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

All beneficiaries shall actively cooperate in the development and implementation of projects. In addition, they shall cooperate in the staffing and/or financing of projects. Each beneficiary shall be legally and financially responsible for the activities that it is implementing and for the share of the Union funds that it receives. The specific obligations as well as the financial responsibilities of the beneficiaries shall be laid down in the agreement referred to in point (c) of paragraph 3

The lead beneficiary shall:

Grants may take any of the following forms:

Grants in the form referred to in point (a) of paragraph 1 shall be calculated on the basis of the eligible costs actually incurred by the beneficiary, subject to a preliminary budget estimate as submitted with the proposal and included in the contract. Flat-rate financing as referred to in point (b) of paragraph 1 shall cover specific categories of eligible costs which are clearly identified in advance by applying a percentage. Lump sums as referred to in point (c) of paragraph 1 shall in global terms cover all or certain specific categories of eligible costs which are clearly identified in advance. Unit costs as referred to in point (d) of paragraph 1 shall cover all or certain specific categories of eligible costs which are clearly identified in advance by reference to an amount per unit.

Grants shall not have the purpose or effect of producing a profit within the framework of the project. The exceptions set out in Article 125(4) of Regulation (EU, Euratom) No 966/2012 shall apply.

Grants shall not exceed an overall ceiling expressed as a percentage and an absolute value which is to be established on the basis of estimated eligible costs. Grants shall not exceed the eligible costs.

Eligible costs are costs actually incurred by the beneficiary which meet all of the following criteria:

A grant may be awarded retroactively in the following cases:

To allow the preparation of strong partnerships, costs incurred before submission of the grant application by projects to which a grant has been awarded are eligible provided that the following conditions are also met:

Subject to paragraphs 1 and 2, the following direct costs of the beneficiary shall be eligible:

Pursuant to Article 4 a programme may establish additional eligibility rules for the programme as a whole.

The following costs relating to the implementation of the project shall not be considered eligible:

Pursuant to Article 4 a programme may declare other categories of costs as ineligible.

The total amount of financing on the basis of lump sums, unit costs and flat rate financing may not exceed EUR 60 000 per beneficiary and per project, unless the programme establishes otherwise according to Article 4, but not exceeding EUR 100 000 .

The use of lump sums, unit-costs and flat-rate financing shall at least be supported by the following:

Once the amounts have been assessed and approved by the Managing Authority, they will not be challenged by ex post controls.

Indirect costs may be calculated on a flat-rate of up to 7 % of eligible direct costs, excluding costs incurred in relation to the provision of infrastructure, provided that the rate is calculated on the basis of a fair, equitable and verifiable calculation method.

As indirect costs for a project shall be considered those eligible costs which may not be identified as specific costs directly linked to the implementation of the project and may not be booked to it directly according to the conditions of eligibility as defined in Article 48. They may not include ineligible costs as referred to in Article 49 or costs already declared under another cost item or heading of the budget of the project.

If the implementation of a project requires procurement of goods, works or services by a beneficiary, the following rules shall apply:

In all other cases the following obligations shall be complied with:

In all cases, the rules of nationality and origin set forth in Articles 8 and 9 of Regulation (EU) No 236/2014 shall apply.

Service contracts with a value of EUR 300 000 or more shall be awarded by means of an international restricted tender procedure following publication of a procurement notice. The procurement notice shall be published in all appropriate media beyond the programme area, stating the number of candidates which will be invited to submit tenders within a range of four to eight candidates and ensuring genuine competition.

Service contracts with a value of more than EUR 60 000 but less than EUR 300 000 shall be awarded by means of a competitive negotiated procedure without publication. The beneficiary shall consult at least three service providers of its choice and negotiate the terms of the contract with one or more of them.

Supply contracts with a value of EUR 300 000 or more shall be awarded by means of an international open tender procedure following publication of a procurement notice, which shall be published in all appropriate media beyond the programme area.

Supply contracts with a value of EUR 100 000 or more but less than EUR 300 000 shall be awarded by means of an open tender procedure published in the programme area. Any eligible tenderer must be provided with the same opportunities as local firms.

Supply contracts with a value of more than EUR 60 000 but less than EUR 100 000 shall be awarded by means of a competitive negotiated procedure without publication. The beneficiary shall consult at least three suppliers of its choice and negotiate the terms of the contract with one or more of them.

Works contracts with a value of EUR 5 000 000 or more shall be awarded by means of an international open tender procedure, or in view of the specific characteristics of certain works by means of a restricted tender procedure, following publication of a procurement notice which shall be published in all appropriate media beyond the programme area.

Work contracts with a value of EUR 300 000 or more but less than EUR 5 000 000 shall be awarded by means of an open tender procedure published in the programme area. Any eligible tenderer must be provided with the same opportunities as local firms.

Work contracts with a value of more than EUR 60 000 but less than EUR 300 000 shall be awarded by means of a competitive negotiated procedure without publication. The beneficiary shall consult at least three contractors of its choice and shall negotiate the terms of the contract with one or more of them.

If the project requires the award of financial support to third parties, it may be given on condition that:

Rules on nationality and origin set out in Articles 8 and 9 Regulation (EU) No 236/2014 shall apply. Where a sub-grant exceeds EUR 60 000 the rules of participation laid down in point (b)(vi) of Article 52 shall apply mutatis mutandis.

Under shared management, the Commission shall make the initial commitments after adoption of the programme by the Commission pursuant to Article 5.

Under indirect management, the Commission shall make the initial commitments after the adoption of the programme, after the entry into force of the agreement delegating budget execution tasks to an international organisation or to a CBC partner country referred to in Articles 81 and 82.

Subsequently the Commission shall make the corresponding commitment each financial year no later than 1 May. The amount of the annual commitments shall be determined in accordance with the financial plan taking into account the programme's progress and the availability of funds. The Commission shall inform the Managing Authority when the annual commitment is made.

Payments to managing authorities may take the form of prefinancing or payment of the final balance.

A bank account in euro, specifically dedicated to the programme shall be opened. When payments by the Commission are channelled through another bank account than the programme's, the related amounts and any accrued interest shall be transferred to the programme bank account without delay and in full.

No amount shall be deducted or withheld and no specific charge or other charge with equivalent effect shall be levied on these amounts or on any accrued interest.

Each financial year, once the Managing Authority has been notified of the annual commitment, it may request as prefinancing the transfer of up to 80 % of the Union contribution for the financial year in question. From the second financial year, requests for prefinancing shall be accompanied by the provisional budget detailing the Managing Authority's commitments and payments for the two accounting years following the latest audit opinion referred to in Article 68. After reviewing that provisional budget, assessing actual financing needs of the programme and verifying the availability of funds, the Commission shall proceed with the payment of all or part of the requested prefinancing no later than 60 days after the date on which the payment request is registered with the Commission.

In the course of the financial year, the Managing Authority may ask for the transfer of all or part of the funds already committed, as additional prefinancing. In support of its request, the Managing Authority shall submit an interim financial report showing that the expenditure actually incurred or likely to be incurred before the end of the financial year exceeds the amount of prefinancing already paid. Such subsequent transfers shall constitute additional prefinancing provided they are not supported by an audit opinion referred to in Article 68.

Each financial year of the programme's implementation, the Commission shall clear previous prefinancing payments on the basis of eligible expenditure actually incurred, supported by the audit opinion referred to in Article 68 following the acceptance of accounts as described in Article 69(2). On the basis of the results of this clearance, the Commission may proceed with the necessary financial adjustments.

The authorising officer by delegation within the meaning of Regulation (EU, Euratom) No 966/2012 may interrupt payment deadline for a payment request for a maximum period of six months in any of the following circumstances:

The authorising officer by delegation shall limit the interruption to the part of the expenditure covered by the payment request affected by the elements referred to in the first subparagraph of paragraph 1, unless it is not possible to identify the part of the expenditure affected. The authorising officer by delegation shall inform the Member State hosting the Managing Authority and the Managing Authority immediately of the reasons for interruption and shall ask them to remedy the situation. The interruption shall be ended by the authorising officer by delegation as soon as the necessary measures have been taken. This interruption may be extended beyond six months if the necessary measures have not been taken.

The Commission may suspend all or part of the payments in any of the following circumstances:

The Commission may decide to suspend all or part of prefinancing payments after having given the Managing Authority the opportunity to present its observations.

The Commission shall end suspension of all or part of payments where the Managing Authority has taken the necessary measures to enable the suspension to be lifted.

Payments to lead beneficiaries can take one of the following forms:

The Managing Authority shall ensure that payments to lead beneficiaries are processed as quickly as possible according to the signed contract. No amount shall be deducted or withheld, unless supported by the signed contract and no specific charge or other charge with equivalent effect shall be levied reducing these payments.

The managing authority shall submit the payment request of the final balance accompanied by the documents referred to in Article 68 and Article 77(5).

The final balance shall be paid no later than three months after the date of clearance of accounts of the final accounting year or one month after the date of acceptance of the final implementation report, whichever date is later.

Payment of the final balance for the programme in the final accounting year may exceed up to 10 % of the Union contribution for each thematic objective as laid down in the Commission implementing decision approving the programme.

The amount concerned by de-commitment shall be reduced by the amounts that the Managing Authority has not been able to declare to the Commission because of:

The Managing Authority claiming force majeure under point (b) of paragraph 1 shall demonstrate the direct consequences of the force majeure on the implementation of all or part of the programme. For the purpose of points (a) and (b) of paragraph 1 the reduction may be requested once, if the suspension or force majeure has lasted no longer than one year, or a number of times that corresponds to the duration of the force majeure or the number of years between the date of the legal or administrative decision suspending the implementation of the project and the date of the final legal or administrative decision.

By 15 February, the Managing Authority shall send to the Commission information on the exceptions referred to in paragraph 1 for the amount to be declared by 31 December of preceding financial year.

The Commission shall timely inform the Managing Authority whenever there is a risk of de-commitment pursuant to Article 6 of Regulation (EU) No 236/2014.

On the basis of information received as of 15 February, the Commission shall inform the Managing Authority of the amount of the de-commitment resulting from that information.

The Managing Authority shall have two months to agree to the amount to be de-committed or to submit its observations.

By 30 June, the Managing Authority shall submit a revised financial plan to the Commission reflecting the impact of the reduced amount of support on the thematic objectives or technical assistance of the programme for the financial year concerned. Failing such a submission, the Commission shall revise the financial plan by reducing the Union contribution for the financial year concerned. The reduction shall affect the thematic objectives and technical assistance proportionately.

The Commission shall amend the decision adopting the programme.

Expenditure incurred in a currency other than the euro shall be converted into euro by the Managing Authority and by the beneficiary using the monthly accounting exchange rate of the Commission of one of the following:

The method chosen shall be set out in the programme and shall apply throughout the programme duration. Different methods may be applied to technical assistance and to projects.

The accounts of the programme shall be drawn up by the Managing Authority. These accounts shall be independent and separate and shall include only transactions relating to the programme. They shall be kept in such a way as to enable analytical monitoring of the programme by priority and technical assistance.

In its annual report, the Managing Authority shall, by 15 February, provide the Commission with the following financial information:

The accounts referred to in point (a) of paragraph 2 shall be submitted for each programme and shall include at the level of each priority and technical assistance:

The audit opinion referred to in point (d) of paragraph 2 shall establish whether the accounts give a true and fair view, the related transactions are legal and regular and the control systems properly put in place function. The opinion shall also state whether the audit work puts in doubt the assertions made in the management declaration referred to in point (b) of paragraph 2.

The Commission shall examine the accounts and inform the Managing Authority by 31 May of the year following the end of the accounting year whether it accepts that the accounts are complete, accurate and true.

On the basis of eligible expenditure incurred, as certified by the audit opinion referred to in point (d) of Article 68(2), the Commission shall clear the prefinancing.

Acceptance of the accounts shall be without prejudice to any subsequent financial corrections in accordance with Article 72.

The Managing Authority and the beneficiaries shall keep all documents related to the programme or a project for five years from the date of payment of the balance for the programme. In particular they shall keep reports, supporting documents, as well as accounts, accounting documents and any other document relating to the financing of the programme (including all documents relating to the contract award) and projects.

Notwithstanding paragraph 1, records pertaining to audits, appeals, litigation or pursuit of claims arising from the programme or project performance shall be retained until such audits, appeals, litigation or claims have been completed.

The Managing Authority shall in the first instance be responsible for preventing and investigating irregularities and for making the financial corrections required and pursuing recoveries. In the case of a systemic irregularity, the Managing Authority shall extend its investigation to cover all operations potentially affected.

The Union contribution cancelled in accordance with paragraph 1 may be reused within the concerned programme, subject to paragraph 3.

The contribution cancelled in accordance with paragraph 1 may not be reused for the project that was the subject of a financial correction or, where a financial correction is made for a systemic irregularity and for any project affected by the systemic irregularity.

The Commission shall make financial corrections by cancelling all or part of the Union contribution to a programme and effecting recovery from the Managing Authority in order to exclude from Union financing expenditure which is in breach of applicable law or related to deficiencies in the programme management and control systems which have been detected by the Commission or the European Court of Auditors.

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:

In particular the Commission shall make financial corrections where, after carrying out the necessary examination, it draws any of the following conclusions:

The Commission shall, when deciding the amount of a financial correction under paragraph 3, respect the principle of proportionality taking into account the nature and gravity of the irregularity and the extent and financial implications of the deficiencies in management and control systems found in the programme.

Where the Commission bases its position on reports of auditors other than those of its own services, it shall draw its own conclusions regarding the financial consequences after having heard the Managing Authority and the auditors.

The closure of the programme shall not prejudice the Commission's right to undertake, at a later stage, financial corrections vis-à-vis the Managing Authority.

The criteria for establishing the level of financial correction to be applied and the criteria for applying flat rates or extrapolated financial correction are those adopted in accordance with Regulation (EU) No 1303/2013 ([^E0005]), in particular Article 144, as well as those contained in the Commission Decision of 19 December 2013 ([^E0006]).

Before taking a decision on a financial correction, the Commission shall inform the Managing Authority of the provisional conclusions of its examination and request the Managing Authority to submit its comments within two months.

Where the Commission proposes a financial correction on the basis of extrapolation or a flat rate, the Managing Authority shall be given the opportunity to demonstrate through an examination of the documentation concerned that the actual extent of irregularity is less than the Commission's assessment. In agreement with the Commission, the Managing Authority may limit the scope of that examination to an appropriate proportion or sample of the documentation concerned. Except in duly justified cases, the time allowed for that examination shall not exceed a further period of two months after the two-month period referred to in paragraph 1.

The Commission shall take account of any evidence supplied by the Managing Authority within the time limits set out in paragraphs 1 and 2.

Where the Managing Authority does not accept the provisional conclusions of the Commission, the Managing Authority shall be invited to a hearing by the Commission, to ensure that all relevant information and observations are available for the conclusions of the Commission on the application of the financial correction.

In case of an agreement and without prejudice to paragraph 6, the Managing Authority may reuse the cancelled contribution for the concerned programme in accordance with Article 71(2).

In order to apply financial corrections, the Commission shall take a decision within six months of the date of the hearing or of the date of receipt of additional information where the Managing Authority agrees to submit such additional information following the hearing. The Commission shall take account of all information and observations submitted during the course of the procedure. If no hearing takes place, the six-month period shall begin to run two months after the date of the invitation letter to the hearing sent by the Commission.

Where the Commission or the European Court of Auditors detect irregularities demonstrating a serious deficiency in the effective functioning of the management and control systems, the resulting financial correction shall reduce the Union contribution.

The Managing Authority shall be responsible for pursuing the recovery of amounts unduly paid.

Where the recovery relates to a breach of legal obligations on the part of the Managing Authority stemming from this Regulation and Regulation (EU, Euratom) No 966/2012 the Managing Authority shall be responsible for reimbursing the amounts concerned to the Commission.

Where the recovery relates to systemic deficiencies in the programme management and control systems, the Managing Authority shall be responsible for reimbursing the amounts concerned to the Commission in accordance with the apportionment of liabilities among the participating countries as laid down in the programme.

Where the recovery relates to a claim against a beneficiary established in a Member State and the Managing Authority is unable to recover the debt, the Member State in which the beneficiary is established shall pay the due amount to the Managing Authority and claim it back from the beneficiary.

Where the recovery relates to a claim against a beneficiary established in a CBC partner country and the Managing Authority is unable to recover the debt, the level of responsibility of the CBC partner country in which the beneficiary is established shall be such as it is laid down in the relevant financing agreements referred to in Articles 8 and 9.

The Managing Authority shall recover the amounts unduly paid together with any interest on late payments from the lead beneficiary. The concerned beneficiaries shall repay the lead beneficiary the amounts unduly paid in accordance with the partnership agreement signed between them. If the lead beneficiary does not succeed in securing repayment from the concerned beneficiary, the Managing Authority shall formally notify the latter to repay to the lead beneficiary. If the concerned beneficiary does not repay, the Managing Authority shall request the participating country in which the concerned beneficiary is established to reimburse the amounts unduly paid in accordance with Article 74(2) to (5).

The Managing Authority shall exercise due diligence to ensure reimbursement of the recovery orders with support from the participating countries. The Managing Authority shall in particular ensure that the claim is certain, of a fixed amount and due. Where the Managing Authority is planning to waive recovery of an established debt, it shall ensure that the waiver is in order and complies with the principles of sound financial management and proportionality. The waiver decision must be submitted to the Joint Monitoring Committee for prior approval.

The Managing Authority shall keep the Commission informed of all steps taken to recover the due amounts. The Commission may at any time take over the task of recovering the amounts directly either from the beneficiary or from the concerned participating country.

Files transferred to a participating country or to the Commission shall contain all the documents needed for recovery as well as proof of steps taken by the Managing Authority to recover the due amounts.

Contracts concluded by the Managing Authority shall contain a clause allowing the Commission or the participating country in which the beneficiary is established to recover any amounts due to the Managing Authority which the latter was not able to recover.

Any repayment due to the Commission shall be effected before the due date indicated in the recovery order. The due date shall be 45 days from the date of the issuing of the debit note.

Any delay in effecting repayment shall give rise to interest on account of late payment, starting on the due date and ending on the date of actual payment. The rate of such interest shall be three and a half percentage points above the rate applied by the European Central Bank in its main refinancing operations on the first working day of the month in which the due date falls. Amounts to be repaid may be offset against amounts of any kind due to the beneficiary or participating country. This shall not affect the parties' right to agree on payment in instalments.

By 15 February the Managing Authority shall submit an annual report approved by the Joint Monitoring Committee to the Commission. That annual report shall include one technical and one financial part covering the preceding accounting year.

The technical part shall describe:

The financial part shall be prepared in accordance with Article 68(2).

In addition, the annual report shall contain the forecast of activities to be implemented in the following accounting year. It shall include:

By  15 February 2025 the Managing Authority shall submit a final report approved by the Joint Monitoring Committee to the Commission. This final report shall contain mutatis mutandis the information requested under paragraphs 2 and 3 above for the last accounting year and for the entire duration of the programme.

The deadlines set out in paragraphs 1 and 5 may exceptionally be extended by the Commission to 1 March, upon communication by the managing authority concerned.

Programme monitoring and evaluation shall aim at improving the quality of the design and implementation, as well as at assessing and improving its consistency, effectiveness, efficiency and impact. The findings of monitoring and evaluations shall be taken into account in the programming and implementation cycle.

An indicative monitoring and evaluation plan shall be included in the programme for its whole duration. Each programme shall subsequently draw up an annual monitoring and evaluation plan to be carried out by the Managing Authority in accordance with the Commission's guidance and evaluation methodology. The annual plan shall be submitted to the Commission not later than 15 February.

The Managing Authority shall carry out result-oriented programme and project monitoring in addition to the day-to-day monitoring.

The Commission shall have access to all monitoring and evaluation reports.

The Commission can at any moment, launch evaluation or monitoring of the programme or of a part thereof. The results of these exercises, which shall be communicated to the Joint Monitoring Committee and the Managing Authority of the programme, may lead to adjustments in the programme.

The responsibility to ensure that appropriate information is communicated to the public shall lie with both the Managing Authority and the beneficiaries.

The Managing Authority and the beneficiaries shall ensure adequate visibility of the Union contribution to programmes and projects in order to strengthen public awareness of the Union action and create a consistent image of the Union support in all participating countries.

The Managing Authority shall ensure that its visibility strategy and visibility measures undertaken by the beneficiaries comply with the Commission's guidance.

The communication strategy for its whole duration and an indicative information and communication plan for the first year, including visibility measures, shall be included in the programme. Each programme shall subsequently draw up an annual information and communication plan to be carried out by the Managing Authority. That plan shall be submitted to the Commission not later than 15 February.

Participating countries may propose that the programme be managed by an international organisation.

Only international organisations in the sense of Article 43 of Delegated Regulation (EU) No 1268/2012 may be proposed as Managing Authority.

An international organisation shall meet the requirements set out in Article 60 of Regulation (EU) No 966/2012.

Before the Commission adopts a programme it shall obtain evidence that the requirements set out in paragraph 3 are fulfilled.

The Commission and the international organisation shall conclude an agreement detailing the arrangements applicable to the programme. In case the programme makes a contribution to a financial instrument pursuant to Article 42, conditions and reporting requirements set out in Article 140 of Regulation (EU, Euratom) No 966/2012 shall be respected.

The provisions contained in Part Two shall apply to programmes managed by an international organisation unless the agreement referred to in paragraph 1 provides otherwise.

Participating countries may propose that the programme is managed by a CBC partner country.

The nature of the tasks entrusted to the appointed CBC partner country shall be set out in the agreement signed by the Commission and the CBC partner country pursuant to the provisions on indirect management contained in the Regulation (EU, Euratom) No 966/2012 and Delegated Regulation (EU) No 1268/2012.

The agreement referred to in paragraph 2 shall detail the arrangements applicable to the programme. In particular, it shall lay down which provisions of Part Two apply in view of the nature of the tasks entrusted to the Managing Authority and the amounts involved.