Subsidy Contract

Lead Partner seminar 13-14 October 2008, Riga

Arina AndreičikaManaging Authoritye-mail: arina.andreicika@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

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) 3

Content of the Subsidy Contract

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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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

Legal Framework (§1)

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Latvia–Lithuania 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

Legal Framework (§1)

Award of subsidy(§2)

Total eligible Project budget=ERDF 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 Project’s 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!

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