Cross-border Social Fraud/Abuse in Social Security (CROBOSOSU) VP/2016/002/0082

Transcription

1 TENDER SPECIFICATIONS FOR SUBCONTRACTING EXTERNAL EXPERTISE: 1 Expert on Social Security (phase 2) Cross-border Social Fraud/Abuse in Social Security (CROBOSOSU) VP/2016/002/0082 Tender Specifications Background of the project In his political guidelines (July 2014), President Jean-Claude Juncker announced that We have to fight social dumping and we will do it. Combatting cross-border social fraud and abuse in social security is one of the EU-key policies of the European Commission, and part of the so-called labour mobility package. On 8th April 2015 the European Commission announced a targeted revision of the Posting of Workers Directive. However this discussion only deals with the non-respect of the applicable working conditions of the posted workers, and is therefore just one side of the coin. The other side of the coin relates to the non- or only partial respect of the Social Security provisions, as regulated in the Regulation 883/2004 on the coordination of social security systems. The Work programme of the European Commission 2016 no time for business as usual (COM(2015) announced the revision of Regulations on social security coordination. Magdalena Bernaciak (2014) defines social dumping as the practice, undertaken by self-interested market participants, of undermining or evading existing social regulations with the aim of gaining competitive advantage. This definition is broad and relates to the working conditions (wages, working time), social protection and security and fundamental workers rights. 1 / 7

2 Although there might be a need to modernize some challenges linked to benefit tourism, the EFBWW considers that there are also many other problems linked to cross-border social fraud which must be dealt with at the same time. During the EFBWW - FIEC discussion in regarding social fraud, both parties identified several serious shortcomings in social security, which should be resolved when the current Social Security Regulation will be revised. Namely: To reduce the period of validity of the A1 forms, for example to 6 months, in order to be able to check more regularly the reality behind them. To improve the reliability of the A1 forms (for ex. by adding the picture and a unique identification of the worker, the identity of the employer). Allow the national authorities of the host countries to reclassify the A1 form, based on a rebuttable presumption that the A1 form could not reflect the reality of posting. Study and develop a system for improving the traceability of the activities of a worker performed outside his/her «country of origin» (amongst others in order to be able to better determine the «habitual place of work»). Consider the setting up of a derogation option to the main country-of-origin principle foreseen in the current Social security Regulation (i.e. payment of social security contributions in the country of origin ). Such a derogation would allow the possibility of setting up a mechanism where the social security contributions due are collected within the host countries by the national authorities and afterwards transferred to the national authorities of the sending countries. This mechanism should be connected to the prior notification of posting. The member states should be able to agree on such a derogation via bilateral agreements. However, it should be noted that the phenomenon of cross-border social fraud/abuse of Social Security is difficult to apprehend. There is no systematic research at EU level on this. One of the reasons for this complete lack of data and information is that companies and Member States do not advertise their fraudulent behaviours. Also, the methods used by businesses to evade the cross-border social security mechanisms are often very complex: they can rely upon a multitude of legal provisions in 28 Member States + EU law. Laying down general principles does not address the complexity of the problem. Fully fledged and dissuasive mechanisms are needed. Also, a consistent approach throughout the Community acquis is indispensable. 1 EFBWW FIEC joint position Towards a level playing field in the European construction sector - Joint proposals of the EU sectoral social partners EFBWW and FIEC 2 / 7

3 General objective of the project The objective of the EFBWW project on cross-border social security abuse/fraud is to collect sufficient data, facts, cases and to unravel evasion mechanisms, identify legal loopholes and ways of circumventing existing rules, and, on the basis of these facts, to elaborate concrete policy recommendations for an overall trade union position. As most of the European Industry Federations and the ETUC are closely involved in the project, the outcome of the project will be a common ETUC and ETUF conclusion. Companies can play a crucial role in preventing social dumping e.g. by exercising control over their subcontracting chains. In order to raise awareness of this issue and promote company based solutions the project will also include a two day training seminar for EWC members and EWC coordinators to provide them with the necessary tools and know how. Partnership and sectors involved Affiliates in the following key sectors and trade union partners will be associated to this EFBWW project: IndustriAll: chemicals & metallurgy (co-applicant) EFFAT: food, agriculture (co-applicant) ETUC, European Trade Union Confederation (associate organisation) ETF: road transport (associate organisation) Methodology of the project A large part of the project will consist of fact-finding missions in order to better understand the scale and nature of the phenomenon of cross-border social fraud and abuse of Social Security. An expert will conduct interviews at local level with trade union representatives, labour and social security inspectors to collect facts, bad and good practices. On the basis of the factfinding mission, other 3 experts will analyse the existing legal/administrative and practical situations at EU and national level, identifying loopholes and contradictions. 3 / 7

4 Subject matter of the contract The subject matter of the contract between EFBWW and the Expert on Social Security will be to: 1) Draft a case-based and user friendly report on the companies practices on how to develop cross-border social security fraud (how EU and national law is used to evade social security obligations) (max. 40 pages); 2) Assist in the preparation of the expert seminar; 3) Participate and report in the Expert Seminar and draft general conclusions/summary based on the discussions; 4) Prepare policy recommendations based on the report s finding and the conclusions of the Seminar; 5) Liaise with the 3 additional experts of the project; 6) Liaise with the Steering Group and the EFBWW project manager; 7) Participate in Steering Group meetings as requested by the project partners and project description; 8) Perform other tasks as requested by the Project Manager and/or the Steering Group. Guidance regarding performance of the tasks and regarding the methodology Performance of the tasks will have to be carried out within the contract period specified in the contract European Commission-EFBWW and with due regard to the order indicated in the description of the above-mentioned tasks and the schedule of the project activities enclosed. Methods of work The general supervision and evaluation of the project will be carried out by the steering group, co-ordinated by the EFBWW project manager. The steering group will be composed of representatives from the EFBWW, IndustriAll, EFFAT, ETUC and ETF. During the project the steering group will meet every 3 months. Additional meetings could be foreseen. The expert will also have to attend steering group meetings. 4 / 7

5 Time schedule and reporting The schedule of activities is laid down in the project description, which could be modified by the steering group. The expert shall finalize the project within a maximum period in line with Commission instructions. The expert on social security shall consult with the EFBWW project manager: a) as regards organization of the steering group meetings b) as regards dispatch of the draft report to the members of the steering group c) as regards preparation of regular interim meetings with the project manager Contract The Contract between EFBWW and the expert on social security will be based on a standard contract taking into consideration the financial regulations of the European Commission and obliging the consultant to respect the obligations laid down in the contract European Commission-EFBWW. The successful expert on social security will submit to the EFBWW a draft contract EFBWWexpert which includes back to back obligations from the contract European Commission- EFBWW also in the relationships expert on social security-subcontractors. Payment Payment shall be made on the basis of invoices, once the tasks have been performed and the results of the work have been accepted by the steering group. Selection criteria The expert on social security will be selected on the basis of the following criteria (as mentioned in the public procurement directive 2004/18, Articles 45, 47 and 48): a) personal situation of the tenderer b) economic and financial standing c) technical and/or professional ability Tenders failing to satisfy all the criteria will be excluded from the further procedure. 5 / 7

6 Award criteria The contract will be awarded to the bidder whose bid represents the economically most advantageous tender taking into account the following criteria: 1. Legal and practical expertise on EU and national social security provisions (50%) 2. Reports drafting skills, especially on legal and practical issues, including EU legislation, and social security issues (30%) 3. Previous working experiences with Trade Unions (10%) 4. English language and communication skills (10%) Content of the tenders Interested parties are invited to present their: a) comments and solutions on the proposed structure of the project; b) comments and solutions on the proposed conceptual and methodological framework for the collection of data; c) a detailed offer/prices for the expert on social security The content of the tender presented by the tenderer must correspond to the specifications indicated in the previous points Evaluation procedure The economically most advantageous tender will be identified by the evaluation of each award criterion on a scale between 0 and 10. These results will be counted using the relative ponderation indicated in % behind the award criteria. Submission of tenders The tender must be sent or delivered in duplicate, under a sealed cover. The envelope should be marked appel d offres à ne pas ouvrir par le service du courrier. If self-adhesive envelopes are used, they must be sealed with adhesive tape and the sender must sign across the tape. 6 / 7

7 Interested parties should send their bid : a) either by registered mail posted no later than 16 November 2016 (date as postmark), to the following address : EFBWW Sam Hägglund/Werner Buelen Rue Royale 45, boîte Bruxelles Belgium b) or delivered by hand, i.e. by delivery in person or by an authorised representative (including private courier services) not later than 2 p.m. on 16 November 2016 to the same address. Late delivery will lead to the exclusion of the tender from the award procedure for this contract. For tenders submitted by private courier services and hand delivered requests, the EFBWW secretariat will sign a receipt stamped on the date of reception, which will serve as proof of delivery. Annexes: Project description and timetable. General Conditions for grants also applying to the tenderer. 7 / 7

8 CROSS-BORDER SOCIAL FRAUD/ABUSE IN SOCIAL SECURITY (CroBoSoSu) Detailed work programme Call for Proposals VP/2016/002/0082 Budget heading Information and training measures for workers organisations Brussels, May 2016 Werner Buelen EFBWW-FETBB : Bank: ING 1050 Brussel n Rue Royale 45/1 Fax: IBAN: BE B Bruxelles info@efbh.be BIC: BBRUBEBB Ondernemingsnummer

9 CONTENT: 1. GENERAL BACKGROUND AND CONTENT OF THE PROJECT Background Objectives of the project Partnership and sectors involved 2. METHODOLOGY OF THE PROJECT Methodology Role of the partners involved Staff involved Work plan of the project Results, impacts and effects List of tasks for the experts EFBWW-FETBB : Bank: ING 1050 Brussel n Rue Royale 45/1 Fax: IBAN: BE B Bruxelles info@efbh.be BIC: BBRUBEBB Ondernemingsnummer

10 CROSS-BORDER SOCIAL FRAUD/ABUSE IN SOCIAL SECURITY (CroBoSoSu) 1. GENERAL BACKGROUND AND CONTENT OF THE PROJECT Background In his political guidelines (July 2014), President Jean-Claude Juncker announced that We have to fight social dumping and we will do it. Combatting cross-border social fraud and abuse in social security is one of the EU-key policies of the European Commission, and part of the so-called labour mobility package. On 8 th April 2015 the European Commission announced a targeted revision of the Posting of Workers Directive. However this discussion only deals with the non-respect of the applicable working conditions of the posted workers, and is therefore just one side of the coin. The other side of the coin relates to the non- or only partial respect of the Social Security provisions, as regulated in the Regulation 883/2004 on the coordination of social security systems. The Work programme of the European Commission 2016 no time for business as usual (COM (2015) announced the revision of Regulations on social security coordination. Magdalena Bernaciak (2014) defines social dumping as the practice, undertaken by selfinterested market participants, of undermining or evading existing social regulations with the aim of gaining competitive advantage. This definition is broad and relates to the working conditions (wages, working time), social protection and security and fundamental workers rights. Although there might be a need to modernize some challenges linked to benefit tourism, the EFBWW considers that there are also many other problems linked to cross-border social fraud which must be dealt with at the same time. During the EFBWW - FIEC discussion in regarding social fraud, both parties identified several serious shortcomings in social security, which should be resolved when the current Social Security Regulation will be revised. Namely: To reduce the period of validity of the A1 forms, for example to 6 months, in order to be able to check more regularly the reality behind them. To improve the reliability of the A1 forms (for ex. by adding the picture and a unique identification of the worker, the identity of the employer). Allow the national authorities of the host countries to reclassify the A1 form, based on a rebuttable presumption that the A1 form could not reflect the reality of posting. Study and develop a system for improving the traceability of the activities of a worker performed outside his/her «country of origin» (amongst others in order to be able to better determine the «habitual place of work»). 1 EFBWW FIEC joint position Towards a level playing field in the European construction sector - Joint proposals of the EU sectoral social partners EFBWW and FIEC EFBWW-FETBB : Bank: ING 1050 Brussel n Rue Royale 45/1 Fax: IBAN: BE B Bruxelles info@efbh.be BIC: BBRUBEBB Ondernemingsnummer

11 Consider the setting up of a derogation option to the main country-of-origin principle foreseen in the current Social security Regulation (i.e. payment of social security contributions in the country of origin ). Such a derogation would allow the possibility of setting up a mechanism where the social security contributions due are collected within the host countries by the national authorities and afterwards transferred to the national authorities of the sending countries. This mechanism should be connected to the prior notification of posting. The member states should be able to agree on such a derogation via bilateral agreements. However, it should be noted that the phenomenon of cross-border social fraud/abuse of Social Security is difficult to apprehend. There is no systematic research at EU level on this. One of the reasons for this complete lack of data and information is that companies and Member States do not advertise their fraudulent behaviours. Also, the methods used by businesses to evade the cross-border social security mechanisms are often very complex: they can rely upon a multitude of legal provisions in 28 Member States + EU law. Laying down general principles does not address the complexity of the problem. Fully fledged and dissuasive mechanisms are needed. Also, a consistent approach throughout the Community acquis is indispensable. Objective of the project The objective of the EFBWW project on cross-border social security abuse/fraud is to collect sufficient data, facts, cases and to unravel evasion mechanisms, identify legal loopholes and ways of circumventing existing rules, and, on the basis of these facts, to elaborate concrete policy recommendations for an overall trade union position. As most of the European Industry Federations and the ETUC are closely involved in the project, the outcome of the project will be a common ETUC and ETUF conclusion. Companies can play a crucial role in preventing social dumping e.g. by exercising control over their sub-contracting chains. In order to raise awareness of this issue and promote company based solutions the project will also include a two day training seminar for EWC members and EWC coordinators to provide them with the necessary tools and know how. Partnership and sectors involved Affiliates in the following key sectors and trade union partners will be associated to this EFBWW project: IndustriAll: chemicals & metallurgy (co-applicant) EFFAT: food, agriculture (co-applicant) ETUC, European Trade Union Confederation (associate organisation) ETF: road transport (associate organisation) A particular feature of this project is that it will interconnect with and build upon the preliminary findings of existing, ongoing projects, such as: EURODETACHEMENT, INTEFP Letterbox companies, ETUC EFBWW-FETBB : Bank: ING 1050 Brussel n Rue Royale 45/1 Fax: IBAN: BE B Bruxelles info@efbh.be BIC: BBRUBEBB Ondernemingsnummer

12 2. METHODOLOGY OF THE PROJECT Methodology A large part of the project will consist in fact-finding missions in order to better understand the scale and nature of the phenomenon of cross-border social fraud and abuse of Social Security. A substantial number of interviews will be conducted with local level trade union representatives, labour and social security inspections. The aims of these interviews is to collect facts, unravel mechanisms and identify loopholes and weaknesses. Where possible concrete cases will be presented. The fact finding phase will focus on bad and good practices. On the basis of these fact-finding missions, experts will analyse the existing legal/administrative and practical situations at EU and national level, identifying loopholes and contradictions. In particular, we will use experts with a background in Social Security Law. The final phase of the project will be to make concrete policy recommendations, which the EFBWW and the project partners will then discuss with affiliates with a view to shape a fullyfledged trade union policy. We will hold discussions involving external and trade unions experts, and hold a seminar for EWC members and EWC coordinators. Every three months, the EFBWW and its partners affiliates will hold steering groups in Brussels to monitor the work of the experts, and to prepare the content of the seminars and conferences. Role of the partners involved The EFBWW will lead and coordinate the whole project, as well as ensure the logistics for fact finding missions and seminars. Our partners and their affiliates will identify key persons and contacts at European and national level, and be closely associated in the interviewing and data collecting phase. They will also be actively involved in the experts discussions, with a view to help shaping policy recommendations. Every three months, a steering group composed of representatives of the partners and their affiliates will take place in Brussels in order to monitor the project progress. EFBWW Staff involved On behalf of the EFBWW, as managing organisation the following persons will be involved in the project: Sam Hägglund, EFBWW General Secretary Werner Buelen, EFBWW political secretary Stephen Schindler, EFBWW policy advisor Marina Saegerman, EFBWW accountant Frank Leus, Administrative assistant EFBWW-FETBB : Bank: ING 1050 Brussel n Rue Royale 45/1 Fax: IBAN: BE B Bruxelles info@efbh.be BIC: BBRUBEBB Ondernemingsnummer

13 Workplan of the project The project will be organised over a period of 24 months and can be divided into three phases: Phase 1: From November 2016 until May During this phase, case studies will be carried out. A first step will be to identify a convincing number of practical case where social fraud took place. The second step will be to gather concrete material/evidence/facts on the practical consequences of such practices for workers. Particular attention should be paid to the social protection/benefits/coverage and social security contributions. Our interlocutors will be trade union representatives at local level, social security inspectors, and where realistic human resources management. This first phase will target around 7 Member States. Working methods during this first phase will consist of an estimated 5-10 fact-finding missions. The actual number of these missions will vary depending on our capacity to identify factual cases and local willingness to investigate what may constitute fraudulent behaviours. Cost and time effective methods will be explored. In particular, interview templates will be developed as early as possible by the EFBWW and its partners, so that fact finding missions can as far as practicable be conducted by local contacts. To undertake the fact-finding missions, the EFBWW will call upon external expertise to collect and process the information. Where necessary, interpretation will be required for local interviews. Interview templates and their responses will be translated into German, French and English. A steering group composed of the EFBWW and its project partners will be held in Brussels every three months to monitor the progress of the fact-finding missions. No translation will be required for the steering group. A mid-term European conference will be organised end of May/June This conference should help the EFBWW Secretariat to exchange the available information and develop new insights through further dialogue. The conference will last two days and will be held in Brussels (with approximately 50 persons). Interpretation will be required in at least 4 languages. Phase 2: June 2017 until June During the second phase, the work on the case studies will continue. Particular attention should be paid to the legal mechanisms used to organise social security fraud and ways to circumvent the existing legislation (applicable national and EU provisions, A1, company forms etc.). In parallel, a screening of the Community acquis, and where applicable national law, should be carried out with a view to identifying existing provisions on social security fraud as well as possible loopholes and inconsistencies. EFBWW-FETBB : Bank: ING 1050 Brussel n Rue Royale 45/1 Fax: IBAN: BE B Bruxelles info@efbh.be BIC: BBRUBEBB Ondernemingsnummer

14 We will make use of 3 external experts with backgrounds in EU legal issues, administrative issues (A1, procedures, ), and company issues. 3 meetings of the steering group composed of the EFBWW and the project partners will be held in Brussels to monitor the progress of the work of the experts. The external experts will be invited to these meetings to report on their work. Translation of the expert reports into German, French and English will be required. 3 expert seminars will also be organised in Brussels, each of them with a clear theme (EU legal, administrative and company aspects on social security). Each of these seminars will last two days, and should each gather a maximum of 30 external and trade union experts, inspectorates, academic, public officials,... Interpretation will be required in at least 3 languages. Phase 3: July 2018 October 2018 During this final phase, discussions will take place on the basis of the output of phases 1 and 2. Policy recommendations will be issued. This work will rely essentially on reports drawn up by the external experts and the conclusions of the expert seminars. 2 meetings of the steering group composed of the EFBWW and its project partners will be held in Brussels to monitor the final stages of the project. A two day training seminar will be held in Brussels for EWC members and EWC coordinators to equip them for the task of tackling social dumping in transnational European companies through means of social dialogue. The seminar will explore practical company based approaches to prevent social dumping together with employers. A final conference will take place in Bulgaria in October 2018 (EU Presidency) to present and discuss these policy recommendations. This event should last 2 days and gather approximately 70 people. Interpretation in at least 5 languages will be required. A final joint report will be drawn up and translated into German, English and French. A leaflet will be drawn up to publicise the project findings. A thousand copies should be printed, in at least 5 languages. Results, impacts and effects The following documents will be produced in the course of the project: - Interviews results - Background documents on EU and national legislation on social security, administrative procedures and company practices - Minutes and written conclusions for each of the expert seminars - A global report of the project - Leaflet, publicising the project findings EFBWW-FETBB : Bank: ING 1050 Brussel n Rue Royale 45/1 Fax: IBAN: BE B Bruxelles info@efbh.be BIC: BBRUBEBB Ondernemingsnummer

15 List of tasks for the experts: 1. Expert for fact-finding mission (phase 1) Preparing templates for questionnaires Interviewing key contacts in the targeted member States (this will involve travels and overnight stays) Processing the results of the interviews, drawing conclusions Liaising with the steering group 2. Legal expert (phase 2) Liaising with the steering group Preparing a report on the EU and national legal aspects of cross-border social security fraud Participating in the expert seminar and drawing general conclusions in particular with regard to policy recommendations 3. Expert in taxation (phase 2) Liaising with the steering group Preparing a report on the administrative aspects of cross-border social security fraud (how do they use EU and national law to optimise social obligations, economic impact of social security contributions evasion and regimes) Participating in the expert seminar and drawing general conclusions in particular with regard to policy recommendations 4. Expert on social security (phase 2) Liaising with the steering group Preparing a report on the company practices how to develop cross-border social security fraud (how do they use EU and national law to optimise their social security obligations) Participating in the expert seminar and drawing general conclusions in particular with regard to policy recommendations EFBWW-FETBB : Bank: ING 1050 Brussel n Rue Royale 45/1 Fax: IBAN: BE B Bruxelles info@efbh.be BIC: BBRUBEBB Ondernemingsnummer

16 Timeline of the project The project will run over a 24 month period starting in November 2016 and ending in October PHASE 1 Month 1-7 Month 1 steering group meeting 1 Selection of the external expert Month 4 steering group meeting 2 Month 7 steering group meeting 3 Month 2-7 Case studies and fact finding missions Month 7 Mid-term Conference PHASE 2 Month 8-20 Month 9 steering group meeting 4 Month 8-16 Elaborating of the case studies by 3 external experts (legal issues, administrative issues, company issues) Month 12 steering group meeting 5 Month 15 steering group meeting 6 Month expert seminars PHASE 3 Month Month 21 steering group meeting 7 Month 23 Training seminar for EWC members and EWC coordinators Month 23 Final conference Month 24 steering group meeting 8 EFBWW-FETBB : Bank: ING 1050 Brussel n Rue Royale 45/1 Fax: IBAN: BE B Bruxelles info@efbh.be BIC: BBRUBEBB Ondernemingsnummer

17 ANNEX II GENERAL CONDITIONS Table of contents PART A LEGAL AND ADMINISTRATIVE PROVISIONS... 5 Article II.1 Definitions... 5 Article II.2 General obligations and roles of the beneficiaries... 6 II.2.1 General obligations and role of the beneficiaries... 6 II.2.2 General obligations and role of each beneficiary... 6 II.2.3 General obligations and role of the coordinator... 7 Article II.3 Communication between the parties... 8 II.3.1 Form and means of communication... 8 II.3.2 Date of communications... 8 Article II.4 Liability for damages... 8 Article II.5 Conflict of interests... 9 Article II.6 Confidentiality... 9 Article II.7 Processing of personal data... 9 II.7.1 Processing of personal data by the Commission... 9 II.7.2 Processing of personal data by the beneficiaries Article II.8 Visibility of Union funding II.8.1 Information on Union funding and use of the European Union emblem II.8.2 Disclaimers excluding Commission responsibility Article II.9 Pre-existing rights and ownership and use of the results (including intellectual and industrial property rights) II.9.1 Ownership of the results by the beneficiaries II.9.2 Pre-existing rights II.9.3 Rights of use of the results and of pre-existing rights by the Union. 11 1

18 Article II.10 Award of contracts necessary for the implementation of the action Article II.11 Subcontracting of tasks forming part of the action Article II.12 Financial support to third parties Article II.13 Amendments to the agreement Article II.14 Assignment of claims for payments to third parties Article II.15 Force majeure Article II.16 Suspension of the implementation of the action II.16.1 Suspension of implementation by the beneficiaries II.16.2 Suspension of implementation by the Commission II.16.3 Effects of the suspension Article II.17 Termination of the ageement II.17.1 Termination of the Agreement by the coordinator II.17.2 Termination of the participation of one or more beneficiaries by the coordinator II.17.3 Termination of the Agreement or the participation of one or more beneficiaries by the Commission II.17.4 Effects of termination Article II.18 Applicable law, settlement of disputes and enforceable decisions. 22 PART B FINANCIAL PROVISIONS Article II.19 Eligible costs II.19.1 Conditions for the eligibility of costs II.19.2 Eligible direct costs II.19.3 Eligible indirect costs II.19.4 Ineligible costs Article II.20 Identifiability and verifiability of the amounts declared II.20.1 Declaring costs and contributions

19 II.20.2 Records and other documentation to support the costs and contributions declared II.20.3 Conditions to determine the compliance of cost accounting practices 27 Article II.21 Eligibility of costs of entities affiliated to the beneficiaries Article II.22 Budget transfers Article II.23 Non-compliance with the reporting obligations Article II.24 Suspension of payments and time limit for payment II.24.1 Suspension of payments II.24.2 Suspension of the time limit for payments Article II.25 Calculation of the final amount of the grant II.25.1 Step 1 Application of the reimbursement rate to the eligible costs and addition of the unit, flat-rate and lump sum contributions 31 II.25.2 Step 2 Limit to maximum amount of the grant II.25.3 Step 3 Reduction due to the no-profit rule II.25.4 Step 4 Reduction due to improper implementation or breach of other obligations Article II.26 Recovery II.26.1 Recovery at the time of payment of the balance II.26.2 Recovery after payment of the balance II.26.3 Recovery procedure II.26.4 Interest on late payment II.26.5 Bank charges Article II.27 Checks, audits and evaluations II.27.1 Technical and financial checks, audits, interim and final evaluations II.27.2 Duty to keep documents II.27.3 Obligation to provide information

20 II.27.4 On-the-spot visits II.27.5 Contradictory audit procedure II.27.6 Effects of audit findings II.27.7 Correction of systemic or recurrent errors, irregularities, fraud or breach of obligations II.27.8 Checks and inspections by OLAF II.27.9 Checks and audits by the European Court of Auditors

21 PART A LEGAL AND ADMINISTRATIVE PROVISIONS ARTICLE II.1 DEFINITIONS The following definitions apply for the purpose of the Agreement: Action : the set of activities or the project for which the grant is awarded, to be implemented by the beneficiaries as described in Annex I. Confidential information or document : any information or document (in any format) received by either party from the other or accessed by either party in the context of the implementation of the Agreement that any of the parties has identified in writing as confidential. It does not include information that is publicly available. Conflict of interests : a situation where the impartial and objective implementation of the Agreement by a beneficiary is compromised for reasons involving family, emotional life, political or national affinity, economic interest, or any other shared interest with the Commission or any third party related to the subject matter of the Agreement. Direct costs : those specific costs which are directly linked to the implementation of the action and can therefore be attributed directly to it. They may not include any indirect costs; Force majeure : any unforeseeable, exceptional situation or event beyond the control of the parties that prevents either of them from fulfilling any of their obligations under the Agreement, which is not attributable to error or negligence on their part or on the part of the subcontractors, affiliated entities or third parties in receipt of financial support and which proves to be inevitable despite their exercising due diligence. The following cannot be invoked as force majeure: labour disputes, strikes, financial difficulties or any default of a service, defect in equipment or materials or delays in making them available, unless they stem directly from a relevant case of force majeure; Formal notification : form of communication between the parties made in writing by mail or electronic mail which provides the sender with compelling evidence that the message was delivered to the specified recipient; Fraud : any intentional act or omission affecting the Union s financial interests relating to the use or presentation of false, incorrect or incomplete statements or documents, to nondisclosure of information in violation of a specific obligation; Implementation period : the period of implementation of the activities forming part of the action, as specified in Article I.2.2; Indirect costs : those costs which are not specific costs directly linked to the implementation of the action and which therefore cannot be attributed directly to it. They may not include any costs identifiable or declared as eligible direct costs; Irregularity : any infringement of a provision of Union law resulting from an act or omission by a beneficiary, which has or would have the effect of prejudicing the Union s budget; 5

22 Maximum amount of the grant : the maximum EU contribution to the action, as defined in Article I.3.1; Pre-existing material : any materials, document, technology or know-how which exists prior to the beneficiary using it for the production of a result in the implementation of the action; Pre-existing right : any industrial and intellectual property right on pre-existing material; it may consist in a right of ownership, a licence right and/or a right of use belonging to the beneficiary or any other third parties; Related person : any person who has the power to represent the beneficiary or to take decisions on its behalf; Starting date : the date on which the implementation of the action starts as provided for in Article I.2.2; Subcontract : a procurement contract within the meaning of Article II.10, which covers the implementation by a third party of tasks forming part of the action as described in Annex I; Substantial error : any infringement of a provision of an agreement resulting from an act or omission, which causes or might cause a loss to the Union s budget. ARTICLE II.2 GENERAL OBLIGATIONS AND ROLES OF THE BENEFICIARIES II.2.1 General obligations and role of the beneficiaries The beneficiaries: (a) (b) (c) are jointly and severally liable for carrying out the action in accordance with the Agreement. If a beneficiary fails to implement its part of the action, the other beneficiaries become responsible for implementing this part (but without increasing the maximum amount of the grant); must comply jointly or individually with any legal obligations they are bound by under applicable EU, international and national law; must make appropriate internal arrangements to implement the action properly. The arrangements must be consistent with the terms of the Agreement. If provided for in the Special Conditions, those arrangements must take the form of an internal cooperation agreement between the beneficiaries. II.2.2 General obligations and role of each beneficiary Each beneficiary must: (a) (b) inform the coordinator immediately of any events or circumstances of which the beneficiary is aware, that are likely to affect or delay the implementation of the action; inform the coordinator immediately: 6

23 (i) of any change in its legal, financial, technical, organisational or ownership situation and of any change in its name, address or legal representative; (ii) of any change in the legal, financial, technical, organisational or ownership situation of its affiliated entities and of any change in their name, address or legal representative; (c) submit in due time to the coordinator: (i) the data needed to draw up the reports, financial statements and other documents provided for in the Agreement; (ii) all the necessary documents required for audits, checks or evaluations as provided for in Article II.27. (iii) any other information to be provided to the Commission under the Agreement, except if the Agreement requires such information to be submitted directly by the beneficiary. II.2.3 General obligations and role of the coordinator The coordinator: (a) (b) must monitor the implementation of the action in order to make sure that the action is implemented in accordance with the terms of the Agreement; is the intermediary for all communications between the beneficiaries and the Commission, except if provided otherwise in the Agreement. In particular, the coordinator: (i) must immediately inform the Commission: - of any change in the name, address, legal representative of any of the beneficiaries or of their affiliated entities; - of any change in the legal, financial, technical, organisational or ownership situation of any of the beneficiaries or of their affiliated entities; - of any events or circumstances of which the coordinator is aware, that are likely to affect or delay the implementation of the action. (ii) is responsible for supplying the Commission with all documents and information required under the Agreement, except if provided otherwise in the Agreement itself. If information is required from the other beneficiaries, the coordinator is responsible for obtaining and verifying this information before passing it on to the Commission; (c) (d) must make the appropriate arrangements for providing any financial guarantees required under the Agreement; must draw up the requests for payment in accordance with the Agreement; 7

24 (e) (f) if it is designated as the sole recipient of payments on behalf of all of the beneficiaries, it must ensure that all the appropriate payments are made to the other beneficiaries without unjustified delay; is responsible for providing all the necessary documents required for checks and audits initiated before the payment of the balance or documents required for evaluation as provided for in Article II.27. The coordinator may not subcontract any part of its tasks to the other beneficiaries or to any other party. ARTICLE II.3 COMMUNICATION BETWEEN THE PARTIES II.3.1 Form and means of communication Any communication relating to the Agreement or to its implementation must: (a) be made in writing (in paper or electronic form); (b) bear the number of the Agreement; and (c) be made using the communication details identified in Article I.7. If a party requests written confirmation of an electronic communication within a reasonable time, the sender must provide an original signed paper version of the communication as soon as possible. II.3.2 Date of communications Any communication is considered to have been made when the receiving party receives it, unless the Agreement states that communication is considered to have been made on the date when the communication was sent. is considered to have been received by the receiving party on the day of dispatch of that , provided that it is sent to the address indicated in Article I.7. The sending party must be able to prove the date of dispatch. If the sending party receives a non-delivery report, it must make every effort to ensure that the other party actually receives the communication by or mail. In such a case, the sending party is not held in breach of its obligation to send such communication within a specified deadline. Mail sent to the Commission using the postal or courier services is considered to have been received by the Commission on the date on which it is registered by the department identified in Article I.7.2. Formal notifications are considered to have been received by the receiving party on the date of receipt indicated in the proof received by the sending party that the message was delivered to the specified recipient. ARTICLE II.4 LIABILITY FOR DAMAGES II.4.1 The Commission may not be held liable for any damage caused or sustained by any of the beneficiaries, including any damage caused to third parties as a consequence of or during the implementation of the action. 8

25 II.4.2 Except in cases of force majeure, the beneficiaries must compensate the Commission for any damage it sustains as a result of the implementation of the action or because the action was not implemented in full compliance with the Agreement. ARTICLE II.5 CONFLICT OF INTERESTS II.5.1 The beneficiaries must take all necessary measures to prevent any situation of conflict of interests. II.5.2 The beneficiaries must inform the Commission without delay of any situation constituting or likely to lead to a conflict of interests. They must take immediately all the necessary steps to rectify this situation. The Commission may verify that the measures taken are appropriate and may require additional measures to be taken by a specified deadline. ARTICLE II.6 CONFIDENTIALITY II.6.1 During implementation of the action and for five years after the payment of the balance, the parties must treat with confidentiality any confidential information and documents. II.6.2 The parties may only use confidential information and documents for a reason other than to fulfil their obligations under the Agreement if they have first obtained the prior written agreement of the other party. II.6.3 The confidentiality obligations do not apply if: (a) the disclosing party agrees to release the other party from those obligations; (b) the confidential information or documents become public through other means than a breach of the confidentiality obligations; (c) the disclosure of the confidential information or documents is required by law. ARTICLE II.7 PROCESSING OF PERSONAL DATA II.7.1 Processing of personal data by the Commission Any personal data included in the Agreement must be processed by the Commission in accordance with Regulation (EC) No 45/ Such data must be processed by the data controller identified in Article I.7.1 solely for implementing, managing and monitoring the Agreement or to protect the financial interests of the EU, including checks, audits and investigations in accordance with Article II Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data. 9

26 The beneficiaries have the right to access and correct their own personal data. For this purpose, they must send any queries about the processing of their personal data to the data controller identified in Article I.7.1. The beneficiaries may have recourse at any time to the European Data Protection Supervisor. II.7.2 Processing of personal data by the beneficiaries The beneficiaries must process personal data under the Agreement in compliance with applicable EU and national law on data protection (including authorisations or notification requirements). The beneficiaries may grant their personnel access only to data that is strictly necessary for implementing, managing and monitoring the Agreement. The beneficiaries must adopt appropriate technical and organisational security measures having regard to the risks inherent in the processing and to the nature of the personal data concerned. This is in order to: (a) prevent any unauthorised person from gaining access to computer systems processing personal data, and especially: (i) (ii) unauthorised reading, copying, alteration or removal of storage media; unauthorised data input as well as any unauthorised disclosure, alteration or erasure of stored personal data; (iii) unauthorised use of data processing systems by means of data transmission facilities; (b) ensure that authorised users of a data processing system can access only the personal data to which their access right refers; (c) record which personal data have been communicated, when and to whom; (d) ensure that personal data processed on behalf of third parties can be processed only in the manner prescribed by the Commission; (e) ensure that, during communication of personal data and transport of storage media, the data cannot be read, copied or erased without authorisation; (f) design their organisational structure in such a way that it meets data protection requirements. ARTICLE II.8 VISIBILITY OF UNION FUNDING II.8.1 Information on Union funding and use of the European Union emblem Unless the Commission requests or agrees otherwise, any communication or publication made by the beneficiaries jointly or individually that relates to the action, including at conferences, seminars or in any information or promotional materials (such as brochures, leaflets, posters, presentations, in electronic form, etc.), must: (a) indicate that the action has received funding from the Union; and (b) display the European Union emblem. 10

27 When displayed in association with another logo, the European Union emblem must have appropriate prominence. The obligation to display the European Union emblem does not confer on the beneficiaries a right of exclusive use. The beneficiaries may not appropriate the European Union emblem or any similar trademark or logo, either by registration or by any other means. For the purposes of the first, second and third subparagraphs and under the conditions specified therein, the beneficiaries may use the European Union emblem without first obtaining permission from the Commission. II.8.2 Disclaimers excluding Commission responsibility Any communication or publication that relates to the action, made by the beneficiaries jointly or individually in any form and using any means, must indicate: (a) that it reflects only the author s view; and (b) that the Commission is not responsible for any use that may be made of the information it contains. ARTICLE II.9 PRE-EXISTING RIGHTS AND OWNERSHIP AND USE OF THE RESULTS (INCLUDING INTELLECTUAL AND INDUSTRIAL PROPERTY RIGHTS) II.9.1 Ownership of the results by the beneficiaries The beneficiaries retain ownership of the results of the action, including industrial and intellectual property rights, and of the reports and other documents relating to it, unless stipulated otherwise in the Agreement. II.9.2 Pre-existing rights If the Commission sends the beneficiaries a written request specifying which of the results it intends to use, the beneficiaries must: (a) establish a list specifying all pre-existing rights included in those results; and (b) provide this list to the Commission at the latest with the request for payment of the balance. The beneficiaries must ensure that they or their affiliated entities have all the rights to use any pre-existing rights during the implementation of the Agreement. II.9.3 Rights of use of the results and of pre-existing rights by the Union The beneficiaries grant the Union the following rights to use the results of the action: (a) for its own purposes and in particular to make available to persons working for the Commission, other Union institutions, agencies and bodies and to Member States institutions, as well as to copy and reproduce in whole or in part and in an unlimited number of copies; 11