1

The revised The revised Financial Regulation and Financial Regulation and the new 2014 – 2020 Financial the new 2014 – 2020 Financial

FrameworkFramework

Laurent SARAZIN Head of Unit, DG EuropeAid R/3 – Legal Affairs

The FIDIC-MDB Harmonised Construction Contract Conference

Brussels, 25 – 26 June 2012

2

Introduction

Revision of the Financial Regulation - state of play

The Common Implementation Regulation (CIR) and MFF package

The new EU policy framework : the "Agenda for Change"

3

New Financial Regulation Calendar

COMMISSION PROPOSAL

May 2010

COREPERHU PRESIDENCY

TEXT

AMENDMENTSEUROPEAN PARLIAMENT

TRILOGUE(1ST READING)

CO

MM

ISSION

EUROPEAN PARLIAMENT

DK

PR

ESID

ENC

Y

2010 201320122011

FR BUDGET IR BUDGET

FR EDF

PRAG

April 2011

MFF - EXTERNAL ACTION FINANCIAL INSTRUMENTS

November 2011

La

st

de

ad

lin

e f

or

en

try

into

fo

rce

Last estimate : 1/1/2013

December 2011PROPOSALS

4

Management modes Current architecture

centralise

d

Shared

(Member States)

direct Indirect

Decentralised

(Third Countries)

Joint

(international organisations)

From 5 categories ….

• All implementing partners of EU funds are public

• Heterogeneous regimes for the rules applicable to expenditure

5

Direct management Indirect management

EU Budget

Heads of Delegation

….To 3 main categories

Member States Third countries International organisations National agencies and Financial Institutions (public or private with public service mission) EIB-EIF Public & Private Partnerships CFSP Missions Regulatory agencies

Shared management

Authorising Officers

Management modes New architecture

….To 3 main categories

EU Budget

….To 3 main categories….To 3 main categories

EU Budget

….To 3 main categories

EU Budget

….To 3 main categories

EU Budget

….To 3 main categories

Direct management

EU Budget

….To 3 main categories

Shared management

Direct management

EU Budget

….To 3 main categories

Indirect managementShared management

Direct management

EU Budget

….To 3 main categories

6

New entities

•Public Private Partnerships: cooperation between public authorities and private sector for performance of public contracts or concessions, complying with:

• Established in a Member States;• Providing adequate financial guarantees;• Entrusted with a public-private partnership

•Financial Institution implementing “financial instruments”, complying with the definition of "public body or private body entrusted with a public service mission".

7

Procurement New thresholds Service

contracts

CURRENT THRESHOLDS PROPOSED THRESHOLDS

> 200,000 International restricted

> 300,000 International restricted

10,000 – 200, 000

FWC (where possible) / Competitive Negotiated

20,000-300,000 FWC / Competitive negotiated / AMI

0 – 10,000 Single tender 2,500-20,000 Single tender

0-2,500 Invoice

8

CURRENT THRESHOLDS PROPOSED THRESHOLDS

> 150,000 International open > 300,000 International open

60,000-150,000 Local open 100,000-300,000 FWC / Local open

10,000-60,000 Competitive negotiated

100,000 -20,000 FWC / Competitive negotiated

0-10,000 Single tender 2,500 -20,000 Single tender

0-2,500 Invoice

Procurement New thresholds Supply contracts

9

CURRENT THRESHOLDS PROPOSED THRESHOLDS

> 5,000,000 International open / International restricted (exceptional)

> 5,000,000 International open / International restricted

300,000-5,000,000 Local open 300,000-5,000,000 Local open

10,000-300,000 Competitive negotiated

20,000-300,000 Competitive negotiated

0-10,000 Single tender 0-20,000 Single tender

Procurement New thresholds Works contracts

10

Procurement

•New case for negotiated procedure:

•Replacement of contractor - where a new contract has to be concluded because of an early termination of an existing contract

11

Procurement Guarantees on pre-financing

CURRENT RULES PROPOSED RULES

Procurement - pre-financing > 150.000

- where financial capacity is not assessed

-possible waiver: public bodies

Procurement Authorising Officer's (AO) Risk assessment

- or where financial capacity is not assessed

12

Development Cooperation Instrument

(DCI)

Non-State Actors & Local Authorities

Pan-African Programme

European Instrument for Democracy & Human Rights (EIDHR)

Instrument for Stability (IFS)

Instrument for Nuclear Safety Cooperation (INSC)

Common Implementing Regulation (CIR)

EDF (outside

MFF)

Partnership Instrument

(PI)

Pre-Accession Instrument

(IPA)

Greenland Instrument

European Neighbourhood

Instrument (ENI)

Thematic Programs Global Public Goods

Objectives :

• Avoiding divergence of rules along the legislative procedure

• Unique set of rules for the implementation of all instruments

13

Link between CIR and FR

Financial Regulation(the main ‘toolbox’)…

…completed by the Common Implementing Rules (CIR)

(specificities authorised by the FR)

Geographical & thematic regulationsfor EU External Action

IMPLEMENTING PARTNERS & FINAL BENEFICIARIES

2 layers of regulations

Harmonising on the basis ofthe simplest rule

• Simplified tax regime (CIR Article 5)

- Where possible, negotiate full tax exemption with third countries for EU aid disregarding the implementing mode;

- Relation EU/contractors and grant beneficiaries: tax actually incurred is an eligible cost of the action

• Simplified untying aid provisions (CIR Article 8-11)

- Common regime for developing countries

- Fully untying aid regime as common de minimis rule for the origin of supplies and goods below 100,000 €.

“Agenda for Change”

- Focus on 2 pillars:

• Democracy, human rights & good governance

• Inclusive & sustainable growth for human development

- Concentration on max. 3 sectors per country

- Aid focused on countries most in need & where impact is greatest (Differentiation)

- Common vision for EU+MS: joint actions & programming promoted

The new EU policy framework