1. FP7 - August 2005 1 EUROPEAN COMMISSION – DG Research – 2006 1 FP7 Rules of the game Presentation based on the Commission proposal on the RP, on the results of an informal trialogue 26 October 2006 - with a view to a first reading agreement – and on the draft of the documents derived by the RP

2. FP7 - August 2005 2 EUROPEAN COMMISSION – DG Research – 2006 2 The full legislative package Framework Programme (EC) Framework Programme (EURATOM) FP7 RTD

3. FP7 - August 2005 3 EUROPEAN COMMISSION – DG Research – 2006 3 The EC legislative package Framework Programme (EC) Rules for Participation (EC) 4 Specific Programmes

4. FP7 - August 2005 4 EUROPEAN COMMISSION – DG Research – 2006 4 Approval Process (EC Treaty): FP & RP

5. FP7 - August 2005 5 EUROPEAN COMMISSION – DG Research – 2006 5 Where do RP come from State Aid Framework for R&D&I Financial Regulations FP7 Needs FP7 Rules for Participation

6. FP7 - August 2005 6 EUROPEAN COMMISSION – DG Research – 2006 6 Rules for Participation l The Rules for Participation cover: –Partner eligibility –Proposal submission, evaluation and negotiation –Legal & financial rules –Community financial contribution –Maximum funding rates –Implementation and grant agreements –Cost Reporting –Intellectual Property Rights –Procedures for appointment of external experts RP do not apply to article 169 & 171

7. FP7 - August 2005 7 EUROPEAN COMMISSION – DG Research – 2006 7 Terminology changes Contract  Grant Agreement Proposer  Applicant Instrument  Funding scheme Financial Guidelines  Financial Rules INCO  ICPC Audit Certificates  Certificate on the financial statements

8. FP7 - August 2005 8 EUROPEAN COMMISSION – DG Research – 2006 8 Derived Documents (1) Rules for Participation (EC) 4 Annual Work Progr. 4 Specific Programmes Grant Agreement Forms & checklists Guides & rules for: Proposals … Evaluation … Financial … Reporting …

9. FP7 - August 2005 9 EUROPEAN COMMISSION – DG Research – 2006 9 DG RTD internal workgroups 1)FP7 funding schemes 2)from Negotiation to Contract 3)from Proposal Submission to ranking 4)Information Technology 5)Legal and financial issues 6)Reporting 7)Risk Management 8)Unique Registration Facility 9)Work programmes 10)Human resources and recruitment 11)Internal and external communication

10. FP7 - August 2005 10 EUROPEAN COMMISSION – DG Research – 2006 10 Derived Documents (2) l Guide for Applicants, including the proposal submission forms (several versions: generic, Marie Curie, Infrastructure actions, SME actions, ERC) l Rules for Proposals submission, Evaluation, Selection and Award procedures (standard and ERC) l Grand agreements (special Annexes: SMEs, NoEs, Infrastructure, Eranet+, lump sum version): three sets of documents (standard, ERC, Marie Curie) l Rules of verification of legal status and financial viability l Modalities for lump sums for IPCP l Negotiation guidelines notes, including grand agreement preparation forms (special Annexes: SMEs, NoEs, Infrastructure, Eranet+): l FP7 financial guidelines l Check list for consortium agreement l IPR guidelines l Reporting guidelines l Implementation modalities of guarantee fund

11. FP7 - August 2005 11 EUROPEAN COMMISSION – DG Research – 2006 11 Guiding principles l Continuity l Simplification l Improvement l Gradual introduction The challenge right balance between –Protection of Community’s financial interests –Simplifying the participation

12. FP7 - August 2005 12 EUROPEAN COMMISSION – DG Research – 2006 12 What’s new l Increased funding rates l Flexible funding schemes l Rationalisation of Audit Certificates l The Unique Registration Facility l The Joint Guarantee Fund l The Risk Sharing Financial Facility l Logistics and administrative tasks -> external structures l Work Programmes & Call for Proposals adopted at the same time each year l “Frontier research”, JTIs & ERANET+

13. FP7 - August 2005 13 EUROPEAN COMMISSION – DG Research – 2006 13 Who can participate? l Type of participants –Undertakings –Universities –Research Centres –International Organisations –Any Other legal entity –Natural Persons l Place of Establishment –Member States –Associated Countries –Third Countries Additional Conditions may be included in the Work Programme Normally, non IPCP third countries are not eligible for funding

14. FP7 - August 2005 14 EUROPEAN COMMISSION – DG Research – 2006 14 Minimum conditions for participation l General rule –3 independent participants from 3 different MS or AC (Associated Countries) l Specific International Cooperation actions –2 participants MS or AC and 2 participants ICPC (International Cooperation Partner Countries) l Coordination and support actions, Training of Researchers, “Frontier” research projects –1 participant  Sole participants composed of members that meet the criteria above can participate  Work Programme or Specific Programme can add conditions on number or type of participant, place of establishment, etc

15. FP7 - August 2005 15 EUROPEAN COMMISSION – DG Research – 2006 15 Funding Schemes l Collaborative projects (small to medium / large / targeted to specific groups) l Networks of Excellence l Co-ordination & support actions l “Frontier” research actions l Marie Curie actions l Joint Technology Initiatives l Joint implementation of national research programmes (Article 169)

16. FP7 - August 2005 16 EUROPEAN COMMISSION – DG Research – 2006 16 Maximum funding rates l Research activities: 50% of eligible costs, except for: –SMEs: 75% –Non-profit public bodies: 75% –Secondary and higher education establishments: 75% –Research organisations (non-profit): 75% l Demonstration activities: 50% of eligible costs l “Frontier” research actions: 100% l Coordination and support actions: 100% l Training and career development of researchers actions: 100% l Other activities (management, training, etc): 100% Receipts to be taken into account

17. FP7 - August 2005 17 EUROPEAN COMMISSION – DG Research – 2006 17 Forms of Grants l Three forms of grants: –reimbursement of eligible costs (vast majority) –lump sums financing (eg NoEs) –flat-rate financing, including scale of unit costs (eg. indirect costs, Marie Curie). l Different forms of grants may be used in combination. l Lump sums and flat rates will not require justification of eligible costs l Gradual introduction of lump sums and flat rates  FR fundamental principle: a grant cannot generate a profit

18. FP7 - August 2005 18 EUROPEAN COMMISSION – DG Research – 2006 18 Cost Reporting Modes l Cost reporting models (FC, AC, etc) have been eliminated –Participants charge direct (and indirect) costs –For indirect costs, a flat rate is an option –Average personnel costs may be used if they do not differ significantly from actual costs l Audit certificates continued, but rationalised –Now called Certificate on the financial statements –No Certificate required for participants receiving <= €375,000 –For projects of 2 years, if required, maximum one Certificate per partner at the end of the project

19. FP7 - August 2005 19 EUROPEAN COMMISSION – DG Research – 2006 19 Indirect costs l Eligible costs = direct costs + indirect costs l Preferred solution: real indirect costs. l Flat rate always an option. 20% l For non-profit public-bodies, universities, research centres and SMEs. Grant awarded: –before 1st January 2010  60% –after 1st January 2010  tbd but > 40% l Coordination & Support Actions  7%

20. FP7 - August 2005 20 EUROPEAN COMMISSION – DG Research – 2006 20 Lump sums - NoEs l A special lump sum for NoEs l Calculated according to the number of researchers l €23,500 / year / researcher l Max number of participants and researchers established in Work Programme l Payments will be based on assessment of progress

21. FP7 - August 2005 21 EUROPEAN COMMISSION – DG Research – 2006 21 Guarantee fund mechanism (1) ● Replaces FP6 concept of “Collective financial responsibility” ● Participants contribute a small fraction of their EC grant to the fund to insure against losses of a defaulting partner ● Does not apply to: ● public bodies, secondary and higher education and entities guaranteed by MS or AC ● participants in certain types of funding schemes (training, frontier research, actions for benefit of specific groups except SMEs) Consequence -> Ex-ante financial viability check only for coordinators and participants receiving more than € 500,000

22. FP7 - August 2005 22 EUROPEAN COMMISSION – DG Research – 2006 22 Guarantee fund mechanism (2) ● Commission will establish & operate the participant guarantee fund ● Max 5% of Commission contribution from pre-financing ● To be returned at the end of the action ● Interest generated by the fund will be used to cover sums due to the Community ● If not sufficient, Commission may deduct from amount to be returned to participant max 1% of Community contribution to it.

23. FP7 - August 2005 23 EUROPEAN COMMISSION – DG Research – 2006 23 The Project Life Cycle Proposal Evaluation Negotiation Implementation Exploitation / Dissemination

24. FP7 - August 2005 24 EUROPEAN COMMISSION – DG Research – 2006 24 Proposals l Call for proposals l Evaluation criteria established in RP and WP. l 1 Specific Programme  1 Annual Work Programme  1 publication date of the calls. l Work Programme will specify: –Topics with associated Type of funding scheme (Collaborative projects, Networks of Excellence, Coordination and support actions) –Indicative budgets –Type of evaluation procedure (one / two stage / hearings) –Particular requirements (criteria, minimum conditions, etc) l Toward Electronic Submission Only l Toward a new Unique Registration Facility

25. FP7 - August 2005 25 EUROPEAN COMMISSION – DG Research – 2006 25 Evaluation. General Principles Same principles than in FP6, l Quality, Transparency, Impartiality, Equal treatment l peer review - independent experts – [hearings] but: l More use of two-stage submission procedure l More use of remote evaluation l New set of evaluation criteria

26. FP7 - August 2005 26 EUROPEAN COMMISSION – DG Research – 2006 26 Evaluation Process l Process –Eligibility checks (time of receipt, completeness, partnership) –Individual reading and marking (3-5 experts) –Consensus discussion and final marking –Evaluation Summary Report –Commission decision on ranking (Selected, Reserve, Rejected) –Start of negotiation for the selected proposals

27. FP7 - August 2005 27 EUROPEAN COMMISSION – DG Research – 2006 27 Evaluation Criteria l General principles in RP l Details of evaluation criteria in Annex 2 of Work Programme & in Guide for Applicants l Interpretation of evaluation criteria is tailored to each funding scheme l For “Ideas” only one evaluation criteria: S&T Excellence

28. FP7 - August 2005 28 EUROPEAN COMMISSION – DG Research – 2006 28 Life of the project - Simplifications l No 18 months detailed implementation plan l Fewer audit certificates to be submitted l Negotiable number of reviews l Reporting rationalised, with significant reduction in number. (tbc deviation reports) l IPR provisions clarified and simplified l Changes in consortium membership possible l Sub-contracting: no change from FP6

29. FP7 - August 2005 29 EUROPEAN COMMISSION – DG Research – 2006 29 Payment modalities l Pre-Financing (PF) l Interim payments (IP) = EC contribution in reporting period l Final payment Condition: l (PF +  IP ) < 90% Total EC Contribution Part of Pre-financing will be used to contribute to the guarantee fund

30. FP7 - August 2005 30 EUROPEAN COMMISSION – DG Research – 2006 30 Consortium Agreement l Compulsory, unless explicitly excluded in the text of the call. l Commission will publish Guidelines on the Consortium Agreement l Consortium Agreement must cover: –Internal organisation of the consortium –The distribution of EC financial contribution –Specific rules of dissemination and IPR –Rules for settlements of dispute –Liability, indemnification and confidentiality arrangements

31. FP7 - August 2005 31 EUROPEAN COMMISSION – DG Research – 2006 31 Management Increased FP budget + No increase in Commission staff  Need new structures to manage the increase  ‘Externalise’ part of the FP management to executive agencies for the first time

32. FP7 - August 2005 32 EUROPEAN COMMISSION – DG Research – 2006 32 Management l Commission, Executive Agencies & Special Structures l Executive agencies for –Frontier research projects –Most Human Potential and SME-specific actions –Space and Security research –Some Transport and Energy research –Some Logistical and administrative tasks

33. FP7 - August 2005 33 EUROPEAN COMMISSION – DG Research – 2006 33 Management: special structures l Ad-hoc special structures to manage –Joint Technology Initiatives –New infrastructure initiatives –Joint projects with Member States (Art.169) –Co-funding of national Human Potential schemes

34. FP7 - August 2005 34 EUROPEAN COMMISSION – DG Research – 2006 34 Time Basic Research Applied Research Technological development Prototyping IPR Own funds Grants Own funds Grants + Loans Many R&D projects, which are currently undertaken thanks to subsidies, or abandoned for lack of them, have a financial profile that could give them access to loans Own funds Equity Grants + Loans Commercialisation Own funds Equity + Loans Framework Programme RSFF loans by EIB and its partner banks The RSFF approach: Loans for R&D

35. FP7 - August 2005 35 EUROPEAN COMMISSION – DG Research – 2006 35 FP7 Contribution: up to € 1 billion EIB Contribution: up to € 1 billion EIB loans and guarantees: € 8 to 12 billions Additional private investments in research: € 24 to 36 billions X 2 X 4 to 6 X 3 Risk coverage Provisioning and capital allocation representing 15% to 25% (average 20%) of volume of individual loan Loans representing on average one third of total cost of financed research projects RSFF The leverage effect

36. FP7 - August 2005 36 EUROPEAN COMMISSION – DG Research – 2006 36 Cooperation with local banks EIB Borrower EIB For loans of EUR 7.5 million or more - direct involvement of the EIB Borrower Intermediary For all loans where borrowers wish to work with their own banks, in particular those of less than EUR 7.5 million - sharing of RSFF benefits with intermediaries (e.g. through guarantees) guarantee

37. FP7 - August 2005 37 EUROPEAN COMMISSION – DG Research – 2006 37 Eligible projects – Some remarks RSFF is a demand-driven instrument and will provide finance on a “first come, first served” basis (no call for proposals) Actions and research infrastructures supported by an FP 7 grant (JTIs, Collaborative Projects, NoE, Research for the benefit of SMEs) Research infrastructures needed by the European Research Community (at least three Member States or Associated Countries) All other RTD European actions (whether trans-national or not) and falling within the scope of the contributing FP 7 themes All other R&D and Innovation projects including commercial innovation (only with EIB’s own contribution for risk coverage)

38. FP7 - August 2005 38 EUROPEAN COMMISSION – DG Research – 2006 38 Personal advise to applicants READ MORE WRITE LESS

39. FP7 - August 2005 39 EUROPEAN COMMISSION – DG Research – 2006 39 Information l EU research: http://ec.europa.eu/research http://ec.europa.eu/research l Seventh Framework Programme: http://ec.europa.eu/research/fp7 http://ec.europa.eu/research/fp7 l Information on research programmes and projects: http://www.cordis.lu/ http://www.cordis.lu/ l RTD info magazine: http://ec.europa.eu/research/rtdinfo/ http://ec.europa.eu/research/rtdinfo/ l Information requests: http://ec.europa.eu/research/enquiries/ http://ec.europa.eu/research/enquiries/

40. FP7 - August 2005 40 EUROPEAN COMMISSION – DG Research – 2006 40 Thank you for your attention! Name: Stefano Puppin E-mail: stefano.puppin@ec.europa.eu Phone +32 2 296.21.91