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Legal framework for research funding Ingrid Mariën-Dusak DG INFSO S4 – Legal Aspects ______________________________________ 18/2/2011 Presentation for the Ombudsman Service. Legal Framework for research programmes. TEU/TFEU. INTERNATIONAL AGREEMENTS. PARTICIPATION AND IPR RULES.

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Legal framework for research funding

Ingrid Mariën-Dusak

DG INFSO S4 – Legal Aspects


18/2/2011 Presentation for the Ombudsman Service

legal framework for research programmes
Legal Framework for research programmes







Grant agreement


Rules on

Submission, evaluation and



Rules on financial capacity

Other relevant

EU Regulations




Calls for proposals

7th Framework Programme for research, technological development and demonstration activities (2007-2013)

supports the following activities:

  • Cooperation: research in trans-national cooperation
  • Ideas: investigator-driven research
  • People: training and mobility for researchers
  • Capacities: support for research infrastructures, research for the benefit of SMEs
  • Maximum budget and share for each programme (Annex II): 50 521 billion EUR
  • Funding schemes (Annex III): collaborative projects, networks of excellence, coordination and support actions etc.
  • Implementation through specific programmes
research grants
Research Grants

Research funding based on grants:

Grants are direct financial contributions from the European Union budget awarded by way of a donation to beneficiaries engaged in activities that serve Union policies.

  • Grants are based on the costs actually incurred by the beneficiaries
  • Results of the action remain the property of the beneficiaries
  • All grants are the subject of a grant agreement
  • Co-financing principle
  • No profit rule
lifecycle of projects
Lifecycle of projects
  • Calls for proposals
  • Evaluation
  • Negotiation
  • Award of grant
  • Signature of grant agreement
  • Project monitoring
      • Technical reporting and reviews
      • Financial reporting: eligible costs
      • Certification
  • EU contribution
  • Payment modalities
  • Recoveries
  • IPR provisions
calls for proposals
Calls for proposals
  • Content and timing set out in the work programmes adopted by the Commission
  • Notifications of calls published in the Official Journal and on CORDIS
  • Guides for applicants
  • Fixed deadline/Open calls 
  • Electronic submissions
who may participate
Who may participate?
  • Legal entities (public or private) from Member States or Associated countries including natural persons
  • Joint Research Centre
  • Entities established under EU law
  • International organisations
  • Legal entities from third countries
  • Minimum 3 independent legal entities from 3 different Member States or Associated countries (general principle)
evaluation of proposals
Evaluation of proposals


- Scientific/technological excellence

  • Relevance to objectives
  • Potential impact
  • Implementation

Independent experts:

  • Impartiality
  • Confidentiality

Legal and financial verification

Commission decision on rules to ensure consistent verification of the legal status and financial capacity of participants:

  • Legal validation for every beneficiary
  • Verification of financial capacity only for coordinators and beneficiaries requesting > 500.000 EUR
  • Protective measures
guarantee fund
Guarantee fund
  • Participant guarantee fund established and operated by the Commission
  • Contribution to guarantee fund of 5% of the EU contribution by each participant
  • Financial interest generated by the Fund to cover financial risk of any project
  • At the end of the project, if interests generated not sufficient to cover sums due to EU, retention of max. 1% of EU contribution
  • Exemption of retention for public bodies, higher and secondary education establishments, legal entities guaranteed by a MS/AC
  • Fund replaces financial guarantees and collective financial responsibility
signature of grant agreement
Signature of Grant Agreement

Model grant agreement adopted by the Commission, after consultation of Member States

Content of General Conditions:

Part A: Implementation of the Project

Part B: Financial Provisions

Part C: Intellectual Property Rights

Grant agreement complemented by Guidance Notes drawn up by the Commission.

obligations of coordinator and beneficiaries
Obligations of coordinator and beneficiaries
  • Coordinator represents beneficiaries towards the Commission/intermediary for any communication
  • Receives the contribution of the EU on behalf of the beneficiaries
  • Tasks of coordinator may not be subcontracted
  • Joint and several liability of beneficiaries to carry out the project
  • Consortium agreement
  • Each beneficiary shall carry out the work identified in Annex I →only limited resort to subcontracts and third party contribution
third parties
Third parties
  • Third parties carrying part of the work
    • Subcontracts: agreement on business conditions without direct supervision
    • Third parties linked to beneficiary
  • Third parties making available resources
    • Free of charge – beneficiary does not reimburse it for the costs of the resources
    • The third party is reimbursed by the beneficiary
  • Periodic reports to be submitted by coordinator 60 days after end of period:

- progress of the work

- use of the resources

- Financial Statement (Form C)

  • Final reportsto be submitted by coordinator 60 days after end of project:

- publishable summary report, conclusions and socio-economic impact

      • covering wider societal implications and a plan on use and dissemination of results
  • Deliverables to be submitted as foreseen in Annex I
  • Certificates on financial statements/on methodology
project technical reviews
Project technical reviews

General principles

• Aim is to assess the work carried out under the

project over a certain period

• The Commission may initiate a technical review

at any time during and up to 5 years after the

end of the project

• It may be assisted by external experts

(reviewers) who give recommendations to the


• The final decision is taken by the

Commission. The consolidated experts’ review

report is communicated to the project coordinator.

review objectives
Review objectives

• Degree of fulfilment of the project work plan

• Continued relevance of the objectives

• Resources planned and used in relation to the achieved progress

• Management procedures

• Beneficiaries’ contributions and integration within

the project

• Expected potential impact and plans for the use

and dissemination of results

review outcome
Review outcome

• Accept or reject the deliverables

• Allow the project to continue without modification of Annex I or with minor modifications

• Consider that the project can only continue with

major modifications

• Initiate the termination of the grant agreement or of the participation of any beneficiary

• Issue a recovery order regarding all or part of the payments already made and apply any applicable sanction.

eligible costs
Eligible Costs
  • Eligibility criteria
    • actual (except: average personnel costs)
    • incurred during duration of project
    • in accordance with usual accounting and management principles
    • recorded in the accounts of beneficiary
    • used for the sole purpose of achieving the objectives of the project
  • Non-eligiblecosts (identifiable indirect taxes including VAT,…)
  • Direct/indirect costs
eligible personnel
Eligible personnel

• Employment status

– Directly hired or

– in-house consultants if:

  • Contract to engage physical person
  • Work under the instructions of the beneficiary
  • In the premises
  • Output belongs to beneficiary
  • Cost in line with normal employment remuneration on basis of number of worked hours
average personnel costs
Average Personnel Costs
  • Usual cost accounting practice
  • Based on actual personnel costs, without estimated or budgeted elements
  • Exclude ineligible cost items
  • Number of productive hours
indirect costs
Indirect Costs
  • For all beneficiaries:
    • actual overhead
    • flat rate of 20% of direct costs minus subcontracting
  • Flat rate of 60% for non profit Public Bodies, Secondary and Higher Education establishments, Research Organisations and SMEs unable to identify real indirect costs per project
  • Certification of financial statements (CFS)
    • Verification of costs and receipts
  • Certification on the Methodology (CoM)
    • System verification
    • For Average Personnel Costs(CoMAv)
    • For Personnel & Indirect Costs (CoM)

• Auditors perform a standard set of checks and

provide information according to a specific

format defined via agreed Terms of Reference


• ToR are part of the FP7 Model Grant Agreement

(Annex VII)

• ToR correspond to international audit standards

(International Federation of Accountants – IFAC –

ISRS 4400)

approval of reports and deliverables
Approval of reports and deliverables

• The Commission has 105 days to evaluate reports and deliverables and make the corresponding payment

• No tacit approval of reports

• EC will pay interest on late payment

• Payment is made after approval of reports and deliverables

• After reception of the reports the Commission may:

  • Approve the reports and deliverables
  • Reject the reports and deliverables
  • Suspend the time limit for approval
  • Suspend the payment in whole or in part
contribution of the eu
Contribution of the EU
  • Maximum contribution indicated in the grant agreement
  • Table of estimated breakdown of budget and contribution of the EU per activity and per beneficiary in Annex I
  • Budget transfers between beneficiaries and activities allowed without amendment, except if changes of Annex I
  • Actual contribution: application of upper funding limits per activity/beneficiary to actual eligible costs/flat rates/lump sums
  • No profit for any beneficiary → receipts to be taken into account for final payment
upper funding limits
Upper funding limits
  • Research and technological development activities: up to 50% of eligible costs.
  • However, up to 75% for:
    • Non profit public bodies, secondary and higher education establishments and research organisations
    • SMEs
    • Security-related research projects
  • Demonstration activities: up to 50%
  • Other activities including management: up to 100%
  • Coordination and support actions: up to 100%
payment modalities
Payment modalities
  • One pre-financing (within 45 days after entry into force) for the whole duration minus guarantee fund
  • Interim payments based on financial statements (EU contribution= amounts justified & accepted * funding rate)
  • Retention (10%)
  • Final payment
  • Any amount unduly paid to a beneficiary shall be subject to a recovery order
  • Waiving of recovery in compliance with the principle of sound financial management and proportionality
  • Criteria:
    • The facts giving rise to recovery
    • Impact on operation of EU and their financial interests
    • Distortion of competition
    • Economic and social damage

Intellectual Property


  • Main objectives
  • to facilitate the implementation of the project and the exploitation of its results
  • to provide a minimum framework while allowing participants flexibility to determine additional rules specific for their cooperation

Intellectual Property


  • Ownership: each participant owns the foreground it generates
  • Transfer of ownership of foreground: prior notification to consortium
  • Protection, use, dissemination (publication)
  • Access rights