Subsidy Contract

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Subsidy Contract
Lead Partner seminar 13-14 October 2008, Riga
Arina Andreicika Managing Authority e-mail
arina.andreicika_at_raplm.gov.lv
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Objective of the Subsidy Contract

• To set unified rules for all Projects
  implementation, administration and monitoring
  within the Programme
• To determine the rights and responsibilities of
  the MA and the LP
• To fulfil requirement of Article 15 (2) of ERDF
  Regulation

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Content of the Subsidy Contract

• Legal Framework (1)
• Award of subsidy (2)
• Object of use, eligibility of funds (3)
• Reporting and Payments (4)
• LP and PP liabilities (5)
• Publicity (6)
• Durability and ownership of results (7)
• Rights of termination and reduction of the
  subsidy (8)
• Retaining of documentation (9)
• Controls and audits (10)
• Recovery of funds (11)
• Assignment, legal succession (12)
• Changes in the content of the Subsidy Contract
  (13)

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Legal Framework (1)

• The LP should implement the Project in accordance
  with regulations and rules as well as the
  horizontal policies
• The LP is responsible for implementation of the
  main Programme principles
• In case different interpretation of legal
  provisions is discovered the strictest rule shall
  apply

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Legal Framework (1)

• Regulation No 1080/2006 (ERDF Regulation)
• Regulation No 1083/2006 (General Regulation)
• Regulation No 1828/2006 (Implementation
  Regulation)
• Regulation No 1605/2002 (Financial Regulation)
• Regulation No 2342/2002 (Rules for the
  implementation of the Financial Regulation)
• Regulation No 45/2001 (Regulation on protection
  of data)
• Regulation No 1998/2006 (Regulation on
  application Treaty to de-minimis aid)
• EU horizontal policies and principles

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Legal Framework (1)

• LatviaLithuania Cross Border Cooperation
  Programme (Programme)
• Agreement between the MA, the CA and the AA, the
  Republic of Latvia and the Republic of Lithuania
  on the management and administration of the
  Programme
• Programme Manual
• Application Form
• Communication Plan
• Subsidy Contract
• Model Partnership Agreement
• Project Progress Report form and Project Final
  Report form
• Relevant national legislation of the Programme
  Member States
• Programme guidance documents

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Award of subsidy(2)

• Total eligible Project budgetERDF co-financing
  National funding
• All the allocations are considered maximum
  provisional amounts
• The MA shall be entitled to suspend the payments
  to the LP or terminate the Subsidy Contract in
  case the European Commission fails to make
  available the funding to the Programme
• The LP for the same activities can receive
  funding only once within the Programme and other
  EU funded programmes

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Object of use, eligibility of funds (3)

• Costs approved in the Application and awarded to
  the LP for implementation of the Project
• Costs from the day after the JMSC meeting (start
  date) when decision was taken about the Project
  approval until the date stated in the Subsidy
  Contract as end date
• Costs validated by the FLC
• Costs certified by the CA
• Preparation costs incurred between 1 January 2007
  and the day before the Project approval in
  accordance with the JMSC decision

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Reporting and Payments (4)

• Only the LP is entitled to request payment of the
  ERDF co-financing after submitting the Progress
  Report
• Payments to the LP will be made on a
  reimbursement basis
• The CA ensures that the LP receives the ERDF
  co-financing as quickly as possible and in full
• The final amount of the ERDF co-financing will be
  paid on the basis of the reported total eligible
  expenditure only
• Payments not requested in time and in full will
  not be reimbursed

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LP and PP liabilities (5)

• The LP solely bears the overall financial and
  legal responsibility for the Project and for the
  PP
• The LP is responsible for concluding the
  Partnership Agreement and submitting it to the
  JTS
• The LP and the PP shall assume liability to third
  parties while the Project is being carried out

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Publicity (6)

• Any notice, publication or event, equipment or
  infrastructure by the Project must specify that
  the Project has received a subsidy from the
  Programme funds
• The LP must ensure that the Project outputs are
  made freely available to public
• The MA has the right to publish information on
  the Project and products deriving from the
  Project for information and publicity purposes
  only

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Durability and ownership of results (7)

• The LP and the PP
• Shall retain the Project outputs and results
  during the Project and at least for 5 years after
  final payment from the ERDF co-financing has been
  made
• Not allowed to transfer ownerships, titles,
  industrial and intellectual property rights for
  outputs of the Project without prior consent of
  the MA
• All estimated revenue must be calculated and
  deducted from the Projects eligible expenditure

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Right of termination and reduction of the
subsidy (8)

• The MA is entitled to
• terminate the Subsidy Contract
• withhold the payments
• reduce the subsidy
• demand repayment of the ERDF co-financing
• The decision to terminate the Subsidy Contract or
  reduce the ERDF co-financing shall be made by the
  JMSC
• In case the Subsidy Contract is terminated
  received ERDF co-financing has to be transferred
  to the CA

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Retaining of documentation (9)

• The LP and the PP are obliged to retain all
  official files, documents and data about the
  Project for control and audit purposes on
  customary data storage media in a safe and
  orderly manner until 31 December 2021 as a
  minimum
• Location, conditions and support for achieving
  must comply with the requirements set in Article
  90 of the General Regulation

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Controls and Audits (10)

• Each Progress Report must be validated by the FLC
• The LP and the PP provides all the supporting
  documents, necessary information and access to
  the Project accounting system, work premises and
  the Project outputs for control and audit purpose
• The CA has a right to withhold payments to the LP
  until required information have been delivered or
  case has been solved

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Recovery of Funds (11)

• Irregular expenditures can be detected by any
  authority involved in the management and
  administration of the Programme
• The MA, the CA and the MSs are responsible for
  detecting and correcting irregularities and
  recover amounts unduly paid
• The CA has a right to deduct an amount of
  irregularly from the Payment Claim or demand the
  reimbursement any irregularly

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Assignment of Rights, Legal Succession (12)

• The MA is entitled to assign its rights under the
  Subsidy Contract immediately informing the LP
• The LP is allowed to assign its duties and rights
  under the Subsidy Contract only prior written
  consent of the MA

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Changes in the content of the Subsidy Contract
(13)

• The LP can request changes to the Subsidy
  Contract or its Annexes
• The changes in the Project may be introduced as
  long as the main objective of the Project is not
  altered and the maximum amount of the ERDF
  co-financing awarded remains the same
• The MA has the rights to decide on changes in the
  Subsidy Contract in cases mentioned under 13
• The JMSC decides in all other cases that are not
  listed under responsibility of the MA
• The JTS shall inform the LP in written about
  decision on proposed changes in the Subsidy
  Contract

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Thank you for your attention!