MS experts meeting on Delegated Acts for ESIF financial instruments 26 September 2013

General questions from MS Contribution to EU-level instruments (ES) ESI Funds contributions in a compartment to be used in a given region EU level instruments are currently under development Open Days workshop Continuity between 2007-2013 and 2014-2020 (CZ) MA can contribute to existing financial instruments, respecting the law, including on public procurement Flows of resources 2007-2013 and 2014-2020 should be kept separate as they fall under two different legal regimes The guidelines and preparation for 2014-2020 (CZ) COM working on the guidance and the TAP, depending on the progress in the adoption of the legislation A glossary of definitions will be prepared

Changes in fiches 9 and 10 CPR as preliminarily agreed in the trilogue on 2 July and endorsed by COREPER on 24 July Legal drafting: Avoiding redundancies with the CPR Coherent use of "bodies implementing financial instruments" versus "bodies implementing funds of funds" Order to better reflect CPR empowerments Further specifying certain requirements Redundancies: 3.8 (capitalisation of interest rates and guarantee fees subsidies) that escrow account and for investments in the eligibility period + 3.4 (Role, liabilities and responsibilities) that need to comply with the law Order: a singled out 3.5. on rules for certain products, i.e. guarantees Further specified requirements: 3.9 (criteria for determining management costs and fees) and 3.10 (ceilings for management costs and fees to be paid after eligibility period for micro-credit and equity-based instruments)

Delegated Act

CPR empowerments (1) 32(10): Delegated act laying down additional specific rules on purchase of land and on combination of technical support with financial instruments 33(5)bis: Delegated act laying down additional specific rules on the role, liabilities and responsibility of bodies implementing financial instruments, related selection criteria and products that may be delivered through financial instruments in accordance with the provisions under Article 32 34(5): Delegated act concerning the management and control of financial instruments pursuant to Article 33(1)(b) of the CPR, including controls to be performed by managing and audit authorities, arrangements for keeping supporting documents, elements to be evidenced by supporting documents, and management and control and audit arrangements

CPR empowerments (2) 35(3): Delegated act laying down the rules for withdrawal of payments to financial instruments and consequent adjustments in respect of application of payments 36(4): Delegated act laying down the specific rules concerning the establishment of a system of capitalisation of annual instalments for interest rate subsidies and guarantee fee subsidies 36(6): Delegated act laying down the specific rules setting out the criteria for determining management costs and fees on the basis of performance and the applicable thresholds as well as rules for the reimbursement of capitalised management costs and fees for equity-based instruments and micro-credit

Changes in fiche 10 (1) 3.1 Purchase of land: for urban development activities, 20% of the support provided to each individual final recipient 3.4.3 In case of irregularities: implementing bodies shall be liable for reimbursement of the amounts of programme contributions affected by irregularities, together with attributable interest and gains – lower levels covered by contractual agreements 3.6.1.f.ii Supporting documents to be kept for duration of a two year period from 31 December following the submission of the accounts in which the final expenditure of the completed operation is included 3.1 - to clarify whether/why the individual final recipient and not investment 3.6.3.f.ii – to align as close as possible with Article 132(1) of the CPR ("Availability of documents")

Changes in fiche 10 (2) 3.6.1.g Documentary evidence: A list of possible supporting documents included 3.7 Withdrawal of payments: Moved from IA following the split of the empowerment 3.9.4 Management costs and fees: The aggregate amount to be reimbursed over the eligibility period shall not exceed [X%] of the total programme contribution paid to the financial instrument

MS comments BG: Ability to raise additional resources applicable rather to the body implementing the financial instrument? BG: To establish separate responsibilities of bodies implementing funds of funds and bodies implementing financial instruments? HU: Controls should be strictly and methodologically set up on the spot (i.e. even at the final recipient level) The possibility to leverage the scarce public resources by attracting private investment is one of the advantages of financial instruments. The combination with private funds is desirable and provided for by Article 33(8) CPR at all levels, i.e. at the level of the fund of funds, at the level of the financial instrument and at the level final recipients. An operation comprising financial instruments should be seen in its entirety and it should be ensured in the whole implementation chain that pre-defined requirements are fulfilled. Taking the example of the appropriate choice of the final recipient: indeed, it is the body implementing the financial instrument that makes the choice, however, the fund of funds manager, when selecting the body implementing the financial instrument, should also ensure that the latter disposes of appropriate capacity/methodology to do so. The Commission supports HU view that controls should be possible at the level of final recipients. The trilogue outcome takes this into account, respecting at the same time the need to limit the administrative burden on the final recipients. Therefore, the cases when such control is possible are stipulated in Article 34(3) CPR. Nota bene, the word "exceptional" does neither appear in the CPR nor in the DA fiche in this context.