Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012

• (26) Article 61 is amended as follows:
• (a) in paragraph 1, the first subparagraph is replaced by the following: ‘1. This Article shall apply to operations which generate net revenue after their completion. For the purposes of this Article, “net revenue” means cash in-flows directly paid by users for the goods or services provided by the operation, such as charges borne directly by users for the use of infrastructure, sale or rent of land or buildings, or payments for services less any operating costs and replacement costs of short-life equipment incurred during the corresponding period. Operating cost-savings generated by the operation, with the exception of cost-savings resulting from the implementation of energy efficiency measures, shall be treated as net revenue unless they are offset by an equal reduction in operating subsidies.’;
• (b) in the first subparagraph of paragraph 3, the following point is inserted:
• ‘(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;’;
• (c) paragraph 5 is replaced by the following: ‘5. As an alternative to the application of the methods laid down in paragraph 3 of this Article, the maximum co-financing rate referred to in Article 60(1) may, at the request of a Member State, be decreased for a priority or measure under which all supported operations could apply a uniform flat rate in accordance with point (a) of the first subparagraph of paragraph 3 of this Article. The decrease shall be not less than the amount calculated by multiplying the maximum Union co-financing rate applicable under the Fund-specific rules by the relevant flat rate referred to in that point.’;
• (d) in the first subparagraph of paragraph 7, point (h) is replaced by the following:
• ‘(h) operations for which amounts or rates of support are defined in Annex II to the EAFRD Regulation or in the EMFF Regulation.’;
• (e) paragraph 8 is replaced by the following: ‘8. In addition, paragraphs 1 to 6 shall not apply to operations for which support under the programme constitutes State aid.’;

• (27) Article 65 is amended as follows:
• (a) the third subparagraph of paragraph 8 is amended as follows:
• (i) Point (h) is replaced by the following:
• ‘(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’;
• (ii) Point (i) is replaced by the following:
• ‘(i) operations for which the total eligible cost does not exceed EUR 100 000 .’;
• (b) paragraph 11 is replaced by the following: ‘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.’;

• (28) Article 67 is amended as follows:
• (a) paragraph 1 is amended as follows:
• (i) point (c) is replaced by the following:
• ‘(c) lump sums;’;
• (ii) the following point is added:
• ‘(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.’;
• (iii) the following subparagraph is added: ‘For the form of financing referred to in point (e) of the first subparagraph, the audit shall exclusively aim at verifying that the conditions for reimbursement have been fulfilled.’;
• (b) the following paragraph is inserted: ‘2a. For an operation or a project not covered by the first sentence of paragraph 4 and which receive support from the ERDF and the ESF, grants and repayable assistance for which the public support does not exceed EUR 100 000 shall take the form of standard scales of unit costs, lump sums or flat rates, except for operations receiving support within the framework of State aid that does not constitute de minimis aid. Where flat-rate financing is used, the categories of costs to which the flat rate is applied may be reimbursed in accordance with point (a) of the first subparagraph of paragraph 1. For operations supported by the EAFRD, ERDF or the ESF, where the flat rate referred to in Article 68b(1) is used, the allowances and the salaries paid to participants may be reimbursed in accordance with point (a) of the first subparagraph of paragraph 1 of this Article. This paragraph shall be subject to the transitional provisions set out in Article 152(7).’;
• (c) paragraph 4 is replaced by the following: ‘4. Where an operation or a project forming a part of an operation is implemented exclusively through the public procurement of works, goods or services, only points (a) and (e) of the first subparagraph of paragraph 1 shall apply. Where the public procurement within an operation or project forming part of an operation is limited to certain categories of costs, all the options referred to in paragraph 1 may be applied for the whole operation or project forming a part of an operation.’;
• (d) paragraph 5 is amended as follows:
• (i) point (a) is replaced by the following:
• ‘(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;’;
• (ii) the following point is inserted:
• ‘(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 ;’;
• (e) the following paragraph is inserted: ‘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.’;

• (29) Article 68 is replaced by the following: ‘Article 68 Flat-rate financing for indirect costs concerning grants and repayable assistance 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. 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.’;

• (30) the following articles are inserted: ‘Article 68a Staff costs concerning grants and repayable assistance

The first subparagraph shall not apply to programmes under the European territorial cooperation goal for staff costs related to individuals who work on a part-time assignment on the operation.

Article 68b

Flat-rate financing for costs other than staff costs

For operations supported by the ESF, the ERDF or the EAFRD, salaries and allowances paid to participants shall be considered additional eligible costs not included in the flat rate.

• (31) Article 70 is replaced by the following: ‘Article 70 Eligibility of operations depending on location

Operations concerning the provision of services to citizens or businesses which cover the whole territory of a Member State shall be considered as being located in all programme areas within a Member State. In such cases, expenditure shall be allocated to the concerned programme areas on a pro-rata basis, based on objective criteria. The second subparagraph of this paragraph does not apply to the national programme referred to in Article 6(2) of Regulation (EU) No 1305/2013 or to the specific programme for the establishment and the operation of the national rural network referred to in Article 54(1) of that Regulation.

(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. 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. Where operations concern the thematic objective referred to in point (1) of the first paragraph of Article 9 and are implemented outside the Member State but within the Union, only points (b) and (d) of the first subparagraph of this paragraph shall apply.

• (32) in Article 71, paragraph 4 is replaced by the following: ‘4. Paragraphs 1, 2 and 3 of this Article shall not apply to contributions to or by financial instruments or for lease purchase under point (b) of Article 45(2) of Regulation (EU) No 1305/2013 nor to any operation which undergoes cessation of a productive activity due to a non-fraudulent bankruptcy.’;

• (33) Article 75 is amended as follows:
• (a) in paragraph 1, the reference to ‘Article 59(5) of the Financial Regulation’ is replaced by ‘Article 63(5), (6) and (7) of the Financial Regulation’;
• (b) the following paragraph is inserted: ‘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. 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. The time limit set out in point (a) of the first subparagraph shall not include the period which starts on the date following the date on which the Commission sends its request for additional information to the Member State and lasts until the Member State responds to that request. This paragraph shall not be applicable to the EAFRD.’;

• (34) in the second paragraph of Article 76, the reference to ‘Article 84(2) of the Financial Regulation’ is replaced by ‘Article 110(1) of the Financial Regulation’;

• (35) in Article 79(2), the reference to ‘Article 68(3) of the Financial Regulation’ is replaced by ‘Article 82(2) of the Financial Regulation’;

• (36) in point (c) of the first subparagraph of Article 83(1), the reference to ‘Article 59(5) of the Financial Regulation’ is replaced by ‘Article 63(5), (6) and (7) of the Financial Regulation’;

• (37) in Article 84, the reference to ‘Article 59(6) of the Financial Regulation’ is replaced by ‘Article 63(8) of the Financial Regulation’;

• (38) in Article 98, paragraph 2 is replaced by the following: ‘2. The ERDF and the ESF may finance, in a complementary manner and subject to a limit of 10 % of Union funding for each priority axis of an operational programme, a part of an operation for which the costs are eligible for support from the other Fund on the basis of rules applied to that Fund, provided that such costs are necessary for the satisfactory implementation of the operation and are directly linked to it.’;

• (39) Article 102 is amended as follows:
• (a) paragraph 6 is replaced by the following: ‘6. Expenditure relating to a major project may be included in a payment application after the submission for approval referred to in paragraph 2. Where the Commission does not approve the major project selected by the managing authority, the declaration of expenditure following the withdrawal of the application by the Member State or the adoption of the Commission decision shall be rectified accordingly.’;
• (b) the following paragraph is added: ‘7. Where the major project is appraised by independent experts pursuant to paragraph 1 of this Article, expenditure relating to that major project may be included in a payment application after the managing authority has informed the Commission of the submission to the independent experts of the information required under Article 101. An independent quality review shall be delivered within six months of the submission of that information to the independent experts. 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.’;

• (40) in Article 104, paragraphs 2 and 3 are replaced by the following: ‘2. The public expenditure allocated to a joint action plan shall be a minimum of EUR 5 000 000 or 5 % of the public support of the operational programme or one of the contributing programmes, whichever is lower.

• (41) in Article 105(2), the second sentence is deleted;

• (42) in Article 106, the first paragraph is amended as follows:
• (a) point (1) is replaced by the following:
• ‘(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;’;
• (b) point (2) is deleted;
• (c) point (3) is replaced by the following:
• ‘(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;’;
• (d) points (6), (7) and (8)are replaced by the following:
• ‘(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;’;
• (e) point (9) is amended as follows:
• (i) point (a) is replaced by 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;’;
• (ii) point (b) is deleted;

• (43) in Article 107, paragraph 3 is replaced by the following: ‘3. The decision referred to in paragraph 2 shall indicate the beneficiary and the objectives of the joint action plan, the milestones, where relevant, and targets for outputs and results, the costs of achieving those milestones and targets for outputs and result, and the financing plan by operational programme and priority axis, including the total eligible amount and the amount of public expenditure, the implementation period of the joint action plan and, where relevant, the geographical coverage and target groups of the joint action plan.’;

• (44) in Article 108(1), the first subparagraph is replaced by the following: ‘1. The Member State or the managing authority shall set up a steering committee for the joint action plan, which may be distinct from the monitoring committee of the relevant operational programmes. The steering committee shall meet at least twice a year and shall report to the managing authority. Where relevant, the managing authority shall inform the relevant monitoring committee of the results of the work carried out by the steering committee and the progress of the implementation of the joint action plan in accordance with point (e) of Article 110(1) and point (a) of Article 125(2).’;

• (45) in Article 109(1), the second sentence is deleted;

• (46) Article 110 is amended as follows:
• (a) in paragraph 1, point (c) is replaced by the following:
• ‘(c) implementation of the communication strategy, including information and communication measures, and of measures to enhance the visibility of the Funds;’;
• (b) in paragraph 2, point (a) is replaced by the following:
• ‘(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);’;

• (47) Article 114 is amended as follows:
• (a) paragraph 1 is replaced by the following: ‘1. An evaluation plan shall be drawn up by the managing authority or a Member State for one or more operational programmes. The evaluation plan shall be submitted to the monitoring committee no later than one year after the adoption of the operational programme. In the cases of dedicated programmes referred to in point (b) of the first subparagraph of Article 39(4) adopted before 2 August 2018, the evaluation plan shall be submitted to the monitoring committee no later than one year after that date.’;
• (b) paragraph 4 is deleted;

• (48) the heading of Chapter II of Title III of Part Three is replaced by the following: ‘Information, communication and visibility’;

• (49) Article 115 is amended as follows:
• (a) the heading is replaced by the following: ‘Information, communication and visibility’;
• (b) in paragraph 1, point (d) is replaced by the following:
• ‘(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.’;
• (c) paragraph 3 is replaced by the following: ‘3. Detailed rules concerning information, communication and visibility for the public and information measures for potential beneficiaries and for beneficiaries are laid down in Annex XII.’;

• (50) in Article 116, paragraph 3 is replaced by the following: ‘3. By way of derogation from the third subparagraph of paragraph 2 of this Article, the managing authority shall inform the monitoring committee or committees responsible at least once a year on the progress in the implementation of the communication strategy as referred to in point (c) of Article 110(1) and on its analysis of the results of that implementation as well as on the information and communication activities and measures to enhance visibility of the Funds that are planned for the following year. The monitoring committee shall give an opinion on the activities and measures planned for the following year, including on ways to increase the effectiveness of communication activities aimed at the public.’;

• (51) in Article 117, paragraph 4 is replaced by the following: ‘4. Union networks comprising the members designated by Member States shall be set up by the Commission to ensure exchange of information on the results of the implementation of the communication strategies, the exchange of experience in implementing the information and communication measures, the exchange of good practices, and to enable joint planning or coordination of communication activities between the Member States and with the Commission where appropriate. The networks shall at least once a year debate and assess the effectiveness of the information and communication measures, and propose recommendations to enhance the outreach and impact of communication activities and to raise awareness about the results and added value of those activities.’;

• (52) Article 119 is amended as follows:
• (a) in paragraph 1, the first subparagraph is replaced by the following: ‘1. The amount of the Funds allocated to technical assistance in a Member State shall be limited to 4 % of the total amount of the Funds allocated to operational programmes under the Investment for growth and jobs goal.’;
• (b) in paragraph 2, the first sentence is deleted;
• (c) paragraph 4 is replaced by the following: ‘4. In the case of the Structural Funds, where the allocations referred to in paragraph 1 are used to support technical assistance operations altogether relating to more than one category of region, the expenditure relating to the operations may be implemented under a priority axis combining different categories of region and attributed on a pro rata basis taking into account either the respective allocations to the different categories of regions of the operational programme or the allocation under each category of region as a share of the total allocation to the Member State.’;
• (d) the following paragraph is inserted: ‘5a. The assessment of the respect of the percentages shall be carried out at the time of adoption of the operational programme.’;

• (53) in Article 122(2), the fourth subparagraph is replaced by the following: ‘When amounts unduly paid to a beneficiary for an operation cannot be recovered and this is as a result of fault or negligence on the part of a Member State, that Member State shall be responsible for reimbursing the amounts concerned to the budget of the Union. Member States may decide not to recover an amount unduly paid if the amount to be recovered from the beneficiary, not including interest, does not exceed EUR 250 in contribution from the Funds to an operation in an accounting year.’;

• (54) in Article 123(5), the first subparagraph is replaced by the following: ‘5. In the case of the Funds and in the case of the EMFF, provided that the principle of separation of functions is respected, the managing authority, the certifying authority, where applicable, and the audit authority may be part of the same public authority or body.’;

• (55) Article 125 is amended as follows:
• (a) in paragraph 3, point (c) is replaced by the following:
• ‘(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;’;
• (b) the first subparagraph of paragraph 4 is amended as follows:
• (i) point (a) is replaced by the following:
• ‘(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;’;
• (ii) in point (e), the reference to ‘points (a) and (b) of Article 59(5) of the Financial Regulation’ is replaced by ‘points (a) and (b) of Article 63(5) and Article 63(6) and (7) of the Financial Regulation’;

• (56) in point (b) of Article 126, the reference to ‘point (a) of Article 59(5) of the Financial Regulation’ is replaced by ‘point (a) of Article 63(5) and Article 63(6) of the Financial Regulation’;

• (57) Article 127 is amended as follows:
• (a) in the third subparagraph of paragraph 1, the reference to ‘the second subparagraph of Article 59(5) of the Financial Regulation’ is replaced by ‘Article 63(7) of the Financial Regulation’;
• (b) in point (a) of the first subparagraph of paragraph 5, the reference to ‘the second subparagraph of Article 59(5) of the Financial Regulation’ is replaced by ‘Article 63(7) of the Financial Regulation’;

• (58) Article 131 is replaced by the following: ‘Article 131 Payment applications

(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.

(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.

(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.

• (59) in Article 137(1), the reference to ‘point (a) of Article 59(5) of the Financial Regulation’ is replaced by ‘point (a) of Article 63(5) and Article 63(6) of the Financial Regulation’;

• (60) in Article 138, the reference to ‘Article 59(5) of the Financial Regulation’ is replaced by ‘Article 63(5), and the second subparagraph of Article 63(7), of the Financial Regulation’;

• (61) in Article 140(3), the following sentence is added: ‘Where documents are kept on commonly accepted data carriers in accordance with the procedure laid down in paragraph 5, no originals shall be required.’;

• (62) in point (a) of the second subparagraph of Article 145(7), the reference to ‘Article 59(5) of the Financial Regulation’ is replaced by ‘Article 63(5), (6) and (7) of the Financial Regulation’;

• (63) in Article 147(1), the reference to ‘Article 78 of the Financial Regulation’ is replaced by ‘Article 98 of the Financial Regulation’;

• (64) in Article 148, paragraph 1 is replaced by the following: ‘1. Operations for which the total eligible expenditure does not exceed EUR 400 000 for the ERDF and the Cohesion Fund, EUR 300 000 for the ESF or EUR 200 000 for the EMFF shall not be subject to more than one audit by either the audit authority or the Commission prior to the submission of the accounts for the accounting year in which the operation is completed. Other operations shall not be subject to more than one audit per accounting year by either the audit authority or the Commission prior to the submission of the accounts for the accounting year in which the operation is completed. Operations shall not be subject to an audit by the Commission or the audit authority in any year if there has already been an audit in that year by the European Court of Auditors, provided that the results of the audit work performed by the European Court of Auditors for such operations can be used by the audit authority or the Commission for the purpose of fulfilling their respective tasks. By derogation from the first subparagraph, operations for which the total eligible expenditure is between EUR 200 000 and EUR 400 000 for the ERDF and the Cohesion Fund, between EUR 150 000 and EUR 300 000 for the ESF and between EUR 100 000 and EUR 200 000 for the EMFF may be subject to more than one audit, if the audit authority concludes, based on its professional judgment, that it is not possible to issue or draw up an audit opinion on the basis of statistical or non-statistical sampling methods referred to in Article 127(1) without carrying out more than one audit of the respective operation.’;

• (65) Article 149 is amended as follows:
• (a) paragraphs 2 and 3 are replaced by the following: ‘2. The power to adopt delegated acts referred to in Article 5(3), the second paragraph of Article 12, the fourth subparagraph of Article 22(7), Article 37(13), the third subparagraph of Article 38(4), Article 39a(7), Article 40(4), Article 41(3), the second subparagraph of Article 42(1), Article 42(6), the second, third, fourth and seventh subparagraphs of Article 61(3), Articles 63(4), 64(4) and 67(5a), the second paragraph of Article 68, the fourth paragraph of Article 101, the fifth subparagraph of Article 122(2), the first subparagraph of Article 125(8), Article 125(9), Article 127(7) and (8), and Article 144(6) shall be conferred on the Commission from 21 December 2013 until 31 December 2020.

• (b) the following paragraph is inserted: ‘3a. Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making.’;
• (c) paragraphs 5 is replaced by the following: ‘5. A delegated act adopted pursuant to Article 5(3), the second paragraph of Article 12, the fourth subparagraph of Article 22(7), Article 37(13), the third subparagraph of Article 38(4), Articles 39a(7), 40(4) and 41(3), the second subparagraph of Article 42(1), Article 42(6), the second, third, fourth and seventh subparagraphs of Article 61(3),Articles 63(4), 64(4) and 67(5a), the second paragraph of Article 68, the fourth paragraph of Article 101, the fifth subparagraph of Article 122(2), the first subparagraph of Article 125(8), Article 125(9), Article 127(7) and (8), and Article 144(6) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and to the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.’;

• (66) In Article 152, the following paragraph is added: ‘7. The managing authority, or the monitoring committee for the programmes under the European territorial cooperation goal, may decide not to apply Article 67(2a) for a maximum period of 12 months starting from 2 August 2018. Where the managing authority, or the monitoring committee for the programmes under the European territorial cooperation goal, considers that Article 67(2a) creates a disproportionate administrative burden, it may decide to extend the transitional period referred to in the first subparagraph of this paragraph for a period it considers appropriate. It shall notify the Commission of such decision before the expiration of the initial transitional period. The first and second subparagraphs do not apply to grants and repayable assistance supported by the ESF for which the public support does not exceed EUR 50 000 .’;

• (67) Annex IV is amended as follows:
• (a) Section 1 is amended as follows:
• (i) the introductory part is replaced by the following:
• ‘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:’;
• (ii) point (f) is replaced by the following:
• ‘(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);’;
• (iii) point (i) is replaced by the following:
• ‘(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;’;
• (b) Section 2 is amended as follows:
• (i) the introductory part is replaced by the following:
• ‘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:’;
• (ii) point (c) is replaced by the following:
• ‘(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;’;

• (68) Annex XII is amended as follows:
• (a) the heading of Annex XII is replaced by the following: ‘INFORMATION, COMMUNICATION AND VISIBILITY OF SUPPORT FROM THE FUNDS’;
• (b) The heading of section 2 is replaced by the following: INFORMATION AND COMMUNICATION MEASURES AND MEASURES TO ENHANCE VISIBILITY FOR THE PUBLIC’;
• (c) subsection 2.1 is amended as follows:
• (i) point 1 is replaced by the following:
• ‘1. The Member State and the managing authority shall ensure that the information and communication measures are implemented in accordance with the communication strategy, in order to improve visibility and interaction with citizens, and that those measures aim for the widest possible media coverage using various forms and methods of communication at the appropriate level and adapted, as appropriate, to technological innovation.’;
• (ii) in point 2, points (e) and (f) are replaced by the following:
• ‘(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.’;
• (d) subsection 2.2 is amended as follows:
• (i) in point 1, the introductory part is replaced by the following:
• ‘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:’;
• (ii) the following point is added:
• ‘6. The responsibilities laid down in this subsection shall apply 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).’;
• (e) in point 2 of subsection 3.1, point (f) is replaced by the following:
• ‘(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.’;
• (f) in subsection 4, point (i) is replaced by the following:
• ‘(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.’.

Article 273

Amendments to Regulation (EU) No 1304/2013

Regulation (EU) No 1304/2013 is amended as follows:

• (1) in Article 13(2), the following subparagraph is added: ‘Where operations falling under point (a) of the first subparagraph also have a benefit for the programme area in which they are implemented, expenditure shall be allocated to those programme areas on a pro rata basis based on objective criteria.’;

• (2) Article 14 is amended as follows:
• (a) the following paragraph is inserted: ‘-1. The general rules applicable to simplified cost options under the ESF are set out in Articles 67, 68, 68a and 68b of Regulation (EU) No 1303/2013.’;
• (b) paragraphs 2, 3 and 4 are deleted;

• (3) in Annex I, point 1 is replaced by the following:
• ‘(1) Common output indicators for participants “Participants” ([^E0034]) refers to persons benefiting directly from an ESF intervention who can be identified and asked for their characteristics, and for whom specific expenditure is earmarked. Other persons shall not be classified as participants. All data shall be broken down by gender. The common output indicators for participants are:
• — unemployed, including long-term unemployed*,
• — long-term unemployed*,
• — inactive*,
• — inactive, not in education or training*,
• — employed, including self-employed*,
• — below 25 years of age*
• — above 54 years of age*,
• — above 54 years of age who are unemployed, including long-term unemployed, or inactive not in education or training*,
• — with primary (ISCED 1) or lower secondary education (ISCED 2)*,
• — with upper secondary (ISCED 3) or post-secondary education (ISCED 4)*,
• — with tertiary education (ISCED 5 to 8)*,
• — migrants, participants with a foreign background, minorities (including marginalised communities such as the Roma)**,
• — participants with disabilities**,
• — other disadvantaged**. The total number of participants will be calculated automatically on the basis of the output indicators. These data on participants entering an ESF supported operation shall be provided in the annual implementation reports as specified in Article 50(1) and (2) and Article 111(1) of Regulation (EU) No 1303/2013. The following data on participants will be provided in the annual implementation reports as specified in Article 50 of Regulation (EU) No 1303/2013:
• — homeless or affected by housing exclusion*,
• — from rural areas* ([^E0035]) The data of those two indicators shall be collected based on a representative sample of participants within each investment priority. Internal validity shall be ensured in such a way that the data can be generalised at the level of the investment priority.

Article 274

Amendments to Regulation (EU) No 1309/2013

Regulation (EU) No 1309/2013 is amended as follows:

• (1) in recital 24, the first sentence is replaced by the following: ‘The Member States should remain responsible for the implementation of the financial contribution and for the management and control of the actions supported by Union funding, in accordance with the relevant provisions of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council ([^E0036]) (the “Financial Regulation”).

• (2) in Article 4, paragraph 2 is replaced by the following: ‘2. In small labour markets or in exceptional circumstances, in particular with regard to collective applications involving SMEs, where duly substantiated by the applicant Member State, an application for a financial contribution under this Article may be considered admissible even if the criteria laid down in point (a) or (b) of paragraph 1 are not entirely met, when the redundancies have a serious impact on employment and the local, regional or national economy. The applicant Member State shall specify which of the intervention criteria set out in points (a) and (b) of paragraph 1 are not entirely met. For collective applications involving SMEs located in one region, where the applicant Member State demonstrates that SMEs are the main or the only type of business in that region, the application may exceptionally cover SMEs operating in different economic sectors defined at NACE Revision 2 division level. The aggregated amount of contributions in exceptional circumstances may not exceed 15 % of the annual maximum amount of the EGF.’;

• (3) in Article 6, paragraph 2 is replaced by the following: ‘2. By way of derogation from Article 2, applicant Member States may provide personalised services co-financed by the EGF to up to a number of NEETs under the age of 25, or where Member States so decide under the age of 30, on the date of submission of the application, equal to the number of targeted beneficiaries, as a priority to persons made redundant or whose activity has ceased, provided that at least some of the redundancies within the meaning of Article 3 occur in NUTS 2 level regions that had youth unemployment rates for young persons aged 15 to 24 of at least 20 % based on the latest annual data available. The support may be rendered to NEETs under the age of 25, or where Member States so decide under the age of 30, in those NUTS 2 level regions.’;

• (4) in Article 11, paragraph 3 is replaced by the following: ‘3. The tasks set out in paragraph 1 shall be performed in accordance with the Financial Regulation.’;

• (5) in Article 15, paragraph 4 is replaced by the following: ‘4. Where the Commission has concluded that the conditions for providing a financial contribution from the EGF are met, it shall submit a proposal to mobilise it. The decision to mobilise the EGF shall be taken jointly by the European Parliament and by the Council within one month of the referral to the European Parliament and to the Council. The Council shall act by a qualified majority and the European Parliament shall act by a majority of its component members and three fifths of the votes cast. Transfers related to the EGF shall be made in accordance with Article 31 of the Financial Regulation, in principle within a period of no more than seven days from the date of adoption of the relevant decision by the European Parliament and by the Council.’;

• (6) in Article 16(2), the reference to ‘Article 59 of the Financial Regulation’ is replaced by ‘Article 63 of the Financial Regulation’;

• (7) in Article 21(2), the reference to ‘Article 59(3) of the Financial Regulation’ is replaced by ‘Article 63(3) of the Financial Regulation’ and the reference to ‘Article 59(5) of the Financial Regulation’ is replaced by ‘Article 63(5) of the Financial Regulation’.

Article 275

Amendments to Regulation (EU) No 1316/2013

Regulation (EU) No 1316/2013 is amended as follows:

• (1) the following chapter is inserted: ‘CHAPTER Va Blending

Article 16a

CEF blending facilities

In addition to the threshold set out in the first subparagraph, in the transport sector the overall contribution from the Union budget to CEF blending facilities shall not exceed EUR 500 000 000 . If 10 % of the overall financial envelope for the implementation of the CEF referred to in Article 5(1) is not fully used for CEF blending facilities and/or financial instruments, the remaining amount shall be made available for and redistributed to that financial envelope.

(a) represent European added value; (b) respond to the objectives of the Europe 2020 Strategy; (c) contribute, where possible, to climate change mitigation and adaptation.

• (2) in Article 17(3), the second subparagraph is replaced by the following: ‘The amount of the financial envelope shall lie within a range of 80 % to 95 % of the budgetary resources referred to in point (a) of Article 5(1).’;

• (3) in Article 22, the fourth paragraph is replaced by the following: ‘The certification of the expenditure referred to in the second paragraph of this Article is not mandatory for grants awarded on the basis of Regulation (EU) No 283/2014.’.

Article 276

Amendments to Regulation (EU) No 223/2014

Regulation (EU) No 223/2014 is amended as follows:

• (1) in Article 9, the following paragraph is added: ‘4. Paragraphs 1, 2 and 3 do not apply for the purposes of modifying elements of an operational programme falling under sub-sections 3.5 and 3.6 and section 4, respectively, of the operational programme templates set out in Annex I. A Member State shall notify the Commission of any decision to modify the elements referred to in the first subparagraph within one month of the date of that decision. The decision shall specify the date of its entry into force, which shall not be earlier than the date of its adoption.’;

• (2) in Article 23, paragraph 6 is replaced by the following: ‘6. An operation may receive support from one or more operational programmes co-financed by the Fund and from other Union instruments, provided that the expenditure declared in a payment application for the Fund is not declared for support from another Union instrument, or support from the same Fund under another programme. The amount of expenditure to be entered into a payment application of the Fund may be calculated for the programme or programmes concerned on a pro rata basis in accordance with the document setting out the conditions for support.’;

• (3) in Article 25(3), the following point is added:
• ‘(e) rules for the application of corresponding unit costs, lump sums and flat rates applicable under Union policies for a similar type of operation and beneficiary.’;

• (4) Article 26 is amended as follows:
• (a) in paragraph 2, points (d) and (e) are replaced by the following:
• ‘(d) the costs of partner organisations for collection, transport, storage and distribution of food donations and directly related awareness raising activities;
• (e) the costs of accompanying measures undertaken and declared by the partner organisations delivering directly or under cooperation agreements the food and/or basic material assistance to the most deprived persons at a flat-rate of 5 % of the costs referred to in point (a) of this paragraph; or 5 % of the value of the food products disposed of in accordance with Article 16 of Regulation (EU) No 1308/2013.’;
• (b) the following paragraph is inserted: ‘3a. Notwithstanding paragraph 2, a reduction of the eligible costs referred to in point (a) of paragraph 2 due to non-compliance with applicable law by the body responsible for the purchase of food and/or basic material assistance shall not lead to a reduction of the eligible costs of other bodies as set out in points (c) and (e) of paragraph 2.’;

• (5) in Article 27, paragraph 4 is replaced by the following: ‘4. At the initiative of the Member States, and subject to a ceiling of 5 % of the Fund allocation at the time of the adoption of the operational programme, the operational programme may finance preparation, management, monitoring, administrative and technical assistance, audit, information, control and evaluation measures necessary for implementing this Regulation. It may also finance technical assistance and capacity building of partner organisations.’;

• (6) in Article 30(2), the fourth subparagraph is replaced by the following: ‘When amounts unduly paid to a beneficiary for an operation cannot be recovered and this is as a result of fault or negligence on the part of a Member State, that Member State shall be responsible for reimbursing the amounts concerned to the budget of the Union. Member States may decide not to recover an amount unduly paid if the amount to be recovered from the beneficiary, not including interest, does not exceed EUR 250 in contribution from the Fund to an operation in an accounting year.’;

• (7) in Article 32(4), point (a) is replaced by the following:
• ‘(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 Article 25(1), that the amount of expenditure declared by the beneficiaries in relation to those costs has been paid;
• (ii) where costs are to be reimbursed pursuant to points (b), (c) and (d) of Article 25(1), that the conditions for reimbursement of expenditure to the beneficiary have been met;’;

• (8) in Article 42, paragraph 3 is replaced by the following: ‘3. The payment deadline referred to in paragraph 2 may be suspended 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 Article 32(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 suspension and the reasons for it. The remaining time allowed for payment shall begin to run again from the date on which the requested information or documents are received or the investigation has been carried out.’;

• (9) in Article 51, paragraph 3 is replaced by the following: ‘3. The documents shall be kept either in the form of the originals, or certified true copies of the originals, or on commonly accepted data carriers including electronic versions of original documents or documents existing in electronic version only. Where documents are kept on commonly accepted data carriers in accordance with the procedure laid down in paragraph 5, no originals shall be required.’.

Article 277

Amendments to Regulation (EU) No 283/2014

Regulation (EU) No 283/2014 is amended as follows:

• (1) in Article 2(2), point (e) is replaced by the following:
• ‘(e) “generic services” means gateway services linking one or more national infrastructures to core service platforms as well as services increasing the capacity of a digital service infrastructure by providing access to high performance computing, storage and data management facilities;’;

• (2) Article 5 is amended as follows:
• (a) paragraph 4 is replaced by the following: ‘4. Actions contributing to projects of common interest in the field of digital service infrastructures shall be supported by: (a) procurement; (b) grants; and/or (c) financial instruments as provided for in paragraph 5.’;
• (b) the following paragraph is inserted: ‘4a. The overall contribution from the Union budget to financial instruments for digital service infrastructures referred to in point (c) of paragraph 4 of this Article shall not exceed 10 % of the financial envelope for the telecommunications sector referred to in point (b) of Article 5(1) of Regulation (EU) No 1316/2013.’;

• (3) in Article 8, paragraph 1 is replaced by the following: ‘1. On the basis of information received under the third paragraph of Article 22 of Regulation (EU) No 1316/2013, Member States and the Commission shall exchange information and best practices about the progress made in the implementation of this Regulation, including the use of financial instruments. Where appropriate, Member States shall involve local and regional authorities in the process. The Commission shall publish a yearly overview of that information and submit it to the European Parliament and to the Council.’.

Article 278

Amendment to Decision No 541/2014/EU

In Article 4 of Decision No 541/2014/EU of the European Parliament and of the Council, the following paragraph is added:

‘3. Funding programmes established by Regulations (EU) No 377/2014 and (EU) No 1285/2013 and by Decision 2013/743/EU may contribute to the financing of the actions referred to in paragraph 1 of this Article, within the scope of those programmes and in conformity with their aims and objectives. Such contributions shall be spent in compliance with Regulation (EU) No 377/2014. The Commission shall before the end of the Multiannual Financial Framework 2014-2020 assess the new simplified financial rules pursuant to this paragraph and their contribution to the objectives of the SST support framework.’.

PART THREE

FINAL AND TRANSITIONAL PROVISIONS

Article 279

Transitional provisions

Article 280

Review

This Regulation shall be reviewed whenever it proves necessary to do so and in any case at the latest two years before the end of each multiannual financial framework.

Such review shall cover, inter alia, the implementation of Titles VIII and X of Part One and the deadlines set out in Article 259.

Article 281

Repeal

Article 282

Entry into force and application

• (a) Article 271(1)(a), Article 272(2), Article 272(10)(a), Article 272(11)(b)(i), (c), (d) and (e), Article 272(12)(a), (b)(i) and (c), Article 272(14)(c), Article 272(15), (17), (18), (22) and (23), Article 272(26)(d), Article 272(27)(a)(i), Article 272(53), and (54), Article 272(55)(b)(i), Article 273(3), Article 276(2) and Article 276(4)(b) shall apply from 1 January 2014;

• (b) Article 272(11)(a) and (f), Article 272(13), Article 272(14)(b), Article 272(16), Article 272(19)(a) and Article 274(3) shall apply from 1 January 2018;

• (c) Articles 6 to 60, 63 to 68, 73 to 207, 241 to 253 and 264 to 268 shall apply from 1 January 2019 as regards the implementation of the administrative appropriations of Union institutions; this is without prejudice to point (h) of this paragraph;

• (d) point (4) of Article 2, Articles 208 to 211 and Article 214(1) shall apply to budgetary guarantees and financial assistance only as from the date of application of the post-2020 multiannual financial framework;

• (e) Article 250 shall apply to budgetary guarantees, financial assistance and contingent liabilities only as from the date of application of the post-2020 multiannual financial framework;

• (f) point (6) of Article 2, Article 21(3)(f), Article 41(4)(l), Articles 62(2), 154(1) and (2), 155(1) to (4) and Article 159 shall apply to budgetary guarantees only as from the date of application of the post-2020 multiannual financial framework;

• (g) points (9), (15), (32) and (39) of Article 2, Article 30(1)(g), Article 41(5), Articles 110(3)(h) and 115(2)(c), Articles 212 and 213, Article 214(2) and Articles 218, 219 and 220 shall apply only as from the date of application of the post-2020 multiannual financial framework;

• (h) the information on the annual average of full-time equivalents referred to in Article 41(3)(b)(iii) and the information on the estimated amount of assigned revenue carried over from preceding years referred to in Article 41(8)(b) shall be provided for the first time together with the draft budget to be presented in 2021.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

ANNEX I

CHAPTER 1

Common provisions

SECTION 1

Framework contracts and publicity

1. Framework contracts and specific contracts