1. 10% rule in ETC programmes A survey on attribution of the 10% and 20% rules in ETC programmes operative in North-East Europe on the level of operative programmes and on the level of project proposals submitted in first calls 26 th May 2010 | Brussels, Belgium

2. (…) In the context of cross-border, transnational and interregional cooperation, the ERDF may finance expenditure incurred in implementing operations or parts of operations on the territory of countries outside the European Community up to a limit of 10 % of the amount of its contribution to the operational programme concerned, where they are for the benefit of the regions of the Community. Member States shall ensure the legality and regularity of these expenditures. The managing authority shall confirm the selection of operations outside the eligible areas as referred to under paragraphs 1, 2 and 3. (…) Article 21.3 and 21.4 Regulation 1080 of 5 July 2006 on the European Regional Development Fund with later amendments 2 10% RULE IN ETC PROGRAMMES

3. - expenditure incurred in implementing operations or parts of operations on the territory outside of the European Community can be financed up to 10% of ERDF programme contribution - some programmes transfer this programme rule to projects (10% of the project budget) - benefit for the regions of the Community must be clearly demonstrated in the project proposal - Managing Authority responsible for confirming operations outside of the EU 10% RULE IN ETC PROGRAMMES 3

4. 4 Project Partner Project activities

5. IN PRACTICE –Non-EU Partner does not receive directly any ERDF funds, although can formally participate in the project (depending on the programme) –Lead Partner or Project Partner located in the cooperation area ensures proper financial control (First Level Control) –In some countries the invoices issued outside of the EU did not meet the requirements of proper audit trail –EU-based supplier contracted in such cases 10% RULE IN ETC PROGRAMMES 5

6. 10% RULE vs. 20% RULE 10% RULE IN ETC PROGRAMMES 6 10% rule20% rule for CBC programmes20% rule for transnational programmes Areas inisde or outside of programme area but outside of European Community NUTS 3 areas adjacent to programme area Outside of programme area, but within European Community Applicable for project activities Applicable for project partners benefit for the European Community regions partners located outside the programme area eligible if the project would have difficulty in achieving its objectives without that partner's participation benefit for the regions in the programme area Article 21.3 and 21.4 of Reg. 1080/2006 Article 21.1 of Reg. 1080/2006Article 21.2 of Reg. 1080/2006

7. ATTRIBUTION OF THE 10% RULE IN ETC PROGRAMMES IN NORTH-EAST EUROPE 7 PROGRAMME Total number of on- going projects with a positive funding decision* Projects relevant for the 10% rule Baltic Sea Region4634 Botnia – Atlantica380 Central Baltic465 Estonia-Latvia281 Latvia–Lithuania4511 Lithuania – Poland242 Lubuskie – Brandenburg370 Mecklenburg-Vorpommern /Brandenburg- Zachodniopomorskie 350 Nord672 South Baltic235 Sweden – Norway970 *Till March 2010

8. 8 ATTRIBUTION OF THE 10% RULE IN ETC PROGRAMMES IN NORTH-EAST EUROPE PROGRAMMEReference made to 10% rule in the studied programme documents Baltic Sea Region The 10% rule can be used to finance expenditures incurred by Lead Partners or Project Partners in implementing projects or part of the projects on the territory of countries outside the EC. It is not possible to have Project Partners from outside the EU territory receiving ERDF co-financing. Botnia – Atlantica No information (only on 20% rule). Central Baltic Up to 10% of the ERDF-funding can be used to finance expenditures incurred in implementing operations outside the EU as long as they are for the benefit of the area and the regions participating in the Central Baltic programme. Estonia-Latvia No information. Latvia–Lithuania In duly justified cases and only if it is for the benefit of the Programme, up to a limit of 10% of the Programme’s budget might be used outside the Programme area and the EC. Lithuania – Poland The 10% rule can be utilized in duly justified cases outside the programme area and EC. Lubuskie – Brandenburg No information. Mecklenburg- Vorpommern /Brandenburg- Zachodniopomorskie No information (only on 20% rule). Nord Funding with up to 10 % can be used to finance expenditures incurred in implementing project or part of a project in countries outside the EC if they are benefiting the cooperating regions. In the North-part of the programme the rule can be used if the investments have strategic importance and are crucial to fulfill the project goals. South Baltic The organizations from outside the EU cannot become partners in South Baltic programme. However, the 10% rule can be used to finance expenditures related to the involvement of regions and organizations from outside the EU. Especially cooperation with organizations from Kaliningrad region is considered to be highly valuable for the programme. Sweden – Norway No information (only on 20% rule).

9. 9 ATTRIBUTION OF THE 10% RULE IN ETC PROGRAMMES IN NORTH-EAST EUROPE From theory to practice - examples of utilisation: -For involvement of the required expertise (29%). -To fulfil project goals (26%). -For involvement of existing networks (16%). -To present the region for wider audience which is outside the programme territory (7%).

10. 10 ATTRIBUTION OF THE 10% RULE IN ETC PROGRAMMES IN NORTH-EAST EUROPE Challenging aspects regarding implementation of 10% rule: -Travels to other regions or countries where they are necessary for the project implementation. -Purchases of services from suppliers in the other regions or countries. -Authorities or organizations who are located in the sense of legal registration outside the programme area. -TA activities.