Regulation (EU) 2021/1059 of the European Parliament and of the Council of 24 June 2021 on specific provisions for the European territorial cooperation goal (Interreg) supported by the European Regional Development Fund and external financing instruments

REGULATION (EU) 2021/1059 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 24 June 2021 on specific provisions for the European territorial cooperation goal (Interreg) supported by the European Regional Development Fund and external financing instruments

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 178, Articles 209(1) and 212(2) and Article 349 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee (1),

Having regard to the opinion of the Committee of the Regions (2),

Acting in accordance with the ordinary legislative procedure (3),

Whereas:

(1) Article 176 of the Treaty on the Functioning of the European Union (TFEU) provides that the European Regional Development Fund (ERDF) is intended to help to redress the main regional imbalances in the Union. Pursuant to that Article and to the second and third paragraphs of Article 174 TFEU, the ERDF is to contribute to reducing disparities between the levels of development of the various regions and the backwardness of the least-favoured regions, among which particular attention is to be paid to certain categories of regions, including a specific reference to cross-border regions.

(2) Regulation (EU) 2021/1060 of the European Parliament and of the Council (4) sets out provisions common to the ERDF and certain other funds and Regulation (EU) 2021/1058 of the European Parliament and of the Council (5) sets out provisions concerning the specific objectives and the scope of the ERDF support. It is also necessary to adopt specific provisions concerning the European territorial cooperation goal (Interreg) where one or more Member States and their regions and, where relevant, partner countries and third countries cooperate across borders with regard to effective programming, including provisions on technical assistance, monitoring, evaluation, communication, eligibility, management and control and financial management.

(3) The promotion of Interreg is a major priority of Union cohesion policy. Support for small and medium-sized enterprises for costs incurred in European territorial cooperation (ETC) projects is already block-exempted pursuant to Commission Regulation (EU) No 651/2014 (6) and special provisions in relation to regional aid for investments by undertakings of all sizes are also included in the regional aid section of that Regulation and in the Commission Guidelines on regional State aid for 2014-2020. Taking into account the 30 years’ experience gained, and given the low financial value of projects and the unlikely negative impact on trade and competition, on the one hand, and the high added value brought by the existing programmes to territorial cohesion in Europe, on the other, the scope of the State aid rules with regard to public financing of ETC projects is expected to be further clarified through future amendment of Regulation (EU) No 651/2014, thereby largely exempting the public financing of Interreg projects from the obligation of prior notification and greatly facilitating the implementation of those projects.

(4) In order to support the harmonious development of the Union’s territory at different levels, the ERDF should support cross-border cooperation, transnational cooperation, interregional cooperation and outermost regions’ cooperation under Interreg goal. In the process, the principles of partnership and multi-level governance should be taken into account, while ensuring that the scale of partnership for a programme remains effective.

(5) Reflecting the importance of tackling climate change in line with the Union’s commitments to implement the Paris Agreement adopted under the United Nations Framework Convention on Climate Change and to achieve the United Nations Sustainable Development Goals, the Funds will contribute to mainstream climate actions and to the achievement of an overall target of 30 % of Union budget expenditure supporting climate objectives. In that context the Funds should support activities that respect the climate and environmental standards and that would do no significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852 of the European Parliament and of the Council (7).

(6) The cross-border cooperation strand should aim to tackle common challenges identified jointly in the border regions, and to exploit the untapped growth potential in border areas as evidenced in the Commission communication of 20 September 2017 entitled ‘Boosting Growth and Cohesion in EU Border Regions’ (‘Border Regions Communication’). As a result, the programme areas for cross-border cooperation should be identified as those regions and areas on the border or separated by a maximum of 150 km of sea where cross-border interaction may effectively take place or in which functional areas can be identified, without prejudice to potential adjustments needed to ensure the coherence and continuity of cooperation programme areas.

(7) The cross-border cooperation strand should also involve cooperation between one or more Member States or their regions, and one or more countries or regions, or other territories outside the Union. Covering internal and external cross-border cooperation under this Regulation should result in a major simplification and streamlining of applicable provisions for the programme authorities in Member States and for the partner authorities and beneficiaries outside the Union compared to the 2014-2020 programming period.

(8) The transnational cooperation strand should aim to strengthen cooperation by means of actions conducive to integrated territorial development linked to the Union’s priorities, in full respect of subsidiarity. Transnational cooperation should cover larger territories on the mainland of the Union and around sea basins with maximum flexibility to ensure the coherence and continuity of cooperation programmes, including previous external maritime cross-border cooperation within a larger maritime cooperation framework, in particular by defining the territory covered, the specific objectives for such cooperation, the requirements for a project partnership and the possibility to set up sub-programmes and specific steering committees.

(9) Based on the experience with cross-border and transnational cooperation during the 2014-2020 programming period in outermost regions, where the combination of both strands within a single programme per cooperation area has not brought about sufficient simplification for programme authorities and beneficiaries, a specific outermost regions’ strand should be established in order to enable outermost regions to cooperate with their neighbouring countries and territories in the most effective and simple way. Under that strand, calls for proposals could be launched for combined funding under the ERDF, the Neighbourhood, Development and International Cooperation Instrument (NDICI) established by Regulation (EU) 2021/947 of the European Parliament and of the Council (8) and the Overseas Association Decision (OAD) established by Council Decision 2013/755/EU (9), through management modes to be agreed upon between participating Member States and regions and third countries.

(10) Based on the experience with the interregional cooperation programmes under Interreg, the interregional cooperation strand should focus on boosting the effectiveness of cohesion policy through four specific programmes: a programme to enable the exchange of experiences, innovative approaches and capacity building focusing on policy objectives and the Interreg-specific objective ‘a better cooperation governance’, in relation to the identification, dissemination and transfer of good practices into regional development policies including Investment for jobs and growth goal programmes; a programme dedicated to the exchange of experiences and capacity building in relation to the identification, transfer and capitalisation of good practices on integrated and sustainable urban development, taking into account the linkages between urban and rural areas including support to actions developed in the framework of Article 11 of Regulation (EU) 2021/1058, complementing and being coordinated with the initiative outlined in Article 12 thereof; a programme for the exchange of experiences, innovative approaches and capacity building with a view to harmonising and simplifying the implementation of Interreg programmes, to harmonising and simplifying cooperation actions referred in point (d) (vi) of Article 22(3) of Regulation (EU) 2021/1060, and supporting the setting-up, functioning and use of European groupings of territorial cooperation (‘EGTCs’) already set up or to be set up pursuant to Regulation (EC) No 1082/2006 of the European Parliament and of the Council (10) as well as macro-regional strategies; and a programme to improve the analysis of development trends. The four programmes under the interregional cooperation strand should cover the whole Union and should also be open for the participation of third countries.

(11) Common objective criteria for designating eligible regions and areas should be established. To that end, the identification of eligible regions and areas at Union level should be based on the common system of classification of the regions established by Regulation (EC) No 1059/2003 of the European Parliament and of the Council (11).

(12) It is necessary to continue supporting or, as appropriate, to establish cooperation in all its dimensions with the Union’s neighbouring third countries, as such cooperation is an important regional development policy tool and should benefit the regions of the Member States which border third countries. To that effect, the ERDF and the external financing instruments of the Union, the Instrument for Pre-Accession Assistance (IPA III) established by a Regulation of the European Parliament and of the Council establishing the Instrument for Pre-accession Assistance (IPA III) (the ‘IPA III Regulation’), NDICI and OAD should support programmes under cross-border cooperation, transnational cooperation, interregional cooperation and outermost regions’ cooperation. The support from the ERDF and from the external financing instruments of the Union should be based on reciprocity and proportionality. However, for IPA III funds allocated to cross-border cooperation (‘IPA III-CBC’) and NDICI funds allocated to cross-border cooperation for the neighbourhood geographic area (‘NDICI-CBC’), the ERDF support should be complemented by at least equivalent amounts under IPA III-CBC and NDICI-CBC, subject to a maximum amount set out in the respective legal act.

(13) IPA III assistance is to mainly focus on assisting the IPA III beneficiaries to strengthen democratic institutions and the rule of law, reform the judiciary and public administration, respect fundamental rights and promote gender equality, tolerance, social inclusion and non-discrimination as well as regional and local development. IPA III assistance is to continue to support the efforts of the IPA III beneficiaries to advance regional, macro-regional and cross-border cooperation as well as territorial development, including through the implementation of Union macro-regional strategies. In addition, IPA III assistance is to address security, migration and border management, ensuring access to international protection, sharing relevant information, enhancing border control and pursuing common efforts in the fight against irregular migration and migrant smuggling.

(14) With regard to NDICI assistance, the Union should develop a special relationship with neighbouring countries, aiming to establish an area of prosperity and good neighbourliness, founded on the values of the Union and characterised by close and peaceful relations based on cooperation. This Regulation should therefore support internal and external aspects of relevant macro-regional strategies. Those initiatives are strategically important and offer meaningful political frameworks for deepening relations with and among partner countries, based on the principles of mutual accountability, shared ownership and responsibility.

(15) It is important to continue observing the role of the European External Action Service as established in Council Decision 2010/427/EU (12) and that of the Commission in the preparation of the strategic programming and of Interreg programmes supported by the ERDF and the NDICI.

(16) In view of the specific situation of outermost regions of the Union, it is necessary to adopt measures concerning the improvement of conditions under which those regions are able to have access to structural funds. Consequently, certain provisions of this Regulation should be adapted to the specificities of the outermost regions of the Union in order to simplify and foster their cooperation with overseas countries and territories (‘OCTs’) and third countries, while taking into account the Commission communication of 24 October 2017 entitled ‘A stronger and renewed strategic partnership with the EU’s outermost regions’. It should be possible for that cooperation to be carried out in close partnership with regional integration and cooperation organisations.

(17) This Regulation should lay down the possibility of the OCTs to participate in Interreg programmes. The specificities and challenges of the OCTs should be taken into consideration in order to facilitate their effective access and participation.

(18) It is necessary to set out the resources allocated to each of the different strands of Interreg, including each Member State’s share of the global amounts for cross-border cooperation, transnational cooperation, outermost regions’ cooperation and the potential available to Member States concerning flexibility between those strands.

(19) For the most efficient use of the support from the ERDF and the external financing instruments of the Union, a mechanism should be set up to organise the return of such support in cases where external cooperation programmes cannot be adopted or have to be discontinued, including with third countries which do not receive support from any financing instrument of the Union. That mechanism should seek to achieve optimal functioning of the programmes and the maximum possible coordination between those instruments.

(20) The ERDF should contribute, under Interreg, to the specific objectives under the cohesion policy objectives. However, the list of the specific objectives under the different policy objectives should be adapted to the specific needs of Interreg in order to allow for ESF-type interventions, according to points (a) to (l) of Article 4(1) of Regulation (EU) 2021/1057 of the European Parliament and of the Council (13) through joint actions under Interreg programmes.

(21) Within the context of the unique and specific circumstances on the island of Ireland, and with a view to supporting North-South cooperation under the Good Friday Agreement, a PEACE PLUS cross-border programme is to continue and build on the work of previous programmes between the border counties of Ireland and Northern Ireland. Taking into account its practical importance, it is necessary to ensure that, where that programme is acting in support of peace and reconciliation, the ERDF should also contribute to promoting social, economic and regional stability and cooperation in the regions concerned, in particular through actions that promote cohesion between communities. Given the specificities of that programme, it should be managed in an integrated manner with the United Kingdom contribution being integrated into that programme as external assigned revenue. Furthermore, certain rules on the selection of operations in this Regulation should not apply to that programme in relation to operations in support of peace and reconciliation.

(22) This Regulation should add two Interreg-specific objectives: an objective to support strengthening institutional capacity, enhancing legal and administrative cooperation, in particular where linked to implementation of the Border Regions Communication, intensify cooperation between citizens and institutions and the development and coordination of macro-regional and sea-basin strategies, build up mutual trust, in particular by encouraging people-to-people actions; and a second objective to address cooperation issues on safety, security, border crossing management and migration.

(23) The major part of the Union support should be concentrated on a limited number of policy objectives in order to maximise the impact of Interreg. Synergies and complementarities between the strands of Interreg should be strengthened.

(24) Provisions on the preparation, approval and amendment of Interreg programmes as well as on territorial development, on the selection of operations, on monitoring and evaluation, on the programme authorities, on audit of operations, and on transparency and communication should be adapted to the specificities of Interreg programmes compared to the provisions set out in Regulation (EU) 2021/1060. Those specific provisions should be kept simple and clear in order to avoid gold-plating and additional administrative burdens for Member States and beneficiaries.

(25) The provisions on the criteria for operations to be considered as genuinely joint and cooperative, on the partnership within an Interreg operation and on the obligations of the lead partner as set out during the 2014-2020 programming period should be continued. Interreg partners should cooperate in development and implementation as well as in staffing or financing, or both, and under outermost regions’ cooperation, in two out of four of these cooperation dimensions, as it should be simpler to combine support from the ERDF and external financing instruments from the Union both on the level of programmes and operations.

(26) Under cross-border cooperation programmes, people-to-people and small-scale projects are important and successful instruments, with high European added value, for eliminating border and cross border obstacles, fostering contacts between people locally and, bringing border regions and their citizens closer together. So far they have been supported via small-project funds or similar instruments, although they have never been covered by specific provisions, making it necessary to clarify the rules governing those funds. In order to maintain the added value and advantages of people-to-people and small-scale projects, also with regard to local and regional development, and to simplify the management of the financing of small projects by the final recipients who are often not used to applying for Union funds, the use of simplified cost options and of lump sums should be made obligatory below a certain threshold.

(27) Due to the involvement of more than one Member State, and the resulting higher administrative costs, including for regional points of contact also known as ‘antennae’, which are important points of contact for those proposing and implementing projects, and therefore function as a direct line to the joint secretariats or the relevant authorities, but in particular in respect of controls and translation, the ceiling for technical assistance expenditure should be higher than that under the Investment for jobs and growth goal. In order to offset the higher administrative costs, Member States should be encouraged to reduce the administrative burden with regard to the implementation of joint projects wherever possible. In addition, Interreg programmes with limited Union support or external cross-border Interreg programmes should receive a certain minimum amount for technical assistance to ensure sufficient funding for effective technical assistance activities, including for regional branch offices of joint secretariats and contact points set up to be closer to potential beneficiaries and partners.

(28) Pursuant to paragraphs 22 and 23 of the Interinstitutional Agreement of 13 April 2016 on Better Law-Making (14), this Regulation should be evaluated on the basis of information collected in accordance with specific monitoring requirements, while avoiding an administrative burden, in particular on Member States, and overregulation. Those requirements, where appropriate, should include measurable indicators as a basis for evaluating the effects of the funding on the ground.

(29) Based on the experience gained during the 2014-2020 programming period, the system introducing a clear hierarchy of rules on eligibility of expenditure should be continued while maintaining the principle of rules on eligibility of expenditure to be established at Union level and for an Interreg programme as a whole to avoid any possible contradictions or inconsistencies between different regulations and between Union and national law. Additional rules adopted by one Member State which would only apply to the beneficiaries in that Member State should be limited to the strict minimum. In particular, Commission Delegated Regulation (EU) No 481/2014 (15), adopted for the 2014-2020 programming period, should be integrated into this Regulation.

(30) Member States should be encouraged to assign the functions of the managing authority to an EGTC or to make such a grouping, like other cross-border legal bodies, responsible for managing a sub-programme, an integrated territorial investment or one or more small project funds, or to act as sole partner. In that context, a cross-border legal body, including euroregions, should be established and have legal personality pursuant to the law of one of the participating countries, and the participation of regional and local authorities from all participating countries should be granted.

(31) In order to continue the payment chain established for the 2014-2020 programming period, namely, from the Commission to the lead partner via the certifying authority, that payment chain should be continued under the accounting function. The Union support should be paid to the lead partner, unless this would result in double fees for conversion into euro and back into another currency or vice versa between the lead partner and the other partners. If not otherwise specified, the lead partner should ensure that the other partners receive the total amount of the contribution from the respective Union fund in full and within the timeframe agreed by all partners and following the same procedure applied in respect of the lead partner.

(32) Pursuant to Article 63(9) of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (16) (the ‘Financial Regulation’) sector-specific rules are to take account of the needs of Interreg programmes in particular as regards the audit function. The provisions on the annual audit opinion, the annual control report and the audits of operations should therefore be simplified and adapted to those programmes involving more than one Member State.

(33) A clear chain of financial liability in respect of recovery for irregularities should be established from sole or other partners via the lead partner and the managing authority to the Commission. Provision should be made for liability of Member States, third countries, partner countries or OCTs, where obtaining recovery from the sole or other or lead partner is not successful, meaning that the Member State reimburses the managing authority. Consequently, under Interreg programmes there is no scope for irrecoverable amounts at the level of beneficiaries. It is, however, necessary to clarify the rules, should a Member State, third country, partner country or OCT not reimburse the managing authority. The obligations of the lead partner for recovery should also be clarified.

(34) In order to apply a mostly common set of rules both in the participating Member States and third countries, partner countries or OCTs, this Regulation should also apply to the participation of third countries, partner countries or OCTs, unless specific rules are set out in a specific chapter of this Regulation. Interreg programme authorities may be mirrored by comparable authorities in third countries, partner countries or OCTs. The starting point for the eligibility of expenditure should be linked to the signature of the financing agreement by the relevant third country, partner country or OCT. Procurement for beneficiaries in the third country, partner country or OCT should follow the rules for external procurement provided for in the Financial Regulation. The procedures for the conclusion of financing agreements with each of the third countries, partner countries or OCTs as well as of the agreements between the managing authority and each third country, partner country or OCT with regard to the support from an external financing instrument of the Union or in the case of transfer of an additional contribution from a third country, partner country or OCT to the Interreg programme other than national co-financing should be set out.

(35) Although Interreg programmes with the participation of third countries, partner countries or OCTs should be implemented under shared management, it should be possible for outermost regions’ cooperation to be implemented under indirect management. Specific rules should be set out on how to implement those programmes as a whole or partially under indirect management.

(36) Based on the experience gained during the 2014-2020 programming period with large infrastructure projects within cross-border cooperation programmes under the European Neighbourhood Instrument established by Regulation (EU) No 232/2014 of the European Parliament and of the Council (17), the procedures should be simplified. However, the Commission should retain certain rights concerning the selection of such projects.

(37) In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission to adopt and amend the lists of Interreg programme areas to receive support and the list of the global amount of the Union support for each Interreg programme. Implementing powers should also be conferred on the Commission to adopt the multi-annual strategy documents for Interreg programmes supported by an external financing instrument of the Union. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (18). Although those acts are of a general nature, the advisory procedure should be used given that they only implement the provisions in a technical way. Where applicable, the multi-annual strategy documents for Interreg programmes supported by an external financial instrument should also respect the procedure set out in the IPA III Regulation and Regulation (EU) 2021/947.

(38) In order to ensure uniform conditions for the approval Interreg programmes and of amendments thereto, implementing powers should be conferred on the Commission. Where applicable, external cross-border Interreg programmes should respect committee procedures established under the IPA III Regulation and Regulation (EU) 2021/947 with regard to the first approval decision of those programmes.

(39) In order to supplement or amend certain non-essential elements of this Regulation, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of amending the Annex. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(40) In view of the adoption of this Regulation after the start of the programming period, and taking into account the need to implement Interreg in a coordinated and harmonised manner, and in order to allow for its prompt implementation, it should enter into force on the day following that of its publication in the Official Journal of the European Union.

(41) Since the objective of this Regulation, namely to foster cooperation between Member States and between Member States and third countries, partner countries or OCTs cannot be sufficiently achieved by the Member States but can rather, by reason of the scale or effects of the action, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective,

HAVE ADOPTED THIS REGULATION:

Article 1

Subject matter and scope

This Regulation lays down rules for the European territorial cooperation goal (Interreg) with a view to fostering cooperation between Member States and their regions inside the Union and between Member States, their regions and third countries, partner countries, other territories or overseas countries and territories (OCTs), or regional integration and cooperation organisations.

This Regulation also lays down the provisions necessary to ensure effective programming including on technical assistance, monitoring, evaluation, communication, eligibility, management and control, as well as financial management of programmes under Interreg (‘Interreg programmes’) supported by the European Regional Development Fund (ERDF).

With regard to support from the Instrument for Pre-Accession Assistance (IPA III), the Neighbourhood, Development and International Cooperation Instrument (NDICI) and the funding for all the OCTs for the 2021-2027 programming period established as a programme by Decision 2013/755/EU (jointly referred to as ‘the external financing instruments of the Union’) to Interreg programmes, this Regulation sets out additional specific objectives as well as the integration of those funds into Interreg programmes, the criteria for third countries, partner countries and OCTs and their regions to be eligible and certain specific implementation rules.

With regard to support from the ERDF and the external financing instruments of the Union (jointly referred to as ‘the Interreg funds’) to Interreg programmes, this Regulation sets out the Interreg-specific objectives as well as the organisation of Interreg, the eligibility criteria for Member States, third countries, partner countries and OCTs and their regions, the financial resources, and the criteria for their allocation.

Regulation (EU) 2021/1060 and Regulation (EU) 2021/1058 shall apply to Interreg programmes, except where specifically provided for otherwise under those Regulations and this Regulation or where Regulation (EU) 2021/1060 can only apply to the Investment for jobs and growth goal.

Article 2

Definitions

For the purpose of this Regulation, the definitions in Article 2 of Regulation (EU) 2021/1060 apply. The following definitions also apply:

(1) ‘IPA III beneficiary’ means a country or territory listed in the relevant annex to the IPA III Regulation;

(2) ‘third country’ means a country which is not a Member State and does not receive support from the Interreg funds or which contributes to the general budget of the Union (‘Union budget’) by external assigned revenue;

(3) ‘partner country’ means an IPA III beneficiary or a country or territory covered, for Interreg A and B programmes, by the Neighbourhood area listed in Annex I to Regulation (EU) 2021/947 or the Russian Federation, or for Interreg C and D programmes, a country or territory covered by any geographic area under NDICI, and which receives support from the external financing instruments of the Union;

(4) ‘cross-border legal body’ means a legal body established pursuant to the law of one of the participating countries in an Interreg programme provided that it is set up by territorial authorities or other bodies from at least two participating countries;

(5) ‘regional integration and cooperation organisation’ means, in the context of outermost regions cooperation, a group of third countries or regions in the same geographic area that aim to cooperate closely on issues of common interest, of which Member States may also be part.

For the purpose of this Regulation, where Regulation (EU) 2021/1060 refers to a ‘Member State’, this shall be construed as meaning ‘the Member State hosting the managing authority’ and where that Regulation refers to ‘Each Member State’ or ‘Member States’, this shall be construed as meaning ‘the Member States and, where applicable, third countries, partner countries and OCTs participating in a given Interreg programme’.

For the purpose of this Regulation, where Regulation (EU) 2021/1060 refers to ‘the Funds’ as listed in point (a) of Article 1(1) of that Regulation or to Regulation (EU) 2021/1058, this shall be construed as also covering the respective external financing instrument of the Union.

Article 3

Interreg strands

Under Interreg, the ERDF and, where applicable, external financing instruments of the Union, shall support the following strands:

(2) transnational cooperation over larger transnational territories or around sea basins, involving national, regional and local programme partners in Member States, third countries and partner countries and OCTs, with a view to achieving a higher degree of territorial integration (‘Interreg B’);

(4) outermost regions’ cooperation among themselves and with their neighbouring third or partner countries or OCTs, or regional integration and cooperation organisations, or several thereof, to facilitate their regional integration and harmonious development in their neighbourhood (‘Interreg D’).

Article 4

Geographical coverage for cross-border cooperation

Article 5

Geographical coverage for transnational cooperation

(a) regions in Iceland, Norway, Switzerland and the United Kingdom as well as Andorra, Liechtenstein, Monaco and San Marino;

(b) OCTs;

(c) the Faroe Islands;

(d) regions of partner countries under IPA III or NDICI.

Article 6

Geographical coverage for interregional cooperation

Article 7

Geographical coverage for outermost regions’ cooperation

Article 8

List of Interreg programme areas to receive support

External cross-border programmes shall be listed as ‘Interreg A IPA III CBC programmes’ (IPA III-CBC) or ‘Interreg A NEXT programmes’ (NDICI-CBC).

Article 9

ERDF resources for Interreg programmes

(a) 72,2 % (i.e., a total of EUR 5 812 790 000 for land and maritime cross-border cooperation (‘strand A’));

(b) 18,2 % (i.e., a total of EUR 1 466 000 000 for transnational cooperation (‘strand B’));

(c) 6,1 % (i.e., a total of EUR 490 000 000 for interregional cooperation (‘strand C’));

(d) 3,5 % (i.e., a total of EUR 281 210 000 for outermost regions’ cooperation (‘strand D’)).

Article 10

Cross-fund provisions

With regard to Interreg programmes supported by the ERDF and the NDICI, the implementing act shall set out the elements referred to in Article 14(2) of Regulation (EU) 2021/947.

With regard to Interreg programmes supported by the ERDF and IPA III, the implementing act shall also cover, where relevant, the participation of IPA III beneficiaries or partner countries in Interreg C and D programmes.

The respective contributions from IPA III and NDICI to Interreg B, C and D programmes shall take account of the composition of the programme partnership by Member States, IPA III beneficiaries and partner countries. Those contributions may be set out in the multi-annual strategy documents covered by the first subparagraph of paragraph 1.

However, where the review of the relevant strategic programming documents under IPA III or NDICI results in the reduction of the matching amount for the remaining years, each Member State concerned shall choose from the following options:

(a) to request the mechanism referred to in Article 12(3);

(b) to continue the Interreg programme with the remaining support from the ERDF and IPA III CBC or NDICI-CBC; or

(c) to combine the options referred to in points (a) and (b) of this subparagraph.

Article 11

List of Interreg programme resources

Article 12

Return of resources and discontinuation

(a) none of the partner countries covered by the Interreg programme concerned has signed the relevant financing agreement by the deadlines set out in accordance with Article 59; or

(b) the Interreg programme cannot be implemented as planned due to problems in relations between the participating countries.

In such cases, the contribution from the ERDF referred to in paragraph 1 corresponding to annual instalments not yet committed, or annual instalments committed and decommitted totally or partially during the same budgetary year, which have not been re-allocated to another Interreg programme also supported by IPA III CBC or NDICI-CBC, respectively, shall be allocated to the internal cross-border Interreg programmes in which the Member State concerned participates.

The participating Member States and, where applicable, the remaining participating partner countries, shall request that:

(a) the Interreg programme be discontinued, in particular where the main joint development challenges thereof cannot be achieved without the participation of that partner country or OCT;

(b) the allocation to that Interreg programme be reduced, in accordance with the applicable rules and procedures; or

(c) the Interreg programme be continued without the participation of that partner country or OCT.

Where the allocation to the Interreg programme is reduced pursuant to point (b), the contribution from the ERDF corresponding to annual instalments not yet committed, shall be allocated to another Interreg B programme in which one or more of the Member States concerned participate or, where a Member State only participates in one Interreg B programme, to one or more internal cross-border Interreg programmes in which that Member State participates.

Article 13

Co-financing rates

Article 14

Interreg-specific objectives

(a) enhance the institutional capacity of public authorities, in particular those mandated to manage a specific territory, and of stakeholders (all strands);

(b) enhance efficient public administration by promoting legal and administrative cooperation and cooperation between citizens, civil society actors and institutions, in particular with a view to resolving legal and other obstacles in border regions (strands A, C, D and, where appropriate, strand B);

(c) build up mutual trust, in particular by encouraging people-to-people actions (strands A, D and, where appropriate, strand B);

(d) enhance institutional capacity of public authorities and stakeholders to implement macro-regional strategies and sea-basin strategies, as well as other territorial strategies (all strands);

(e) enhance sustainable democracy and support civil society actors and their role in reforming processes and democratic transitions (all strands with involvement of third countries, partner countries or OCTs); and

(f) other actions to support better cooperation governance (all strands).

Article 15

Thematic concentration

Interreg A programmes along internal land borders shall allocate at least 60 % of the allocated ERDF contribution to policy objectives 2 and 4 and a maximum of two other policy objectives set out in Article 5(1) of Regulation (EU) 2021/1060.

Article 16

Preparation and submission of Interreg programmes

The participating third countries or partner countries or, where applicable, OCTs shall also involve the programme partners, including regional integration and cooperation organisations, equivalent to those referred to in that Article.

However, where an Interreg programme covers support from an external financing instrument of the Union, the Member State hosting the prospective managing authority shall submit the Interreg programme to the Commission not later than nine months after the adoption by the Commission of the relevant multi-annual strategy documents provided for in Article 10(1) or in accordance with the respective basic legislative act of that external financing instrument of the Union.

By way of derogation from the first subparagraph, in the case of Interreg programmes involving outermost regions and third countries, partner countries or OCTs, the Member States concerned shall consult the respective third countries, partner countries or OCTs before submitting the Interreg programmes to the Commission. In that case, the agreements to the contents of the Interreg programmes and the possible financial contribution by the third countries, partner countries or OCTs may be expressed instead in the formally approved minutes of the consultation meetings with the third countries, partner countries or OCTs concerned or of the deliberations of regional integration and cooperation organisations.

Article 17

Content of Interreg programmes

Each priority shall correspond to a single policy objective or, where applicable, to one or both Interreg-specific objectives, respectively, and shall consist of one or more specific objectives. More than one priority may correspond to the same policy or Interreg-specific objective.

(a) the programme area, including, whenever possible, a map thereof as a separate document;

(c) a justification for the selected policy objectives and Interreg-specific objectives, corresponding priorities, specific objectives or actions under the Interreg-specific objectives and the forms of support, addressing, where appropriate, missing links in cross-border infrastructure;

(d) the specific objectives or actions under the Interreg-specific objectives for each priority;

(g) the actions taken to involve the relevant programme partners referred to in Article 8 of Regulation (EU) 2021/1060 in the preparation of the Interreg programme, and the role of those programme partners in the implementation, monitoring and evaluation of that programme;

(h) the envisaged approach to communication and visibility for the Interreg programme through defining its objectives, target audiences, communication channels, including social media outreach, where appropriate, planned budget and relevant indicators for monitoring and evaluation; and

(i) an indication of support to small-scale projects, including small projects within small project funds.

When a Member State submits the programme, it shall ensure that the programme is accompanied for information purposes by a list of planned operations of strategic importance and a timetable.

(a) for Interreg A programmes supported by IPA III and NDICI as a single amount (IPA III CBC or NEXT CBC) combining the contribution from Heading 2 ‘Cohesion and Values’, sub-ceiling Economic, social and territorial cohesion and Heading 6 ‘Neighbourhood and the World’;

(b) for Interreg B and C programmes supported by IPA III, NDICI or the OCTP as a single amount (‘Interreg funds’) combining the contribution from Heading 2 and Heading 6 or split per financing instrument ERDF, IPA III, NDICI and OCTP, pursuant to the choice of the programme partners;

(c) for Interreg B programmes supported by OCTP split per financing instrument (ERDF and OCTP);

(d) for Interreg D programmes supported by the NDICI and by the OCTP split per financing instrument (ERDF, NDICI and OCTP, as appropriate).

(a) identify the programme authorities and the body to which payments are to be made by the Commission;

(b) lay down the procedure for setting up the joint secretariat;

(c) set out the apportionment of liabilities among the participating Member States and, where applicable, third or partner countries or OCTs, in the event of financial corrections imposed by the managing authority or the Commission.

(a) the information referred to in point (a) of paragraph 3 is not required;

(b) the information required pursuant to points (b) and (g) of paragraph 3 shall be given as a short outline;

Article 18

Approval of Interreg programmes

Article 19

Amendment of Interreg programmes

Such transfers shall not affect previous years.

The transfer and related changes shall not be considered substantial and shall not require a decision of the Commission amending the Interreg programme. They shall, however, comply with all regulatory requirements. The managing authority shall submit to the Commission the revised table referred to in point (f)(ii) of Article 17(3) together with any related changes in the programme.

Article 20

Integrated territorial development

For Interreg programmes, the relevant territorial authorities or bodies responsible for drawing up territorial or local development strategies as listed in Article 28 of Regulation (EU) 2021/1060 or involved in the selection of operations to be supported under those strategies as referred to in Article 29(5) of that Regulation, or for both, shall represent at least two participating countries, of which at least one is a Member State.

Where a cross-border legal body or an EGTC implements an integrated territorial investment pursuant to Article 30 of Regulation (EU) 2021/1060 or another territorial tool pursuant to point (c) of the first subparagraph of Article 28 of that Regulation, it may also be the sole beneficiary pursuant to Article 23(6) of this Regulation, provided that there is a separation of functions inside the cross-border legal body or the EGTC.

Article 21

Community-led local development

Community-led local development (CLLD) provided for in point (b) of the first subparagraph of Article 28 of Regulation (EU) 2021/1060 may be implemented in Interreg programmes, provided that the relevant local action groups are composed of representatives of public and private local socio-economic interests, in which no single interest group controls the decision-making, and of at least two participating countries, of which at least one is a Member State.

Article 22

Selection of Interreg operations

That monitoring committee may set up one or, in particular in the case of sub-programmes, more steering committees which act under its responsibility for the selection of operations. Steering committees shall apply the partnership principle as set out in Article 8 of Regulation (EU) 2021/1060.

When all or part of an operation is implemented outside the programme area inside or outside the Union, the selection of that operation shall require the explicit approval by the managing authority in the monitoring committee or, where applicable, the steering committee.

When the operation involves one or several partners located in the territory of a Member State, third country, partner country or OCT which is not represented in the monitoring committee, the managing authority shall condition its explicit approval to the submission of a written acceptance by the concerned Member State, third country, partner country or OCT to reimburse any amounts unduly paid to these partners, in accordance with Article 52(2).

When the written acceptance referred to in the fourth subparagraph of this paragraph cannot be obtained, the body implementing all or part of an operation outside the programme area shall obtain a guarantee from a bank or another financial institution for the corresponding amount of the Interreg funds granted. Such a guarantee shall be included in the document provided for in paragraph 6.

The criteria and procedures shall ensure the prioritisation of operations to be selected with a view to maximising the contribution of Union funding to the achievement of the objectives of the Interreg programme and to implementing the cooperation dimension of operations under Interreg programmes, as set out in Article 23(1) and (4) of this Regulation.

(a) ensure that selected operations comply with the Interreg programme and provide an effective contribution to the achievement of its specific objectives;

(b) ensure that selected operations do not conflict with the corresponding strategies established pursuant to Article 10(1) or established for one or more of the external financing instruments of the Union;

(c) ensure that selected operations present the best relationship between the amount of support, the activities undertaken and the achievement of objectives;

(d) verify that the beneficiary has the necessary financial resources and mechanisms to cover operation and maintenance costs for operations comprising investment in infrastructure or productive investment, so as to ensure their financial sustainability;

(e) ensure that selected operations which fall under the scope of Directive 2011/92/EU of the European Parliament and of the Council (19) are subject to an environmental impact assessment or a screening procedure and that the assessment of alternative solutions has been taken in due account, on the basis of the requirements of that Directive;

(f) verify that where the operations have started before the submission of an application for funding to the managing authority, the applicable law has been complied with;

(g) ensure that selected operations fall within the scope of the Interreg fund concerned and are attributed to a type of intervention;

(h) ensure that operations do not include activities which were part of an operation subject to relocation within the meaning of point (27) of Article 2 of Regulation (EU) 2021/1060 or which would constitute a transfer of a productive activity within the meaning of point (a) of Article 65(1) of that Regulation;

(i) ensure that selected operations are not directly affected by a reasoned opinion by the Commission in respect of an infringement within the scope of Article 258 TFEU that puts at risk the legality and regularity of expenditure or the performance of operations; and

(j) ensure that, for investments in infrastructure with an expected lifespan of at least five years, an assessment of expected impacts of climate change is carried out.

That document shall also set out the lead partner’s obligations with regard to recoveries pursuant to Article 52. Those obligations shall be defined by the monitoring committee.

Article 23

Partnership within Interreg operations

Operations selected under the Interreg Europe and URBACT programmes shall involve partners from at least three participating countries, at least two of which shall be beneficiaries from Member States.

Beneficiaries receiving support from Interreg funds and partners participating in the operation but not receiving any financial support under those funds (jointly referred to as ‘partners’) constitute an Interreg operation partnership.

For Interreg operations under Interreg D programmes, the partners from outermost regions and third countries, partner countries or OCTs shall be required to cooperate only in two of the four dimensions listed in the first subparagraph.

The cross-border legal body or EGTC shall have members from at least three participating countries under the Interreg Europe and URBACT programmes.

A legal body that implements a financial instrument, a fund of holding funds or a small project fund, as applicable, may be the sole partner of an Interreg operation without the application of the requirements for its composition set out in the first subparagraph.

Article 24

Support to projects of limited financial volume

(a) directly within each programme; or

(b) within one or more small project funds.

Article 25

Small project funds

The final recipients within a small project fund shall receive support from the ERDF or, where applicable, the external financing instruments of the Union through the beneficiary and implement the small projects within that small project fund (‘small project’).

The beneficiary shall be a cross-border legal body or an EGTC or a body which shall have legal personality.

The beneficiary shall select the small projects which are implemented by the final recipients within the meaning of point (18) of Article 2 of Regulation (EU) 2021/1060. Where the beneficiary is not a cross-border legal body or an EGTC, a body involving representatives from at least two participating countries, of which at least one is a Member State, shall select the joint small projects.

(a) establishes a non-discriminatory and transparent selection procedure;

(b) applies objective criteria for the selection of small projects, which avoid conflicts of interest;

(c) assesses applications for support;

(d) selects projects and fixes the amount of support for each small project;

(e) is accountable for the implementation of the operation and keeps at its level all supporting documents required for the audit trail in accordance with Annex XIII to Regulation (EU) 2021/1060; and

(f) makes available to the public the list of the final recipients which benefit from the operation.

The beneficiary shall ensure that the final recipients comply with the requirements set out in Article 36.

Where the total costs of each project do not exceed EUR 100 000, the amount of support for one or more small projects may be set out on the basis of a draft budget which is established on a case-by-case basis and agreed ex ante by the beneficiary managing the small project fund.

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 Article 53(1) of Regulation (EU) 2021/1060.

Article 26

Tasks of the lead partner

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

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

(c) ensure that expenditure presented by all partners has been paid in implementing the Interreg operation and corresponds to the activities agreed between all the partners, and is in accordance with the document provided by the managing authority pursuant to Article 22(6).

Article 27

Technical assistance

(a) for internal cross-border cooperation programmes supported by the ERDF: 7 %;

(b) for external cross-border cooperation programmes supported by IPA III CBC or NDICI-CBC, for strand B programmes where the support from the ERDF is 50 % or less and for strand D programmes, both for the ERDF contribution and for one or more of the external financing instruments of the Union: 10 %; and

(c) for strand B programmes where the support from the ERDF is more than 50 % and for strand C programmes, both for the ERDF contribution and, where applicable, for one or more of the external financing instruments of the Union: 8 %.

Article 28

Monitoring committee