Commission Implementing Regulation (EU) No 447/2014 of 2 May 2014 on the specific rules for implementing Regulation (EU) No 231/2014 of the European Parliament and of the Council establishing an Instrument for Pre-accession assistance (IPA II)

TITLE I

SUBJECT MATTER AND GENERAL FRAMEWORK FOR IMPLEMENTATION OF IPA ASSISTANCE

CHAPTER I

Subject matter and definitions

Article 1

Subject matter

This Regulation lays down specific rules establishing uniform conditions for implementing Regulation (EU) No 231/2014 and detailed rules implementing Regulation (EU) No 236/2014 with regards to methods of implementation, financial management, monitoring, evaluation and reporting, transparency and visibility of IPA II assistance as well as specific rules for cross-border cooperation in the policy area ‘regional and territorial cooperation’ and assistance under rural development programmes in the policy area ‘agriculture and rural development’.

Article 2

Definitions

For the purposes of this Regulation the following definitions shall apply:

(a) ‘IPA II beneficiary’ means one of the beneficiaries listed in Annex I to Regulation (EU) No 231/2014;

(b) ‘programme’ means an action programme, individual, special or support measures provided for in Articles 2 and 3 of Regulation (EU) No 236/2014;

(c) ‘framework agreement’ means an arrangement concluded between the Commission and an IPA II beneficiary applying to all IPA II policy areas and laying down the principles of the financial cooperation between the IPA II beneficiary and the Commission under this Regulation;

(d) ‘sectoral agreement’ means an arrangement concluded between the Commission and an IPA II beneficiary relating to a specific IPA II policy area or programme, setting out the rules and procedures to be respected which are not contained in the framework agreement or financing agreements;

(e) ‘policy area(s)’ means the main areas of cooperation addressed by actions funded by IPA II assistance, as provided for in Article 3(1) of Regulation (EU) No 231/2014;

(f) ‘authorities’ means public entities or bodies of an IPA II beneficiary or a Member State at national, regional or local level;

(g) ‘major project’ means a project comprising of a series of works, activities or services which is intended, in itself, to accomplish a definite and indivisible task of a precise economic or technical nature, which has clearly identified goals and whose total cost exceeds that which is specified in the Framework Agreement;

(h) ‘participating countries’ means the IPA II beneficiaries alone or the IPA II beneficiaries together with the Member State(s) or with the countries falling within the scope of the European Neighbourhood Instrument participating in a multi-annual programme for cross-border cooperation jointly drawn up by the participating countries;

(i) ‘financing agreement’ means an annual or multi-annual agreement concluded between the Commission and an IPA II beneficiary, for implementing the Union's financial assistance through an action falling within the scope of this Regulation.

CHAPTER II

General Framework for Implementation of IPA II Assistance

Article 3

Principles of Union financing

Article 4

Principle of ownership

The NIPAC shall:

(a) ensure coordination within the IPA II beneficiary's administration and with other donors and a close link between the use of IPA II assistance and the general accession process;

(b) coordinate the participation of IPA II beneficiaries in the relevant territorial cooperation programmes, in particular cross-border cooperation programmes referred to in points (a) to (c) of Article 27 and, if appropriate, transnational or interregional cooperation programmes established and implemented under Regulation (EU) No 1299/2013. The NIPAC may delegate this coordination task to a territorial cooperation coordinator or operating structure as appropriate;

(c) ensure that the objectives set out in the actions or programmes proposed by the IPA II beneficiaries are coherent with the objectives in the Country Strategy Papers and take due account of the relevant macro-regional and sea basin strategies;

(d) endeavour that the IPA II beneficiary's administration takes all necessary steps to facilitate the implementation of the related programmes.

The NIPAC shall be a high-ranking representative of the government or the national administration of the IPA II beneficiary with the appropriate authority.

Article 5

Framework agreements and sectoral agreements

The framework agreement and, where relevant, sectoral agreements shall lay down, in particular, detailed provisions concerning:

(a) the structures and authorities needed for the management, control, supervision, monitoring, evaluation, reporting and audit of IPA II assistance, as well as their functions and responsibilities;

(b) conditions and control requirements for: (i) the establishment of the required structures and authorities by the IPA II beneficiary in order to allow for entrusting budget implementation tasks of IPA II assistance; (ii) the monitoring, suspension or termination of the budget implementation tasks entrusted;

(c) programming and implementation of IPA II assistance and in particular provisions concerning aid intensities, rates of Union contribution and eligibility;

(d) procurement, grant and other award procedures, in accordance with Articles 1(3), 8 and 10 of Regulation (EU) No 236/2014;

(e) rules on taxes, customs duties and other fiscal charges in accordance with Article 5 of Regulation (EU) No 236/2014;

(f) requirements for payments, examination and acceptance of accounts and financial corrections procedures and de-commitment of unused funds;

(g) protection of the financial interests of the Union, as provided for in Article 7 of Regulation (EU) No 236/2014, and provisions on the reporting of fraud and other irregularities;

(h) transparency, visibility, information and publicity requirements.

Article 6

Financing decisions and financing agreements

TITLE II

INDIRECT MANAGEMENT BY IPA II BENEFICIARIES

CHAPTER I

Management and control systems

Article 7

Structures and authorities

The IPA II beneficiary shall establish the following structures and authorities needed for the management, control, supervision, monitoring, evaluation, reporting and internal audit of IPA II assistance:

(a) the National IPA Coordinator (NIPAC);

(b) the National Authorising Officer (NAO);

(c) the Operating Structures.

Article 8

Functions and responsibilities of the National IPA Coordinator

In addition to the functions provided for in Article 4(2), the NIPAC shall take measures to ensure that the objectives set out in the actions or programmes for which budget implementation tasks have been entrusted are appropriately addressed during the implementation of IPA II assistance.

Article 9

Functions and responsibilities of the National Authorising Officer

The NAO shall, in particular, be responsible for:

(a) the management of IPA II accounts and financial operations;

(b) the effective functioning of the internal control systems for the implementation of IPA II assistance;

(c) putting into place effective and proportionate anti-fraud measures taking into account the risks identified;

(d) launching the process provided for in Article 14.

At the end of the implementation of a programme, the NAO shall provide a final statement of expenditure.

Article 10

Functions and responsibilities of the operating structures

Article 11

Functions and responsibilities of the management structure

Article 12

Functions and responsibilities of the audit authority

CHAPTER II

Specific provisions relating to entrusting budget implementation tasks

Article 13

Conditions for entrusting an IPA II beneficiary with budget implementation tasks

The management, control, supervision and audit systems set up in the IPA II beneficiary shall provide for an effective internal control system which includes at least the following five areas:

(a) control environment;

(b) risk management;

(c) control activities;

(d) information and communication;

(e) monitoring activities.

Article 14

Entrusting budget implementation tasks

For entrusting budget implementation tasks of IPA II assistance, the Commission may rely on an ex ante assessment carried out with regard to an earlier financing agreement with the IPA II beneficiary or an ex ante assessment carried out with regard to the conferral of management powers decided under Council Regulation (EC) No 1085/2006 (¹). The Commission shall request additional evidence if those assessments do not address all the requirements.

TITLE III

FINANCIAL MANAGEMENT

CHAPTER I

Financial contribution by the Union

Article 15

Eligibility of expenditure

The following expenditure shall not be eligible for funding under Regulation (EU) No 231/2014:

(a) purchase of land and existing buildings, except where duly justified by the nature of the action in the financing decision;

(b) other expenditure as may be provided for in the sectoral or financing agreements.

CHAPTER II

Rules relating to indirect management by the IPA II beneficiary

Article 16

Reporting on suspected fraud and other irregularities

The IPA II beneficiary shall report suspected fraud and other irregularities which have been the subject of a primary administrative or judicial finding, without delay, to the Commission and keep the latter informed of the progress of administrative and legal proceedings. Reporting shall be done by electronic means using the module provided by the Commission for this purpose.

Article 17

Financial corrections

A financial correction may arise from the following:

(a) identification of a specific error, irregularity or fraud;

(b) identification of a weakness or deficiency in the management and control systems of the IPA II beneficiary.

TITLE IV

MONITORING, EVALUATION AND REPORTING

CHAPTER I

Monitoring

Article 18

IPA monitoring committee

Article 19

Sectoral monitoring committees

Article 20

Other monitoring activities

Other monitoring platforms may be set up where appropriate. Their activities shall be reported to the IPA monitoring committee.

CHAPTER II

Evaluation

Article 21

Principles

Article 22

Evaluations by the IPA II beneficiary under indirect management

CHAPTER III

Reporting

Article 23

Annual reports on implementation of IPA II assistance by IPA II beneficiaries under indirect management

By 15 February of the following financial year, the IPA II beneficiary shall in accordance with points (a) to (c) of the first subparagraph of Article 60(5) of Regulation (EU, Euratom) No 966/2012 provide the Commission with:

(a) an annual report on the implementation of the tasks entrusted;

(b) annual financial reports or statements on accrual basis as specified in the financing agreement, drawn up for the expenditure incurred in the execution of the tasks entrusted;

(c) an annual management declaration, as provided for by Article 9(4);

(d) a summary of the reports on the audits and controls carried out by the management structure, providing a sound basis for the management declaration. Such summary shall include an analysis of the nature and extent of errors and weaknesses identified in systems, corrective action taken or planned as well as the follow-up given to the reports issued by the audit authority.

TITLE V

TRANSPARENCY AND VISIBILITY

Article 24

Information, publicity and transparency

Article 25

Visibility and communication

TITLE VI

CROSS-BORDER COOPERATION

CHAPTER I

General provisions

Article 26

Definitions

For the purposes of this Title the following definitions shall apply:

(a) ‘operation’ means a project, contract, action or group of projects selected by the joint monitoring committee or the contracting authority of the programme concerned, or under its responsibility, that contribute to the objectives, as regards the cross-border cooperation programmes under point (a) of Article 27, of the priority axis or priority axes to which it relates or, as regards cross-border cooperation programmes in points (b) or (c) of Article 27 of a thematic priority or thematic priorities to which it relates;

(b) ‘beneficiary’ means a public or private body, responsible for initiating or initiating and implementing operations; in the context of State aid schemes (as defined in Article 2(13) of Regulation (EU) No 1303/2013 of the European Parliament and of the Council (²)), the term ‘beneficiary’ means the body which receives the aid, as far as cross-border cooperation programmes involving Member States are concerned.

Article 27

Form of assistance

Assistance shall be provided to one of the following forms of cross-border cooperation:

(a) cross-border cooperation between one or more Member States and one or more IPA II beneficiaries as provided for in Chapter II;

(b) cross-border cooperation between two or more IPA II beneficiaries as provided for in Chapter III;

(c) cross-border cooperation between an IPA II beneficiary and countries under the European Neighbourhood Instrument as provided for in Chapter III.

Article 28

Aid intensity and rate of IPA II assistance

The Commission decision adopting a cross-border cooperation programme for the forms of cooperation referred to in Article 27 shall fix the co-financing rate and the maximum amount of IPA II assistance, based either on:

(a) total eligible expenditure, including public and private expenditure; or

(b) public eligible expenditure.

Request for modification of the co-financing rate shall be submitted in accordance with the procedure for the amendment of programmes set out in Article 31(5A) and shall be accompanied by a revised programme. The co-financing rate of 100% shall apply only if the relevant amendment of the cooperation programme is approved by the Commission before the submission of the final application for an interim payment in accordance with Article 135(2) of Regulation (EU) No 1303/2013.

On the first day of the accounting year starting 1 July 2021 and ending 30 June 2022, the co-financing rate shall come back automatically to the level it was on the day when the request for modification of the co-financing rate, referred to in the second subparagraph, was submitted to the Commission.

Article 29

Thematic priorities and concentration of IPA II assistance

Article 30

Geographical coverage

The list of eligible regions shall be included in the relevant cross-border cooperation programme which shall be as follows:

(a) for cross-border cooperation programmes referred to in point (a) of Article 27, Nomenclature of Territorial Units for Statistics (NUTS) level 3 regions or, in the absence of NUTS classification, equivalent areas along land borders or along maritime borders separated by a maximum of 150 km, without prejudice to potential adjustments needed to ensure the coherence and continuity of cross-border programmes established for the 2007-2013 programming period;

(b) for cross-border cooperation programmes referred to in points (b) and (c) of Article 27, the eligible regions shall be established in the relevant cross-border cooperation programme, as appropriate.

Article 31

Preparation, assessment, approval and amendment of cross-border cooperation programmes

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 Joint monitoring committee in advance. The Member State shall notify the revised financing plan to the Commission.

Paragraphs 2 and 3 shall not apply to programme amendments under this paragraph.

Article 32

Technical assistance

CHAPTER II

Cross-border cooperation between Member States and IPA II beneficiaries

Article 33

Applicable provisions

Article 34

Programming

The Commission may consult the EIB before the adoption of cross-border cooperation programmes.

Article 35

Technical assistance

The amount of IPA II assistance to be allocated to technical assistance shall be limited to 10 % of the total amount allocated to the cross-border cooperation programme, but shall not be less than EUR 1 500 000 .

Article 36

Implementation mode and designation of programme authorities

Articles 73 and 74 of Regulation (EU) No 1303/2013 concerning the responsibilities of the Member States under shared management shall apply to the Member State where the managing authority is located.

Article 75 of Regulation (EU) No 1303/2013 concerning the powers and responsibilities of the Commission under shared management shall apply.

The procedure for the designation of the managing authority and, where appropriate, of the certifying authority, set out in Article 124 of Regulation (EU) No 1303/2013, shall be carried out by the Member State in which the authority is located.

Designations provided for in this Article shall be without prejudice to the apportionment of liabilities in relation to the application of financial corrections among the participating countries as provided for in the cross-border cooperation programme.

Article 37

Functions of the programme authorities

The certifying authority shall receive the payments made by the Commission and shall, as a general rule, make payments to the lead beneficiary in accordance with Article 132 of Regulation (EU) No 1303/2013.

Article 38

Joint monitoring committee

Articles 49 and 110 of Regulation (EU) No 1303/2013 concerning its functions shall also apply.

The JMC and the managing authority shall carry out monitoring by reference to indicators laid down in the relevant cross-border cooperation programme, in accordance with Article 16 of Regulation (EU) No 1299/2013.

Article 39

Selection of operations

The JMC may set up a steering committee acting under its responsibility for the selection of operations.

Article 40

Beneficiaries

The lead beneficiary shall carry out the following tasks:

(a) lay down the arrangements with other beneficiaries in an agreement comprising provisions that, inter alia, guarantee the sound financial management of the funds allocated to the operation, including the arrangements for recovering amounts unduly paid;

(b) assume responsibility for ensuring implementation of the entire operation;