Commission Implementing Regulation (EU) No 897/2014 of 18 August 2014 laying down specific provisions for the implementation of cross-border cooperation programmes financed under Regulation (EU) No 232/2014 of the European Parliament and the Council establishing a European Neighbourhood Instrument

PART ONE

SUBJECT MATTER AND DEFINITIONS

Article 1

Subject matter

This Regulation lays down detailed provisions for the implementation of cross-border cooperation programmes as set out in Article 12 of Regulation (EU) No 232/2014 and Article 6(2) of Regulation (EU) No 236/2014.

Article 2

Definitions

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

(a) ‘programme’ means a joint operational programme within the meaning of Article 10 of Regulation (EU) No 232/2014;

(b) ‘participating countries’ means all Member States, CBC partner countries and any European Economic Area country taking part in a programme;

(c) ‘programming document’ means the document which is referred to Article 9(1) of Regulation (EU) No 232/2014 and which establishes the strategic objectives, the list of programmes, their indicative multiannual allocation and geographical eligibility;

(d) ‘programme area’ means core regions, adjoining regions, the major social, economic or cultural centres and territorial units referred to in Article 8(3) and (4) of Regulation (EU) No 232/2014 respectively

(e) ‘core regions’ means the territorial units referred to in Article 8(1) of Regulation (EU) No 232/2014 and border areas in Instrument for Pre-Accession Assistance geographic entities and in European Economic Area countries as set out in the programming document;

(f) ‘adjoining regions’ means the territorial units referred to in Article 8(2) of Regulation (EU) No 232/2014 and those adjoining to core regions in Instrument for Pre-Accession Assistance geographic entities and in European Economic Area countries;

(g) ‘Joint Monitoring Committee’ means the joint committee responsible for monitoring the implementation of the programme;

(h) ‘Managing Authority’ means the authority or body appointed by the participating countries as responsible for managing the programme;

(i) ‘national authority’ means the entity appointed by each participating country bearing the ultimate responsibility for supporting the Managing Authority in the implementation of the programme on its own territory;

(j) ‘Joint Technical Secretariat’ means the body set up by the participating countries to assist the programme bodies;

(k) ‘financial instruments’ means Union measures of financial support provided on a complementary basis in order to address one or more specific policy objectives of the Union. Such instruments may take the form of equity or quasi-equity investments, loans or guarantees, or other risk-sharing instruments, and may, where appropriate, be combined with grants;

(l) ‘CBC partner countries’ means countries and territories listed in Annex I to Regulation (EU) No 232/2014, the Russian Federation and beneficiaries listed in Annex I to Regulation (EU) No 231/2014 when there is co-financing under the latter;

(m) ‘irregularities’ means any infringement of a financing agreement, a contract or of applicable law resulting from an act or omission by an economic operator involved in the implementation of the programme, 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;

(n) ‘Union contribution’ means the part of the eligible expenditure of the programme or project which is financed by the Union;

(o) ‘contract’ means any procurement or grant contract concluded in the framework of a programme;

(p) ‘large infrastructure projects’ means projects comprising a set of works, activities or services intended to fulfil an indivisible function of a precise nature pursuing clearly identified objectives of common interest for the purposes of implementing investments delivering a cross-border impact and benefits and where a budget share of at least EUR 2,5 million is allocated to acquisition of infrastructure;

(q) ‘intermediate body’ means any public or private body which acts under the responsibility of a Managing Authority, or which carries out duties on behalf of such an in relation to beneficiaries implementing projects;

(r) ‘contractor’ means a natural or legal person with whom a procurement contract has been concluded;

(s) ‘beneficiary’ means a natural or legal person with whom a grant contract has been signed;

(t) ‘accounting year’ means the period from 1 July to 30 June, except for the first accounting year, 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 September 2024. In case of indirect management with an international organisation in the sense of Article 80, the accounting year shall be the financial year;

(u) ‘financial year’ means the period from 1 January to 31 December.

PART TWO

COMMON PROVISIONS

TITLE I

GENERAL FRAMEWORK FOR IMPLEMENTATION

CHAPTER 1

Programmes

Article 3

Preparation

Each programme shall be prepared by a common agreement of all the participating countries, in accordance with Regulation (EU) No 232/2014, the programming document and this Regulation.

Article 4

Content

Each programme shall contain in particular the following information:

(a) core regions: a list of eligible territorial units as set out in the programming document and, where relevant, any extension in accordance with Article 8(4) of Regulation (EU) No 232/2014 and in line with the requirements set out in the programming document; (b) adjoining regions, where relevant: a list of adjoining regions, the justification for their inclusion in line with the requirements set out in the programming document and the conditions for their participation in the programme, as decided by the participating countries; (c) major social, economic or cultural centres referred to in Article 8(3) of Regulation (EU) No 232/2014, where relevant: a list of centres identified per priority, the justification for their inclusion in line with the requirements set out in the programming document and the conditions for their participation in the programme, as decided by the participating countries; (d) a map of the programme area, mentioning the name of each territorial unit and, where relevant, distinguishing between the territorial units referred to in (a), (b) and (c); (e) in addition to the description of the programme area, where relevant, the intention to make use of Article 10(5) of Regulation (EU) No 232/2014 under the conditions set out in the programming document shall be indicated in the programme.

(a) a description of the programme strategy including the choice of thematic objectives and corresponding priorities in line with the provisions of the programming document; (b) a justification for the chosen strategy based on: — an analysis of the socioeconomic and environmental situation of the programme area in terms of strengths and weaknesses and the medium-term needs deriving from that analysis, — a description of lessons learnt from previous experiences in cross-border programmes, — based on a wider stakeholders consultation, information on the coherence with other Union-financed programmes in the countries and regions concerned together with an analysis of coherence with national and regional strategies and policies, — a risk analysis and mitigating measures; (c) a description of objectively verifiable indicators, in particular: — the expected results for each priority, and the corresponding result indicators, with a baseline value and a target value, — the output indicators for each priority, including the quantified target value, which are expected to contribute to the results; (d) a description of ways to mainstream the following cross-cutting issues, where relevant: democracy and human rights, environmental sustainability, gender equality and HIV/AIDS.

(a) the composition of the Joint Monitoring Committee and tasks; (b) the Managing Authority and its designation process; (c) national authorities of all participating countries, in particular, the authority in each participating country referred to in Articles 20 and 31 and where relevant support structures, other than those referred to in points (e) and (f); (d) the procedure for setting up the Joint Technical Secretariat, and branch offices and tasks, where relevant; (e) the audit authority and the members of the group of auditors; (f) the body or bodies appointed as control contact points in all participating countries and its/their tasks pursuant to Article 32;

(a) a summary description of the management and control systems in accordance with Article 30; (b) a time-frame for programme implementation; (c) a description of project selection procedures in accordance with Article 30; (d) a description per priority of nature of support in accordance with Article 38, including a list of projects to be selected through direct award procedure or contributions to financial instruments. It shall also include an indicative timetable for the selection of projects to be financed in accordance with Article 41; (e) a description of planned use of technical assistance and applicable contract award procedures; (f) a description of the monitoring and evaluation systems, together with an indicative monitoring and evaluation plan for the whole duration of the programme; (g) the communication strategy for the whole programme period and an indicative information and communication plan for the first year; (h) information on fulfilment of regulatory requirements laid down in Directive 2001/42/EC of the European Parliament and of the Council (¹); (i) an indicative financial plan containing two tables (without any division per participating country): — a table specifying the yearly provisional financial appropriations for commitments and payments envisaged for the support from the Union for each thematic objective and technical assistance. The first year's appropriations shall include the costs for preparatory actions pursuant to Article 16, — a table specifying the provisional amounts of the financial appropriations of the support from the Union and co-financing for the whole programming period for each thematic objective and technical assistance; (j) rules on eligibility of expenditure referred to in Articles 48 and 49; (k) the apportionment of liabilities among the participating countries in accordance with Article 74; (l) the rules of transfer, use and monitoring of co-financing; (m) a description of IT systems for the reporting and exchange of computerised data between the Managing Authority and the Commission; (n) language(s) adopted by the programme in conformity with Article 7.

Article 5

Adoption

The Commission shall verify that the programme contains all the elements referred to in Article 4. The Commission shall assess the consistency of the programme with Regulation (EU) No 232/2014, the programming document, this Regulation and any other relevant Union law. The assessment shall in particular address:

(a) the quality of the analysis, its consistency with the proposed priorities and with other Union-financed programmes;

(b) the accuracy of the financial plan;

(c) the compliance with Directive 2001/42/EC.

Article 6

Adjustments and revision

Adjustments of the programme that do not significantly affect the nature and objectives of the programme shall be considered non substantial. In particular:

(a) cumulative changes up to 20 % of the originally allocated Union contribution to each thematic objective or technical assistance or as amended pursuant to paragraph 2 involving transfer between thematic objectives or from technical assistance to thematic objectives;

(b) cumulative changes up to 20 % of the originally allocated Union contribution to each thematic objective or as amended pursuant to paragraph 2 involving transfer from thematic objectives to technical assistance.

Changes of the programme financial plan referred to in point (a) may be directly made by the Managing Authority, with the prior approval of the Joint Monitoring Committee. The Managing Authority shall inform the Commission of any of these changes, at the latest in the next annual report, and provide the Commission with all necessary additional information.

In case of changes of the programme financial plan referred to in point (b), the Managing Authority shall seek the prior approval of both the Joint Monitoring Committee and the Commission.

Following a reasoned request from the Joint Monitoring Committee or at the initiative of the Commission after having consulted the Joint Monitoring Committee, programmes may be revised as a result of any of the following:

(a) review of the programming document;

(b) major socioeconomic changes or substantial changes in the programme's area;

(c) implementation difficulties;

(d) changes in the financial plan beyond the margin of flexibility referred to in paragraph 1 or any change significantly affecting the nature and objectives of the programme;

(e) audits, monitoring and evaluations.

Article 7

Use of Languages

CHAPTER 2

Financing Agreements

Article 8

Financing agreements with CBC partner countries

Article 9

Financing agreements with CBC partner countries providing co-financing

That financing agreement shall contain provisions concerning the CBC partner country's co-financing, such as:

(a) amount;

(b) intended use and conditions for use, including conditions for applying;

(c) modalities of payments;

(d) financial management;

(e) record keeping;

(f) reporting obligations;

(g) verifications and controls;

(h) irregularities and recoveries.

CHAPTER 3

Other agreements or Memoranda of Understanding

Article 10

Content

The Managing Authority may conclude Memoranda of Understanding or any other agreement with participating countries outlining programme provisions, in particular national co-financing, specific financial responsibilities, audits and recoveries.

The content of those Memoranda of Understanding or any other agreement shall be in line with the provisions laid down in this Regulation and in the financing agreement(s).

CHAPTER 4

Implementation

Article 11

Methods of implementation

Programmes shall be usually implemented in shared management with Member States in accordance with Article 59 of Regulation (EU, Euratom) No 966/2012. Participating countries may propose implementation in indirect management by a CBC partner country or an international organisation in accordance with Article 60 of Regulation (EU, Euratom) No 966/2012.

Programmes implemented in indirect management shall be governed by Part Three of this Regulation.

TITLE II

CO-FINANCING

Article 12

Co-financing rate

Article 13

Co-financing sources

Article 14

Contributions in kind

TITLE III

PERIOD OF EXECUTION

Article 15

Period of execution

The period of execution of each programme shall start at the earliest on the date of the adoption of the programme by the Commission and end on  31 December 2025 at the latest.

Article 16

Starting phase of the programme

In addition, the following further preparatory actions required to start the programme may be undertaken:

(a) the establishment of the Managing Authority and, where relevant, of the Joint Technical Secretariat;

(b) the first meetings of the Joint Monitoring Committee, including also representatives of CBC partner countries that have not yet signed a financing agreement or where the financing agreement has not yet entered into force;

(c) the preparation and launching of project selection or contract award procedures with a suspension clause linked to the entry into force of the financing agreements.

Article 17

Discontinuation of the programme

European Regional Development Fund annual instalments already committed shall remain available for their normal lifetime, but they may be used only for activities that take place exclusively in the Member States concerned and contracted before the Commission discontinuation decision. The Managing Authority shall transmit to the Commission the final report within three months from the closure of the contracts and the latter shall proceed in conformity with paragraphs 2 and 3.

As an alternative, it may be decided to reduce the programme budget allocation in accordance with point (c) of Article 6(2).

Support from Regulation (EU) No 232/2014 corresponding to annual instalments not yet committed or annual instalments committed and de-committed totally or partially during the same budgetary year shall be used to finance other programmes or projects eligible under Regulation (EU) No 232/2014.

Article 18

Projects

Article 19

Closure of the programme

A programme shall be considered closed when:

(a) all contracts concluded under the programme have been closed;

(b) the final balance has been paid or reimbursed;

(c) remaining appropriations have been de-committed by the Commission.

TITLE IV

PROGRAMME STRUCTURES

Article 20

Appointment of authorities and management bodies

Each participating country shall appoint:

(a) a national authority to support the Managing Authority in the management of the programme in accordance with the principle of sound financial management;

(b) a control contact point to support the Managing Authority in its control of the programme obligations;

(c) a representative to the group of auditors referred to in Article 28(2);

(d) representatives to the Joint Monitoring Committee referred to in Article 21.

CHAPTER 1

Joint Monitoring Committee

Article 21

Joint Monitoring Committee

Within three months of the date of the adoption of the programme by the Commission, the participating countries shall set up the Joint Monitoring Committee.

Article 22

Composition of the Joint Monitoring Committee

Article 23

Functioning

Article 24

Functions of the Joint Monitoring Committee

The Joint Monitoring Committee shall in particular: