Revision of Financial Regulation & Its Implementing Rules Brussels, 16 November 2010
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Transcript of Revision of Financial Regulation & Its Implementing Rules Brussels, 16 November 2010
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EuropeAidRevision of Revision of
Financial Regulation & Financial Regulation &
Its Implementing RulesIts Implementing Rules
Brussels, 16 November 2010Brussels, 16 November 2010
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EuropeAidSUMMARY
1. INTRODUCTION
2. DELEGATED COOPERATION
3. ASSIGNED REVENUES
4. PROCUREMENT, GRANTS OTHER TYPES OF FINANCIAL CONTRIBUTION
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EuropeAid
1INTRODUCTION
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EuropeAidIntroductionContext
• 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 cooperationo Assigned revenues & establishment of Trust Fundso Grantso Procurement
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EuropeAid
2DELEGATED COOPERATION
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EuropeAid
Management modes New structure
Direct management Indirect management
EU Budget
Heads of Delegation
TWO main categories
Member States
(shared management)
Third countries International organisations National agencies EIB-EIF / Financial institutions Public & Private Partnerships CFSP Missions Regulatory agencies
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EuropeAidManagement modes (2)New structure (1)
More entities for indirect management
• Same bodies as before:o Member States (sub-category - shared management)o national public service mission bodieso beneficiary countrieso bodies under art 185 (“traditional agencies”)o persons under CFSPo EIB/EIF and o international organisations
… but also new type of entities: PPP, FI
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EuropeAidManagement modes (3)New structure (2)
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 decisiono No more limited to three caseso EIB/EIF not anymore considered international organisations (ad hoc
category)
Note: Executive Agencies – it is now direct management!
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EuropeAidManagement Modes (4)New structure (3)
New entities! • Public Private Partnerships: cooperation between public
authorities and private sector for performance of public contracts or concessions:
o Established in Member States; ORo Established by a Basic Act
• Financial Institution implementing “financial instruments”:o EU MS is a shareholder ORo Established in a EU MS with a public service missiono If use of intermediaries: (i) they must satisfy same criteria;
and (ii) no located in non-cooperative jurisdictions
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EuropeAidManagement Modes (5)Ex ante assessment
Harmonization of pillars
• Limitation to 4 pillars: procurement/grants/financial instruments; accounting; internal control and audit
• Clarification of standards for pillars:o Audit: international standardso Internal control: international standardso Accounting: international standardso 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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EuropeAidManagement Modes (6)Ex ante assessment (2)
Alignment and mutual recognition• Who does the ex ante assessment? RAO, but he/she can rely on
assessment by:
o other RAO if conclusions are relevant to the specific risks of tasks to be entrusted (nature and amounts)
o 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)
o Exception: EIB/EIF ex ante assessment will only be made once for all future implementation of financial instruments
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EuropeAidManagement Modes (7)Obligations in indirect management
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EuropeAidManagement Modes (8)Deadlines for signature and contracts
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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EuropeAidManagement Modes (9)Procedures
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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EuropeAidManagement Modes (10)Control issues
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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EuropeAidManagement Modes (11)Conclusions
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
3ASSIGNED REVENUES
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EuropeAidAssigned revenues: Transfer Agreements
• 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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EuropeAidAssigned revenues: Transfer Agreements (2)
• Making available commitment appropriations:
o With Member States in EURO: upon signature of Transfer Agreement for the whole amount indicated in the Agreement
o With Member States in another currency: upon actual receipt of funds
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EuropeAid
4PROCUREMENT, GRANTS & OTHER TYPES OF FINANCIAL CONTRIBUTION
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EuropeAidProcurementNew thresholds – Service contracts
CURRENT THRESHOLDS PROPOSED THRESHOLDS
> 200,000 International restricted > 300,000 International restricted
10,000 –
200, 000
FWC (where possible) /
Competitive Negotiated
20,000-300,000 FWC / Competitive
negotiated / AMI
0 – 10,000 Single tender 2,500-20,000 Single tender
0-2,500 Invoice
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EuropeAidProcurementNew thresholds – Supply contracts
CURRENT THRESHOLDS 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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EuropeAidProcurementNew thresholds – Work contracts
CURRENT THRESHOLDS PROPOSED THRESHOLDS
> 5,000,000 International open /
International restricted
(exceptional)
> 5,000,000 International open /
International restricted
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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EuropeAidProcurementNew cases for negotiated procedure
• 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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EuropeAidProcurement Other
• 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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EuropeAidProcurement & GrantsGuarantees on pre-financing
CURRENT RULES PROPOSED RULES
Procurement - pre-financing > 150.000
- where financial capacity is not
assessed
- possible waiver: public bodies
Procurement - AO Risk assessment
- where financial
capacity is not assessed
Grants - pre-financing > 60.000 and > 80
% of the grant value
- NGO: pre-financing > 1,000,000
or > 90% of the grant value
- possible waiver: public bodies
and international organizations
Grants - AO Risk assessment
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EuropeAidProcurement & GrantsExclusion Cases
• 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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EuropeAidProcurement & GrantsExclusion Cases (2)
• Two additional exceptions to the obligation to exclude:
o Candidates/tenderers/applicants that have taken adequate measures against persons having powers of representation
o 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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EuropeAidGrantsPerformance based grants
• Output control vs. Input control
• Tools:
o Simplification of lump sums: ex ante methodology or on the basis of budget submitted by applicant
o “Factual audits”: was the output of the grant effectively achieved?
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EuropeAidGrantsSub-granting
CURRENT RULES PROPOSED RULES
• It cannot be the primary aim of
the action
• Conditions for giving financial
support are defined in the
contract: activities
• Amounts are small: total <
100,000 and each < 10,000
• The beneficiary offers adequate
guarantees as regards the
recovery.
• Conditions for giving financial
support are defined in the
contract: activities,
persons/categories, procedures
• Amounts are small: each <
50,000
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EuropeAidGrantsRules on pre-financing
CURRENT RULES PROPOSED RULES
< 250,000 Not due Interest is not due unless
otherwise provided in
agreements.
Interest shall be re-used for the
corresponding programme.
250,000 –
750,000
Deducted from
final payment
> 750,000 Annual
Recovery
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EuropeAidGrantsOther
• 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% financingo 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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EuropeAidGrantsOther (2)• 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 projecto Extension of findings to non audited projects and request
reimbursement
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EuropeAidNew category of financial contribution:Prizes and financial instruments
• 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 Principles shall also apply to directly related elements (i.e. technical assistance)
o Implemented: directly or indirectly (EIB, EIF, any other financial institution)
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EuropeAidFurther information• On EuropeAid:
http://ec.europa.eu/europeaid/index_en.htm
• On the speakers:
Javier RAYA AGUADOHead of Contractual matters [email protected]
Dolores DOMINGUEZ PEREZContractual matters [email protected]
Unit G7: Financial and contractual matters, and legal affairs