1. The revised Financial Regulation and the new 2014 – 2020 Financial Framework
Laurent SARAZIN
Head of Unit, DG EuropeAid R/3 – Legal Affairs
The FIDIC-MDB Harmonised Construction Contract Conference
Brussels, 25 – 26 June 2012 1 1

2. Introduction Revision of the Financial Regulation - state of play
The Common Implementation Regulation (CIR) and MFF package
The new EU policy framework : the "Agenda for Change" 2

3. New Financial Regulation Calendar
Last estimate : 1/1/2013
2010
2011
2012
2013
April 2011
FR BUDGET
IR BUDGET
COREPER
HU PRESIDENCY
TEXT
FR EDF
May 2010
COMMISSION PROPOSAL
PRAG
DK PRESIDENCY
COMMISSION
TRILOGUE
(1ST READING)
Last deadline for entry into force
EUROPEAN PARLIAMENT
November 2011
AMENDMENTS
EUROPEAN PARLIAMENT
MFF - EXTERNAL ACTION FINANCIAL INSTRUMENTS
December 2011
PROPOSALS 3 3

4. Management modes Current architecture
From 5 categories ….
Shared
(Member States)
Decentralised
(Third Countries)
Joint
(international organisations)
centralised
direct
Indirect
All implementing partners of EU funds are public
Heterogeneous regimes for the rules applicable to expenditure 4 4

5. Management modes New architecture
….To 3 main categories
….To 3 main categories
….To 3 main categories
….To 3 main categories
….To 3 main categories
….To 3 main categories
….To 3 main categories
….To 3 main categories
….To 3 main categories
….To 3 main categories
EU Budget
EU Budget
EU Budget
EU Budget
EU Budget
EU Budget
EU Budget
EU Budget
Indirect management
Indirect management
Direct management
Direct management
Direct management
Direct management
Shared management
Shared management
Shared management
Third countries International organisations National agencies and Financial Institutions (public or private with public service mission)
EIB-EIF
Public & Private Partnerships
CFSP Missions Regulatory agencies
Member States
Heads of Delegation
Authorising Officers 5

6. New entities
Public Private Partnerships: cooperation between public authorities and private sector for performance of public contracts or concessions, complying with:
Established in a Member States;
Providing adequate financial guarantees;
Entrusted with a public-private partnership
Financial Institution implementing “financial instruments”, complying with the definition of "public body or private body entrusted with a public service mission". 6

7. Procurement New thresholds Service contracts
CURRENT THRESHOLDS
PROPOSED THRESHOLDS
> 200,000
International restricted
> 300,000
10,000 –
200, 000
FWC (where possible) / Competitive Negotiated
20, ,000
FWC / Competitive negotiated / AMI
0 – 10,000
Single tender
2,500-20,000
0-2,500
Invoice 7

8. Procurement New thresholds Supply contracts
CURRENT THRESHOLDS
PROPOSED THRESHOLDS
> 150,000
International open
> 300,000
60, ,000
Local open
100, ,000
FWC / Local open
10,000-60,000
Competitive negotiated
100, ,000
FWC / Competitive negotiated
0-10,000
Single tender
2, ,000
0-2,500
Invoice 8

9. Procurement New thresholds Works contracts
CURRENT THRESHOLDS
PROPOSED THRESHOLDS
> 5,000,000
International open / International restricted (exceptional)
International open / International restricted
300,000-5,000,000
Local open
10, ,000
Competitive negotiated
20, ,000
0-10,000
Single tender
0-20,000 9

10. Procurement New case for negotiated procedure:
Replacement of contractor - where a new contract has to be concluded because of an early termination of an existing contract 10

11. Procurement Guarantees on pre-financing
CURRENT RULES
PROPOSED RULES
Procurement
- pre-financing >
- where financial capacity is not assessed
-possible waiver: public bodies
Authorising Officer's (AO) Risk assessment
- or where financial capacity is not assessed 11

12. Objectives :
Avoiding divergence of rules along the legislative procedure
Unique set of rules for the implementation of all instruments 12

13. Link between CIR and FR 2 layers of regulations Financial Regulation
(the main ‘toolbox’)…
…completed by the Common Implementing Rules (CIR)
(specificities authorised by the FR)
Geographical & thematic regulations
for EU External Action
IMPLEMENTING PARTNERS & FINAL BENEFICIARIES

14. Harmonising on the basis of the simplest rule
Simplified tax regime (CIR Article 5)
Where possible, negotiate full tax exemption with third countries for EU aid disregarding the implementing mode;
Relation EU/contractors and grant beneficiaries: tax actually incurred is an eligible cost of the action
Simplified untying aid provisions (CIR Article 8-11)
- Common regime for developing countries
- Fully untying aid regime as common de minimis rule for the origin of supplies and goods below 100,000 €.

15. The new EU policy “Agenda for Change” framework - Focus on 2 pillars:
Democracy, human rights & good governance
Inclusive & sustainable growth for human development
- Concentration on max. 3 sectors per country
- Aid focused on countries most in need
& where impact is greatest (Differentiation)
- Common vision for EU+MS: joint actions & programming promoted