Fiche no 12. Brussels, 15 February 2012

Transcription

1 ELEMENTS RELATED TO A PROPOSED DELEGATED ACT AND IMPLEMENTING ACT REFERRED TO IN THE COMMON PROVISIONS REGULATION CONCERNING FINANCIAL INSTRUMENTS (TITLE IV) Fiche n 12 Brussels, 15 February 2012 Cmmissin Prpsal Cmmn Prvisins Regulatin [COM(2011) 615] Relevant Article 32(1); 33(3), (4), (7); 34 (3); 35(5), 36(4), 40(3) ERDF Regulatin [COM(2011) 614] ETC Regulatin [COM(2011) 611] EGTC Regulatin [COM(2011) 610] ESF Regulatin [COM(2011) 607] This paper has been drawn up n the basis f the prpsals fr regulatins adpted by the Eurpean Cmmissin n 6 Octber It des nt prejudge the final nature f the act, nr the cntent f any delegated r implementing act that may be prepared by the Cmmissin. 1

2 Backgrund & Objectives f the Paper Building n the implementatin experiences with financial instruments under shared management in past prgramming perids and reflecting the imprtance attached t them in the prpsed MFF , the Cmmissin prpses t expand and strengthen the use f financial instruments in the next prgramming perid as a cmplement t traditinal grantbased financing. T encurage and increase the use f financial instruments in the CSF related plicies , the Cmmissin prpsals: ffer greater flexibility t Member States and Eurpean regins when it cmes t targeting sectrs and implementatin structures; prvide a stable implementatin framewrk funded n a clear and mre detailed set f rules, building n existing guidance and experiences n the grund; capture synergies between financial instruments and ther frms f supprt such as grants; and, ensure cmpatibility with financial instruments set-up and implemented at EU level under direct management rules, while taking int cnsideratin the specific characteristics f shared management. T this end, the Cmmissin has established a separate Title IV (Articles 32 t 40) n financial instruments in the prpsed Cmmn Prvisins Regulatin ('CPR'), allwing fr a clearer presentatin f their specificities and regulatry requirements. In accrdance with the references included in the CPR, nn-essential supplementary elements and unifrm cnditins fr implementatin shuld be laid dwn in nn-legislative acts t be adpted by the Cmmissin (Delegated and Implementing Acts). This fiche is intended t utline the basis n which the essential elements f the legislative act shuld be supplemented by way f a delegated act and implemented by an implementing act. The delegated act wuld set ut the detailed rules which are based n the bjectives laid dwn in the CPR. Many f these elements are reflected in the principles agreed by the Crdinatin Cmmittee f the Funds (COCOF) and established in the mst recent COCOF Guidance Nte n Financial Engineering Instruments (COCOF ) (hereinafter referred t as the 'COCOF Guidance Nte') and take int cnsideratin a set f recmmendatins made by the Eurpean Curt f Auditrs 1. Where new elements cncerning financial instruments are intrduced in the CPR, the necessary supplementary prvisins, ften technical in nature, wuld be cntained in the delegated act are described. 1 Eurpean Curt f Auditrs, Opinin 7/

3 Main Elements f the Delegated Act 1. Ex-ante assessment f financial instruments (Article 32(1) CPR) Ratinale & new elements in the cmmn prvisins regulatin: Financial instruments are a special categry f spending and their success hinges n a crrect assessment f market gaps and needs and suitable, well thught-ut design. Article 32(1) CPR prvides that financial instruments shuld be based n an ex ante assessment t identify market failures r subptimal investment situatins, and investment needs. An analysis f this aspect will help t avid verlaps and incnsistencies between instruments implemented at different levels. Reflecting als recmmendatins frm the Eurpean Curt f Auditrs, and n the basis f Article 32(1) CPR, detailed rules n the ex ante assessment are necessary. The assessment wuld be cnducted prir t the establishment f the financial instrument as part f prgramme implementatin. The assessment wuld aim at identifying market failures r subptimal investment situatins, and investment needs, wuld als assess pssible private sectr participatin and an apprpriate investment strategy (including apprpriate delivery structures, financial prducts and target final recipients) t be pursued by the financial instrument in questin. criteria and main issues t be cvered by the ex-ante assessment; submissin f ex-ante assessment t the Mnitring Cmmittee prir t the selectin f the peratin; publicatin f summary findings and cnclusins n a website r prtal established under Art 105(1)(a) f the CPR and Article 73(i) f the prpsed Regulatin fr the EAFRD. 2. Cmbinatin f supprt [Article 32(1) CPR] Ratinale & new elements in the cmmn prvisins regulatin: The CPR will enable a better cmbinatin f financial instruments with ther frms f supprt in duly justified cases. Article 32(1) CPR prvides that financial instruments may be cmbined with grants, interest rate subsidies and guarantee fee subsidies. Cmpared t Regulatins, additinal detailed elements will be needed t prevent inapprpriate practices r abuses. Cnsequently, and in line with Article 32(1), detailed rules n a cmbinatin f supprt shuld be prvided. Final recipients may be supprted by several peratins prviding any ther frm f supprt and in such cases, different frms f supprt shuld cnstitute separate peratins, requiring separate recrds and audit trails; grant peratins shuld nt reimburse supprt received thrugh financial instruments and financial instruments shuld nt be used t pre-finance grants; 3/12

4 revenue-generating peratins under Article 54 CPR culd be supprted thrugh a cmbinatin f grants and financial instruments. In such cases, the grant amunt as well as the pssible grant equivalent f supprt frm financial instruments shuld be taken int accunt when assessing the grant-related limits f prgramme supprt. Where supprt thrugh financial instruments is cmbined with any ther frm f supprt in a single financing package, ntably grants fr financial incentives r fr the technical preparatin f the investment t the benefit f the final recipient, they shuld be cnsidered part f the peratin supprting the financial instrument; in such cases, separate accunts and recrds shuld be maintained fr each stream f financing prvided fr the benefit f final recipients. Fr all frms f cmbining financial instruments with ther frms f supprt as utlined abve, State aid rules regarding the cumulatin f aid and the rules cncerning natinal c-financing cntributins shuld be respected. 3. Eligibility f expenditure and types f activities which shall nt be supprted thrugh financial instruments [Article 32(1) CPR] Ratinale & new elements in the cmmn prvisins regulatin: Accrding t the prpsed CPR, Member States and managing authrities may apply financial instruments t all thematic bjectives cvered by prgrammes, based n prjects' ptential ecnmic viability which is a pre-requisite fr financial instrument supprt t functin effectively. Hwever, in line with the latest COCOF Guidance Nte, several activities are prpsed t be excluded frm the scpe f supprt frm financial instruments in rder t safeguard the Unin's bjectives. In this regard, Article 32(1) lays dwn that additinal specific rules n eligibility and rules specifying the type f activities nt entitled t supprt shuld be laid dwn in a delegated act. These supplement general rules n eligibility laid dwn in CPR. The elements included in the delegated act wuld cver: the types f investments t be supprted by financial instruments; the rules fr the treatment f VAT; eligibility in respect f enterprises: supprt nly at their establishment, in the early stages, including seed capital, r n expansin, as freseen in a business plan fr the establishment r expansin f the enterprise's business activities; in such circumstances the supprt culd include a certain amunt f wrking capital, as may be justified t prvide the necessary liquidity and cash t implement the business plan smthly and successfully; nt supprt firms in difficulty; nt supprt mergers, management buy uts, management buy ins r family transfers, unless supprt is prvided exclusively fr the implementatin f a business plan fr the expansin f the enterprise's business activities, with the exclusin f the financing f the acquisitin f the enterprise frm its previus wners; 4/12

5 eligibility f natural persns establishing a business cmpatible with the bjectives f the CPR and receiving supprt frm a financial instrument established under the CPR; rules n cverage f sustainable urban develpment falling under Article (7) (1) f the prpsed ERDF Regulatin in regard t: re-financing f acquisitins r participatins in prjects already cmpleted; the eligibility f purchase f land. 3. Rules regarding financial instruments and specific prducts set-up under shared management [Art 33(1)(b)] (Article 33 f CPR) Ratinale & new elements in the cmmn prvisins regulatin: During the current prgramming perid, Member States sught clarificatin frm the Cmmissin cncerning the nature f activities which may be supprted by financial instruments as well as minimum targets cncerning the leverage effects f financial instruments and the specific prducts ffered by them. Article 33(1)(b) CPR prvides that financial instruments under shared management may be set up. Building n previus guidance prvided by the Cmmissin, and in line with Article 33(1)(b), detailed requirements are necessary in rder t prvide a clear and stable implementatin framewrk. limiting supprt t final recipients and activities fr which the ptential ecnmic viability was established, taking int accunt als a pssible cmbinatin f financial instruments and grant supprt; existence f a business plans setting ut as supprt targets at the level f final recipients an amunt at least twice the amunt f the CSF cntributin t the financial instrument ver the eligibility perid; prvisin f supprt t final recipients and activities in a prprtinate manner. In this regard, preferential treatment f private investrs wuld be limited t the minimum necessary t generate expected market returns fr private investrs; fr guarantee prducts, an apprpriate multiplier rati wuld be established by way f prudent ex-ante assessment [in additin t the financial instrument-specific ex-ante assessment under Article 36 (1) (b) f the CPR] between the amunts established t cver expected and unexpected lsses t be cvered by guarantees and the crrespnding new lans r ther risk-bearing instruments issued and disbursed which are cvered by these guarantees. 4. Terms and cnditins fr cntributins t financial instruments [Article 33(4) CPR] Ratinale & new elements in the cmmn prvisins regulatin: The delivery structures and re-imbursement mechanisms fr financial instruments differ significantly frm thse established fr the prvisin f grant supprt. Cnsequently, Article 33(4) CPR prvides that rules are necessary cncerning funding agreements. This wuld be established by way f terms and cnditins cncerning the management and use f CSF Funds. 5/12

6 Fr financial instruments implemented under Articles 33 (4) (a) and (b) f the CPR (excluding instruments directly implemented by managing authrities), subject t the implementatin structure f the financial instrument, the terms and cnditins fr cntributins frm peratinal prgrammes t financial instruments shuld be set ut in funding agreements at tw levels, where applicable: Level I, where applicable - between the Member State r the managing authrity and the bdy that implements the fund f funds, and Level II - between the Member State r the managing authrity, r the bdy that implements the fund f funds where applicable, and the bdy that implements the financial instrument. Fr these instruments, the funding agreements shuld include minimum requirements in accrdance with the mst recent COCOF Guidance Nte. Fr financial instruments implemented under Article 33 (4) (c) f the CPR (i.e. instruments implemented directly by managing authrities), the terms and cnditins fr cntributins frm peratinal prgrammes t financial instruments shuld be set ut in a strategy dcument t be examined by the Mnitring Cmmittee. It is envisaged that the strategy dcument wuld include elements such as the investment strategy r plicy f the financial instrument, general terms and cnditins f envisaged financial debt prducts, target recipients and actins, a business plan r equivalent dcuments fr the financial instrument t be implemented, including the supprt targets, prvisins regarding the use and re-use f cntributins, and audit requirements. 5. Rules cncerning bdies that implement financial instruments pursuant t Article 33 (1) (b) [Article 33(4) CPR] Ratinale & new elements in the cmmn prvisins regulatin: Article 33(4) CPR takes int accunt that specific rules n the rle f entities t which implementatin tasks are entrusted are necessary. This builds n previus COCOF guidance and best practice in implementing financial instruments at bth EU r natinal/reginal level, regarding the basic parameters t be used by managing authrities when selecting bdies t implement financial instruments. The detailed rules wuld als reflect the differences between newly intrduced implementatin ptins set ut in the CPR. The selectin f bdies implementing financial instruments, including bdies implementing funds f funds shuld be undertaken in accrdance with EU and natinal public prcurement rules. A set f minimum selectin criteria (e.g. track recrd, peratinal capacity) and award criteria (e.g. prpsed level f management csts and fees, pricing fr final recipients) t be used by managing authrities when selecting bdies that implement financial instruments. 6/12

7 Where financial instruments are rganised thrugh a fund f funds, the bdy that implements the fund f funds is the beneficiary. Specific prvisins cncerning arrangements with the invlvement f the EIB 2. Fr financial instruments implemented directly by the managing authrity the managing authrity is the beneficiary and the entity receiving the lan r guarantee is the final recipient. 6. Specific respnsibilities f the bdies that implement financial instruments pursuant t Articles 33 (1) (b) [Article 33(4) CPR] Ratinale & new elements in the cmmn prvisins regulatin: Article 33(4) CPR prvides that specific rules are necessary n the respnsibility f entities t which implementatin tasks are entrusted, when they receive EU budget resurces fr investment in final recipients. It is necessary t ensure therefre that these selected bdies (including bdies implementing funds f funds) manage such EU/CSF resurces with the apprpriate degree f integrity and prfessinalism, and that basic principles (such as sund financial management) as well as EU and natinal rules are adhered t during the full implementatin cycle f the instruments. The prpsed prvisins wuld primarily reflect the principles laid dwn in the mst recent COCOF guidance as well as gd practice frm EU central level instruments. management f financial instruments with an apprpriate degree f independence and prfessinalism; ensuring that managers f financial instruments act in gd faith in the exclusive interest f the parties prviding cntributins t the financial instrument; prtect the EU frm financial and reputatinal risk; fulfilling the infrmatin and publicity requirements laid dwn in Article 105 f the CPR and in Article 73(i) f the prpsed Rural Develpment Regulatin fr the EAFRD; ensuring cmpliance with the relevant Unin and natinal rules, including inter alia regulatins cvering the CSF Funds, state aid, public prcurement, and standards t prevent mney laundering, tax fraud and finance f terrrism. 7. Management csts and fees [Article 33(4) CPR] Ratinale & new elements in the cmmn prvisins regulatin: Article 33(4) CPR prvides that detailed rules n management csts and fees are required. Bdies that implement financial instruments may charge t the CSF Funds their csts fr managing cntributins received frm peratinal prgrammes t supprt final recipients. While the COCOF Guidance Nte prvided further explanatins n the relevant principles and ceilings applicable t CSF cntributins, bth Member States and the Eurpean Curt f Auditrs stressed the need fr mre effective rules that help bth (i) t increase the efficiency and effectiveness f investments undertaken by the instruments and (ii) t avid undesirable practice (e.g. duble-charging f csts t bth the final recipients and the CSF Funds). T this 2 As defined under Article 2(21) f the prpsed CSF Regulatin. 7/12

8 end, the Cmmissin culd prpse a simplified and perfrmance-driven methdlgy fr the calculatin f management csts and fees. Fr financial instruments implemented directly by managing authrities under Article 33(4)(c) f the CPR, management csts and fees culd nt be declared as eligible expenditure fr reimbursement frm the CSF Funds. T infrm the Mnitring Cmmittee in advance f the prpsed methdlgy fr the calculatin and reimbursement f the management csts and fees and receive regular reprts every six mnths n the management csts and fees effectively paid. Detailed rules culd be prpsed fr the calculatin f management csts and fees pursuant t Article 36(1)(d) f the CPR, namely: eligibility frm any date after the signature f the relevant funding agreement. Therefre, management csts and fees incurred fr preparatry wrk in relatin t financial instruments wuld be recverable nly after signature f the relevant funding agreement; the establishment f ceilings and breakdwn f management csts and fees int tw cmpnents: i. a base remuneratin fr the management f cntributins frm the peratinal prgrammes paid by the managing authrity t bdy implementing the financial instrument, r fund f funds as applicable, eligible frm the mment f effective payment t the financial instrument r funds f funds until clsure. A ceiling fr base remuneratin wuld apply t all financial instruments; and ii. a perfrmance-based remuneratin fr the management f payments t final recipients which cnstitute eligible expenditure in the meaning f Article 36 f the CPR, eligible frm the mment f investment/payment t the final recipient, r cmmitment in the case f guarantees, until clsure. Fr funds f funds, the perfrmance-based remuneratin shuld relate t the management f payments made int underlying financial instruments, eligible frm the mment f effective payment t the financial instrument until clsure. Ceilings fr perfrmance-based remuneratin wuld be specified fr funds f funds and fr the different types f financial prducts prvided frm financial instruments t final recipients. Beynd management csts and fees pursuant t Article 33 f the CPR, managing authrities culd prvide additinal incentives t bdies implementing financial instruments fr achieving high quality results linked t peratinal prgramme bjectives. Such incentives culd be ffered, in a prprtinate manner, by applying Article 38(2)(a) f the CPR. If arrangement fees r ther administrative csts f the financial instrument related t specific supprt prvided by the financial instrument verlap with the management csts and fees declared as eligible expenditures fr reimbursement by the CSF funds, the crrespnding amunts shuld nt be part f the eligible expenditures at clsure. 8/12

9 8. Transfer and management f assets managed by bdies t which implementatin tasks were entrusted [Article 33(7) CPR] Ratinale & new elements in the cmmn prvisins regulatin: The CPR aims at increased flexibility in mbilising supprt t financial instruments frm a variety f surces. Article 33(7) prvides that specific requirements are necessary regarding the transfer and management f assets managed by entities t which implementatin tasks are entrusted. This will enable cntributins t financial instruments frm several pririty axes r peratinal prgrammes and allw a wider range f ptins fr natinal cntributins. During the prgramming perid, managing authrities faced difficulties in generating natinal cntributins necessary t btain the full reimbursement f OP cntributins paid t financial instrument. Therefre, fr the prgramming perid, the CPR prpses t ffer the pssibility t intrduce natinal cntributins paid and expected t be paid t a financial instrument during the eligibility perid. In additin, and fllwing the COCOF Guidance Nte, it is necessary t clarify under which circumstances nn-csf Funds cntributins t financial instruments culd be taken int cnsideratin as natinal c-financing resurces. Allwing supprt frm mre than ne peratinal prgramme supprted by the CSF Funds r frm mre than ne pririty axis. In such cases, fr reprting and audit purpses, separate accunts r adequate accunting cdes shuld be kept fr the cntributin frm each peratinal prgramme and frm each pririty axis. A single managing authrity and a single audit authrity wuld be designated t ensure cmpliance f the peratin with applicable rules. Allwing natinal public and private c-financing cntributins at the level f the financial instrument r - under peratinal prgrammes fr the ERDF, ESF and CF - at the level f final recipients. The ttal amunt f supprt r in-kind cntributins, prvided at the level f the final recipient in additin t CSF cntributins, wuld be cunted as natinal c-financing, in accrdance with the c-financing mdalities f the OP. Natinal public r private cntributins at the level f the financial instrument wuld be paid int an escrw accunt r t anther apprpriate type f accunt fr subsequent supprt t final recipients within the eligibility perid. 9. Cnversin f assets between eur and natinal currencies under the ERDF, ESF and CF [Article 33(7) CPR] Ratinale & new elements in the cmmn prvisins regulatin: Article 33(7) prvides that specific requirements are necessary n the cnversin f assets between eur and natinal currencies. In line with the wrding f the mst recent COCOF guidance, these elements wuld take int cnsideratin the specificities f financial instrument and the relevant payment prcedures. 9/12

10 10. Management and cntrl f financial instruments [Article 34(3) CPR] Ratinale & new elements in the cmmn prvisins regulatin: The implementatin f financial instruments invlves new prcedures and actrs in delivering CSF Funds supprt n the grund. Article 34(3) CPR prvides that specific arrangements n management and cntrl prvisins shuld be laid dwn. These rules shuld take int cnsideratin bth the COCOF Guidance Nte (in particular sectins 6 and 7) as well as the recently presented audit methdlgy fr financial engineering instruments in the current prgramming perid 3. Eligible expenditure wuld be evidenced by adequate supprting dcuments, t be kept at the apprpriate level f the peratin until three years after clsure (a nn-exhaustive list f apprpriate supprting dcuments will be prpsed); supprting dcuments shuld be available t allw verificatin f the legality and regularity f the expenditure declared t the Cmmissin. Management verificatins wuld be carried ut thrughut the prgramming perid. An adequate audit trail wuld be established fr reprting and audit purpses; fr Funds ther than EAFRD, audits culd be cnducted at the level f the final recipients nly when the supprting dcuments are nt available at the level f the financial instrument r at the level f the managing authrity r in case f insufficient mnitring and verificatins, r f legitimate dubt that the dcuments d nt reflect the reality f the supprt prvided thrugh financial instruments; financial instruments shuld be audited thrughut the prgramming perid until clsure; the audit rights f the ECA and OLAF wuld nt be cnstrained. Fr financial instruments implemented by the EIB and receiving supprt under the ERDF, ESF and CF, the managing authrity shuld mandate a firm perating under a cmmn framewrk cntract as established by the Cmmissin t carry ut n-the-spt verificatins r audits n the peratin r the management and cntrl systems relating t thse instruments. The audit authrity culd draw up its audit pinin n the basis f the infrmatin prvided by this firm. Funding agreements shuld cntain prvisins cncerning the respnsibilities and liabilities f the managing authrity, bdies implementing the financial instrument and final recipients in the case f irregularities and financial crrectins. Finally, the abve management and cntrl prvisins will need t reflect the specificities f all the Funds cvered by the CPR. 11. Payments and withdrawal f payments [Article 35(5) CPR] Ratinale & new elements in the cmmn prvisins regulatin: Article 35 CPR lays dwn prvisins where requests fr payment include expenditure fr financial instruments. In the cntext f financial instruments, supprt frm prgrammes t beneficiaries is prvided exante. Prcedural guidance is required t facilitate the cncept f frnt-lading and the newly intrduced requirement fr phased cntributins t financial instruments. Cnsequently, 3 DG Reginal Plicy, Cmmn Audit Framewrk - Financial engineering instruments in the cntext f Structural Funds, 31 July /12

11 Article 35(5) prvides that the necessary elements n payments and withdrawal f payments t financial instruments and pssible cnsequences in respect f requests f payments shuld be adpted. Prvisin f additinal infrmatin in an attachment t each statement f expenditure; a template will be prpsed by the Cmmissin (Annex t Delegated Act). Member States and managing authrities culd nly withdraw cntributins frm peratinal prgrammes t financial instruments if such cntributins were nt already reimbursed by the Cmmissin n the basis f a payment request r if the declaratin f expenditure is subsequently mdified t withdraw r replace the expenditure in questin. Cnditins fr a pssible withdrawal f cntributins frm prgrammes t financial instruments (in part r in full) shuld be included in funding agreements. 12. Capitalisatin f interest rate subsidies and guarantee fee subsidies [Article 36(4) CPR] Ratinale & new elements in the cmmn prvisins regulatin: The CPR intrduces new categries f eligible expenditure that allw fr a mre effective functining f financial instruments and specific prducts beynd the end f the eligibility perid. Article 36(1)(c) prvides fr the eligibility f capitalised interest rate subsidies r guarantee fee subsidies and Article 36(2) prvides fr the eligibility f a certain amunt f capitalised management csts and fees fr equity-based instruments and micr-credit. In rder t lay dwn mre detailed elements n this, Article 36(2) prvides that rules n the establishment f a system f capitalisatin f annual instalments fr interest rate subsidies and guarantee fee subsidies shuld be adpted. calculatin at clsure as the ttal f discunted payment bligatins fr the purpses and perids laid dwn in the CPR, based n the utstanding prtfli under management (and ceilings fr management csts and fees where applicable); transfer f the ttal amunt t an escrw accunt frm which they can be drawn dwn nly as required; and any residual resurces left in the escrw accunt after the maximum perid referred t under Articles 36(1)(c) r 36(2) f the CPR, r as a result f unexpected winding-up f the instrument during this maximum perid, shuld be used in accrdance with the legacy prvisins f Article 39 f the CPR. 11/12

12 Main elements f the Implementing Act Title IV f the CPR als cntains prvisins which refer t the intrductin f standard terms and cnditins fr financial instruments (Article 33(3)(a)) and unifrm cnditins cncerning the mnitring and prvisin f mnitring infrmatin (Article 40(3)). T facilitate the timely launch and sund functining f financial instruments at natinal, reginal r crss-brder level, the Cmmissin will prpse standard terms and cnditins which culd be used by Member States and managing authrities fr the set-up, implementatin and gvernance f financial instruments. While applicable EU rules, in particular as regards the use f CSF Funds and public prcurement, will serve as a fundatin fr these standard terms and cnditins, they are als intended t reflect existing State aid rules s as t catalyse the rll-ut f these instruments. With regard t reprting prvisins under Article 40 f the CPR, a template is prpsed fr the prvisin f mnitring infrmatin t the Cmmissin. This template will take int accunt a streamlined set f parameters currently cntained in Annex II f the COCOF Guidance Nte. Mrever, a specific template fr Eurpean Scial Fund Plicy Based Guarantees will be prpsed. 12/12