Common use of Eligibility of expenditure Clause in Contracts

Eligibility of expenditure. 1. Expenditure paid earlier than the date of conferral of management shall in no case be eligible with the exception of technical assistance and general costs, covered by the technical assistance measure of the IPARD Programme and the activities referred to in paragraph 6(c). 2. Expenditure shall be eligible if it is in accordance with the principles of sound financial management and, in particular, of economy and cost-effectiveness. 3. The [Candidate Country] shall notify the Commission of the rules for eligibility of expenditure for each measure. It shall also notify the Commission of the costs explicitly provided for in the standard contract(s) for each measure as issued by the IPARD Agency to beneficiaries. The Commission shall notify the [Candidate Country] of its acceptance or otherwise of the proposed rules within three months of their receipt but in any case no later than the date when the Commission Decision conferring management of aid provided for in Article 25 is taken. The rules and costs shall be applicable thereafter. 4. The following expenditure shall not be eligible under the IPARD Programme: (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, irrespective of whether the lease results in ownership being transferred to the lessee; (d) fines, financial penalties and expenses of litigation; (e) operating costs; (f) second hand machinery and equipment; (g) bank charges, costs of guarantees and similar charges; (h) conversion costs, charges and exchange losses associated with the IPARD euro account, as well as other purely financial expenses; (i) contributions in kind; (j) the purchase of agricultural production rights, animals, annual plants and their planting; (k) any maintenance, depreciation and rental costs; (l) any cost incurred by public administration in managing and implementing assistance, namely those of the Operating Structure and, in particular, overheads, rentals and salaries of staff employed on activities of management, implementation, monitoring and control. By way of derogation from sub-paragraphs (c) and (e) the items mentioned in those sub-paragraphs may be eligible under measures "preparation and implementation of local rural development strategies" and "support for the setting-up of producer groups". 5. Unless the Commission expressly and explicitly decides otherwise the following expenditure is also not eligible: (a) the costs of any services, supplies and works costing more than an amount equivalent to € 10 000 for which the beneficiary has not obtained quotations from at least three suppliers, the originals of these being included in the applications for approval of projects; (b) expenditure on projects which, before completion, have charged fees to users or participants unless the fees received have been deducted from the costs claimed; (c) promotional costs, other than in the collective interest; (d) expenditure incurred by a final beneficiary where more than 25% of whose capital is held by a public body or bodies unless the Commission has so decided in a specific case on the basis of a complete reasoned request from the [Candidate Country]. The Commission shall take its decision within three months of receiving the request. This exclusion shall not apply to expenditure on infrastructure or human capital. 6. Notwithstanding paragraphs 4 and 5, in the case of investments: (a) eligible expenditure shall be limited to the construction or improvement of immovable property; (b) the purchase or lease-purchase of new machinery and equipment, including computer software, up to the market value of the asset shall be considered as eligible; other costs connected with the leasing contract, such as lessor's margin, interest refinancing costs, overheads and insurance charges, shall not be eligible; (c) general costs linked to expenditure referred to in points (a) and (b) of this paragraph such as architects’, engineers’ and other consultation fees, feasibility studies, the acquisition of patent rights and licences shall be eligible up to a ceiling of 12% of the costs referred to in the said points (a) and (b) according to the following conditions: • for projects with eligible expenditure of the investments referred to in sub- paragraphs (a) and (b) greater than € 3 million, the business plan preparation costs cannot be greater than 3% of the eligible expenditure of these investments, • for projects with eligible expenditure of the investments referred to in points (a) and (b) of at least € 1 million and no more than € 3 million, the business plan preparation costs cannot be greater than 4% of the eligible expenditure of these investments, and • for projects with eligible expenditure of the investments referred to in points (a) and (b) less than € 1 million, the business plan preparation costs cannot be greater than 5% of the eligible expenditure of these investments. The detailed provisions concerning the maximum eligible amount under this paragraph shall be established in the IPARD Programme on the basis of an assessment of the level of costs for similar actions in the [Candidate Country]. 7. Investment projects shall remain eligible for Community financing provided they do not, within five years from the final payment by the IPARD Agency, undergo a substantial modification. Substantial modifications to a project are those which: - affect its nature or its implementation conditions or give undue advantage to a firm or public body, and/or - result either from a change in the nature of ownership of an item of infrastructure, or a cessation or relocation of a productive activity co-financed. Where any such modification is detected by the [Candidate Country], it shall immediately inform the Commission. 8. No project shall be eligible for co-financing where the [Candidate Country] reduced the amounts payable or paid to the final beneficiary, where this reduction applies only to payments under the IPARD Programme. However, the IPARD Agency may make reductions for amounts owing to it due to: - overpayments under the IPARD Programme, - a failing by a final beneficiary to respect conditions under the IPARD Programme. 9. In the event that the Commission determines that an exceptional natural disaster has affected the [Candidate Country] it may, on the basis of a reasoned request by the [Candidate Country], authorise, for relevant projects in the region affected and for a specified period, derogation from provisions of paragraphs 5(a), (d) and 7. 10. In the event that the Commission determines that the expenditure is not fully in conformity with the Agreements and in particular the principles set out in this Article, it shall assess the amounts to be not eligible under the IPARD Programme on the basis of the gravity of the non-conformity recorded. It shall take due account of the nature and the gravity of the non-conformity and of the financial damage caused to the Community. In instances where such a decision is envisaged, there must be satisfactory compliance with the two first conditions set out in paragraph 4 of Article 25.

Eligibility of expenditure. 1. Expenditure paid earlier than the date of conferral of management shall in no case be eligible with the exception of technical assistance and general costs, covered by the technical assistance measure of the IPARD Programme and the activities referred to in paragraph 6(c). 2. Expenditure shall be eligible if it is in accordance with the principles of sound financial management and, in particular, of economy and cost-effectiveness. 3. The [Candidate Country] Turkey shall notify the Commission of the rules for eligibility of expenditure for each measure. It shall also notify the Commission of the costs explicitly provided for in the standard contract(s) for each measure as issued by the IPARD Agency to beneficiaries. The Commission shall notify the [Candidate Country] Turkey of its acceptance or otherwise of the proposed rules within three months of their receipt but in any case no later than the date when the Commission Decision conferring management of aid provided for in Article 25 is taken. The rules and costs shall be applicable thereafter. 4. The following expenditure shall not be eligible under the IPARD Programme: (a) taxes, including value added taxescustoms and import duties and levies and/or taxes of equivalent effect, as provided for in Article 26 of the Framework Agreement; (b) customs and import duties, or any other charges; (c) purchase, rent or leasing of land and existing buildings, irrespective of whether the lease results in ownership being transferred to the lessee; (dc) fines, financial penalties and expenses of litigation; (ed) operating costs; (fe) second hand machinery and equipment; (gf) bank charges, costs of guarantees and similar charges; (hg) conversion costs, charges and exchange losses associated with the IPARD euro account, as well as other purely financial expenses; (ih) contributions in kind; (ji) the purchase of agricultural production rights, animals, annual plants and their planting; (kj) any maintenance, depreciation and rental costs; (lk) any cost incurred by public administration in managing and implementing assistance, namely those of the Operating Structure and, in particular, overheads, rentals and salaries of staff employed on activities of management, implementation, monitoring and control. By way of derogation from sub-paragraphs (cb) and (ed) the items mentioned in those sub-paragraphs may be eligible under measures "preparation and implementation of local rural development strategies" and "support for the setting-up of producer groups". 5. Unless the Commission expressly and explicitly decides otherwise the following expenditure is also not eligible: (a) the costs of any services, supplies and works costing more than an amount equivalent to € 10 000 for which the beneficiary has not obtained quotations from at least three suppliers, the originals of these being included in the applications for approval of projects; (b) expenditure on projects which, before completion, have charged fees to users or participants unless the fees received have been deducted from the costs claimed; (c) promotional costs, other than in the collective interest; (d) expenditure incurred by a final beneficiary where more than 25% of whose capital is held by a public body or bodies unless the Commission has so decided in a specific case on the basis of a complete reasoned request from the [Candidate Country]Turkey. The Commission shall take its decision within three months of receiving the request. This exclusion shall not apply to expenditure on infrastructure or human capital. 6. Notwithstanding paragraphs 4 and 5, in the case of investments: (a) eligible expenditure shall be limited to the construction or improvement of immovable property; (b) the purchase or lease-purchase of new machinery and equipment, including computer software, up to the market value of the asset shall be considered as eligible; other costs connected with the leasing contract, such as lessor's margin, interest refinancing costs, overheads and insurance charges, shall not be eligible; (c) general costs linked to expenditure referred to in points (a) and (b) of this paragraph such as architects’, engineers’ and other consultation fees, feasibility studies, the acquisition of patent rights and licences shall be eligible up to a ceiling of 12% of the costs referred to in the said points (a) and (b) according to the following conditions: • for projects with eligible expenditure of the investments referred to in sub- sub-paragraphs (a) and (b) greater than € 3 million, the business plan preparation costs cannot be greater than 3% of the eligible expenditure of these investments, • for projects with eligible expenditure of the investments referred to in points (a) and (b) of at least € 1 million and no more than € 3 million3million, the business plan preparation costs cannot be greater than 4% of the eligible expenditure of these investments, and • for projects with eligible expenditure of the investments referred to in points (a) and (b) less than € 1 million, the business plan preparation costs cannot be greater than 5% of the eligible expenditure of these investments. The detailed provisions concerning the maximum eligible amount under this paragraph shall be established in the IPARD Programme on the basis of an assessment of the level of costs for similar actions in the [Candidate Country]Turkey. 7. Investment projects shall remain eligible for Community European Union financing provided they do not, within five years from the final payment by the IPARD Agency, undergo a substantial modification. Substantial modifications to a project are those which: - affect its nature or its implementation conditions or give undue advantage to a firm or public body, and/or - result either from a change in the nature of ownership of an item of infrastructure, or a cessation or relocation of a productive activity co-co- financed. Where any such modification is detected by the [Candidate Country]Turkey, it shall immediately inform the Commission. 8. No project shall be eligible for co-financing where the [Candidate Country] Turkey reduced the amounts payable or paid to the final beneficiary, where this reduction applies only to payments under the IPARD Programme. However, the IPARD Agency may make reductions for amounts owing to it due to: - overpayments under the IPARD Programme, - a failing by a final beneficiary to respect conditions under the IPARD Programme. 9. In the event that the Commission determines that an exceptional natural disaster has affected the [Candidate Country] Turkey it may, on the basis of a reasoned request by the [Candidate Country]Turkey, authorise, for relevant projects in the region affected and for a specified period, derogation from provisions of paragraphs 5(a), (d) and 7. 10. In the event that the Commission determines that the expenditure is not fully in conformity with the Agreements and in particular the principles set out in this Article, it shall assess the amounts to be not eligible under the IPARD Programme on the basis of the gravity of the non-conformity recorded. It shall take due account of the nature and the gravity of the non-conformity and of the financial damage caused to the CommunityEuropean Union. In instances where such a decision is envisaged, there must be satisfactory compliance with the two first conditions set out in paragraph 4 of Article 25.

Eligibility of expenditure. 1. Expenditure paid earlier than the date of conferral of management shall in no case be eligible with the exception of technical assistance and general costs, covered by the technical assistance measure of the IPARD Programme and the activities referred to in paragraph 6(c). 2. Expenditure shall be eligible for Community support under SAPARD only, if it in addition to being in conformity with this Agreement, the use of SAPARD assistance is also in accordance with the principles of sound financial management and, in particular, of economy and cost-effectiveness. 3. The [Candidate Country] shall notify the Commission of the rules for eligibility of expenditure for each measure. It shall also notify the Commission of the costs Costs explicitly provided for in the standard contract(sdraft contrac(s) for each per measure as issued by the IPARD SAPARD Agency to beneficiariesthe beneficiearies shall apply. The Commission shall notify inform the [Candidate Country] Republic of Bulgaria of its acceptance or otherwise of the proposed rules within three months of their receipt but in any case no later than the date when the Commission Decision conferring management of aid provided for in Article 25 3 (1) of Section A is taken. The rules taken and costs shall be applicable thereafterwithout prejudice to that Decision. 42. The Unless the Commission expressly and explicitly decides otherwise, the following expenditure shall is not be eligible for Community co-financing under the IPARD Programme: (a) taxes, including value added taxes; (b) customs and import duties, or any other charges; (c) purchasePurchase, rent or leasing of land and existing buildings, buildings irrespective of whether the lease results in ownership being transferred to the lessee; (b) Taxes, customs and import duties which (i) are recoverable, refunded or offset by any means whatsoever, (ii) do not form part of the general taxation system in the Republic of Bulgaria, (iii) bear disproportionately on any part of the Programme; (c) Operating costs including maintenance and rental costs; (d) finesLeasing, financial penalties and expenses of litigationexcept where the lease results in ownership being transferred to the lessee; (e) operating costsThe costs of any services, supplies and works costing more than 10 000 euro equivalent in national currency for which the beneficiary has not obtained quotations from at least three suppliers, the originals of these being included in the declaration of expenditure referred to in Article (8) (b) of Section A; (f) second hand machinery and equipment; (g) bank Bank charges, costs of guarantees and similar charges; (hg) conversion Conversion costs, charges and exchange losses associated with the IPARD SAPARD euro account, as well as other purely financial expenses; (ih) contributions in kind; (j) the purchase of agricultural production rights, animals, annual plants and their planting; (k) any maintenance, depreciation and rental costs; (l) any cost Costs incurred by public administration in managing and implementing assistanceadministration, namely those of including the Operating Structure SAPARD Agency and, in particular, overheads, rentals and salaries of staff employed on activities of management, implementation, monitoring and control. By way of derogation from sub-paragraphs (c) and (e) the items mentioned in those sub-paragraphs may be eligible under measures "preparation and implementation of local rural development strategies" and "support for the setting-up of producer groups". 5. Unless the Commission expressly and explicitly decides otherwise the following expenditure is also not eligible: (a) the costs of any services, supplies and works costing more than an amount equivalent to € 10 000 for which the beneficiary has not obtained quotations from at least three suppliers, the originals of these being included in the applications for approval of projects; (b) expenditure on projects which, before completion, have charged fees to users or participants unless the fees received have been deducted from the costs claimed; (c) promotional costs, other than in the collective interest; (d) expenditure incurred by a final beneficiary where more than 25% of whose capital is held by a public body or bodies unless the Commission has so decided in a specific case on the basis of a complete reasoned request from the [Candidate Country]. The Commission shall take its decision within three months of receiving the request. This exclusion shall not apply to expenditure on infrastructure or human capital. 6. Notwithstanding paragraphs 4 and 5, in the case of investments: (a) eligible expenditure shall be limited to the construction or improvement of immovable property; (b) the purchase or lease-purchase of new machinery and equipment, including computer software, up to the market value of the asset shall be considered as eligible; other costs connected with the leasing contract, such as lessor's margin, interest refinancing costs, overheads and insurance charges, shall not be eligible; (c) general costs linked to expenditure referred to in points (a) and (b) of this paragraph such as architects’, engineers’ and other consultation fees, feasibility studies, the acquisition of patent rights and licences shall be eligible up to a ceiling of 12% of the costs referred to in the said points (a) and (b) according to the following conditions: • for projects with eligible expenditure of the investments referred to in sub- paragraphs (a) and (b) greater than € 3 million, the business plan preparation costs cannot be greater than 3% of the eligible expenditure of these investments, • for projects with eligible expenditure of the investments referred to in points (a) and (b) of at least € 1 million and no more than € 3 million, the business plan preparation costs cannot be greater than 4% of the eligible expenditure of these investments, and • for projects with eligible expenditure of the investments referred to in points (a) and (b) less than € 1 million, the business plan preparation costs cannot be greater than 5% of the eligible expenditure of these investments. The detailed provisions concerning the maximum eligible amount under this paragraph shall be established in the IPARD Programme on the basis of an assessment of the level of costs for similar actions in the [Candidate Country]. 7. Investment projects shall remain eligible for Community financing provided they do not, within five years from the final payment by the IPARD Agency, undergo a substantial modification. Substantial modifications to a project are those which: - affect its nature or its implementation conditions or give undue advantage to a firm or public body, and/or - result either from a change in the nature of ownership of an item of infrastructure, or a cessation or relocation of a productive activity co-financed. Where any such modification is detected by the [Candidate Country], it shall immediately inform the Commission. 8. No project shall be eligible for co-financing where the [Candidate Country] reduced the amounts payable or paid to the final beneficiary, where this reduction applies only to payments under the IPARD Programme. However, the IPARD Agency may make reductions for amounts owing to it due to: - overpayments under the IPARD Programme, - a failing by a final beneficiary to respect conditions under the IPARD Programme. 9. In the event that the Commission determines that an exceptional natural disaster has affected the [Candidate Country] it may, on the basis of a reasoned request by the [Candidate Country], authorise, for relevant projects in the region affected and for a specified period, derogation from provisions of paragraphs 5(a), (d) and 7. 10. In the event that the Commission determines that the expenditure is not fully in conformity with the Agreements and in particular the principles set out in this Article, it shall assess the amounts to be not eligible under the IPARD Programme on the basis of the gravity of the non-conformity recorded. It shall take due account of the nature and the gravity of the non-conformity and of the financial damage caused to the Community. In instances where such a decision is envisaged, there must be satisfactory compliance with the two first conditions set out in paragraph 4 of Article 25.