Regulation (EU) 2022/2192 of the European Parliament and of the Council of 9 November 2022 laying down specific provisions for the 2014-2020 cooperation programmes supported by the European Neighbourhood Instrument and under the European territorial cooperation goal, following programme implementation disruption

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, Article 209(1) and Article 212(2) thereof,

Having regard to the proposal from the European Commission,

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

After consulting the European Economic and Social Committee,

After consulting the Committee of the Regions,

Acting in accordance with the ordinary legislative procedure (1),

Whereas:

(1) In its conclusions of 24 February 2022, the European Council condemned Russia’s unprovoked and unjustified military aggression against Ukraine as well as the involvement of Belarus in that aggression. As a result of the aggression, the Commission has suspended the financing agreements for cooperation programmes between the Union and Russia or Belarus respectively, and, where relevant, the Member State hosting the managing authority of the programme concerned. Since the start of Russia’s military aggression against Ukraine, the Union has imposed a series of new sanctions against Russia and Belarus.

(2) The Russian military aggression has disrupted the implementation of thirteen cross-border cooperation programmes supported by the European Neighbourhood Instrument (ENI) established by Regulation (EU) No 232/2014 of the European Parliament and of the Council (2) between nine Member States hosting a programme’s managing authority and Ukraine, the Republic of Moldova, Russia and Belarus.

(3) The fraudulent nature of the August 2020 presidential elections in Belarus and the violent crackdown on peaceful protests already led to the recalibration of the Union’s assistance to Belarus following the Council Conclusions of 12 October 2020.

(4) As a result of the Russian military aggression against Ukraine, the Union and its eastern regions in particular, as well as the western parts of Ukraine and the Republic of Moldova are facing a substantial inflow of displaced persons. That inflow poses an additional challenge to the Member States and other countries bordering Ukraine, which could spread further to other Member States, especially at a time when their economies are still recovering from the impact of the COVID-19 pandemic.

(5) Moreover, two transnational cooperation programmes supported by the ENI and the European Regional Development Fund (ERDF) under Regulation (EU) No 1299/2013 of the European Parliament and of the Council (3), namely the Interreg Baltic Sea Region Programme with the participation of Russia, and the Danube Transnational Programme with the participation of Ukraine and the Republic of Moldova, were considerably disrupted by the Russian military aggression against Ukraine or, with regard to the Republic of Moldova, by the flows of displaced persons from Ukraine resulting directly from that aggression.

(6) Since the notifications of the suspension of the financing agreements for cooperation programmes with Russia and Belarus, any programme and project implementation with those countries is suspended. It is necessary to lay down specific rules on the continued implementation of the cooperation programmes supported by the ENI and the ERDF, even in the event of a termination of the respective financing agreement.

(7) The implementation of cooperation programmes supported by the ENI is governed by Commission Implementing Regulation (EU) No 897/2014 (4). However, Implementing Regulation (EU) No 897/2014 cannot be amended as necessary, because its legal basis, Regulation (EU) No 232/2014 is no longer in force since 31 December 2020. Consequently, it is necessary to lay down specific provisions with regard to the continued implementation of the cooperation programmes concerned in a separate legal instrument.

(8) The financing agreements for cooperation programmes with Ukraine and the Republic of Moldova are not suspended. However, the implementation of those programmes is considerably impacted by Russia’s unprovoked and unjustified military aggression against Ukraine and a substantial flow of displaced persons from Ukraine towards the Republic of Moldova. In order to address the challenges for programme partners, programme authorities and project partners, it is necessary to lay down specific rules on the continued implementation of the cooperation programmes concerned.

(9) With a view to alleviating the burden on public budgets arising from the need to respond to Russia’s unprovoked and unjustified military aggression against Ukraine and to a substantial flow of displaced persons from Ukraine, the co-financing rule laid down in Implementing Regulation (EU) No 897/2014 should not apply for the Union contribution.

(10) The modification of the co-financing rate should only require a notification of revised financial tables to the Commission and other procedural arrangements. It is necessary that the rules on adjustments and revisions of programmes be simplified for the programmes directly affected by the military aggression against Ukraine or by a substantial flow of displaced persons from Ukraine. Any potential consequential adjustments, including to the target values of indicators, should be allowed as part of a subsequent programme adjustment after the end of the accounting year.

(11) Expenditure for projects addressing the migratory challenges as a result of the Russian military aggression against Ukraine should be eligible from the start date of that aggression on 24 February 2022.

(12) Although the management of projects already selected by the Joint Monitoring Committee is the responsibility of the managing authority, under some programmes certain project amendments are to be approved by the Joint Monitoring Committee. In order to speed up the necessary changes, it is therefore necessary to establish that the responsibility for amending the documents setting out the conditions for support to projects affected by a programme implementation disruption in accordance with the national law of the managing authority lies only with the respective managing authority, without the prior approval of the Joint Monitoring Committee. It should be possible for such amendments to also cover, among others, the replacement of the lead beneficiary or any changes to the financing plan or to the execution deadlines. With regard to new projects, the managing authority should explicitly be allowed to sign contracts other than contracts for large infrastructure projects after 31 December 2022. However, all project activities financed by the programme should end by 31 December 2023.

(13) The Russian military aggression against Ukraine has caused higher than expected inflation and an unexpected increase in supply and construction prices, which together affect the implementation of large infrastructure projects in the programmes concerned. In order to remedy that situation, the share of the Union contribution allocated to such projects should be allowed to exceed the ceiling set out in Implementing Regulation (EU) No 897/2014, namely 30 % at the closure of the programme, provided that the excess is only due to an unexpected increase in supply and construction prices.

(14) Verifications carried out by the managing authority consist of administrative and on-the-spot project verifications. Due to programme implementation disruption, it could no longer be possible to carry out on-the-spot project verifications in Ukraine. Therefore, it is necessary to provide for the possibility to carry out only administrative verifications. In addition, where an infrastructure component of a project was destroyed before verifications could be carried out, it should be possible for the beneficiary to declare the related expenditure for clearance of accounts on the basis of a declaration of honour from the beneficiary stating that the project before its destruction corresponded to the content set out in invoices or documents of equivalent probative value.

(15) Pursuant to Implementing Regulation (EU) No 897/2014, projects may receive financial contribution if they meet a set of detailed criteria. Due to programme implementation disruption, one or more of those criteria, in particular the requirement that the project has a clear cross-border or transnational cooperation impact, might not be fulfilled at the start of the disruption or at the closure of a given project. Furthermore, the basic condition to involve beneficiaries from at least one of the participating Member States and at least one of the participating partner countries might not be respected anymore. It is therefore necessary to determine whether expenditure can nevertheless be considered as eligible despite the fact that some conditions for financing might no longer be met due to programme implementation disruption.

(16) As a result of programme implementation disruption, many projects will de facto not have a partner from a partner country. In order to make it possible for the beneficiaries in Member States to finalise their activities, it is appropriate to derogate exceptionally from the obligation for all projects to have at least one beneficiary from a partner country and for all activities to have genuine cross-border or transnational impact and benefits.

(17) The obligations of a lead beneficiary cover all activities linked to project implementation. As a result of project implementation disruption, lead beneficiaries could be prevented from carrying out their obligations with regard to the partner country. The lead beneficiary’s obligations should therefore be adapted and, where necessary, limited to project implementation with regard to the Member States. Lead beneficiaries should also be allowed to amend the written agreement with the other project partners and to suspend certain activities or the participation of certain partners. Finally, the obligation of lead beneficiaries to transfer payments received from the managing authority to other partners should be waived or at least adapted.

(18) In order for the affected programmes to address the exceptional circumstances, it is necessary to allow projects addressing the migratory challenges to be selected without a prior call for proposals in exceptional and duly substantiated cases.

(19) Following the suspension of the financing agreements with partner countries, payments related to the Russian or Belarusian participation have been suspended. Moreover, in Ukraine the extraordinary measures taken by the National Bank and the security situation resulting from the Russian military aggression against it inhibit the transfer of money abroad. It is therefore appropriate to allow for direct payment of the grants from the managing authority to the project beneficiaries in Member States and in partner countries whose financing agreements are not suspended.

(20) Cooperation programmes supported by the ENI are required to set out the method of converting expenditure incurred in a currency other than the euro. That method is to apply throughout the programme duration. Due to the financial and economic consequences of the Russian military aggression against Ukraine, there are unexpected fluctuations of exchange rates. It is therefore necessary to provide for the possibility to change that method.

(21) Due to programme implementation disruption, managing authorities could be unable to receive bank transfers from certain partner countries, resulting in the impossibility to recover debts from project beneficiaries located in such countries. In the case of a partner country which has transferred part of its national contribution to the managing authority, those amounts should be used to off-set such debts. In the case of other partner countries, recovery orders regarding irrecoverable debts should be waived or handled by the Commission.

(22) In accordance with Regulation (EU) No 1299/2013, the applicable programme implementation conditions governing the financial management as well as the programming, monitoring, evaluation and control aspects of the participation of third countries, through a contribution of ENI resources to transnational cooperation programmes, are to be established in the relevant cooperation programme and also, where necessary, in the financing agreement between the Commission, the governments of the third countries concerned and the Member State hosting the managing authority of the relevant cooperation programme. Although the applicable programme implementation conditions governing such aspects could be adapted by an adjustment of the cooperation programme, it is necessary to provide for some derogations from certain provisions of Regulation (EU) No 1299/2013 in order to allow for the application of the provisions established for the cooperation programmes supported by the ENI also to the Interreg Baltic Sea Region Programme and the Danube Transnational Programme.

(23) Since the objectives of this Regulation, namely to establish specific provisions regarding the implementation of the cooperation programmes affected by the Russian military aggression against Ukraine, cannot be sufficiently achieved by the Member States alone and can therefore, by reason of the scale and effects of the proposed 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 (TEU). In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary to achieve those objectives.

(24) The funding provided in the context of this Regulation is to comply with the conditions and procedures set out by the restrictive measures adopted pursuant to Article 215 of the Treaty on the Functioning of the European Union (TFEU).

(25) In view of the urgency to address the migratory challenges resulting from the Russian military aggression against Ukraine and the continued public health crisis stemming from the COVID-19 pandemic, it is considered to be appropriate to invoke the exception to the eight-week period referred to in Article 4 of Protocol No 1 on the role of national Parliaments in the European Union, annexed to the TEU, to the TFEU and to the Treaty establishing the European Atomic Energy Community.

(26) In order to allow Member States to adjust their programmes in time to benefit from the application of the option of no co-financing to the Union contribution for the accounting year 2021/2022, this Regulation should enter into force on the day following that of its publication in the Official Journal of the European Union,

HAVE ADOPTED THIS REGULATION:

Article 1

Subject matter and scope

Article 2

Definitions

(1) ‘partner country’ means any of the third countries participating in a cooperation programme listed in the Annex;

Article 3

Co-financing

In the situation referred to in Article 2(1), point (2)(b), no co-financing of the Union contribution from Member States or partner countries shall be required for expenditure incurred and paid and included in the annual accounts for the accounting years starting 1 July 2021, 1 July 2022 and 1 July 2023 respectively.

Article 4

Programming

Article 5

Eligibility of expenditure for projects addressing the migratory challenges

Expenditure for projects addressing the migratory challenges as a result of programme implementation disruption shall be eligible as of 24 February 2022.

Article 6

Projects

Those amendments may also cover the replacement of the lead beneficiary or changes to the financing plan or to the execution deadlines.