Council Regulation (EC) No 1265/1999 of 21 June 1999 amending Annex II to Regulation (EC) No 1164/94 establishing a Cohesion Fund
L 161/62 EN Official Journal of the European Communities 26. 6. 1999 COUNCIL REGULATION (EC) No 1265/1999 of 21 June 1999 amending Annex II to Regulation (EC) No 1164/94 establishing a Cohesion Fund THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, (4) Whereas the desired simplification should be accompanied that expenditure has actually been incurred and by greater responibility by the Member State for ensuring sound financial management; improved checks by Having regard to Council Regulation (EC) No 1164/ 94 of 16 May 1994 establishing a Cohesion Fund (1), and in particular Article K of Annex II thereto, (5) Whereas the Commission and the Member State should improve their cooperation on checking projects and this cooperation should be made systematic; Having regard Commission (2), to the proposal from the Having regard to the opinion of Parliament (3), the European Having regard to the opinion of the Economic and Social Committee (4), Having regard to the opinion of the Committee of the Regions (5), (1) Whereas, in order to make the Fund more effective, the concepts of project’, groups of projects’ and stages of a project’ and the criteria for grouping should be defined; (6) Whereas, where irregularities are detected, there should be a system of financial corrections to protect the financial interests of the Community; (7) Whereas Annex II to Regulation (EC) No 1164/ 94 should be amended accordingly, HAS ADOPTED THIS REGULATION: Article 1 (2) Whereas the system of financial management should be simplified, while retaining its link with the actual implementation of operations; Annex II to Regulation (EC) No 1164/94 is hereby amended as follows: (3) Whereas, during transitional period the (1 January 1999 to 31 December 2001), all references to the euro should normally also be read as references to the euro as a monetary unit, as provided for in the second sentence of Article 2 of Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro (6); (1) OJ L 130, 25. 5. 1994, p. 1. (2) OJ C 159, 26. 5. 1998, p. 11. (3) Opinion delivered on 6 May 1999 (not yet published in the Official Journal). (4) OJ C 407, 28. 12. 1998, p. 74. (5) OJ C 51, 22. 2. 1999, p. 10. (6) OJ L 139, 11. 5. 1998, p. 1. 1. Article A shall be replaced by the following: Article A Designation of projects, of stages or groups of projects The Commission may, in agreement with the 1. beneficiary Member State, group projects together and designate technically and financially separate stages of a project for the purpose of granting assistance. 26. 6. 1999 EN Official Journal of the European Communities L 161/63 For 2. following definitions shall apply: the purpose of this Regulation, the 3. Article C is hereby amended as follows: (a) a be an shall “project” economically indivisible series of works fulfilling a precise technical function and with clearly identified aims the from which to judge whether project complies with the criterion laid down in the first indent of Article 10(5); (b) a “technically and financially independent stage” shall be a stage which can be identified as operational in its own right. A stage may 3. feasibility carrying out a project. and technical also cover preliminary, studies needed for 4. To comply with the criterion in the third indent of Article 1(3), projects meeting the following three conditions may be grouped: (a) they must be located in the same area or situated along the same transport corridor; (b) (c) they must be carried out under an overall plan for the area or corridor with clearly in as identified Article 1(3); provided goals, for be supervised they must body responsible for coordinating and monitoring the group of projects in cases where the projects different carried are competent authorities. ’ out by by a 2. In Article B(2), the second sentence shall be replaced by the following: The beneficiary Member States shall provide all necessary information, as set out in Article 10(4), including the results of feasibility studies and ex ante appraisals. In order to make this appraisal as effective as possible, Member States shall also provide the results of the environmental impact assessment in conformity with the Community legislation, and their consistency with a general environmental at administrative unit or sector level, and, where appropriate: transport strategy or (a) paragraph 2 shall be amended as follows: (i) in the second subparagraph of point (a), the second sentence shall be replaced by the following: Commitments in respect of subsequent annual instalments shall be based on the initial or revised financing plan for the project and shall normally be made at the beginning of each budget year and as a general rule by 30 April each year, based on the expenditure forecasts for the project for that current year. ’; (ii) point (b) following: shall be replaced by the (b) for projects to be carried out over a period of less than two years or where Community assistance is less than EUR 50 million, an initial commitment of 80 % of assistance may be made when the Commission adopts grant decision the Community assistance. to The balance shall be committed according to the implementation of the project’; (b) the following paragraph 5 shall be added: Except in duly justified cases, 5. the assistance granted to a project, group of projects or project stage on which work has not begun within two years from the date of its expected start as indicated in the decision granting assistance or the date of its approval if later, shall be cancelled. In any case the Commission shall inform in good time the Member States and the designated authority whenever there is a risk of cancellation. ’ 4. Article D is hereby amended as follows: — an indication of the possible alternatives that were not chosen, and (a) in paragraph 1, the second sentence shall be replaced by the following: — the links between projects of common located along the same transport interest corridor. ’ Payments may take the form of payments on interim payments or payments of account, Interim payments and the final balance. L 161/64 EN Official Journal of the European Communities 26. 6. 1999 the balance shall payments of relate to expenditure actually paid out, which must be supported by receipted invoices or accounting documents of equivalent probative value. ’; (b) paragraphs 2 and 3 shall be replaced by the following: 2. Payments shall be made as follows: (a) a single payment on account of 20 % of the Fund assistance as initially decided shall be paid when the decision granting Community assistance is adopted and, after duly except where signature of the contracts relating to public procurement. justified, (c) (d) repaid by or All or part of a payment on account the designated shall be authority in referred paragraph 1 if no payment application is to the Commission within 12 sent months from the date on which the payment on account is paid; body to (b) the project interim payments may be paid provided that progressing satisfactorily towards completion and shall be made to refund the expenditure certified and actually paid, subject to the following conditions: is — the Member State has submitted an application describing the progress of the project in terms of its physical and financial and its conformity with the decision to grant asssistance, where appropriate any specific conditions attached to the assistance, indicators including and recommen- — the observations and/or national the of dations Community authorities inspection have been acted on, in particular as regards any observed or presumed irregularities, correction the of — the steps taken to publicise the project have been described. The Member States shall be informed without delay by the Commission if one of the abovementioned conditions is not fulfilled; the total amount of the payments made under (a) and (b) may not exceed 80 % of the total assistance granted. This percentage may be increased to 90 % for important projects committed in annual instalments and in justified cases; final balance the of Community assistance calculated on the basis of expenditure certified and actually paid shall be paid provided that: — the project, stage of project, or group of projects has been carried out according to its objectives, for payment — the designated authority or body referred to in paragraph 1 submits an application to the Commission within six months of the deadline for completion of the work and for expenditure laid down in the decision granting assistance to the project, stage of project or group of projects, — the final Article F(4) Commission, report is referred to in submitted to the — the Member State certifies to the Commission that information given in the application for payment and in the report is correct, the — the Member State has the Commission the declaration referred to in Article 12(1), sent — all the information and publicity measures the Commission under Article 14(3) have been implemented. drawn up by — the main technical, financial and legal problems that have arisen and the measures taken to correct them have been indicated, — any departures from the original financing plan have been analysed, If the final report referred to in 3. paragraph 2 is not sent to the Commission within 18 months of the final date for completion of the works and payments as given in the decision granting assistance, that 26. 6. 1999 EN Official Journal of the European Communities L 161/65 the part of the remaining balance for the project shall be cancelled. ’; representing assistance (c) in paragraph 4, the final words shall read in paragraph 2(d). ’; (d) the following paragraph shall be inserted: shall States 4a. Member that applications for payment are submitted to the Commission as a general rule three times a year, by 1 March, 1 July and 1 November at the latest. ’; ensure (e) in paragraph 5, payment’, provided budget funds are available. ’; for the following shall be added: the words after (f) the following paragraph shall be added: The Commission shall rules on the lay eligibility down of 7. common expenditure. ’ 5. Article E is hereby amended as follows: (b) information on all publicity measures; (c) certification that the work conforms to the decision granting assistance; (d) an initial assessment as to whether the anticipated in Article 13(4) are likely to be achieved, including in particular: indicated results as — the actual starting date of the project, — the way in which it will be managed once finished, — confirmation, financial regards expected revenue, if appropriate, of the as and especially costs forecasts, the operating — confirmation of the socioeconomic forecasts, in particular the expected costs and benefits, — an indication of the environmental protection measures taken, and their cost, including compliance with the polluter-pays principle. ’; (a) in the title and in paragraphs 1 to 4, ecu(s)’ shall be replaced by euro’ where required; (b) the following subparagraph shall be added to paragraph 5: (b) in paragraphs 1 and 3, national currency’ shall be deleted; the words or in (c) the following paragraph shall be added: 5. For Member States not participating in the euro, the conversion rate shall be the Commission’s financial accounting rate. ’ 6. Article F is hereby amended as follows: (a) the following subparagraph shall be added to paragraph 4: This report shall include: (a) a description of the work carried out, accompanied by the physical indicators, the expenditure by category of work and specific any measures taken clauses granting assistance; decision under the in The decision granting assistance shall include appropriate arrangements for making the modifications, differentiating between them on the basis of their nature and importance. ’ 7. Article G shall be amended as follows: Article G Checks Current paragraph 1 shall be transferred to Article subparagraph. New paragraph 1 shall read as follows: second 12(2), The Commission and the Member State 1. shall on the basis of bilateral administrative arrangements to coordinate plans, methods and implementation of checks so as to those carried out. maximise the usefulness of cooperate L 161/66 EN Official Journal of the European Communities 26. 6. 1999 They shall immediately exchange the results of the checks carried out. At least once a year the following shall be examined and evaluated: (a) the results of the checks carried out by the Member State and the Commission; (b) any comments made by other national or Community control bodies or institutions; (either supporting documents the originals or versions certified to be in conformity with the originals on commonly accepted data carriers) regarding expenditure and checks on the project concerned. This period shall be interrupted either in the case of legal proceedings or at the duly substantiated request of the Commission. ’ (c) the impact of steps already taken or the irregularities the financial still noted, required them and, where necessary, adjustments to the management and control systems. correct to Following this examination and evaluation and without prejudice to the measures to be taken immediately by the Member State under Article H, the Commission may make observations, particularly regarding the financial impact of any irregularities detected. These observations shall be addressed to the Member State and the designated concerned. The authority observations accompanied, where necessary, by requests for corrective measures to remedy the management shortcomings found and correct those irregularities detected which have not already been corrected. The Member State shall have the opportunity to comment on these observations. project be the shall of Where following or in the absence of comments the Member State the Commission adopts of conclusions, take the the Member State shall necessary steps within the deadline set to comply with the Commission’s request and inform the Commission of its actions. to this Article, 2. Without prejudice the Commission may suspend all or part of an interim payment if it finds that the expenditure concerned is linked to a serious irregularity. The Commission shall inform the Member State concerned of the action taken and the reasons for it. the For a period of three years, unless otherwise 3. administrative bilateral in decided arrangements, following the payment by the Commission of the final balance in respect of a project, the responsible body and authorities shall the keep available the Commission all for 8. Article H is hereby amended as follows: (a) the heading shall be replaced by: Financial corrections’; (b) paragraph 1 shall be replaced by: If, 1. the necessary completing verifications, the Commission concludes that: after (a) to comply with one of the implementation of a project does not justify either part or the whole of the including a assistance granted to it, failure the in the decision to grant conditions any in and assistance significant change affecting the nature or conditions of the project for which the Commission’s approval has not been sought, or implementation of particular (b) there is an irregularity with regard to assistance from the Fund and that the Member State concerned has not taken the necessary corrective measures, the Commission shall suspend the assistance the project concerned and in respect of stating its reason, request that the Member State submits its comments within a specified period of time. to objects the Member If the State observations made by the Commission, the Member State shall be invited to a hearing by the Commission, in which both sides make the efforts observations and the conclusions to be drawn from them. ’; to reach an agreement about (c) paragraph 2 shall be replaced by: 2. At the end of the period set by the Commission, the Commission shall, subject 26. 6. 1999 EN Official Journal of the European Communities L 161/67 to the respect of due procedure, if no agreement has been reached within three months, taking into account any comments made by the Member State, decide to: (a) reduce the payment on account referred to in Article D(2), or (b) make the financial corrections required. This shall mean cancelling all or part of the assistance granted to the project. These decisions shall respect the principle of proportionality. The Commission shall, when deciding the amount of a correction, take account of the type of irregularity or change financial and the extent of in impact the of management systems. Any reduction or cancellation shall give rise to recovery of the sums paid. ’; the potential shortcomings control any or (e) the following paragraph shall be added: 4. The Commission shall lay down the detailed rules for implementing paragraphs 1 to 3 and shall inform the Member States and the European Parliament thereof. ’ 9. In the second subparagraph of Article J, the following sentences shall be added: At 4. this meeting the Commission shall inform the Member States in particular of the relevant subjects for the annual report and its actions and decisions taken. The Commission shall send the Member States the appropriate documents in good time before the meeting is held. ’ 10. The Annex to Annex II is hereby amended as follows: (a) Point 2 shall be replaced by: 2. the economic and social impact of the Fund in the Member States and on economic and social cohesion in the on Union, employment;’ including impact the (d) in paragraph 3, the second sentence shall be replaced by the following: (b) Point 4 shall end with the words …in Article 6’. sum received unduly Any and to be recovered shall be paid to the Commission. Interest on account of late repayment shall be charged in accordance with the rules to be adopted by the Commission. ’; Article 2 This Regulation shall enter into force on 1 January 2000. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Luxembourg, 21 June 1999. For the Council The President G. VERHEUGEN