Revision of
EuropeAid
Financial Regulation &
Its Implementing Rules
Brussels, 16 November 2010
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SUMMARY
EuropeAid
1. INTRODUCTION
2. DELEGATED COOPERATION
3. ASSIGNED REVENUES
4. PROCUREMENT, GRANTS
OTHER TYPES OF FINANCIAL
CONTRIBUTION
2
EuropeAid
INTRODUCTION
3
Introduction
Context
EuropeAid
• Wider context: preparation for the post-2013 programmes
will also be under way
• Calendar: Entry into force of the package: the latest by 1
June 2012.
• Main areas of simplification:
o Delegated cooperation
o Assigned revenues & establishment of Trust Funds
o Grants
o Procurement
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EuropeAid
DELEGATED COOPERATION
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Management modes
New structure
EuropeAid
TWO main categories
EU Budget
Direct management
Indirect management
Member
States
Heads of Delegation
(shared
management)
Third countries
International organisations
National agencies
EIB-EIF / Financial institutions
Public & Private Partnerships
CFSP Missions
Regulatory agencies
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Management modes (2)
New structure (1)
EuropeAid
More entities for indirect management
• Same bodies as before:
o Member States (sub-category - shared management)
o national public service mission bodies
o beneficiary countries
o bodies under art 185 (“traditional agencies”)
o persons under CFSP
o EIB/EIF and
o international organisations
… but also new type of entities: PPP, FI
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Management modes (3)
New structure (2)
EuropeAid
New elements relating to existing entities
• “EU Member States”:
o Delegations to Member States will continue to be done
under “shared management” (it is not ICM!)
o In External action, it is very exceptional:
• IPA: cross-border cooperation
• ENPI: cross-border cooperation
• International Organisations:
o Other organisations assimilated by Commission decision
o No more limited to three cases
o EIB/EIF not anymore considered international
organisations (ad hoc category)
Note: Executive Agencies – it is now direct management!
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Management Modes (4)
New structure (3)
EuropeAid
New entities!
• Public Private Partnerships: cooperation between public
authorities and private sector for performance of public
contracts or concessions:
o Established in Member States; OR
o Established by a Basic Act
• Financial Institution implementing “financial
instruments”:
o EU MS is a shareholder OR
o Established in a EU MS with a public service mission
o If use of intermediaries: (i) they must satisfy same
criteria; and (ii) no located in non-cooperative
jurisdictions
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Management Modes (5)
Ex ante assessment
EuropeAid
Harmonization of pillars
• Limitation to 4 pillars: procurement/grants/financial
instruments; accounting; internal control and audit
• Clarification of standards for pillars:
o Audit: international standards
o Internal control: international standards
o Accounting: international standards
o Procurement/Grants (general principles)/Financial
instruments (principles of FR)
• New! National agencies will be able to apply their
procedures for grants
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Management Modes (6)
Ex ante assessment (2)
EuropeAid
Alignment and mutual recognition
• Who does the ex ante assessment? RAO, but he/she can rely
on assessment by:
o
o
o
other RAO if conclusions are relevant to the specific risks
of tasks to be entrusted (nature and amounts)
New! Other donor (only for third countries) if same
criteria and standards as benchmarks (cf. EU
Operational Framework for Aid Effectiveness, Part
II, Section B)
Exception: EIB/EIF ex ante assessment will only be
made once for all future implementation of financial
instruments
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Management Modes (7)
Obligations in indirect management
EuropeAid
New contractual obligations (art 53b FR & 34d IR)
• Harmonization
• New FR obligations but already specified in the existing
models (publication of beneficiaries, provisions on
irregularities and fraud, suspension, termination)
• New obligations (which need amendment of existing
models):
o Reasonable level of data protection,
o Contact point for OLAF
o Additional obligations for financial instruments managed
by EIB/EIF/financial institution
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Management Modes (8)
Deadlines for signature and contracts
EuropeAid
More clarity and flexibility (art 166 FR & 34d IR)
• All agreements for indirect management concluded between
the EU and delegatees by 31 December N+1;
• Contracts concluded by the delegatees to implement the
action, concluded in D+3, except for multi-donor
actions;
• Conclusions:
o Alignment to all cases of indirect management;
o More flexibility for agreements with National Agencies:
• Under current rules if there is no FA, contracts
should be signed in N+1;
• More flexibility for multi-donor actions.
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Management Modes (9)
Procedures
EuropeAid
More consistency and simplification (Art 43b IR)
• Procurement: “international standards” specified (principles
of transparency, non discrimination, competition) – reference
to the EU Directives
• Grants: new for EU budget! procedures can also be used by
national agencies if compliant with the principles mentioned
(non-retroactivity, co-financing, etc).
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Management Modes (10)
Control issues
EuropeAid
Reinforcement of assurance/control (art 53b(5) FR)
• Obligation to provide the Commission with*:
o financial and narrative report and summary of results of
all available audits and controls carried out concerning
the action by 1 February
o a management declaration of assurance by 1 February*
o an audit opinion on the DAS by 15 March*
• Clearance of accounts procedures applicable to all indirect
management entities (art 34cb IR)
*
Flexibility to be negotiated with IO and third countries
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Management Modes (11)
Conclusions
EuropeAid
What is new for national agencies?
• Only four pillars.
• New obligations: data protection, reinforced assurance.
• Possibility to recognise “assessments” made by national
agencies of procedures of beneficiary countries.
• More flexibility for contractualisation period (D+3 or more in
cases of multi-donor actions).
• Possibility to use its own grant procedures.
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EuropeAid
ASSIGNED REVENUES
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Assigned revenues: Transfer Agreements
EuropeAid
• More potential donors: legal entities (i.e. private
foundations) and natural persons;
• No requirement of authorization by Basic Act: new possibility
for actions without Basic Act (i.e. joint evaluations);
• Flexibility for the priority rule: if an action is not completed
the funds from donors can be reimbursed;
• Carry over provision (for both operational and administrative
expenditure) for the whole duration of the action;
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Assigned revenues: Transfer Agreements
(2)
EuropeAid
• Making available commitment appropriations:
o
o
With Member States in EURO: upon signature of Transfer
Agreement for the whole amount indicated in the
Agreement
With Member States in another currency: upon actual
receipt of funds
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EuropeAid
PROCUREMENT, GRANTS &
OTHER TYPES OF FINANCIAL
CONTRIBUTION
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Procurement
New thresholds – Service contracts
CURRENT THRESHOLDS
EuropeAid
PROPOSED THRESHOLDS
> 200,000
International restricted
> 300,000
International restricted
10,000 –
FWC (where possible) /
20,000-300,000
FWC / Competitive
200, 000
Competitive Negotiated
0 – 10,000
Single tender
negotiated / AMI
2,500-20,000
Single tender
0-2,500
Invoice
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Procurement
New thresholds – Supply contracts
CURRENT THRESHOLDS
EuropeAid
PROPOSED THRESHOLDS
> 150,000
International open
> 300,000
International open
60,000-150,000
Local open
100,000-300,000
FWC / Local open
10,000-60,000
Competitive negotiated
100,000 -20,000
FWC / Competitive
negotiated
0-10,000
Single tender
2,500 -20,000
Single tender
0-2,500
Invoice
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Procurement
New thresholds – Work contracts
CURRENT THRESHOLDS
> 5,000,000
International open /
EuropeAid
PROPOSED THRESHOLDS
> 5,000,000
International restricted
International open /
International restricted
(exceptional)
300,000-5,000,000
Local open
300,000-5,000,000
Local open
10,000-300,000
Competitive negotiated
20,000-300,000
Competitive negotiated
0-10,000
Single tender
0-20,000
Single tender
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Procurement
New cases for negotiated procedure
EuropeAid
• All: Replacement of contractor - where an new contract
has to be concluded after early termination of an existing
contract
• Services:
o Extension of services already started: The extension
of the contract not limited to a single one (value and
duration shall not exceed the value and the duration of
the initial contract)
o Legal services: competitive negotiated procedure
(regardless of value of contract)
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Procurement
Other
EuropeAid
• Eligibility rules for participation in procurement procedures
without Basic Act: possibility of third country nationals
• Quality standards: no limitation to European standards
• Avoid overregulation: rules mandated by IR would be
transferred to PRAG/Instruction Notes
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Procurement & Grants
Guarantees on pre-financing
CURRENT RULES
Procurement
- pre-financing > 150.000
EuropeAid
PROPOSED RULES
Procurement
- AO Risk assessment
- where financial capacity is not
- where
financial
assessed
capacity is not assessed
- possible waiver: public bodies
Grants
- pre-financing > 60.000 and >
Grants
- AO Risk assessment
80 % of the grant value
- NGO: pre-financing >
1,000,000 or > 90% of the grant
value
- possible waiver: public bodies
and international organizations
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Procurement & Grants
Exclusion Cases
EuropeAid
• New cases:
o New illegal activity: Money laundering;
o Persons with powers of representation, decision making
or control over tenderers/candidates/applicants: illegal
activities and professional conduct offence
• On the basis of decisions taken by:
o Professional misconduct: ALSO decisions of EIB and
international organizations
o Professional conduct offence: ONLY Member State
authorities
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Procurement & Grants
Exclusion Cases (2)
EuropeAid
• Two additional exceptions to the obligation to exclude:
o
o
Candidates/tenderers/applicants that have taken
adequate measures against persons having powers of
representation
Captive situations (monopoly) in order to ensure
continuity of service: In case of bankruptcy and
analogous situations; grave professional misconduct and
non compliance with social obligations
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Grants
Performance based grants
EuropeAid
• Output control vs. Input control
• Tools:
o
o
Simplification of lump sums: ex ante methodology or on
the basis of budget submitted by applicant
“Factual audits”: was the output of the grant effectively
achieved?
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Grants
Sub-granting
CURRENT RULES
EuropeAid
PROPOSED RULES
• It cannot be the primary aim of
• The beneficiary offers adequate
the action
guarantees as regards the
• Conditions for giving financial
recovery.
support are defined in the
• Conditions for giving financial
contract: activities
support are defined in the
• Amounts are small: total <
contract: activities,
100,000 and each < 10,000
persons/categories, procedures
• Amounts are small: each <
50,000
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Grants
Rules on pre-financing
CURRENT RULES
< 250,000
Not due
EuropeAid
PROPOSED RULES
Interest is not due unless
otherwise provided in
agreements.
250,000 –
Deducted from
Interest shall be re-used for the
750,000
final payment
corresponding programme.
> 750,000
Annual
Recovery
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Grants
Other
EuropeAid
• Deadline for submission of applications: By post/courier
service: deadline = receipt by the contracting authority
and not date of dispatch
• Co- financing:
o more flexibility for 100% financing
o Total costs vs. Eligible costs
• Non profit:
o Broader exception (only for external actions): generation
of income was provided in the agreement and where it is
reinvested to ensure the sustainability of the action
o Profit is recovered on a pro rata basis
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Grants
Other (2)
EuropeAid
• Direct award: updated definition of “crisis situation”
• Operating grants: clarification of bodies pursuing aims of
general European interest: not only European bodies
• Low value grants > 50,000 EUR (eligibility check)
• No obligation to have selection procedure with Evaluation
Committee in case of direct award of grants
• Extrapolation of errors:
o Recurrent errors by one beneficiary proven by
controls/audit with impact on non-audited project
o Extension of findings to non audited projects and
request reimbursement
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New category of financial contribution:
Prizes and financial instruments
EuropeAid
• Prizes are not anymore regarded as grants: new specific
rules
• Financial instruments:
o Loans, guarantees, equity/quasi-equity investments or
participations, other risk-bearing instruments, possibly
combined with grants
o
o
Principles shall also apply to directly related elements
(i.e. technical assistance)
Implemented: directly or indirectly (EIB, EIF, any other
financial institution)
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Further information
EuropeAid
• On EuropeAid:
http://ec.europa.eu/europeaid/index_en.htm
• On the speakers:
Javier RAYA AGUADO
Head of Contractual matters section
Javier.RAYA-AGUADO@ec.europa.eu
Dolores DOMINGUEZ PEREZ
Contractual matters section
Dolores.DOMINGUEZ-PEREZ@ec.europa.eu
Unit G7: Financial and contractual matters, and legal
affairs
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