of commitments, without delay, in the following cases:

(a)where the excessive deficit procedure is held in abeyance in accordance with Article 9 of Council Regulation (EC) No 1467/97 (18) or the Council has decided in accordance with Article 126(12) TFEU to abrogate the decision on the existence of an excessive deficit;

(b)where the Council has endorsed the corrective action plan submitted by the Member State concerned in accordance with Article 8(2) of Regulation (EU) No 1176/2011 or the excessive imbalance procedure is placed in a position of abeyance in accordance with Article 10(5) of that Regulation or the Council has closed the excessive imbalance procedure in accordance with Article 11 of that Regulation;

(c)where the Commission has concluded that the Member State concerned has taken adequate measures to implement the adjustment programme referred to in Article 7 of Regulation (EU) No 472/2013 or the measures requested by a decision of the Council in accordance with Article 136(1) TFEU.

(a) where the excessive deficit procedure is held in abeyance in accordance with Article 9 of Council Regulation (EC) No 1467/97 (18) or the Council has decided in accordance with Article 126(12) TFEU to abrogate the decision on the existence of an excessive deficit;

(b) where the Council has endorsed the corrective action plan submitted by the Member State concerned in accordance with Article 8(2) of Regulation (EU) No 1176/2011 or the excessive imbalance procedure is placed in a position of abeyance in accordance with Article 10(5) of that Regulation or the Council has closed the excessive imbalance procedure in accordance with Article 11 of that Regulation;

(c) where the Commission has concluded that the Member State concerned has taken adequate measures to implement the adjustment programme referred to in Article 7 of Regulation (EU) No 472/2013 or the measures requested by a decision of the Council in accordance with Article 136(1) TFEU.

When lifting the suspension of commitments, the Commission shall re-budget the suspended commitments in accordance with Article 8 of Council Regulation (EU, Euratom) No 1311/2013.

@@ -624,11 +597,11 @@

If a Member State meets one of the following conditions after 21 December 2013, the increased rate, which may not exceed 100 %, shall apply to its payment applications for the period until 30 June 2016:

(a)where the Member State concerned receives a loan from the Union under Regulation (EU) No 407/2010;

(b)where the Member State concerned receives medium-term financial assistance in accordance with Regulation (EC) No 332/2002 conditional on the implementation of a macroeconomic adjustment programme;

(c)where financial assistance is made available to the Member State concerned conditional on the implementation of a macroeconomic adjustment programme as specified in Regulation (EU) No 472/2013.

(a) where the Member State concerned receives a loan from the Union under Regulation (EU) No 407/2010;

(b) where the Member State concerned receives medium-term financial assistance in accordance with Regulation (EC) No 332/2002 conditional on the implementation of a macroeconomic adjustment programme;

(c) where financial assistance is made available to the Member State concerned conditional on the implementation of a macroeconomic adjustment programme as specified in Regulation (EU) No 472/2013.

If a Member State meets one of the conditions set out in the second subparagraph after 30 June 2016, the increased rate shall apply to its payment applications for the period until 30 June of the year following the calendar year in which the related financial assistance comes to an end.

@@ -636,9 +609,9 @@

2. Notwithstanding paragraph 1, Union support through interim payments and payments of the final balance shall not be higher than:

(a)the public expenditure; or

(b)the maximum amount of support from the ESI Funds for each priority for the ERDF, ESF and the Cohesion Fund, or for each measure for the EAFRD and the EMFF, as laid down in the decision of the Commission approving the programme,

(a) the public expenditure; or

(b) the maximum amount of support from the ESI Funds for each priority for the ERDF, ESF and the Cohesion Fund, or for each measure for the EAFRD and the EMFF, as laid down in the decision of the Commission approving the programme,

whichever is lower.

@@ -694,11 +667,11 @@

4. Each priority shall set out indicators and corresponding targets expressed in qualitative or quantitative terms, in accordance with the Fund-specific rules, in order to assess progress in programme implementation aimed at achievement of objectives as the basis for monitoring, evaluation and review of performance. Those indicators shall include:

(a)financial indicators relating to expenditure allocated;

(b)output indicators relating to the operations supported;

(c)result indicators relating to the priority concerned.

(a) financial indicators relating to expenditure allocated;

(b) output indicators relating to the operations supported;

For each ESI Fund, the Fund-specific rules shall set out common indicators and may set out provisions related to programme-specific indicators.

@@ -714,11 +687,11 @@

1. By way of derogation from Article 27, the dedicated programmes referred to in point (b) of the first subparagraph of Article 39(4) shall include:

(a)the elements set out under the first subparagraph of Article 27(1), and under paragraphs 2, 3 and 4 of that Article as regards the principles set out under Article 5;

(b)an identification of the bodies referred to under Articles 125, 126 and 127 of this Regulation and Article 65(2) of the EAFRD Regulation as relevant for the Fund concerned;

(c)for each ex ante conditionality, established in accordance with Article 19 and Annex XI, which is applicable to the programme, an assessment of whether the ex ante conditionality is fulfilled at the date of submission of the Partnership Agreement and programme, and where ex ante conditionalities are not fulfilled, a description of the actions to fulfil the ex ante conditionality, the bodies responsible and a timetable for such actions in accordance with the summary submitted in the Partnership Agreement.

(a) the elements set out under the first subparagraph of Article 27(1), and under paragraphs 2, 3 and 4 of that Article as regards the principles set out under Article 5;

(b) an identification of the bodies referred to under Articles 125, 126 and 127 of this Regulation and Article 65(2) of the EAFRD Regulation as relevant for the Fund concerned;

(c) for each ex ante conditionality, established in accordance with Article 19 and Annex XI, which is applicable to the programme, an assessment of whether the ex ante conditionality is fulfilled at the date of submission of the Partnership Agreement and programme, and where ex ante conditionalities are not fulfilled, a description of the actions to fulfil the ex ante conditionality, the bodies responsible and a timetable for such actions in accordance with the summary submitted in the Partnership Agreement.

2. By way of derogation from Article 55, the ex ante assessment referred to in point (a) of the first subparagraph of Article 39(4) shall be considered as the ex ante evaluation of such programmes.

@@ -752,6 +725,10 @@

4. By way of derogation from paragraph 2, specific procedures for the amendment of operational programmes may be established in the EMFF Regulation.

5. By way of derogation from paragraphs 1 and 2, for the programmes supported by the ERDF, Cohesion Fund and ESF, the Member State may transfer during the programming period an amount of up to 8 % of the allocation as of 1 February 2020 of a priority and no more than 4 % of the programme budget to another priority of the same Fund of the same programme.

Such transfers shall not affect previous years. They shall be considered to be not substantial and shall not require a decision of the Commission amending the programme. They shall however comply with all regulatory requirements and shall be approved by the monitoring committee in advance. The Member State shall notify the revised financial tables to the Commission.

#### Article 31

##### Participation of the EIB

@@ -776,13 +753,13 @@

2. Community-led local development shall be:

(a)focused on specific subregional areas;

(b)led by local action groups composed of representatives of public and private local socio-economic interests, in which, at the decision-making level neither public authorities, as defined in accordance with national rules, nor any single interest group represents more than 49 % of the voting rights;

(c)carried out through integrated and multi-sectoral area-based local development strategies;

(d)designed taking into consideration local needs and potential, and shall include innovative features in the local context, networking and, where appropriate, cooperation.

(a) focused on specific subregional areas;

(b) led by local action groups composed of representatives of public and private local socio-economic interests, in which, at the decision-making level neither public authorities, as defined in accordance with national rules, nor any single interest group represents more than 49 % of the voting rights;

(d) designed taking into consideration local needs and potential, and shall include innovative features in the local context, networking and, where appropriate, cooperation.

3. Support from the ESI Funds concerned to community-led local development shall be consistent and coordinated between the ESI Funds concerned. This shall be ensured inter alia through coordinated capacity-building, selection, approval and funding of community-led local development strategies and local action groups.

@@ -796,19 +773,19 @@

1. A community-led local development strategy shall contain at least the following elements:

(a)the definition of the area and population covered by the strategy;

(b)an analysis of the development needs and potential of the area, including an analysis of strengths, weaknesses, opportunities and threats;

(c)a description of the strategy and its objectives, a description of the integrated and innovative features of the strategy and a hierarchy of objectives, including measurable targets for outputs or results. In relation to results, targets may be expressed in quantitative or qualitative terms. The strategy shall be consistent with the relevant programmes of all the ESI Funds concerned that are involved;

(d)a description of the community involvement process in the development of the strategy;

(e)an action plan demonstrating how objectives are translated into actions;

(f)a description of the management and monitoring arrangements of the strategy, demonstrating the capacity of the local action group to implement the strategy and a description of specific arrangements for evaluation;

(g)the financial plan for the strategy, including the planned allocation from each of the ESI Funds concerned.

(a) the definition of the area and population covered by the strategy;

(b) an analysis of the development needs and potential of the area, including an analysis of strengths, weaknesses, opportunities and threats;

(c) a description of the strategy and its objectives, a description of the integrated and innovative features of the strategy and a hierarchy of objectives, including measurable targets for outputs or results. In relation to results, targets may be expressed in quantitative or qualitative terms. The strategy shall be consistent with the relevant programmes of all the ESI Funds concerned that are involved;

(d) a description of the community involvement process in the development of the strategy;

(e) an action plan demonstrating how objectives are translated into actions;

(f) a description of the management and monitoring arrangements of the strategy, demonstrating the capacity of the local action group to implement the strategy and a description of specific arrangements for evaluation;

(g) the financial plan for the strategy, including the planned allocation from each of the ESI Funds concerned.

2. Member States shall define criteria for the selection of community-led local development strategies.

@@ -832,19 +809,19 @@

3. The tasks of local action groups shall include the following:

(a)building the capacity of local actors, including potential beneficiaries, to develop and implement operations including by fostering their capacity to prepare and manage their projects;

(b)drawing up a non-discriminatory and transparent selection procedure which avoids conflicts of interests, ensures that at least 50 % of the votes in selection decisions are cast by partners which are not public authorities, and allows selection by written procedure;

(c)drawing up and approving non-discriminatory objective criteria for the selection of operations that ensure coherence with the community-led local development strategy by prioritising those operations according to their contribution to meeting that strategy’s objectives and targets;

(d)preparing and publishing calls for proposals or an ongoing project submission procedure;

(e)receiving and assessing applications for support;

(f)selecting operations and fixing the amount of support and, where relevant, presenting the proposals to the body responsible for final verification of eligibility before approval;

(g)monitoring the implementation of the community-led local development strategy and the operations supported and carrying out specific evaluation activities linked to that strategy.

(a) building the capacity of local actors, including potential beneficiaries, to develop and implement operations including by fostering their capacity to prepare and manage their projects;

(b) drawing up a non-discriminatory and transparent selection procedure which avoids conflicts of interests, ensures that at least 50 % of the votes in selection decisions are cast by partners which are not public authorities, and allows selection by written procedure;

(c) drawing up and approving non-discriminatory objective criteria for the selection of operations that ensure coherence with the community-led local development strategy by prioritising those operations according to their contribution to meeting that strategy’s objectives and targets;

(d) preparing and publishing calls for proposals or an ongoing project submission procedure;

(e) receiving and assessing applications for support;

(f) selecting operations and fixing the amount of support and, where relevant, presenting the proposals to the body responsible for final verification of eligibility before approval;

(g) monitoring the implementation of the community-led local development strategy and the operations supported and carrying out specific evaluation activities linked to that strategy.

Where local action groups carry out tasks not covered by points (a) to (g) of the first subparagraph that fall under the responsibility of the managing or certifying authority or of the paying agency, those local action groups shall be designated as intermediate bodies in accordance with the Fund-specific rules.

@@ -858,29 +835,22 @@

1. Support from the ESI Funds concerned for community-led local development shall cover:

(a)the costs of preparatory support consisting of capacitybuilding, training and networking with a view to preparing and implementing a community-led local development strategy.

Such costs may include one or more of the following elements:

(i)training actions for local stakeholders;

(ii)studies of the area concerned;

(iii)costs related to the design of the community-led local development strategy, including consultancy costs and costs for actions related to consultations of stakeholders for the purposes of preparing the strategy;

(iv)administrative costs (operating and personnel costs) of an organisation that applies for preparatory support during the preparation phase;

(v)support for small pilot projects.

Such preparatory support shall be eligible regardless of whether the community-led local development strategy designed by the local action group benefitting from the support is selected for funding by the selection committee set up under Article 33(3).

(b)implementation of operations under the community-led local development strategy;

(c)preparation and implementation of the local action group's cooperation activities;

(d)running costs linked to the management of the implementation of the community-led local development strategy consisting of operating costs, personnel costs, training cost, costs linked to public relations, financial costs as well as the costs linked to monitoring and evaluation of that strategy as referred to in point (g) of Article 34(3);

(e)animation of the community-led local development strategy in order to facilitate exchange between stakeholders to provide information and to promote the strategy and to support potential beneficiaries with a view to developing operations and preparing applications.

(a) the costs of preparatory support consisting of capacitybuilding, training and networking with a view to preparing and implementing a community-led local development strategy.

Such costs may include one or more of the following elements:

(i) training actions for local stakeholders;

(ii) studies of the area concerned;

(iii) costs related to the design of the community-led local development strategy, including consultancy costs and costs for actions related to consultations of stakeholders for the purposes of preparing the strategy;

(iv) administrative costs (operating and personnel costs) of an organisation that applies for preparatory support during the preparation phase;

(v) support for small pilot projects.

(b) implementation of operations under the community-led local development strategy;

(d) running costs linked to the management of the implementation of the community-led local development strategy consisting of operating costs, personnel costs, training cost, costs linked to public relations, financial costs as well as the costs linked to monitoring and evaluation of that strategy as referred to in point (g) of Article 34(3);

(e) animation of the community-led local development strategy in order to facilitate exchange between stakeholders to provide information and to promote the strategy and to support potential beneficiaries with a view to developing operations and preparing applications.

2. Support for running costs and animation as referred to in points (d) and (e) of paragraph 1 shall not exceed 25 % of the total public expenditure incurred within the community-led local development strategy.

@@ -918,19 +888,19 @@

2. Support of financial instruments shall be based on an ex ante assessment which has established evidence of market failures or suboptimal investment situations, and the estimated level and scope of public investment needs, including types of financial instruments to be supported. Such ex ante assessment shall include:

(a)an analysis of market failures, suboptimal investment situations, and investment needs for policy areas and thematic objectives or investment priorities to be addressed with a view to contributing to the achievement of specific objectives set out under a priority and to be supported through financial instruments. That analysis shall be based on available good practices methodology;

(b)an assessment of the added value of the financial instruments that are being considered for support from the ESI Funds, consistency with other forms of public intervention addressing the same market, possible State aid implications, the proportionality of the envisaged intervention and measures to minimise market distortion;

(c)an estimate of additional public and private resources to be potentially raised by the financial instrument down to the level of the final recipient (expected leverage effect), including as appropriate an assessment of the need for, and the extent of, differentiated treatment as referred to in Article 43a to attract counterpart resources from investors operating under the market economy principle and/or a description of the mechanisms which will be used to establish the need for, and extent of, such differentiated treatment, such as a competitive or appropriately independent assessment process;

(d)an assessment of lessons learnt from similar instruments and ex ante assessments carried out by the Member State in the past, and how such lessons will be applied in the future;

(e)the proposed investment strategy, including an examination of options for implementation arrangements within the meaning of Article 38, financial products to be offered, final recipients targeted and envisaged combination with grant support as appropriate;

(f)a specification of the expected results and how the financial instrument concerned is expected to contribute to the achievement of the specific objectives set out under the relevant priority including indicators for that contribution;

(g)provisions allowing for the ex ante assessment to be reviewed and updated as required during the implementation of any financial instrument which has been implemented based upon such assessment, where during the implementation phase, the managing authority considers that the ex ante assessment may no longer accurately represent the market conditions existing at the time of implementation.

(a) an analysis of market failures, suboptimal investment situations, and investment needs for policy areas and thematic objectives or investment priorities to be addressed with a view to contributing to the achievement of specific objectives set out under a priority and to be supported through financial instruments. That analysis shall be based on available good practices methodology;

(b) an assessment of the added value of the financial instruments that are being considered for support from the ESI Funds, consistency with other forms of public intervention addressing the same market, possible State aid implications, the proportionality of the envisaged intervention and measures to minimise market distortion;

(c) an estimate of additional public and private resources to be potentially raised by the financial instrument down to the level of the final recipient (expected leverage effect), including as appropriate an assessment of the need for, and the extent of, differentiated treatment as referred to in Article 43a to attract counterpart resources from investors operating under the market economy principle and/or a description of the mechanisms which will be used to establish the need for, and extent of, such differentiated treatment, such as a competitive or appropriately independent assessment process;

(d) an assessment of lessons learnt from similar instruments and ex ante assessments carried out by the Member State in the past, and how such lessons will be applied in the future;

(e) the proposed investment strategy, including an examination of options for implementation arrangements within the meaning of Article 38, financial products to be offered, final recipients targeted and envisaged combination with grant support as appropriate;

(f) a specification of the expected results and how the financial instrument concerned is expected to contribute to the achievement of the specific objectives set out under the relevant priority including indicators for that contribution;

(g) provisions allowing for the ex ante assessment to be reviewed and updated as required during the implementation of any financial instrument which has been implemented based upon such assessment, where during the implementation phase, the managing authority considers that the ex ante assessment may no longer accurately represent the market conditions existing at the time of implementation.

3. The *ex ante* assessment referred to in paragraph 2 of this Article may take into account the *ex ante* evaluations referred to in point (h) of the first subparagraph and the second subparagraph of Article 209(2) of the Financial Regulation and may be performed in stages. It shall, in any event, be completed before the managing authority decides to make programme contributions to a financial instrument.

@@ -940,6 +910,8 @@

4. Where financial instruments support financing to enterprises, including SMEs, such support shall target the establishment of new enterprises, early stage-capital, i.e. seed capital and start-up capital, expansion capital, capital for the strengthening of the general activities of an enterprise, or the realisation of new projects, penetration of new markets or new developments by existing enterprises, without prejudice to applicable Union State aid rules, and in accordance with the Fund-specific rules. Such support may include investment in both tangible and intangible assets as well as working capital within the limits of applicable Union State aid rules and with a view to stimulating the private sector as a supplier of funding to enterprises. It may also include the costs of transfer of proprietary rights in enterprises provided that such transfers take place between independent investors.

Financial instruments may also provide support in the form of working capital to SMEs, if necessary as a temporary measure, to provide an effective response to a public health crisis.

5. Investments that are to be supported through financial instruments shall not be physically completed or fully implemented at the date of the investment decision.

6. Where financial instruments provide support to final recipients in respect of infrastructure investments with the objective of supporting urban development or urban regeneration or similar infrastructure investments with the objectives of diversifying non-agricultural activities in rural areas, such support may include the amount necessary for the reorganisation of a debt portfolio regarding infrastructure forming part of the new investment, up to a maximum of 20 % of the total amount of programme support from the financial instrument to the investment.

@@ -964,11 +936,11 @@

1. In implementing Article 37, managing authorities may provide a financial contribution to the following financial instruments:

(a)financial instruments set up at Union level, managed directly or indirectly by the Commission;

(b)financial instruments set up at national, regional, transnational or cross-border level, managed by or under the responsibility of the managing authority;

(c)financial instruments combining such contribution with EIB financial products under the EFSI in accordance with Article 39a.

(a) financial instruments set up at Union level, managed directly or indirectly by the Commission;

(b) financial instruments set up at national, regional, transnational or cross-border level, managed by or under the responsibility of the managing authority;

(c) financial instruments combining such contribution with EIB financial products under the EFSI in accordance with Article 39a.

2. Contributions from the ESI Funds to financial instruments under point (a) of paragraph 1 shall be placed in separate accounts and used, in accordance with the objectives of the respective ESI Funds, to support actions and final recipients consistent with the programme or programmes from which such contributions are made.

@@ -978,39 +950,30 @@

3. For financial instruments under point (b) of paragraph 1, the managing authority may provide a financial contribution to the following financial instruments:

(a)financial instruments complying with the standard terms and conditions laid down by the Commission, in accordance with the second subparagraph of this paragraph;

(b)already existing or newly created financial instruments which are specifically designed to achieve the specific objectives set out under the relevant priority.

(a) financial instruments complying with the standard terms and conditions laid down by the Commission, in accordance with the second subparagraph of this paragraph;

(b) already existing or newly created financial instruments which are specifically designed to achieve the specific objectives set out under the relevant priority.

The Commission shall adopt implementing acts concerning the standard terms and conditions with which the financial instruments under point (a) of the first subparagraph shall comply. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 150(3).

4. When supporting financial instruments referred to in point (b) of paragraph 1 the managing authority may:

(a)invest in the capital of existing or newly created legal entities, including those financed from other ESI Funds, dedicated to implementing financial instruments consistent with the objectives of the respective ESI Funds, which will undertake implementation tasks; the support to such entities shall be limited to the amounts necessary to implement new investments in accordance with Article 37 and in a manner that is consistent with the objectives of this Regulation;

(b)entrust implementation tasks, through the direct award of a contract, to:

(i)the EIB;

(ii)an international financial institution in which a Member State is a shareholder;

(iii)a publicly-owned bank or institution, established as a legal entity carrying out financial activities on a professional basis, which fulfils all of the following conditions:

—there is no direct private capital participation, with the exception of non-controlling and non-blocking forms of private capital participation required by national legislative provisions, in conformity with the Treaties, which do not exert a decisive influence on the relevant bank or institution, and with the exception of forms of private capital participation which confer no influence on decisions regarding the day-to-day management of the financial instrument supported by the ESI Funds;

—operates under a public policy mandate given by the relevant authority of a Member State at national or regional level, which includes carrying out, as all or part of its activities, economic development activities contributing to the objectives of the ESI Funds;

—carries out, as all or part of its activities, economic development activities contributing to the objectives of the ESI Funds in regions, policy areas or sectors for which access to funding from market sources is not generally available or sufficient;

—operates without primarily focussing on maximising profits, but ensures a long-term financial sustainability for its activities;

—ensures that the direct award of a contract referred to in point (b) does not provide any direct or indirect benefit for commercial activities by way of appropriate measures in accordance with applicable law;

—is subject to the supervision of an independent authority in accordance with applicable law;

(c)entrust implementation tasks to another body governed by public or private law; or

(d)undertake implementation tasks directly, in the case of financial instruments consisting solely of loans or guarantees. In that case the managing authority shall be considered to be the beneficiary within the meaning of point (10) of Article 2.

(a) invest in the capital of existing or newly created legal entities, including those financed from other ESI Funds, dedicated to implementing financial instruments consistent with the objectives of the respective ESI Funds, which will undertake implementation tasks; the support to such entities shall be limited to the amounts necessary to implement new investments in accordance with Article 37 and in a manner that is consistent with the objectives of this Regulation;

(b) entrust implementation tasks, through the direct award of a contract, to:

(i) the EIB;

(ii) an international financial institution in which a Member State is a shareholder;

(iii) a publicly-owned bank or institution, established as a legal entity carrying out financial activities on a professional basis, which fulfils all of the following conditions:

— there is no direct private capital participation, with the exception of non-controlling and non-blocking forms of private capital participation required by national legislative provisions, in conformity with the Treaties, which do not exert a decisive influence on the relevant bank or institution, and with the exception of forms of private capital participation which confer no influence on decisions regarding the day-to-day management of the financial instrument supported by the ESI Funds;

— operates under a public policy mandate given by the relevant authority of a Member State at national or regional level, which includes carrying out, as all or part of its activities, economic development activities contributing to the objectives of the ESI Funds;

— carries out, as all or part of its activities, economic development activities contributing to the objectives of the ESI Funds in regions, policy areas or sectors for which access to funding from market sources is not generally available or sufficient;

— operates without primarily focussing on maximising profits, but ensures a long-term financial sustainability for its activities;

— ensures that the direct award of a contract referred to in point (b) does not provide any direct or indirect benefit for commercial activities by way of appropriate measures in accordance with applicable law;

— is subject to the supervision of an independent authority in accordance with applicable law;

(d) undertake implementation tasks directly, in the case of financial instruments consisting solely of loans or guarantees. In that case the managing authority shall be considered to be the beneficiary within the meaning of point (10) of Article 2.

When implementing the financial instrument, the bodies referred to in points (a) to (d) of the first subparagraph of this paragraph shall ensure compliance with applicable law and with the requirements laid down in Article 155(2) and (3) of the Financial Regulation.

@@ -1022,9 +985,9 @@

7. Where a financial instrument is implemented under points (a), (b) and (c) of the first subparagraph of paragraph 4, subject to the implementation structure of the financial instrument, the terms and conditions for contributions from programmes to financial instruments shall be set out in funding agreements in accordance with Annex IV at the following levels:

(a)where applicable, between the duly mandated representatives of the managing authority and the body that implements the fund of funds; and

(b)between the duly mandated representatives of the managing authority, or where applicable, the body that implements the fund of funds, and the body that implements the financial instrument.

(a) where applicable, between the duly mandated representatives of the managing authority and the body that implements the fund of funds; and

(b) between the duly mandated representatives of the managing authority, or where applicable, the body that implements the fund of funds, and the body that implements the financial instrument.

8. For financial instruments implemented under point (d) of the first subparagraph of paragraph 4, the terms and conditions for contributions from programmes to financial instruments shall be set out in a strategy document in accordance with Annex IV to be examined by the monitoring committee.

@@ -1040,13 +1003,11 @@

2. Member States may use the ERDF and EAFRD during the eligibility period set out in Article 65(2) of this Regulation to provide a financial contribution to financial instruments referred to in point (a) of Article 38(1) of this Regulation, implemented indirectly by the Commission with the EIB pursuant to point (c)(iii) of the first subparagraph of Article 62(1) of the Financial Regulation and Article 208(4) of the Financial Regulation, in respect of the following activities:

(a)uncapped guarantees providing capital relief to financial intermediaries for new portfolios of debt finance to eligible SMEs in accordance with Article 37(4) of this Regulation;

(b)securitisation, as defined in point (61) of Article 4 (1) of Regulation (EU) 575/2013 of the European Parliament and of the Council (21), of any of the following:

(i)existing portfolios of debt finance to SMEs and other enterprises with less than 500 employees;

(ii)new portfolios of debt finance to SMEs.

(a) uncapped guarantees providing capital relief to financial intermediaries for new portfolios of debt finance to eligible SMEs in accordance with Article 37(4) of this Regulation;

(b) securitisation, as defined in point (61) of Article 4 (1) of Regulation (EU) 575/2013 of the European Parliament and of the Council (21), of any of the following:

(i) existing portfolios of debt finance to SMEs and other enterprises with less than 500 employees;

(ii) new portfolios of debt finance to SMEs.

The financial contribution referred to in points (a) and (b) of the first subparagraph of this paragraph shall contribute to junior and/or mezzanine tranches of portfolios mentioned therein provided that the relevant financial intermediary retains a sufficient part of the risk of the portfolios at least equal to the risk retention requirement set out in Directive 2013/36/EU of the European Parliament and of the Council (22) and in Regulation (EU) No 575/2013 to ensure adequate alignment of interest. In the case of securitisation under point (b) of the first subparagraph of this paragraph, the financial intermediary is obliged to originate new debt finance to eligible SMEs in accordance with Article 37(4) of this Regulation.

@@ -1064,37 +1025,25 @@

4. The financial contribution referred to in paragraph 2 shall comply with the following conditions:

(a)by way of derogation from Article 37(2), it shall be based on an *ex ante* assessment at Union level carried out by the EIB and the Commission or, where more recent data are available, on an *ex ante* assessment at Union, national or regional level.

On the basis of available data sources on bank debt finance and SMEs, the *ex ante* assessment shall cover, inter alia, an analysis of the SME financing needs at the relevant level, SME financing conditions and needs as well as an indication of the SME financing gap, a profile of the economic and financial situation of the SME sector at the relevant level, minimum critical mass of aggregate contributions, a range of estimated total loan volume generated by such contributions, and the added value;

(b)it shall be provided by each participating Member State as part of a separate priority axis within a programme in the case of ERDF contribution, or a single dedicated national programme per financial contribution by ERDF and EAFRD, supporting the thematic objective set out in point (3) of the first paragraph of Article 9;

(c)it shall be subject to the conditions set out in a funding agreement concluded between each participating Member State and the EIB including, inter alia:

(i)tasks and obligations of the EIB including remuneration;

(ii)minimum leverage to be achieved at clearly defined milestones within the eligibility period indicated in Article 65(2);

(iii)conditions for the new debt finance;

(iv)provisions relating to non-eligible activities and exclusion criteria;

(v)schedule of payments;

(vi)penalties in the event of non-performance by financial intermediaries;

(vii)selection of financial intermediaries;

(viii)monitoring, reporting and auditing;

(ix)visibility;

(x)the conditions for termination of the agreement.

For the purposes of implementation of the instrument, the EIB will enter into contractual arrangements with selected financial intermediaries;

(d)in the event that the funding agreement referred to in point (c) is not concluded within six months of the adoption of the programme referred to in point (b), the Member State shall have the right to reallocate such contribution to other programmes and priorities in accordance with requirements for thematic concentration.

(a) by way of derogation from Article 37(2), it shall be based on an *ex ante* assessment at Union level carried out by the EIB and the Commission or, where more recent data are available, on an *ex ante* assessment at Union, national or regional level.

(b) it shall be provided by each participating Member State as part of a separate priority axis within a programme in the case of ERDF contribution, or a single dedicated national programme per financial contribution by ERDF and EAFRD, supporting the thematic objective set out in point (3) of the first paragraph of Article 9;

(c) it shall be subject to the conditions set out in a funding agreement concluded between each participating Member State and the EIB including, inter alia:

(i) tasks and obligations of the EIB including remuneration;

(ii) minimum leverage to be achieved at clearly defined milestones within the eligibility period indicated in Article 65(2);

(iii) conditions for the new debt finance;

(iv) provisions relating to non-eligible activities and exclusion criteria;

(v) schedule of payments;

(vi) penalties in the event of non-performance by financial intermediaries;

(vii) selection of financial intermediaries;

(viii) monitoring, reporting and auditing;

(ix) visibility;

(x) the conditions for termination of the agreement.

For the purposes of implementation of the instrument, the EIB will enter into contractual arrangements with selected financial intermediaries;

(d) in the event that the funding agreement referred to in point (c) is not concluded within six months of the adoption of the programme referred to in point (b), the Member State shall have the right to reallocate such contribution to other programmes and priorities in accordance with requirements for thematic concentration.

The Commission shall, in order to ensure uniform conditions for the implementation of this Article, adopt an implementing act laying down the model of the funding agreement referred to in point (c) of the first subparagraph. That implementing act shall be adopted in accordance with the examination procedure referred to in Article 150(3).

@@ -1110,17 +1059,17 @@

8. At closure of the programme, the eligible expenditure as referred to in points (a) and (b) of the first subparagraph of Article 42(1) shall be the total amount of programme contributions paid to the financial instrument, corresponding:

(a)for the activities referred to in point (a) of the first subparagraph of paragraph 2 of this Article, to the resources referred to in point (b) of the first subparagraph of Article 42(1);

(b)for the activities referred to in point (b) of the first subparagraph of paragraph 2 of this Article, to the aggregate amount of new debt finance resulting from the securitisation transactions, paid to or to the benefit of eligible SMEs within the eligibility period set out in Article 65(2).

(a) for the activities referred to in point (a) of the first subparagraph of paragraph 2 of this Article, to the resources referred to in point (b) of the first subparagraph of Article 42(1);

(b) for the activities referred to in point (b) of the first subparagraph of paragraph 2 of this Article, to the aggregate amount of new debt finance resulting from the securitisation transactions, paid to or to the benefit of eligible SMEs within the eligibility period set out in Article 65(2).

9. For the purpose of Articles 44 and 45, the uncalled guarantees and the amounts recovered in relation to, respectively, the uncapped guarantees and the securitisation transactions, shall be deemed to be resources paid back to the financial instruments. At the winding up of the financial instruments, the net liquidation proceeds, after deduction of costs, fees and payment of amounts due to creditors ranking senior to those contributed by the ERDF and EAFRD, shall be returned to the relevant Member States pro rata to their contributions to the financial instrument.

10. The report referred to in Article 46(1) shall include the following additional elements:

(a)the total amount of ERDF and EAFRD support paid to the financial instrument in relation to uncapped guarantees or securitisation transactions, by programme and priority or measure;

(b)progress in creating the new debt finance in accordance with Article 37(4), for eligible SMEs.

(a) the total amount of ERDF and EAFRD support paid to the financial instrument in relation to uncapped guarantees or securitisation transactions, by programme and priority or measure;

(b) progress in creating the new debt finance in accordance with Article 37(4), for eligible SMEs.

11. Notwithstanding Article 93(1), the resources allocated to instruments under paragraph 2 of this Article may be used for the purpose of giving rise to new SME debt finance in the entire territory of the Member State without regard to the categories of region, unless otherwise provided for in the funding agreement referred to in point (c) of the first subparagraph of paragraph 4.

@@ -1140,9 +1089,9 @@

5. When contributing to financial instruments referred to in point (c) of Article 38(1) the managing authority may do any of the following:

(a)invest in the capital of an existing or newly created legal entity dedicated to implement investments in final recipients consistent with the objectives of the respective ESI Funds which will undertake implementation tasks;

(b)entrust implementation tasks in accordance with points (b) and (c) of the first subparagraph of Article 38(4).

(a) invest in the capital of an existing or newly created legal entity dedicated to implement investments in final recipients consistent with the objectives of the respective ESI Funds which will undertake implementation tasks;

(b) entrust implementation tasks in accordance with points (b) and (c) of the first subparagraph of Article 38(4).

The body entrusted with implementation tasks as referred to in point (b) of the first subparagraph of this paragraph shall either open a fiduciary account in its name and on behalf of the managing authority or set up a separate block of finance within the institution for programme contribution. In the case of a separate block of finance, an accounting distinction shall be made between programme resources invested in the financial instrument and the other resources available in the institution. The assets held on fiduciary accounts and such separate blocks of finance shall be managed in accordance with the principle of sound financial management following appropriate prudential rules and shall have appropriate liquidity.

@@ -1160,9 +1109,9 @@

11. The terms and conditions for contributions pursuant to point (c) of Article 38(1) shall be set out in funding agreements in accordance with Annex IV at the following levels:

(a)where applicable, between the duly mandated representatives of the managing authority and the body that implements the fund of funds;

(b)between the duly mandated representatives of the managing authority, or where applicable, between the body that implements the fund of funds, and the body that implements the financial instrument.

(a) where applicable, between the duly mandated representatives of the managing authority and the body that implements the fund of funds;

(b) between the duly mandated representatives of the managing authority, or where applicable, between the body that implements the fund of funds, and the body that implements the financial instrument.

12. For contributions pursuant to paragraph 1 of this Article to investment platforms which receive contributions from instruments set up at Union level, consistency with State aid rules shall be ensured in accordance with point (c) of the first subparagraph of Article 209(2) of the Financial Regulation.

@@ -1198,9 +1147,9 @@

3. The bodies responsible for the audit of programmes may conduct audits at the level of final recipients only when one or more of the following situations occur:

(a)supporting documents, providing evidence of the support from the financial instrument to final recipients and of its use for the intended purposes in line with applicable law, are not available at the level of the managing authority or at the level of the bodies that implement financial instruments;

(b)there is evidence that the documents available at the level of the managing authority or at the level of the bodies that implement financial instruments do not represent a true and accurate record of the support provided.

(a) supporting documents, providing evidence of the support from the financial instrument to final recipients and of its use for the intended purposes in line with applicable law, are not available at the level of the managing authority or at the level of the bodies that implement financial instruments;

(b) there is evidence that the documents available at the level of the managing authority or at the level of the bodies that implement financial instruments do not represent a true and accurate record of the support provided.

4. By 3 November 2018, the Commission shall adopt delegated acts in accordance with Article 149 supplementing this Regulation by laying down additional specific rules on the management and control of financial instruments referred to in points (b) and (c) of Article 38(1), the types of controls to be performed by managing and audit authorities, the arrangements for keeping supporting documents and the elements to be evidenced by supporting documents.

@@ -1208,9 +1157,9 @@

5a. By way of derogation from Article 143(4) of this Regulation and from the second paragraph of Article 56 of Regulation (EU) No 1306/2013, in operations comprising financial instruments, a contribution cancelled in accordance with Article 143(2) of this Regulation or in accordance with the first paragraph of Article 56 of Regulation (EU) No 1306/2013, as a result of an individual irregularity, may be reused within the same operation under the following conditions:

(a)where the irregularity that gives rise to the cancellation of the contribution is detected at the level of the final recipient, the contribution cancelled may be reused only for other final recipients within the same financial instrument;

(b)where the irregularity that gives rise to the cancellation of the contribution is detected at the level of the financial intermediary within a fund of funds, the contribution cancelled may be reused only for other financial intermediaries.

(a) where the irregularity that gives rise to the cancellation of the contribution is detected at the level of the final recipient, the contribution cancelled may be reused only for other final recipients within the same financial instrument;

(b) where the irregularity that gives rise to the cancellation of the contribution is detected at the level of the financial intermediary within a fund of funds, the contribution cancelled may be reused only for other financial intermediaries.

Where the irregularity that gives rise to the cancellation of the contribution is detected at the level of the body implementing funds of funds, or at the level of the body implementing financial instruments where a financial instrument is implemented through a structure without a fund of funds, the contribution cancelled may not be reused within the same operation.

@@ -1222,19 +1171,16 @@

1. As regards financial instruments referred to in points (a) and (c) of Article 38(1), and as regards financial instruments referred to in point (b) of Article 38(1) implemented in accordance with points (a), (b) and (c) of the first subparagraph of Article 38(4), phased applications for interim payment shall be made for programme contributions paid to the financial instrument during the eligibility period laid down in Article 65(2) (the ‘eligibility period’) in accordance with the following conditions:

(a)the amount of the programme contribution paid to the financial instrument included in each application for interim payment submitted during the eligibility period shall not exceed 25 % of the total amount of programme contributions committed to the financial instrument under the relevant funding agreement, corresponding to expenditure within the meaning of points (a), (b) and (d) of Article 42(1) expected to be paid during the eligibility period. Applications for interim payment submitted after the eligibility period shall include the total amount of eligible expenditure within the meaning of Article 42;

(b)each application for interim payment referred to in point (a) of this paragraph may include up to 25 % of the total amount of the national co-financing as referred to in Article 38(9) expected to be paid to the financial instrument, or at the level of final recipients for expenditure in the meaning of points (a), (b) and (d) of Article 42(1), within the eligibility period;

(c)subsequent applications for interim payment submitted during the eligibility period shall only be made:

(i)for the second application for interim payment, when at least 60 % of the amount included in the first application for interim payment has been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1);

(ii)for the third and subsequent applications for interim payment, when at least 85 % of the amounts included in the previous applications for interim payment have been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1);

(d)each application for interim payment, which includes expenditure related to financial instruments, shall separately disclose the total amount of programme contributions paid to the financial instruments and the amounts paid as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1).

At closure of a programme, the application for payment of the final balance shall include the total amount of eligible expenditure as referred to in Article 42.

(a) the amount of the programme contribution paid to the financial instrument included in each application for interim payment submitted during the eligibility period shall not exceed 25 % of the total amount of programme contributions committed to the financial instrument under the relevant funding agreement, corresponding to expenditure within the meaning of points (a), (b) and (d) of Article 42(1) expected to be paid during the eligibility period. Applications for interim payment submitted after the eligibility period shall include the total amount of eligible expenditure within the meaning of Article 42;

(b) each application for interim payment referred to in point (a) of this paragraph may include up to 25 % of the total amount of the national co-financing as referred to in Article 38(9) expected to be paid to the financial instrument, or at the level of final recipients for expenditure in the meaning of points (a), (b) and (d) of Article 42(1), within the eligibility period;

(i) for the second application for interim payment, when at least 60 % of the amount included in the first application for interim payment has been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1);

(ii) for the third and subsequent applications for interim payment, when at least 85 % of the amounts included in the previous applications for interim payment have been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1);

(d) each application for interim payment, which includes expenditure related to financial instruments, shall separately disclose the total amount of programme contributions paid to the financial instruments and the amounts paid as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1).

At closure of a programme, the application for payment of the final balance shall include the total amount of eligible expenditure as referred to in Article 42.

2. As regards financial instruments referred to in point (b) of Article 38(1) implemented in accordance with point (d) of the first subparagraph of Article 38(4), the applications for interim payment and for payment of the final balance shall include the total amount of the payments effected by the managing authority for investments in final recipients as referred to in points (a) and (b) of the first subparagraph of Article 42(1).

@@ -1248,13 +1194,13 @@

1. At closure of a programme, the eligible expenditure of the financial instrument shall be the total amount of programme contributions effectively paid or, in the case of guarantees, committed by the financial instrument within the eligibility period, corresponding to:

(a)payments to final recipients, and in the cases referred to in Article 37(7) payments to the benefit of final recipients;

(b)resources committed for guarantee contracts, whether outstanding or already come to maturity, in order to honour possible guarantee calls for losses, calculated on the basis of a prudent ex ante risk assessment, covering a multiple amount of underlying new loans or other risk-bearing instruments for new investments in final recipients;

(c)capitalised interest rate subsidies or guarantee fee subsidies, due to be paid for a period not exceeding 10 years after the eligibility period, used in combination with financial instruments, paid into an escrow account specifically set up for that purpose, for effective disbursement after the eligibility period, but in respect of loans or other risk-bearing instruments disbursed for investments in final recipients within the eligibility period;

(d)reimbursement of management costs incurred or payment of management fees of the financial instrument.

(a) payments to final recipients, and in the cases referred to in Article 37(7) payments to the benefit of final recipients;

(b) resources committed for guarantee contracts, whether outstanding or already come to maturity, in order to honour possible guarantee calls for losses, calculated on the basis of a prudent ex ante risk assessment, covering a multiple amount of underlying new loans or other risk-bearing instruments for new investments in final recipients;

(c) capitalised interest rate subsidies or guarantee fee subsidies, due to be paid for a period not exceeding 10 years after the eligibility period, used in combination with financial instruments, paid into an escrow account specifically set up for that purpose, for effective disbursement after the eligibility period, but in respect of loans or other risk-bearing instruments disbursed for investments in final recipients within the eligibility period;

(d) reimbursement of management costs incurred or payment of management fees of the financial instrument.

The Commission shall be empowered to adopt delegated acts in accordance with Article 149 laying down the specific rules concerning the establishment of a system of capitalisation of annual instalments for interest rate subsidies and guarantee fee subsidies referred to in point (c) of the first subparagraph.

@@ -1264,19 +1210,19 @@

The amount paid into the escrow account:

(a)shall be used solely for follow-on investments in final recipients having received initial equity investments from the financial instrument within the eligibility period, which are still wholly or partially outstanding;

(b)shall be used solely for follow-on investments to be made in accordance with market standards and market standard contractual arrangements and limited to the minimum necessary to stimulate private sector co-investment, while ensuring continuity of financing for the target enterprises so that both public and private investors can benefit from investments;

(c)shall not exceed 20 % of the eligible expenditure of the equity-based instrument referred to in point (a) of the first subparagraph of paragraph 1 from which ceiling capital resources and gains returned to that equity-based instrument during the eligibility period shall be deducted.

(a) shall be used solely for follow-on investments in final recipients having received initial equity investments from the financial instrument within the eligibility period, which are still wholly or partially outstanding;

(b) shall be used solely for follow-on investments to be made in accordance with market standards and market standard contractual arrangements and limited to the minimum necessary to stimulate private sector co-investment, while ensuring continuity of financing for the target enterprises so that both public and private investors can benefit from investments;

(c) shall not exceed 20 % of the eligible expenditure of the equity-based instrument referred to in point (a) of the first subparagraph of paragraph 1 from which ceiling capital resources and gains returned to that equity-based instrument during the eligibility period shall be deducted.

Any amounts paid into the escrow account which are not used for investments in final recipients paid in the period referred to in the first subparagraph shall be used in accordance with Article 45.

4. The eligible expenditure disclosed in accordance with paragraphs 1, 2 and 3 shall not exceed the sum of the:

(a)total amount of the support from the ESI Funds paid for the purposes of paragraphs 1, 2 and 3; and

(b)corresponding national co-financing.

(a) total amount of the support from the ESI Funds paid for the purposes of paragraphs 1, 2 and 3; and

(b) corresponding national co-financing.

5. Where management costs and fees as referred to in point (d) of the first subparagraph of paragraph 1 of this Article and in paragraph 2 of this Article are charged by the body implementing the fund of funds or bodies implementing financial instruments pursuant to point (c) of Article 38(1) and points (a), (b) and (c) of the first subparagraph of Article 38(4), they shall not exceed the thresholds defined in the delegated act referred to in paragraph 6 of this Article. Whereas management costs shall comprise direct or indirect cost items reimbursed against evidence of expenditure, management fees shall refer to an agreed price for services rendered established via a competitive market process, where applicable. Management costs and fees shall be based on a performance-based calculation methodology.

@@ -1314,11 +1260,11 @@

1. Without prejudice to Article 43a, resources paid back to financial instruments from investments or from the release of resources committed for guarantee contracts, including capital repayments and gains and other earnings or yields, such as interest, guarantee fees, dividends, capital gains or any other income generated by investments, which are attributable to the support from the ESI Funds, shall be re-used for the following purposes, up to the amounts necessary and in the order agreed in the relevant funding agreements:

(a)further investments through the same or other financial instruments, in accordance with the specific objectives set out under a priority;

(b)where applicable, to cover the losses in the nominal amount of the ESI Funds contribution to the financial instrument resulting from negative interest, if such losses occur despite active treasury management by the bodies implementing financial instruments;

(c)where applicable, reimbursement of management costs incurred and payment of management fees of the financial instrument.

(a) further investments through the same or other financial instruments, in accordance with the specific objectives set out under a priority;

(b) where applicable, to cover the losses in the nominal amount of the ESI Funds contribution to the financial instrument resulting from negative interest, if such losses occur despite active treasury management by the bodies implementing financial instruments;

(c) where applicable, reimbursement of management costs incurred and payment of management fees of the financial instrument.

2. The managing authority shall ensure that adequate records of the re-use of the resources referred to in paragraph 1 are maintained.

@@ -1336,25 +1282,25 @@

2. The specific report referred to in paragraph 1 shall include, for each financial instrument, the following information:

(a)identification of the programme and of the priority or measure from which support from the ESI Funds is provided;

(b)description of the financial instrument and implementation arrangements;

(c)identification of the bodies implementing financial instruments, and the bodies implementing funds of funds where applicable, as referred to under points (a), (b) and (c) of Article 38(1);

(d)total amount of programme contributions by priority or measure paid to the financial instrument;

(e)total amount of support paid to the final recipients or to the benefit of final recipients, or committed in guarantee contracts by the financial instrument for investments in final recipients, as well as management costs incurred or management fees paid, by programme and priority or measure;

(f)the performance of the financial instrument including progress in its set-up and in selection of bodies implementing the financial instrument, including the body implementing a fund of funds;

(g)interest and other gains generated by support from the ESI Funds to the financial instrument and programme resources paid back to financial instruments from investments as referred to in Articles 43 and 44 and amounts used for differentiated treatment as referred to in Article 43a;

(h)progress in achieving the expected leverage effect of investments made by the financial instrument;

(i)the value of equity investments, with respect to previous years;

(j)contribution of the financial instrument to the achievement of the indicators of the priority or measure concerned.

(a) identification of the programme and of the priority or measure from which support from the ESI Funds is provided;

(b) description of the financial instrument and implementation arrangements;

(c) identification of the bodies implementing financial instruments, and the bodies implementing funds of funds where applicable, as referred to under points (a), (b) and (c) of Article 38(1);

(d) total amount of programme contributions by priority or measure paid to the financial instrument;

(e) total amount of support paid to the final recipients or to the benefit of final recipients, or committed in guarantee contracts by the financial instrument for investments in final recipients, as well as management costs incurred or management fees paid, by programme and priority or measure;

(f) the performance of the financial instrument including progress in its set-up and in selection of bodies implementing the financial instrument, including the body implementing a fund of funds;

(g) interest and other gains generated by support from the ESI Funds to the financial instrument and programme resources paid back to financial instruments from investments as referred to in Articles 43 and 44 and amounts used for differentiated treatment as referred to in Article 43a;

(h) progress in achieving the expected leverage effect of investments made by the financial instrument;

(i) the value of equity investments, with respect to previous years;

(j) contribution of the financial instrument to the achievement of the indicators of the priority or measure concerned.

The information in points (h) and (j) of the first subparagraph may be included only in the annex to the annual implementation reports submitted in 2017 and 2019 as well as in the final implementation report. The reporting obligations set out in points (a) to (j) of the first subparagraph shall not be applied at the level of final recipients.

@@ -1464,23 +1410,23 @@

2. The progress report shall set out information on and assess:

(a)changes in the development needs in the Member State since the adoption of the Partnership Agreement;

(b)progress made towards achievement of the Union strategy for smart, sustainable and inclusive growth, as well as of the Fund-specific missions referred to in Article 4(1), through the contribution of the ESI Funds to the thematic objectives selected, and in particular with regard to the milestones set out in the performance framework for each programme, and to the support used for climate change objectives;

(c)whether the actions taken to fulfil the applicable ex ante conditionalities set out in the Partnership Agreement not fulfilled at the date of adoption of the Partnership Agreement have been implemented in accordance with the timetable established. This point shall only apply to the progress report to be submitted in 2017;

(d)implementation of mechanisms to ensure coordination between the ESI Funds and other Union and national funding instruments and with the EIB;

(e)implementation of the integrated approach to territorial development, or a summary of the implementation of the integrated approaches that are based on the programmes, including progress towards achievement of priority areas established for cooperation;

(f)where appropriate, actions taken to reinforce the capacity of the Member State authorities and beneficiaries to administer and use the ESI Funds;

(g)actions taken, and progress made, with regard to reducing the administrative burden on beneficiaries;

(h)the role of the partners referred to in Article 5 in the implementation of the Partnership Agreement;

(i)a summary of the actions taken in relation to the application of the horizontal principles referred to in Articles 5, 7 and 8 and policy objectives for the implementation of the ESI Funds.

(a) changes in the development needs in the Member State since the adoption of the Partnership Agreement;

(b) progress made towards achievement of the Union strategy for smart, sustainable and inclusive growth, as well as of the Fund-specific missions referred to in Article 4(1), through the contribution of the ESI Funds to the thematic objectives selected, and in particular with regard to the milestones set out in the performance framework for each programme, and to the support used for climate change objectives;

(c) whether the actions taken to fulfil the applicable ex ante conditionalities set out in the Partnership Agreement not fulfilled at the date of adoption of the Partnership Agreement have been implemented in accordance with the timetable established. This point shall only apply to the progress report to be submitted in 2017;

(d) implementation of mechanisms to ensure coordination between the ESI Funds and other Union and national funding instruments and with the EIB;

(e) implementation of the integrated approach to territorial development, or a summary of the implementation of the integrated approaches that are based on the programmes, including progress towards achievement of priority areas established for cooperation;

(f) where appropriate, actions taken to reinforce the capacity of the Member State authorities and beneficiaries to administer and use the ESI Funds;

(g) actions taken, and progress made, with regard to reducing the administrative burden on beneficiaries;

(h) the role of the partners referred to in Article 5 in the implementation of the Partnership Agreement;

(i) a summary of the actions taken in relation to the application of the horizontal principles referred to in Articles 5, 7 and 8 and policy objectives for the implementation of the ESI Funds.

3. Where the Commission determines, within two months of the date of submission of the progress report, that the information submitted is incomplete or unclear in a manner which significantly affects the quality and reliability of the assessment concerned, it may request additional information from the Member State, on condition that that request does not cause unjustified delays and that the Commission provides reasons to substantiate the alleged lack of quality and reliability. The Member State shall provide to the Commission the information requested within three months and, where appropriate, shall revise the progress report accordingly.

@@ -1524,33 +1470,33 @@

3. Ex ante evaluations shall appraise:

(a)the contribution to the Union strategy for smart, sustainable and inclusive growth, having regard to the selected thematic objectives and priorities, taking into account national and regional needs and potential for development as well as lessons drawn from previous programming periods;

(b)the internal coherence of the proposed programme or activity and its relationship with other relevant instruments;

(c)the consistency of the allocation of budgetary resources with the objectives of the programme;

(d)the consistency of the selected thematic objectives, the priorities and corresponding objectives of the programmes with the CSF, the Partnership Agreement and the relevant country specific recommendations adopted in accordance with Article 121(2) TFEU and where appropriate at national level, the National Reform Programme;

(e)the relevance and clarity of the proposed programme indicators;

(f)how the expected outputs will contribute to results;

(g)whether the quantified target values for indicators are realistic, having regard to the support envisaged from the ESI Funds;

(h)the rationale for the form of support proposed;

(i)the adequacy of human resources and administrative capacity for management of the programme;

(j)the suitability of the procedures for monitoring the programme and for collecting the data necessary to carry out evaluations;

(k)the suitability of the milestones selected for the performance framework;

(l)the adequacy of planned measures to promote equal opportunities between men and women and to prevent any discrimination, in particular as regards accessibility for persons with disabilities;

(m)the adequacy of planned measures to promote sustainable development;

(n)measures planned to reduce the administrative burden on beneficiaries.

(a) the contribution to the Union strategy for smart, sustainable and inclusive growth, having regard to the selected thematic objectives and priorities, taking into account national and regional needs and potential for development as well as lessons drawn from previous programming periods;

(b) the internal coherence of the proposed programme or activity and its relationship with other relevant instruments;

(d) the consistency of the selected thematic objectives, the priorities and corresponding objectives of the programmes with the CSF, the Partnership Agreement and the relevant country specific recommendations adopted in accordance with Article 121(2) TFEU and where appropriate at national level, the National Reform Programme;

(e) the relevance and clarity of the proposed programme indicators;

(f) how the expected outputs will contribute to results;

(g) whether the quantified target values for indicators are realistic, having regard to the support envisaged from the ESI Funds;

(h) the rationale for the form of support proposed;

(i) the adequacy of human resources and administrative capacity for management of the programme;

(j) the suitability of the procedures for monitoring the programme and for collecting the data necessary to carry out evaluations;

(k) the suitability of the milestones selected for the performance framework;

(l) the adequacy of planned measures to promote equal opportunities between men and women and to prevent any discrimination, in particular as regards accessibility for persons with disabilities;

(m) the adequacy of planned measures to promote sustainable development;

(n) measures planned to reduce the administrative burden on beneficiaries.

4. Ex ante evaluations shall incorporate, where appropriate, the requirements for strategic environmental assessment set out in Directive 2001/42/EC of the European Parliament and of the Council (23) taking into account climate change mitigation needs.

@@ -1592,29 +1538,29 @@

The measures referred to in the first subparagraph may include in particular:

(a)assistance for project preparation and appraisal, including with the EIB;

(b)support for institutional strengthening and administrative capacity-building for the effective management of the ESI Funds;

(c)studies linked to the Commission's reporting on the ESI Funds and the cohesion report;

(d)measures related to the analysis, management, monitoring, information exchange and implementation of the ESI Funds, as well as measures relating to the implementation of control systems and technical and administrative assistance;

(e)evaluations, expert reports, statistics and studies, including those of a general nature, concerning the current and future operation of the ESI Funds, which may be carried out where appropriate by the EIB;

(f)actions to disseminate information, support networking, carry out communication activities with particular attention to the results and added value of support from the ESI Funds, raise awareness and promote cooperation and exchange of experience, including with third countries;

(g)the installation, operation and interconnection of computerised systems for management, monitoring, audit, control and evaluation;

(h)actions to improve evaluation methods and the exchange of information on evaluation practices;

(i)actions related to auditing;

(j)the strengthening of national and regional capacity regarding investment planning, needs assessment, preparation, design and implementation of financial instruments, joint action plans and major projects, including joint initiatives with the EIB;

(k)the dissemination of good practices in order to assist Member States to strengthen the capacity of the relevant partners referred to in Article 5 and their umbrella organisations;

(l)actions financed under Regulation (EU) 2017/825 in order to contribute to delivering the Union strategy for smart, sustainable and inclusive growth.

(a) assistance for project preparation and appraisal, including with the EIB;

(b) support for institutional strengthening and administrative capacity-building for the effective management of the ESI Funds;

(d) measures related to the analysis, management, monitoring, information exchange and implementation of the ESI Funds, as well as measures relating to the implementation of control systems and technical and administrative assistance;

(e) evaluations, expert reports, statistics and studies, including those of a general nature, concerning the current and future operation of the ESI Funds, which may be carried out where appropriate by the EIB;

(f) actions to disseminate information, support networking, carry out communication activities with particular attention to the results and added value of support from the ESI Funds, raise awareness and promote cooperation and exchange of experience, including with third countries;

(g) the installation, operation and interconnection of computerised systems for management, monitoring, audit, control and evaluation;

(h) actions to improve evaluation methods and the exchange of information on evaluation practices;

(i) actions related to auditing;

(j) the strengthening of national and regional capacity regarding investment planning, needs assessment, preparation, design and implementation of financial instruments, joint action plans and major projects, including joint initiatives with the EIB;

(k) the dissemination of good practices in order to assist Member States to strengthen the capacity of the relevant partners referred to in Article 5 and their umbrella organisations;

(l) actions financed under Regulation (EU) 2017/825 in order to contribute to delivering the Union strategy for smart, sustainable and inclusive growth.

The Commission shall dedicate at least 15 % of the resources referred to in this Article to bring about greater efficiency in communication to the public and stronger synergies between the communication activities undertaken at the initiative of the Commission, by extending the knowledge base on results, in particular through more effective data collection and dissemination, evaluations and reporting, and especially by highlighting the contribution of the ESI Funds to improving people’s lives, and by increasing the visibility of support from the ESI Funds as well as by raising awareness about the results and the added value of such support. Information, communication and visibility measures on results and added value of support from the ESI Funds, with particular focus on operations, shall be continued after the closure of the programmes, where appropriate. Such measures shall also contribute to the corporate communication of the political priorities of the Union as far as they are related to the general objectives of this Regulation.

@@ -1634,11 +1580,11 @@

3. Without prejudice to paragraph 2, Member States may implement actions referred to in paragraph 1 through the direct award of a contract to:

(a)the EIB;

(b)an international financial institution in which a Member State is a shareholder;

(c)a publicly-owned bank or institution, as referred to in point (b)(iii) of the first subparagraph of Article 38(4).

(a) the EIB;

(b) an international financial institution in which a Member State is a shareholder;

## TITLE VII

@@ -1668,11 +1614,11 @@

3. The potential net revenue of the operation shall be determined in advance by one of the following methods chosen by the managing authority for a sector, subsector or type of operation:

(a)application of a flat rate net revenue percentage for the sector or subsector applicable to the operation as defined in Annex V or in any of the delegated acts referred to in the second, third and fourth subparagraphs;

(aa)application of a flat rate net revenue percentage established by a Member State for a sector or subsector not covered by point (a). Before the application of the flat rate the responsible audit authority shall verify that the flat rate has been established according to a fair, equitable and verifiable method based on historical data or objective criteria;

(b)calculation of the discounted net revenue of the operation, taking into account the reference period appropriate to the sector or subsector applicable to the operation, the profitability normally expected of the category of investment concerned, the application of the polluter-pays principle and, if appropriate, considerations of equity linked to the relative prosperity of the Member State or region concerned.

(a) application of a flat rate net revenue percentage for the sector or subsector applicable to the operation as defined in Annex V or in any of the delegated acts referred to in the second, third and fourth subparagraphs;

(aa) application of a flat rate net revenue percentage established by a Member State for a sector or subsector not covered by point (a). Before the application of the flat rate the responsible audit authority shall verify that the flat rate has been established according to a fair, equitable and verifiable method based on historical data or objective criteria;

(b) calculation of the discounted net revenue of the operation, taking into account the reference period appropriate to the sector or subsector applicable to the operation, the profitability normally expected of the category of investment concerned, the application of the polluter-pays principle and, if appropriate, considerations of equity linked to the relative prosperity of the Member State or region concerned.

The Commission shall be empowered to adopt delegated acts in accordance with Article 149 in duly justified cases to amend Annex V by adjusting the flat rates established therein taking into account historical data, the potential for cost recovery and the polluter-pays principle where applicable.

@@ -1694,21 +1640,21 @@

7. Paragraphs 1 to 6 shall not apply to:

(a)operations or parts of operations supported solely by the ESF;

(b)operations whose total eligible cost before application of paragraphs 1 to 6 does not exceed EUR 1 000 000 ;

(c)repayable assistance subject to an obligation for full repayment and prizes;

(d)technical assistance;

(e)support to or from financial instruments;

(f)operations for which public support takes the form of lump sums or standard scale unit costs;

(g)operations implemented under a joint action plan;

(h)operations for which amounts or rates of support are defined in Annex II to the EAFRD Regulation or in the EMFF Regulation.

(a) operations or parts of operations supported solely by the ESF;

(b) operations whose total eligible cost before application of paragraphs 1 to 6 does not exceed EUR 1 000 000 ;

(d) technical assistance;

(e) support to or from financial instruments;

(f) operations for which public support takes the form of lump sums or standard scale unit costs;

(g) operations implemented under a joint action plan;

(h) operations for which amounts or rates of support are defined in Annex II to the EAFRD Regulation or in the EMFF Regulation.

Notwithstanding point (b) of the first subparagraph of this paragraph, where a Member State applies paragraph 5, it may include in the relevant priority or measure operations whose total eligible cost before application of paragraphs 1 to 6 does not exceed EUR 1 000 000 .

@@ -1730,9 +1676,9 @@

1. In relation to a PPP operation, and by way of derogation from point (10) of Article 2, a beneficiary may be either:

(a)the public law body initiating the operation; or

(b)a body governed by private law of a Member State (the "private partner") selected or to be selected for the implementation of the operation.

(a) the public law body initiating the operation; or

(b) a body governed by private law of a Member State (the "private partner") selected or to be selected for the implementation of the operation.

2. The public law body initiating the PPP operation may propose that the private partner, to be selected after approval of the operation, be the beneficiary for the purposes of support from the ESI Funds. In that event, the approval decision shall be conditional on the managing authority satisfying itself that the selected private partner fulfils and assumes all the corresponding obligations of a beneficiary under this Regulation.

@@ -1748,9 +1694,9 @@

1. In the case of a PPP operation where the beneficiary is a public law body, expenditure under a PPP operation which has been incurred and paid by the private partner may, by way of derogation from Article 65(2), be considered as incurred and paid by a beneficiary and included in a payment application to the Commission provided that the following conditions are met:

(a)the beneficiary has entered into a PPP agreement with a private partner;

(b)the managing authority has verified that the expenditure declared by the beneficiary has been paid by the private partner and that the operation complies with applicable Union and national law, the programme and the conditions for support of the operation.

(a) the beneficiary has entered into a PPP agreement with a private partner;

(b) the managing authority has verified that the expenditure declared by the beneficiary has been paid by the private partner and that the operation complies with applicable Union and national law, the programme and the conditions for support of the operation.

2. Payments to beneficiaries made in respect of expenditure included in a payment application in accordance with paragraph 1 shall be paid into an escrow account set up for that purpose in the name of the beneficiary.

@@ -1786,23 +1732,23 @@

This paragraph shall not apply to:

(a)technical assistance;

(b)financial instruments;

(c)repayable assistance subject to an obligation for full repayment;

(d)prizes;

(e)operations subject to the State aid rules;

(f)operations for which public support takes the form of lump sums or standard scale unit costs provided that the net revenue has been taken into account ex ante;

(g)operations implemented under a joint action plan provided that the net revenue has been taken into account ex ante;

(h)operations for which amounts or rates of support are defined in Annex II to the EAFRD Regulation or in the EMFF Regulation with the exception of those operations for which reference is made to this paragraph in the EMFF Regulation; or

(i)operations for which the total eligible cost does not exceed EUR 100 000 .

(a) technical assistance;

(b) financial instruments;

(d) prizes;

(e) operations subject to the State aid rules;

(f) operations for which public support takes the form of lump sums or standard scale unit costs provided that the net revenue has been taken into account ex ante;

(g) operations implemented under a joint action plan provided that the net revenue has been taken into account ex ante;

(h) operations for which amounts or rates of support are defined in Annex II to the EAFRD Regulation or in the EMFF Regulation with the exception of those operations for which reference is made to this paragraph in the EMFF Regulation; or

(i) operations for which the total eligible cost does not exceed EUR 100 000 .

For the purposes of this Article and Article 61, any payment received by the beneficiary arising from contractual penalties as a result of a breach of contract between the beneficiary and a third party or third parties or that has occurred as a result of the withdrawal of an offer by a third party chosen under public procurement rules (the 'deposit') shall not be considered as revenue and shall not be deducted from the eligible expenditure of the operation.

@@ -1812,6 +1758,8 @@

10. By way of derogation from paragraph 9, specific provisions on the starting date of eligibility may be established in the EAFRD Regulation.

By way of derogation from paragraph 9, expenditure for operations for fostering crisis response capacities in the context of the COVID-19 outbreak shall be eligible as of 1 February 2020.

11. An operation may receive support from one or more ESI Funds or from one or more programmes and from other Union instruments, provided that the expenditure declared in a payment application for one of the ESI Funds is not declared for support from another Fund or Union instrument, or for support from the same Fund under another programme. The amount of expenditure to be entered into a payment application of an ESI Fund may be calculated for each ESI Fund and for the programme or programmes concerned on a pro rata basis in accordance with the document setting out the conditions for support.

#### Article 66

@@ -1828,15 +1776,15 @@

1. Grants and repayable assistance may take any of the following forms:

(a)reimbursement of eligible costs actually incurred and paid, together with, where applicable, contributions in kind and depreciation;

(b)standard scales of unit costs;

(c)lump sums;

(d)flat-rate financing, determined by the application of a percentage to one or more defined categories of costs;

(e)financing which is not linked to costs of the relevant operations but is based on the fulfilment of conditions related to the realisation of progress in implementation or the achievement of objectives of programmes as set out in the delegated act adopted in accordance with paragraph 5a.

(a) reimbursement of eligible costs actually incurred and paid, together with, where applicable, contributions in kind and depreciation;

(b) standard scales of unit costs;

(d) flat-rate financing, determined by the application of a percentage to one or more defined categories of costs;

(e) financing which is not linked to costs of the relevant operations but is based on the fulfilment of conditions related to the realisation of progress in implementation or the achievement of objectives of programmes as set out in the delegated act adopted in accordance with paragraph 5a.

Fund-specific rules may limit the forms of grants or repayable assistance applicable to certain operations.

@@ -1858,23 +1806,20 @@

5. The amounts referred to in points (b), (c) and (d) of the first subparagraph of paragraph 1 shall be established in one of the following ways:

(a)a fair, equitable and verifiable calculation method based on any of the following:

(i)statistical data, other objective information or an expert judgement;

(ii)the verified historical data of individual beneficiaries;

(iii)the application of the usual cost accounting practices of individual beneficiaries;

(aa)a draft budget established on a case-by-case basis and agreed *ex ante* by the managing authority, or in the case of EAFRD the authority responsible for the selection of operations, where the public support does not exceed EUR 100 000 ;

(b)in accordance with the rules for application of corresponding scales of unit costs, lump sums and flat rates applicable in Union policies for a similar type of operation and beneficiary;

(c)in accordance with the rules for application of corresponding scales of unit costs, lump sums and flat rates applied under schemes for grants funded entirely by the Member State for a similar type of operation and beneficiary;

(d)rates established by this Regulation or the Fund-specific rules;

(e)specific methods for determining amounts established in accordance with the Fund-specific rules.

(a) a fair, equitable and verifiable calculation method based on any of the following:

(i) statistical data, other objective information or an expert judgement;

(ii) the verified historical data of individual beneficiaries;

(iii) the application of the usual cost accounting practices of individual beneficiaries;

(aa) a draft budget established on a case-by-case basis and agreed *ex ante* by the managing authority, or in the case of EAFRD the authority responsible for the selection of operations, where the public support does not exceed EUR 100 000 ;

(b) in accordance with the rules for application of corresponding scales of unit costs, lump sums and flat rates applicable in Union policies for a similar type of operation and beneficiary;

(c) in accordance with the rules for application of corresponding scales of unit costs, lump sums and flat rates applied under schemes for grants funded entirely by the Member State for a similar type of operation and beneficiary;

(d) rates established by this Regulation or the Fund-specific rules;

(e) specific methods for determining amounts established in accordance with the Fund-specific rules.

5a. The Commission is empowered to adopt delegated acts in accordance with Article 149 supplementing this Regulation with regard to the definition of the standard scales of unit costs or the flat-rate financing referred to in points (b) and (d) of the first subparagraph of paragraph 1 of this Article, the related methods referred to in point (a) of paragraph 5 of this Article and the form of support referred to in point (e) of the first subparagraph of paragraph 1 of this Article, by specifying detailed modalities concerning the financing conditions and their application.

@@ -1886,11 +1831,11 @@

Where the implementation of an operation gives rise to indirect costs, they may be calculated at a flat rate in one of the following ways:

(a)a flat rate of up to 25 % of eligible direct costs, provided that the rate is calculated on the basis of a fair, equitable and verifiable calculation method or a method applied under schemes for grants funded entirely by the Member State for a similar type of operation and beneficiary;

(b)a flat rate of up to 15 % of eligible direct staff costs without there being a requirement for the Member State to perform a calculation to determine the applicable rate;

(c)a flat rate applied to eligible direct costs based on existing methods and corresponding rates, applicable in Union policies for a similar type of operation and beneficiary.

(a) a flat rate of up to 25 % of eligible direct costs, provided that the rate is calculated on the basis of a fair, equitable and verifiable calculation method or a method applied under schemes for grants funded entirely by the Member State for a similar type of operation and beneficiary;

(b) a flat rate of up to 15 % of eligible direct staff costs without there being a requirement for the Member State to perform a calculation to determine the applicable rate;

(c) a flat rate applied to eligible direct costs based on existing methods and corresponding rates, applicable in Union policies for a similar type of operation and beneficiary.

The Commission is empowered to adopt delegated acts in accordance with Article 149 to supplement the provisions on the flat rate and the related methods referred to in point (c) of the first subparagraph of this paragraph.

@@ -1926,35 +1871,35 @@

1. Contributions in kind in the form of provision of works, goods, services, land and real estate for which no cash payment supported by invoices, or documents of equivalent probative value, has been made, may be eligible on condition that the eligibility rules of the ESI Funds and the programme so provide and that all the following criteria are fulfilled:

(a)the public support paid to the operation which includes contributions in kind does not exceed the total eligible expenditure, excluding contributions in kind, at the end of the operation;

(b)the value attributed to contributions in kind does not exceed the costs generally accepted on the market in question;

(c)the value and the delivery of the contribution can be independently assessed and verified;

(d)in the case of provision of land or real estate, a cash payment, for the purposes of a lease agreement of a nominal amount per annum not exceeding a single unit of the currency of the Member State, may be made;

(e)in the case of contributions in kind in the form of unpaid work, the value of that work is determined by taking into account the verified time spent and the rate of remuneration for equivalent work.

(a) the public support paid to the operation which includes contributions in kind does not exceed the total eligible expenditure, excluding contributions in kind, at the end of the operation;

(b) the value attributed to contributions in kind does not exceed the costs generally accepted on the market in question;

(d) in the case of provision of land or real estate, a cash payment, for the purposes of a lease agreement of a nominal amount per annum not exceeding a single unit of the currency of the Member State, may be made;

(e) in the case of contributions in kind in the form of unpaid work, the value of that work is determined by taking into account the verified time spent and the rate of remuneration for equivalent work.

The value of the land or real estate referred to in point (d) of the first subparagraph of this paragraph shall be certified by an independent qualified expert or duly authorised official body and shall not exceed the limit laid down in point (b) of paragraph 3.

2. Depreciation costs may be considered as eligible where the following conditions are fulfilled:

(a)the eligibility rules of the programme allow for it;

(b)the amount of the expenditure is duly justified by supporting documents having equivalent probative value to invoices for eligible costs where reimbursed in the form referred to in point (a) of the first subparagraph of Article 67(1);

(c)the costs relate exclusively to the period of support for the operation;

(d)public grants have not contributed towards the acquisition of the depreciated assets.

(a) the eligibility rules of the programme allow for it;

(b) the amount of the expenditure is duly justified by supporting documents having equivalent probative value to invoices for eligible costs where reimbursed in the form referred to in point (a) of the first subparagraph of Article 67(1);

(d) public grants have not contributed towards the acquisition of the depreciated assets.

3. The following costs shall not be eligible for a contribution from the ESI Funds and from the amount of support transferred from the Cohesion Fund to the CEF as referred to in Article 92(6):

(a)interest on debt, except in relation to grants given in the form of an interest rate subsidy or guarantee fee subsidy;

(b)the purchase of land not built on and land built on in the amount exceeding 10 % of the total eligible expenditure for the operation concerned. For derelict sites and for those formerly in industrial use which comprise buildings, that limit shall be increased to 15 %. In exceptional and duly justified cases, the limit may be raised above the respective aforementioned percentages for operations concerning environmental conservation;

(c)value added tax except where it is non-recoverable under national VAT legislation.

(a) interest on debt, except in relation to grants given in the form of an interest rate subsidy or guarantee fee subsidy;

(b) the purchase of land not built on and land built on in the amount exceeding 10 % of the total eligible expenditure for the operation concerned. For derelict sites and for those formerly in industrial use which comprise buildings, that limit shall be increased to 15 %. In exceptional and duly justified cases, the limit may be raised above the respective aforementioned percentages for operations concerning environmental conservation;

#### Article 70

@@ -1968,13 +1913,13 @@

2. The managing authority may accept that an operation is implemented outside the programme area but within the Union, provided that all the following conditions are satisfied:

(a)the operation is for the benefit of the programme area;

(b)the total amount from the ERDF, Cohesion Fund, EAFRD or EMFF allocated under the programme to operations located outside the programme area does not exceed 15 % of the support from the ERDF, Cohesion Fund, EAFRD or EMFF at the level of the priority at the time of adoption of the programme;

(c)the monitoring committee has given its agreement to the operation or types of operations concerned;

(d)the obligations of the authorities for the programme in relation to management, control and audit concerning the operation are fulfilled by the authorities responsible for the programme under which that operation is supported or they enter into agreements with authorities in the area in which the operation is implemented.

(a) the operation is for the benefit of the programme area;

(b) the total amount from the ERDF, Cohesion Fund, EAFRD or EMFF allocated under the programme to operations located outside the programme area does not exceed 15 % of the support from the ERDF, Cohesion Fund, EAFRD or EMFF at the level of the priority at the time of adoption of the programme;

(d) the obligations of the authorities for the programme in relation to management, control and audit concerning the operation are fulfilled by the authorities responsible for the programme under which that operation is supported or they enter into agreements with authorities in the area in which the operation is implemented.

Where operations financed from the Funds and the EMFF are implemented outside the programme area in accordance with this paragraph and have benefits both outside and within the programme area, such expenditure shall be allocated to those areas on a pro rata basis based on objective criteria.

@@ -1990,11 +1935,11 @@

1. An operation comprising investment in infrastructure or productive investment shall repay the contribution from the ESI Funds if within five years of the final payment to the beneficiary or within the period of time set out in State aid rules, where applicable, it is subject to any of the following:

(a)a cessation or relocation of a productive activity outside the programme area;

(b)a change in ownership of an item of infrastructure which gives to a firm or a public body an undue advantage;

(c)a substantial change affecting its nature, objectives or implementation conditions which would result in undermining its original objectives.

(a) a cessation or relocation of a productive activity outside the programme area;

(b) a change in ownership of an item of infrastructure which gives to a firm or a public body an undue advantage;

(c) a substantial change affecting its nature, objectives or implementation conditions which would result in undermining its original objectives.

Sums unduly paid in respect of the operation shall be recovered by the Member State in proportion to the period for which the requirements have not been fulfilled.

@@ -2022,21 +1967,21 @@

Management and control systems shall, in accordance with Article 4(8), provide for:

(a)a description of the functions of each body involved in management and control, and the allocation of functions within each body;

(b)compliance with the principle of separation of functions between and within such bodies;

(c)procedures for ensuring the correctness and regularity of expenditure declared;

(d)computerised systems for accounting, for the storage and transmission of financial data and data on indicators, for monitoring and for reporting;

(e)systems for reporting and monitoring where the body responsible entrusts execution of tasks to another body;

(f)arrangements for auditing the functioning of the management and control systems;

(g)systems and procedures to ensure an adequate audit trail;

(h)the prevention, detection and correction of irregularities, including fraud, and the recovery of amounts unduly paid, together with any interest on late payments.

(a) a description of the functions of each body involved in management and control, and the allocation of functions within each body;

(b) compliance with the principle of separation of functions between and within such bodies;

(d) computerised systems for accounting, for the storage and transmission of financial data and data on indicators, for monitoring and for reporting;

(e) systems for reporting and monitoring where the body responsible entrusts execution of tasks to another body;

(f) arrangements for auditing the functioning of the management and control systems;

(g) systems and procedures to ensure an adequate audit trail;

(h) the prevention, detection and correction of irregularities, including fraud, and the recovery of amounts unduly paid, together with any interest on late payments.

#### Article 73

@@ -2074,9 +2019,9 @@

2a. The Commission shall provide the competent national authority with:

(a)the draft audit report from the on-the-spot audit or check within three months of the end of that audit or check;

(b)the final audit report within three months of the receipt of a complete reply from the competent national authority to the draft audit report from the on-the-spot audit or check concerned.

(a) the draft audit report from the on-the-spot audit or check within three months of the end of that audit or check;

(b) the final audit report within three months of the receipt of a complete reply from the competent national authority to the draft audit report from the on-the-spot audit or check concerned.

The reports referred to in points (a) and (b) of the first subparagraph shall be made available within the time limits set out in those points in at least one of the official languages of the institutions of the Union.

@@ -2161,11 +2106,11 @@

1. The payment deadline for an interim payment claim may be interrupted by the authorising officer by delegation within the meaning of the Financial Regulation for a maximum period of six months if:

(a)following information provided by a national or Union audit body, there is clear evidence to suggest a significant deficiency in the functioning of the management and control system;

(b)the authorising officer by delegation has to carry out additional verifications following information that has come to that officer's attention alerting him or her that expenditure in a payment application is linked to an irregularity having serious financial consequences;

(c)there is a failure to submit one of the documents required under Article 63(5), (6) and (7) of the Financial Regulation.

(a) following information provided by a national or Union audit body, there is clear evidence to suggest a significant deficiency in the functioning of the management and control system;

(b) the authorising officer by delegation has to carry out additional verifications following information that has come to that officer's attention alerting him or her that expenditure in a payment application is linked to an irregularity having serious financial consequences;

(c) there is a failure to submit one of the documents required under Article 63(5), (6) and (7) of the Financial Regulation.

The Member State may agree to an extension of the interruption period for another three months.

@@ -2195,9 +2140,9 @@

2. A breach of applicable law shall lead to a financial correction only in relation to expenditure which has been declared to the Commission and where one of the following conditions is met:

(a)the breach has affected the selection of an operation by the body responsible for support from the ESI Funds or in cases where, due to the nature of the breach, it is not possible to establish that impact but there is a substantiated risk that the breach has had such an effect;

(b)the breach has affected the amount of expenditure declared for reimbursement by the budget of the Union or in cases where, due to the nature of the breach, it is not possible to quantify its financial impact but there is a substantiated risk that the breach has had such an effect.

(a) the breach has affected the selection of an operation by the body responsible for support from the ESI Funds or in cases where, due to the nature of the breach, it is not possible to establish that impact but there is a substantiated risk that the breach has had such an effect;

(b) the breach has affected the amount of expenditure declared for reimbursement by the budget of the Union or in cases where, due to the nature of the breach, it is not possible to quantify its financial impact but there is a substantiated risk that the breach has had such an effect.

3. When deciding on a financial correction under paragraph 1, the Commission shall respect the principle of proportionality by taking account of the nature and gravity of the breach of applicable law and its financial implications for the budget of the Union. The Commission shall keep the European Parliament informed of decisions taken to apply financial corrections.

@@ -2227,9 +2172,9 @@

1. The amount concerned by decommitment shall be reduced by the amounts equivalent to that part of the budget commitment for which:

(a)the operations are suspended by a legal proceeding or by an administrative appeal having suspensory effect; or

(b)it has not been possible to make a payment application for reasons of force majeure seriously affecting implementation of all or part of the programme.

(a) the operations are suspended by a legal proceeding or by an administrative appeal having suspensory effect; or

(b) it has not been possible to make a payment application for reasons of force majeure seriously affecting implementation of all or part of the programme.

The national authorities claiming force majeure under point (b) of the first subparagraph shall demonstrate the direct consequences of the force majeure on the implementation of all or part of the programme.

@@ -2273,9 +2218,9 @@

2. For the purpose of the mission referred to in paragraph 1, the following goals shall be pursued:

(a)Investment for growth and jobs in Member States and regions, to be supported by the Funds; and

(b)European territorial cooperation, to be supported by the ERDF.

(a) Investment for growth and jobs in Member States and regions, to be supported by the Funds; and

(b) European territorial cooperation, to be supported by the ERDF.

#### Article 90

@@ -2285,11 +2230,11 @@

2. Resources for the Investment for growth and jobs goal shall be allocated among the following three categories of NUTS level 2 regions:

(a)less developed regions, whose GDP per capita is less than 75 % of the average GDP of the EU-27;

(b)transition regions, whose GDP per capita is between 75 % and 90 % of the average GDP of the EU-27;

(c)more developed regions, whose GDP per capita is above 90 % of the average GDP of the EU-27.

(a) less developed regions, whose GDP per capita is less than 75 % of the average GDP of the EU-27;

(b) transition regions, whose GDP per capita is between 75 % and 90 % of the average GDP of the EU-27;

The classification of regions under one of the three categories of regions shall be determined on the basis of how the GDP per capita of each region, measured in purchasing power parities (PPS) and calculated on the basis of Union figures for the period 2007 - 2009, relates to the average GDP of the EU-27 for the same reference period.

@@ -2321,15 +2266,15 @@

1. Resources for the Investment for growth and jobs goal shall amount to 96,09 % of the global resources (i.e., a total of EUR 317 073 545 392 ) and shall be allocated as follows:

(a)51,52 % (i.e., a total of EUR 163 359 380 738 ) for less developed regions;

(b)10,82 % (i.e., a total of EUR 34 319 221 039 ) for transition regions;

(d)20,89 % (i.e., a total of EUR 66 236 030 665 ) for Member States supported by the Cohesion Fund;

(e)0,44 % (i.e., a total of EUR 1 385 591 518 ) as additional funding for the outermost regions identified in Article 349 TFEU and the NUTS level 2 regions fulfilling the criteria laid down in Article 2 of Protocol No 6 to the 1994 Act of Accession.

(a) 51,52 % (i.e., a total of EUR 163 359 380 738 ) for less developed regions;

(b) 10,82 % (i.e., a total of EUR 34 319 221 039 ) for transition regions;

(d) 20,89 % (i.e., a total of EUR 66 236 030 665 ) for Member States supported by the Cohesion Fund;

(e) 0,44 % (i.e., a total of EUR 1 385 591 518 ) as additional funding for the outermost regions identified in Article 349 TFEU and the NUTS level 2 regions fulfilling the criteria laid down in Article 2 of Protocol No 6 to the 1994 Act of Accession.

2. In addition to the amounts set out in Article 91 and paragraph 1 of this Article, for the years 2014 and 2015, a further amount of EUR 94 200 000 and of EUR 92 400 000 respectively shall be made available as set out in the "Additional adjustments" under Annex VII. Those amounts shall be identified in the decision of the Commission referred to in Article 91(2).

@@ -2391,13 +2336,13 @@

1. For the purposes of this Article and Annex X, the following definitions apply:

(1)'gross fixed capital formation' means all the resident producers' acquisitions, less disposals, of fixed assets during a given period and certain additions to the value of non-produced assets realised by the productive activity of producer or institutional units, as defined in Council Regulation (EC) No 2223/96 (24);

(2)'fixed assets' means all tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year;

(3)'general government' means the totality of institutional units which, in addition to fulfilling their political responsibilities and their role of economic regulation, produce principally non-market services (possibly goods) for individual or collective consumption and redistribute income and wealth;

(4)'public or equivalent structural expenditure' means the gross fixed capital formation of the general government.

(1) 'gross fixed capital formation' means all the resident producers' acquisitions, less disposals, of fixed assets during a given period and certain additions to the value of non-produced assets realised by the productive activity of producer or institutional units, as defined in Council Regulation (EC) No 2223/96 (24);

(2) 'fixed assets' means all tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year;

(3) 'general government' means the totality of institutional units which, in addition to fulfilling their political responsibilities and their role of economic regulation, produce principally non-market services (possibly goods) for individual or collective consumption and redistribute income and wealth;

(4) 'public or equivalent structural expenditure' means the gross fixed capital formation of the general government.

2. Support from the Funds for the Investment for growth and jobs goal shall not replace public or equivalent structural expenditure by a Member State.

@@ -2433,105 +2378,87 @@

1. An operational programme shall consist of priority axes. A priority axis shall concern one Fund and one category of region, except in the case of the Cohesion Fund, and shall correspond, without prejudice to Article 59, to a thematic objective and comprise one or more of the investment priorities of that thematic objective, in accordance with the Fund-specific rules. Where appropriate and in order to increase its impact and effectiveness through a thematically coherent integrated approach, a priority axis may:

(a)concern more than one category of region;

(b)combine one or more complementary investment priorities from the ERDF, the Cohesion Fund and the ESF under one thematic objective;

(c)in duly justified cases combine one or more complementary investment priorities from different thematic objectives in order to achieve the maximum contribution to that priority axis;

(d)for the ESF, combine investment priorities from different thematic objectives set out in points (8), (9), (10) and (11) of the first paragraph of Article 9 in order to facilitate their contribution to other priority axes and in order to implement social innovation and transnational cooperation.

(a) concern more than one category of region;

(b) combine one or more complementary investment priorities from the ERDF, the Cohesion Fund and the ESF under one thematic objective;

(c) in duly justified cases combine one or more complementary investment priorities from different thematic objectives in order to achieve the maximum contribution to that priority axis;

(d) for the ESF, combine investment priorities from different thematic objectives set out in points (8), (9), (10) and (11) of the first paragraph of Article 9 in order to facilitate their contribution to other priority axes and in order to implement social innovation and transnational cooperation.

Member States may combine two or more of the options in points (a) to (d).

2. An operational programme shall contribute to the Union strategy for smart, sustainable and inclusive growth and to the achievement of economic, social and territorial cohesion and shall set out:

(a)a justification for the choice of thematic objectives, corresponding investment priorities and financial allocations having regard to the Partnership Agreement, based on an identification of regional and, where appropriate, national needs including the need to address the challenges identified in relevant country-specific recommendations adopted in accordance with Article 121(2) TFEU and the relevant Council recommendations adopted in accordance with Article 148(4) TFEU, taking into account the ex ante evaluation in accordance with Article 55;

(b)for each priority axis other than technical assistance:

(i)the investment priorities and corresponding specific objectives;

(ii)in order to strengthen the result-orientation of the programming, the expected results for the specific objectives, and the corresponding result indicators, with a baseline value and a target value, where appropriate quantified in accordance with the Fund-specific rules;

(iii)a description of the type and examples of actions to be supported under each investment priority and their expected contribution to the specific objectives referred to in point (i) including the guiding principles for the selection of operations and where appropriate, the identification of main target groups, specific territories targeted, types of beneficiaries, the planned use of financial instruments and major projects;

(iv)the output indicators, including the quantified target value, which are expected to contribute to the results, in accordance with the Fund-specific rules, for each investment priority;

(v)identification of implementation steps and financial and output indicators, and where appropriate, result indicators, to be used as milestones and targets for the performance framework in accordance with Article 21(1) and Annex II;

(vi)the corresponding categories of intervention based on a nomenclature adopted by the Commission, and an indicative breakdown of the programmed resources;

(vii)where appropriate, a summary of the planned use of technical assistance including, where necessary, actions to reinforce the administrative capacity of authorities involved in the management and control of the programmes and beneficiaries;

(c)for each priority axis concerning technical assistance:

(i)specific objectives;

(ii)the expected results for each specific objective, and, where objectively justified given the content of the actions, the corresponding result indicators, with a baseline value and a target value, in accordance with the Fund-specific rules;

(iii)a description of actions to be supported and their expected contribution to the specific objectives referred to in point (i);

(iv)the output indicators which are expected to contribute to the results;

(v)the corresponding categories of intervention based on a nomenclature adopted by the Commission, and an indicative breakdown of the programmed resources.

Point (ii) shall not apply where the Union contribution to the priority axis or axes concerning technical assistance in an operational programme does not exceed EUR 15 000 000 .

(d)a financing plan containing the following tables:

(i)tables specifying for each year, in accordance with Articles 60, 120 and 121, the amount of the total financial appropriation envisaged for the support from each of the Funds, identifying the amounts related to the performance reserve;

(ii)tables specifying, for the whole programming period, for the operational programme and for each priority axis, the amount of the total financial appropriation of the support from each of the Funds and the national co-financing, identifying the amounts related to the performance reserve. For priority axes, which concern several categories of region, the tables shall specify the amount of total financial appropriation from the Funds and the national co-financing for each category of region.

For priority axes, which combine investment priorities from different thematic objectives, the table shall specify the amount of total financial appropriation from each of the Funds and the national co-financing for each of the corresponding thematic objectives.

Where the national co-financing is made up of public and private co-financing, the table shall give the indicative breakdown between the public and the private components. It shall show, for information purposes, the envisaged participation from the EIB;

(e)a list of major projects for which the implementation is planned during the programming period.

The Commission shall adopt implementing acts concerning the nomenclature referred to in points (b)(vi) and (c)(v)of the first subparagraph. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 150(3).

(a) a justification for the choice of thematic objectives, corresponding investment priorities and financial allocations having regard to the Partnership Agreement, based on an identification of regional and, where appropriate, national needs including the need to address the challenges identified in relevant country-specific recommendations adopted in accordance with Article 121(2) TFEU and the relevant Council recommendations adopted in accordance with Article 148(4) TFEU, taking into account the ex ante evaluation in accordance with Article 55;

(b) for each priority axis other than technical assistance:

(i) the investment priorities and corresponding specific objectives;

(ii) in order to strengthen the result-orientation of the programming, the expected results for the specific objectives, and the corresponding result indicators, with a baseline value and a target value, where appropriate quantified in accordance with the Fund-specific rules;

(iii) a description of the type and examples of actions to be supported under each investment priority and their expected contribution to the specific objectives referred to in point (i) including the guiding principles for the selection of operations and where appropriate, the identification of main target groups, specific territories targeted, types of beneficiaries, the planned use of financial instruments and major projects;

(iv) the output indicators, including the quantified target value, which are expected to contribute to the results, in accordance with the Fund-specific rules, for each investment priority;

(v) identification of implementation steps and financial and output indicators, and where appropriate, result indicators, to be used as milestones and targets for the performance framework in accordance with Article 21(1) and Annex II;

(vi) the corresponding categories of intervention based on a nomenclature adopted by the Commission, and an indicative breakdown of the programmed resources;

(vii) where appropriate, a summary of the planned use of technical assistance including, where necessary, actions to reinforce the administrative capacity of authorities involved in the management and control of the programmes and beneficiaries;

(i) specific objectives;

(ii) the expected results for each specific objective, and, where objectively justified given the content of the actions, the corresponding result indicators, with a baseline value and a target value, in accordance with the Fund-specific rules;

(iii) a description of actions to be supported and their expected contribution to the specific objectives referred to in point (i);

(iv) the output indicators which are expected to contribute to the results;

(v) the corresponding categories of intervention based on a nomenclature adopted by the Commission, and an indicative breakdown of the programmed resources.

Point (ii) shall not apply where the Union contribution to the priority axis or axes concerning technical assistance in an operational programme does not exceed EUR 15 000 000 .

(d) a financing plan containing the following tables:

(i) tables specifying for each year, in accordance with Articles 60, 120 and 121, the amount of the total financial appropriation envisaged for the support from each of the Funds, identifying the amounts related to the performance reserve;

(ii) tables specifying, for the whole programming period, for the operational programme and for each priority axis, the amount of the total financial appropriation of the support from each of the Funds and the national co-financing, identifying the amounts related to the performance reserve. For priority axes, which concern several categories of region, the tables shall specify the amount of total financial appropriation from the Funds and the national co-financing for each category of region.

(e) a list of major projects for which the implementation is planned during the programming period.

3. Taking into account its content and objectives, an operational programme shall describe the integrated approach to territorial development, having regard to the Partnership Agreement, and showing how that operational programme contributes to the accomplishment of its objectives and expected results, specifying, where appropriate, the following:

(a)the approach to the use of community-led local development instruments and the principles for identifying the areas where it will be implemented;

(b)the indicative amount of the ERDF support for integrated actions for sustainable urban development, to be implemented in accordance with Article 7(4) of the ERDF Regulation and the indicative allocation of ESF support for integrated actions;

(c)the approach to the use of the ITI instrument other than in cases covered by point (b), and their indicative financial allocation from each priority axis;

(d)the arrangements for interregional and transnational actions, within the operational programmes, with beneficiaries located in at least one other Member State;

(e)where Member States and regions participate in macro-regional strategies and sea-basin strategies, subject to the needs of the programme area as identified by the Member State, the contribution of the planned interventions under the programme to such strategies.

(a) the approach to the use of community-led local development instruments and the principles for identifying the areas where it will be implemented;

(b) the indicative amount of the ERDF support for integrated actions for sustainable urban development, to be implemented in accordance with Article 7(4) of the ERDF Regulation and the indicative allocation of ESF support for integrated actions;

(c) the approach to the use of the ITI instrument other than in cases covered by point (b), and their indicative financial allocation from each priority axis;

(d) the arrangements for interregional and transnational actions, within the operational programmes, with beneficiaries located in at least one other Member State;

(e) where Member States and regions participate in macro-regional strategies and sea-basin strategies, subject to the needs of the programme area as identified by the Member State, the contribution of the planned interventions under the programme to such strategies.

4. In addition, the operational programme shall specify the following:

(a)where appropriate, the identification of whether and how it addresses the specific needs of geographical areas most affected by poverty or target groups at highest risk of discrimination or social exclusion, with special regard to marginalised communities, and persons with disabilities, and where relevant the contribution to the integrated approach set out in the Partnership Agreement;

(b)where appropriate, the identification of whether and how it addresses the demographic challenges of regions or specific needs of areas which suffer from severe and permanent natural or demographic handicaps, as referred to in Article 174 TFEU and the contribution to the integrated approach set out in the Partnership Agreement to this end.

(a) where appropriate, the identification of whether and how it addresses the specific needs of geographical areas most affected by poverty or target groups at highest risk of discrimination or social exclusion, with special regard to marginalised communities, and persons with disabilities, and where relevant the contribution to the integrated approach set out in the Partnership Agreement;

(b) where appropriate, the identification of whether and how it addresses the demographic challenges of regions or specific needs of areas which suffer from severe and permanent natural or demographic handicaps, as referred to in Article 174 TFEU and the contribution to the integrated approach set out in the Partnership Agreement to this end.

5. The operational programme shall identify:

(a)the managing authority, the certifying authority, where applicable, and the audit authority;

(b)the body to which payments are to be made by the Commission;

(c)the actions taken to involve the relevant partners referred to in Article 5 in the preparation of the operational programme, and the role of those partners in the implementation, monitoring and evaluation of the operational programme.

(a) the managing authority, the certifying authority, where applicable, and the audit authority;

(b) the body to which payments are to be made by the Commission;

(c) the actions taken to involve the relevant partners referred to in Article 5 in the preparation of the operational programme, and the role of those partners in the implementation, monitoring and evaluation of the operational programme.

6. The operational programme shall also set out the following, having regard to the content of the Partnership Agreement and taking into account the institutional and legal framework of the Member States:

(a)mechanisms to ensure coordination between the Funds, the EAFRD, the EMFF and other Union and national funding instruments, and with the EIB taking into account the relevant provisions laid down in the CSF;

(b)for each ex ante conditionality, established in accordance with Article 19 and Annex XI, which is applicable to the operational programme, an assessment of whether the ex ante conditionality is fulfilled at the date of submission of the Partnership Agreement and operational programme, and where ex ante conditionalities are not fulfilled, a description of the actions to fulfil the ex ante conditionality, the bodies responsible and a timetable for such actions in accordance with the summary submitted in the Partnership Agreement;

(c)a summary of the assessment of the administrative burden on beneficiaries and, where necessary, the actions planned, accompanied by an indicative timeframe, to reduce the administrative burden.

(a) mechanisms to ensure coordination between the Funds, the EAFRD, the EMFF and other Union and national funding instruments, and with the EIB taking into account the relevant provisions laid down in the CSF;

(b) for each ex ante conditionality, established in accordance with Article 19 and Annex XI, which is applicable to the operational programme, an assessment of whether the ex ante conditionality is fulfilled at the date of submission of the Partnership Agreement and operational programme, and where ex ante conditionalities are not fulfilled, a description of the actions to fulfil the ex ante conditionality, the bodies responsible and a timetable for such actions in accordance with the summary submitted in the Partnership Agreement;

(c) a summary of the assessment of the administrative burden on beneficiaries and, where necessary, the actions planned, accompanied by an indicative timeframe, to reduce the administrative burden.

7. Each operational programme, except those where technical assistance is undertaken under a specific operational programme, shall, subject to the Member State's duly justified assessment of their relevance to the content and objectives of the operational programmes, include a description of:

(a)the specific actions to take into account environmental protection requirements, resource efficiency, climate change mitigation and adaptation, disaster resilience and risk prevention and management, in the selection of operations;

(b)the specific actions to promote equal opportunities and prevent discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation during the preparation, design and implementation of the operational programme and in particular in relation to access to funding, taking account of the needs of the various target groups at risk of such discrimination and in particular the requirements to ensure accessibility for persons with disabilities;

(c)the contribution of the operational programme to the promotion of equality between men and women and, where appropriate, the arrangements to ensure the integration of gender perspective at operational programme and operation level.

(a) the specific actions to take into account environmental protection requirements, resource efficiency, climate change mitigation and adaptation, disaster resilience and risk prevention and management, in the selection of operations;

(b) the specific actions to promote equal opportunities and prevent discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation during the preparation, design and implementation of the operational programme and in particular in relation to access to funding, taking account of the needs of the various target groups at risk of such discrimination and in particular the requirements to ensure accessibility for persons with disabilities;

(c) the contribution of the operational programme to the promotion of equality between men and women and, where appropriate, the arrangements to ensure the integration of gender perspective at operational programme and operation level.

Member States may submit an opinion from the national equality bodies on the measures set out in points (b) and (c) of the first subparagraph with the proposal for an operational programme under the Investment for growth and jobs goal.

@@ -2539,7 +2466,7 @@

9. The operational programme shall be prepared in accordance with a model. The Commission shall, in order to ensure uniform conditions for the implementation of this Article adopt an implementing act laying down that model. That implementing act shall be adopted in accordance with the advisory procedure referred to in Article 150(2).

10. The Commission shall adopt a decision, by means of implementing acts, approving all the elements, including any of its future amendments, of the operational programme falling under this Article, except those falling under points (b)(vi), (c)(v) and (e) of the first subparagraph of paragraph 2, paragraphs 4 and 5, points (a) and (c) of paragraph 6 and paragraph 7, which remain under the responsibility of the Member States.

10. Without prejudice to Article 30(5), the Commission shall adopt a decision, by means of implementing acts, approving all the elements, including any of its future amendments, of the operational programme falling under this Article, except those falling under points (b)(vi), (c)(v) and (e) of the first subparagraph of paragraph 2, paragraphs 4 and 5, points (a) and (c) of paragraph 6 and paragraph 7, which remain under the responsibility of the Member States.

11. The managing authority shall notify the Commission of any decision amending the elements of the operational programme not covered by the Commission decision, referred to in paragraph 10, within one month of the date of that amending decision. The amending decision shall specify the date of its entry into force, which shall not be earlier than the date of its adoption.

@@ -2583,23 +2510,23 @@

Before a major project is approved, the managing authority shall ensure that the following information is available:

(a)details concerning the body to be responsible for implementation of the major project, and its capacity;

(b)a description of the investment and its location;

(c)the total cost and total eligible cost, taking account of the requirements set out in Article 61;

(d)feasibility studies carried out, including the options analysis, and the results;

(e)a cost-benefit analysis, including an economic and a financial analysis, and a risk assessment;

(f)an analysis of the environmental impact, taking into account climate change adaptation and mitigation needs, and disaster resilience;

(g)an explanation as to how the major project is consistent with the relevant priority axes of the operational programme or operational programmes concerned, and its expected contribution to achieving the specific objectives of those priority axes and the expected contribution to socio-economic development;

(h)the financing plan showing the total planned financial resources and the planned support from the Funds, the EIB, and all other sources of financing, together with physical and financial indicators for monitoring progress, taking account of the identified risks;

(i)the timetable for implementing the major project and, where the implementation period is expected to be longer than the programming period, the phases for which support from the Funds is requested during the programming period.

(a) details concerning the body to be responsible for implementation of the major project, and its capacity;

(b) a description of the investment and its location;

(d) feasibility studies carried out, including the options analysis, and the results;

(e) a cost-benefit analysis, including an economic and a financial analysis, and a risk assessment;

(f) an analysis of the environmental impact, taking into account climate change adaptation and mitigation needs, and disaster resilience;

(g) an explanation as to how the major project is consistent with the relevant priority axes of the operational programme or operational programmes concerned, and its expected contribution to achieving the specific objectives of those priority axes and the expected contribution to socio-economic development;

(h) the financing plan showing the total planned financial resources and the planned support from the Funds, the EIB, and all other sources of financing, together with physical and financial indicators for monitoring progress, taking account of the identified risks;

(i) the timetable for implementing the major project and, where the implementation period is expected to be longer than the programming period, the phases for which support from the Funds is requested during the programming period.

The Commission shall adopt implementing acts establishing the methodology to be used based on recognised best practices, in carrying out the cost-benefit analysis referred to in point (e) of the first paragraph. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 150(2).

@@ -2615,17 +2542,13 @@

1. Where a major project has been appraised positively by a quality review by independent experts, on the basis of their assessment of the information referred to in the first paragraph of Article 101, the managing authority may proceed with the selection of the major project in accordance with Article 125(3). The managing authority shall notify the Commission of the selected major project. That notification shall consist of the following elements:

(a)the document referred to in point (c) of Article 125(3) setting out:

(i)the body to be responsible for implementation of the major project;

(ii)a description of the investment, its location, timetable and expected contribution of the major project to the specific objectives of the relevant priority axis or axes;

(iii)the total cost and total eligible cost, taking account of the requirements set out in Article 61;

(iv)the financing plan, and the physical and financial indicators for monitoring progress, taking account of the identified risks;

(b)the quality review of the independent experts, providing clear statements on the investment's feasibility and the economic viability of the major project.

(a) the document referred to in point (c) of Article 125(3) setting out:

(i) the body to be responsible for implementation of the major project;

(ii) a description of the investment, its location, timetable and expected contribution of the major project to the specific objectives of the relevant priority axis or axes;

(iii) the total cost and total eligible cost, taking account of the requirements set out in Article 61;

(iv) the financing plan, and the physical and financial indicators for monitoring progress, taking account of the identified risks;

(b) the quality review of the independent experts, providing clear statements on the investment's feasibility and the economic viability of the major project.

The financial contribution to the major project selected by the Member State shall be deemed to be approved by the Commission in the absence of a decision, by means of an implementing act, refusing the financial contribution within three months of the date of the notification referred to in the first subparagraph. The Commission shall refuse the financial contribution only on the grounds that it has established a significant weakness in the independent quality review.

@@ -2647,11 +2570,11 @@

The corresponding expenditure shall be withdrawn and the declaration of expenditure shall be rectified accordingly in the following cases:

(a)where the independent quality review has not been notified to the Commission within three months of the expiry of the deadline referred to in the second subparagraph;

(b)where the submission of the information is withdrawn by the Member State; or

(c)where the relevant appraisal is negative.

(a) where the independent quality review has not been notified to the Commission within three months of the expiry of the deadline referred to in the second subparagraph;

(b) where the submission of the information is withdrawn by the Member State; or

#### Article 103

@@ -2659,15 +2582,15 @@

1. By way of derogation from the third paragraph of Article 101 and Article 102(1) and (2), the procedures set out in paragraphs 2, 3 and 4 of this Article shall apply to an operation which satisfies the following conditions:

(a)the operation consists of the second or subsequent phase of a major project under the previous programming period for which the preceding phase or phases are approved by the Commission not later than 31 December 2015 pursuant to Regulation (EC) No 1083/2006; or in the case of Member States which acceded to the Union after 1 January 2013, no later than 31 December 2016;

(b)the sum of the total eligible costs of all phases of the major project exceeds the respective levels set out in Article 100;

(c)the major project application and assessment by the Commission under the previous programming period covered all the planned phases;

(d)there are no substantial changes in the information referred to in the first paragraph of Article 101 of this Regulation for the major project compared to the information provided for the major project application submitted under Regulation (EC) No 1083/2006, in particular as regards the total eligible cost;

(e)the phase of the major project to be implemented under the previous programming period is or will be ready to be used for its intended purpose as specified in the Commission decision by the deadline of the submission of the closure documents for the relevant operational programme or programmes.

(a) the operation consists of the second or subsequent phase of a major project under the previous programming period for which the preceding phase or phases are approved by the Commission not later than 31 December 2015 pursuant to Regulation (EC) No 1083/2006; or in the case of Member States which acceded to the Union after 1 January 2013, no later than 31 December 2016;

(b) the sum of the total eligible costs of all phases of the major project exceeds the respective levels set out in Article 100;

(c) the major project application and assessment by the Commission under the previous programming period covered all the planned phases;

(d) there are no substantial changes in the information referred to in the first paragraph of Article 101 of this Regulation for the major project compared to the information provided for the major project application submitted under Regulation (EC) No 1083/2006, in particular as regards the total eligible cost;

(e) the phase of the major project to be implemented under the previous programming period is or will be ready to be used for its intended purpose as specified in the Commission decision by the deadline of the submission of the closure documents for the relevant operational programme or programmes.

2. The managing authority may proceed with the selection of the major project in accordance with Article 125(3) and submit the notification containing all the elements set out in point (a) of the first subparagraph of Article 102(1) together with its confirmation that the condition under point (d) of paragraph 1 of this Article is fulfilled. No quality review of the information by independent experts shall be required.

@@ -2703,31 +2626,27 @@

A joint action plan shall contain:

(1)a description of the objectives of the joint action plan and how it contributes to the objectives of the programme or to the relevant country-specific recommendations and the broad guidelines of the economic policies of the Member States and of the Union under Article 121(2) TFEU and the relevant Council recommendations which the Member States are to take into account in their employment policies under Article 148(4) TFEU;

(3)a description of the projects or types of projects envisaged, together with the milestones, where relevant, and the targets for outputs and results linked to the common indicators by priority axis, where relevant;

(4)information on its geographic coverage and target groups;

(5)its expected implementation period;

(6)confirmation that it will contribute to the approach to promoting equality between men and women, as set out in the relevant programme or Partnership Agreement;

(7)confirmation that it will contribute to the approach on sustainable development, as set out in the relevant programme or Partnership Agreement;

(8)its implementing provisions, including the following:

(a)information on the selection of the joint action plan by the managing authority in accordance with Article 125(3);

(b)the arrangements for steering the joint action plan, in accordance with Article 108;

(c)the arrangements for monitoring and evaluating the joint action plan including arrangements ensuring the quality, collection and storage of data on the achievement of milestones, outputs and results;

(9)its financial arrangements, including the following:

(a)the costs of achieving milestones, and targets for outputs and results, based, in the case of standard scales of unit costs and lump sums, on the methods set out in Article 67(5) of this Regulation and in Article 14 of the ESF Regulation;

(c)the financing plan by operational programme and priority axis, including the total eligible amount and the amount of public expenditure.

(1) a description of the objectives of the joint action plan and how it contributes to the objectives of the programme or to the relevant country-specific recommendations and the broad guidelines of the economic policies of the Member States and of the Union under Article 121(2) TFEU and the relevant Council recommendations which the Member States are to take into account in their employment policies under Article 148(4) TFEU;

(3) a description of the projects or types of projects envisaged, together with the milestones, where relevant, and the targets for outputs and results linked to the common indicators by priority axis, where relevant;

(4) information on its geographic coverage and target groups;

(5) its expected implementation period;

(6) confirmation that it will contribute to the approach to promoting equality between men and women, as set out in the relevant programme or Partnership Agreement;

(7) confirmation that it will contribute to the approach on sustainable development, as set out in the relevant programme or Partnership Agreement;

(8) its implementing provisions, including the following:

(a) information on the selection of the joint action plan by the managing authority in accordance with Article 125(3);

(b) the arrangements for steering the joint action plan, in accordance with Article 108;

(c) the arrangements for monitoring and evaluating the joint action plan including arrangements ensuring the quality, collection and storage of data on the achievement of milestones, outputs and results;

(9) its financial arrangements, including the following:

(a) the costs of achieving milestones, and targets for outputs and results, based, in the case of standard scales of unit costs and lump sums, on the methods set out in Article 67(5) of this Regulation and in Article 14 of the ESF Regulation;

—————

(c) the financing plan by operational programme and priority axis, including the total eligible amount and the amount of public expenditure.

The Commission shall, in order to ensure uniform conditions for the implementation of this Article, adopt implementing acts laying down the format of the model for the joint action plan. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 150(2).

@@ -2757,9 +2676,9 @@

2. The steering committee shall carry out the following activities:

(a)review progress towards achieving the milestones, outputs and results of the joint action plan;

(b)consider and approve any proposal to amend the joint action plan in order to take account of any issues affecting its performance.

(a) review progress towards achieving the milestones, outputs and results of the joint action plan;

(b) consider and approve any proposal to amend the joint action plan in order to take account of any issues affecting its performance.

3. Requests for amendment of joint action plans submitted by a Member State to the Commission shall be duly substantiated. The Commission shall assess whether the request for amendment is justified, taking account of the information provided by the Member State. The Commission may make observations and the Member State shall provide to the Commission all necessary additional information. The Commission shall adopt a decision, by means of an implementing act, on a request for amendment no later than three months after its submission by the Member State, provided that any observations made by the Commission have been satisfactorily taken into account. The amendment shall enter into force from the date of the decision, unless otherwise set out in the decision.

@@ -2787,35 +2706,35 @@

1. The monitoring committee shall examine in particular:

(a)any issues that affect the performance of the operational programme;

(b)progress made in implementation of the evaluation plan and the follow-up given to findings of evaluations;

(c)implementation of the communication strategy, including information and communication measures, and of measures to enhance the visibility of the Funds;

(d)implementation of major projects;

(e)implementation of joint action plans;

(f)actions to promote equality between men and women, equal opportunities, and non-discrimination, including accessibility for persons with disabilities;

(g)actions to promote sustainable development;

(h)where applicable ex ante conditionalities are not fulfilled at the date of the submission of the Partnership Agreement and operational programme, progress on actions to fulfil the applicable ex ante conditionalities;

(i)financial instruments.

(a) any issues that affect the performance of the operational programme;

(b) progress made in implementation of the evaluation plan and the follow-up given to findings of evaluations;

(c) implementation of the communication strategy, including information and communication measures, and of measures to enhance the visibility of the Funds;

(d) implementation of major projects;

(e) implementation of joint action plans;

(f) actions to promote equality between men and women, equal opportunities, and non-discrimination, including accessibility for persons with disabilities;

(g) actions to promote sustainable development;

(h) where applicable ex ante conditionalities are not fulfilled at the date of the submission of the Partnership Agreement and operational programme, progress on actions to fulfil the applicable ex ante conditionalities;

(i) financial instruments.

2. By way of derogation from Article 49(3), the monitoring committee shall examine and approve:

(a)the methodology and criteria used for selection of operations, except where those criteria are approved by local action groups in accordance with point (c) of Article 34(3);

(b)the annual and final implementation reports;

(c)the evaluation plan for the operational programme and any amendment of the evaluation plan, including where either is part of a common evaluation plan pursuant to Article 114(1);

(d)the communication strategy for the operational programme and any amendment of the strategy;

(e)any proposal by the managing authority for any amendment to the operational programme.

(a) the methodology and criteria used for selection of operations, except where those criteria are approved by local action groups in accordance with point (c) of Article 34(3);

(b) the annual and final implementation reports;

(c) the evaluation plan for the operational programme and any amendment of the evaluation plan, including where either is part of a common evaluation plan pursuant to Article 114(1);

(d) the communication strategy for the operational programme and any amendment of the strategy;

(e) any proposal by the managing authority for any amendment to the operational programme.

#### Article 111

@@ -2827,35 +2746,35 @@

3. Annual implementation reports shall set out information on:

(a)implementation of the operational programme in accordance with Article 50(2);

(b)progress in preparation and implementation of major projects and joint action plans.

(a) implementation of the operational programme in accordance with Article 50(2);

(b) progress in preparation and implementation of major projects and joint action plans.

4. The annual implementation reports submitted in 2017 and 2019 shall set out and assess the information required under Article 50(4) and (5) respectively and the information set out in paragraph 3 of this Article together with the following information:

(a)progress in the implementation of the evaluation plan and the follow-up given to the findings of evaluations;

(b)the results of the information and publicity measures of the Funds carried out under the communication strategy;

(c)the involvement of the partners in the implementation, monitoring and evaluation of the operational programme.

(a) progress in the implementation of the evaluation plan and the follow-up given to the findings of evaluations;

(b) the results of the information and publicity measures of the Funds carried out under the communication strategy;

The annual implementation reports submitted in 2017 and 2019 may, depending on the content and objectives of operational programmes, set out information and assess the following:

(a)progress in the implementation of the integrated approach to territorial development, including development of regions facing demographic challenges and permanent or natural handicaps, sustainable urban development, and community-led local development under the operational programme;

(b)progress in the implementation of actions to reinforce the capacity of Member State authorities and beneficiaries to administer and use the Funds;

(c)progress in the implementation of any interregional and transnational actions;

(d)where appropriate, the contribution to macro-regional and sea basin strategies;

(e)the specific actions taken to promote equality between men and women and to prevent discrimination, in particular accessibility for persons with disabilities, and the arrangements implemented to ensure the integration of the gender perspective in the operational programme and operations;

(f)actions taken to promote sustainable development in accordance with Article 8;

(g)progress in the implementation of actions in the field of social innovation, where appropriate;

(h)progress in the implementation of measures to address the specific needs of geographical areas most affected by poverty or of target groups at highest risk of poverty, discrimination or social exclusion, with special regard to marginalised communities and persons with disabilities, long term unemployed and young people not in employment, including, where appropriate, the financial resources used.

(a) progress in the implementation of the integrated approach to territorial development, including development of regions facing demographic challenges and permanent or natural handicaps, sustainable urban development, and community-led local development under the operational programme;

(b) progress in the implementation of actions to reinforce the capacity of Member State authorities and beneficiaries to administer and use the Funds;

(d) where appropriate, the contribution to macro-regional and sea basin strategies;

(e) the specific actions taken to promote equality between men and women and to prevent discrimination, in particular accessibility for persons with disabilities, and the arrangements implemented to ensure the integration of the gender perspective in the operational programme and operations;

(f) actions taken to promote sustainable development in accordance with Article 8;

(g) progress in the implementation of actions in the field of social innovation, where appropriate;

(h) progress in the implementation of measures to address the specific needs of geographical areas most affected by poverty or of target groups at highest risk of poverty, discrimination or social exclusion, with special regard to marginalised communities and persons with disabilities, long term unemployed and young people not in employment, including, where appropriate, the financial resources used.

By way of derogation from the first and second subparagraphs, and in order to ensure consistency between the Partnership Agreement and the progress report, Member States with no more than one operational programme per Fund may include the information relating to ex ante conditionalities referred to in Article 50(4), the information required by Article 50(5) and the information referred to in points (a), (b), (c) and (h) of the second subparagraph of this paragraph in the progress report instead of the annual implementation reports submitted in 2017 and 2019 respectively and the final implementation report, without prejudice to point (b) of Article 110(2).

@@ -2867,9 +2786,9 @@

1. By 31 January, 31 July and 31 October, the Member State shall transmit electronically to the Commission for monitoring purposes, for each operational programme and by priority axis:

(a)the total and public eligible cost of the operations and the number of operations selected for support;

(b)the total eligible expenditure declared by beneficiaries to the managing authority.

(a) the total and public eligible cost of the operations and the number of operations selected for support;

(b) the total eligible expenditure declared by beneficiaries to the managing authority.

2. In addition, the transmission made by 31 January shall contain the above data broken down by category of intervention. That transmission shall be considered to fulfil the requirement for the submission of financial data referred to in Article 50(2).

@@ -2885,11 +2804,11 @@

The report of the Commission referred to in Article 175 TFEU shall include:

(a)a record of progress made towards achieving economic, social and territorial cohesion, including the socio-economic situation and development of the regions, as well as the integration of the Union's priorities;

(b)a record of the role of the Funds, EIB funding and the other instruments in, as well as the effect of other Union and national policies on, the progress made;

(c)where appropriate an indication of future Union measures and policies necessary to strengthen economic, social and territorial cohesion, as well as to deliver the Union's priorities.

(a) a record of progress made towards achieving economic, social and territorial cohesion, including the socio-economic situation and development of the regions, as well as the integration of the Union's priorities;

(b) a record of the role of the Funds, EIB funding and the other instruments in, as well as the effect of other Union and national policies on, the progress made;

(c) where appropriate an indication of future Union measures and policies necessary to strengthen economic, social and territorial cohesion, as well as to deliver the Union's priorities.

#### Article 114

@@ -2911,13 +2830,13 @@

1. Member States and managing authorities shall be responsible for:

(a)drawing up communication strategies;

(b)ensuring the establishment of a single website or a single website portal providing information on, and access to, all operational programmes in that Member State, including information about the timing of implementation of programming and any related public consultation processes;

(c)informing potential beneficiaries about funding opportunities under operational programmes;

(d)publicising to Union citizens the role and achievements of cohesion policy and of the Funds through measures to enhance the visibility of the results and impact of Partnership Agreements, operational programmes and operations.

(a) drawing up communication strategies;

(b) ensuring the establishment of a single website or a single website portal providing information on, and access to, all operational programmes in that Member State, including information about the timing of implementation of programming and any related public consultation processes;

(d) publicising to Union citizens the role and achievements of cohesion policy and of the Funds through measures to enhance the visibility of the results and impact of Partnership Agreements, operational programmes and operations.

2. Member States or managing authorities shall, in order to ensure transparency concerning support from the Funds, maintain a list of operations by operational programme and by Fund in a spreadsheet data format, which allows data to be sorted, searched, extracted, compared and easily published on the internet, for instance in CSV or XML format. The list of operations shall be accessible through the single website or the single website portal providing a list and summary of all operational programmes in that Member State.

@@ -3001,21 +2920,21 @@

2. For each priority axis, the Commission decision shall set out whether the co-financing rate for the priority axis is to be applied to:

(a)total eligible expenditure, including public and private expenditure; or

(b)eligible public expenditure.

(a) total eligible expenditure, including public and private expenditure; or

(b) eligible public expenditure.

3. The co-financing rate at the level of each priority axis and, where relevant, by category of region and Fund, of operational programmes under the Investment for growth and jobs goal shall be no higher than:

(a)85 % for the Cohesion Fund;

(b)85 % for the less developed regions of Member States whose average GDP per capita for the period 2007 - 2009 was below 85 % of the EU-27 average during the same period and for the outermost regions including the additional allocation for outermost regions in accordance with point (e) of Article 92(1) and Article 4(2) of the ETC Regulation;

(c)80 % for the less developed regions of Member States other than those referred to in point (b), and for all regions whose GDP per capita used as an eligibility criterion for the 2007-2013 programming period was less than 75 % of the average of the EU-25 but whose GDP per capita is above 75 % of the GDP average of the EU-27, as well as for regions defined in Article 8(1) of Regulation (EU) 1083/2006 receiving transitional support for the 2007-2013 programming period;

(d)60 % for the transition regions other than those referred to in point (c);

(e)50 % for the more developed regions other than those referred to in point (c).

(a) 85 % for the Cohesion Fund;

(b) 85 % for the less developed regions of Member States whose average GDP per capita for the period 2007 - 2009 was below 85 % of the EU-27 average during the same period and for the outermost regions including the additional allocation for outermost regions in accordance with point (e) of Article 92(1) and Article 4(2) of the ETC Regulation;

(c) 80 % for the less developed regions of Member States other than those referred to in point (b), and for all regions whose GDP per capita used as an eligibility criterion for the 2007-2013 programming period was less than 75 % of the average of the EU-25 but whose GDP per capita is above 75 % of the GDP average of the EU-27, as well as for regions defined in Article 8(1) of Regulation (EU) 1083/2006 receiving transitional support for the 2007-2013 programming period;

(d) 60 % for the transition regions other than those referred to in point (c);

(e) 50 % for the more developed regions other than those referred to in point (c).

For the period from 1 January 2014 until closure of the operational programme the co-financing rate at the level of each priority axis for all operational programmes in Cyprus shall not be higher than 85 %.

@@ -3035,11 +2954,11 @@

8. A separate priority axis with a co-financing rate of up to 95 % may be established within an operational programme to support operations which fulfil all of the following conditions:

(a)the operations are selected by managing authorities in response to major or regional natural disasters as defined in Article 2(2) and (3) of Council Regulation (EC) No 2012/2002 (25);

(b)the operations are aimed at reconstruction in response to the natural disaster; and

(c)the operations are supported under an ERDF investment priority.

(a) the operations are selected by managing authorities in response to major or regional natural disasters as defined in Article 2(2) and (3) of Council Regulation (EC) No 2012/2002 (25);

(b) the operations are aimed at reconstruction in response to the natural disaster; and

The amount allocated to the operations referred to in the first subparagraph shall not exceed 5 % of the total ERDF allocation in a Member State for the 2014-2020 programming period.

@@ -3053,21 +2972,17 @@

The co-financing rate from the Funds to a priority axis may be modulated to take account of:

(1)the importance of the priority axis for the delivery of the Union strategy for smart, sustainable and inclusive growth, having regard to the specific gaps to be addressed;

(2)the protection and improvement of the environment, principally through the application of the precautionary principle, the principle of preventive action and the polluter pays principle;

(3)the rate of mobilisation of private financing;

(4)the coverage of areas with severe and permanent natural or demographic handicaps defined as follows:

(a)island Member States eligible under the Cohesion Fund, and other islands except those on which the capital of a Member State is situated or which have a fixed link to the mainland;

(b)mountainous areas as defined by the national legislation of the Member State;

(c)sparsely (i.e. less than 50 inhabitants per square kilometre) and very sparsely (less than 8 inhabitants per square kilometre) populated areas;

(d)the inclusion of the outermost regions as referred to in Article 349 TFEU.

(1) the importance of the priority axis for the delivery of the Union strategy for smart, sustainable and inclusive growth, having regard to the specific gaps to be addressed;

(2) the protection and improvement of the environment, principally through the application of the precautionary principle, the principle of preventive action and the polluter pays principle;

(3) the rate of mobilisation of private financing;

(4) the coverage of areas with severe and permanent natural or demographic handicaps defined as follows:

(a) island Member States eligible under the Cohesion Fund, and other islands except those on which the capital of a Member State is situated or which have a fixed link to the mainland;

(b) mountainous areas as defined by the national legislation of the Member State;

(c) sparsely (i.e. less than 50 inhabitants per square kilometre) and very sparsely (less than 8 inhabitants per square kilometre) populated areas;

(d) the inclusion of the outermost regions as referred to in Article 349 TFEU.

## **PART FOUR**

@@ -3091,11 +3006,11 @@

The Member States shall not notify the Commission of irregularities in relation to the following:

(a)cases where the irregularity consists solely of the failure to execute, in whole or in part, an operation included in the co-financed operational programme owing to the bankruptcy of the beneficiary;

(b)cases brought to the attention of the managing authority or certifying authority by the beneficiary voluntarily and before detection by either authority, whether before or after the payment of the public contribution;

(c)cases which are detected and corrected by the managing authority or certifying authority before inclusion of the expenditure concerned in a payment application submitted to the Commission.

(a) cases where the irregularity consists solely of the failure to execute, in whole or in part, an operation included in the co-financed operational programme owing to the bankruptcy of the beneficiary;

(b) cases brought to the attention of the managing authority or certifying authority by the beneficiary voluntarily and before detection by either authority, whether before or after the payment of the public contribution;

(c) cases which are detected and corrected by the managing authority or certifying authority before inclusion of the expenditure concerned in a payment application submitted to the Commission.

In all other cases, in particular those preceding a bankruptcy or in cases of suspected fraud, the detected irregularities and the associated preventive and corrective measures shall be reported to the Commission.

@@ -3173,61 +3088,56 @@

2. As regards the management of the operational programme, the managing authority shall:

(a)support the work of the monitoring committee referred to in Article 47 and provide it with the information it requires to carry out its tasks, in particular data relating to the progress of the operational programme in achieving its objectives, financial data and data relating to indicators and milestones;

(b)draw up and, after approval by the monitoring committee, submit to the Commission annual and final implementation reports referred to in Article 50;

(c)make available to intermediate bodies and beneficiaries information that is relevant to the execution of their tasks and the implementation of operations respectively;

(d)establish a system to record and store in computerised form data on each operation necessary for monitoring, evaluation, financial management, verification and audit, including data on individual participants in operations, where applicable;

(e)ensure that the data referred to in point (d) is collected, entered and stored in the system referred to in point (d), and that data on indicators is broken down by gender where required by Annexes I and II of the ESF Regulation.

(a) support the work of the monitoring committee referred to in Article 47 and provide it with the information it requires to carry out its tasks, in particular data relating to the progress of the operational programme in achieving its objectives, financial data and data relating to indicators and milestones;

(b) draw up and, after approval by the monitoring committee, submit to the Commission annual and final implementation reports referred to in Article 50;

(c) make available to intermediate bodies and beneficiaries information that is relevant to the execution of their tasks and the implementation of operations respectively;

(d) establish a system to record and store in computerised form data on each operation necessary for monitoring, evaluation, financial management, verification and audit, including data on individual participants in operations, where applicable;

(e) ensure that the data referred to in point (d) is collected, entered and stored in the system referred to in point (d), and that data on indicators is broken down by gender where required by Annexes I and II of the ESF Regulation.

3. As regards the selection of operations, the managing authority shall:

(a)draw up and, once approved, apply appropriate selection procedures and criteria that:

(i)ensure the contribution of operations to the achievement of the specific objectives and results of the relevant priority;

(ii)are non-discriminatory and transparent;

(iii)take into account the general principles set out in Articles 7 and 8;

(b)ensure that a selected operation falls within the scope of the EMFF, the Fund or Funds concerned and can be attributed to a category of intervention or, in the case of the EMFF, a measure identified in the priority or priorities of the operational programme;

(c)ensure that the beneficiary is provided with a document setting out the conditions for support for each operation including the specific requirements concerning the products or services to be delivered under the operation, the financing plan, the time limit for execution, as well as the requirements regarding information, communication and visibility;

(d)satisfy itself that the beneficiary has the administrative, financial and operational capacity to fulfil the conditions referred to in point (c) before approval of the operation;

(e)satisfy itself that, where the operation has started before the submission of an application for funding to the managing authority, applicable law relevant for the operation has been complied with;

(f)ensure that operations selected for support from the Funds or the EMFF do not include activities which were part of an operation which has been or should have been subject to a procedure of recovery in accordance with Article 71 following the relocation of a productive activity outside the programme area;

(g)determine the categories of intervention or, in the case of the EMFF, the measures to which the expenditure of an operation shall be attributed.

(a) draw up and, once approved, apply appropriate selection procedures and criteria that:

(i) ensure the contribution of operations to the achievement of the specific objectives and results of the relevant priority;

(ii) are non-discriminatory and transparent;

(iii) take into account the general principles set out in Articles 7 and 8;

(b) ensure that a selected operation falls within the scope of the EMFF, the Fund or Funds concerned and can be attributed to a category of intervention or, in the case of the EMFF, a measure identified in the priority or priorities of the operational programme;

(c) ensure that the beneficiary is provided with a document setting out the conditions for support for each operation including the specific requirements concerning the products or services to be delivered under the operation, the financing plan, the time limit for execution, as well as the requirements regarding information, communication and visibility;

(d) satisfy itself that the beneficiary has the administrative, financial and operational capacity to fulfil the conditions referred to in point (c) before approval of the operation;

(e) satisfy itself that, where the operation has started before the submission of an application for funding to the managing authority, applicable law relevant for the operation has been complied with;

(f) ensure that operations selected for support from the Funds or the EMFF do not include activities which were part of an operation which has been or should have been subject to a procedure of recovery in accordance with Article 71 following the relocation of a productive activity outside the programme area;

(g) determine the categories of intervention or, in the case of the EMFF, the measures to which the expenditure of an operation shall be attributed.

4. As regards the financial management and control of the operational programme, the managing authority shall:

(a)verify that the co-financed products and services have been delivered, that the operation complies with applicable law, the operational programme and the conditions for support of the operation and:

(i)where costs are to be reimbursed pursuant to point (a) of the first subparagraph of Article 67(1), that the amount of expenditure declared by the beneficiaries in relation to those costs has been paid;

(ii)in the case of costs reimbursed pursuant to points (b) to (e) of the first subparagraph of Article 67(1), that the conditions for reimbursement of expenditure to the beneficiary have been met;

(b)ensure that beneficiaries involved in the implementation of operations reimbursed on the basis of eligible costs actually incurred maintain either a separate accounting system or an adequate accounting code for all transactions relating to an operation;

(c)put in place effective and proportionate anti-fraud measures taking into account the risks identified;

(d)set up procedures to ensure that all documents regarding expenditure and audits required to ensure an adequate audit trail are held in accordance with the requirements of point (g) of Article 72;

(e)draw up the management declaration and annual summary referred to in points (a) and (b) of Article 63(5) and Article 63(6) and (7) of the Financial Regulation.

(a) verify that the co-financed products and services have been delivered, that the operation complies with applicable law, the operational programme and the conditions for support of the operation and:

(i) where costs are to be reimbursed pursuant to point (a) of the first subparagraph of Article 67(1), that the amount of expenditure declared by the beneficiaries in relation to those costs has been paid;

(ii) in the case of costs reimbursed pursuant to points (b) to (e) of the first subparagraph of Article 67(1), that the conditions for reimbursement of expenditure to the beneficiary have been met;

(b) ensure that beneficiaries involved in the implementation of operations reimbursed on the basis of eligible costs actually incurred maintain either a separate accounting system or an adequate accounting code for all transactions relating to an operation;

(d) set up procedures to ensure that all documents regarding expenditure and audits required to ensure an adequate audit trail are held in accordance with the requirements of point (g) of Article 72;

(e) draw up the management declaration and annual summary referred to in points (a) and (b) of Article 63(5) and Article 63(6) and (7) of the Financial Regulation.

By way of derogation from point (a) of the first subparagraph, the ETC Regulation may establish specific rules on verification applicable to cooperation programmes.

5. Verifications pursuant to point (a) of the first subparagraph of paragraph 4 shall include the following procedures:

(a)administrative verifications in respect of each application for reimbursement by beneficiaries;

(b)on-the-spot verifications of operations.

(a) administrative verifications in respect of each application for reimbursement by beneficiaries;

(b) on-the-spot verifications of operations.

The frequency and coverage of the on-the-spot verifications shall be proportionate to the amount of public support to an operation and to the level of risk identified by such verifications and audits by the audit authority for the management and control system as a whole.

@@ -3249,21 +3159,21 @@

The certifying authority of an operational programme shall be responsible in particular for:

(a)drawing up and submitting payment applications to the Commission, and certifying that they result from reliable accounting systems, are based on verifiable supporting documents and have been subject to verifications by the managing authority;

(b)drawing up the accounts referred to in point (a) of Article 63(5) and Article 63(6) of the Financial Regulation;

(c)certifying the completeness, accuracy and veracity of the accounts and that the expenditure entered in the accounts complies with applicable law and has been incurred in respect of operations selected for funding in accordance with the criteria applicable to the operational programme and complying with applicable law;

(d)ensuring that there is a system which records and stores, in computerised form, accounting records for each operation, and which supports all the data required for drawing up payment applications and accounts, including records of amounts recoverable, amounts recovered and amounts withdrawn following cancellation of all or part of the contribution for an operation or operational programme;

(e)ensuring, for the purposes of drawing up and submitting payment applications, that it has received adequate information from the managing authority on the procedures and verifications carried out in relation to expenditure;

(f)taking account when drawing up and submitting payment applications of the results of all audits carried out by, or under the responsibility of, the audit authority;

(g)maintaining, in a computerised form, accounting records of expenditure declared to the Commission and of the corresponding public contribution paid to beneficiaries;

(h)keeping an account of amounts recoverable and of amounts withdrawn following cancellation of all or part of the contribution for an operation. Amounts recovered shall be repaid to the budget of the Union prior to the closure of the operational programme by deducting them from the subsequent payment application.

(a) drawing up and submitting payment applications to the Commission, and certifying that they result from reliable accounting systems, are based on verifiable supporting documents and have been subject to verifications by the managing authority;

(b) drawing up the accounts referred to in point (a) of Article 63(5) and Article 63(6) of the Financial Regulation;

(c) certifying the completeness, accuracy and veracity of the accounts and that the expenditure entered in the accounts complies with applicable law and has been incurred in respect of operations selected for funding in accordance with the criteria applicable to the operational programme and complying with applicable law;

(d) ensuring that there is a system which records and stores, in computerised form, accounting records for each operation, and which supports all the data required for drawing up payment applications and accounts, including records of amounts recoverable, amounts recovered and amounts withdrawn following cancellation of all or part of the contribution for an operation or operational programme;

(e) ensuring, for the purposes of drawing up and submitting payment applications, that it has received adequate information from the managing authority on the procedures and verifications carried out in relation to expenditure;

(f) taking account when drawing up and submitting payment applications of the results of all audits carried out by, or under the responsibility of, the audit authority;

(g) maintaining, in a computerised form, accounting records of expenditure declared to the Commission and of the corresponding public contribution paid to beneficiaries;

(h) keeping an account of amounts recoverable and of amounts withdrawn following cancellation of all or part of the contribution for an operation. Amounts recovered shall be repaid to the budget of the Union prior to the closure of the operational programme by deducting them from the subsequent payment application.

#### Article 127

@@ -3285,9 +3195,9 @@

5. The audit authority shall draw up:

(a)an audit opinion in accordance with Article 63(7) of the Financial Regulation;

(b)a control report setting out the main findings of the audits carried out in accordance with paragraph 1, including findings with regard to deficiencies found in the management and control systems, and the proposed and implemented corrective actions.

(a) an audit opinion in accordance with Article 63(7) of the Financial Regulation;

(b) a control report setting out the main findings of the audits carried out in accordance with paragraph 1, including findings with regard to deficiencies found in the management and control systems, and the proposed and implemented corrective actions.

Where a common management and control system applies to more than one operational programme, the information required under point (b) of the first subparagraph may be grouped in a single report.

@@ -3333,9 +3243,9 @@

2. The contribution from the Funds or the EMFF to a priority through the interim payments and payment of the final balance shall not be higher than:

(a)the eligible public expenditure indicated in the payment applications for the priority; or

(b)the contribution from the Funds or the EMFF for the priority laid down in the decision of the Commission approving the operational programme,

(a) the eligible public expenditure indicated in the payment applications for the priority; or

(b) the contribution from the Funds or the EMFF for the priority laid down in the decision of the Commission approving the operational programme,

whichever is the lower.

@@ -3345,9 +3255,9 @@

1. Payment applications shall include, for each priority:

(a)the total amount of eligible expenditure incurred by beneficiaries and paid in implementing operations, as entered in the accounting system of the certifying authority;

(b)the total amount of public expenditure incurred in implementing operations, as entered in the accounting system of the certifying authority.

(a) the total amount of eligible expenditure incurred by beneficiaries and paid in implementing operations, as entered in the accounting system of the certifying authority;

(b) the total amount of public expenditure incurred in implementing operations, as entered in the accounting system of the certifying authority.

With regard to the amounts to be included in payment applications for the form of support referred to in point (e) of the first subparagraph of Article 67(1), the payment applications shall include the elements set out in the delegated acts adopted in accordance with Article 67(5a) and shall use the model for payment applications set out in the implementing acts adopted in accordance with paragraph 6 of this Article.

@@ -3357,21 +3267,21 @@

4. By way of derogation from paragraph 1 of this Article, in the case of State aid, the payment application may include advances paid to the beneficiary by the body granting the aid or, where Member States have decided that the beneficiary is the body granting the aid pursuant to point (10)(a) of Article 2, paid by the beneficiary to the body receiving the aid, under the following cumulative conditions:

(a)those advances are subject to a guarantee provided by a bank or other financial institution established in the Member State or are covered by a facility provided as a guarantee by a public entity or by the Member State;

(b)those advances do not exceed 40 % of the total amount of the aid to be granted to a beneficiary for a given operation or, where Member States have decided that the beneficiary is the body granting the aid pursuant to point (10)(a) of Article 2, of the total amount of the aid to be granted to the body receiving the aid as part of a given operation;

(c)those advances are covered by expenditure paid by the beneficiary or, where Member States have decided that the beneficiary is the body granting the aid pursuant to point (10)(a) of Article 2, expenditure paid by the body receiving the aid in implementing the operation, and supported by receipted invoices or accounting documents of equivalent probative value within three years of the year of the payment of the advance or on 31 December 2023, whichever is earlier.

(a) those advances are subject to a guarantee provided by a bank or other financial institution established in the Member State or are covered by a facility provided as a guarantee by a public entity or by the Member State;

(b) those advances do not exceed 40 % of the total amount of the aid to be granted to a beneficiary for a given operation or, where Member States have decided that the beneficiary is the body granting the aid pursuant to point (10)(a) of Article 2, of the total amount of the aid to be granted to the body receiving the aid as part of a given operation;

(c) those advances are covered by expenditure paid by the beneficiary or, where Member States have decided that the beneficiary is the body granting the aid pursuant to point (10)(a) of Article 2, expenditure paid by the body receiving the aid in implementing the operation, and supported by receipted invoices or accounting documents of equivalent probative value within three years of the year of the payment of the advance or on 31 December 2023, whichever is earlier.

Where the conditions set out in point (c) of the first subparagraph are not met, the next payment application shall be corrected accordingly.

5. Each payment application which includes advances of the type referred to in paragraph 4 of this Article shall separately disclose:

(a)the total amount paid from the operational programme as advances;

(b)the amount which, within three years of the payment of the advance in accordance with point (c) of the first subparagraph of paragraph 4, has been covered by expenditure paid by the beneficiary or, where Member States have decided that the beneficiary is the body granting the aid pursuant to point (10)(a) of Article 2, by the body receiving the aid; and

(c)the amount which has not been covered by expenditure paid by the beneficiary or, where Member States have decided that the beneficiary is the body granting the aid pursuant to point (10)(a) of Article 2, by the body receiving the aid, and for which the three year period has not yet elapsed.

(a) the total amount paid from the operational programme as advances;

(b) the amount which, within three years of the payment of the advance in accordance with point (c) of the first subparagraph of paragraph 4, has been covered by expenditure paid by the beneficiary or, where Member States have decided that the beneficiary is the body granting the aid pursuant to point (10)(a) of Article 2, by the body receiving the aid; and

(c) the amount which has not been covered by expenditure paid by the beneficiary or, where Member States have decided that the beneficiary is the body granting the aid pursuant to point (10)(a) of Article 2, by the body receiving the aid, and for which the three year period has not yet elapsed.

6. The Commission shall, in order to ensure uniform conditions for the implementation of this Article, adopt implementing acts laying down the model for payment applications. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 150(3).

@@ -3385,9 +3295,9 @@

2. The payment deadline referred to in paragraph 1 may be interrupted by the managing authority in either of the following duly justified cases:

(a)the amount of the payment claim is not due or the appropriate supporting documents, including the documents necessary for management verifications under point (a) of the first subparagraph of Article 125(4), have not been provided;

(b)an investigation has been initiated in relation to a possible irregularity affecting the expenditure concerned.

(a) the amount of the payment claim is not due or the appropriate supporting documents, including the documents necessary for management verifications under point (a) of the first subparagraph of Article 125(4), have not been provided;

(b) an investigation has been initiated in relation to a possible irregularity affecting the expenditure concerned.

The beneficiary concerned shall be informed in writing of the interruption and the reasons for it.

@@ -3407,11 +3317,11 @@

1. The initial pre-financing amount shall be paid in instalments as follows:

(a)in 2014: 1 % of the amount of support from the Funds and the EMFF for the entire programming period to the operational programme or 1,5 % of the amount of support from the Funds and the EMFF for the entire programming period to the operational programme when a Member State has been receiving financial assistance since 2010, in accordance with Articles 122 and 143 TFEU, or from the European Financial Stability Facility (EFSF), or is receiving financial assistance on 31 December 2013 in accordance with Articles 136 and 143 TFEU;

(b)in 2015: 1 % of the amount of support from the Funds and the EMFF for the entire programming period to the operational programme or 1,5 % of the amount of support from the Funds and the EMFF for the entire programming period to the operational programme when a Member State has been receiving financial assistance since 2010, in accordance with Articles 122 and 143 TFEU, or from the EFSF, or is receiving financial assistance on 31 December 2014 in accordance with Articles 136 and 143 TFEU;

(c)in 2016: 1 % of the amount of support from the Funds and the EMFF for the entire programming period to the operational programme.

(a) in 2014: 1 % of the amount of support from the Funds and the EMFF for the entire programming period to the operational programme or 1,5 % of the amount of support from the Funds and the EMFF for the entire programming period to the operational programme when a Member State has been receiving financial assistance since 2010, in accordance with Articles 122 and 143 TFEU, or from the European Financial Stability Facility (EFSF), or is receiving financial assistance on 31 December 2013 in accordance with Articles 136 and 143 TFEU;

(b) in 2015: 1 % of the amount of support from the Funds and the EMFF for the entire programming period to the operational programme or 1,5 % of the amount of support from the Funds and the EMFF for the entire programming period to the operational programme when a Member State has been receiving financial assistance since 2010, in accordance with Articles 122 and 143 TFEU, or from the EFSF, or is receiving financial assistance on 31 December 2014 in accordance with Articles 136 and 143 TFEU;

(c) in 2016: 1 % of the amount of support from the Funds and the EMFF for the entire programming period to the operational programme.

If an operational programme is adopted in 2015 or later, the earlier instalments shall be paid in the year of adoption.

@@ -3423,15 +3333,15 @@

2. An annual pre-financing amount shall be paid before 1 July in the years 2016 to 2023. It shall be a percentage of the amount of the support from the Funds and the EMFF for the whole programming period to the operational programme as follows:

—2016: 2 %

—2017: 2,625 %

—2018: 2,75 %

—2019: 2,875 %

—2020 to 2023: 3 %.

— 2016: 2 %

— 2017: 2,625 %

— 2018: 2,75 %

— 2019: 2,875 %

— 2020 to 2023: 3 %.

3. When calculating the amount of initial pre-financing referred to in paragraph 1, the amount of support for the entire programming period shall exclude the amounts from the performance reserve which were initially allocated to the operational programme.

@@ -3473,13 +3383,13 @@

1. The accounts referred to in point (a) of Article 63(5) and Article 63(6) of the Financial Regulation shall be submitted to the Commission for each operational programme. The accounts shall cover the accounting year and shall include at the level of each priority and, where applicable, fund and category of regions:

(a)the total amount of eligible expenditure entered into the accounting systems of the certifying authority which has been included in payment applications submitted to the Commission in accordance with Article 131 and Article 135(2) by 31 July following the end of the accounting year, the total amount of the corresponding public expenditure incurred in implementing operations, and the total amount of corresponding payments made to beneficiaries under Article 132(1);

(b)the amounts withdrawn and recovered during the accounting year, the amounts to be recovered as at the end of the accounting year, the recoveries effected pursuant to Article 71, and the irrecoverable amounts;

(c)the amounts of programme contributions paid to financial instruments under Article 41(1) and advances of State aid under Article 131(4);

(d)for each priority, a reconciliation between the expenditure stated pursuant to point (a) and the expenditure declared in respect of the same accounting year in payment applications, accompanied by an explanation of any differences.

(a) the total amount of eligible expenditure entered into the accounting systems of the certifying authority which has been included in payment applications submitted to the Commission in accordance with Article 131 and Article 135(2) by 31 July following the end of the accounting year, the total amount of the corresponding public expenditure incurred in implementing operations, and the total amount of corresponding payments made to beneficiaries under Article 132(1);

(b) the amounts withdrawn and recovered during the accounting year, the amounts to be recovered as at the end of the accounting year, the recoveries effected pursuant to Article 71, and the irrecoverable amounts;

(c) the amounts of programme contributions paid to financial instruments under Article 41(1) and advances of State aid under Article 131(4);

(d) for each priority, a reconciliation between the expenditure stated pursuant to point (a) and the expenditure declared in respect of the same accounting year in payment applications, accompanied by an explanation of any differences.

2. Where expenditure previously included in an application for interim payment for the accounting year is excluded by a Member State from its accounts due to an ongoing assessment of that expenditure's legality and regularity, any or all of that expenditure subsequently found to be legal and regular may be included in an application for interim payment relating to subsequent accounting years.

@@ -3491,11 +3401,11 @@

For each year from 2016 until and including 2025, Member States shall submit, by the deadline set out in Article 63(5), and the second subparagraph of Article 63(7), of the Financial Regulation, the documents referred to in that Article namely:

(a)the accounts, referred to in Article 137(1) of this Regulation, for the preceding accounting year;

(b)the management declaration and the annual summary referred to in point (e) of the first subparagraph of Article 125(4) of this Regulation, for the preceding accounting year;

(c)the audit opinion and the control report referred to in points (a) and (b) of the first subparagraph of Article 127(5) of this Regulation, for the preceding accounting year.

(a) the accounts, referred to in Article 137(1) of this Regulation, for the preceding accounting year;

(b) the management declaration and the annual summary referred to in point (e) of the first subparagraph of Article 125(4) of this Regulation, for the preceding accounting year;

(c) the audit opinion and the control report referred to in points (a) and (b) of the first subparagraph of Article 127(5) of this Regulation, for the preceding accounting year.

#### Article 139

@@ -3513,16 +3423,18 @@

6. On the basis of the accepted accounts, the Commission shall calculate the amount chargeable to the Funds and to the EMFF for the accounting year and the consequent adjustments in relation to the payments to the Member State. The Commission shall take into account:

(a)the amounts in the accounts referred to in point (a) of Article 137(1) and to which the co-financing rate for each priority is to be applied;

(b)the total amount of payments made by the Commission during that accounting year, consisting of:

(i)the amount of interim payments paid by the Commission in accordance with Article 130(1) and Article 24; and

(ii)the amount of the annual pre-financing paid under Article 134(2).

(a) the amounts in the accounts referred to in point (a) of Article 137(1) and to which the co-financing rate for each priority is to be applied;

(b) the total amount of payments made by the Commission during that accounting year, consisting of:

(i) the amount of interim payments paid by the Commission in accordance with Article 130(1) and Article 24; and

(ii) the amount of the annual pre-financing paid under Article 134(2).

7. After the calculation carried out under paragraph 6, the Commission shall clear the respective annual pre-financing and pay any additional amount due within 30 days of the acceptance of the accounts. Where there is an amount recoverable from the Member State, it shall be subject to a recovery order issued by the Commission which shall be executed, where possible, by offsetting against amounts due to the Member State under subsequent payments to the same operational programme. Such recovery shall not constitute a financial correction and shall not reduce support from the Funds and the EMFF to the operational programme. The amount recovered shall constitute assigned revenue in accordance with Article 177(3) of the Financial Regulation.

By way of derogation from the first subparagraph, the Commission shall not issue a recovery order for amounts recoverable from the Member State for the accounts submitted in 2020. Amounts not recovered shall be used to accelerate investments related to the COVID-19 outbreak and eligible under this Regulation and Fund-specific rules.

The amounts not recovered shall be cleared or recovered at closure.

8. Where, after applying the procedure set out in paragraph 4, the Commission is unable to accept the accounts, the Commission shall determine, on the basis of the available information and in accordance with paragraph 6, the amount chargeable to the Funds and the EMFF for the accounting year, and shall inform the Member State. Where the Member State notifies the Commission of its agreement within two months of the transmission by the Commission of the information, paragraph 7 shall apply. In the absence of such agreement, the Commission shall adopt a decision, by means of implementing acts, setting out the amount chargeable to the Funds and the EMFF for the accounting year. Such decision shall not constitute a financial correction and shall not reduce support from the Funds and the EMFF to the operational programme. On the basis of the decision, the Commission shall apply the adjustments to the payments to the Member State in accordance with paragraph 7.

9. The acceptance of the accounts by the Commission, or a decision by the Commission under paragraph 8 of this Article, shall be without prejudice to the application of corrections under Articles 144 and 145.

@@ -3573,17 +3485,17 @@

1. All or part of the interim payments at the level of priorities or operational programmes may be suspended by the Commission if one or more of the following conditions are met:

(a)there is a serious deficiency in the effective functioning of the management and control system of the operational programme, which has put at risk the Union contribution to the operational programme and for which corrective measures have not been taken;

(b)expenditure in a payment application is linked to an irregularity having serious financial consequences which has not been corrected;

(c)the Member State has failed to take the necessary action to remedy the situation giving rise to an interruption under Article 83;

(d)there is a serious deficiency in the quality and reliability of the monitoring system or of the data on common and specific indicators;

(e)there is a failure to complete actions to fulfil an ex ante conditionality subject to the conditions set out in Article 19;

(f)there is evidence resulting from the performance review for a priority that there has been a serious failure in achieving that priority's milestones relating to financial and output indicators and key implementation steps set out in the performance framework subject to the conditions set out in Article 22.

(a) there is a serious deficiency in the effective functioning of the management and control system of the operational programme, which has put at risk the Union contribution to the operational programme and for which corrective measures have not been taken;

(b) expenditure in a payment application is linked to an irregularity having serious financial consequences which has not been corrected;

(c) the Member State has failed to take the necessary action to remedy the situation giving rise to an interruption under Article 83;

(d) there is a serious deficiency in the quality and reliability of the monitoring system or of the data on common and specific indicators;

(e) there is a failure to complete actions to fulfil an ex ante conditionality subject to the conditions set out in Article 19;

(f) there is evidence resulting from the performance review for a priority that there has been a serious failure in achieving that priority's milestones relating to financial and output indicators and key implementation steps set out in the performance framework subject to the conditions set out in Article 22.

The Fund-specific rules for the EMFF may lay down specific bases for suspension of payments linked to non-compliance with rules applicable under the Common Fisheries Policy, which shall be proportionate, having regard to the nature, gravity, duration and recurrence of the non-compliance.

@@ -3623,11 +3535,11 @@

1. The Commission shall make financial corrections, by means of implementing acts, by cancelling all or part of the Union contribution to an operational programme in accordance with Article 85, where, after carrying out the necessary examination, it concludes that:

(a)there is a serious deficiency in the effective functioning of the management and control system of the operational programme which has put at risk the Union contribution already paid to the operational programme;

(b)the Member State has not complied with its obligations under Article 143 prior to the opening of the correction procedure under this paragraph;

(c)expenditure contained in a payment application is irregular and has not been corrected by the Member State prior to the opening of the correction procedure under this paragraph.

(a) there is a serious deficiency in the effective functioning of the management and control system of the operational programme which has put at risk the Union contribution already paid to the operational programme;

(b) the Member State has not complied with its obligations under Article 143 prior to the opening of the correction procedure under this paragraph;

(c) expenditure contained in a payment application is irregular and has not been corrected by the Member State prior to the opening of the correction procedure under this paragraph.

The Commission shall base its financial corrections on individual cases of identified irregularity and shall take account of whether an irregularity is systemic. Where it is not possible to quantify precisely the amount of irregular expenditure charged to the Funds or the EMFF, the Commission shall apply a flat rate or extrapolated financial correction.

@@ -3663,19 +3575,19 @@

The first subparagraph shall not apply in the case of a serious deficiency in the effective functioning of a management and control system which, prior to the date of detection by the Commission or the European Court of Auditors:

(a)had been identified in the management declaration, annual control report or the audit opinion submitted to the Commission in accordance with Article 63(5), (6) and (7) of the Financial Regulation, or in other audit reports of the audit authority submitted to the Commission and appropriate measures taken; or

(b)had been the subject of appropriate remedial measures by the Member State.

(a) had been identified in the management declaration, annual control report or the audit opinion submitted to the Commission in accordance with Article 63(5), (6) and (7) of the Financial Regulation, or in other audit reports of the audit authority submitted to the Commission and appropriate measures taken; or

(b) had been the subject of appropriate remedial measures by the Member State.

The assessment of serious deficiencies in the effective functioning of management and control systems shall be based on the applicable law when the relevant management declarations, annual control reports and audit opinions were submitted.

When deciding on a financial correction the Commission shall:

(a)respect the principle of proportionality by taking account of the nature and gravity of the serious deficiency in the effective functioning of a management and control system and its financial implications for the budget of the Union;

(b)for the purpose of applying a flat rate or extrapolated correction, exclude irregular expenditure previously detected by the Member State which has been the subject of an adjustment in the accounts in accordance with Article 139(10), and expenditure subject to an ongoing assessment of its legality and regularity under Article 137(2);

(c)take into account flat rate or extrapolated corrections applied to the expenditure by the Member State for other serious deficiencies detected by the Member State when determining the residual risk for the budget of the Union.

(a) respect the principle of proportionality by taking account of the nature and gravity of the serious deficiency in the effective functioning of a management and control system and its financial implications for the budget of the Union;

(b) for the purpose of applying a flat rate or extrapolated correction, exclude irregular expenditure previously detected by the Member State which has been the subject of an adjustment in the accounts in accordance with Article 139(10), and expenditure subject to an ongoing assessment of its legality and regularity under Article 137(2);

(c) take into account flat rate or extrapolated corrections applied to the expenditure by the Member State for other serious deficiencies detected by the Member State when determining the residual risk for the budget of the Union.

8. The Fund-specific rules for the EMFF may lay down additional rules of procedure for financial corrections referred to in Article 144(7).

@@ -3831,21 +3743,21 @@

1.Member States and managing authorities responsible for the implementation of the ESI Funds shall work closely together in the preparation, implementation, monitoring and evaluation of the Partnership Agreement and programmes. In particular, they shall ensure that the following actions are carried out:

(a)identify areas of intervention where the ESI Funds can be combined in a complementary manner to achieve the thematic objectives set out in this Regulation;

(b)ensure in accordance with Article 4(6), the existence of arrangements for the effective coordination of the ESI Funds in order to increase the impact and effectiveness of the Funds including, where appropriate, through the use of multi-fund programmes for the Funds;

(c)promote the involvement of managing authorities responsible for other ESI Funds and relevant ministries in the development of support schemes to ensure coordination and synergies and to avoid overlaps;

(d)establish, where appropriate, joint monitoring committees for programmes implementing the ESI Funds, and the development of other joint management and control arrangements to facilitate coordination between authorities responsible for the implementation of the ESI Funds;

(e)make use of available joint eGovernance solutions, which may assist applicants and beneficiaries, and make the widest possible use of "one-stop shops", including for advice on the opportunities of support available through each of the ESI Funds;

(f)establish mechanisms to coordinate cooperation activities financed by the ERDF and the ESF with investments supported by the programmes under the Investment for growth and jobs goal;

(g)promote common approaches between ESI Funds with regard to guidance for the development of operations, calls for proposals and selection processes or other mechanisms to facilitate access to Funds for integrated projects;

(h)encourage cooperation between managing authorities of different ESI Funds in the areas of monitoring, evaluation, management and control, and audit.

(a) identify areas of intervention where the ESI Funds can be combined in a complementary manner to achieve the thematic objectives set out in this Regulation;

(b) ensure in accordance with Article 4(6), the existence of arrangements for the effective coordination of the ESI Funds in order to increase the impact and effectiveness of the Funds including, where appropriate, through the use of multi-fund programmes for the Funds;

(c) promote the involvement of managing authorities responsible for other ESI Funds and relevant ministries in the development of support schemes to ensure coordination and synergies and to avoid overlaps;

(d) establish, where appropriate, joint monitoring committees for programmes implementing the ESI Funds, and the development of other joint management and control arrangements to facilitate coordination between authorities responsible for the implementation of the ESI Funds;

(e) make use of available joint eGovernance solutions, which may assist applicants and beneficiaries, and make the widest possible use of "one-stop shops", including for advice on the opportunities of support available through each of the ESI Funds;

(f) establish mechanisms to coordinate cooperation activities financed by the ERDF and the ESF with investments supported by the programmes under the Investment for growth and jobs goal;

(g) promote common approaches between ESI Funds with regard to guidance for the development of operations, calls for proposals and selection processes or other mechanisms to facilitate access to Funds for integrated projects;

(h) encourage cooperation between managing authorities of different ESI Funds in the areas of monitoring, evaluation, management and control, and audit.

### 3.3 **Encouraging integrated approaches**

@@ -3867,11 +3779,11 @@

2.Member States and the Commission shall, in accordance with Article 4(6) and with their respective responsibilities, ensure coordination between the ESI Funds and other relevant Union instruments at Union and Member State level. They shall take appropriate steps to ensure consistency, at programming and implementation stages, between interventions supported by the ESI Funds and the objectives of other Union policies. To this end, they shall seek to take into account the following aspects:

(a)enhancing complementarities and synergies between different Union instruments at Union, national and regional level, both in the planning phase and during implementation;

(b)optimise existing structures and where necessary, establish new structures that facilitate the strategic identification of priorities for the different instruments and structures for coordination at Union and national level that avoid duplication of effort and identify areas where additional financial support is needed;

(c)make use of the potential to combine support from different instruments to support individual operations and work closely with those responsible for implementation at Union and national level to deliver coherent and streamlined funding opportunities for beneficiaries.

(a) enhancing complementarities and synergies between different Union instruments at Union, national and regional level, both in the planning phase and during implementation;

(b) optimise existing structures and where necessary, establish new structures that facilitate the strategic identification of priorities for the different instruments and structures for coordination at Union and national level that avoid duplication of effort and identify areas where additional financial support is needed;

(c) make use of the potential to combine support from different instruments to support individual operations and work closely with those responsible for implementation at Union and national level to deliver coherent and streamlined funding opportunities for beneficiaries.

### 4.2 **Coordination with the Common Agricultural Policy and the Common Fisheries Policy**

@@ -3885,29 +3797,28 @@

2.Member States shall develop national and/or regional 'smart specialisation' strategies in line with the National Reform Programme, where appropriate. Such strategies may take the form of or be included in a national or a regional research and innovation strategic policy framework for 'smart specialisation'. Smart specialisation strategies shall be developed through involving national or regional managing authorities and stakeholders such as universities and other higher education institutions, industry and social partners in an entrepreneurial discovery process. The authorities directly concerned by Horizon 2020 shall be closely associated with that process. Smart specialisation strategies shall include:

(a)"Upstream actions" to prepare regional R&I players to participate in Horizon 2020 ("stairways to excellence") to be developed, where necessary, through capacity- building. Communication and cooperation between Horizon 2020 national contact points and managing authorities of the ESI Funds shall be strengthened.

(b)"Downstream actions" to provide the means to exploit and diffuse R&I results, stemming from Horizon 2020 and preceding programmes, into the market with particular emphasis on creating an innovation-friendly environment for business and industry, including SMEs and in line with the priorities identified for the territories in the relevant smart specialisation strategy.

(a) "Upstream actions" to prepare regional R&I players to participate in Horizon 2020 ("stairways to excellence") to be developed, where necessary, through capacity- building. Communication and cooperation between Horizon 2020 national contact points and managing authorities of the ESI Funds shall be strengthened.

(b) "Downstream actions" to provide the means to exploit and diffuse R&I results, stemming from Horizon 2020 and preceding programmes, into the market with particular emphasis on creating an innovation-friendly environment for business and industry, including SMEs and in line with the priorities identified for the territories in the relevant smart specialisation strategy.

3.Member States shall encourage the use of the provisions in this Regulation that allow the ESI Funds to be combined with resources under Horizon 2020 in the relevant programmes used to implement parts of the strategies referred to in point 2. Joint support shall be provided to national and regional authorities for the design and implementation of such strategies, to identify opportunities for joint financing of R&I infrastructures of European interest, the promotion of international collaboration, methodological support through peer reviews, exchange of good practice, and training throughout regions.

4.Member States and, where appropriate under Article 4(4), regions, shall consider additional measures aimed at unlocking their potential for excellence in R&I, in a manner that is complementary to and creates synergies with Horizon 2020, in particular through joint funding. Those measures shall consist of:

(a)linking excellent research institutions and less developed regions as well as low- performing Research, Development and Innovation (RDI) Member States and regions to create new or upgrade existing centres of excellence in less developed regions as well as in low-performing RDI Member States and regions;

(b)building links in less developed regions as well as in low-performing RDI Member States and regions between innovative clusters of recognised excellence;

(c)establishing "ERA Chairs" to attract outstanding academics, in particular to less developed regions and low-performing RDI Member States and regions;

(d)supporting access to international networks for researchers and innovators who lack sufficient involvement in the European Research Area (ERA) or are from less developed regions or low-performing RDI Member States and regions;

(e)contributing as appropriate to the European Innovation Partnerships;

(f)preparing national institutions and/or clusters of excellence for participation in the Knowledge and Innovation Communities (KICs) of the European Institute of Innovation and Technology (EIT); and

(g)hosting high-quality international researcher mobility programmes with co-funding from the "Marie Sklodowska-Curie Actions".

Member States shall endeavour to use where appropriate, and in accordance with Article 70, the flexibility to support operations outside the programme area, with a level of investment sufficient to attain a critical mass, in order to implement the measures referred to in the first subparagraph as effectively as possible.

(a) linking excellent research institutions and less developed regions as well as low- performing Research, Development and Innovation (RDI) Member States and regions to create new or upgrade existing centres of excellence in less developed regions as well as in low-performing RDI Member States and regions;

(b) building links in less developed regions as well as in low-performing RDI Member States and regions between innovative clusters of recognised excellence;

(c) establishing "ERA Chairs" to attract outstanding academics, in particular to less developed regions and low-performing RDI Member States and regions;

(d) supporting access to international networks for researchers and innovators who lack sufficient involvement in the European Research Area (ERA) or are from less developed regions or low-performing RDI Member States and regions;

(e) contributing as appropriate to the European Innovation Partnerships;

(f) preparing national institutions and/or clusters of excellence for participation in the Knowledge and Innovation Communities (KICs) of the European Institute of Innovation and Technology (EIT); and

(g) hosting high-quality international researcher mobility programmes with co-funding from the "Marie Sklodowska-Curie Actions".

### 4.4 **New Entrants Reserve (NER) 300 demonstration funding (29)**

@@ -3969,13 +3880,13 @@

Managing authorities shall undertake actions throughout the programme lifecycle, to avoid or reduce environmentally harmful effects of interventions and ensure results in net social, environmental and climate benefits. Actions to be undertaken may include the following:

(a)directing investments towards the most resource-efficient and sustainable options;

(b)avoiding investments that may have a significant negative environmental or climate impact, and supporting actions to mitigate any remaining impacts;

(c)taking a long-term perspective when 'life-cycle' costs of alternative options for investment are compared;

(d)increasing the use of green public procurement.

(a) directing investments towards the most resource-efficient and sustainable options;

(b) avoiding investments that may have a significant negative environmental or climate impact, and supporting actions to mitigate any remaining impacts;

(d) increasing the use of green public procurement.

2.Member States shall take into consideration the climate change mitigation and adaptation potential of investments made with the support of the ESI Funds, in accordance with Article 8, and ensure that they are resilient to the impact of climate change and natural disasters such as increased risks of flooding, droughts, heat waves, forest fires and extreme weather events.

@@ -4003,13 +3914,13 @@

3.To address challenges in the regions most affected by demographic change, Member States shall in particular identify measures to:

(a)support demographic renewal through better conditions for families and an improved balance between working and family life;

(b)boost employment, raise productivity and economic performance through investing in education, ICT and research and innovation;

(c)focus on the adequacy and quality of education, training and social support structures as well as where appropriate, on the efficiency of social protection systems;

(d)promote cost-effective provision of health care and long-term care including investment in e-health, e-care and infrastructure.

(a) support demographic renewal through better conditions for families and an improved balance between working and family life;

(b) boost employment, raise productivity and economic performance through investing in education, ICT and research and innovation;

(c) focus on the adequacy and quality of education, training and social support structures as well as where appropriate, on the efficiency of social protection systems;

(d) promote cost-effective provision of health care and long-term care including investment in e-health, e-care and infrastructure.

### 5.6 **Climate change mitigation and adaptation**

@@ -4025,21 +3936,21 @@

6.4With a view to an integrated territorial approach to addressing territorial challenges Member States shall ensure that programmes under the ESI Funds reflect the diversity of European regions, in terms of employment and labour market characteristics, interdependencies between different sectors, commuting patterns, population ageing and demographic shifts, cultural, landscape and heritage features, climate change vulnerabilities and impacts, land use and resource constraints, potential for more sustainable use of natural resources including renewables, institutional and governance arrangements, connectivity and accessibility, and linkages between rural and urban areas. In accordance with point (a) of Article 15(1), Member States and regions shall therefore undertake the following steps for the purpose of preparation of their Partnership Agreements and programmes:

(a)An analysis of the Member State's or region's characteristics, development potential and capacity, particularly in relation to the key challenges identified in the Union strategy for smart, sustainable and inclusive growth, the National Reform Programmes, where appropriate, relevant country-specific recommendations adopted in accordance with Article 121(2) TFEU and in relevant Council recommendations adopted in accordance with Article 148(4)TFEU;

(b)An assessment of the major challenges to be addressed by the region or Member State, the identification of the bottlenecks and missing links, innovation gaps, including the lack of planning and implementation capacity that inhibit the long-term potential for growth and jobs. This shall form the basis for the identification of the possible fields and activities for policy prioritisation, intervention and concentration;

(c)An assessment of the cross-sectoral, cross-jurisdictional or cross-border coordination challenges, particularly in the context of macro-regional and sea-basin strategies;

(d)Identification of steps to achieve improved coordination across different territorial levels, taking account of the appropriate territorial scale and context for policy design as well as Member States' institutional and legal framework, and sources of funding to deliver an integrated approach linking the Union strategy for smart, sustainable and inclusive growth with regional and local actors.

(a) An analysis of the Member State's or region's characteristics, development potential and capacity, particularly in relation to the key challenges identified in the Union strategy for smart, sustainable and inclusive growth, the National Reform Programmes, where appropriate, relevant country-specific recommendations adopted in accordance with Article 121(2) TFEU and in relevant Council recommendations adopted in accordance with Article 148(4)TFEU;

(b) An assessment of the major challenges to be addressed by the region or Member State, the identification of the bottlenecks and missing links, innovation gaps, including the lack of planning and implementation capacity that inhibit the long-term potential for growth and jobs. This shall form the basis for the identification of the possible fields and activities for policy prioritisation, intervention and concentration;

(c) An assessment of the cross-sectoral, cross-jurisdictional or cross-border coordination challenges, particularly in the context of macro-regional and sea-basin strategies;

(d) Identification of steps to achieve improved coordination across different territorial levels, taking account of the appropriate territorial scale and context for policy design as well as Member States' institutional and legal framework, and sources of funding to deliver an integrated approach linking the Union strategy for smart, sustainable and inclusive growth with regional and local actors.

6.5In order to take into account the objective of territorial cohesion, the Member States and regions shall, in particular, ensure that the overall approach to promoting smart, sustainable and inclusive growth in the areas concerned:

(a)reflects the role of cities, urban and rural areas, fisheries and coastal areas, and areas facing specific geographical or demographic handicaps;

(b)takes account of the specific challenges of the outermost regions, the northernmost regions with a very low population density and of island, cross-border or mountain regions;

(c)addresses urban-rural linkages, in terms of access to affordable, high quality infrastructure and services, and problems in regions with a high concentration of socially marginalised communities.

(a) reflects the role of cities, urban and rural areas, fisheries and coastal areas, and areas facing specific geographical or demographic handicaps;

(b) takes account of the specific challenges of the outermost regions, the northernmost regions with a very low population density and of island, cross-border or mountain regions;

(c) addresses urban-rural linkages, in terms of access to affordable, high quality infrastructure and services, and problems in regions with a high concentration of socially marginalised communities.

### 7. **COOPERATION ACTIVITIES**

@@ -4063,17 +3974,17 @@

2.Member States and regions shall, in the areas concerned, seek to draw on cross-border and transnational cooperation to:

(a)ensure that areas that share major geographical features (islands, lakes, rivers, sea basins or mountain ranges) support the joint management and promotion of their natural resources;

(b)exploit the economies of scale that can be achieved, in particular with regard to investment related to the shared use of common public services;

(c)promote coherent planning and development of cross-border network infrastructure, in particular missing cross-border links, and environmentally friendly and interoperable transport modes in larger geographical areas;

(d)achieve critical mass, particularly in the field of research and innovation and ICT, education and in relation to measures improving the competitiveness of SMEs;

(e)strengthen cross-border labour market services to foster the mobility of workers across borders;

(f)improve cross-border governance.

(a) ensure that areas that share major geographical features (islands, lakes, rivers, sea basins or mountain ranges) support the joint management and promotion of their natural resources;

(b) exploit the economies of scale that can be achieved, in particular with regard to investment related to the shared use of common public services;

(c) promote coherent planning and development of cross-border network infrastructure, in particular missing cross-border links, and environmentally friendly and interoperable transport modes in larger geographical areas;

(d) achieve critical mass, particularly in the field of research and innovation and ICT, education and in relation to measures improving the competitiveness of SMEs;

(e) strengthen cross-border labour market services to foster the mobility of workers across borders;

(f) improve cross-border governance.

3.Member States and regions shall seek to make use of interregional cooperation to reinforce the effectiveness of Cohesion Policy by encouraging exchange of experience between regions and cities to enhance design and implementation of programmes under the Investment for growth and jobs goal and the European territorial cooperation goal.

@@ -4110,15 +4021,15 @@

3.Milestones and targets shall be:

(a)realistic, achievable, relevant, capturing essential information on the progress of a priority;

(b)consistent with the nature and character of the specific objectives of the priority;

(c)transparent, with objectively verifiable targets and the source data identified and, where possible, publicly available;

(d)verifiable, without imposing a disproportionate administrative burden;

(e)consistent across programmes, where appropriate.

(a) realistic, achievable, relevant, capturing essential information on the progress of a priority;

(b) consistent with the nature and character of the specific objectives of the priority;

(c) transparent, with objectively verifiable targets and the source data identified and, where possible, publicly available;

(d) verifiable, without imposing a disproportionate administrative burden;

(e) consistent across programmes, where appropriate.

4.The targets for 2023 for a given priority shall be established taking into account the amount of performance reserve related to the priority.

@@ -4132,23 +4043,20 @@

The maximum level of suspension applied to a Member State shall in the first instance be determined taking into account the ceilings set out in points (a) to (c) of the third subparagraph of Article 23(11). That level shall be reduced if one or more of the following apply:

(a)where the unemployment rate in the Member State for the year preceding the trigger event referred to in Article 23(9) exceeds the average rate for the Union by more than two percentage points, the maximum level of suspension shall be reduced by 15 %;

(b)where the unemployment rate in the Member State for the year preceding the trigger event referred to in Article 23(9) exceeds the average rate for the Union by more than five percentage points, the maximum level of suspension shall be reduced by 25 %;

(c)where the unemployment rate in the Member State for the year preceding the trigger event referred to in Article 23(9) exceeds the average rate for the Union by more than eight percentage points, the maximum level of suspension shall be reduced by 50 %;

(d)where the proportion of people at risk of poverty or social exclusion in the Member State exceeds the average for the Union by more than 10 percentage points for the year preceding the trigger event referred to in Article 23(9), the maximum level of suspension shall be reduced by 20 %;

(e)where the Member State experiences a contraction of real GDP for two or more consecutive years preceding the trigger event referred to in Article 23(9), the maximum level of suspension shall be reduced by 20 %;

(f)where the suspension concerns commitments for the years 2018, 2019 or 2020, a reduction shall be applied to the level resulting from the application of Article 23(11) as follows:

(i)for the year 2018, the level of suspension shall be reduced by 15 %;

(ii)for the year 2019, the level of suspension shall be reduced by 25 %;

(iii)for the year 2020, the level of suspension shall be reduced by 50 %.

(a) where the unemployment rate in the Member State for the year preceding the trigger event referred to in Article 23(9) exceeds the average rate for the Union by more than two percentage points, the maximum level of suspension shall be reduced by 15 %;

(b) where the unemployment rate in the Member State for the year preceding the trigger event referred to in Article 23(9) exceeds the average rate for the Union by more than five percentage points, the maximum level of suspension shall be reduced by 25 %;

(c) where the unemployment rate in the Member State for the year preceding the trigger event referred to in Article 23(9) exceeds the average rate for the Union by more than eight percentage points, the maximum level of suspension shall be reduced by 50 %;

(d) where the proportion of people at risk of poverty or social exclusion in the Member State exceeds the average for the Union by more than 10 percentage points for the year preceding the trigger event referred to in Article 23(9), the maximum level of suspension shall be reduced by 20 %;

(e) where the Member State experiences a contraction of real GDP for two or more consecutive years preceding the trigger event referred to in Article 23(9), the maximum level of suspension shall be reduced by 20 %;

(f) where the suspension concerns commitments for the years 2018, 2019 or 2020, a reduction shall be applied to the level resulting from the application of Article 23(11) as follows:

(i) for the year 2018, the level of suspension shall be reduced by 15 %;

(ii) for the year 2019, the level of suspension shall be reduced by 25 %;

(iii) for the year 2020, the level of suspension shall be reduced by 50 %.

The reduction in the level of suspension resulting from the application of points (a) to (f) shall not exceed in total 50 %.

@@ -4160,13 +4068,13 @@

However, the following programmes and priorities shall be excluded from the scope of the suspension:

(i)programmes or priorities which are already subject to a suspension decision adopted in accordance with Article 23(6);

(ii)programmes or priorities whose resources are to be increased as a result of a reprogramming request addressed by the Commission in accordance with Article 23(1) in the year of the trigger event referred to in Article 23(9);

(iii)programmes or priorities whose resources have been increased within the two years preceding the trigger event referred to in Article 23(9) as a result of a decision adopted in accordance with Article 23(5);

(iv)programmes or priorities which are of critical importance to addressing adverse economic or social conditions. Such programmes or priorities shall cover programmes or priorities supporting investments of particular importance to the Union related to the YEI. Programmes or priorities may be considered of such critical importance when they support investments related to the implementation of recommendations addressed to the Member State concerned in the framework of the European Semester and aimed at structural reforms, or related to priorities supporting poverty reduction or to financial instruments for the competitiveness of SMEs.

(i) programmes or priorities which are already subject to a suspension decision adopted in accordance with Article 23(6);

(ii) programmes or priorities whose resources are to be increased as a result of a reprogramming request addressed by the Commission in accordance with Article 23(1) in the year of the trigger event referred to in Article 23(9);

(iii) programmes or priorities whose resources have been increased within the two years preceding the trigger event referred to in Article 23(9) as a result of a decision adopted in accordance with Article 23(5);

(iv) programmes or priorities which are of critical importance to addressing adverse economic or social conditions. Such programmes or priorities shall cover programmes or priorities supporting investments of particular importance to the Union related to the YEI. Programmes or priorities may be considered of such critical importance when they support investments related to the implementation of recommendations addressed to the Member State concerned in the framework of the European Semester and aimed at structural reforms, or related to priorities supporting poverty reduction or to financial instruments for the competitiveness of SMEs.

### 3. **DETERMINING THE FINAL LEVEL OF SUSPENSION OF COMMITMENTS FOR THE PROGRAMMES FALLING WITHIN THE SCOPE OF THE SUSPENSION**

@@ -4186,43 +4094,43 @@

1.Where a financial instrument is implemented under Article 39a and points (a), (b) and (c) of the first subparagraph of Article 38(4), the funding agreement shall include the terms and conditions for making contributions from the programme to the financial instrument and shall include at least the following elements:

(a)the investment strategy or policy including implementation arrangements, financial products to be offered, final recipients targeted, and envisaged combination with grant support (as appropriate);

(b)a business plan or equivalent documents for the financial instrument to be implemented, including the expected leverage effect referred to in Article 37(2);

(c)the target results that the financial instrument concerned is expected to achieve to contribute to the specific objectives and results of the relevant priority;

(d)provisions for monitoring of the implementation of investments and of deal flows including reporting by the financial instrument to the fund of funds and/or the managing authority to ensure compliance with Article 46;

(e)audit requirements, such as minimum requirements for documentation to be kept at the level of the financial instrument (and at the level of the fund of funds where appropriate), and requirements in relation to the maintenance of separate records for the different forms of support in compliance with Article 37(7) and (8) (where applicable), including provisions and requirements regarding access to documents by audit authorities of Member States, Commission auditors and the European Court of Auditors in order to ensure a clear audit trail, in accordance with Article 40;

(f)requirements and procedures for managing the phased contribution provided by the programme in accordance with Article 41 and for the forecast of deal flows, including requirements for fiduciary/separate accounting as set out in Article 38(6) and the second subparagraph of Article 39a(5);

(g)requirements and procedures for managing interest and other gains generated as referred to in Article 43, including acceptable treasury operations/investments, and the responsibilities and liabilities of the parties concerned;

(h)provisions regarding the calculation and payment of management costs incurred or of the management fees of the financial instrument;

(i)provisions regarding the re-use of resources attributable to the support from the ESI Funds until the end of the eligibility period in compliance with Article 44 and, where applicable, provisions regarding differentiated treatment as referred to in Article 43a;

(j)provisions regarding the re-use of resources attributable to the support of the ESI Funds after the end of the eligibility period in compliance with Article 45 and a policy regarding the exit of those resources from the financial instrument;

(k)conditions for a possible total or partial withdrawal of programme contributions from programmes to financial instruments, including the fund of funds where applicable;

(l)provisions to ensure that bodies implementing financial instruments manage financial instruments with independence and in accordance with the relevant professional standards, and act in the exclusive interest of the parties providing contributions to the financial instrument;

(m)provisions for the winding-up of the financial instrument.

(a) the investment strategy or policy including implementation arrangements, financial products to be offered, final recipients targeted, and envisaged combination with grant support (as appropriate);

(b) a business plan or equivalent documents for the financial instrument to be implemented, including the expected leverage effect referred to in Article 37(2);

(c) the target results that the financial instrument concerned is expected to achieve to contribute to the specific objectives and results of the relevant priority;

(d) provisions for monitoring of the implementation of investments and of deal flows including reporting by the financial instrument to the fund of funds and/or the managing authority to ensure compliance with Article 46;

(e) audit requirements, such as minimum requirements for documentation to be kept at the level of the financial instrument (and at the level of the fund of funds where appropriate), and requirements in relation to the maintenance of separate records for the different forms of support in compliance with Article 37(7) and (8) (where applicable), including provisions and requirements regarding access to documents by audit authorities of Member States, Commission auditors and the European Court of Auditors in order to ensure a clear audit trail, in accordance with Article 40;

(f) requirements and procedures for managing the phased contribution provided by the programme in accordance with Article 41 and for the forecast of deal flows, including requirements for fiduciary/separate accounting as set out in Article 38(6) and the second subparagraph of Article 39a(5);

(g) requirements and procedures for managing interest and other gains generated as referred to in Article 43, including acceptable treasury operations/investments, and the responsibilities and liabilities of the parties concerned;

(h) provisions regarding the calculation and payment of management costs incurred or of the management fees of the financial instrument;

(i) provisions regarding the re-use of resources attributable to the support from the ESI Funds until the end of the eligibility period in compliance with Article 44 and, where applicable, provisions regarding differentiated treatment as referred to in Article 43a;

(j) provisions regarding the re-use of resources attributable to the support of the ESI Funds after the end of the eligibility period in compliance with Article 45 and a policy regarding the exit of those resources from the financial instrument;

(k) conditions for a possible total or partial withdrawal of programme contributions from programmes to financial instruments, including the fund of funds where applicable;

(l) provisions to ensure that bodies implementing financial instruments manage financial instruments with independence and in accordance with the relevant professional standards, and act in the exclusive interest of the parties providing contributions to the financial instrument;

(m) provisions for the winding-up of the financial instrument.

In addition, where financial instruments are organised through a fund of funds, the funding agreement between the managing authority and the body that implements the fund of funds must also provide for the appraisal and selection of bodies implementing the financial instruments, including calls for expression of interest or public procurement procedures.

2.Strategy documents referred to under Article 38(8) for financial instruments implemented under point (d) of the first subparagraph of Article 38(4) shall include at least the following elements:

(a)the investment strategy or policy of the financial instrument, general terms and conditions of envisaged loan or guarantees, target final recipients and actions to be supported;

(b)a business plan or equivalent documents for the financial instrument to be implemented, including the expected leverage effect referred to in Article 37(2);

(c)the use and re-use of resources attributable to the support of the ESI Funds in accordance with Articles 43, 44 and 45, and, where applicable, provisions regarding differentiated treatment as referred to in Article 43a;

(d)monitoring and reporting of the implementation of the financial instrument to ensure compliance with Article 46.

(a) the investment strategy or policy of the financial instrument, general terms and conditions of envisaged loan or guarantees, target final recipients and actions to be supported;

(b) a business plan or equivalent documents for the financial instrument to be implemented, including the expected leverage effect referred to in Article 37(2);

(c) the use and re-use of resources attributable to the support of the ESI Funds in accordance with Articles 43, 44 and 45, and, where applicable, provisions regarding differentiated treatment as referred to in Article 43a;

(d) monitoring and reporting of the implementation of the financial instrument to ensure compliance with Article 46.

## ANNEX V

@@ -4252,27 +4160,24 @@

1.Each Member State's allocation shall be the sum of the allocations for its individual eligible NUTS level 2 regions, calculated in accordance with the following steps:

(a)determination of an absolute amount (in EUR) obtained by multiplying the population of the region concerned by the difference between that region's GDP per capita, measured in PPS, and the EU-27 average GDP per capita (in PPS);

(b)application of a percentage to the above absolute amount in order to determine that region's financial envelope; this percentage shall be graduated to reflect the relative prosperity, measured in PPS, as compared to the EU-27 average, of the Member State in which the eligible region is situated, i.e.:

(i)for regions in Member States whose level of GNI per capita is below 82 % of the EU-27 average: 3,15 %;

(ii)for regions in Member States whose level of GNI per capita is between 82 % and 99 % of the EU-27 average: 2,70 %;

(iii)for regions in Member States whose level of GNI per capita is over 99 % of the EU-27 average: 1,65 %;

(c)to the amount obtained in accordance with point (b) is added, if applicable, an amount resulting from the allocation of a premium of EUR 1 300 per unemployed person per year, applied to the number of persons unemployed in that region exceeding the number that would be unemployed if the average unemployment rate of all the EU less developed regions applied.

(a) determination of an absolute amount (in EUR) obtained by multiplying the population of the region concerned by the difference between that region's GDP per capita, measured in PPS, and the EU-27 average GDP per capita (in PPS);

(b) application of a percentage to the above absolute amount in order to determine that region's financial envelope; this percentage shall be graduated to reflect the relative prosperity, measured in PPS, as compared to the EU-27 average, of the Member State in which the eligible region is situated, i.e.:

(i) for regions in Member States whose level of GNI per capita is below 82 % of the EU-27 average: 3,15 %;

(ii) for regions in Member States whose level of GNI per capita is between 82 % and 99 % of the EU-27 average: 2,70 %;

(iii) for regions in Member States whose level of GNI per capita is over 99 % of the EU-27 average: 1,65 %;

(c) to the amount obtained in accordance with point (b) is added, if applicable, an amount resulting from the allocation of a premium of EUR 1 300 per unemployed person per year, applied to the number of persons unemployed in that region exceeding the number that would be unemployed if the average unemployment rate of all the EU less developed regions applied.

#### **Allocation method for transition regions eligible under the Investment for growth and jobs goal, referred to in point (b) of the first subparagraph of Article 90(2)**

2.Each Member State's allocation shall be the sum of the allocations for its individual eligible NUTS level 2 regions, calculated in accordance with the following steps:

(a)determination of the minimum and maximum theoretical aid intensity for each eligible transition region. The minimum level of support is determined by the average per capita aid intensity per Member State before the application of the regional safety net, allocated to the more developed regions of that Member State. If the Member State has no more developed regions, the minimum level of support will correspond to the initial average per capita aid intensity of all more developed regions, i.e. EUR 19,80 per head and per year. The maximum level of support refers to a theoretical region with a GDP per head of 75 % of the EU-27 average and is calculated using the method defined in points (a) and (b) of paragraph 1. Of the amount obtained by this method, 40 % is taken into account;

(b)calculation of initial regional allocations, taking into account regional GDP per capita (in PPS) through a linear interpolation of the region's relative GDP per capita compared to EU-27;

(c)to the amount obtained in accordance with point (b) is added, if applicable, an amount resulting from the allocation of a premium of EUR 1 100 per unemployed person per year, applied to the number of persons unemployed in that region exceeding the number that would be unemployed if the average unemployment rate of all the less developed regions applied.

(a) determination of the minimum and maximum theoretical aid intensity for each eligible transition region. The minimum level of support is determined by the average per capita aid intensity per Member State before the application of the regional safety net, allocated to the more developed regions of that Member State. If the Member State has no more developed regions, the minimum level of support will correspond to the initial average per capita aid intensity of all more developed regions, i.e. EUR 19,80 per head and per year. The maximum level of support refers to a theoretical region with a GDP per head of 75 % of the EU-27 average and is calculated using the method defined in points (a) and (b) of paragraph 1. Of the amount obtained by this method, 40 % is taken into account;

(b) calculation of initial regional allocations, taking into account regional GDP per capita (in PPS) through a linear interpolation of the region's relative GDP per capita compared to EU-27;

(c) to the amount obtained in accordance with point (b) is added, if applicable, an amount resulting from the allocation of a premium of EUR 1 100 per unemployed person per year, applied to the number of persons unemployed in that region exceeding the number that would be unemployed if the average unemployment rate of all the less developed regions applied.

#### **Allocation method for the more developed regions eligible under the Investment for growth and jobs goal, referred to in point (c) of the first subparagraph of Article 90(2)**

@@ -4280,27 +4185,27 @@

4.The share of each Member State concerned shall be the sum of the shares of its eligible NUTS level 2 regions, which are determined on the basis of the following criteria, weighted as indicated:

(a)total regional population (weighting 25 %);

(b)number of unemployed people in NUTS level 2 regions with an unemployment rate above the average of all more developed regions (weighting 20 %);

(c)employment to be added to reach the Union strategy for smart, sustainable and inclusive growth target for regional employment rate (ages 20 to 64) of 75 % (weighting 20 %);

(d)number of persons aged 30 to 34 with tertiary educational attainment to be added to reach the Union strategy for smart, sustainable and inclusive growth target of 40 % (weighting 12,5 %);

(e)number of early leavers from education and training (aged 18 to 24) to be subtracted to reach the Union strategy for smart, sustainable and inclusive growth target of 10 % (weighting 12,5 %);

(f)difference between the observed GDP of the region (measured in PPS), and the theoretical regional GDP if the region were to have the same GDP per head as the most prosperous NUTS level 2 region (weighting 7,5 %);

(g)population of NUTS level 3 regions with a population density below 12,5 inhabitants/km2 (weighting 2,5 %).

(a) total regional population (weighting 25 %);

(b) number of unemployed people in NUTS level 2 regions with an unemployment rate above the average of all more developed regions (weighting 20 %);

(c) employment to be added to reach the Union strategy for smart, sustainable and inclusive growth target for regional employment rate (ages 20 to 64) of 75 % (weighting 20 %);

(d) number of persons aged 30 to 34 with tertiary educational attainment to be added to reach the Union strategy for smart, sustainable and inclusive growth target of 40 % (weighting 12,5 %);

(e) number of early leavers from education and training (aged 18 to 24) to be subtracted to reach the Union strategy for smart, sustainable and inclusive growth target of 10 % (weighting 12,5 %);

(f) difference between the observed GDP of the region (measured in PPS), and the theoretical regional GDP if the region were to have the same GDP per head as the most prosperous NUTS level 2 region (weighting 7,5 %);

(g) population of NUTS level 3 regions with a population density below 12,5 inhabitants/km2 (weighting 2,5 %).

#### **Allocation method for the Member States eligible for the Cohesion Fund under Article 90(3)**

5.The total theoretical financial envelope shall be obtained by multiplying the average aid intensity per head and per year of EUR 48 by the eligible population. Each eligible Member State's a priori allocation of this theoretical financial envelope corresponds to a percentage based on its population, surface area and national prosperity, and shall be obtained by applying the following steps:

(a)calculation of the arithmetical average of that Member State's population and surface area shares of the total population and surface area of all the eligible Member States. If, however, a Member State's share of total population exceeds its share of total surface area by a factor of five or more, reflecting an extremely high population density, only the share of total population will be used for this step;

(b)adjustment of the percentage figures so obtained by a coefficient representing one third of the percentage by which that Member State's GNI per capita (measured in purchasing power parities) for the period 2008-2010 exceeds or falls below the average GNI per capita of all the eligible Member States (average expressed as 100 %).

(a) calculation of the arithmetical average of that Member State's population and surface area shares of the total population and surface area of all the eligible Member States. If, however, a Member State's share of total population exceeds its share of total surface area by a factor of five or more, reflecting an extremely high population density, only the share of total population will be used for this step;

(b) adjustment of the percentage figures so obtained by a coefficient representing one third of the percentage by which that Member State's GNI per capita (measured in purchasing power parities) for the period 2008-2010 exceeds or falls below the average GNI per capita of all the eligible Member States (average expressed as 100 %).

6.In order to reflect the significant needs of Member States, which acceded to the Union on or after 1 May 2004, in terms of transport and environment, their share of the Cohesion Fund will be set at a minimum of one third of their total final financial allocation after capping as defined in paragraphs 10 to 13 received on average over the period.

@@ -4334,15 +4239,15 @@

17.To address the effects of the economic crisis on Member States within the euro area on their level of prosperity, and in order to boost growth and job creation in these Member States, the Structural Funds will provide the following additional allocations:

(a)EUR 1 375 000 000 for the more developed regions of Greece;

(b)EUR 1 000 000 000 for Portugal, distributed as follows: EUR 450 000 000 for more developed regions, of which EU 150 000 000 for Madeira, EUR 75 000 000 for the transition region and EUR 475 000 000 for the less developed regions;

(c)EUR 100 000 000 for the Border, Midland and Western region of Ireland;

(d)EUR 1 824 000 000 for Spain, of which EUR 500 000 000 for Extremadura, EUR 1 051 000 000 for the transition regions and EUR 273 000 000 for the more developed regions;

(e)EUR 1 500 000 000 for the less developed regions of Italy, out of which EUR 500 000 000 for non-urban areas.

(a) EUR 1 375 000 000 for the more developed regions of Greece;

(b) EUR 1 000 000 000 for Portugal, distributed as follows: EUR 450 000 000 for more developed regions, of which EU 150 000 000 for Madeira, EUR 75 000 000 for the transition region and EUR 475 000 000 for the less developed regions;

(d) EUR 1 824 000 000 for Spain, of which EUR 500 000 000 for Extremadura, EUR 1 051 000 000 for the transition regions and EUR 273 000 000 for the more developed regions;

(e) EUR 1 500 000 000 for the less developed regions of Italy, out of which EUR 500 000 000 for non-urban areas.

18.In order to recognise the challenges posed by the situation of island Member States and the remoteness of certain parts of the Union, Malta and Cyprus shall receive, after applying the method of calculation referred to in paragraph 16, an additional envelope of EUR 200 000 000 and EUR 150 000 000 respectively under the Investment for growth and jobs goal and distributed as follows: one third for the Cohesion Fund and two thirds for the Structural Funds.

@@ -4352,11 +4257,11 @@

19.To facilitate the adjustment of certain regions either to changes in their eligibility status or to the long-lasting effects of recent developments in their economy the following additional allocations are made:

(a)for Belgium EUR 133 000 000 , out of which EUR 66 500 000 for Limburg and EUR 66 500 000 for the transition regions of the Region of Wallonia;

(b)for Germany EUR 710 000 000 , out of which EUR 510 000 000 for the former Convergence regions in the transition regions' category and EUR 200 000 000 for the Leipzig region;

(c)notwithstanding paragraph 10, the less developed regions of Hungary will be allocated an additional envelope of EUR 1 560 000 000 , the less developed regions of the Czech Republic an additional envelope of EUR 900 000 000 and the less developed region of Slovenia an additional envelope of EUR 75 000 000 , under the Structural Funds.

(a) for Belgium EUR 133 000 000 , out of which EUR 66 500 000 for Limburg and EUR 66 500 000 for the transition regions of the Region of Wallonia;

(b) for Germany EUR 710 000 000 , out of which EUR 510 000 000 for the former Convergence regions in the transition regions' category and EUR 200 000 000 for the Leipzig region;

(c) notwithstanding paragraph 10, the less developed regions of Hungary will be allocated an additional envelope of EUR 1 560 000 000 , the less developed regions of the Czech Republic an additional envelope of EUR 900 000 000 and the less developed region of Slovenia an additional envelope of EUR 75 000 000 , under the Structural Funds.

20.A total of EUR 150 000 000 will be allocated for the PEACE programme, of which EUR 106 500 000 for the United Kingdom and EUR 43 500 000 for Ireland. That programme will be implemented as a cross-border cooperation programme involving Northern Ireland and Ireland.

@@ -4370,11 +4275,11 @@

I.The breakdown of the specific allocation for the YEI shall be determined in accordance with the following steps:

1.The number of young unemployed persons between the ages of 15-24 shall be identified in the eligible NUTS level 2 regions as defined in Article 16 of the ESF Regulation, namely NUTS level 2 regions that have youth unemployment rates for young persons aged 15 to 24 of more than 25 % in 2012 and, for Member States where the youth unemployment rate has increased by more than 30 % in 2012, regions that have youth unemployment rates of more than 20 % in 2012 (the ‘eligible regions’).

2.The allocation corresponding to each eligible region shall be calculated on the basis of the ratio between the number of young unemployed persons in the eligible region and the total number of young unemployed persons referred to in point 1 in all eligible regions.

3.The allocation for each Member State shall be the sum of the allocations for each of its eligible regions.

1. The number of young unemployed persons between the ages of 15-24 shall be identified in the eligible NUTS level 2 regions as defined in Article 16 of the ESF Regulation, namely NUTS level 2 regions that have youth unemployment rates for young persons aged 15 to 24 of more than 25 % in 2012 and, for Member States where the youth unemployment rate has increased by more than 30 % in 2012, regions that have youth unemployment rates of more than 20 % in 2012 (the ‘eligible regions’).

2. The allocation corresponding to each eligible region shall be calculated on the basis of the ratio between the number of young unemployed persons in the eligible region and the total number of young unemployed persons referred to in point 1 in all eligible regions.

3. The allocation for each Member State shall be the sum of the allocations for each of its eligible regions.

II.The specific allocation for the YEI shall not be taken into account for the purpose of applying the capping rules set out in Annex VII in relation to the allocation of the global resources.

@@ -4388,13 +4293,13 @@

The additional percentage share to be added to the share of Structural Funds resources referred to in Article 92(4) allocated in a Member State to the ESF which corresponds to the share of that Member State for the 2007-2013 programming period shall be determined as follows, based on employment rates (for persons between the ages of 20-64) of reference year 2012:

—where the employment rate is 65 % or less the share shall be increased by 1,7 percentage points;

—where the employment rate is above 65 % but not higher than 70 % the share shall be increased by 1,2 percentage points;

—where the employment rate is above 70 % but not higher than 75 % the share shall be increased by 0,7 percentage points;

—where the employment rate is above 75 %, no increase shall be required.

— where the employment rate is 65 % or less the share shall be increased by 1,7 percentage points;

— where the employment rate is above 65 % but not higher than 70 % the share shall be increased by 1,2 percentage points;

— where the employment rate is above 70 % but not higher than 75 % the share shall be increased by 0,7 percentage points;

— where the employment rate is above 75 %, no increase shall be required.

The total percentage share of a Member State after the addition shall not exceed 52 % of Structural Funds resources referred to in Article 92(4).

@@ -4512,27 +4417,27 @@

The list of operations referred to in Article 115(2) shall contain, in at least one of the official languages of the Member State, the following data fields:

—beneficiary name (only of legal entities; no natural persons shall be named);

—operation name;

—operation summary;

—operation start date;

—operation end date (expected date for physical completion or full implementation of the operation);

—total eligible expenditure allocated to the operation;

—Union co-financing rate, as per priority axis;

—operation postcode; or other appropriate location indicator;

—country;

—name of category of intervention for the operation in accordance with point (b) (vi) of the first subparagraph of Article 96(2);

—date of last update of the list of operations.

— beneficiary name (only of legal entities; no natural persons shall be named);

— operation name;

— operation summary;

— operation start date;

— operation end date (expected date for physical completion or full implementation of the operation);

— total eligible expenditure allocated to the operation;

— Union co-financing rate, as per priority axis;

— operation postcode; or other appropriate location indicator;

— country;

— name of category of intervention for the operation in accordance with point (b) (vi) of the first subparagraph of Article 96(2);

— date of last update of the list of operations.

The headings of the data fields shall be also provided in at least one other official language of the Union.

@@ -4546,25 +4451,25 @@

2.The Member State or the managing authority shall be responsible for at least the following information and communication measures:

(a)organising a major information activity publicising the launch of the operational programme or programmes, even prior to the approval of the relevant communication strategies;

(b)organising one major information activity a year which promotes the funding opportunities and the strategies pursued and presents the achievements of the operational programme or programmes, including, where relevant, major projects, joint action plans and other project examples;

(c)displaying the Union emblem at the premises of each managing authority;

(d)publishing electronically the list of operations in accordance with Section 1 of this Annex;

(e)giving examples of operations, in particular of operations where the added value of the intervention of the Funds is particularly visible, by operational programme, on the single website or on the operational programme’s website that is accessible through the single website portal; the examples shall be in a widely spoken official language of the Union other than the official language or languages of the Member State concerned;

(f)updating information about the operational programme’s implementation, including its main achievements and results, on the single website or on the operational programme’s website that is accessible through the single website portal.

(a) organising a major information activity publicising the launch of the operational programme or programmes, even prior to the approval of the relevant communication strategies;

(b) organising one major information activity a year which promotes the funding opportunities and the strategies pursued and presents the achievements of the operational programme or programmes, including, where relevant, major projects, joint action plans and other project examples;

(d) publishing electronically the list of operations in accordance with Section 1 of this Annex;

(e) giving examples of operations, in particular of operations where the added value of the intervention of the Funds is particularly visible, by operational programme, on the single website or on the operational programme’s website that is accessible through the single website portal; the examples shall be in a widely spoken official language of the Union other than the official language or languages of the Member State concerned;

(f) updating information about the operational programme’s implementation, including its main achievements and results, on the single website or on the operational programme’s website that is accessible through the single website portal.

3.The managing authority shall involve in information and communication measures, in accordance with national laws and practices, the following bodies where appropriate:

(a)the partners referred to in Article 5;

(b)information centres on Europe, as well as Commission representation offices, and information offices of the European Parliament in the Member States;

(c)educational and research institutions.

(a) the partners referred to in Article 5;

(b) information centres on Europe, as well as Commission representation offices, and information offices of the European Parliament in the Member States;

These bodies shall widely disseminate the information described in Article 115(1).

@@ -4572,17 +4477,17 @@

1.All information and communication measures and measures to enhance visibility of the Funds provided by the beneficiary shall acknowledge support from the Funds to the operation by displaying:

(a)the Union emblem in accordance with the technical characteristics laid down in the implementing act adopted by the Commission under Article 115(4), together with a reference to the Union;

(b)a reference to the Fund or Funds supporting the operation.

(a) the Union emblem in accordance with the technical characteristics laid down in the implementing act adopted by the Commission under Article 115(4), together with a reference to the Union;

(b) a reference to the Fund or Funds supporting the operation.

Where an information or communication measure relates to an operation or to several operations co-financed by more than one Fund, the reference provided for in point (b) may be replaced by a reference to the ESI Funds.

2.During implementation of an operation, the beneficiary shall inform the public about the support obtained from the Funds by:

(a)providing on the beneficiary's website, where such a website exists, a short description of the operation, proportionate to the level of support, including its aims and results, and highlighting the financial support from the Union;

(b)placing, for operations not falling under points 4 and 5, at least one poster with information about the project (minimum size A3), including the financial support from the Union, at a location readily visible to the public, such as the entrance area of a building.

(a) providing on the beneficiary's website, where such a website exists, a short description of the operation, proportionate to the level of support, including its aims and results, and highlighting the financial support from the Union;

(b) placing, for operations not falling under points 4 and 5, at least one poster with information about the project (minimum size A3), including the financial support from the Union, at a location readily visible to the public, such as the entrance area of a building.

3.For operations supported by the ESF, and in appropriate cases for operations supported by the ERDF or Cohesion Fund, the beneficiary shall ensure that those taking part in an operation have been informed of this funding.

@@ -4592,9 +4497,9 @@

5.No later than three months after completion of an operation, the beneficiary shall put up a permanent plaque or billboard of significant size at a location readily visible to the public for each operation that fulfils the following criteria:

(a)the total public support to the operation exceeds EUR 500 000 ;

(b)the operation consists of the purchase of a physical object or of the financing of infrastructure or of construction operations.

(a) the total public support to the operation exceeds EUR 500 000 ;

(b) the operation consists of the purchase of a physical object or of the financing of infrastructure or of construction operations.

The plaque or billboard shall state the name and the main objective of the operation. It shall be prepared in accordance with the technical characteristics adopted by the Commission in accordance with Article 115(4).

@@ -4608,17 +4513,17 @@

2.The managing authority shall ensure that potential beneficiaries have access to the relevant information, including updated information where necessary, and taking into account the accessibility of electronic or other communication services for certain potential beneficiaries, on at least the following:

(a)the funding opportunities and the launching of application calls;

(b)the eligibility of expenditure conditions to be met in order to qualify for support under an operational programme;

(c)a description of the procedures for examining applications for funding and of the time periods involved;

(d)the criteria for selecting the operations to be supported;

(e)the contacts at national, regional or local level that are able to provide information on the operational programmes;

(f)the responsibility of beneficiaries to inform the public about the aim of the operation and the support from the Funds to the operation in accordance with subsection 2.2 as from the time the beneficiary is provided with the document setting out the conditions for support to the operation referred to in point (c) of Article 125(3). The managing authority may request that potential beneficiaries propose indicative communication activities to enhance the visibility of the Funds, proportional to the size of the operation, in the applications.

(a) the funding opportunities and the launching of application calls;

(b) the eligibility of expenditure conditions to be met in order to qualify for support under an operational programme;

(d) the criteria for selecting the operations to be supported;

(e) the contacts at national, regional or local level that are able to provide information on the operational programmes;

(f) the responsibility of beneficiaries to inform the public about the aim of the operation and the support from the Funds to the operation in accordance with subsection 2.2 as from the time the beneficiary is provided with the document setting out the conditions for support to the operation referred to in point (c) of Article 125(3). The managing authority may request that potential beneficiaries propose indicative communication activities to enhance the visibility of the Funds, proportional to the size of the operation, in the applications.

### 3.2. **Information measures for beneficiaries**

@@ -4630,23 +4535,23 @@

The communication strategy drawn up by the managing authority and, where appropriate, by the Member State shall include the following elements:

(a)a description of the approach taken, including the main information and communication measures to be taken by the Member State or the managing authority and aimed at potential beneficiaries, beneficiaries, multipliers and the wider public, having regard to the aims described in Article 115;

(b)a description of materials that will be made available in formats accessible for people with disabilities;

(c)a description of how beneficiaries will be supported in their communication activities;

(d)the indicative budget for implementation of the strategy;

(e)a description of the administrative bodies, including the staff resources, responsible for implementing the information and communication measures;

(f)the arrangements for the information and communication measures referred to in point 2, including the website or website portal at which such data may be found;

(g)an indication of how the information and communication measures shall be assessed in terms of visibility and awareness of policy, operational programmes and operations, and of the role played by the Funds and the Union;

(h)where appropriate, a description of the use of the main results of the previous operational programme;

(i)an annual update setting out the information and communication activities, including measures to enhance visibility of the Funds, to be carried out in the following year, based on, inter alia, lessons learnt on the effectiveness of such measures.

(a) a description of the approach taken, including the main information and communication measures to be taken by the Member State or the managing authority and aimed at potential beneficiaries, beneficiaries, multipliers and the wider public, having regard to the aims described in Article 115;

(b) a description of materials that will be made available in formats accessible for people with disabilities;

(d) the indicative budget for implementation of the strategy;

(e) a description of the administrative bodies, including the staff resources, responsible for implementing the information and communication measures;

(f) the arrangements for the information and communication measures referred to in point 2, including the website or website portal at which such data may be found;

(g) an indication of how the information and communication measures shall be assessed in terms of visibility and awareness of policy, operational programmes and operations, and of the role played by the Funds and the Union;

(h) where appropriate, a description of the use of the main results of the previous operational programme;

(i) an annual update setting out the information and communication activities, including measures to enhance visibility of the Funds, to be carried out in the following year, based on, inter alia, lessons learnt on the effectiveness of such measures.

## ANNEX XIII

@@ -4825,9 +4730,9 @@

The European Parliament, the Council and the Commission agree to include in the revision of the Financial Regulation, aligning Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council to the Multiannual Financial Framework 2014-20, provisions necessary for the application of the arrangements for the allocation of the performance reserve and in relation to the implementation of financial instruments under Article 39 (SME initiative) under the Regulation laying down common provisions for the European Structural and Investment Funds concerning the reconstitution of:

i.appropriations which had been committed to programmes in relation to the performance reserve and which had to be decommitted as a result of priorities under these programmes not having attained their milestones and;

ii.appropriations which had been committed in relation to dedicated programmes referred to under Article 39(4)b and which had to be de-committed because the participation of a Member State in the financial instrument had to be discontinued.

i. appropriations which had been committed to programmes in relation to the performance reserve and which had to be decommitted as a result of priorities under these programmes not having attained their milestones and;

ii. appropriations which had been committed in relation to dedicated programmes referred to under Article 39(4)b and which had to be de-committed because the participation of a Member State in the financial instrument had to be discontinued.

## Joint Statement by the European Parliament, the Council and the Commission on Article 1

@@ -4837,11 +4742,11 @@

The European Parliament and the Council agree that:

—concerning the application of Articles 14(2), 15(1)(c), and 26 (2) of Regulation laying down common provisions for the European Structural and Investment Funds, the actions taken by the Member States to involve the partners referred to in Article 5(1) in the preparation of the Partnership Agreement and the programmes referred to in Article 5 (2) include all actions taken on a practical level by the Member States irrespective of their timing as well as actions taken by them before the entry into force of that and before the day of the entry into force of the delegated act for a European code of conduct adopted in accordance with Article 5(3) of the same Regulation, during the preparatory phases of a Member State programming procedure, provided that the objectives of the partnership principle, laid down in that Regulation, are achieved. In this context, Member States, in accordance with their national and regional competences, will decide on the content of both, the proposed Partnership Agreement and proposed draft programmes, in accordance with the relevant provisions of that Regulation and the fund specific rules;

—the delegated act laying down a European code of conduct, adopted in accordance with Article 5(3), will under no circumstances and neither directly nor indirectly have any retroactive effect, especially concerning the approval procedure of the Partnership Agreement and the programmes, since it is not the intention of the EU legislature to confer any powers on the Commission to the effect that it could reject the approval of the Partnership Agreement and programmes solely and exclusively based on any kind of non-compliance with the European code of conduct, adopted in accordance with Article 5(3);

—the European Parliament and the Council invite the Commission to make available for them the draft text of the delegated act to be adopted under article 5(3) as early as possible, but not later than the date when the political agreement on the Regulation laying down common provisions for the European Structural and Investment Funds is adopted by the Council or the date when the draft report on that Regulation is voted at the plenary of the European Parliament, whichever date is the earliest.

— concerning the application of Articles 14(2), 15(1)(c), and 26 (2) of Regulation laying down common provisions for the European Structural and Investment Funds, the actions taken by the Member States to involve the partners referred to in Article 5(1) in the preparation of the Partnership Agreement and the programmes referred to in Article 5 (2) include all actions taken on a practical level by the Member States irrespective of their timing as well as actions taken by them before the entry into force of that and before the day of the entry into force of the delegated act for a European code of conduct adopted in accordance with Article 5(3) of the same Regulation, during the preparatory phases of a Member State programming procedure, provided that the objectives of the partnership principle, laid down in that Regulation, are achieved. In this context, Member States, in accordance with their national and regional competences, will decide on the content of both, the proposed Partnership Agreement and proposed draft programmes, in accordance with the relevant provisions of that Regulation and the fund specific rules;

— the delegated act laying down a European code of conduct, adopted in accordance with Article 5(3), will under no circumstances and neither directly nor indirectly have any retroactive effect, especially concerning the approval procedure of the Partnership Agreement and the programmes, since it is not the intention of the EU legislature to confer any powers on the Commission to the effect that it could reject the approval of the Partnership Agreement and programmes solely and exclusively based on any kind of non-compliance with the European code of conduct, adopted in accordance with Article 5(3);

— the European Parliament and the Council invite the Commission to make available for them the draft text of the delegated act to be adopted under article 5(3) as early as possible, but not later than the date when the political agreement on the Regulation laying down common provisions for the European Structural and Investment Funds is adopted by the Council or the date when the draft report on that Regulation is voted at the plenary of the European Parliament, whichever date is the earliest.

(1) Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agriculture policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (See page 549 of this Official Journal).

2019-05-11

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the European Regional Development Fund, the European Social Fund, the C

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