Validation of beneficiaries REA.A1 - FP7 Support Katrien Steijleman 28 May 2013

The Participant Portal (PP) offers… A facility to support the validation of legal entities by: Submitting data over a web interface Generating a Participant Identification Code (PIC) Nominating a Legal Entity Representative (LEAR)

How to register via the PP? When you connect the first time to PP you have to self-register as participant. In your browser you connect to PP, using the following URL: To access PP, you have to use your ECAS login and password (if you don’t have it you must register)

Log on and fill out your data in the PP Registration of legal data (address), status of the organisation, Indirect Cost method. Once the registration done Reception of an with the data you entered, and a temporary Participant Identification Code (PIC) will be provided to you.

The validation process: The validation of a participant is unique and valid throughout the entire FP7 programme; During the validation of a legal entity, the validation services verify the (i) legal existence and (ii) FP7 status of an applicant and (iii) the ICM; These verifications are based on supporting documents; Documents can be uploaded directly on the URF/PP or sent via by the participant to the mailbox:

Types of Legal Entities under FP7: Public and Private International Organisation Higher or Secondary Education Profit and non-profit Research organisation Enterprise SME The legal status of an organisation determines: The maximum level of EC financial contribution for RTD activities The Indirect Cost Model (ICM)

Documents required for the validation: For All Types : The Legal Entity Form, dated, duly filled-in, signed and stamped (please use only that which is appropriate to your status "Public" or "Private"); es/legal_entities_en.cfm For Public Entities: A copy of the resolution or law or decree or decision legally establishing your organisation; Extract proving your VAT registration number or proof of VAT exemption (not older than 6 months); For Private Entities: A copy of the registration extract proving registration number, legal address and legal name; Extract proving your VAT registration number or proof of VAT exemption (not older than 6 months);

Documents required for the validation: For Research Organisations: A legal document that proves that your organisation is: considered as a non-profit organisation by national or international law; and carries out research or technological development as one of its main objectives For Non–profit Organisations: A legal document which mentions the non-profit character of your organisation.

Documents required for the validation of SME: SME CHECK LIST Duly signed and bearing the name of the legal representative (provided by the REA) BALANCE SHEET Clear mention of company’s total assets and liabilities (ANNUAL BALANCE SHEET THRESHOLD) PROFIT & LOSS ACCOUNT Clear mention of company’s turnover (ANNUAL TURNOVER THRESHOLD) The kind of income the company generates help us understand if it is involved in a commercial/economic activity. STATEMENT OF THE STAFF HEADCOUNT In case there is no mention on any of the Balance Sheet, the Profit & Loss account or accompanying notes 9

The Thresholds for SME The Thresholds for SME COMMISSION RECOMMENDATION OF 6 MAY 2003 concerning the definition of micro, small and medium enterprises STAFF HEADCOUNT (ARTICLE 5) ANNUAL TURNOVER (ARTICLE 4) ANNUAL BALANCE SHEET (ARTICLE 4) ENTERPRISE CATEGORY STAFF HEADCOUNT ANNUAL TURNOVER OR ANNUAL BALANCE SHEET TOTAL Medium-sized< 250≤ EUR 50 million AND/OR≤ EUR 43 million Small< 50≤ EUR 10 million AND/OR≤ EUR 10 million Micro< 10≤ EUR 2 million AND/OR≤ EUR 2 million Part 2: The validation process

AUTONOMOUS, PARTNER OR LINKED? AUTONOMOUS, PARTNER OR LINKED? COMMISSION RECOMMENDATION OF 6 MAY 2003 AUTONOMOUS (Article 3.1) PARTNER (Article 3.2) LINKED (Art.3.3) -Totally independent -Holds less than 25% (capital or voting rights) in another and/or -Another holds less than 25% - Holds between 25% and 50% (capital or voting rights) in another and/or -Another holds between 25% and 50% - Not linked to another enterprise -Direct or indirect control of the majority of voting rights/Capital EXCEPTIONS (Art.3.2 (a-d)): Venture Capital Companies, Universities, Institutional Investors and Autonomous local authorities are permitted to hold a stake between 25% and 50% without affecting company’s autonomous status. An enterprise is NOT an SME if 25% or more of capital or voting rights are directly or indirectly controlled, jointly or individually, by one or more public bodies.

Once the validation completed: The participant receives an with his final PIC number, his FP7 status and the link for appointing the Legal Entity Appointed Representative (LEAR). The appointment of the LEAR is mandatory (EC Decision of 18/12/2012 of Rules of validation) Tasks of LEAR: -- maintains and updates regularly the legal and financial data regarding his entity -- nominates the persons authorised to sign Form C Contact details:

Financial Viability Check REA.A1 - FP7 Support 28 May 2013

Legal basis EC-Decision 2012/838/EU – 18/12/2012 Three categories of participants are subject to Financial Viability Check: Coordinators: (if not public bodies, international organisations or guaranteed). Beneficiaries: requesting more than € EU contribution (if not public bodies, international organisations or guaranteed). Others: exceptionally, if the operational unit requires it. Required documents: The non-consolidated 2012 statements (or 2011, should 2012 not yet be available): 1. The balance sheet; 2. The income statement; 3. The notes being part of the statements; 4a. If the requested EU-contribution is less than € K500: the signed statutory audit report (If exempted from auditing under your national legislation, the statements have to be signed for approval by the board of directors). 4b. If the requested EU-contribution exceeds € K500: the signed external auditors report, which has to include the clear mandate to audit, the responsibilities of both the management and the auditor, the way of conducting the audit, including the reasonable assurance about whether the financial statements are free of material misstatement, and the auditor's opinion. The exemption from auditing under national legislation is not applicable if the requested EU-contribution exceeds the threshold of € K500. Start-ups have to provide a signed business plan with the forecasted financial data (Balance sheet and Income statement) for the 3 coming years.

Roles in the FVC-procedure FVC-request initiated by NEF The FVC-team contacts the participant by . Data submission The participant, directly in the participant portal: - encodes its data, and - uploads the supporting documents If no LEAR has been appointed yet (or if problems with the procedure in the portal), the documents are sent by to Data validation The FVC-team: - checks the data, and - performs its assessment in PDM (IT-tool for legal and financial validation). The ratios and qualifications are available in NEF and in the participant portal. Project related assessment The Operational unit assesses the results. The final decision is with the Authorizing officer (AOSD)

Key points Reduced Workflow All intermediate exchanges are deleted. (PO  FVC-team, PO  Coordinator, Coordinator  Participant, …). Reinforced confidentiality Transmission by avoided. Ensured equal treatment Common approach of the data, regardless of differences that may occur due to national legislation. Unique assessment The results remain valid for any other FP7 project until the data are being considered as outdated. Order of treatment First in, first out (FIFO). Role The FVC-team doesn’t deal with project-related issues.

How can a Coordinator check the FVC-status of the participants? In NEF