FINANCING AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF CROATIA AND THE EUROPEAN COMMISSION CONCERNING THE HORIZONTAL PROGRAMME ON NUCLEAR SAFETY AND RADIATION PROTECTION UNDER THE INSTRUMENT FOR PRE-ACCESSION ASSISTANCE FOR THE YEAR 2011
(Centralised Management)*
FINANCING AGREEMENT
THE GOVERNMENT OF THE REPUBLIC OF CROATIA
and
THE EUROPEAN COMMISSION
hereafter jointly referred to as «the Parties», or individually as «the Beneficiary» in the case of the Government of the Republic of Croatia, or »the Commission», in the case of the European Commission.
Whereas:
(a) On 1 August 2006, the Council of the European Union adopted Regulation (EC) No 1085/2006 establishing an instrument for pre-accession assistance (hereafter: the «IPA Framework Regulation»). With effect from 1 January 2007, this instrument constitutes the single legal basis for the provision of financial assistance to candidate countries and potential candidates in their efforts to enhance political, economic and institutional reforms with a view to their eventually becoming members of the European Union.
(b) On 12 June 2007, the Commission adopted Regulation (EC) No 718/2007 implementing the IPA Framework Regulation, detailing applicable management and control provisions (hereafter: the «IPA Implementing Regulation»).
(c) European Union assistance under the instrument for pre-accession assistance should continue to support the beneficiary countries in their efforts to strengthen democratic institutions and the rule of law, reform public administration, carry out economic reforms, respect human as well as minority rights, promote gender equality, support the development of civil society and advance regional cooperation as well as reconciliation and reconstruction, and contribute to sustainable development and poverty reduction.
European Union assistance for candidate countries should additionally focus on the adoption and implementation of the full EU acquis, and in particular prepare them for the implementation of the European Union’s agricultural and cohesion policy.
(d) The Parties have concluded on 27 August 2007 a Framework Agreement setting out the general rules for cooperation and implementation of the European Union assistance under the Instrument for Pre-accession Assistance.
(e) The Commission adopted on 11 November 2011 the Horizontal programme on Nuclear Safety and Radiation Protection under the IPA Transition Assistance and Institution Building Component for the year 2011 (hereafter: »the programme»). Part of this programme concerning the Republic of Croatia is to be implemented by the Commission on a centralised basis.
(f) It is necessary for the implementation of this programme that the Parties conclude a Financing Agreement to lay down the conditions for the delivery of European Union assistance, the rules and procedures concerning disbursement related to such assistance and the terms on which the assistance will be managed.
HAVE AGREED ON THE FOLLOWING:
1 THE PROGRAMME
The Commission will contribute, by way of grant, to the financing of the following programme, which is set out in Annex A to this Agreement:
Programme number: CRIS Nº 2011/023-384, 2011/023-388 and 2011/023-389
Title: Horizontal programme on Nuclear Safety and Radiation Protection under the IPA Transition Assistance and Institution Building Component for the year 2011 – C(2011)8164 of 11 November 2011.
The part of this programme concerning the Republic of Croatia to be implemented by centralised management includes one administrative arrangement with the Joint Research Centre – Institute for Energy (Petten), namely:
Project No 6: »Technical back-up to the IPA horizontal programme on nuclear safety and radiation protection».
2 IMPLEMENTATION OF THE PROGRAMME
(1) The part of this programme specified under »Heading 1 – The programme», concerning the Republic of Croatia shall be implemented by the Commission on a centralised basis, in the meaning of Article 53a of Council Regulation (EC Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities, as last modified by Regulation (EC)1525/2007 of 17 December 2007 (hereafter: «Financial Regulation»).
(2) The programme shall be implemented in accordance with the provisions of the Framework Agreement on the Rules for co-operation concerning EU Financial Assistance to the Republic of Croatia and the implementation of the Assistance under the Instrument for Pre-accession Assistance (IPA) concluded between the Parties on 27 August 2007 (hereafter: «the Framework Agreement»), which is set out in Annex B to this Agreement.
3 STRUCTURES AND AUTHORITIES WITH RESPONSIBILITIES
(1) The Beneficiary shall designate a national IPA co-ordinator, in accordance with the Framework Agreement, who shall act as the representative of the Beneficiary vis-à-vis the Commission. He/she shall ensure that a close link is maintained between the Commission and the Beneficiary with regard both to the general accession process and to EU pre-accession assistance under IPA.
4 FUNDING
The funding for the implementation of this Agreement shall be as follows:
(a) The European Union contribution for the total of the programme for the year 2011 is fixed at a maximum of EUR 4 613 750, as detailed in the programme. However, payment of the European Union contribution by the Commission shall be made within the limits of the funds available.
(b) The cost of the structures and authorities put in place by the Beneficiary for the implementation of this programme shall be borne by the Beneficiary.
5 CONTRACTING DEADLINE
(1) The individual contracts and agreements which implement this Agreement shall be concluded no later than three years from the date of conclusion of this Agreement.
(2) Any funds for which no contract has been concluded before the contracting deadline shall be cancelled.
6 DEADLINE FOR THE EXECUTION OF CONTRACTS
(1) The contracts must be executed within a maximum of two years from the end date of contracting.
(2) The deadline for the execution of contracts may be extended before its end date in duly justified cases.
7 DISBURSEMENT DEADLINE
(1) Disbursement of funds must be made no later than one year after the final date for the execution of contracts.
(2) The deadline for disbursement of funds may be extended before its end date in duly justified cases.
8 TREATMENT OF RECEIPTS
(1) Receipts for the purposes of IPA include revenue earned by an operation, during the period of its co-financing, from sales, rentals, service enrolment/fees or other equivalent receipts with the exception of:
(a) receipts generated through the economic lifetime of the co-financed investments in the case of investments in firms;
(b) receipts generated within the framework of a financial engineering measure, including venture capital and loan funds, guarantee funds, leasing;
(c) where applicable, contributions from the private sector to the co-financing of operations, which shall be shown alongside public contribution in the financing tables of the programme.
(2) Receipts as defined in paragraph 1 above represent income which shall be deducted from the amount of eligible expenditure for the operation concerned. No later than the closure of the programme, such receipts shall be deducted from the relevant operation’s eligibility expenditure in their entirety or pro-rata, depending on whether they were generated entirely or only in part by the co-financed operation.
9 ELIGIBILITY OF EXPENDITURE
(1) Expenditure under the programme in Annex A shall be eligible for European Union contribution if it has been incurred after the contracts and grants implementing such programme have been signed, except in the cases explicitly provided for in the Financial Regulation.
(2) The following expenditure shall not be eligible for European Union contribution under the programme in Annex A:
(a) taxes, including value added taxes;
(b) customs and import duties, or any other charges;
(c) purchase, rent or leasing of land and existing buildings;
(d) fines, financial penalties and expenses of litigation;
(e) operating costs;
(f) second hand equipment;
(g) bank charges, costs of guarantees and similar charges;
(h) conversion costs, charges and exchange losses associated with any of the component specific euro accounts, as well as other purely financial expenses;
(i) contributions in kind;
(j) any leasing costs;
(k) depreciation costs.
(3) By way of derogation from paragraph 2 above, the Commission will decide on a case-by-case basis whether the following expenditure is eligible:
(a) operating costs, including rental costs, exclusively related to the period of co-financing of the operation;
(b) value added taxes, if the following conditions are fulfilled:
(i) the value added taxes are not recoverable by any means;
(ii) it is established that they are borne by the final beneficiary, and
(iii) they are clearly identified in the project proposal.
(c) costs relating to a bank guarantee or comparable surety to be lodged by the final beneficiary of a grant.
(4) Expenditure financed under IPA shall not be the subject of any other financing under the European Union budget.
10 RETENTION OF DOCUMENTS
(1) All documents relating to the programme in Annex A shall be kept for at least five years from the date on which the European Parliament grants discharge for the budgetary year to which the document relate.
(2) In the case that the programme in Annex A is not definitely closed within the deadline set in paragraph 1 above, the documents relating to it shall be kept until the end of the year following that in which the programme in Annex A is closed.
11 ROADMAP FOR DECENTRALISATION WITHOUT EX-ANTE CONTROLS
(1) The Beneficiary shall establish a detailed roadmap with indicative benchmarks and time limits to achieve decentralisation with ex ante controls by the Commission. In addition, the Beneficiary shall establish an indicative roadmap to achieve decentralisation without ex ante controls by the Commission.
(2) The Commission shall monitor the implementation of the roadmaps mentioned in paragraph 1, and shall take due account of the results achieved by the Beneficiary in this context, in particular in the provision of assistance. The roadmap to achieve decentralization without ex ante controls may refer to a phased waiver of different types of ex-ante control.
(3) The Beneficiary shall keep the Commission regularly updated with the progress made in the implementation of this roadmap.
12 INTERPRETATION
(1) Subject to any express provision to the contrary in this Agreement, the terms used in this Agreement shall bear the same meaning as attributed to them in the IPA Framework Regulation and the IPA Implementing Regulation.
(2) Subject to any express provision to the contrary in this Agreement, references to this Agreement are references to such Agreement as amended, supplemented or replaced from time to time.
(3) Any references to Council or Commission Regulations are made to the version of those regulations as indicated. If required, modifications of these regulations shall be transposed into this Agreement by means of amendments.
(4) Headings in this Agreement have no legal significance and do not affect its interpretation.
13 PARTIAL INVALIDITY AND UNINTENTIONAL GAPS
(1) If a provision of this Agreement is or becomes invalid or if this Agreement contains unintentional gaps, this will not affect the validity of the other provisions of this Agreement. The Parties will replace any invalid provision by a valid provision which comes as close as possible to the purpose of and intent of the invalid provision.
(2) The Parties will fill any unintentional gap by a provision which best suits the purpose and intent of this Agreement, in compliance with the IPA Framework Regulation and the IPA Implementing Regulation.
14 REVIEW AND AMENDMENTS
(1) The implementation of this Agreement will be subject to periodic reviews at times arranged between the Parties.
(2) Any amendment agreed to by the Parties will be in writing and will form part of this Agreement. Such amendment shall come into effect on the date determined by the Parties.
15 TERMINATION
(1) Without prejudice to paragraph 2, this Agreement shall terminate eight years after its signature. This termination shall not preclude the possibility for the Commission making financial corrections in accordance with Article 56 of the IPA Implementing Regulation.
(2) This Agreement may be terminated by either Party by giving written notice to the other Party. Such termination shall take effect six calendar months from the date of the written notice.
16 SETTLEMENT OF DIFFERENCES
(1) Differences arising out of the interpretation, operation and implementation of this Agreement, at any and all levels of participation, will be settled amicably through consultation between the Parties.
(2) In default of amicable settlement, either Party may refer the matter to arbitration in accordance with the Permanent Court of Arbitration Optional Rules for Arbitration Involving International Organisations and States in force at the date of this Agreement.
(3) The language to be used in the arbitration proceedings shall be English. The appointing authority shall be the Secretary General of the Permanent Court of Arbitration following a written request submitted by either Party. The Arbitrator’s decision shall be binding on all Parties and there shall be no appeal.
17 NOTICES
(1) Any communication in connection with this Agreement shall be made in writing and in the English language. Each communication must be signed and must be supplied as an original document or by fax.
(2) Any communication in connection with this Agreement must be sent to the following addresses:
For the Commission:
Mr Gerhard Schumann-Hitzler
Director
Directorate General for Enlargement
Financial Instruments & Regional Programmes
CHAR 04/99
B-1049 Brussels
Fax: +32 2 2957502
For the Beneficiary
Mr Matija Derk
National IPA Co-ordinator
Assistant Minister of Regional Development and EU Funds
Ministry of Regional Development and EU Funds
Trg kralja Petra Krešimira IV br. 1
10000 Zagreb
Croatia
18 NUMBER OF ORIGINALS
This Agreement is drawn up in duplicate in the English language.
19 ANNEXES
The Annexes A and B shall form an integral part of this Agreement.
20 ENTRY INTO FORCE
This Agreement shall enter into force on the date on which the Recipient notifies the Commission that all internal procedures in the Republic of Croatia necessary for the entry into force of this Agreement have been fulfilled.
Signed, for and on behalf of the Government of the Republic of Croatia, at Zagreb, on 25 September 2012
by Mr Matija Derk
National IPA Co-ordinator
Assistant Minister of Regional Development and EU Funds
Signed, for and on behalf of the Commission, at Brussels, on 24 May 2012
by Mr Gerhard Schumann-Hitzler
Director
HORIZONTAL PROGRAMME ON NUCLEAR SAFETY AND RADIATION PROTECTION UNDER THE IPA TRANSITION ASSISTANCE AND INSTITUTION BUILDING COMPONENT FOR THE YEAR 2011 ADOPTED BY COMMISSION DECISION C(2011)8164 OF 11 NOVEMBER 2011
ANNEX A: Horizontal Programme on Nuclear Safety and Radiation Protection under the IPA-Transition Assistance and Institution Building Component for the year 2011
1 IDENTIFICATION
Beneficiaries
|
Albania, Bosnia and, Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Montenegro, Serbia, as well as Kosovo*
|
CRIS decision number (centralised management/joint management)
CRIS decision number (decentralised management)
|
2011/023-384 – Projects No 1, 2 and 6
2011/023-388 – Project No 3
2011/023-389 – Projects no 4 and 5
|
Year
|
2011
|
EU contribution
|
EUR 4 613 750
|
Implementing Authority
|
Project No 1 by the European Commission in joint management with the International Atomic Energy Agency (IAEA);
Projects No 2, 3 and 6 by the European Commission on behalf of the Beneficiaries in centralised management; and
Projects No 4 and 5 by the Central Finance and Contracting Agency (CFCA) of Croatia in decentralised management.
|
Final date for concluding the financing agreements
|
At the latest by 31 December 2012
|
Final dates for contracting
|
3 years following the date of conclusion of the financing agreements.
These dates apply also to the national co-financing.
|
Final dates for execution
|
2 years following the end date for contracting.
These dates apply also to the national co-financing.
|
Budget line(s) concerned
|
22.020701 – Regional and horizontal programmes
|
Programming Unit
|
Unit D3 – Regional Programmes DG Enlargement
|
Implementation Unit/ EU Delegation
|
Project No 1 will be implemented by Unit D3 – Regional Programmes DG Enlargement in joint management with the IAEA.
Projects No 2, 3 and 6 will be implemented by Unit D3-
Regional Programmes DG Enlargement in centralised management.
Project No 4 and 5 will be implemented in decentralised management by the CFCA of Croatia
|
2. THE PROGRAMME
2.a Priorities selected under this programme
The IPA horizontal programme on nuclear safety and radiation protection is implemented in the context of the priorities for IPA support covered under sector 5 – Transport and energy infrastructure, including nuclear safety which have been identified in the IPA Multi-Beneficiary Multi-annual Indicative Planning Document (MIPD) for the years 2011-2013.
As mentioned in the Multi-Beneficiary MIPD «in the area of nuclear safety and radiation protection, full transposition of the EU acquis remains an objective for most of the IPA Beneficiaries. This transposition would require the full operation of the national regulatory bodies which, for some of them, has not yet been accomplished.
In addition, there are a number of issues that need to be addressed in all Beneficiaries such as the establishment of an appropriate regulatory framework, the reduction of medical or occupational exposure and the radioactive contamination of the environment (including by depleted uranium).
Much remains to be done also for emergency preparedness and early warning systems, training of personnel confronted with ionising radiation and public information. The prevention of illicit trafficking of nuclear materials and radiation sources as well as the management of radioactive waste (including radioactive lightning rods) and the storage in licensed facilities remains a major concern.
All these issues may require funding for supplying equipment, providing technical assistance and possibly carrying out works.
It should be pointed out that for Serbia, which has operated nuclear research reactors in the past, specific actions must be undertaken in order to decommission these reactors according to best EU practices. In this regard, security of radioactive sources and fissile materials should be treated as an issue of highest importance.
Two Beneficiaries (Turkey and Albania) have declared their intention to eventually construct nuclear power plants. In those cases, particular attention should be paid to ensure that all provisions, especially those regarding safety and security, comply with international conventions, with the IAEA Safety Standards, with international (including bilateral) agreements and the EU acquis.
The actions foreseen under this sector will aim at achieving the following:
(1) Technical capacity of the national regulatory agencies enhanced to comply with EU acquis and regulations on nuclear safety and radiation protection.
(2) Further contribution to the development of emergency plans and strengthening of capacity for emergency preparedness and response in several Beneficiaries.
(3) Implementation of monitoring programmes for measuring the occurrence of radioactivity in the environment and establishing of methodologies for public dose assessment.
(4) Actions to decrease occupational and patients’ exposure in the medical sector.
(5) Public awareness campaigns run and early warning systems established.
This programme focuses on a set of two regional projects, and three national projects that are covering the Multi-Beneficiary MIPD priorities and addressing a number of issues, i.e. approximation of the legislations/regulations with the EU acquis in the field of nuclear safety and radiation protection, enhancement of the technical capacity of the national nuclear regulatory bodies and their Technical Support Organisations, monitoring of the radioactivity in the environment, emergency preparedness, reduction of medical exposure. In addition the programme includes one administrative arrangement with the Joint Research Centre – Institute for Energy (Petten) that should provide the necessary technical back-up to DG Enlargement to launch, monitor and evaluate the results of all these projects.
2.b Past assistance, lessons learned and donor coordination in the sector nuclear safety and radiation protection
With the exception of Kosovo, all Beneficiaries have established nuclear regulatory bodies during the last few years. Although one 2008 IPA-funded regional project is being performed in order to enhance the regulatory infrastructure and to assess the degree of transposition of the EU acquis, this action appears quite insufficient to align the legislation and regulations of all Beneficiaries with the EU acquis. Further regulatory assistance in order to enhance the technical capacity of the regulatory bodies and wherever possible their Technical Support Organisations (TSOs) is needed and this is precisely the main aim of this programme which focuses on Albania, Bosnia and Herzegovina, the former Yugoslav Republic of Macedonia, Montenegro, Serbia, as well as Kosovo.
As part of the enhancement of the technical capacity of the TSO in the field of medical exposure and monitoring of the radioactivity in the environment, it is considered worthwhile to support a Montenegrin organisation named CETI through the delivery of equipment. Actually this project takes over a former 2008 IPA-funded project for which – for various reasons – the tendering procedure failed.
Croatia is now close to accession to the EU and its regulatory framework is in line with the EU acquis. However the implementation of the regulations needs further support in two specific domains: emergency preparedness and monitoring of the radioactivity in the environment. Both domains were identified as priority in the IPA-funded assessment study on the regulatory infrastructure that was concluded in 2010. They are also clearly identified as priority domains in the Multi-Beneficiary MIPD.
This programme constitutes a logical continuation of the past and running IPA-funded projects. It should help to solve most of the outstanding radiological issues in the Western Balkans by 2015-2016.
It is important to underline that all these projects are part of a coherent strategy for external assistance to the Western Balkans in the nuclear domain that was drawn up together with each Beneficiary in 2010 and 2011. This strategy sets out in detail the needs for external assistance, supply of equipment and works until 2015-2016. The IAEA has been associated to the drafting of the corresponding roadmaps until 2013.
Although in the recent past, most emphasis of the IPA horizontal programme was placed on tackling the Vinča nuclear issues and in particular on the repatriation of the Serbian spent nuclear fuel to the Russian Federation, it was decided to put on hold the support for at least one year due to the delays that were recorded in the implementation of IPA-funded projects on radioactive waste management at Vinča. However, it is worth highlighting the successful repatriation project which absorbed approximately one third of the resources of this programme over the years 2007 – 2010.
All projects directly connected with technical assistance to the Western Balkans are closely coordinated with the IAEA.
Since 2007 the IPA horizontal programme on nuclear safety and radiation protection is providing the Western Balkans with a significant support in order to solve a number of important nuclear and radiological issues. Although some political problems somewhat delayed the implementation of these successive programmes, in particular concerning the rather late establishment of nuclear regulatory bodies in some of the Beneficiaries, the overall appraisal of past and on going assistance is very positive.
The lessons learnt mainly concern the insufficient involvement of the beneficiary organisations of these programmes in the tendering procedures for contracting. Most of them – including Croatia – need technical support from DG Enlargement and the JRC-Petten so that Terms of Reference are detailed enough and neutral. This led to late contracting for most of the projects. Another important lesson is that improvement of the regulatory infrastructure in each of the Beneficiaries faces political difficulties. Most of the regulatory bodies are not in line with their sister organisations in the EU and their further alignment is very difficult to achieve. A third lesson is that licensing of storage facilities for radioactive waste – which is a key-issue in nuclear safety – experienced many difficulties again for political reasons. Also,, the implementation of projects in joint management with the IAEA proved to be a rather complex task due to the high turn-over of staff within the IAEA and the different policies followed for technical assistance. Anyway the coordination is performed through regular contacts with the IAEA and joint missions in the Beneficiaries of concern.
Coherence of approach with the Instrument for Nuclear Safety Cooperation (INSC) is ensured through close contacts and exchange of information with the members of the INSC Committee.
2.c Description
Project No 1: «Further enhancement of the technical capacity of nuclear regulatory bodies in Bosnia and Herzegovina and Montenegro« aims at providing a direct support to the nuclear regulatory bodies of Bosnia and Herzegovina and Montenegro to further contribute to the transposition of the EU acquis in the field of nuclear safety and radiation protection, and to align their functioning with their sister organisations in the EU.
This project covers two Beneficiaries of the Western Balkans for which the needs for regulatory assistance are currently similar. The project will mainly aim at finalising the transposition of the EU acquis into the national legislation and regulations, at defining implementing procedures for regulations, at reducing medical exposure, at improving dosimetry control, at delivering some equipment in particular for Quality Assurance/Quality Control (QA/QC) in diagnostic radiology, at reviewing national emergency plans and at contributing to the setting-up of public information campaigns.
Enhancement of the technical capacity of the national regulatory bodies in the nuclear area is fully compliant with the basic objectives of the Multi-Beneficiary MIPD.
Due to the fact that the IAEA is currently implementing a number of projects in the field of regulatory assistance in Bosnia and Herzegovina as well as in Montenegro, and that this assistance will continue over the next years, it is considered worthwhile to implement this project in joint management with the IAEA. In this way, risks of duplication of external assistance will be avoided and synergies can be developed.
A contribution agreement with the IAEA for an amount of EUR
850 000 will be concluded in Q2 2013 for the implementation of this project in accordance with the terms of the Financial and Administrative Framework Agreement (FAFA) between the European Union and the United Nations, signed on 29 April 2003, to which the IAEA adhered on 17 September 2004.
Project No 2: «Further enhancement of the technical capacity of nuclear regulatory bodies in Albania, the former Yugoslav Republic of Macedonia, Serbia, as well as Kosovo« aims at providing a direct support to the nuclear regulatory bodies of the Beneficiaries to further contribute to the transposition of the EU acquis in the field of nuclear safety and radiation protection, and to align their functioning with their sister organisations in the EU.
This is a regional project in scope. It will aim at enhancing the technical capacity of the regulatory bodies of the Beneficiaries in the field of nuclear safety and radiation protection and therefore is fully compliant with the MIPD’s objectives. Many regulatory topics should be addressed within the framework of this project e.g. finalisation of the transposition of the EU acquis into the national legislation and regulations in Serbia and Kosovo; definition of criteria to establish TSOs to the national regulatory bodies in Albania, establishment of Quality Management System in Albania and Serbia; establishment of QA/QC procedures in the medical sector in the former Yugoslav Republic of Macedonia; reviewing of response plans in case of a radiological emergency in Albania; drawing-up of a national strategy for radioactive waste management and decommissioning activities in Serbia.
Despite the fact that similar activities are being supported by the IAEA, it has not been possible to reach an agreement with the Agency regarding the implementation of this project in joint management. Therefore a close coordination with IAEA activities will be required in order to avoid any overlapping.
One service contract for an amount of EUR 2.1 million and one supply contract for an amount of EUR 200 000 will be concluded following two calls for tenders that will be launched in the second quarter of 2013 and in the fourth quarter of 2014, respectively.
Project No 3: «Strengthening Radiation Protection and Nuclear Safety in Montenegro through Capability Upgrading of Technical Support Institution« is a supply project with aims at providing various types of equipment to upgrade the technical capabilities of the Centre for Ecotoxicological Research of Montenegro (CETI) that is acting as TSO to the Montenegrin regulatory body. The areas covered by this supply project are: monitoring of the radioactivity in the environment, including response to radiological/nuclear emergency situations, management of low and medium radioactivity, radioactive waste storage and transportation of radioactive materials, professional, patient, public and environmental exposure control and Quality assurance/Quality control (QA/QC) of medical radiation source.
The Multi-Beneficiary MIPD specifies that actions should be undertaken on the development of emergency plans and strengthening of capacity for emergency preparedness and response in all Beneficiaries, the implementation of monitoring programmes for measuring the occurrence of radioactivity in the environment and establishing of methodologies for public dose assessment, and actions to decrease occupational and patients’ exposure in the medical and industrial sectors. All these issues may require funding for supplying equipment, providing technical assistance and possibly carrying out works.
The project will be implemented through one to four supply contracts for a total amount of EUR 300 000 that will be concluded following a call for tenders (4 lots) launched in the first quarter of 2012. Additional supply contracts for an estimated amount of EUR 95 000 fully financed by the beneficiary organization will be concluded by CETI following a call for tenders to be launched in the first quarter of 2012 (parallel co-financing) by the beneficiary organisation.
Project No 4: «Upgrading of the emergency preparedness system in the Republic of Croatia« provides support to the State Office for Radiological and Nuclear Safety in Croatia mainly to harmonize radiological emergency response procedures with neighbouring countries, in particular with Slovenia and Hungary. It also aims at upgrading the national radiological emergency response capabilities to face incidents and accidents of different levels, as well as the national emergency plan that will enable rapid implementation of protective measures within the first few hours and in the days after the accident through a coordinated response of the emergency services and other agencies.
The Multi-Beneficiary MIPD’s objectives include an action on emergency preparedness and therefore this project is fully compliant.
The following two contracts are expected to be concluded to implement this project: one service contract for an EU contribution of EUR 171 000 following a call for tenders launched in the third quarter of 2012 (a national co-financing is foreseen for an amount of EUR 19 000); and one supply contract for an EU contribution of EUR 263 500 following a call for tender launched in the fourth quarter of 2013 (a national co-financing is foreseen for an amount of EUR 46 500).
The implementation of this project will be decentralised.
Project No 5: «Upgrading the systems for the on- and off-line monitoring of radioactivity in environment in Croatia in regular and emergency situations». The project focuses on the upgrading of the system for on- and off-line monitoring of the environment in the Republic of Croatia necessary to comply with the Article 35 of the Euratom Treaty under regular and emergency situations, and in particular, ambient dose rate network, on-line monitoring in surface waters, off-line monitoring and mobile systems. It consists of two components: component 1 for the purchase, installation and commissioning of additional equipment for upgrading the existing technical infrastructure; and component 2 for the verification of existing gamma dose rate (GDR) stations regarding standard site criteria and generation of corrective/deviation factors if needed to standardize GDR station measurements with EU requirements for environmental monitoring.
The project responds to some of the conclusions of IPA 2007 Project «Assessment of the needs and proposed actions in order to perform the monitoring of the radioactivity in the environment in Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Montenegro, Serbia, as well as Kosovo« with regards to Croatia.
It is also fully compliant with the MIPD’s objectives as far as monitoring of the radioactivity in the environment is concerned.
The following two contracts are expected to be concluded to implement this project: one supply contract for an EU contribution of EUR 310 250 following a call for tender launched in the third quarter of 2012 (a national co-financing is foreseen for an amount of EUR 54 750); and one service contract for an EU contribution of EUR 64 000 following a call for tender launched in the second quarter of 2013 (a national co-financing is foreseen for an amount of EUR 6 000).
The implementation of this project will be decentralised.
Project No 6: «Technical back-up to the IPA horizontal programme on nuclear safety and radiation protection« should enable DG Enlargement to better manage all the IPA-funded projects thanks to the technical expertise given by the Joint Research Centre – Institute for Energy (JRC-IE) in Petten. This support will mainly consists of preparing or reviewing terms of reference of nuclear projects, participation in evaluation committees for tenders, kick-off, progress and concluding meetings during project implementation and evaluation of the results achieved. It will also include the verification of the requests for payment that DG Enlargement regularly receives from the Beneficiaries of the IPA nuclear projects.
An administrative arrangement for an amount of EUR 355 000 will be concluded with the JRC-IE in the first quarter of 2012.
2.d Horizontal issues
The implementation of projects 1 to 6 will contribute to significantly decrease exposure to and improve the protection of people and environment from ionising radiation in the Western Balkans. As a general rule, enhancement of the capacity of nuclear safety authorities is a prerequisite to improve nuclear safety and radiation protection in the whole Western Balkans.
2.e Risks and Assumptions
The implementation of projects No 1 to 5 under this programme is subject to the following prerequisite:
• National regulatory bodies in the field of nuclear safety and radiation protection are fully operational and sufficiently staffed in order to be able to absorb the transfer of know-how in particular in Kosovo.
3. BUDGET (AMOUNTS IN EUR MILLION)
3.a Indicative budget
3.a.a Table for projects to be implemented in joint management with the IAEA
Amounts net of VAT
* contribution (public and private national and/or international contribution) provided by national counterparts
(1) Expressed in % of the Total expenditure IB or INV (column (a) or (d)).
(2) Sector rows only. Expressed in % of the grand total of column (h). It indicates the relative weight of the sector with reference to the total IPA EU contribution of the entire FP.
3.a.b Table for centralised projects
Amounts net of VAT
* contribution (public and private national and/or international contribution) provided by national counterparts
(1) Expressed in % of the Total expenditure IB or INV (column (a) or (d)).
(2) Sector rows only and for Centralised only. Expressed in % of the grand total of column (h). It indicates the relative weight of the sector with reference to the total IPA EU contribution of the entire FP.
3.a.c Table for decentralised projects
Amounts net of VAT
* public contribution (private contributions are not taken into account (Article 67(1) IPA IR) under decentralised management)
(1) Expressed in % of the Total expenditure IB or INV (column (a) or (d)).
(2) Sector rows only. Expressed in % of the grand total of column (h). It indicates the relative weight of the sector with reference to the total IPA EU contribution of the entire FP.
3.a.d Table summarising the IPA support according to the management mode adopted
Amounts net of VAT
* contribution (public and private national and/or international contribution) provided by national counterparts for centralised management; public contribution (private contributions are not taken into account (Article 67(1) IPA IR) under decentralised management)
(1) Expressed in % of the Total expenditure IB or INV (column (a) or (d)).
(2) Expressed in % of the grand total of column (h)
3.b Principle of Co-Financing applying to the programme
For project No 1 in joint management with the IAEA, the IPA EU contribution represents 100% of the total budget allocated to this part of the programme. This has been calculated in relation to the eligible expenditure, which is based on the total expenditure. On account of its regional character, project No 1 is not co-financed.
For projects to be implemented by centralised management (projects No 2, 3 and 6) the IPA EU contribution represents 95% of the total budget allocated to this part of the programme. This has been calculated in relation to the eligible expenditure, which is based on the total expenditure. Parallel co-financing will be used. The requirements of co-financing for INV at project level have been complied with for project No 3. No co-financing is planned for project No 2 which is a regional project. Project No 6 refers to an administrative arrangement with the Joint Research Centre. No co-financing is required for this activity.
For projects to be implemented by decentralised management (projects No 4 and 5), the IPA EU contribution represents 86% of the total budget allocated to this part of the programme. This has been calculated in relation to the eligible expenditure, which is based on the public expenditure. Joint co-financing will be used as a rule. The requirements of co-financing for Institution Building (IB) and Investment (INV) at project level have been complied with.
4. IMPLEMENTATION
4.a Management modes and Implementation modalities
For project No 1, the programme will be implemented by the European Commission by joint management with the International Atomic Energy Agency following Article 53d of the Financial Regulation and the corresponding provisions of the Implementing Rules. To this end, the Commission and the IAEA will conclude one Contribution Agreement in accordance with the Financial and Administrative Framework Agreement (FAFA).
Joint management will be used to delegate implementation of tasks to international organisations. Only the IAEA is concerned by this management mode and it is currently subject to an assessment in relation to Article 53d of the Financial Regulation. In anticipation of the results of the assessment, the authorising officer deems that, based on the longstanding and problem free cooperation with the IAEA, joint management mode can be proposed and a Convention can be signed in accordance with the provisions laid down in Article 43 of the Implementing Rules to the Financial Regulation.
Projects No 2, 3 and 6 will be implemented on a centralised basis by the European Commission in accordance with Article 53a of the Financial Regulation and the corresponding provisions of the Implementing Rules.
Projects No 4 and 5 shall be implemented by decentralised management, in accordance with Article 53c of the Financial Regulation and the corresponding provisions of the Implementing Rules. The Beneficiary will continue to ensure that the conditions laid down in Article 56 of the Financial Regulation are respected at all times.
The ex-ante control by the European Commission shall apply to the tendering of contract, launch of call for proposals and the award of contracts and grants until the European Commission allows for decentralised management without ex-ante controls as referred in Article 18 of the IPA Implementing Regulation.
4.b General rules for procurement and grant award procedures
For project No 1, the general rules for procurement and grant award procedures shall be defined in the Contribution Agreements between the Commission and the IAEA implementing such programme/activity.
For projects No 2, No 3, No 4, No 5 and No 6 procurement shall follow the provisions of Part Two, Title IV of the Financial Regulation and Part Two, Title III, Chapter 3 of its Implementing Rules as well as the rules and procedures for service, supply and works contracts financed from the general budget of the European Union for the purposes of cooperation with third countries adopted by the Commission on 24 May 2007 (C (2007)2034).
Grant award procedures shall follow the provisions of Part One, Title VI of the Financial Regulation and Part One, Title VI of its Implementing Rules.
The Contracting authorities shall also use the procedural guidelines and standard templates and models facilitating the application of the above rules provided for in the «Practical Guide to contract procedures for EU external actions« («Practical Guide») as published on the DEVCO website at the date of the initiation of the procurement or grant award procedure. The essential selection and award criteria for the award of grants are laid down in the Practical Guide. The detailed selection and award criteria will be laid down in the Calls for proposals – Guidelines for applicants.
5. MONITORING AND EVALUATION
5.a Monitoring
The Commission may undertake any actions it deems necessary to monitor the programmes concerned and for the projects in joint management with IAEA these actions may be carried out jointly with the IAEA.
Decentralised projects will be monitored through the IPA Monitoring Committee assisted by Transition Assistance and Institution Building Monitoring Committee, and the Joint Monitoring Committee.
They shall assess the effectiveness, quality and coherence of the implementation of this programme. They may make proposals to the European Commission and the national IPA co-ordinator, with a copy to the national authorising officer, for decisions on any corrective measures to ensure the achievements of programme objectives and enhance the efficiency of the assistance provided.
5.b Evaluation
Programmes shall be subject to ex ante evaluations, as well as interim and, where relevant, ex post evaluations in accordance with Articles 57 and 82 of the IPA Implementing Regulation, with the aim of improving the quality, effectiveness and consistency of the assistance from EU funds and the strategy and implementation of the programmes.
For decentralised projects, after the conferral of management powers, the responsibility for carrying out interim evaluations shall lie with the Beneficiary, without the prejudice on the European Commission’s rights to perform any ad hoc interim evaluations of the programmes it deems necessary. Ex post evaluation shall remain a prerogative of the European Commission even after the conferral of management powers to the Beneficiary.
The results of evaluations shall be taken into account in the programming and implementation cycle.
The Commission may also carry out strategic evaluations.
6. AUDIT, FINANCIAL CONTROL, ANTIFRAUD MEASURES; FINANCIAL ADJUSTMENTS, PREVENTIVE MEASURES AND FINANCIAL CORRECTIONS
6.a Audit, Financial Control and Anti-fraud measures
The accounts and operations of all parties involved in the implementation of this programme, as well as all contracts and agreements implementing this programme, are subject to, on the one hand, the supervision and financial control by the European Commission (including the European Anti-Fraud Office), which may carry out checks at its discretion, either by itself or through an outside auditor and, on the other hand, audits by the European Court of Auditors. This includes measures such as ex-ante verification of tendering and contracting carried out by the EU Delegation in the Beneficiary.
In order to ensure the efficient protection of the financial interests of the European Union, the European Commission (including the European Anti-Fraud Office) may conduct on-the-spot checks and inspections in accordance with the procedures foreseen in Council Regulation (EC, Euratom) 2185/96.
The controls and audits described above are applicable to all contractors, subcontractors and grant beneficiaries who have received EU funds.
6.b Financial adjustments
For decentralised projects, the national authorising officer, who bears in the first instance the responsibility for investigating all irregularities, shall make the financial adjustments where irregularities or negligence are detected in connection with the implementation of this programme, by cancelling all or part of the EU assistance. The national authorising officer shall take into account the nature and gravity of the irregularities and the financial loss to the EU assistance.
In case of an irregularity, including negligence and fraud, the national authorising officer shall recover the EU assistance paid to the Beneficiary in accordance with national recovery procedures.
6.c Audit trail
For decentralised projects, the national authorising officer shall ensure that all the relevant information is available to ensure at all times a sufficiently detailed audit trail. This information shall include documentary evidence of the authorisation of payment applications, of the accounting and payment of such applications, and of the treatment of advances, guarantees and debts.
6.d Preventive Measures
For decentralised projects, Beneficiaries shall ensure investigation and effective treatment of suspected cases of fraud and irregularities and shall ensure the functioning of a control and reporting mechanism equivalent to that provided for in Commission Regulation 1828/2006. All suspected or actual cases of fraud and irregularity as well as all measures related thereto taken must be reported to the European Commission services without delay. Should there be no suspected or actual cases of fraud or irregularity to report, the Beneficiary shall inform the European Commission of this fact within two months following the end of each quarter.
Irregularity shall mean any infringement of a provision of applicable rules and contracts, resulting from an act or omission by an economic operator, which has, or would have, the effect of prejudicing the general budget of the European Union by charging an unjustified item of expenditure to the general budget.
Fraud shall mean any intentional act or omission relating to: the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the misappropriation or wrongful retention of funds from the general budget of the European Union or budgets managed by, or on behalf of, the European Union; non disclosure of information in violation of a specific obligation with the same effect; the misapplication of such funds for purposes other than those for which they are originally granted.
The Beneficiary shall take any appropriate measure to prevent and counter active and passive corruption practises at any stage of the procurement procedure or grant award procedure, as well as during the implementation of corresponding contracts.
Active corruption is defined as the deliberate action of whosoever promises or gives, directly or through an intermediary, an advantage of any kind whatsoever to an official for himself or for a third party for him to act or to refrain from acting in accordance with his duty or in the exercise of his functions in breach of his official duties in a way which damages or is likely to damage the European Union’s financial interests.
Passive corruption is defined as the deliberate action of an official, who, directly or through an intermediary, requests or receives advantages of any kind whatsoever, for himself or a third party, or accepts a promise of such advantage, to act or to refrain from acting in accordance with his duty or in the exercise of his functions in breach of his official duties in a way which damages or is likely to damage the European Union’s financial interests.
The authorities of the Beneficiary, including the personnel responsible for the implementation of the programme, shall also undertake to take whatever precautions are necessary to avoid any risk of conflict of interest, and shall inform the European Commission immediately of any such conflict of interest or any situation likely to give rise to any such conflict.
6.e Financial corrections
For decentralised projects, in order to ensure that the funds are used in accordance with the applicable rules, the European Commission shall apply clearance-of-accounts procedures or financial correction mechanisms in accordance with Article 53c (2) of the Financial Regulation and as detailed in the Framework Agreement concluded between the European Commission and the Beneficiary.
A financial correction may arise following:
(i) identification of a specific irregularity, including fraud; or
(ii) identification of a weakness or deficiency in the management and control systems of the Beneficiary;
If the European Commission finds that expenditure under this programme has been incurred in a way that has infringed applicable rules, it shall decide what amounts are to be excluded from EU financing.
The calculation and establishment of any such corrections, as well as the related recoveries, shall be made by the European Commission following the criteria and procedures provided for in the IPA Implementing Regulation.
7. NON SUBSTANTIAL REALLOCATION OF FUNDS
The authorising officer by delegation (AOD), or the authorising officer by sub-delegation (AOSD), in line with the delegation of powers conferred upon him/her by the AOD, in accordance with the principles of sound financial management, may undertake non substantial reallocations of funds without an amending financing decision being necessary. In this context, cumulative reallocations not exceeding 20% of the total amount allocated for the programme, subject to a limit of EUR 4 million, shall not be considered substantial, provided that they do not affect the nature and objectives of the programme. The IPA Committee shall be informed of the above reallocation of funds.
8. LIMITED CHANGES
Limited changes in the implementation of this programme affecting essential elements listed under Article 90 of the Implementing Rules to the Financial Regulation, which are of an indicative nature, may be undertaken by the authorising officer by delegation (AOD), or by the authorising officer by sub-delegation (AOSD), in line with the delegation of powers conferred upon him by the AOD, in accordance with the principles of sound financial management without an amending financing decision being necessary.
FRAMEWORK AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF CROATIA AND THE COMMISSION OF THE EUROPEAN COMMUNITIES ON THE RULES FOR CO-OPERATION CONCERNING EC-FINANCIAL ASSISTANCE TO THE REPUBLIC OF CROATIA IN THE FRAMEWORK OF THE IMPLEMENTATION OF THE ASSISTANCE UNDER THE INSTRUMENT FOR PRE-ACCESSION ASSISTANCE (IPA)
DATED 27 AUGUST 2007
Annexes:
ANNEX A: Functions and common responsibilities of the structures, authorities and bodies in accordance with Article 8 of the Framework Agreement between the Commission and the Government of the Republic of Croatia of 27 August 2007
ANNEX B: Model Statement of Assurance of the national authorising officer in accordance with Article 17 of the Framework Agreement between the Commission and the Government of the Republic of Croatia of 27 August 2007
ANNEX C: Model Annual Audit Activity Report of the audit authority of the Republic of Croatia in accordance with Article 29(2)(b) of the IPA Implementing Regulation
ANNEX D: Model Annual Audit Opinion of the audit authority of the Republic of Croatia in accordance with Article 29(2)(b) of the IPA Implementing Regulation
ANNEX E: Model Audit Opinion of the audit authority of the Republic of Croatia on the final statement of expenditure for the closure of a programme or parts of a programme in accordance with Article 29(2)(b) of the IPA Implementing Regulation
The Commission of the European Communities, hereinafter referred to as «the Commission», acting for and on behalf of the European Community, hereinafter referred to as «the Community« on the one part,
and the Government of the Republic of Croatia, acting on behalf of the Republic of Croatia, hereinafter referred to as «the Beneficiary»
and together, jointly referred to as «the Contracting Parties»
Whereas
(1) On 1 August 2006, the Council of the European Union adopted Regulation (EC) No 1085/2006 of 17 July 2006() establishing an instrument for pre-accession assistance (hereinafter referred to as «IPA Framework Regulation»). With effect from the 1 January 2007, this new instrument constitutes the single legal basis for the provision of financial assistance to candidate countries and potential candidate countries in their efforts to enhance political, economic and institutional reforms with a view to become members of the European Union;
(2) On 12 June 2007, the Commission has adopted the regulation implementing the IPA Framework Regulation, detailing applicable management and control provisions;
(3) The new instrument for pre-accession assistance (IPA) replaces the five previously existing pre-accession instruments: Regulation (EEC) No 3906/1989 on economic aid to certain countries of Central and Eastern Europe, Regulation (EC) No 1267/1999 on the establishment of an instrument for structural policies for pre-accession, Regulation (EC) No 1268/1999 on the support for pre-accession measures for agriculture and rural development, Regulation (EC) No 2666/2000 on assistance for Albania, Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia and the Former Yugoslav Republic of Macedonia, repealing Regulation (EC) No 1628/96 and amending Regulations (EEC) No 3906/89 and (EEC) No 1360/90 and Decisions 97/256/EC and 1999/311/EC and Regulation (EC) No 2500/2001 on the financial assistance to Turkey;
(4) The Beneficiary is eligible under IPA as provided for in the IPA Framework Regulation and in Commission Regulation (EC) No 718/2007 of 12 June 2007() implementing the IPA Framework Regulation (hereinafter referred to as «IPA Implementing Regulation»);
(5) The Beneficiary figures in Annex I of the IPA Framework Regulation, and should therefore have access to the 5 components established under IPA, i.e. the Transition Assistance and Institution Building Component, the Cross-Border Co-operation Component, the Regional Development Component, the Human Resources Development Component and the Rural Development Component;
(6) It is therefore necessary to set out the rules for co-operation concerning EC financial assistance with the Beneficiary under IPA;
HAVE AGREED AS FOLLOWS:
SECTION I
GENERAL PROVISIONS
Article 1
INTERPRETATION
(1) Subject to any express provision to the contrary in this Framework Agreement, the terms used in this Agreement shall bear the same meaning as attributed to them in the IPA Framework Regulation and the IPA Implementing Regulation.
(2) Subject to any express provision to the contrary in this Framework Agreement, references to this Agreement are references to such Agreement as amended, supplemented or replaced from time to time.
(3) Any references to Council or Commission Regulations are made to the version of those regulations as indicated. If required, modifications of theses regulations shall be transposed into this Framework Agreement by means of amendments.
(4) Headings in this Agreement have no legal significance and do not affect its interpretation.
Article 2
PARTIAL INVALIDITY AND UNINTENTIONAL GAPS
If a provision of this Agreement is or becomes invalid or if this Agreement contains unintentional gaps, this will not affect the validity of the other provisions of this Agreement. The Contracting Parties will replace any invalid provision by a valid provision which comes as close as possible to the purpose of and intent of the invalid provision. The Contracting Parties will fill any unintentional gap by a provision which best suits the purpose and intent of this Agreement in compliance with the IPA Framework Regulation and the IPA Implementing Regulation.
Article 3
PURPOSE
(1) In order to promote co-operation between the Contracting Parties and to assist the Beneficiary in its progressive alignment with the standards and policies of the European Union, including, where appropriate the acquis communautaire, with a view to membership, the Contracting Parties agree to implement activities in the various fields as specified in the two regulations mentioned above and as applicable to the Beneficiary.
(2) The assistance activities shall be financed and implemented within the legal, administrative and technical framework laid down in this Agreement and as further detailed in Sectoral Agreements and/or Financing Agreements, if any.
(3) The Beneficiary takes all necessary steps in order to ensure the proper execution of all assistance activities and to facilitate the implementation of the related programmes.
Article 4
GENERAL RULES ON FINANCIAL ASSISTANCE
(1) The following principles shall apply to financial assistance by the Community under IPA:
a) Assistance shall respect the principles of coherence, complementarity, co-ordination, partnership and concentration;
b) Assistance shall be coherent with EU policies and shall support alignment to the acquis communautaire;
c) Assistance shall comply with the budgetary principles laid down in Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002() on the Financial Regulation applicable to the general budget of the European Communities (hereinafter referred to as «Financial Regulation») and its Implementing Rules();
d) Assistance shall be consistent with the needs identified in the enlargement process and absorption capacities of the Beneficiary. It shall also take account of lessons learned;
e) The ownership of the programming and implementation of assistance by the Beneficiary shall be strongly encouraged and adequate visibility of EU intervention shall be ensured;
f) Operations shall be properly prepared, with clear and verifiable objectives, which are to be achieved within a given period; the results obtained should be assessed through clearly measurable and adequate indicators;
g) Any discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation shall be prevented during the various stages of the implementation of assistance;
h) The objectives of pre-accession assistance shall be pursued in the framework of sustainable development and the Community promotion of the goal of protecting and improving the environment.
(2) Assistance for the Beneficiary shall be based on the priorities identified in the existing documents, i.e. the European Partnership, the Accession partnership, the national programme for the adoption of the acquis communautaire, the reports and strategy paper contained in the annual enlargement package of the Commission, the Stabilisation and Association Agreement and the negotiation framework.
(3) All operations receiving assistance under IPA shall in principle require co-financing by the Beneficiary and the Community, unless otherwise agreed upon in a Sectoral Agreement or Financing Agreement.
(4) Where the execution of activities depends on financial commitments from the Beneficiary’s own resources or from other sources of funds, the funding of the Community shall become available at such time as the financial commitments of the Beneficiary and/or the other sources of funds themselves become available.
(5) The provision of Community financing under IPA shall be subject to the fulfilment by the Beneficiary’s obligations under this Framework Agreement and under Sectoral Agreements and Financing Agreements, if any.
Article 5
IMPLEMENTATION METHODS
(1) For the implementation of assistance under IPA in the Republic of Croatia, decentralised management, whereby the Commission confers the management of certain actions on the Beneficiary, while retaining overall final responsibility for general budget execution in accordance with Article 53c of the Financial Regulation and the relevant provisions of the EC Treaties, shall apply as a rule. Decentralised management shall cover at least tendering, contracting and payments by the national administration of the Beneficiary. Operations shall be implemented in accordance with the provisions laid down in Article 53c of the Financial Regulation and the ones referred to in this article.
(2) However, the Contracting Parties may agree to make use of
a) centralised management as defined in Article 53a of the Financial Regulation under the Transition Assistance and Institution Building Component, in particular for regional and horizontal programmes, and under the Cross-Border Co-operation Component. It may also be used for technical assistance under any of the IPA components. Operations shall be implemented in accordance with the provisions laid down in Articles 53 point (a), 53a and 54 to 57 of the Financial Regulation.
b) joint management as defined in Article 53d of the Financial Regulation for the Transition Assistance and Institution Building Component, in particular for regional and horizontal programmes, and for programmes involving international organisations. Operations shall be implemented in accordance with the provisions laid down in Articles 53 point (c) and 53d of the Financial Regulation.
c) shared management as defined in Article 53b of the Financial Regulation under the Cross-Border Co-operation Component, for cross-border programmes involving Member States of the European Union. Operations shall be implemented in accordance with the provisions laid down in Articles 53 point (b), 53b and Title II of Part two of the Financial Regulation. The following particular provision shall be taken into account in the implementation of cross-border programmes with Member States.
Where one or more Member States of the European Union and the Beneficiary participating in a cross-border programme are not yet ready for implementation of the whole programme under shared management, the part of the programme concerning the Member State(s) shall be implemented in accordance with Title II (Cross-Border Co-operation Component), Chapter III, Section 2 of the IPA Implementing Regulation (Articles 101 to 138) and the part of the programme concerning the Beneficiary shall be implemented in accordance with Title II, Chapter III, Section 3 of the IPA Implementing Regulation. (Articles 139 to 146 IPA Implementing Regulation, with the exception of Article 142. The provisions concerning the joint monitoring committee of Article 110 shall apply).
(3) If required by the related Financing Decision, the Commission and the Beneficiary shall conclude a Financing Agreement in accordance with Article 8 of the IPA Implementing Regulation on multi-annual or annual programmes. Financing Agreements may be concluded between the Commission and several beneficiary countries under IPA including the Beneficiary for assistance for multi-country programmes and horizontal initiatives.
(4) This Framework Agreement shall apply to all Financing Agreements concluded between the Contracting Parties for the financial assistance under IPA. Where they exist, Sectoral Agreements related to a given component shall apply to all Financing Agreements concluded under that component. Where there is no Financing Agreement, the rules included in this Framework Agreement apply together with Sectoral Agreements, if any.
Section II
MANAGEMENT STRUCTURES AND AUTHORITIES
Article 6
ESTABLISHMENT AND DESIGNATION OF STRUCTURES AND AUTHORITIES FOR DECENTRALIZED MANAGEMENT
(1) The following structures and authorities must be designated by the Beneficiary in the event of decentralised management:
a) The competent accrediting officer (CAO);
b) The national IPA co-ordinator (NIPAC);
c) The strategic coordinator for the Regional Development Component and the Human Resources Development Component;
d) The national authorising officer (NAO);
e) The national fund (NF);
f) Operating structures per component or programme to deal with the management and implementation of assistance under the IPA Regulation;
g) The audit authority.
(2) Specific bodies may be established within the overall framework defined by the bodies and authorities described above within or outside the operating structures initially designated. The Beneficiary shall ensure that the final responsibility for the functions of operating structures shall remain with the operating structure initially designated. Such a restructuring shall be formalised in written agreements or governmental acts and shall be subject to accreditation by the national authorising officer and the conferral of management by the Commission.
(3) The Beneficiary shall ensure that appropriate segregation of duties applies to the bodies and authorities mentioned under paragraph 1 and 2 above in accordance with Article 56 of the Financial Regulation. Duties are segregated when different tasks related to a transaction are allocated to different staff, thereby helping to ensure that each separate task has been properly undertaken.
Article 7
ESTABLISHMENT AND DESIGNATION OF STRUCTURES AND AUTHORITIES FOR CENTRALIZED OR JOINT MANAGEMENT
(1) In the event of centralised or joint management the national IPA co-ordinator shall act as the representative of the Beneficiary vis-ŕ-vis the Commission. He shall ensure that a close link is maintained between the Commission and the Beneficiary with regard both to the general accession process and to EU pre-accession assistance under IPA.
(2) The national IPA co-ordinator shall also be responsible for co-ordinating the Beneficiary’s participation in the relevant cross-border programmes, both with Member States and with other Beneficiary countries, as well as in the trans-national, interregional or sea basins programmes under other Community instruments. He may delegate the tasks relating to this latter responsibility to a cross-border co-operation co-ordinator.
(3) In the case of the Cross-border Co-operation Component, operating structures shall be designated and put in place by the Beneficiary, in accordance with Article 139 of the IPA Implementing Regulation.
Article 8
FUNCTIONS AND COMMON RESPONSIBILITIES OF THE STRUCTURES, AUTHORITIES AND BODIES
(1) The bodies and authorities mentioned in Article 6 above shall be allocated the functions and common responsibilities as set out in ANNEX A to this Framework Agreement.
(2) Component-related specific allocations of functions and responsibilities may be set out in Sectoral Agreements or Financing Agreements. They must not be in contradiction to the basic approach chosen for the allocation of functions and common responsibilities as shown in ANNEX A.
(3) Where under decentralised management specific persons have been given responsibility for an activity in relation to the management, implementation and control of programmes, the Beneficiary shall enable such persons to exercise the duties associated with that responsibility including in cases where, there is no hierarchical link between them and the bodies participating in that activity. The Beneficiary shall, in particular, provide those persons with the authority to establish, through formal working arrangements between them and the bodies concerned:
a) an appropriate system for the exchange of information, including the power to require information and a right of access to documents and staff on the spot, if necessary;
b) the standards to be met;
c) the procedures to be followed.
Section III
ACCREDITATION AND CONFERRAL OF MANAGEMENT POWERS UNDER DECENTRALISED MANAGEMENT
Article 9
COMMON REQUIREMENTS
Management relating to a component, a programme or a measure can only be conferred on the Republic of Croatia, if and when the following requirements are fulfilled:
a) The Beneficiary meets the conditions set to Article 56 of the Financial Regulation, in particular as regards the management and control systems. The management and control systems set up in the Republic of Croatia shall provide for effective and efficient control in at least the areas set out in the Annex to the IPA Implementing Regulation and as listed under No 1 c) of ANNEX A to this Framework Agreement. The Contracting Parties may define further provisions in Sectoral Agreements or Financing Agreements.
b) The competent accrediting officer has given accreditation to the national authorising officer both
• as the head of the national fund bearing overall responsibility for the financial management of EU funds in the Republic of Croatia and being responsible for the legality and regularity of the underlying transactions;
• with regard to national authorising officer’s capacity to fulfil the responsibilities for the effective functioning of management and control systems under IPA.
The accreditation of the national authorising officer shall also cover the national fund as described in Annex A, 5.
c) The national authorising officer has given accreditation to the relevant operating structures.
Article 10
PROCEDURE FOR ACCREDITATION OF THE NATIONAL AUTHORIZING OFFICER AND THE NATIONAL FUND BY THE COMPETENT ACCREDITING OFFICER
(1) Accreditation of the national authorising officer in accordance with Article 11 of the IPA Implementing Regulation is subject to his fulfilment of the applicable requirements set out in Article 11 of the said regulation and as further defined in Annex A, 4. This accreditation shall be supported by an audit opinion drawn up by an external auditor functionally independent from all actors in the management and control system. The audit opinion shall be based on examinations conducted according to internationally accepted auditing standards.
(2) The competent accrediting officer shall notify the Commission of the accreditation of the national authorising officer, not later than the notification of the accreditation of the first operating structure. The competent accrediting officer shall provide all relevant supporting information required by the Commission.
(3) The competent accrediting officer shall immediately inform the Commission of any changes concerning the national authorising officer or the national fund. Where a change affects the national authorising officer or the national fund in relation to the applicable requirements as set out in Article 11 of the IPA Implementing Regulation, the competent accrediting officer shall send to the Commission an assessment of the consequences of such a change on the validity of the accreditation. Where such a change is significant, the competent accrediting officer shall also notify the Commission of his decision concerning the accreditation.
Article 11
PROCEDURE FOR ACCREDITATION OF OPERATING STRUCTURE BY THE NATIONAL AUTHORIZING OFFICER
(1) Accreditation of an operating structure is subject to its fulfilment of the requirements set out in Article 11 of the IPA Implementing Regulation. This assurance shall be supported by an audit opinion drawn up by an external auditor functionally independent from all actors in the management and control system. The audit opinion shall be based on examinations conducted according to internationally accepted auditing standards.
(2) The national authorising officer shall notify the Commission of the accreditation of the operating structures and shall provide all relevant supporting information required by the Commission, including a description of the management and control systems.
Article 12
PROCEDURE FOR CONFERRAL OF MANAGEMENT POWERS BY THE COMMISSION
(1) The Commission shall confer management powers on the Beneficiary, only after the bodies and authorities referred to in Article 6 above have been designated and put in place and the conditions laid down in this article are fulfilled.
(2) Before the conferral of management powers, the Commission shall review the accreditations of the national authorising officer and the operating structures as laid down in Articles 10 and 11 above and examine the procedures and structures of any of the bodies or authorities concerned within the Republic of Croatia. This may include on-the-spot verifications by the services of the Commissions or subcontracted to an audit firm.
(3) The Commission may, in its decision to confer management powers, set further conditions, with a view to ensuring that the requirements referred to in Article 11 of the IPA Implementing Regulation are met. These further conditions must be fulfilled within a fixed period determined by the Commission for the conferral of management powers to remain effective.
(4) The Commission Decision on the conferral of management powers shall lay down the list of the ex ante controls, if any, to be performed by the Commission on the tendering of contracts, launch of calls for proposals and the award of contracts and grants. This list may vary with the component or the programme. The ex ante controls shall apply, depending on the component or programme, until the Commission allows for decentralised management without ex ante controls as referred to in Article 16 below.
Article 13
WITHDRAWAL OR SUSPENSION OF THE ACCREDITATION OF THE NATIONAL AUTHORISING OFFICER AND THE NATIONAL FUND
(1) After the conferral of management powers by the Commission, the competent accrediting officer shall be responsible for monitoring the continuing fulfilment of all the requirements for this accreditation to be maintained and shall inform the Commission of any significant change related thereto.
(2) If any of the applicable requirements set out in Article 11 of the IPA Implementing Regulation, are not, or are no longer, fulfilled, the competent accrediting officer shall either suspend or withdraw the accreditation of the national authorising officer, and shall immediately inform the Commission of his decision and of the reasons for his decision. The competent accrediting officer shall assure himself that those requirements are again fulfilled before restoring the accreditation. This assurance shall be supported by an audit opinion as specified in Article 10(1) above.
(3) Where the accreditation of the national authorising officer is withdrawn or suspended by the competent accrediting officer, the following provisions shall apply:
• The Commission shall cease to make transfers of funds to the Beneficiary during the period when the accreditation is not in force;
• During the period when the accreditation is not in force, all the euro accounts or the euro accounts for the components concerned shall be blocked and no payment made by the National Fund from those euros accounts which are blocked shall be considered eligible for Community funding;
• Without prejudice to any other financial corrections, the Commission may make financial corrections as laid down in Article 30 below against the Beneficiary in respect of its past non-compliance with the requirements for the conferral of management powers.
Article 14
WITHDRAWAL OR SUSPENSION OF THE ACCREDITATION OF THE OPERATING STRUCTURES
(1) After the conferral of management powers by the Commission, the national authorising officer shall be responsible for monitoring the continuing fulfilment of all the requirements for this accreditation to be maintained and shall inform the Commission and the competent accrediting officer of any significant change related thereto.
(2) If any of the requirements set out in Article 11 of the IPA Implementing Regulation are not, or are no longer, fulfilled, the national authorising officer shall either suspend or withdraw the accreditation of the operating structure concerned, and shall immediately inform the Commission and the competent accrediting officer of his decision and of the reasons for his decision.
The national authorising officer shall assure himself that those requirements are again fulfilled before restoring the accreditation concerned. This assurance shall be supported by an audit opinion as referred to in Article 11(1) above.
(3) Where the accreditation of an operating structure is withdrawn or suspended by the national authorising officer, the following provisions shall apply.
• The Commission shall make no transfers to the Beneficiary of funds relating to programmes or operations implemented by the operating structure concerned while its accreditation is suspended or withdrawn;
• Without prejudice to any other financial corrections, the Commission may make financial corrections as laid down in Article 30 below against the Beneficiary in respect of its past non-compliance with the requirements and conditions for the conferral of management powers;
• No new legal commitments made by the operating structure concerned shall be considered eligible during the period when the accreditation is not in force;
• The national authorising officer shall be responsible for taking any appropriate safeguard measures regarding payments made or contracts signed by the operating structure concerned.
Article 15
WITHDRAWAL OR SUSPENSION OF THE ACCREDITATION OF MANAGEMENT POWERS
(1) The Commission shall monitor compliance with the requirements set out in Article 11 of the IPA Implementing Regulation.
(2) Irrespective of the decision by the competent accrediting officer to maintain, suspend or withdraw the accreditation of the national authorising officer, or of the decision by the national authorising officer to maintain, suspend or withdraw the accreditation of the operating structure, the Commission may withdraw or suspend the conferral of management powers at any time, in particular in the event that any of the requirements mentioned in Article 11 of the IPA Implementing Regulation are not, or no longer, fulfilled.
(3) Where the conferral of management powers is withdrawn or suspended by the Commission, the following provisions shall apply:
• The Commission shall cease to make transfers of funds to the Beneficiary;
• Without prejudice to any other financial corrections, the Commission may make financial corrections as laid down in Article 30 below against the Beneficiary in respect of its past non-compliance with the requirements for the conferral of management powers.
The Commission may lay down other consequences of such a suspension or withdrawal in a specific Commission Decision
(4) The Commission Decision may lay down provisions concerning the suspension or withdrawal of the conferral of management powers in relation to specific bodies or authorities.
Article 16
DECENTRALIZATION WITHOUT EX-ANTE CONTROL BY THE COMMISSION
(1) Decentralisation without ex-ante control by the Commission shall be the objective for the implementation of all IPA components where assistance is implemented on a decentralised basis in accordance with Article 5 above. The timing for attainment of this objective may vary depending on the IPA Component concerned.
(2) Before dispensing with the ex-ante controls laid down in the Commission Decision on conferral of management, the Commission shall satisfy itself of the effective functioning of the management and control system concerned in accordance with the relevant Community and national rules. In particular, the Commission shall monitor the implementation, by the Beneficiary, of the roadmap included in the Financing Agreement, which may refer to a phased waiver of different types of ex-ante controls. The Commission shall take due account of the results achieved by the Beneficiary in this context, in particular in the provision of assistance and in the negotiation process.
Article 17
STATEMENT OF ASSURANCE BY THE NATIONAL AUTHORIZING OFFICER
(1) The national authorising officer shall make an annual management declaration covering
• his overall responsibility, in his function as head of the national fund, for the financial management of EU funds in the Republic of Croatia and for the legality and regularity of the underlying transactions;
• his responsibility for the effective functioning of management and control systems under IPA.
This management declaration shall take the form of a statement of assurance to be presented to the Commission by 28 February each year with a copy to the competent accrediting officer.
(2) The Statement of Assurance shall be based on the national authorising officer’s actual supervision of the management and control system throughout the financial year.
(3) The Statement of Assurance shall be drawn up according to the model attached in ANNEX B to this Framework Agreement.
(4) If the confirmations regarding the effective functioning of the management and control systems and the legality and regularity of underlying transactions required through the Statement of Assurance are not available, the national authorising officer shall inform the Commission, copy to the competent accrediting officer, of the reasons and potential consequences as well as of the actions being taken to remedy the situation and to protect the interests of the Community.
Article 18
ESTABLISHMENT OF REPOTS AND OPINIONS BY THE AUDIT AUTHORITY AND FOLLOW UP BY THE NATIONAL AUTHORIZING OFFICER AND THE COMMISSION
(1) Subject to the detailed functions and responsibilities of the audit authority as set out ANNEX A to this Framework Agreement, the audit authority shall in particular establish the following reports and opinions:
a) An annual audit activity report according to the model in ANNEX C to this Framework Agreement;
b) An annual audit opinion on the management and control system according to the model in ANNEX D to this Framework Agreement;
c) An audit opinion on the final statement of expenditure for the closure of a programme or parts of a programme according to the model in ANNEX E to this Framework Agreement.
(2) Following receipt of the annual audit activity report and the annual audit opinion referred to in paragraph 1, the national authorising officer shall:
a) decide whether any improvements to the management and control systems are required, record the decisions in that respect and ensure the timely implementation of those improvements;
b) make any necessary adjustments to the payment applications to the Commission.
(3) The Commission may decide either to take follow-up action itself in response to the reports and opinions, for example by initiating a financial correction procedure, or to require the Beneficiary to take action, while informing the national authorising officer and the competent accrediting officer of its decision.
Section IV
GENERAL RULES FOR COMMUNITY FINANCIAL ASSISTANCE
Article 19
ELIGIBILITY OF EXPENDITURE
(1) In the event of decentralised management, notwithstanding accreditations by the competent accrediting officer and the national authorising officer, contracts and addenda signed, expenditure incurred and payments made by the national authorities shall not be eligible for funding under IPA prior to the conferral of management by the Commission on the concerned structures and authorities. The end date for the eligibility of expenditure shall be laid down in Financing Agreements, where necessary.
(2) By way of derogation from paragraph 1,
a) technical assistance to support the setting up of management and control systems may be eligible prior to the initial conferral of management, for expenditure incurred after 1 January 2007;
b) expenditure following the launch of calls for proposals or calls for tenders may also be eligible if the call is launched prior to the initial conferral of management, subject to this initial conferral of management being in place within the time limits defined in a reserve clause to be inserted in the operations or calls concerned, and subject to prior approval of the documents concerned by the Commission. The calls for proposal or calls for tender concerned may be cancelled or modified depending on the decision on conferral of management.
(3) Expenditure financed under IPA shall not be the subject of any other financing under the Community budget.
(4) In addition to paragraph 1 to 3 above, more detailed rules on eligibility of expenditure may be set out in Financing Agreements or Sectoral Agreements.
Article 20
PROPERTY OF INTEREST
Any interest earned on any of the component-specific euro accounts remains the property of the Beneficiary. Interest generated by the financing by the Community of a programme shall be posted exclusively to that programme, being regarded as a resource for the Beneficiary in the form of a national public contribution, and shall be declared to the Commission, at the time of the final closure of the programme.
Article 21
AUDIT TRAIL
The national authorising officer shall ensure that all the relevant information is available to ensure at all times a sufficiently detailed audit trail. This information shall include documentary evidence of the authorisation of payment applications, of the accounting and payment of such applications, and of the treatment of advances, guarantees and debts.
Article 22
AID INTENSITIES AND RATE OF COMMUNITY CONTRIBUTION
(1) The Community contribution shall be calculated in relation to the eligible expenditure, as defined in Part II of the IPA Implementing Regulation for each IPA component.
(2) Financing decisions adopting the annual or multi-annual programmes for each IPA component shall set the maximum indicative amount of the Community contribution and the subsequent maximum rate for each priority axis.
Section V
GENERAL RULES FOR IMPLEMENTATION
Article 23
RULES ON PROCUREMENT
(1) Assistance under all IPA components shall be managed in accordance with the rules for External Aid contained in the Financial Regulation. This shall not apply to assistance implemented under the transitional arrangements of Article 99 IPA Implementing Regulation regarding the Cross-Border Co-operation Component to that part of the programme that is implemented on Member States’ territory, unless otherwise decided by the participating Member State.
(2) Results of tender procedures shall be published according to the rules referred to in paragraph 1 above and as further specified in Article 24(3) below.
(3) The rules of participation and origin as laid down in Article 19 of the IPA Framework Regulation shall apply to all contract award procedures under IPA.
(4) All service, supplies and work contracts shall be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission for the implementation of external operations, in force at the time of the launch of the procedure in question, unless otherwise provided for in Sectoral or Financing Agreements.
Article 24
PUBLICITY AND VISIBILITY
(1) In the case of centralised and joint management, information on programmes and operations shall be provided by the Commission with the assistance of the national IPA co-ordinator as appropriate. In the case of decentralised management and in all cases for programmes or part of programmes under the cross-border co-operation component not implemented through shared management, the Beneficiary, in particular the national IPA co-ordinator, shall provide information on and publicise programmes and operations. In the case of shared management, the Member States and the Beneficiary shall provide information on and publicise programmes and operations. The information shall be addressed to the citizens and beneficiaries, with the aim of highlighting the role of the Community and ensuring transparency.
(2) In the case of decentralised management, the operating structures shall be responsible for organising the publication of the list of the final beneficiaries, the names of the operations and the amount of Community funding allocated to the operations by means of the award of grants in the following way:
a) The publication shall be made according to a standard presentation, in a dedicated and easily accessible place of the Beneficiary’s internet site. If such internet publication is impossible, the information shall be published by any other appropriate means, including the national official journal.
b) Publication shall take place during the fist half of the year following the closure of the budget year in respect of which the funds were attributed to the Beneficiary.
c) The Beneficiary shall communicate to the Commission the address of the place of publication. If the information is published otherwise, the Beneficiary shall give the Commission full details of the means used.
d) The operating structures shall ensure that the final beneficiary is informed that acceptance of funding is also an acceptance of their inclusion in this list of beneficiaries published. Any personal data included in this list shall nevertheless be processed in accordance with the requirements of Regulation (EC) No 45/2001 of the European Parliament and the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data(), and with due observance of the requirements of security.
(3) In the case of decentralised management, the relevant bodies shall prepare a contract award notice, once the contract has been signed, and send it to the Commission for publication. The contract award notice may also be published by the beneficiary in the appropriate national publications.
(4) The Commission and the relevant national, regional or local authorities of the Beneficiary shall agree on a coherent set of activities to make available, and publicise, in the Republic of Croatia information about assistance under IPA. The procedures for implementing such activities shall be specified in the Sectoral or Financing Agreements.
(5) Implementation of the activities referred to in paragraph 4 shall be the responsibility of the final beneficiaries, and might be funded from the amount allocated to the relevant programmes or operations.
Article 25
GRANTING OF FACILITIES FOR THE IMPLEMENTATION OF PROGRAMMERS AND EXECUTION OF CONTRACTS
(1) In order to ensure the effective implementation of programmes under IPA, the Beneficiary shall take all necessary measures to ensure:
a) that, in the case of service, supplies or works tender procedures, natural or legal persons eligible to participate in tender procedures pursuant to Article 23 above shall be entitled to temporary installation and residence where the importance of the contract so warrants. This right shall be acquired only after the invitation to tender has been launched and shall be enjoyed by the technical staff needed to carry out studies and other preparatory measures to the drawing up of tenders. This right shall expire one month after the decision of contract award;
b) that personnel taking part in Community financed activities and members of their immediate family are accorded no less favourable benefits, privileges and exemptions than those usually accorded to other international staff employed in the Republic of Croatia, under any other bilateral or multilateral agreement or arrangements for assistance and technical co-operation;
c) that personnel taking part in Community financed activities and members of their immediate family are allowed to enter the Republic of Croatia, to establish themselves in the Republic of Croatia, to work there and to leave the Republic of Croatia, as the nature of the underlying contract so justifies;
d) the granting of all permits necessary for the importation of goods, above all professional equipment, required for the execution of the underlying contract, subject to existing laws, rules and regulations of the Beneficiary;
e) that imports carried out under IPA will be exempted from customs duties, import duties and other fiscal charges;
f) the granting of all permits necessary for the re-export of the above goods, once the underlying contract has been fully executed;
g) the granting of authorisations for the import or acquisition of the foreign currency necessary for the implementation of the underlying contract and the application of national exchange control regulations in a non-discriminatory manner to contractors, regardless of their nationality or place of establishment;
h) the granting of all permits necessary to repatriate funds received in respect of the activity financed under IPA, in accordance with the foreign exchange control regulations in force in the Republic of Croatia.
(2) The Beneficiary shall ensure full co-operation of all relevant authorities. It will also ensure access to state-owned companies and other governmental institutions, which are involved or are necessary in the implementation of a programme or in the execution of the contract.
Article 26
RULES ON TAXES, CUSTOMS DUTIES AND OTHER FISCAL CHARGES
(1) Save where otherwise provided for in a Sectoral Agreement or a Financing Agreement, taxes, customs and import duties or other charges having equivalent effect are not eligible under IPA.
(2) The following detailed provisions shall apply:
a) Customs duties, import duties, taxes or fiscal charges having equivalent effect in the case of the import of goods under a Community financed contract are not eligible under IPA. The imports concerned shall be released from the point of entry into the Republic of Croatia for delivery to the contractor, as required by the provisions of the underlying contract and for immediate use as required for the normal implementation of the contract, without regard to any delays or disputes over the settlement of the above mentioned duties, taxes or charges;
b) Community financed contracts for services, supplies or works carried out by contractors registered in the Republic of Croatia or by external contractors shall not be subject in the Republic of Croatia to value added tax, documentary stamp or registration duties or fiscal charges having equivalent effect, whether such charges exist or are to be instituted. EC contractors registered in the Republic of Croatia shall be exempted from VAT for services rendered, goods supplied and/or works executed by them under EC contracts with the right of the contractors to offset or deduct input VAT paid in connection with the services rendered, the goods supplied and/or the works executed against any VAT collected by them for any of their other transactions. Should EC contractors not be able to make use of this possibility, they shall be entitled to obtain VAT refund for VAT paid in the Republic of Croatia directly from the tax authorities upon submission of a written request accompanied by the necessary documentation required under the national/local law for refund and by a certified copy of the underlying EC contract.
For the purposes of this Framework Agreement, the term «EC contractor« shall be construed as natural and legal persons, rendering services and/or supplying goods and/or executing works and/or executing a grant under an EC contract. The term «EC contractor« shall also cover pre-accession advisors, also known as resident twinning advisors, and experts included in a twinning covenant or contract. The term «EC contract« means any legally binding document through which an activity is financed under IPA and which is signed by the EC or the Beneficiary.
At least the same procedural privileges shall apply to such contractors as applicable to contractors under any other bilateral or multilateral agreement or arrangements for assistance and technical co-operation.
c) Profit and/or income arising from EC contracts shall be taxable in the Republic of Croatia in accordance with the national/local tax system. However, natural and legal persons, including expatriate staff, from the Member States of the European Union or other countries eligible under IPA, executing Community financed contracts shall be exempted from those taxes in the Republic of Croatia.
d) Personal and household effects imported for personal use by natural persons (and members of their immediate families), other than those recruited locally, engaged in carrying out tasks defined in technical co-operation contracts, shall be exempted from customs duties, import duties, taxes and other fiscal charges having equivalent effect, the said personal and household effects being re-exported or disposed of in the state, in accordance with the regulations in force in the Republic of Croatia after termination of the contract.
Article 27
SUPERVISION, CONTROL AND AUDIT BY THE COMMISSION AND THE EUROPEAN COURT OF AUDITORS
(1) All Financing Agreements as well as all resulting programmes and subsequent contracts shall be subject to supervision and financial control by the Commission including the European Anti-Fraud Office (OLAF) and audits by the European Court of Auditors. This includes the right of the Delegation of the Commission in the Republic of Croatia to carry out measures such as ex-ante verification of tendering and contracting carried out by the related operating structures, as long as ex-ante control has not been waived in accordance with Article 16 above. The duly authorised agents or representatives of the Commission and of OLAF shall have the right to carry out any technical and financial verification that the Commission or OLAF consider necessary to follow the implementation of a programme including visits of sites and premises at which Community financed activities are implemented. The Commission shall give the national authorities concerned advance notice of such missions.
(2) The Beneficiary shall supply all requested information and documents including any computerised data and take all suitable measures to facilitate the work of the persons instructed to carry out audits or inspections.
(3) The Beneficiary shall maintain records and accounts adequate to identify the services, supplies, works and grants financed under the related Financing Agreement in accordance with sound accounting procedures. The Beneficiary shall also ensure that the agents or representatives of the Commission including OLAF have the right to inspect all relevant documentation and accounts pertaining to items financed under the related Financing Agreement and assist the European Court of Auditors to carry out audits relating to the use of Community funds.
(4) In order to ensure the efficient protection of the financial interests of the Community, the Commission including OLAF may also conduct documentary and on-the-spot checks and inspections in accordance with the procedural provisions of Council Regulation (EC, Euratom) No 2185/1996 of 11 November 1996(). These checks and inspections shall be prepared and conducted in close collaboration with the competent authorities designated by the Beneficiary, which shall be notified in good time of the object, purpose and legal basis of the checks and inspections, so that they can provide all the requisite help. The Beneficiary shall identify a service which will assist at OLAF’s request in conducting investigations in accordance with Council Regulation (EC, Euratom) No 2185/1996. If the Beneficiary wishes, the on-the-spot checks and inspections may be carried out jointly with them. Where the participants in Community financed activities resist an on-the-spot check or inspection, the Beneficiary, acting in accordance with national rules, shall give Commission/OLAF inspectors such assistance as they need to allow them to discharge their duty in carrying out an on-the-spot check or inspection.
The Commission/OLAF shall report as soon as possible to the Beneficiary any fact or suspicion relating to an irregularity which has come to its notice in the course of the on-the-spot check or inspection. In any event, the Commission/OLAF shall be required to inform the above-mentioned authority of the result of such checks and inspections.
(5) The controls and audits described above are applicable to all contractors and sub-contractors who have received Community funds including all related information to be found in the documents of the national fund of the Beneficiary concerning the national contribution.
(6) Without prejudice to the responsibilities of the Commission and the European Court of Auditors, the accounts and operations of the National Fund and, where applicable, operating structures may be checked at the discretion of the Commission by the Commission itself or by an external auditor assigned by the Commission.
Article 28
PREVENTION OF IRREGULARITY AND FRAUD, MEASURES AGAINST CORRUPTION
(1) The Beneficiary shall ensure investigation and effective treatment of suspected cases of fraud and irregularities and shall ensure the functioning of a control and reporting mechanism equivalent to that foreseen in the Commission Regulation (EC) No 1828/2006 of 8 December 2006(). In the case of suspected fraud or irregularity, the Commission shall be informed without delay.
(2) Furthermore, the Beneficiary shall take any appropriate measure to prevent and counter any active or passive corruption practices at any stage of the procurement procedure or grant award procedure or during the implementation of corresponding contracts.
(3) The Beneficiary, including the personnel responsible for the implementation tasks of the Community financed activities, undertakes to take whatever precautions are necessary to avoid any risk of conflict of interests and shall inform the Commission immediately of any such conflict of interest or any situation likely to give rise to any such conflict.
(4) The following definitions shall apply:
a) Irregularity shall mean any infringement of a provision of applicable rules and contracts resulting from an act or an omission by an economic operator which has, or would have, the effect of prejudicing the general budget of the European Union by charging an unjustified item of expenditure to the general budget.
b) Fraud shall mean any intentional act or omission relating to: the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the misappropriation or wrongful retention of funds from the general budget of the European Communities or budgets managed by, or on behalf of, the European Communities; non disclosure of information in violation of a specific obligation with the same effect; the misapplication of such funds for purposes other than those for which they are originally granted.
c) Active corruption is defined as the deliberate action of whosoever promises or gives, directly or through an intermediary, an advantage of any kind whatsoever to an official for himself or for a third party for him to act or to refrain from acting in accordance with his duty or in the exercise of his functions in breach of his official duties in a way which damages or is likely to damage the financial interests of the European Communities.
d) Passive corruption is defined as the deliberate action of an official, who, directly or through an intermediary, requests or receives advantages of any kind whatsoever, for himself or a third party, or accepts a promise of such advantage, to act or to refrain from acting in accordance with his duty or in the exercise of his functions in breach of his official duties in a way which damages or is likely to damage the financial interests of the European Communities.
Article 29
RECOVERY OF FUNDS IN CASE OF IRREGULARITY OR FRAUD
(1) Any proven case of irregularity or fraud discovered at any time during the implementation of assistance under IPA or as the result of an audit will lead to the recovery of the funds by the Commission from the Beneficiary.
(2) The national authorising officer shall recover the Community contribution paid to the Beneficiary from those who committed the irregularity, fraud or corruption or benefited from it, in accordance with national recovery procedures. The fact that the national authorising officer does not succeed in recovering all or part of the funds shall not prevent the Commission from recovering the funds from the Beneficiary.
Article 30
FINANCIAL CORRECTION
(1) In the case of decentralised management, in order to ensure that the funds are used in accordance with the applicable rules, the Commission shall apply clearance-of-accounts procedures or financial correction mechanisms in accordance with Article 53b(4) and 53c(2) of the Financial Regulation and as detailed in Sectoral Agreements or Financing Agreements.
(2) A financial correction may arise following either:
• identification of a specific irregularity, including fraud;
• identification of a weakness or deficiency in the management and control systems of the Beneficiary;
(3) If the Commission finds that expenditure under the programmes covered by IPA has been incurred in a way that has infringed applicable rules, it shall decide what amounts are to be excluded from Community financing.
(4) The calculation and establishment of any such corrections, as well as the related recoveries, shall be made by the Commission, following the criteria and procedures provided for in Articles 32, 33 and 34 below. Provisions on financial corrections which have been set down in Sectoral Agreements or Financing Agreements shall apply in addition to this Framework Agreement.
Article 31
FINANCIAL ADJUSTMENTS
In the case of decentralised management the national authorising officer, who bears in the first instance the responsibility for investigating irregularities, shall make the financial adjustments where irregularities or negligence are detected in operations or operational programmes, by cancelling all or part of the Community contribution to the operations or the operational programmes concerned. The national authorising officer shall take into account the nature and gravity of the irregularities and the financial loss to the Community contribution.
Article 32
CRITERIA FOR FINANCIAL CORRECTIONS
(1) The Commission may make financial corrections, by cancelling all or part of the Community contribution to a programme, in the situations referred to in Article 30(2) above.
(2) Where individual cases of irregularity are identified, the Commission shall take into account the systemic nature of the irregularity to determine whether flat-rate corrections, punctual corrections or corrections based on an extrapolation of the findings should be applied. For the Rural Development Component, criteria for financial corrections are set out in Financing Agreements or Sectoral Agreements.
(3) When deciding the amount of a correction, the Commission shall take into account the nature and gravity of the irregularity and/or the extent and financial implications of the weaknesses or the deficiencies found in the management and control system in the programme concerned.
Article 33
PROCEDURE FOR FINANCIAL CORRECTIONS
(1) Before taking a decision on a financial correction, the Commission shall inform the national authorising officer of its provisional conclusions and request his comments within two months.
Where the Commission proposes a financial correction on the basis of extrapolation or at a flat rate, the Beneficiary shall be given the opportunity to establish the actual extent of the irregularity, through an examination of the documentation concerned. In agreement with the Commission, the Beneficiary may limit the scope of this examination to an appropriate proportion or sample of the documentation concerned. Except in duly justified cases, the time allowed for this examination shall not exceed a period of two months after the two-month period referred to in the first subparagraph.
(2) The Commission shall take account of any evidence supplied by the Beneficiary within the time limits mentioned in paragraph 1.
(3) The Commission shall endeavour to take a decision on the financial correction within six months after opening the procedure as set out in paragraph 1.
Article 34
REPAYMENT
(1) Any repayment to the general budget of the European Union shall be effected before the due date indicated in the recovery order drawn up in accordance with Article 72 of the Financial Regulation. The due date shall be the last day of the second month following the issuing of the order.
(2) Any delay in repayment shall give rise to interest on account of late payment, starting on the due date and ending on the date of actual payment. The rate of such interest shall be one-and-a-half percentage points above the rate applied by the European Central Bank in its main refinancing operations on the first working day of the month in which the due date falls.
Article 35
RE-USE OF COMMUNITY CONTRIBUTION
(1) The resources from the Community contribution cancelled following financial corrections pursuant to Article 30 shall be paid to the Community Budget, including interest thereon.
(2) The contribution cancelled or recovered in accordance with Article 31 above may not be re-used for the operation or operations that were the subject of the recovery or the adjustment, nor, where the recovery or adjustment is made for a systemic irregularity, for existing operations within the whole or part of the priority axis in which the systemic irregularity occurred.
Article 36
MONITORING IN THE CASES OF DECENTRALIZED MANAGEMENT, MONITORING COMMITTEES
(1) In the case of decentralised management, the Beneficiary shall, within six months after the entry into force of the first financing agreement, set up an IPA monitoring committee, in agreement with the Commission, to ensure coherence and coordination in the implementation of the IPA components.
(2) The IPA monitoring committee shall be assisted by sectoral monitoring committees set up under the IPA components. They shall be attached to programmes or components. They may include representatives of civil society, where appropriate. More detailed rules may be provided for in Financing Agreements or Sectoral Agreements.
(3) The IPA monitoring committee shall satisfy itself as to the overall effectiveness, quality and coherence of the implementation of all programmes and operations towards meeting the objectives set out in the multi-annual indicative planning documents and the financing agreements.
(a) The IPA monitoring committee may make proposals to the Commission, the national IPA co-ordinator and the national authorising officer for any actions to ensure the coherence and co-ordination between the programmes and operations implemented under the different components, as well as for any cross-component corrective measures needed to ensure the achievement of the global objectives of the assistance provided, and to enhance its overall efficiency. It may also make proposals to the relevant sectoral monitoring committee(s) for decisions on any corrective measures to ensure the achievements of programme objectives and enhance the efficiency of assistance provided under the programmes or IPA component(s) concerned;
(b) The IPA monitoring committee shall adopt its internal rules of procedure in compliance with a monitoring committee mandate established by the Commission, and within the institutional, legal and financial framework of the Republic of Croatia;
(c) Unless otherwise provided in the monitoring committee mandate set out by the Commission, the following provisions shall apply:
aa) The IPA monitoring committee shall include among its members representatives of the Commission, the national IPA co-ordinator, the national authorising officer, representatives of the operating structures, and the strategic co-ordinator.
bb) A representative of the Commission and the national IPA co-ordinator shall co-chair the IPA monitoring committee meetings;
cc) The IPA monitoring committee shall meet at least once a year. Intermediate meetings may also be convened on a thematic basis.
Article 37
MONITORING IN THE CASE OF CENTRALIZED AND JOINT MANAGEMENT
In the case of centralised and joint management, the Commission may undertake any actions it deems necessary to monitor the programmes concerned. In the case of joint management, these actions may be carried out jointly with the international organisation(s) concerned.
Article 38
ANNUAL AND FINAL REPORTS ON IMPLEMENTATION
(1) The operating structures shall draw up a sectoral annual report and a sectoral final report on the implementation of the programmes for which they are responsible, in compliance with the procedures defined for each IPA component in Part II of the IPA Implementing Regulation.
The sectoral annual reports on implementation shall cover the financial year. The sectoral final reports on implementation shall cover the whole period of implementation and may include the last sectoral annual report.
(2) The reports referred to in paragraph 1 shall be sent to the national IPA co-ordinator, the national authorising officer and to the Commission, after examination by the sectoral monitoring committees.
(3) On the basis of the reports referred to in paragraph 1, the national IPA co-ordinator shall send to the Commission and the national authorising officer, after examination by the IPA monitoring committee, annual and final reports on the implementation of assistance under the IPA Regulation.
(4) The annual report on implementation referred to in paragraph 3, which shall be sent by 31 August each year and for the first time in 2008, shall synthesise the different sectoral annual reports issued under the different components and shall include information about:
a) progress made in implementing Community assistance, in relation to the priorities set up in the multi-annual indicative planning document and the different programmes;
b) financial implementation of Community assistance.
(5) The final report on the implementation as referred to in paragraph 3 shall cover the whole period of implementation and may include the latest annual report mentioned in paragraph 4.
Article 39
CLOSURE OF PROGRAMMES UNDER DECENTRALIZED MANAGEMENT
(1) After an application for final payment has been received by the Commission from the Beneficiary, a programme is considered closed as soon as one of the following occurs:
• payment of the final balance due by the Commission;
• issuance of a recovery order by the Commission;
• de-commitment of appropriations by the Commission.
(2) The closure of a programme does not prejudice the right of the Commission to undertake a financial correction at a later stage.
(3) The closure of a programme does not affect the obligations of the Beneficiary to continue to retain related documents.
(4) In addition to paragraph 1 to 3 above, more detailed rules on the closure of programmes may be set out in Financing Agreements or Sectoral Agreements.
Article 40
CLOSURE OF PROGRAMMES UNDER CENTRALIZED AND JOINT MANAGEMENT
(1) A programme is closed when all the contracts and grants funded by this programme have been closed.
(2) After a final payment application has been received, a contract or grant is considered closed as soon as one of the following occurs:
• payment of the final amount due by the Commission;
• issuance of a recovery order by the Commission following receipt of the final payment application;
• de-commitment of appropriations by the Commission.
(3) The closure of a contract or grant does not prejudice the right of the Commission to undertake a financial correction at a later stage.
(4) In addition to paragraph 1 to 3 above, more detailed rules on the closure of programmes may be set out in Financing Agreements or Sectoral Agreements.
Section VI
FINAL PROVISIONS
Article 41
CONSULTATIONS
(1) Any question relating to the execution or interpretation of this Framework Agreement shall be the subject of consultation between the Contracting Parties leading, where necessary, to an amendment of this Framework Agreement.
(2) Where there is a failure to carry out an obligation set out in this Framework Agreement which has not been the subject of remedial measures taken in due time, the Commission may suspend the financing of activities under IPA after consultation with the Beneficiary.
(3) The Beneficiary may renounce in whole or in part the implementation of activities under IPA. The Contracting Parties shall set out the details of the said renunciation in an exchange of letters.
Article 42
SETTLEMENT OF DIFFERENCES, ARBITRATION
(1) Differences arising out of the interpretation, operation and implementation of this Framework Agreement, at any and all levels of participation, will be settled amicably through consultation as provided for under Article 41.
(2) In default of amicable settlement, either Contracting Party may refer the matter to arbitration in accordance with the Permanent Court of Arbitration Optional Rules for Arbitration Involving International Organisations and States in force at the date of this Framework Agreement.
(3) The language to be used in the arbitral proceedings shall be English. The appointing authority shall be the Secretary-General of the Permanent Court of Arbitration following a written request submitted by either Contracting Party. The Arbitrator’s decision shall be binding on all Parties and there shall be no appeal.
Article 43
DISPUTES WITH THIRD PARTIES
(1) Without prejudice to the jurisdiction of the court designated in a contract as the competent court for disputes arising out of that contract between the parties to it, the European Community shall enjoy in the territory of the Republic of Croatia immunity from suit and legal process with respect to any dispute between the European Community and/or the Beneficiary and a third party, or between third parties, which directly or indirectly relates to the provision of Community Assistance to the Beneficiary under this Framework Agreement, except in so far as in any particular case the European Community has expressly waived its immunity.
(2) The Beneficiary shall in any legal or administrative proceedings before a court, tribunal or administrative instance in the Republic of Croatia defend this immunity and take a position which takes duly account of the interests of the European Community. Where necessary, the Beneficiary and the European Commission shall proceed with consultations on the position to take.
Article 44
NOTICES
(1) Any communication in connection with this Framework Agreement shall be made in writing and in the English language. Each communication must be signed and must be supplied as an original document or by fax.
(2) Any communication in connection with this Framework Agreement must be sent to the following addresses:
For the Commission:
European Commission
Directorate-General Enlargement
1049 Brussels
BELGIUM
Fax: +32 (2) 295.95.40
|
For the Beneficiary:
Central Office for Development Strategy and Co-ordination of EU Funds
Radnička cesta 80
10 000 Zagreb
CROATIA
Fax: +385 (1) 4569 150
|
Article 45
ANNEXES
The Annexes shall be deemed an integral part of this Framework Agreement.
Article 46
ENTRY INTO FORCE
This Framework Agreement shall enter into force on the date on which the Contracting Parties inform each other in writing of its approval in accordance with the existing internal legislation or procedure of each of the Parties.
Article 47
AMENDMENT
Any amendment agreed to by the Contracting Parties will be in writing and will form part of this Agreement. Such amendment shall come into effect on the date determined by the Contracting Parties.
Article 48
TERMINATION
(1) This Framework Agreement shall continue to be in force for an indefinite period unless terminated by written notification by one of the Contracting Parties.
(2) On termination of this Framework Agreement, any assistance still in the course of execution shall be carried out to its completion in accordance with this Framework Agreement and any Sectoral Agreement and Financing Agreement.
Article 49
LANGUAGE
This Framework Agreement is drawn up in two originals in the English language.
Done at Zagreb on 27 August 2007
For the Government of the
Republic of Croatia
Martina Dalić
State Secretary and National IPA Co-ordinator Central Office for Development Strategy and Co-ordination of EU Funds
|
Done at Zagreb on
27 August 2007
For the Commission
Vincent Degert
Head of Delegation of the European Commission to the Republic of Croatia
|
ANNEX A
Allocation of functions and common responsibilities to the structures, authorities and bodies in accordance with Article 8 of the Framework Agreement between the Commission and the Beneficiary of 27 August
Preliminary remark:
This list shows the main functions and common responsibilities of the structures, authorities and bodies concerned. It is not to be considered exhaustive. It supplements the core part of this Framework Agreement.
1) The Competent Accrediting Officer (CAO):
a) The CAO shall be appointed by the Beneficiary. He shall be a high-ranking official in the government or the state administration of the Republic of Croatia.
b) The CAO shall be responsible for issuing, monitoring and suspending or withdrawing the accreditation of the national authorising officer (NAO) both
• as the head of the national fund bearing overall responsibility for the financial management of EU funds in the Republic of Croatia and being responsible for the legality and regularity of the underlying transactions;
• with regard to the NAO’s capacity to fulfil the responsibilities for the effective functioning of management and control systems under IPA.
The accreditation of the NAO shall also cover the national fund (NF).
The CAO shall notify the Commission of the accreditation of the NAO and shall inform the Commission of any changes regarding the accreditation of the NAO. This includes the provision of all relevant supporting information required by the Commission.
c) Prior to accrediting the NAO, the CAO shall satisfy himself that the applicable requirements set out in Article 11 of the IPA Implementing Rules are fulfilled. This includes the verification of the compliance of the management and control system set up by the Beneficiary for effective controls in at least the areas set out in the Annex to the IPA Implementing Regulation (accreditation criteria). This annex provides for the following overall requirements:
• Control environment (establishment and management of the organisation and the staff) comprising ethics and integrity policies, irregularity management and reporting, staff planning, recruitment, training and appraisal including sensitive post management, sensitive functions and conflicts of interest, establishment of legal bases for bodies and individuals, formal establishment of accountability, responsibility, delegated responsibility and any necessary related authority for all tasks and positions throughout the organisation);
• Planning and risk management comprising risk identification, assessment and management, objective setting and allocation of resources against objectives, planning of the implementation process;
• Control activities (implementation of interventions) comprising verification procedures, procedures for supervision by accountable management of tasks delegated to subordinates, including annual statements of assurance from subordinate actors, rules for each type of procurement and calls for proposals, procedures including checklists for each step of procurement and calls for proposals, rules and procedures on publicity, payment procedures, procedures for monitoring the delivery of co-financing, budgetary procedures to ensure the availability of funds, procedures for continuity of operations, accounting procedures, reconciliation procedures, reporting of exceptions, amongst others exceptions to normal procedures approved at appropriate level, unapproved exceptions and control failures whenever identified, security procedures, archiving procedures, segregation of duties and reporting of internal control weaknesses;
• Monitoring activities (supervision of interventions), comprising internal audit with handling of audit reports and recommendations, evaluations;
• Communication (ensuring all actors receive information necessary to fulfil their role) comprising the regular coordination meetings between different bodies to exchange information on all aspects of planning and implementation and the regular reporting at all appropriate levels on efficiency and effectiveness of internal control.
2) The National IPA Coordinator (NIPAC):
a) The NIPAC shall be appointed by the Beneficiary. He shall be a high-ranking official in the government or the state administration of the Beneficiary.
b) He shall ensure the overall coordination of assistance under IPA.
c) The NIPAC shall ensure partnership between the Commission and the Beneficiary and close link between the general accession process and the use of pre-accession assistance under IPA. He shall bear the overall responsibility for
• the coherence and coordination of the programmes provided under IPA;
• the annual programming for the Transition Assistance and Institution Building Component at national level;
• the co-ordination of the participation of the Beneficiary in the relevant cross-border programmes both with Member States and with other Beneficiary countries, as well as the transnational, interregional or sea basins programmes under other Community instruments. The NIPAC may delegate the tasks relating to this co-ordination to a cross-border co-operation co-ordinator.
d) The NIPAC shall draw up and, after examination by the IPA monitoring committee, submit to the Commission the IPA annual and final reports on implementation as defined in Article 38 of this Framework Agreement and in Article 61(3) of the IPA Implementing Regulation. He shall send a copy of these reports to the NAO.
3) The Strategic Co-ordinator:
a) A strategic co-ordinator shall be appointed by the Beneficiary to ensure the co-ordination of the Regional Development Component and Human Resources Development Component under the responsibility of the national IPA co-ordinator. The strategic co-ordinator shall be an entity within the state administration of the Beneficiary with no direct involvement in the implementation of components concerned.
b) The strategic co-ordinator shall in particular:
• co-ordinate assistance granted under the Regional Development Component and the Human Resources Development Component;
• draft the strategic coherence framework as defined in Article 154 of the IPA Implementing Regulation;
• ensure co-ordination between sectoral strategies and programmes.
4) The National Authorising Officer (NAO):
The NAO shall be appointed by the Beneficiary. He shall be a high-ranking official in the government or the state administration of the Beneficiary.
The NAO shall fulfil the following functions and assume the following responsibilities:
a) As the head of the national fund, bearing overall responsibility for the financial management of EU funds in the Republic of Croatia and being responsible for the legality and regularity of the underlying transactions. The NAO shall in particular fulfil the following tasks as regards these responsibilities:
• providing assurance about the regularity and legality of underlying transactions;
• drawing up and submitting to the Commission certified statements of expenditure and payment applications; he shall bear overall responsibility for the accuracy of the payment application and for the transfer of funds to the operating structures and/or final beneficiaries;
• verifying the existence and correctness of the co-financing elements;
• ensuring the identification and immediate communication of any irregularity;
• making the financial adjustments required in connection with irregularities detected, in accordance with Article 50 of the IPA Implementing Regulation;
• being the contact point for financial information sent between the Commission and the Beneficiary.
b) being responsible for the effective functioning of management and control systems under IPA. The NAO shall in particular fulfil the following tasks as regards these responsibilities:
• being responsible for issuing, monitoring and suspending or withdrawing the accreditation of the operating structures;
• ensuring the existence and effective functioning of systems of management of assistance under IPA;
• ensuring that the system of internal control concerning the management of funds is effective and efficient;
• reporting on the management and control system;
• ensuring that a proper reporting and information system is functioning;
• following-up the findings of audit reports from the audit authority, in accordance with Article 18 of this Framework Agreement and Article 30(1) of the IPA Implementing Regulation;
• immediately notifying the Commission, with a copy of the notification to the CAO, any significant change concerning the management and control systems.
As corollary to the responsibilities under a) and b) above, the NAO shall establish an Annual Statement of Assurance as defined in Article 17 of this Framework Agreement and following ANNEX B to this Agreement, which shall include:
a) a confirmation of the effective functioning of the management and control systems;
b) a confirmation regarding the legality and regularity of the underlying transactions;
c) information concerning any changes in systems and controls, and elements of supporting accounting information.
If the confirmations regarding the effective functioning of the management and control systems and the legality and regularity of underlying transactions (a) and b) above) are not available, the NAO shall inform the Commission, copy to the CAO, of the reasons and potential consequences as well as of the actions being taken to remedy the situation and to protect the interests of the Community.
5) The National Fund (NF):
a) The NF shall be a body located in a State level Ministry of the Beneficiary and shall have central budgetary competence and act as central treasury entity.
b) The NF shall be in charge of tasks of financial management of assistance under IPA, under the responsibility of the NAO.
c) The NF shall in particular be in charge of organising the bank accounts, requesting funds from the Commission, authorising the transfer of funds from the Commission to the operating structures or to the final beneficiaries and the financial reporting to the Commission.
6) The Operating Structures:
a) An operating structure shall be established for each IPA component or programme to deal with the management and implementation of assistance under IPA. The operating structure shall be a body or a collection of bodies within the administration of the Beneficiary.
b) The operating structure shall be responsible for managing and implementing the IPA programme or programmes concerned in accordance with the principle of sound financial management. For those purposes, the operating structure shall carry a number of functions that include:
• drafting the annual or multi-annual programmes;
• monitoring programme implementation and guiding the work of the sectoral monitoring committee as defined in Article 36(2) of this Framework Agreement and in Article 59 of the IPA Implementing Regulation, notably by providing the documents necessary for monitoring the quality of implementation of the programmes;
• drawing up the sectoral annual and final implementation reports defined in Article 38(1) and (2) of this Framework Agreement and in Article 61(1) of the IPA Implementing Regulation and, after their examination by the sectoral monitoring committee, submitting them to the Commission the NIPAC and the NAO;
• ensuring that operations are selected for funding and approved in accordance with the criteria and mechanisms applicable to the programmes, and that they comply with the relevant Community and national rules;
• setting up procedures to ensure the retention of all documents regarding expenditure and audits required to ensure an adequate audit trail;
• arranging for tendering procedures, grant award procedures, the ensuing contracting, and making payments to, and recovery from, the final Beneficiary;
• ensuring that all bodies involved in the implementation of operations maintain a separate accounting system or a separate accounting codification;
• ensuring that the NF and the NAO receive all necessary information on the procedures and verifications carried out in relation to expenditure;
• setting up, maintaining and updating the reporting and information system;
• carrying out verifications to ensure that the expenditure declared has actually been incurred in accordance with the applicable rules, the products or services have been delivered in accordance with the approval decision, and the payment requests by the final Beneficiary are correct: These verifications shall cover administrative, financial, technical and physical aspects of operations, as appropriate;
• ensuring internal audit of its different constituting bodies;
• ensuring irregularity reporting;
• ensuring compliance with the information and publicity requirements.
c) The heads of the bodies constituting the operating structure shall be clearly designated and shall be responsible for the tasks assigned to their respective bodies, in accordance with Article 8(3) of this Framework Agreement and with Article 11(3) of the IPA Implementing Regulation.
7) The Audit Authority:
a) The audit authority shall be designated by the Beneficiary and shall be functionally independent from all actors in the management and control system and comply with internationally accepted audit standards.
b) The audit authority shall be responsible for the verification of the effective and sound functioning of the management and control systems.
c) The audit authority, under the responsibility of its head, shall in particular fulfil the following functions and assume the following responsibilities:
• During the course of each year, establishing and fulfilling an annual audit work plan which encompasses audits aimed at verifying:
– the effective functioning of the management and control systems;
– the reliability of accounting information provided to the Commission.
The audit work shall include audits of an appropriate sample of operations or transactions, and an examination of procedures.
The annual audit work plan shall be submitted to the NAO and the Commission before the start of the year in question.
• submitting reports and opinions as follows:
– an annual audit activity report following the model in ANNEX C to this Framework Agreement and setting out the resources used by the audit authority, and a summary of any weaknesses found in the management and control system or in transaction findings from the audits carried out in accordance with the annual audit work plan during the previous 12 month period, ending on 30 September of the year concerned. The annual audit activity report shall be addressed to the Commission, the NAO and the CAO by 31 December each year. The first such report shall cover the period 1 January 2007 – 30 November 2007.
– an annual audit opinion following the model set out in ANNEX D to this Framework Agreement as to whether the management and control systems function effectively and conform to the requirements of this Framework Agreement and the IPA Implementing Regulation and/or any other agreements between the Commission and the Beneficiary. This opinion shall be addressed to the Commission, the NAO and the CAO. It shall cover the same period and have the same deadline as the annual audit activity report.
– an opinion on any final statement of expenditure submitted to the Commission by the NAO, for the closure of any programme or of any part thereof. Where appropriate, the final statement of expenditure may include payment applications in the form of accounts submitted annually. This opinion shall address the validity of the final payment application, the accuracy of the financial information, and, where appropriate, be supported by a final audit activity report. It shall follow the model provided in ANNEX E to this Framework Agreement. It shall be sent to the Commission and to the CAO at the same time as the relevant final statement of expenditure submitted by the NAO, or at least within three months of the submission of that final statement of expenditure.
• Further specific requirements for the annual audit work plan and/or the reports and opinions mentioned under the previous bullet point may be set out in the Sectoral Agreements or Financing Agreements.
• With regard to the methodology for the audit work, reports and audit opinions, the audit authority must comply with international standards on auditing in particular as regards the areas of risk assessment, audit materiality and sampling. That methodology may be complemented by any further guidance and definitions from the Commission, notably in relation to an appropriate general approach to sampling, confidence levels and materiality.
ANNEX B
to the Framework Agreement between the Commission and the Government of the Republic of Croatia
Statement of Assurance of the National Authorising Officer of the Republic of Croatia
I, (name, first name, official title or function), National Authorising Officer of the Republic of Croatia herewith present to the Commission the [statement of expenditure] [accounts and statement of expenditure]3 of the Instrument for Pre-accession (IPA) for the Republic of Croatia for the financial year 01/01/20xx to 31/12/20xx.
I declare that I have put in place, and supervised the operation of, a management and internal control system relating to the IPA component [1 to 5] (Annual Management Declaration).
I confirm, based on my own judgment and on the information at my disposal, including, inter alia, the results of the work of the internal audit, that:
• The expenditure declared [and the accounts submitted]3 to the Commission during the financial year 01/01/20xx to 31/12/20xx give[s], to the best of my knowledge, a true, complete and accurate view of the expenditure and receipts related to the IPA component [1 to 5] for the financial year mentioned above;
• The management and control system has functioned effectively to provide reasonable assurance on the legality and regularity of the underlying transactions including, inter alia, the adherence to the principles of sound financial management;
• The management and control system in operation for component [1 to 5] was not [significantly] changed as compared to the description provided at the moment of submitting the application for conferral of management (taking into account of changes notified to the Commission in previous years);
• All relevant contractual agreements which could have a material effect on the expenditure declared [and the accounts submitted]3 during the reference period in the event of non-compliance have been complied with. There have been no incidences of non-compliance with Community rules that could have a material effect on the expenditure declared [and the accounts submitted]3 in the event of non-compliance.
I confirm that, where necessary, I have taken appropriate actions in respect of the reports and opinions from the audit authority issued to date in accordance with Article 29 of the IPA Implementing Rules.
[This assurance is, however, subject to the following reservations <also describe remedial actions>:
• …
• … ].
Furthermore, I confirm that I am not aware of any undisclosed matter which could be damaging to the financial interest of the Community.
(Place and date of issue
__________________________________________________
Signature
Name and official title or function of the National Authorising Officer)
ANNEX C
to the Framework Agreement between the Commission and the Government of the Republic of Croatia
Annual Audit Activity Report of the Audit Authority of the Republic of Croatia
addressed to
– the European Commission, Directorate–General...
– the Competent Accrediting Officer (CAO) of the Republic of Croatia and
– [copy to] the National Authorising Officer (NAO) of the Republic of Croatia
1. INTRODUCTION
→ Identify the component/programme of IPA covered by the report
→ Indicate the bodies that have been involved in preparing the report, including the Audit Authority itself
→ Describe the steps taken for the preparation of the report
→ Indicate the scope of the audits (including the expenditure declared to the Commission for the year concerned in respect of the relevant operations)
→ Indicate the period which is covered by this annual audit activity report (previous 12 months ending on 30/09/20xx)
2. SUMMARY OF FINDINGS
→ Describe the nature and extent of findings arisen from both systems and substantive testing. (Categorise these findings by reference to their level of importance – «major», «intermediate« and «minor». The list of these findings is shown in the annex to this report). Indicate those errors, which are considered systemic in nature and assess the probability of a possible subsequent qualification linked to the errors. Describe and quantify any irregularities encountered.
3. CHANGES IN MANAGEMENT AND CONTROL SYSTEMS
→ Indicate any significant changes in the management and control systems as compared to the description provided for at the moment of submitting the application for conferral of management (decentralised management) and since the last annual audit activity report.
→ Confirm whether or not the changes referred to have been communicated by the NAO in accordance with Annex A 4) b) of the Framework Agreement.
4. CHANGES TO THE ANNUAL AUDIT WORK PLAN
→ Indicate any changes that have been made to the annual audit work plan or are proposed, giving explanations and reasons.
→ Given the changes listed above, describe the audit approach adopted in response. Outline the implications of the changes and deviations, including an indication of the basis for selection of any additional audits in the context of the revised annual audit work plan.
5. SYSTEMS AUDITS
→ Indicate the bodies that have carried out systems testing for the purpose of this report, including the Audit Authority itself.
→ Attach a summary list of the audits carried out; indicate the materiality and confidence levels applied (%), where appropriate, and the date on which the audit report was forwarded to the Commission.
→ Describe the basis for selection of the audits in the context of the annual audit work plan.
→ Describe the principal findings and the conclusions drawn from the audit work for the management and control systems, including the adequacy of the audit trail and compliance with Community requirements and policies.
→ Indicate any financial impact of findings.
→ Provide information on the follow-up of the audit findings and in particular any corrective and preventive measures applied or recommended.
6. AUDITS OF SAMPLE OF OPERATIONS
→ Indicate the bodies that have carried out substantive testing for the purpose of this report, including the Audit Authority itself.
→ Attach a summary list indicating the number of audits carried out, the materiality and confidence levels applied (%), where appropriate, and the amount of expenditure checked, broken down by components, programme priority axis and/or measure if relevant, distinguishing between risk-based and statistical sampling, where appropriate. Provide the percentage of expenditure checked in relation to total eligible expenditure declared to the Commission (both for the period in question and cumulatively).
→ Describe the basis for selection of the operations inspected.
→ Describe the principal results of the substantive testing, indicating in particular, the overall rate of financial errors in proportion to the total expenditure audited resulting from the sample.
→ Provide information on the follow-up of errors the application of any financial adjustments and/or any remedial action plan.
→ Indicate any resulting financial corrections.
7. CO-ORDINATION BETWEEN AUDIT BODIES AND SUPERVISORY WORK OF THE AUDIT AUTHORITY
→ Describe the procedure for co-ordination between different national audit bodies and the audit authority itself (if applicable).
→ Describe the procedure for supervision applied by the audit authority to other audit bodies (if applicable).
8. FOLLOW-UP OF PREVIOUS YEARS’ AUDIT ACTIVITY
→ Provide information, where appropriate, on the follow-up to audit recommendations and results of audits of operations from earlier years.
9. RESOURCES USED BY THE AUDIT AUTHORITY
→ Describe the resources used in order to establish this Annual Audit Activity Report
ANNEX
Annual audit work plan for the reference year (previous 12 months ending on 30/09/20xx)
[List of findings according to point 2 above]
[List of changes according to point 4 above]
[Summary list according to point 5 above following the model enclosed]
[Summary list according to point 6 above following the model enclosed]
1. Amount of expenditure audited.
2. Percentage of expenditure audited in relation to expenditure declared to the Commission in the reference year.
3. Where the random sample covers more than one Fund or programme, the information is provided for the whole sample.
4. Expenditure from complementary sample and expenditure for random sample not in reference year.
ANNEX D
to the Framework Agreement between the Commission and the Government of the Republic of Croatia
Annual Audit Opinion of the Audit Authority of the Republic of Croatia on the management and control systems
addressed to
– the European Commission, Directorate-General......,
– the Competent Accrediting Officer (CAO) of the Republic of Croatia and
– [copy to] the National Authorising Officer (NAO) of the Republic of Croatia
Introduction:
I, (name, first name, official title or function), Head of the Audit Authority of the Republic of Croatia, (name of Audit Authority designated), have examined the functioning of the management and control systems for the operations under component [1 to 5] of the Instrument for pre-accession (IPA) during the previous 12-month period ended on (date), as presented in the description sent to the Commission on (date) at the moment of submitting the application for conferral of management (taking into account of changes notified to the Commission in previous years on (date) together with the changes identified in the annual audit activity report accompanying this opinion).
The objective of this examination is to issue an opinion on the conformity of the management and control systems with the Framework Agreement and/or any other agreements between the Commission and the Government of the Republic of Croatia in the framework of IPA and as to whether these management and control systems – designed to contribute to the production of reliable [statements of expenditure] [accounts and statements of expenditure] presented to the Commission and therefore to help to ensure, inter alia, the legality and regularity of the transactions underlying those statements – were operated effectively.
Respective responsibilities of the NAO and the auditors:
The NAO is responsible, inter alia, for the preparation and fair presentation of the Statement of Assurance in accordance with Article 25 of the IPA Implementing Regulation (IPA IR). This responsibility includes the expression of a representation as regards the truth, completeness and accuracy of the expenditure declared [and the accounts submitted]3 to the Commission, as well as whether the effective functioning of the management and control systems under IPA provides reasonable assurance as to the legality and regularity of transactions underlying the Statement.
The NAO should base his/her assessment upon all information at his/her disposal. This includes the work of the internal audit service.
My responsibility in this report – in accordance with Article 29(2)(b) 2nd indent of the IPA IR – is to express an opinion on the effective functioning of the management and control systems established for the operations under the IPA component [1 to 5] during the previous 12-month period ended on (date) in all material respects.
Our audits are organised with this objective in mind (together with the objective of also providing opinions on expenditure declared [and annual accounts of Component 5] and final statements of claim). We organise an overall audit work plan to fulfil all our responsibilities under Article 29 IPA IR. We did not plan and perform our audits with a view to be able to express an overall opinion on the reliability of the NAO’s Statement of Assurance as such. However, we do state our conclusions whether the results of the audit work that we have carried out give rise to any significant doubts in respect of the Statement of Assurance. In particular we have assessed whether our audit findings are consistent with the presence or absence of reservations by the NAO to the Statement of Assurance. We conducted our audits in accordance with international auditing standards. Those standards require, inter alia, that we comply with ethical requirements, and that we plan and perform the audits to obtain reasonable assurance on which to base our opinion.
I believe that the work carried out provides a sound basis for our opinion.
Scope of the examination:
The audit assignments were carried out in accordance with the annual audit work plan in respect of this component during the 12-month period in question and reported in the annual audit activity report covering the period until... (date).
Our system-based audit included an examination, on a test basis, of the design and operation of the management and control systems put in place by the beneficiary to effectively manage those risks which threaten the production of reliable [statements of expenditure] [accounts and statements of expenditure]3 presented to the Commission.
Indicate any limitations on the scope of the examination:
→ Explain any limitations
Auditors’ Opinion:
[Option 1 – Unqualified opinion
Based on the examination referred to above, it is my opinion that for the period 1 October 20xx until 30 September 20xx+1) the management and control systems established for the component [1 to 5] to contribute to the production of reliable [statements of expenditure] [accounts and statements of expenditure]3 presented to the Commission and, therefore, to help to ensure, inter alia, the legality and regularity of the transactions underlying those statements, functioned effectively and, concerning its design and operation, complied in all material respects with all applicable requirements of the IPA Framework Agreement and/or any other agreements between the Commission and the Government of the Republic of Croatia in the framework of IPA. Without expressing an opinion on the overall reliability of the Statement of Assurance I conclude that the Statement of Assurance issued by the NAO did not contain any representations that would be materially inconsistent with our audit findings and which would therefore provide any reason to doubt that the Statement of Assurance has been correctly drawn up in accordance with the applicable legislation.
The audits were conducted between DD/MM/20YY and DD/MM/20YY. A report on my findings is delivered at the same date as the date of this opinion.
(Place and date of issue
__________________________________________________
Signature
Name and official title or function of the Head of the Audit Authority designated)]
[Option 2 – Qualified opinion
Based on the examination referred to above, it is my opinion that for the period 1 October 20xx until 30 September 20xx+1) the management and control systems established for the component [1 to 5] to contribute to the production of reliable [statements of expenditure] [accounts and statements of expenditure]3 presented to the Commission and, therefore, to help to ensure, inter alia, the legality and regularity of the transactions underlying those statements, functioned effectively and, concerning its design and operation, complied in all material respects with all applicable requirements of the IPA Framework Agreement and/or any other agreements between the Commission and Government of the Republic of Croatia in the framework of IPA except in the following respects:
→ State and explain the qualifications (whether due to disagreement with the NAO or scope limitation); in particular, indicate the bodies concerned
→ Indicate whether the qualifications are of a recurring/systemic nature or one-off
As a consequence, [the Republic of Croatia] [the... authority] [any other actor(s)] has failed to comply with the requirements of the IPA Framework Agreement and/or any other agreements between the Commission and the Government of the Republic of Croatia in the framework of IPA.
I estimate the impact of the qualification(s) to be... EUR [%] of the total expenditure declared, corresponding to... EUR [%] of the public contribution. The Community contribution affected is thus..... Without expressing an opinion on the overall reliability of the Statement of Assurance as a whole, I conclude that the Statement of Assurance issued by the NAO contained representation(s) that is/are materially inconsistent with our audit findings and which therefore provide(s) some reason to doubt that the Statement of Assurance has been correctly drawn up in accordance with the applicable legislation in this respect. This/These reservation(s) and inconsistency(ies) is/are:
The audits were conducted between DD/MM/20YY and DD/MM/20YY. A report on my findings is delivered at the same date as the date of this opinion.
(Place and date of issue
__________________________________________________
Signature
Name and official title or function of the Head of the Audit Authority designated)]
[Option 3 – Adverse opinion
Based on the examination referred to above, it is my opinion that for the period 1 October 20xx until 30 September 20xx+1) the management and control systems established for the IPA component [1 to 5] to contribute to the production of reliable [statements of expenditure] [accounts and statements of expenditure]3 presented to the Commission and, therefore, to help to ensure, inter alia, the legality and regularity of the transactions underlying those statements, did not function effectively and, concerning its design and operation, failed to comply, in significant respects, with applicable requirements of the IPA Framework Agreement and/or any other agreements between the Commission and the Government of the Republic of Croatia in the framework of IPA.
This adverse opinion is based on the following observation(s):
→ Describe the circumstances giving rise to the reservations – together with its significant compliance implications with Community rules – and name in particular the bodies affected, if applicable.
Because of the effects of the matters described in the preceding paragraph [Republic of Croatia] [the... authority] [any other actor(s)] has failed to comply with the requirements of the IPA Framework Agreement and/or any other agreements between the Commission and (country) in the framework of IPA.
The audits were conducted between DD/MM/20YY and DD/MM/20YY. A report on my findings is delivered at the same date as the date of this opinion.
(Place and date of issue
__________________________________________________
Signature
Name and official title or function of the Head of the Audit Authority designated)]
[Option 4 – Disclaimer of opinion
Because of the significance of the matter discussed in the preceding paragraph, I do not express an opinion on the effectiveness of the management and control systems under the IPA component [1 to 5] for the period 1 October 20xx until 30 September 20xx+1 and its conformity with the IPA Framework Agreement and/or any other agreements between the Commission and the Government of the Republic of Croatia in the framework of IPA. Without expressing an opinion on the overall reliability of the Statement of Assurance as a whole, I conclude that the Statement of Assurance issued by the NAO contained representation(s) that is/are materially inconsistent with our audit findings and which therefore provide(s) some reason to doubt that the Statement of Assurance has been correctly drawn up in accordance with the applicable legislation in this respect. This/These reservation(s) and inconsistency(ies) is/are:
(Place and date of issue
__________________________________________________
Signature
Name and official title or function of the Head of the Audit Authority designated)]
ANNEX E
to the Framework Agreement between the Commission and the Government of the Republic of Croatia
Audit Opinion of the Audit Authority of the Republic of Croatia on the final statement of expenditure of the [programme with reference:...]
[on the accounts and statement of expenditure of component 5]
[part... of the programme with reference:...]
[as supported by the final Audit Activity Report]
addressed to
– the European Commission, Directorate-General......,
– the Competent Accrediting Officer (CAO) of the Republic of Croatia
1. Introduction
I, (name, first name, official title or function), Head of the Audit Authority of the Republic of Croatia, (name of Audit Authority designated), have examined the results of the audit work carried out on the programme (indicate programme – title, component, period, reference (CCI) number) by or under the responsibility of the Audit Authority in accordance with the audit work plan [and have carried out additional work as I judged necessary].
2. Respective responsibilities of the National Authorising Officer (NAO) and the auditors
In accordance with Article 25 of the IPA Implementing Regulation (IPA IR) the preparation and fair presentation of the expenditure statements submitted to the Commission, as well as ensuring the legality and regularity of the transactions underlying those statements, rest with the NAO.
[This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of annual accounts that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances] 3.
My responsibility in this report – in accordance with Article 29(2)(b) 3rd indent of the IPA IR – is to express an opinion [on the reliability of the final statement of expenditure] [on the reliability of statement of expenditure and annual accounts]3 [and the validity of the final payment application] submitted by the NAO. I conducted the audits in accordance with international auditing standards.
Those standards require that I plan and perform the audits in order to obtain reasonable assurance about whether the statement of expenditure [and the annual accounts]3 [and the payment application for the final balance of the Community contribution to the programme] is [are] free of material misstatement [and the effectiveness of internal control procedures]3.
We organise an overall audit work plan to fulfil all our responsibilities under Article 29 of the IPA IR. The audits included [examination, on a test basis, of evidence supporting the amounts and disclosures in the final statement of expenditure and the payment application for the final balance of the Community contribution to the programme] [examination, on a test basis, of evidence supporting the information in the annual accounts, an examination of procedures and of an appropriate sample of transactions to obtain audit evidence about the amounts and disclosures in the statement of expenditure and the annual accounts]3. [The audits covered compliance of payments with Community rules only as regards the capability of the accredited administrative structures to ensure that such compliance has been checked before payment is made].
I believe that my audits provide a reasonable basis for my opinion.
3. Scope of the examination
I have conducted my examination in accordance with Article 29(2)(b) IPA IR.
5
The scope was further limited by the following factors:
(a)...
(b)...
(c)..., etc.
(Indicate any limitation on the scope of the examination, for example any systemic problems, weaknesses in the management and control system, lack of supporting documentation, cases under legal proceedings, etc., and estimate the amounts of expenditure and the Community contribution affected. If the Audit Authority does not consider that the limitations have an impact on the final expenditure declared, this should be stated.)
4. Errors and irregularities
[The error rates and cases of irregularity found in the audit work are not such as to preclude an unqualified opinion given the satisfactory way they have been dealt with by the NAO and the trend in the level of their occurrence over time.]
Or
[The rate of errors and irregularities found in the audit work and the way, they have been dealt with by the NAO, are such as to preclude an unqualified opinion. A list of these cases is provided in the final audit activity report together with an indication of their possible systemic character and the scale of the problem.]
5. Auditors’ opinion on the final statement of expenditure
[Option 1 – Unqualified opinion
(If there have been no limitations on the scope of the examination, and the error rates and cases of irregularity and the way they have been dealt with by the NAO do not preclude an unqualified opinion)
[Based on the examination referred to above covering the audit work carried out in accordance with Article 29(2)(b) IPA IR [and the additional work I have performed], it is my opinion that the accounts submitted to the Commission for the operations under the IPA component [1 to 5] for the period from (date) to (date) (in particular, the statement of expenditure) are presented fairly, in all material respects <, including those pertaining to the legality and regularity of the underlying transactions> [and the internal control procedures have operated satisfactorily]3.]
Or
[Based on the examination referred to above covering the audit work carried out in accordance with Article 29(2)(b) IPA IR [and the additional work I have performed], it is my opinion that the final statement of expenditure presents fairly, in all material respects – <including those pertaining to the legality and regularity of the underlying transactions>7 – the expenditure paid under the operational programme with reference:... of the IPA component [1 to 5] for the period from (date) to (date), and that the application for payment of the final balance of the Community contribution to this programme is valid.]
My audits were conducted between DD/MM/20YY and DD/MM/20YY.
(Place and date of issue
__________________________________________________
Signature
Name and official title or function of the Head of the Audit Authority designated)]
[Option 2 – Qualified opinion
(If there have been limitations on the scope of the examination and/or the error rates and cases of irregularity and the way they have been dealt with by the NAO calls for a qualified opinion but do not justify an unfavourable opinion for all the expenditure concerned)
[Based on the examination referred to above covering the audit work carried out in accordance with Article 29(2)(b) IPA IR [and the additional work I have performed], it is my opinion that the accounts submitted to the Commission for the operations under the IPA component [1 to 5] for the period from (date) to (date) are presented fairly in all material respects – <including those pertaining to the legality and regularity of the underlying transactions>7 [and the internal control procedures have operated satisfactorily]3- except in the following respects:
(a)...
(b)...
(c)..., etc.
(state the qualifications, in particular the bodies concerned, and explain, e.g. whether they are of a recurring/systemic nature or one-off)
I estimate the impact of the qualification(s) to be [EUR] [%]... of the total expenditure declared, [corresponding to [EUR] [%] of the public contribution]. The Community contribution affected is thus....].
Or
[Based on the examination referred to above covering the audit work carried out in accordance with Article 29(2)(b) IPA IR [and the additional work I have performed], it is my opinion that the final statement of expenditure presents fairly, in all material respects -<including those pertaining to the legality and regularity of the underlying transactions>7 the expenditure paid under the operational programme with reference:... of the IPA component [1 to 5] for the period from (date) to (date), and that the application for payment of the final balance of the Community contribution to this programme is valid except with regard to the matters referred to at point 3 above and/or to the observations at point 4 regarding the error rates and cases of irregularity and the way they have been dealt with by the NAO.
I estimate the impact of the qualification(s) to be [EUR] [%]... of the total expenditure declared, [corresponding to [EUR] [%] of the public contribution]. The Community contribution affected is thus....].
My audits were conducted between DD/MM/20YY and DD/MM/20YY.
(Place and date of issue
__________________________________________________
Signature
Name and official title or function of the Head of the Audit Authority designated)]
[Option 3 – Adverse opinion
(If the nature and extent of the errors and of the cases of irregularities and the way they have been dealt with by the NAO are so pervasive that a qualification is deemed inadequate to disclose the misleading nature of the final statement of expenditure as a whole)
[Based on the examination referred to above covering the audit work carried out in accordance with Article 29(2)(b) IPA IR [and the additional work I have performed], and in particular in view of the nature and extent of the errors and of cases of irregularities and the fact that they have not been dealt with satisfactorily by the NAO as disclosed under point 4, it is my opinion that that the accounts submitted to the Commission for the operations under the IPA component [1 to 5] for the period from (date) to (date) are not presented fairly, in all material respects [and the internal control procedures have not operated satisfactorily]3.]
OR
[Based on the examination referred to above covering the audit work carried out in accordance with Article 29(2)(b) IPA IR [and the additional work I have performed], it is my opinion that the final statement of expenditure does not present fairly, in all material respects – <including those pertaining to the legality and regularity of the underlying transactions>7 the expenditure paid under the operational programme with reference:... of the IPA component [1 to 5] for the period from (date) to (date), and that the application for payment of the final balance of the Community contribution to this programme is not valid.]
My audits were conducted between DD/MM/20YY and DD/MM/20YY.
(Place and date of issue
__________________________________________________
Signature
Name and official title or function of the Head of the Audit Authority designated)]
[Option 4 – Disclaimer of opinion
(If there have been major limitations on the scope of the examination such that no conclusion can be reached on the reliability of the final statement of expenditure without considerable further work)
[Based on the examination referred to above covering the audit work carried out in accordance with Article 29(2)(b) IPA IR [and the additional work I have performed], and in particular in view of the matters referred to at point 3, I am unable to express an opinion.
(Place and date of issue
__________________________________________________
Signature
Name and official title or function of the Head of the Audit Authority designated)]
– [copy to: National Authorising Officer (NAO) of the Republic of Croatia] 6